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Bringing people closer to their dreams
2 0 0 6 A N N U A L R E P O R T
FINANCIAL INFORMATIONPATRICK BATAILLARD
Finance DirectorTel: +33 475 232 526
Fax: +33 475 031 877Shareholder’s Service Tel: + 33 475 235 878
Web site: www.norbert-dentressangle.com (browse FINANCE)
AUDITORSERNST & YOUNG AUDIT
Member of the Versailles Regional Accountants Association
CABINET ALAIN BONNIOT & ASSOCIESMember of the Lyon Regional Accountants Association
Appointed Auditors
GROUPE NORBERT DENTRESSANGLE
BP 98 - 26241 Saint-Vallier-sur-Rhône - France
RCS ROMANS 309 645 539
2
15%of the cost price of a product in Europe (source EU).
2
TRANSPORT AND LOGISTICS: A BUOYANT MARKET IN EUROPE 3
The cost ofTransport/Logisticsaccounts for
cost price of a product in Europe (source EU).
A shared commitment:
sustainable development
4
A shared commitment:
e development
TRANSPORT AND LOGISTICS: THE CHALLENGES 5
7
March Inauguration of the warehouse in Niederbipp (Switzerland)
July Acquisition of the Romanian transport company Transcondor
SeptemberAcquisition of the Spanish logistics company CCH
November Signing of the European Charter on Road Safety
European Company Grand Prix in the growth category awarded to theNorbert Dentressangle Group by Roland Berger Strategy Consultants
December Extra-financial rating by BMJ RATINGS for the Norbert DentressangleGroup: AA=
HIGHLIGHTS IN 2006 IN THE NORBERT DENTRESSANGLE GROUP
8
THE NORBERT DENTRESSANGLE GROUP KEY FIGURES 9
NET RESULTGroup share in millions of euros
TURNOVERin millions of euros
NET GEARING AS A PERCENTAGE OF EQUITY
NET EARNINGSper share in euros
2002 2003 2004 2005 2006
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
1,053
1,3031,399
1,608
1,222
2002 2003 2004 2005 2006
100
80
60
40
20
0
49%
81%
61%
41%
25%
2002 2003 2004 2005 2006
7.06.56.05.55.04.54.03.53.02.52.01.51.00.5
0
2.79
3.66
6.56
5.19
2.88
2002 2003 2004 2005 2006
70
60
50
40
30
20
10
0
26.3
36.2
62.7
49.8
27.2
OPERATING INCOMEin millions of euros
2002 2003 2004 2005 2006
90
80
70
60
50
40
30
20
10
0
48.7
64.3
51.5
83.1
50.6
63% 37%
TURNOVER
1.608 billion euros
Transport
Logistics
Of which 21% outside France
10
2,800,000 sq.m
13 countries
VEHICLE FLEET
5,300 tractor units6,500 trailers
WAREHOUSING AREA
190 facilities in Europe:
Germany The Netherlands
Belgium Poland
Spain Portugal
France The Czech Republic
United Kingdom Romania
Italy Switzerland
Luxembourg
24% outside France
Based in
14,608 employees
THE NORBERT DENTRESSANGLE GROUP CONSOLIDATED FIGURES IN 2006 11
ALLOCATION OF THE CAPITAL AND VOTING RIGHTS
CAPITALOn 28 February 2007, the capital of the Norbert Dentressangle Group stood at € 19,671,386 divided
into 9,835,693 shares with a par value of € 2.
61.46%
29.74%
0.71%
5.55%
2.54%
Allocation of capital Allocation of voting rights
0.63%
16.55%6.86%
75.97%
On 28 February 2007 Number Number of share of voting rights
Dentressangle family 545,646 1,091,292
Financière Norbert Dentressangle(1) 6,045,400 12,079,800
Employees 69,806 99,662
General public 2,924,727 2,630,988
Shares held by the Norbert Dentressangle Group 250,114 0
TOTAL 9,835,693 15,901,742
Dentressangle family
Financière Norbert Dentressangle(1)
Employees
General public
Shares held by the Norbert Dentressangle Group
(1) The Dentressangle family wholly owns the capital of Financière Norbert Dentressangle.
Price on 31 December in € 69.00 49.74 49.74 40.80 40.80Number of shares on 31 December(1) 9,835,693 9,923,306 9,923,306 9,766,708 9,766,706Market capitalisation in €m 679 494 494 398 398Net earnings per share in €(2) 5.19 6.77 6.56 4.23 3.80Net dividend in € 1.00 0.89 0.89 0.84 0.84Distribution ratio in%(1) 19.8 13.6 14.1 20.4 22.7
(1) Including treasury stock(2) After cancellation of treasury stock
DIVIDENDIt is proposed that a dividend of € 1 per share be distributed for 2006. It is up 12% compared to the
2005 dividend. The dividend shall be paid on 6 June 2007.
Stock market data 2006 2005 2005 2004 2005 restated published IFRS published
12
Jan. 2005 54 40.85 46.96 10,578 493
Feb. 2005 51.6 46.3 49.73 5,223 263
March 2005 38 44.6 47.85 5,619 268
April 2005 36 40.61 44.62 6,186 275
May 2005 44.9 37.96 41.94 11,087 463
June 2005 43.2 38 40.53 16,187 50
July 2005 47 37.8 41.94 12,744 545
Aug. 2005 45.49 40.5 42.77 4,599 194
Sept. 2005 46 39.5 41.89 9,545 395
Oct. 2005 46.5 42.2 44.86 16,885 763
Nov. 2005 45.3 41 42.76 4,623 198
Dec. 2005 49.75 44 47.25 16,807 781
Jan. 2006 54.7 48.01 51.57 15,031 770
Feb. 2006 53 51 51.82 4,715 244
March 2006 55.6 51.1 52.65 5,653 298
April 2006 65 56.3 59.22 15,931 930
May 2006 61 53.5 57.62 14,541 827
June 2006 56.2 46.05 52.91 12,042 637
July 2006 57.5 50.6 54.95 10,849 596
Aug. 2006 58.2 53.95 56.2 2,029 114
Sept. 2006 62.8 55.05 7.38 6,910 400
Oct. 2006 66.5 62.55 64.92 11,552 747
Nov. 2006 70.5 64.05 68.11 5,181 353
Dec. 2006 72.9 65.65 68.64 5,180 358
Jan. 2007 70 62 66.35 3,864 256
Feb. 2007 72.95 63.10 67.86 3,364 230
0
5,000
10,000
15,000
20,000
Jan. 2
005
Jan.
2007
March 2
005
May 20
05
July 2
005
Sept.
2005
Nov. 2
005
Ja
n. 20
06
March 2
006
May 20
06
July 2
006
Sept.
2006
Nov. 2
006
2005 - 2006
200
400
600
800
1,000
0
Jan. 2
005
Jan.
2007
March 2
005
May 20
05
July 2
005
Sept.
2005
Nov. 2
005
Ja
n. 20
06
March 2
006
May 20
06
July 2
006
Sept.
2006
Nov. 2
006
NUMBER OF SECURITIES TRADED (daily average))
AVERAGE CLOSING PRICE (in euros)
CAPITAL TRADED (daily average in thousands of euros)
0
10
20
30
40
50
60
70
80
Jan. 2
005
Jan.
2007
March 2
005
May 20
05
July 2
005
Sept.
2005
Nov. 2
005
Ja
n. 20
06
March 2
006
May 20
06
July 2
006
Sept.
2006
Nov. 2
006
2005 - 2006
2005 - 2006
Norbert Dentressangle: FR0000052870-GNDStock market: Euronext ParisMarket: Eurolist Compartiment BMain index: CACMid 100Other indices: CACMid & small 190
STOCK EXCHANGE 13
Highestshare price(in €)
Lowestshare price(in €)
Averageclosing
price(in €)
Numberof securities
traded(daily
average)
Capital(daily
average inthousands
of €)
TRANSACTIONS
Summary
Transport and Logistics: a buoyant market in Europe 3 5 7
14 16 19
28 30 32
85 128 133
Summary
Sustainable development:reducing greenhouse gasemissions
Transport and Logistics: the challenges
The Group boards
Sustainable development:improving road safety
Highlights in 2006 in theNorbert Dentressangle Group
The Supervisory Board
Sustainable development:environmental sitemanagement
Consolidated financialstatements
Company financialstatements
Draft resolutions
14
9 11 1221 24 26
34 44 56
Key figures
The Executive Board
Logistics
The Group consolidatedfigures
Challenge 2008
Transport
Stock Exchange
Sustainable development:integration and internalpromotion
Executive Boardmanagement report
15
2006 ANNUAL REPORT
16 THE GROUP BOARDS
SUPERVISORY BOARDBelow, from left to right:
Jacques GairardNorbert Dentressangle / Supervisory Board ChairmanEvelyne Dentressangle / Vice-ChairmanPierre-André MartelHenri LachmannFrançois-Marie Valentin
EXECUTIVE BOARDOpposite, from left to right:
Jean-Claude Michel CEOAged 54 / EM Lyon.Joined the Group in 1990 as General Goods division Director.Appointed as General Manager of the Group in 1994.Executive Board Chairman since 1998.
François BertreauMD Logistics Division. Aged 52 / ESCP / MBA INSEAD.Joined the Group in 1998 as Logistics Division Director.Member of the Executive Board since 2002.
Hervé MontjotinMD Transport Division.Aged 42 / Ecole Normale Supérieure. ESCP Masters.Joined the Group in 1995.Human Resources Manager from 1996 to 2001.Member of the Executive Board since 1998.General Manager in charge of Organisation and Human Resources from 2001 to 2005.
Patrick BataillardCFO.Aged 42 / EM Lyon.Joined the Group in 1998 as Group’s FinanceController.Transport Division Finance director from 2000 to 2001.Member of the Executive Board since 2001.
17
2006 ANNUAL REPORT
18
A MESSAGE FROM NORBERT DENTRESSANGLE 19
Transport and Logistics are more thanever at the heart of the Europeaneconomy. In its mid-term examination of the WhitePaper on Transport published in 2001, theEuropean Union reaffirmed in 2006 thecentral place occupied by the logistics andtransport sector. The Commission pointed out that theEuropean transport and logistics systemmust obviously meet the economicrequirements and socialand environmental expec-tations of the countries inthe Union. To achieve this goal,Europe, quite rightly in ouropinion, takes account ofmarket realities by notfavouring any means oftransport in the firstinstance. It prefers to focuson the effectiveness ofcommitments so that eachmode is as respectful aspossible of the environ-ment. The Norbert DentressangleGroup demonstrates thevalidity of this position bycombining service quality,economic performance andcommitment in takingsustainable developmentinto account.
A still very buoyant market, from whichevery means of transport benefits. Transport and logistics needs are growingunder the effect of the globalised economyand the rise of new information and e-commerce technologies. The world economy relies more and more onthe fluidity and the reliability of the flow ofgoods within and between continents.Transport and logistics have thereforebecome strategic, and every means oftransport - air, sea and road – is seeinggrowth rates higher than the growth in GDP.
The Norbert Dentressangle Group showsgood results in 2006.The Norbert Dentressangle Group’s resultsfor 2006 consolidate its position as a major
transport and logistics player in Europe. Both areas of activity contributed to theGroup’s good performance. Thanks to a sustained sales drive and theactivities resulting from TNT LogisticsFrance, the Logistics Division, is in a leadingposition in the logistics market in France. By significantly improving its operatingmargin, the Transport Division reasserted itsEuropean leadership in 2006 in terms ofgrowth in activity and level of profitability.
The Group has strengthened its assets toexploit market potential and seize newexternal growth opportunities.
The quality of the financial results for theNorbert Dentressangle Group for the year2006 reinforces its already healthy and solidfinancial standing. In addition, Group performance for the year2006 testifies to the strength of itsfundamentals, particularly the entrepre-neurial culture shared by our employees.Our teams are organized operationallyaround two areas of activity, and share ourkey values of commitment, a responsibleattitude, enjoying a challenge and taking arigorous approach to management. These values have forged the identity of the
“Norbert Dentressangle” brand, whichenjoys a considerable reputation and bringsadded confidence in the NorbertDentressangle Group’s relations with itscustomers, partners and society in thebroader sense of the word. Strengthened by these qualities, the qualityof its employees and of its organisation, theNorbert Dentressangle Group must takeadvantage of favourable prospects forinternal and external growth in its markets
and launch ambitiousdevelopment projects.
Beyond Challenge 2008,the Norbert DentressangleGroup needs to prepareto accelerate its rate ofdevelopment. A year from the date of the“Challenge 2008” businessplan, Norbert DentressangleGroup’s teams, andparticularly the Board, aremobilised in an effort toattain targets. At the sametime, 2007 will be put togood use in preparation forthe next stages in theGroup’s development. Theaction plan remains to bewritten, but the NorbertDentressangle Group hasthe means to achieveambitious targets inpromising markets. Our
trustworthy, motivated teams are ready torise to new challenges.
Norbert DentressangleChairman of the Supervisory Board
The Norbert DentressangleGroup’s results for 2006consolidate its position as a major player in thetransport and logisticssector in Europe. Bothareas of activity havecontributed to the Group’sgood performance.
2006 ANNUAL REPORT
20
AN INTERVIEW WITH JEAN-CLAUDE MICHEL 21
How would you describe 2006 for the NorbertDentressangle Group?
2006 was a good year for the Group. Sales turnoverincreased by 15% to 1.608 billion euros. Theproportion of internal growth, + 5.5%, proved to bein line with our expectations, with 21% of salesachieved outside France. The Group’s operating income (EBITA) for 2006increased by 61% to 83 million euros. It consolidatesa balance of 23 million under “Other products andnon-current charges”, including 13.8 million euros ofnon-current products corresponding to a refunding,by the French State, of VAT on motorway tolls overthe period 1996-2000. Current operational profitability alsoshows an increase of 27.6% comparedto the previous year as it is fixed at 3.8% of sales. The Norbert Dentressangle Group’s netearnings are fixed at 49.8 million euros,i.e. a clear margin equal to 3.1% of sales.An excellent performance in whichcomparison with the preceding yearshould be made by taking account ofthe fact that a significant proportion ofnet earnings for 2005 were used toconsolidate exceptional items related tothe acquisition of the Logistics assetsand part of the Transport assets of TNTLogistics France. Finally the Norbert DentressangleGroup further reduced its debt in 2006,and the Group’s net debt represented only41% of share capital at the end of 2006.
In 2006, the challenge for the Group’sTransport activities was primarily torecover profitability. What is yourassessment today?
With a 12.3% growth in sales in 2006,5.5% of which was internal growth,impetus in our transport activities wassustained in 2006. The real satisfaction for the year comes from therecovery in profitability for these activities, with anoperating margin excluding VAT refunds onmotorway tolls showing an increase of 37% andequal to 3.6% of sales. On the one hand, these results demonstrate theeffectiveness of the strong measures that wereinitiated by teams in the Transport Division relatingto the control and reduction of production costs, andon the other hand by the quality of internal growthdue to the development of a range of personalisedservices with added value and by relying oninnovation and information systems. Moreover, we succeeded in repositioning ourselves inthe international road transport market, becomingcompetitive by establishing a strong presence in
Poland. Thanks to progress in the product mix of ourtransport activities in France, the change has gonethrough in a peaceful social climate.
You anticipated a return to growth for the logisticsbusiness. What happened in 2006?
In accordance with our expectations, the logisticsactivity increased by 19.5% in 2006, accounting for37% of total sales for the Norbert DentressangleGroup. We were pleased to note, throughout the year, theacceleration in the rate of internal growth for logisticswhich reached + 7.1% over the last quarter. Operating profitability in the Logistics Division,
including 10.6 million euros for a reversal ofprovisions for possible liabilities related to takingover the activities of TNT Logistics France, isprogressing to reach the very pleasing level of 5.5%of sales. The Logistics Division teams have fully integrated theactivities that have come to us from TNT LogisticsFrance. Group operating procedures and policieshave been deployed over all the reviewed sites, whichhave consequently achieved ISO 9001 certificationquality.
How has the external growth contributed to thedevelopment of the Norbert Dentressangle Groupin 2006?
The two external growth transactions carried out in2006 were very much targeted and will contribute tothe international development of our two businesses. With the acquisition in July 2006 of the Romaniantransport company Transcondor, the Group wasreinforced in Central and Eastern Europe, in acountry with high economic potential and whoseindustrial and commercial fabric is expandingrapidly. This operation makes it possible for theGroup to accompany its customers who aredeveloping in this country, which is now part of theEuropean Union and to increase its potential in theinternational transport market. With the acquisition of the Spanish logistics
company CCH in September 2006, theGroup has a foothold in one of the mostdynamic logistics markets in Europe.The set-up in Madrid and thecompany’s expertise in the high-techsector provide the Group with a solidbase for developing the logisticsbusiness in the Iberian Peninsula.
The “Challenge 2008” business planlaunched in 2005 included aninnovative and ambitious strategy of integrating sustainable developmentinto the Group’s day to dayoperations. Are you on the right path?
Sustainable development has nowbecome a real commitment for Groupemployees – reducing greenhouse gasemissions, improving road safety,having sites that show concern for theenvironment and supporting careermanagement. In addition, the Norbert DentressangleGroup’s commitment is now recognisedby its customers, thus reinforcing itsposition on the market, and by theFrench authorities and Europeaninstitutions. Our “Challenge 2008” business plan
also includes three other commitments: growthin activity and operating profitability, widening therange of services and speeding up internationaldevelopment. On all these points too, 2006 showedthat the Group is making real progress towardsreaching the “Challenge 2008” targets. All credit goes to all the European employees in theNorbert Dentressangle Group to whom I pay tributeon behalf of the Executive Board. We have everyconfidence in our teams to turn 2007 into a new yearof growth in both activity and profitability.
Jean-Claude MichelChairman of the Executive Board
2006 showed that theNorbert DentressangleGroup is making realprogress towards reachingthe “Challenge 2008”targets. We have everyconfidence in our Europeanemployees in the Group toturn 2007 into a new yearof growth and profitability.
Challenge 2008
What could be more appealing than a world that makes life easier?
2006 ANNUAL REPORT
To improve drive and performanceand integrate
24
WITH Challenge 2008 THE NORBERT DENTRESSANGLE GROUPCONFIRMS ITS GROWTH AMBITIONS
The Norbert Dentressangle Group’s current business plan, Challenge 2008, is based on development. To achieveits targets, it aims to broaden its range of services, speed up its international coverage and integrate sustainabledevelopment into the Group’s day to day operations.
CHALLENGE 2008 25
STRONG AMBITION FOR INTERNALAND EXTERNAL GROWTH
+ 53% in three years, reaching a turnover of2 billion euros.
n Internal growth To exploit the development potential of
the European transport and logistics market. To achieve this, the Group intends to takeadvantage of: - Economic growth in Europe and the
expansion of the European Union,- The externalisation of transport and logistics
operations management on the part ofindustrial manufacturers and large distributors,
- The concentration of transport and logisticsdemand among an increasingly smallernumber of providers,
- The increasing distance between productionareas and consumption areas.
management and control of resources,- A range of offerings that differentiate us from the
competition, with a strong added value content,- Continued innovation in all fields of the
business,- A continuous search for savings and cost
reduction opportunities,- Human resources: strengthen the management
model of the Group based on creating a strongsense of responsibility among employees.
ACTIVATING THREE NEW LEVERS FORGROWTH
n Offering extended services thanks to thecontrol of new products:
- Domestic distribution ; a national “pallet-based” network system,
- Reverse logistics: set of logistics processes tohandle returns for the recycling of products
been constructed around four commitments: - Reducing greenhouse gas emissions, - Environmental site management, - Road safety, - Integration and internal promotion.
These commitments were set out inaccordance with the expectations of ourcustomers, our fellow-citizens and ouremployees. The Norbert Dentressangle Groupmust set the example in these areas.
In each area, the Group has defined areference indicator and laid down an objective tobe reached at the end of Challenge 2008. Eachcommitment is linked to operational action planswith results measured by follow-up indicators.
n External growthTo be a player in the forthcoming
concentration in transport and logistics inthe European market.
The Norbert Dentressangle Group canplay a role in Europe in facilitatingconcentration and has the financial andhuman means to cope with a high volume ofexternal growth over the three years ofChallenge 2008.
COMBINING GROWTH WITHPROFITABILITY
The Norbert Dentressangle Group wants tomaintain its economic performance and has seta target for operating income equivalent to 5%of sales.
PERPETUATING AND STIMULATINGOUR ASSETS
The Group wants to develop its strongpoints and its assets: - A specific economic model based on the
at the end of their life or for the maintenanceof damaged products (mobile telephones,PCs...),
- Temperature controlled logistics.
n To accelerate our development at international level:
Transport:- Consolidation of our leadership in Cross-
Channel transport,- Strengthening of our presence in the Central
European and Eastern Countries.
Logistics:- Consolidation of our European positions.
n To continue our commitment tosustainable development:
The Group’s commitment to sustainabledevelopment gives it a competitive advantagein terms of commercial offer. Moreover, ithelps to improve the Group’s economiccompetitiveness. Lastly, it constitutes a factorof pride and motivation for our teams.
The Sustainable Development policy has
performance in both our Transport and Logistics services
sustainable development into our activities.
EXTRA-FINANCIAL RATING BY BMJRATINGS FOR THE NORBERT
DENTRESSANGLE GROUP: AA=
The overall performance of the NorbertDentressangle Group has progressed sincethe previous rating and reinforces thecompany’s leadership within its branch ofindustry. The assessment carried out revealsa high level of consistency between thevarious areas of sustainable development,which reflects the consistency of thecommitted approach. The whole area of the company’s social andenvironmental responsibility is covered. Inparticular, the quality of relations withcontractual stakeholders (employees,customers, suppliers and subcontractors)constitutes a strength for the company.
2006 ANNUAL REPORT
26 SUSTAINABLE DEVELOPMENT
Giving people responsibility, trust, an understanding of the need to keep costs down, a taste for effort,rigour, reactivity and a desire to do the job:
these are the values upheld
Sustainable development is right at the heart of the Norbert Dentressangle Group strategy, and is a strong factorfor economic competitiveness and employee motivation. In a service company, service quality and profitabilityare the direct result of the motivation of employees, their skills and their understanding of the company’s plans.The Group puts all its efforts into ensuring that everyone behaves like a real manager responsible for his ownlevel of service and results.
INTEGRATION AND INTERNAL PROMOTION 27
Our transport and logistics businesses areopen to people with low qualifications and offerstrong development prospects. They offer anyonewho wants it real social and personal opportunitiesfor promotion.
Accountability, confidence, awareness of cost-saving, hard work, rigour, reactivity andwillingness to take the initiative are the drivingforces of the Group’s Human Resources policy.These values enable us to make the most ofeveryone’s ability and merit. Our policy aims toreinforce these values and help everyone todevelop.
A growing rate of internal promotionIn the key areas of integration and social
advancement, the indicator used by the Group isthe internal promotion rate. The percentage ofcolleagues having achieved promotion duringthe year summarises the Group’s ability to act asa “social elevator”. In 2006, this rate was 6.3%.The Group is aiming to increase the rate to 8%by the end of 2007.
Another illustration of this commitment: in2006, 60% of key positions to be filled in theGroup were filled by internal promotion.
THE SUCCESS OF THE HUMANRESOURCES POLICY DEPENDS ON THE INTRODUCTION OF PROCESSESSHARED BY ALL OPERATIONAL STAFF
n Career management The manager analyses his colleagues’ skills,strengths and areas for improvement by comparingthem with a system of reference. In 2006, thisapproach concerned almost 1,000 people. It madeit possible to work out a personal developmentplan for each employee, incorporating training,professional mobility and salary.
n Training The Group invests heavily in training to
support the development of its employees. Every year: 3% of the wage bill is devoted to training. Over half our employees benefit from
training. This is organised by the Norbert Dentressangle
Training School. The training programme issystematic and supports the development ofteams at every stage of their progress.
In practical terms, during the first two yearsin their career, transport operators follow fourtraining sessions. The aim is to strengthen theirtechnical skills in their business area (throughmodules entitled “Being an Operator”,“Operational IT tools”, “Safe Driving Plan”) andmanagement the module “People on the move”.
Another example: every 18 months, NorbertDentressangle’s drivers are given on-goingtraining as part of the “Safe Driving Plan”, whichgoes far beyond legal requirements (such asobligatory training for drivers every 5 years). Thetraining based on road safety, rational drivingand customer satisfaction, is one of the key leversfor achieving the Group’s sustainable
Group employees with high “potential” wereidentified: they are given special monitoring. The annual interview with employees has beengiven a new boost: managers have been giventraining (10 training courses in 2006), and a newtype of form has been introduced, moreappropriate to the needs of operational staff,incorporating skills equivalent to those found inthe reference frameworks.
development objectives (in particular regardingroad safety and controlling greenhouse gasemissions).
Similarly, Logistics Division teams comeunder a training plan, “Skills Plus”, whichsupports their progress. For each job – fromorder preparer to site manager - the TrainingSchool offers specific training modules.
In 2006, to improve this offer, the Group setup a “Customer satisfaction” training activity,more specifically intended for operationalmanagers (agency managers, operators).
Vincent LECERFAged 42. Human Resources Director.
THE FOUNDATIONS OF OUR HUMAN RESOURCES POLICY
e are the values upheldby the Norbert Dentressangle Group’s Human Resources policy.
2006 ANNUAL REPORT
28 SUSTAINABLE DEVELOPMENT
MORE THAN AN OBJECTIVE, A PRIORITY Aware of the environmental impact of its transport and logistics activities, the Norbert Dentressangle Group hasmade the reduction of greenhouse gas emissions one of the priorities in its commitment to sustainabledevelopment.
Greenhouse gases play a major role inraising the temperature of the planet. However,greenhouse gas emissions in road transport aredirectly proportional to diesel fuel consumption.To commit oneself to reducing greenhouse gasemissions means committing oneself toconsuming less - and thus spending less - for thesame quantity transported.
To measure its emissions, the NorbertDentressangle Group has chosen an indicator:the quantity of CO2 (expressed in grams) emittedper transported ton and kilometre. Thisindicator best expresses the impact – linked togreenhouse gases – of goods transport on theincreasing temperature of the planet.
The operational levers improvement are: thedecrease in vehicle fuel consumption, thereduction in kilometres run empty andoptimised vehicle loading. By the end of 2007,the Norbert Dentressangle Group aims toachieve a level of emission of 50 G / T/km.
In 2006, this indicator stood at 59 G / T /km, a result that emerged from data analysiscarried out in all the Group’s Transport branches.Despite a drop in consumption of 0.6 litre ofdiesel fuel per 100 km for the Group’s vehiclefleet and a stabilisation in the journey ratio whenempty, the 2006 indicator highlights adeterioration compared to the previous year. Thereason for this is the change in the product mix
in the Transport Division and the developmentof services such as distribution transport andthe transport of voluminous products, involvinga drop in transported tonnage.
ANALYSIS OF TECHNOLOGICALSOLUTIONS WITH ADEME
To fulfil its commitment, the NorbertDentressangle Group has signed two partnershipagreements with ADEME (the FrenchEnvironmental and Energy Management Agency).
In 2006, the Transport Division’s average fuel consumption was reduced by
REDUCING GREENHOUSE GAS EMISSIONS 29
n The first agreement, signed in December2005 with the Department for TransportTechnology, aims to study a range oftechnological solutions in order to reducepolluting emissions and consumption andto use new sources of energy:
EGR and SCR Technology. Purpose of thetest: to compare EGR and SCR technologyvehicles with vehicles meeting the old Euro IIIstandard on the following points: diesel fuelconsumption, urea consumption and cost ofmaintenance of the system. 13 vehicles havebeen mobilised: 10 SCR Euro IV type vehicles, 2 SCR Euro V type vehicles and 1 EGR vehicle.As a result of the test, the Group has chosen SCREuro IV technology.
Tyres. Purpose of the test: to compare thediesel fuel consumption of vehicles according tothe type of tyres fitted to the tractor and semi-trailer. Carried out in collaboration withMichelin, the test involved a fleet of 16 vehicles:8 equipped with “energy” tyres (with lowresistance on the ground) and 8 others equippedwith “standard” tyres.
The test revealed an average saving onconsumption of 1.29 litres per 100 km for thefleet equipped with “energy” tyres. This mayincrease to up to 2.58 litres per 100 kilometresin national long-distance use, mainly onmotorways.
Speed capping. Purpose of the test: tocheck whether capped speed leads to savings inconsumption and if so, to identify the mostappropriate level of speed capping to optimisereduced consumption.
The test was carried out on nearly 80vehicles divided into three categories: weak,average and heavy consumers.
A growing number of transport salesproposals include a section entitled“Environmental Impact” which shows anassessment in figures of the benefits togreenhouse gas emissions contributed by theNorbert Dentressangle solution.
n The second agreement, signed in June2006 with the Department for TransportOrganisation, aims to study the market forthe rail transport of goods in Europe in
order to analyse the possible opportunitiesof integrating this mode into the NorbertDentressangle Group transport plan.
Alongside this, as a result of its policy of fastand systematic renewal of its tractor fleet, theNorbert Dentressangle Group contributes to thereduction of particle emissions (Nox). As from2006, the Group has chosen SCR Euro IVtechnology for its tractor investment.
compared to 2005.0.6 litre per 100 km
91%
5%3% 1%
Euro 4: 3%
Euro 3: 91%
Euro 2: 5%
Euro 1: 1%
2006 ANNUAL REPORT
30 SUSTAINABLE DEVELOPMENT
SAFETY FOR ROAD USERS,CUSTOMERS AND RESIDENTS LIVING NEAR OUR SITESFrom the 1990’s, well before the legal requirements on road safety, the Norbert Dentressangle Group has givenpriority to controlling road risks. It now renews this commitment by incorporating sustainable development.
By committing itself to the control of roadrisks, the Norbert Dentressangle Groupimproves safety for road users, customers andresidents living near its sites. At the same time, itreduces occupational hazards and improvesemployee working conditions. Lastly, the Groupis increasing its control of the environmentalrisks linked to road and industrial accidents.
To measure its control of road risks, theGroup has chosen as an indicator the number ofkilometres covered by a driver without being
responsible for a declared accident with a thirdparty. In 2004, this figure rose to 500,000 km.For 2007, the Group aims to reach 550,000 kmwithout being responsible for an accident with athird party.
In 2006, despite of integration throughexternal growth of companies not reaching theoverall level of road safety performance, theGroup recorded an average of 540,000 kmcovered per driver without being responsible foran accident with a third party.
THE EUROPEAN ROAD SAFETY CHARTER
The Norbert Dentressangle Group has beeninvolved in road safety for more than 15 years, asis demonstrated by the implementation of its“Safe Driving Plan”. In November 2006, theGroup signed the European Road Safety Charterin Brussels, in the presence of Jacques Barrot,Vice-President of the European Commission incharge of transport. The Group is thus the firstFrench signatory in its sector.
covered per driver without being responsiblefor an accident with a third party.
THE “SAFE DRIVING PLAN” The “Safe Driving Plan” constitutes a strong
commitment by the Management of the NorbertDentressangle Group. Its purpose is to avoidroad accidents. 70% of accidents are avoidablein that they are caused by driver behaviour. Thebasic concept of the “Safe Driving Plan” istherefore defensive control, a reference frameworkfor driving that aims to avoid accidents.
In this sense, the “Safe Driving Plan”consists in: - involving the whole hierarchy, from manager to
driver, - recruiting good driver profiles, - training all drivers in “Norbert Dentressangle
defensive driving”, - monitoring the use of defensive driving by
drivers and organising regular refresher courses, - analysing each accident to understand the
causes and decide on corrective action.
550,000 km The Group’s target for 2007:
31
0.0
0.2
0.4
0.6
0.8
1.0
1990 19941992 1996 1998 2000 2002 2004 2006
IMPROVING ROAD SAFETY
Improvement in the number of accidents when at fault / driver / year
were certified
In 2006,
Norbert Dentressangle
The Norbert Dentressangle Group has nearly 190 offices throughout Europe which consume energy, dischargewaste and interact with the environment. For its sites, the Group applies an environmental management policy,in line with its commitment to sustainable development.
Controlling energy consumption is a keyfactor in controlling development costs.Similarly, reducing waste and managing itsrecycling help to save money and motivateteams. Concern for the environment makes iteasier to set up constructive relationships withinstitutions and local authorities.
Aware of the impact of its activities on theenvironment, the Norbert Dentressangle Grouphas defined an environmental managementstandard, which covers several aspects.
n Compliance with regulations
n Monitoring and measuring energyconsumption
- Systematic recording of consumption andreporting to head office every month for sitesinvolved in the environmental approach.
n Monitoring and measuring dischargesand waste
- For many sites, sorting and processingdischarged waste is now a priority action,
- Treatment uses optimised methods and new,adapted equipment: skips, compactors,equipment cleaning...
n Internal training and communicationwith third parties
- 2,000 hours of environmental managementtraining given in 2006.
INFRASTRUCTURES RESPECTFUL OF THE ENVIRONMENT
2006 ANNUAL REPORT
32 SUSTAINABLE DEVELOPMENT
43 sites
ENVIRONMENTAL SITE MANAGEMENT 33
ISO 14001, the global standard for environmental management.
FOCUS ON THE SAINT-VULBASLOGISTICS SITE (FRANCE)
Staff at Saint-Vulbas set themselves a targetto reduce electricity consumption in one oftheir warehouses covering 50,000 sq.m. Between 2003 and 2006, the site reducedits consumption by nearly 45%, i.e.333,540 kw. By intervening on 7 of the 12 consumption areas, defined by thepresence of sub-meters, the real reductionin consumption is about 240 000 kw.Random (non-identifiable) savingsrepresent a reduction of 93,540 kw. 70% of savings were achieved throughbetter management of lighting in thestorage units and the installation ofprogrammers in the operating offices.
- Environment integration module (wastesorting, energy saving, reading the SafetyFile).
- Awareness of the ISO 14001 standardand/or environmental approach.
- Awareness of sorting and recovery andwhat happens to the waste generated onsite.
- Training in energy saving and naturalresources (turning taps off, checking watermeters, reasonable use of air-conditioningand heating).
- Training in the correct use of consumables(cling film, paper, toner cartridges).
- Training in the use of equipment (sprinkler,equipment, waste...).
At the end of 2006, 52.3% of the Group’sTransport and Logistics sites – i.e. 73 sites –conformed to the in-house environmentalmanagement standard. By 2007, the Groupis looking to increase this rate to 100%.
Alongside this, in 2003, the Group tooksteps to obtain ISO 14001 certification, moredemanding than the standard forenvironmental management, for all its recentsites and automatic for its new sites. At the end of 2006, 43 NorbertDentressangle Group sites obtained ISO14001 certification.
ENVIRONMENTAL MANAGEMENT TRAINING
Logistics
A world of logistics solutions transcending space and time.
TURNOVER€ 600,000,000
Logistics share in total Group 2006 turnover: 37%
Of which 26% outside France
2006 ANNUAL REPORT
36
LOGISTICS: KEY FIGURES 37
Based in 116 operations sites in Europe: Spain The Netherlands Switzerland
France Poland
Great Britain The Czech Republic
Italy Romania
5,887 employees
2,800,000 sq.m of warehousespace
215 tractor units320 trailers
WAREHOUSING AREA
Outside France 27.8%
2006 ANNUAL REPORT
38
Logistics Division Transport Division
EXECUTIVE BOARD
Richard Noël (5)Aged 52, Engineering Director
Stéphane Point (6)Aged 43, Central / West Area Manager.
Christophe Tchordjallian (7)Aged 40, Sales Director.
Marc Pastuzak (8)Aged 39, Poland Area Manager.
Roland Van Veen (9)Aged 46, ND Logistics Nederland General manager.
Jean-Luc Declas (1)Aged 46, General Manager in charge of Development.
Frédéric Lavergne (2)Aged 49, Human Resources Director.
Gilles Favellet (3)Aged 54, Administrative and Financial Director.
Dominique De La Cruz (4)Aged 57, South/Eastern Area Manager.
8
3
1
2
4
7
9
9
6
5
LOGISTICS MANAGEMENT COMMITTEE
François Bertreau (10)
Alessandro Gokinajew (11)Aged 58, ND Logistics Italia General manager.
Richard Cawston (12)Aged 33, ND Logistics UK General manager.
Thierry Ranson (13)Aged 46, Paris Area Manager.
Georges Laurent (14)Aged 46, IT systems Director.
Jean-Luc Bessade (15)Aged 40, Northern Area Manager.
Pascal Leroux (16)Aged 41, Central Europe Area Manager.
Gérard Martin (17)Aged 54, Orléans Val de Loire Area Manager.
10 11
12
13 14
15
17
16
39
2006 ANNUAL REPORT
40
With 37% of total sales, the Norbert Dentressangle Group Logistics activity was still expanding in 2006. Thisyear, the Group succeeded in setting-up its office in Spain, with the acquisition of the logistics company CCH,and major developments are in progress in Central and Eastern Europe.
The Norbert Dentressangle Group Logisticsactivity increased by 19% in 2006. It accountedfor 37% of total sales, 26% of which wereachieved outside France. The internal growth ofLogistics accelerated throughout the year to reach+ 7.1% in the last quarter. Operating profitability- including 10.6 million euros of reversal ofprovisions for possible liabilities related to theacquisition of the activities of TNT LogisticsFrance – is in progress to reach the very pleasinglevel of 5.5% of sales.
entrusted by customers and capable ofoptimising their supply chain. The lattercovers all of the processes required for thedevelopment of a finished product to itsprovision for consumers.
STRONG INTERNAL GROWTH,EXCELLENT PROFITABILITY
SPAIN: CCH IN BRIEF
€ 20m in annual sales 360 employees. 40,000 sq.m of warehouses in Madrid. Strong presence in the high-tech sector (telephones, IT...). Reverse logistics service.
Leader in France on the logistics market, the Group extends its expertise throughout Europe.
Logistics Division teams have completelyintegrated the activities of TNT Logistics France.Group operating procedures and policies havebeen deployed over all of the sites taken over:they have all consequently obtained ISO 9001quality certification.
Lastly, in 2006, the Logistics Division sawmajor developments in its activity throughinternal growth in the Central European andEastern countries, such as Poland, the CzechRepublic and Romania.
THE NORBERT DENTRESSANGLEGROUP SETS UP AN OFFICE IN SPAIN
In September 2006, the Group acquired theSpanish logistics company CCH, based inMadrid. As a result, it has a position in one of themost dynamic logistics markets in Europe. Thisacquisition constitutes a solid base fordevelopment in a country with strong potential.
In 2005, the Group had wanted to considerthe possibility of an office for its logistics activitiesin China. The project was aimed at providingsupport for its increasing number of customerssettling in that country. The report came out in
2006, stating that the environment in theChinese market had not yet created theconditions for introducing logistics solutionssuch as those developed in Europe. The Grouptherefore decided to provisionally abandon itsplan to set up in China. But it has not given upon this ambition and will return to the project assoon as the Group’s logistics expertise appears tobe in tune with customer expectations in theChinese market.
A FULL RANGE OF LOGISTICS SERVICES
Logistics is the art of combining andorchestrating all the links in the supply chain.
It meets the requirements of industrialistsand supermarkets who want to refocus ontheir core business in order to better adapt tothe internationalisation of trade andspecialisation in consumer expectations.
The Group’s logistics offer responds to amajor ambition: to provide a solution ledservice offer, responsible for the flow of goods
Main services are as follows:
n Storage, stock management To satisfy its customers’ logistics
requirements, the Norbert Dentressangle Groupoperates warehouses throughout Europe. In theevent of a specific request, the Group canundertake the construction of a new site.
All the Group’s warehouses meet thestandards in force and the Group has thenecessary authorisations for installationsclassified to store any type of product: simple,foods (HACCP standards / ambient orcontrolled temperature) and dangerous (DRIRE,SEVESO 2). The warehouses are equipped tomeet all storage needs: bulk storage, in racks,mezzanine, dynamic storage or on hangers.
41
Countries Number of Warehousewarehouses space operated
operated
Great Britain 2 100,000 sq.m
Italy (including Switzerland) 17 380,000 sq.m
The Netherlands 3 250,000 sq.m
Spain 5 50,000 sq.m
Central European Eastern 5 170,000 sq.m
Countries
Le pôle logistique hors de France market, the Group extends its expertise throughout Europe.
PACKED GOODS LOGISTICS
2006 ANNUAL REPORT
42
the various processes involved in orderpreparation: cross-docking, just-in-timelogistics flow, single unit, parcel or palletpreparation.
ENGINEERING, CONTROL OF ITSYSTEMS AND NEW TECHNOLOGIES
n Engineering covers three sections: Development engineering
It responds to customer specifications bydefining the best technical solutions: resources,equipment, process and budget.
Operational engineering This installs the Norbert Dentressangle
service as part of starting up a contract. A start-up kit and post-start-up audits are some of thetools used in the management of the project.
A re-engineering service is proposed forcontracts in progress that require readjustments,and a new offer is designed.
n Delayed differentiation and co-packing From assembly to labelling, the Logistics team isable to intervene on products delivered out ofwarehouses to provide added value to theproduct or to manufacture a new product froma number of components. - Simple assembly, - Kitting (assembly of up to 6 different
components, in particular for the mobiletelephones sector),
- Co-packing (for promotional batches), - Packing (film wrapping, made-to-order
repackaging, boxing), - Labelling (in Braille, in all languages), - Samplings and Quality tests.
n Order preparationThe Logistics team determines the process
most suited to customer requirements, with, inall cases, a dual ambition: increasingproductivity and reliability. The Group controls
Control
PACKED GOODS LOGISTICS 43
Technology engineeringEngineering devotes part of its activity to
Research and Development for new processesand equipment. It is therefore at the forefrontof solutions provided for customers and isconstantly broadening its offer of services.
n IT systems and new technologies The Logistics Division has responded to
changes in market needs in terms of the controlof information systems. The tools are sufficientlyopen to respond to the internationalisation ofactivities.
WMS (Warehouse Management System) WMS is a software package for warehouse
management. It makes it possible to treat entry andexit flows out of the warehouse - reception, orderpreparation, forwarding and stock management.
To do this, the Group uses two marketsoftware packages: Infolog and Reflex. The
software package used is configured on a made-to-measure basis in line with the solution suggestedto the customer.
TMS (Transport Management System) Developed by the Norbert Dentressangle
Group, TMS is a software package used tomanage deliveries from the warehouse. Thesoftware makes it possible to organise thedelivery with the best distribution between sub-contracting/own fleet/express.
According to the transport plan that hasbeen decided, the file goes back through theWMS filter: the organisation of the deliverydecides the warehouse preparation plan.
Finally, TMS makes it possible to control,trace and manage all information relating to thecustomer’s delivery.
RMS (Replenishment Management System) Implemented by the Group, RMS is used to
manage stock replenishment. In practical terms,
integrated voice recognition technology into itsorder preparation process.
Results: assured reliability, a quality close tozero defects and increased productivity. Thevoice recognition device allows the orderpreparer to communicate in real time, via ahands free unit, with a voice server linked to acomputer. For each parcel, the computer tellsthe preparer the quantities, the pickingaddresses and the product destination. With hismicrophone, the preparer confirms the quantitytaken.
STRONG STRATEGIC POSITIONS INEUROPE
In its market, the Norbert DentressangleGroup Logistics Division covers the whole ofFrance with a strong presence in four strategicareas: the Paris Region, the Orleans Region, theLyons Region and the Provence Alpes-Côted’Azur Region.
In Europe, the Logistics Division’s cover isconstantly growing, with operations in GreatBritain, Italy, Romania, Czech Republic,Netherlands, Poland, Switzerland and nowSpain.
RMS is the concept of integrating tools and stagesin the supply-chain aimed at offering a MSMservice (Mutual Supply Management).
RFID (Radio Frequency Identification Data)To guarantee its customers faultless
traceability adapted to their needs, the NorbertDentressangle Group has invested in the RFID forseveral years: advanced ID technology that usesradio waves.
The system makes it possible to improve thelevel of customer service by reducing location orpreparation errors and the damage ratio.
At the same time, the RFID increasescompetitiveness by reducing handling costs. Italso helps to reduce administrative handling costsby reducing the frequency of inventories and thehandling of disputes.
Order preparation by voice recognition The Norbert Dentressangle Group has
of IT systems and
technologies, advantages for Logistics. new
Transport
Transport solutions serving business development.
2006 ANNUAL REPORT
46
TURNOVER€ 1,008,000,000
Transport share in total Group 2006 turnover: 63% Of which 18% outside France
TRANSPORT: KEY FIGURES 47
Transport sales split per market Transport sales split per activity
75% Transport of packed goods
5% Temperature controlled transport
20% Transport of goods in bulk
4,238 curtainsiders and box trailers
1,078 powder bulk tipping tankers
302 liquid chemical tankers
320 refrigerated trailers
179 hydrocarbon products tankers
150 swap bodies and containers
93 tippers
24 liquid foodstuff tankers
Trailer fleet
5,085 tractor units
Domestic and international full loads 41%Transport solutions 24%Contract distribution 17%Distribution 8%International groupage 7%Logistics services 3%
Outside France 21.7%
8,689 employees
2006 ANNUAL REPORT
48
Nathalie Delbreuve (1)Aged 34, Management Control Manager.
Daniel Guilbot (2)Aged 46, Central and Eastern Europe area Manager.
Michel Perrin (3)Aged 51, Human Resources Director.
Jacques Dauteuille (4)Aged 49, Road train division Manager.
David Walkowiak (5)Aged 39, Bulk division Manager.
1
2
3
4
5
6
7
Logistics Division Transport Division
EXECUTIVE BOARD
TRANSPORT MANAGEMENT COMMITTEE 49
Daniel-Elie Létard (6)Aged 55, Western Europe area Manager.
Hervé Montjotin (7)
Damien Chapotot (8)Aged 38, Controlled temperature division Manager.
Emmanuel Saminada (9)Aged 45, Distribution division manager.
Antoine Vermersch (10)Aged 48, Northern area Manager.
Jérôme Burtin (11)Aged 46, Sales Director.
Henri Linière (12)Aged 46, IT Systems Director.
Yves Montignot (13)Aged 52, Southern/Eastern Europe Area manager.
Bernard Dumas (14)Aged 59, Runs the Norbert Dentressangle Franchise.
8
9
10
12
13
14
11
2006 ANNUAL REPORT
50
12% in growth
TRANSPORT 51
SUSTAINED HIGH GROWTH AND HIGHER MARGIN
With growth in sales of 12.3% in 2006,5.5% of which was in internal growth, theNorbert Dentressangle Group’s Transportactivities were particularly dynamic in 2006.The real satisfaction of the year is the recoveryin the profitability of these activities, with anoperating margin, excluding the refunding ofVAT on motorway tolls, increasing by 37%, i.e.3.6% of sales.
These good results are the result of twofactors. On the one hand, the effectiveness ofmeasures engaged by the Transport Division onthe control and reduction of production costs.In addition, the quality of internal growthsustained by the development of a range of non-standard, personalised services as a result of apolicy of sophisticated innovation andinformation systems.
Lastly, the Group has returned tocompetitiveness in the international roadtransport market, due in particular to theintroduction of major transport resources inPoland. Thanks to the evolution of the productmix for transport activities in France, thechange took place in a peaceful social climate.
THE ACQUISITION OF TRANSCONDORTRANSPORT IN ROMANIA
In July 2006, the Group acquired theRumanian company Transcondor Transportbased in Arad.
In line with “Challenge 2008”, thisacquisition reinforces the Group’s networksystem in the Central European and Easterncountries. It forms part of the strategy ofsupporting industrial customers anddistributors in this area and of conquering
market share in the international transportsector. Romania is also a key market for theGroup due to its high economic potential,rapidly expanding industrial and commercialfabric and the prospects of an acceleration intrade with this country since its entry into theEuropean Union.
Lastly, the Group already knows Romania,where it has been running a Logistics activitysince 1998 with a 26,000 sq.m warehouse inArad.
ROMANIA: TRANSCONDOR IN BRIEF
€ 10m in annual sales 188 employees. Fleet of 110 tractors and 110 trailers. International transport of packed goodsand products under controlled temperaturebetween Romania and the countries of theEuropean Union.
In 2006, the Transport activities of the Norbert Dentressangle Group recorded an increase in sales of more than12% and have shown a significant turnaround in their profitability. In addition, the acquisition of Transcondortransport in Romania has allowed the Group to reinforce its position in the Central European and EasternCountries. Lastly, innovation, commitment to results and the management of information flows are more thanever part of the strengths of the Group’s Transport offer.
due to control, reduced production costs and the development of a range of non-standard, personalised services.
2006 ANNUAL REPORT
52
A FULL RANGE OF TRANSPORT SERVICES
The Norbert Dentressangle Group has taken upa resolutely different positioning in theEuropean transport market. Indeed, the Groupregards transport as a key factor in optimisingand managing its customers’ supply chain. The Group’s logistics offer responds to a majorambition: to provide a solution led service offer,responsible for the flow of goods entrusted bycustomers and capable of optimising theirsupply chain. The Transport Division intervenes at every stagein the supply chain: transport and transportsolutions, transport of packed or bulk products,or products under controlled temperature. It offers a broad range of services:
n Transport solutionsThe Norbert Dentressangle Group is the
single contact partner of its customers for themanagement of all their transport needs.
n International groupage The Group organises transport throughout
Europe from one pallet.
n Domestic distribution The Group organises the distribution of
customer products within every country in theEuropean Union.
n Outsourcing customer fleetsThe Group buys back and optimises the
transport resources of customers who have notexternalised their transport management.
n Contract distributionThe Group dedicates a fleet of vehicles to
the exclusive use of a customer.
n Logistics on customer sitesThe Group manages logistics services on
the industrial sites of its customers.
n Domestic and international transport offull loads
The Group organises and manages full loadmovements throughout Europe.
EUROPEAN MARKET LEADER for theroad transport of goods between GreatBritain and the European continent with168,000 Channel crossings in 2006, i.e.660 a day.
27% of the tractor fleet is operated undercontract.
European Number 1
TRANSPORT 53
INNOVATION AND COMMITMENT TORESULTS SUPPORTED BY THE CONTROLOF OWNED MEANS
Innovation and the commitment to resultsare key features of the Norbert DentressangleGroup. Indeed, for each customer, Group teamssystematically work out a customised transportsolution. Moreover, through its investment inresearch and development, supported byresearch teams and the use of strategicsimulation software, the Group innovates intransport and commits itself to a result.
This capability stems from the Group’sability to combine innovation with theoperational control of services, supported by afleet of 5,300 tractors.
Control of the means of transport isaccompanied by total control of costs and theadjustment of means on request.
INFORMATION FLOW MANAGEMENT:PROVEN EXPERTISE
Information flow management is one of thestrengths of the Norbert Dentressangle Group’sservice offer. The associated services enable it tocontrol the management of goods. In this sense,the Norbert Dentressangle Group has designedand introduced an information exchange portal.“My Norbert-Dentressangle.com” is dedicated tothe management of Group customer supplychains. It is fully secure and accessible to everymember of the supply chain.
These are the main functionalities: • Computerised data exchange, • Online order monitoring, • Notification of standard activity, • On-line provision of proof of delivery, • Logistics partner management, • Supplier flow management.
THE NORBERT DENTRESSANGLE FRANCHISE: AN INNOVATIVE SOLUTION
As a transport organiser and sole representative of its customers forthe organisation and the management of transport flows, the NorbertDentressangle Group is developing subcontracting. This trend satisfiesa dual requirement: to provide customers with all the guarantees ofthe “Norbert Dentressangle” brand - including sub-contractedtransport - and to create an ongoing relationship with subcontractorsbased on trust. Faced with these issues, the Norbert DentressangleGroup is innovating and launching the “Norbert Dentressangle”franchise. To do this, the Group has designed a franchise contractthat has the seal of approval of the French Franchise Federationand sets specific and codified operating rules, for a “win-win”contractual relationship between the transport franchisee andNorbert Dentressangle the franchisor.
The Franchisee, a transport firm that: - Can demonstrate that it has the ability to run
a transport company, - Benefits from: • the attraction of the
“Norbert Dentressangle” brand,
• Norbert Dentressangle expertise formalised in the “NorbertDentressangle know-how Manual”,
• The purchasing power of the Norbert Dentressangle Group.
The franchisor, “ND Franchise”, subsidiary of the NorbertDentressangle Group: - Recruits and selects franchisees, - Ensures the initial and ongoing training of franchisees, - Communicates expertise and checks that it is applied according to
the ND Franchise manual.
At the end of 2006, the Norbert Dentressangle Group had over 60 franchisees
with a fleet of over100 vehicles.
for the road transport of goods between Great Britain and the European mainland. The Group completed 168,000 Channel crossings in 2006.
2006 Financial Report
6 Financial Report
2006 FINANCIAL REPORT56
I – GROUP ACTIVITY, PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS
Revenue over 2006 reached € 1,608m. There was a € 2.5m impact on this figure from the acquisition, during the year, of Romaniantransport company Transcondor, and a € 5.6m impact from the acquisition of Spanish logistics firm CCH. Revenue was up 14.9% on 2005.
The total increase in transport activities between 2005 and 2006 reached 12.3%, of which 5.5% stemming from internal growth. Therewas a 19.5% increase in the logistics activities, 5.5% of which from internal growth. This latter figure, as expected, demonstrates an upturn after twoyears of moderate internal growth: 2.1% in 2004 and 0.3% in 2005.
Note that in 2006, the business acquired from TNT Logistics France at the end of 2005 yielded revenue of € 101m, of which € 5.4mcorresponding to new business generated by our teams within companies formerly belonging to TNT.
EBITA reached € 83.1m, i.e. 5.2% of revenue. This high figure is particularly due to the non-recurring income from the success of ourND Services subsidiary in its dispute with the Tax office then the Ministry of Finance (which discontinued its appeal in November 2006) over therecovery of motorway toll VAT paid between 1996 and 2000. The net amount recovered was € 13.8m. If we deduct this sum, EBITA would havetotalled € 69.2m, i.e. 4.3% of consolidated revenue. This is therefore the ratio to retain regarding the Group’s operating performance for 2006 and tobe compared with the operating margin of 3.7% in 2005.
The recovery noted during the year was therefore confirmed at the end of the fourth quarter, despite the transport activities suffering adisappointing last quarter, particularly in December.
The ordinary operating result (EBITA excluding extraordinary items) was as follows:
n In €m 2005 2006 Difference
Ordinary operating income 48.3 61.7 +28%As a % of revenue 3.5% 3.8%
Restructuring costs (excluding TNT) (2.6) (4.7)
Capital gains on real estate 2.1 3.7
Restructuring costs / TNT scope (0.1) (4.9)
Reversal of provisions / TNT scope 3.8 13.7
Capital gains on LRF sale 0.6
Expenses and impairment on acquisitions (0.9)(Logistica Lombardia, SAVAM, VENDITELLI…)
EBITA excl. Motorway/VAT income 51.5 69.2 +34%i.e. % of revenue 4.3%
Motorway/VAT recovery income 1996 to 2000 13.9
Operating income (EBITA) 51.5 83.1 +61%As a % of revenue 3.7% 5.2%
In the absence of depreciation of goodwill (impairment tests) and badwill from acquisitions, EBIT was equivalent to EBITA in 2006, i.e.€ 83.1m. They were also comparable to the 2005 published EBIT of € 85m, which was retroactively adjusted in 2006 (according to IFRS 3) to € 87m. The increase in the 2005 EBIT stems mainly from a restatement of the badwill from the acquisition of TNT amounting to € 2m net, to takeinto account pre-acquisition information that could not be integrated correctly into the initial assessment of possible liabilities registered at the timeof acquisition.
The financial result for FY 2006 was an expense of € 6.6m. The same figure for 2005 was € 5.8m. This difference is essentially due toan increase in the average interest rate paid for the debt, owing to a sharp increase in interest rates in general (the Group’s debts mainly carry variableinterest rates, on a 3 month Euribor basis); this was partially counterbalanced by hedges (positive impact of € 0.3m in 2006 versus a cost of -€ 0.9min 2005). The 2006 result was also affected by a foreign exchange loss of € 0.1m, versus a foreign exchange gain of € 0.9m in 2005.
EXECUTIVE BOARD MANAGEMENT REPORT
YEAR ENDED 31 DECEMBRE 2006
57
The corporate tax expenditure for the year was € 27.2m. This expense corresponds to 35.3% of net pre-tax profit. The main differencecompared to the French CT rate (34.43% for 2006) stems from the effect of foreign rates increasing the Group’s tax expenditure by 0.57%, while thenon-activation of foreign deficits (primarily in Belgium) generated an increase in CT of € 724,000, counterbalanced by the use (in Spain) of non-activated deficits of € 677,000 in previous years.
Earnings from minority holdings in joint-ventures consolidated by equity method reached € 444,000, of which € 253,000 from NDBLogistica Romania (50% of the result), € 74m from CSND (Czech Republic, 50% of the result) and € 66,000 from LGL (Switzerland, 49% of the result).
Net earnings (Group share) reached € 49.792m. The following comparisons are made to measure the financial performances reflected:
n In €m 2005 published 2005 restated 2006 Difference
Net earnings 62.7 64.7 49.8 -23%% of revenue 4.5 4.6 3.1
- Recovery of motorway VAT 1996 to 2000,after CT (9.1)
- Badwill from TNT acquisition 35.1 37.2
Net earnings excl. extraord. items 28.6 27.6 40.7 +48%% of revenue 2.0 2.5
The consolidated balance sheet for 31 December 2006 shows:
A net consolidated situation of € 297m, i.e. a € 37m increase on 31 December 2005, stemming from:• € 49.8m in earnings over the year,• – € 8.5m in dividends distributed in 2005,• – € 7.3m, to neutralise treasury shares purchased over the year,• € 1.0m from a foreign exchange effect on conversion rate adjustments.
Intangible fixed assets reached € 83.7m on 31 December 2006, of which € 78.1m in goodwill from acquisitions. The goodwill fromthe acquisition of CCH (Logistics, Spain) reached € 7.3m. The goodwill from the acquisition of Transcondor (Transport, Romania) was zero.
Tangible fixed assets reached € 409m on 31 December 2006, of which:• € 54m in “Lands and buildings”,• € 55m in equipment and tools, as well as “Other fixed assets” such as storage equipment,• € 2m in instalments on fixed assets pending delivery,• € 298m in transport equipment.
This latter item increased the most in 2006 (+€ 17m), given the external growth in Romania (Transcondor) and particularly the increasein the fleet of transport vehicles (10,743 on 31 December 2006 versus 10,428 one year earlier).
The working capital requirement on 31 December 2006 was negative (a resource of € 15.1m), versus a positive WCR of € 16.6m oneyear earlier. This significant € 32m improvement over the year is a result of the decree of 05/01/2006 that enabled us to receive payments from our“Transport” customers in France earlier (estimated impact, after faster payment of around € 20m to subcontractors), but is also due to staff efforts torecover receivables, particularly at the end of the year, despite an unfavourable schedule in December 2006.
The average customer payment timeline on 31 December 2006 was 60.7 days, versus 72.2 days at the end of 2005 (-11.5 days). Theaverage supplier timeline was 73.5 days versus 82.9 days at the end of 2005 (-9.4 days).
Net financial debts on 31 December 2006 totalled € 121m (versus € 159m at the end of 2005). This level of debt constitutes 41% ofcapital (versus 61% at the end of 2005). Excluding assets and businesses taken over from TNT, this ratio would have reached 64%, which once againconfirms, at the very least, the financial importance of this operation, realised at the end of 2005.
The NFD/EBITDA leverage ratio (net financial debts/earnings before interest, taxes, depreciation and amortisation) reached 0.8 at year-end 2006, versus 1.2 in 2005.
On 31 December 2006, cash flow was € 197m.
The “Provisions” items fell from € 78m at year-end 2005 to € 63m at year-end 2006, € 13.7m of the € 15m consumed resulting fromdifferences in “Provisions for possible liabilities” registered at the time of the acquisition of TNT’s French business.
2006 FINANCIAL REPORT58
On 31 December 2006, the remaining balance of these “Provisions for possible liabilities” and provisions for unoccupied surfaces informer-TNT warehouses was € 34m.
Thanks to the improvement in the Group’s financial solidity in 2006, the (end of period) capital employed decreased from € 510m to€ 500m between 2005 and 2006, despite the heavy investments in tangible assets (vehicles) and intangible assets (goodwill from CCH acquisition).
The ROCE (EBITA before CT/average capital employed (net situation + net financial debts + provisions + net deferred taxes)) thereforeincreased from 11% in 2005 to 14% in 2006.
Cash flow statement
Given the level of net earnings (€ 49.8m) and the significant decrease in working capital requirement (WCR) over the year (-€ 37mexcluding the impact of the integration of acquisitions over the year consuming WCR), the operating cash flow reached € 153m, compared to € 60min 2005.
Cash flow investments reached –€ 98m in 2006 versus just –€ 18m in 2005 (affected by the negative price of the TNT transaction by€ 76m).
After the sale price of the two logistics sites sold at the start of the year (Toulouse Bréguet and Le Meux), the CAPEX (Investments lesssale) was € 92m in 2006. This was a sharp increase on the two previous years, when it reached a net amount of between € 70m and € 75m. This isa result of the reapplication, in 2006, of the transport vehicle fleet expansion policy, which is expected to continue and even increase in 2007.
The financing cash flow was practically balanced at –€ 3.2m. This includes € 8.5m in 2005 dividend payments and € 7.3m for thebuy-back of treasury shares designed to deal with stock options granted, and to avoid the dilution of the shareholding.
The free consolidated cash flow increased by € 53m over the period, reaching € 197m.
Situation of two business Divisions in 2006
Figures are broken down by business Division at the end of FY 2006 as follows:
LOGISTICS TRANSPORT GROUP TOTALEn K€ 31/12/05 31/12/06 31/12/06 31/12/05 31/12/06 31/12/06 31/12/05 31/12/06 31/12/06
Excluding Excluding Excluding TNT TNT TNT
Consolidated revenue 501,264 599,758 526,527 898,052 1,008,147 980,521 1,399,316 1,607,905 1,507,048
Ordinary operating result 19,770 26,300 26,310 28,569 35,399 37,470 48,339 61,699 63,780% 3.9% 4.4% 5.0% 3.2% 3.5% 3.8% 3.5% 3.8% 4.2%
Operating result (EBITA) 25,212 33,138 26,835 26,296 49,950 48,873 51,508 83,088 75,708% 5.0% 5.5% 5.1% 2.9% 5.0% 5.0% 3.7% 5.2% 5.0%
In a context of sharp external and internal growth, the Logistics Division was able to maintain an excellent operating margin, at 5.5%of revenue, exceeding the “Challenge 2008” business plan targets (5.0% EBIT). After restating non-recurring expenses and revenue, the ordinaryoperating result also improved, from 3.9% in 2005 to 4.4% in 2006 (which would have been 5.0% had the scope excluded TNT’s loss-makingbusinesses taken over).
In the Transport Division, the recovery over the first part of the year was confirmed over the remainder of the year; the ordinaryoperating margin (excluding non-recurring expenses and revenues, for example € 13.9m received over the “motorway VAT” litigation) increased from3.2% in 2005 to 3.5% in 2006, of which 3.8% over the pro-forma scope “excluding businesses acquired from TNT”.
With non-recurring revenue, the Transport Division’s EBITA reached € 50m, i.e. 5.0% of revenue, almost double that of 2005 (€ 26m,2.9% of revenue).
The consolidated EBITA reached € 83m, i.e. 5.2% of revenue. It is important to note that pro-forma EBITA excluding businesses takenover from TNT would have been € 75.7m. This means that the businesses taken over from TNT at the end of 2005 made a positive contribution toconsolidated EBITA amounting to € 7.4m, despite ordinary operating losses of € 2.1m and restructuring costs of € 4.9m. The extent of thiscontribution is a result of the reversal of € 13.7m in “Provisions for possible liabilities” required by the fast integration of these businesses, hence thedecrease in related risks.
59
Logistics
2006 was particularly satisfactory for the Logistics Division.
On the one hand, there was a significant increase in revenue in France, both through external growth (with the takeover of TNT’sbusinesses) and internal growth. The Division expanded business abroad, in Poland and Spain, taking over CCH.
Furthermore, there was a healthy profitability level, with the sound French performance counterbalancing a more disappointing levelin the Italian and Dutch subsidiaries.
In France, ND Logistics and its subsidiaries’ total revenues reached € 436m versus € 343m in 2005. This increase was due both to thetakeover of TNT’s businesses in France and a high rate of internal growth.
Revenue picked up a particularly fast pace towards the end of the year.
The margin from operations was satisfactory and operating profitability was in line with targets and improved by capital gains from thesale of the Toulouse and Le Meux sites.
As for human resource management, a difficult redundancy scheme was implemented and carried through at the end of the year atRoncq (Lamy-Lutti business discontinued), Le Meux (Brico-Dépôt business discontinued) and Rantigny (move to Lagny, formerly owned by TNT).
The mandatory annual negotiation (signed by 2 out of 4 unions) led to a 1.8% wage increase, effective as of 1 January 2007.
Businesses at the Thuit and Thouars sites, taken over from Carrefour Logidis, have been housed within an “ad hoc” company namedTHT. This company has operated satisfactorily.
As for the businesses taken over from TNT Logistics France, revenue reached € 73.1m. This figure is satisfactory, despite the fact thatsome surfaces remain vacant.
As was expected at the time of the purchase, 2 Logidis Carrefour sites in Louviers (135 employees) and Montauban (100 employees)were shut down at the start of the year.
The management of TNT’s operations does not pose any operating problems but two issues have been raised:- leases contracted in the past by TNT are abnormally long and costly,- labour management at certain sites is delicate.
Revenue yielded abroad totalled € 157m versus € 150m last year. Profitability on the whole was down compared to 2005, owingessentially to businesses in Italy and Holland.
The situation in Italy was once again disappointing in terms of revenue and profitability.
In Switzerland, Gucci’s global warehouse, operated by the Gucci - Norbert Dentressangle joint venture, known as LGL, is runningsatisfactorily.
The second warehouse operated by ND Logistics Switzerland has had satisfactory results but suffered from an insufficient level of Swisscustomer sales.
In the Netherlands, revenue was slightly increased compared to the previous year.
In the Czech Republic, with revenue of almost € 9m and an excellent profit level, the subsidiary made a marked improvement on theprevious year.
The business in Poland started up in May 2006. It is important to note that the Michelin contract was acquired from a competitor on1 July 2006 and that an important contract was entered into with a major mail order group.
In the UK, results were better than expected, despite a significant downsizing after the termination of two customer contracts.
In Spain, CCH, taken over on 20 September 2006, achieved revenue of € 5.7m at the end of the year, with a healthy profitability level.The integration scheme is underway and a Managing Director must now be recruited, as the former shareholder manager left the company in January2007.
2006 FINANCIAL REPORT60
Transport
In 2006, sales remained healthy, with a 5.5% internal growth level despite the voluntary stoppage of business at the end of 2005 / startof 2006, resulting in a loss of sales of € 28m.
In all, at € 1,008m, revenue increased by 12.3%.
In 2006, the business level remained sound, despite a shortage of means in the summer, which strengthens our position in meansmanagement/solution organisation.
Marketing development remained healthy over the year with a business pipeline of € 70m, additions to Transport Solutions Servicesthat are significant in size or geographic cover, the renewal of 95% of existing Transport Solutions Services business in 2006, an acceleration in rentalmarketing (particularly in supermarkets) and an upturn in Trans-UK business.
The TOP 30 customers now account for 35% of revenue, producing a healthy distribution of revenue.
At the end of December, the EBITA (excluding VAT effect on ND Services) reached € 36m, up € 10m on 2005.
This improvement is mainly due to:
• diesel costs (accounting for 28% of cost price, i.e. +3% versus +17% in 2005), which were passed on appropriately,• firm control over the cost price, which “only” increased by 0.4% with variable costs at +3% (including motorways) and fixed costs at
–2 % (including driver wage bill),• the elimination of sources of losses,• an increase in selling price, excluding diesel, of between 2 and 3% over the year.
Change in scope of consolidation
Several changes came about during 2006:
On 19 July 2006, the Norbert Dentressangle Group purchased Romanian transport company Transcondor, based in Arad.With annual revenue of around € 10m, Transcondor develops an international business of packed goods transport and temperature
controlled transport between Romania and EU countries.Transcondor employs 188 workers and manages a fleet of 110 tractors and 110 trailers.This acquisition was part of the “Challenge 2008” business plan aimed particularly at reinforcing the Norbert Dentressangle Group
transport network in Central and Eastern Europe, with a view to assisting its industrial and distributor customers.
The Group also purchased Spanish logistics companies CCH and GPL on 20 September 2006. These companies have 360 employeesand manage 40,000sq.m of warehouses.
Their primary business is the transport of high-tech products and reverse logistics.This acquisition gives the Group a foothold in the Spanish market, which offers very strong prospects.
In addition, a number of legal simplifications were implemented in 2006 within the Group’s scope. These operations are described inthe consolidated account appendices.
Lastly, OMEGA VI and OMEGA VII were created at the end of 2006. These companies have not yet started operating.
Human Resources
On 31 December 2006, the Norbert Dentressangle Group had a staff of 14,608, up 5% on 31 December 2005.
24% of these workers are employed outside France.
In 2006 staff expenditure reached € 455m, versus € 408m in 2005. This increase in the wage bill (+11%), which was slower than theincrease in revenue, is due to a better geographic distribution of human resources with regard to the Group’s business flow. A growing share of theGroup’s business is now produced in Central Europe, where the average salary is lower than that of the Group’s long-standing countries of business inWestern Europe.
For information, the discretionary and obligatory profit-sharing items in 2006 reached € 7.9m, a sharp increase on the € 4.7m paidout in 2005.
No major labour conflicts arose in 2006.
61
Group prospects
FY 2007 will be the 3rd and last financial year covered by the Group’s three-year “Challenge 2008” business plan.
This ambitious development project involves:- the ongoing objective for strong growth: the aim is to achieve a 53% increase in revenue over 3 years, to reach € 2 billion in invoicing
after 3 years,- the desire to continue to combine growth with profitability: the Group wants to maintain a high level of performance, i.e. an operating
margin of 5% of revenue,- greater integration of sustainable development in the Group’s business activities.
This business plan follows on from the previous three-year business plans. It is based on the Group’s key current success factors:- the continuity of a specific model based on means management (self-management or through outsourcing),- offering differentiating, service-based businesses,- further innovation in all company sectors,- permanently striving to make savings and reduce costs,- the Group’s “entrepreneurial” ideology.
The business plan is also based on the following means of growth:- a broader range of services by mastering new areas of business:
in Transport: logistics on customer sites, domestic distribution,in Logistics: reverse logistics, hazardous goods logistics,
- faster development abroad,- greater integration of sustainable development, a winning means of differentiating the Group and motivating staff.
Specifically for 2007, the Group plans to:- increase further the number of transport vehicles, following on from the increases in 2006. In 2007, the amount of investments after
disposals may exceed € 100m,- increase the size and profitability of businesses currently developed in Central Europe, particularly in the two biggest countries,
Poland and Romania, both in Transport and Logistics.
In this context, the Group expects internal growth to reach 6 to 8% and EBITA to improve on that of 2006, particularly in Transportand Logistics activities taken over from TNT Logistics France at the end of 2005, which did not achieve a sufficient level of profitability in 2006.
II – PARENT COMPANY ACTIVITY, PRESENTATION OF THE CORPORATE FINANCIAL STATEMENTS
The balance sheet and profit and loss account of the Norbert Dentressangle Group parent company, “Groupe Norbert Dentressangle S.A.”, give:
• a net figure of € 175.9m, including earnings of € 15,244,656.62 for the year plus € 30,552,430.67 brought forward from theprevious year,
• a free cash flow of € 49.5m,• € 15.2m in earnings over the year after corporate tax savings (as Groupe Norbert Dentressangle S.A. is the bridgehead in terms of
fiscal integration, it benefits from tax savings generated by the deficit of certain subsidiaries), resulting essentially from € 11.8m individends from subsidiaries.
Over FY 2006, the company’s business focused on the management of its direct subsidiaries:• NDT (100%), a sub-holding company that owns the transport subsidiaries,• ND Logistics France (100%), a company operating in France and that owns the other subsidiaries specialising in Logistics, particularly
abroad,• Omega II (100%), a holding company taking over the businesses from TNT Logistics France in 2005,• and Stockalliance (99%), a company acquired in 2002, whose business is now confined to real estate, and which we propose to merge
with Groupe Norbert Dentressangle S.A., subject to approval at the General Shareholders Meeting.
2006 FINANCIAL REPORT62
Non tax-deductible expenses
In accordance with the provisions of Article 223 (4) of the French General Tax Code, you are hereby informed that no amount relatingto the expenses referred to in Article 39-4 of said Code has been re-included in the taxable income.
Major events and amendments to the Articles of Association during the financial year
Major eventsThe Combined General Meeting of 23 May 2006 renewed the term of office of Cabinet ALAIN BONNIOT & ASSOCIES, joint
incumbent statutory auditors, as well as that of Mr Pascal VUAILLAT, substitute statutory auditor.
Amendments to the Articles of Association As its meeting of 16 January 2006, the Executive Board:- duly noted the exercising in 2005 of 61,600 share subscription options granted by the Executive Board on 9 October 2000, under
authorisation from the Combined Ordinary and Extraordinary General Meeting of 24 May 2000,- duly noted the exercising of 95,000 warrants allotted by the Executive Board on 30 June 2003, under a delegation from the Combined
General Meeting of 27 May 2003, so that at 31 December 2005, our Company’s share capital was 19,846,612 euros, divided into 9,923,306 shares with face value of 2euros each,
- duly noted the exercising at the beginning of 2006, of 21,600 share subscription options granted by the Executive Board on 9 October2000, under authorisation from the Combined General Meeting of 24 May 2000,
- under the authorisation granted by the Combined General Meeting of 24 May 2005, resolved to cancel 160,913 treasury sharesacquired within the context of the share buyback programmes authorised by the General Meeting.
Therefore, on 16 January 2006, the share capital was down by 278,626 euros to 19,567,986 euros, divided into 9,783,993 shares withpar value of 2 euros, all of the same category.
Consequently, Article 6, “Contributions – Share capital”, of our Articles of Association has been amended.
The participants of the Combined General Meeting of 23 May 2006 were called upon exceptionally to modify statute articles 9 “Rightsattaching to each share” and 23 “Proceedings of the Supervisory Board - Minutes”.
Key events and amendments to the Articles of Association since the year-end
Key eventsNo event has had any significant impact on the accounts of Groupe Norbert Dentressangle S.A. since 31 December 2006.
Amendments to the Articles of Association As its meeting of 15 January 2007, the Executive Board:- duly noted the exercising of 41,700 share subscription options granted by the Executive Board on 9 October 2000 and 3 September
2001, under authorisation from the Combined Ordinary and Extraordinary General Meeting of 24 May 2000,- duly noted the exercising of 10,000 warrants allotted by the Executive Board on 30 June 2003, under a delegation from the
Combined General Meeting of 27 May 2003, so that at 31 December 2005, our Company’s share capital was 19,671,386 euros, divided into 9,835,693 shares with face value of2 euros each.
Consequently, Article 6, “Contributions – Share capital”, of our Articles of Association has been amended.
63
ProspectsIn 2007, Groupe Norbert Dentressangle S.A. will have the same sources of revenue and expenses as in 2006. There should not be a
significant change in its results and net worth compared to figures posted for 2006.
Activity and results of subsidiaries and controlled companiesThe revenues and results of subsidiaries and sub-subsidiaries, which are all included in the scope of consolidation, are set forth in the
notes to the financial statements. Moreover, the activity of the Norbert Dentressangle Group, as described above, summarises their activity.
Acquisition of interestBarring the creation of the companies OMEGA VI and OMEGA VII, which are not yet operating, no interest was acquired in 2006 by
your Company under articles L.233-6 and L.247-1 of the commercial code.
TERMS OF OFFICE AND DUTIES CARRIED OUT BY CORPORATE OFFICERS FROM 1 JANUARY 2006 TO 31 DECEMBER 2006
1. Members of the Supervisory Board
• Evelyne DENTRESSANGLE
Company Term of office
GROUPE NORBERT DENTRESSANGLE Member of the Supervisory Board and Vice-Chairman
FINANCIERE NORBERT DENTRESSANGLE Director and Deputy General Manager
FINAIXAM Member of the Supervisory Board and Vice-Chairman
FELIX POTIN Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Director
MEGA PRODUCTIONS Director
SOFADE Chairman
TOURS NORD TRANSIT Manager
CAVAILLON TRANSIT Manager
LONGUEIL TRANSIT Manager
SAINT-RAMBERT TRANSIT Manager
BEAUSEMBLANT IMMOBILIER Manager
BORDEAUX TRANSIT Manager
CHAMBERY TRANSIT Manager
LILLE TRANSIT Manager
ND COULOGNE ENTREPOT Manager
PORT CHAMPAGNE Manager
SAINT-VALLIER CALAIS Manager
SAT 3D IMMOBILIER Manager
SAT 3E IMMOBILIER Manager
SAT 3G IMMOBILIER Manager
PLA 2F IMMOBILIER Manager
OTHER OFFICES AND DUTIES CARRIED OUT DURING THE LAST FIVE YEARS
AIXAM MEGA Director
2006 FINANCIAL REPORT64
• Norbert DENTRESSANGLE
Company Term of office
GROUPE NORBERT DENTRESSANGLE Chairman of the Supervisory Board
FINANCIERE NORBERT DENTRESSANGLE Chairman of the Board of Directors and General Manager
FINAIXAM Chairman of the Supervisory Board
AXA Member of the Supervisory Board
FINANCIERE DE CUZIEU Chairman
SEB Director
SOGEBAIL Director
FINANCIERE EGNATIA Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Director
EMIN LEYDIER Member of the Supervisory Board
SOFADE General Manager
NDI Manager
PLA 2A IMMOBILIER Manager
PLA 2B IMMOBILIER Manager
PLA 2C IMMOBILIER Manager
PLA 2E IMMOBILIER Manager
FINANCIERE DE LA GALAURE Manager
TEXIM Joint manager
TEXMAT Joint manager
OTHER OFFICES AND DUTIES CARRIED OUT DURING THE LAST FIVE YEARS
SIPAREX CROISSANCE Director
EGNATIA Director
VIA LOCATION Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Director
MICHAUX GESTION SA Director
SOCIETE NOUVELLE D’ALIMENTATION PHILIPPE POTIN - SNAPP Director
IDB IMMOBILIER Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Chairman
SAT 3 D IMMOBILIER Manager
SAT 3 E IMMOBILIER Manager
VIA LOCATION ILE DE FRANCE Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Director
VIA LOCATION FRANCE PROVINCES Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Director
SAINT-RAMBERT TRANSIT Manager
PORT CHAMPAGNE Manager
BEAUSEMBLANT IMMOBILIER Manager
BORDEAUX TRANSIT Manager
CHAMBERY TRANSIT Manager
ND COULOGNE ENTREPOTS Manager
LILLE TRANSIT Manager
65
• Jacques GAIRARD
Company Term of office
GROUPE NORBERT DENTRESSANGLE Member of the Supervisory Board
SOPARIND SCA Member of the Supervisory Board
BONGRAIN Director
SEB Director
LA MAISON ROUGE (Foundation for Contemporary Art) Director
OTHER OFFICES AND DUTIES CARRIED OUT DURING THE LAST FIVE YEARS
AESCRA Ecole de Management de Lyon – EM Lyon Chairman of the Board of Directors
• Henri LACHMANN
Company Term of office
GROUPE NORBERT DENTRESSANGLE Member of the Supervisory Board
SCHNEIDER ELECTRIC SA Chairman until 3 May 2006, then Chairman of the Supervisory Board
SCHNEIDER ELECTRIC INDUSTRIES SAS Chairman until 3 May 2006
Various companies of SCHNEIDER ELECTRIC Group Director
AXA Member of the Supervisory Board
Various companies of AXA Group Director
VIVENDI Member of the Supervisory Board
FIMALAC Independent advisor
TAJAN Independent advisor
CENTRE CHIRURGICAL MARIE LANNELONGUE Chairman of the Board of Directors
FONDATION POUR LE DROIT CONTINENTAL Chairman
CONSEIL DES PRELEVEMENTS OBLIGATOIRES Member
OTHER OFFICES AND DUTIES CARRIED OUT DURING THE LAST FIVE YEARS
VIVENDI UNIVERSAL Director
Various companies of SCHNEIDER ELECTRIC Group Director
FINAXA Director
FIMALAC Director
ETABLISSEMENTS DE DIETRICH & CIE Director
• Pierre-André MARTEL
Company Term of office
GROUPE NORBERT DENTRESSANGLE Member of the Supervisory Board
CARAVELLE SA Chairman of the Board of Directors
XRT Chairman of the Supervisory Board
COOPER SAS Chairman
MARREL SAS Chairman
PX HOLDING SAS Chairman
SOPRA GMT SA Member of the Board of Directors
2006 FINANCIAL REPORT66
SOPRA GROUP SA Member of the Supervisory Board
FRUEHAUF SAS Member of the Supervisory Board
OTHER OFFICES AND DUTIES CARRIED OUT DURING THE LAST FIVE YEARS
DUPLI 31 Director
INNODEC SA Member of the Board of Directors
LEGRIS INDUSTRIES SA Member of the Supervisory Board
SONOVISION-ITEP SAS Member of the Supervisory Board
• François-Marie VALENTIN
Company Term of office
GROUPE NORBERT DENTRESSANGLE Member of the Supervisory Board
FINAIXAM SA Member of the Supervisory Board
FMV & ASSOCIES SARL Manager
VAUCRAINS PARTICIPATIONS Director
OTHER OFFICES AND DUTIES CARRIED OUT DURING THE LAST FIVE YEARS
EGNATIA Director
ELCO BRANDT SA Member of the Supervisory Board
2. Members of the Executive Board
• Patrick BATAILLARD
Company Term of office
GROUPE NORBERT DENTRESSANGLE Member of the Executive Board
LOCAD 06 Director
LOCAD 07 Director
ND GESTION Joint manager
NDT General Manager
OMEGA II Chairman
OMEGA III (aujourd’hui THT LOGISTICS) Manager
OMEGA IV Manager
OMEGA V Manager
OMEGA VI Manager
OMEGA VII Manager
SCI DES VOLCANS Manager
SCI GYVES Joint manager
SCI IMOTRANS Manager
SCI LOGIS-TRANS EUROPE Manager
STOCKALLIANCE Permanent representative of ND LOGISTICS, Director
TEXLOG Manager
TRANSIMMO PICARDIE Joint manager
UTL LOCATION Joint manager
ND SILO IBERICA Director
NORBERT DENTRESSANGLE HOLDINGS LIMITED Director
OTHER OFFICES AND DUTIES CARRIED OUT DURING THE LAST FIVE YEARS
COMPAGNIE DES ENTREPOTS ET MAGASINS GENERAUX DE CHAMPAGNE Permanent representative of ND LOGISTICS, Director
FINANCIERE DE VSG Director
LMDI Permanent representative of ND LOGISTICS, Director
LOCAD 02 Director
LOCAD 03 Director
LOCAD 04 Director
LOCAD 05 Director
SOCIETE D’EXPLOITATION DES MAGASINS GENERAUX DE CHAMPAGNE Permanent representative of ND LOGISTICS, Director
SOCIETE DE TRANSPORTS SA CELANO Director
TRANSLITTORAL Chairman
TRANSPORTS CROULLET AFFRETEMENT Director
TRANSPORTS HARDY Permanent representative of FINANCIERE DE VSG, Director
TRANSPORTS LAURENT Manager
TRANSPORTS VOLUMINEUX NORBERT DENTRESSANGLE Chairman
VOLUTRANS Chairman of the Board of Directors
COREND Director
NAVAMAR Permanent representative of ND IBERICA, Director
TRANSDUC Permanent representative of ND IBERICA, Director
TND RHÔNE-ALPES Chairman
• François BERTREAU
Company Term of office
GROUPE NORBERT DENTRESSANGLE Member of the Executive Board and General Manager
STOCKALLIANCE Chairman of the Board of Directors and General Manager
ND LOGISTICS Chairman
AIXOR LOGISTICS Chairman
CEMGA LOGISTICS Chairman
COPAL LOGISTICS Chairman
VENDILOG Chairman
LE TRAIT D’UNION PACKAGING CONDITIONNEMENT Manager
THT LOGISTICS Joint manager
BARLATIER CAMIONNAGE ORGANISATION Joint manager
CCH Chairman
ND LOGISTICS ITALIA Chairman of the Board of Directors
ND LOGISTICS UK Director
ND LOGISTICS SWITZERLAND Manager
ND LOGISTICS HUNGARY Managing Director
OTHER OFFICES AND DUTIES CARRIED OUT DURING THE LAST FIVE YEARS
LMDI Permanent representative of STOCKALLIANCE, Director
COMPAGNIE DES ENTREPOTS ET MAGASINS GENERAUX DE CHAMPAGNE Permanent representative of STOCKALLIANCE, Director
67
2006 FINANCIAL REPORT68
SOCIETE D’EXPLOITATION DES MAGASINS GENERAUX DE CHAMPAGNE Permanent representative of STOCKALLIANCE, Director
CIDEM Chairman of the Board of Directors
• Jean-Claude MICHEL
Company Term of office
GROUPE NORBERT DENTRESSANGLE Chairman of the Executive Board
STOCKALLIANCE Permanent representative of the NORBERT DENTRESSANGLE Group, Director
NDT General Manager
OMEGA II General Manager
LES ROUTIERS FRANÇAIS – L.R.F. SAS (jusqu’au 19/04/06) Chairman
SCI GPT4 Manager (until 31 December 2006)
ND BELGIUM Permanent representative of NDT, Director
ND SILO IBERICA Director
NORBERT DENTRESSANGLE HOLDINGS LIMITED Director
NORBERT DENTRESSANGLE IBERICA Chairman
NORBERT DENTRESSANGLE IBERICA ESTE Chairman
NORBERT DENTRESSANGLE UK Director
SCHEDDICK TRANSPORT LIMITED Director
OTHER OFFICES AND DUTIES CARRIED OUT DURING THE LAST FIVE YEARS
AROLAZ Manager
CIDEM Director
COMPAGNIE DES ENTREPOTS ET MAGASINS GENERAUX DE CHAMPAGNE Permanent representative of the NORBERT DENTRESSANGLE Group, Director
FINANCIERE DE VSG Permanent representative of NDT, Director
LMDI Permanent representative of the NORBERT DENTRESSANGLE Group, Director
SCI PGT3 Manager
SOCIETE D’EXPLOITATION DES MAGASINS GENERAUX DE CHAMPAGNE Permanent representative of the
NORBERT DENTRESSANGLE Group, Director
SOCIETE DE TRANSPORTS SA CELANO Permanent representative of NDT, Director
TRANSPORTS CROULLET AFFRETEMENT Permanent representative of NDT, Director
TRANSPORTS HARDY Permanent representative of NDT, Director
UNITED SAVAM Permanent representative of NDT, Director
VOLUTRANS Permanent representative of NDT, Director
AJG INTERNATIONAL TRANSPORT Director
GTPI DE TRANSPORTES Director
COREND Chairman of the Board of Directors
NAVAMAR Permanent representative of the NORBERT DENTRESSANGLE Group, Director
NORBERT DENTRESSANGLE HOLDING, UK Director
ND SAVAM IBERICA Director
ND SILO BELGIUM Permanent representative of NDT, Director
NORBERT DENTRESSANGLE IBERICA OESTE Chairman
NORBERT DENTRESSANGLE IBERICA ESTE Chairman
NORBERT DENTRESSANGLE ITALIA Director
SAVAM LUX Permanent representative of NDT, Director
TRANSDUC Permanent representative of the NORBERT DENTRESSANGLE Group, Director
TRANSPORTES PENYAFORT Chairman of the Board of Directors
• Hervé MONTJOTIN
Company Term of office
GROUPE NORBERT DENTRESSANGLE Member of the Executive Board and General Manager
AIR ND Joint manager
BARLATIER CAMIONNAGE ORGANISATION Joint manager
MNS Permanent representative of NDT, Director (until 15 January 2007)
ND FRANCHISE Joint manager
ND INFORMATIQUE Joint manager
ND MAINTENANCE Joint manager
ND SERVICES Joint manager
ND CHIMIE Chairman
ND MEDITERRANEE Chairman
ND PETRONALP Chairman
ND PETRONORD Chairman
NDT Chairman
SNM VALENCIENNES Chairman
SNN CLERMONT Chairman
STOCKALLIANCE Permanent representative of ND SERVICES, Director
UNITED SAVAM Chairman
VENDITELLI TRANSPORTS Chairman
VENDILOG Chairman
TRANSCONDOR Director
OTHER OFFICES AND DUTIES CARRIED OUT DURING THE LAST FIVE YEARS
FINANCIERE DE VSG Chairman of the Board of Directors
LMDI Permanent representative of LOGIBAIL, Director
ND FORMATION Joint manager
SOCIETE DE TRANSPORTS SA CELANO Permanent representative of ND SILO, Director
TRANSPORTS CROULLET AFFRETEMENT Permanent representative of ND LOCATION, Director
TRANSPORTS HARDY Permanent representative of UNITED SAVAM, Director
VOLUTRANS Permanent representative of TVND, Director
NAVAMAR Company secretary
ND SAVAM IBERICA Director
NORBERT DENTRESSANGLE HOLDINGS UK Director
TRANSDUC Company secretary
69
2006 FINANCIAL REPORT70
Payments and benefits to corporate officers*The set payment made to Mr. Jean-Claude Michel, Chairman of the Executive Board, under his employment contract, amounted to
€ 358,270 in 2006, versus € 342,966 for FY 2005.The payment made for his services as corporate officer amounted to € 5,488 in 2006, as in FY 2005.In addition, the bonus to be paid out in 2007 with regard to 2006 profits is estimated at € 184,679, versus € 147,500 in 2006 with
regard to 2005 profits.Benefits in kind reached € 14,577 in 2006 versus € 7,759 for 2005.
The set payment made to Mr. François Bertreau, member of the Executive Board and General Manager, under his employment contract,amounted to € 254,819 € in 2006, versus € 234,497 for FY 2005.
The payment made for his services as corporate officer amounted to € 3,659 in 2006 versus € 3,659 for FY 2005.In addition, the bonus to be paid out in 2007 with regard to 2006 profits is estimated at € 122,887, versus € 110,000 in 2006 with
regard to 2005 profits.Benefits in kind reached € 3,663 in 2006 versus € 5,072 for 2005.
The set payment made to Mr. Hervé Montjotin, member of the Executive Board and General Manager, under his employment contract,amounted to € 246,060 in 2006, versus € 235,378 for FY 2005.
The payment made for his services as corporate officer amounted to € 3,659 in 2006, versus € 3,659 for FY 2005.In addition, the bonus to be paid out in 2007 with regard to 2006 profits is estimated at € 95,660, versus € 82,000 in 2006 with regard
to 2005 profits.Benefits in kind reached € 2,949 in 2006 versus € 2,410 € in 2005.
The set payment made to Mr. Patrick Bataillard, member of the Executive Board, under his employment contract, amounted to € 235,846in 2006, versus € 223,935 for FY 2005.
The payment made for his services as corporate officer amounted to € 3,659 in 2006, versus € 3,659 for FY 2005.In addition, the bonus to be paid out in 2007 with regard to 2006 profits is estimated at € 109,057, versus € 73,500 in 2006 with regard
to 2005 profits.Benefits in kind reached € 1,857 in 2006 versus € 1,754 for 2005.
The variable share of Board member payments is determined by the Group’s net consolidated earnings, the performance of the twobusiness Divisions or the “Net earnings on stockholders’ equity” ratio, as well as an evaluation of their individual performance.
The managers do not receive any benefits or compensation other than those mentioned hereinabove.
The remuneration paid by the company to Mr. Norbert Dentressangle, for this term of office as Chairman of the Supervisory Board, in2006, amounted to € 118,800 compared to € 113,400 for 2005.
The payment made by Financière Norbert Dentressangle, the firm that controls the company Groupe Norbert Dentressangle, was € 181,200 in 2006. Financière Norbert Dentressangle’s business is not comprised exclusively of control of Groupe Norbert Dentressangle but alsoincludes other activities.
The attendance fees paid to Mrs. Evelyne Dentressangle, member of the Supervisory Board, amounted to € 10,350 for 2006 comparedto € 10,350 for 2005.
The attendance fees paid to Mr. Pierre-André Martel, member of the Supervisory Board, amounted to € 10,350 for 2006 compared to € 6,370 for 2005.
The attendance fees paid to Mr. Jacques Gairard, member of the Supervisory Board, amounted to € 10,350 for 2006 compared to € 10,850 for 2005.
The attendance fees paid to Mr. Henri Lachmann, member of the Supervisory Board, amounted to € 9,850 for 2006 compared to € 9,850 for 2005.
The attendance fees paid to Mr. François-Marie Valentin, member of the Supervisory Board, amounted to € 10,350 for 2006 comparedto € 10,350 for 2005.
The Shareholder’s General Meeting set the total amount of attendance fees for 2006 at € 51,750. The Supervisory Board shall allocateattendance fees on the basis of criteria that provide for a set share for all members of the Board, apart from the Chairman, as well as a share related toactual attendance at meetings of the Supervisory Board.
(*) All amounts in respect of compensation mentioned are gross figures.
Recap of share operations over FY 2006 in pursuance of article 222-15-3 of the Autorité des Marchés Financiers’ general regulations
257,000 shares were purchased at an average weighted unit price of € 55.89 by a company related to Mr Norbert DENTRESSANGLE,of which 248,071 were sold at the unit price of € 56 to the following companies:
- JCM - ND PARTICIPATIONS (133,849 shares),- FB - ND PARTICIPATIONS (42,833 shares),- HM - ND PARTICIPATIONS (42,833 shares),- PB - ND PARTICIPATIONS (28,556 shares),
In addition, Mr. Jean-Claude Michel or related parties purchased 2,640 shares at an average weighted unit price of € 52.93 and sold orcontributed 49,650 at the average weighted unit price of € 58.12. In 2006, each Board member exercised the share warrants authorised by the GeneralMeeting of 23 May 2006. Mr. François Bertreau also exercised the share warrants granted by the General Meeting of 27 May 2003, and sold 5,000shares at a unit price of € 57.95. Mr. Patrick Bataillard sold 972 shares at a unit price of € 60.50.
Share subscription or call options – Transactions reserved for employees – Warrants
At 31 December 2006, certain employees or corporate officers of the Company, or its subsidiaries, had been granted share subscriptionand/or call options. On said date, the following options or warrants had not been exercised:
- 122,500 share call options, 105,500 of which may be exercised as from 2008 and 17,000 as from 2010.- 115,000 warrants, which may be exercised from 1 June 2008 to 31 May 2009 included, under condition of performance.
In accordance with the provisions of Article L.225-102 of the French Commercial Code, we hereby inform you that no fraction of ourcapital was held on 31 December 2006 by employees of the Company or affiliated companies under the Company Savings Plan provided for by ArticlesL.443-1 to L.443-9 of the French Labour Code or as part of the company mutual fund governed by chapter 3 of the Act of 23 December 1988.
Allocation of the capital and voting rights
On 1 January 2007, Financière Norbert Dentressangle held more than half of the shares, and 75.97% of the voting rights. During theyear, said company did not cross any threshold set by legislation or the Articles of Association. On 31 December 2006, the Dentressangle family held5.55% of the shares and 6.86% of the voting rights; Mr Norbert Dentressangle personally held less than 5% of the shares, but held 5.85% of the votingrights.
Furthermore, the firm Columbia Wanger Asset Management LP, acting on behalf of funds, exceeded 5% of the Company’s capital duringFY 2006.
In accordance with the provisions of Article L.225-102 of the French Commercial Code, we hereby specify to you that the number ofsecurities held directly by employees represented, at the end of the previous financial year, 0.69% of the capital and 0.66% of the voting rights. Nosecurities were held by employees under a company savings scheme.
Achievements and commitments concerning the Company’s labour and environmental policy; this is an exhaustive report regarding risks anduncertainties the Company faces through the businesses in which it operates.
The sustainable development policy initiated in 2002 was created and formalised in 2005 based on the Group’s four commitments,according to the priorities of our customers, employees and civil society organisations. These are the areas in which the Norbert Dentressangle Groupintends to be exemplary:
- Integration and internal promotion,
- Reduction of greenhouse gas emissions,
- Environmental site management,
- Road safety.
Human resources: Integration and internal promotion
On 31/12/2006, the Norbert Dentressangle Group employed 14,608 people, of which 3,525 outside France.As at 31 December 2006, the breakdown of employees of the Norbert Dentressangle Group by country was as follow:
71
Germany 112Belgium 51Spain 486United Kingdom 665The Netherlands 374
Hungary 1Italy 242Luxembourg 169Poland 849Portugal 150
The Czech Republic 225France 11,084Romania 176Switzerland 24
2006 FINANCIAL REPORT72
The male/female ratio, all business areas combined, is 79.5 % men and 20.5 % women.The average length in service is 6.2 years and average age 38.5.
The values driving the Group’s Human Resources policy are staff empowerment, trust, thrift, effort, rigour, reactivity, and the desire toundertake. These values enable everyone to develop their talent according to their merit. The Group’s Human Resources policy is aimed at strengtheningthese values to assist personal development.
The Group’s chosen company integration and promotion indicator is the internal promotion rate, i.e. the percentage of staff receiving apromotion during the year. It summarises the Group’s “company ladder”. In 2006, the rate was 6.3%.
The Group seeks to increase this rate to 8% by the end of 2007.
An illustration of this is the fact that in 2006, 60% of all key positions within the Norbert Dentressangle Group were acquired by internalpromotion.
To facilitate its success, this policy is implemented through Human Resources processes shared by all operatives, including, primarily,career management:
• Each manager analyses their staff’s skills, strengths and points to improve by comparing with a sector reference. This system, whichconcerned almost 1,000 people in 2006, enabled an individual development plan to be created for each person, taking into accounttraining, occupational mobility and pay,
• The Group’s future “potentials” have been identified and are monitored specifically,• Managers have been given training (10 training sessions in 2006) to improve the annual employee interviews and a new system has
been set up that is better adapted to the needs of operatives and that incorporates the skills corresponding to sector reference systems.
The Group invests heavily in training to enable employee development:• Each year, 3% of the payroll corresponds to training,• More than one in two employees receives training each year.
This training is organised with the Norbert Dentressangle training school. The course serves to help staff to develop in the various stagesof their career through systematic training programmes.
Reduction of greenhouse gas emissions
Striving to reduce greenhouse gas emissions means striving to reduce consumption and therefore reduce expenditure, for any givenquantity carried.
The Norbert Dentressangle Group has chosen to use the quantity of CO2 emitted (in grammes) per ton transported per kilometre as anindicator, as this is the best way of measuring the impact of goods transport on global warming from greenhouse gases.
The operational means of improving this indicator are vehicle fuel consumption, kilometres covered by empty trucks and vehicle loadoptimisation.
By the end of 2007, the Group aims to reach an emissions level of 50g/T/km.
The greenhouse gas emissions indicator calculated for 2006, resulting from an analysis of data in each of the Group Transport branches,was 59g/T/km.
Despite a decrease of 0.6 litres of diesel per 100 kilometres in the Norbert Dentressangle vehicle fleet and the levelling of the non-revenue kilometre ratio, the greenhouse gas emissions indicator shows deterioration compared to the previous year. This is a result of the way in whichthe Transport Division’s product mix has evolved and the development of services such as the transport of large products and distribution, which reducecarried tonnage.
The Group’s partnership with ADEME (the French Environmental and Energy Management) has resulted in two agreements beingsigned, one in December 2005, with the Transport Technology Department, and the other with the Transport Solutions Services Department.
The aim of the first agreement is to consider various technological solutions to reduce pollution and consumption and to use new energysources.
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A few examples:
EGR and SCR technology: This test was designed to compare vehicles with different EGR and SCR technologies with vehicles meetingthe Euro III standard. The results of these tests steered Norbert Dentressangle’s choice towards the SCR Euro IV technology.
Tyres: The aim was to compare diesel consumption according to the type of tyres used on tractors and semi-trailers. This testdemonstrated an average consumption saving of 1.29 litres per 100 kilometres for the fleet fitted with “energy” tyres. This difference may reach as muchas 2.58 litres per 100 kilometres for long distances, i.e. primarily motorway.
Speed restrictions: The aim of this test was, initially, to verify whether speed restrictions could save consumption, then, to identify thelevel of restriction best adapted to optimise consumption savings.
An increasing number of transport business proposals comprise a section on “Environmental impact” giving greenhouse gas emissionsaving figures for the solution offered by Norbert Dentressangle.
The second agreement with the ADEME served to produce a market survey of Europe’s goods rail transport to analyse the possibilitiesof integrating rail transport into the Group’s transport plan.
In addition to its commitment to reduce greenhouse gas emissions, through its policy to rapidly and systematically replace its tractorunits, the Group contributes to reducing particle emissions (NOx).
In 2006, the Norbert Dentressangle Group decided to use the SCR Euro IV technology for all new road tractors.
Environmental site management
The Group has almost 190 sites, consuming fuel, producing waste and interacting with the environment.Managing fuel consumption is a major part of operating cost management. Cutting down on waste and waste recycling means greater
savings and higher staff motivation. Caring for the environment facilitates constructive relations with institutions and local authorities.The Norbert Dentressangle Group has established an environmental management standard, covering several dimensions:- Regulatory conformity,- Monitoring and measuring fuel consumption,
Euro 4: 3%
Euro 3: 91%
Euro 2: 5%
Euro 1: 1%
91%
5%3%
1%
Breakdown of the Norbert Dentressangle Group’s road tractor fleet as at 31/12/2006
2006 FINANCIAL REPORT74
Environmentally-leading sites systematically record consumption and regularly report to general management.- Monitoring and measuring residue and waste,Sorting and waste management have become a priority on a number of sites.
The ways in which the waste is managed have been reviewed and optimised (new, better adapted equipment: skips, compactors,equipment cleaning, etc.). A greater number of efficient channels have been chosen.
- Internal training and external communication.Almost 2,000 hours of training in environmental management were provided in 2006.
The Group monitors the percentage of sites achieving the internal environmental standard. At the end of 2006, 52.3% of all Group sites,i.e. 73, met this internal requirement. The Group aims to bring all of its Transport and Logistics sites up to this standard by the end of 2007.
At all of its new and recent sites, the Group has obtained ISO 14001 certification, which goes beyond the environmental managementstandard. At the end of 2006, 43 Group sites were ISO 14001 certified.
Road safety
By making efforts in road risk management, the Group aims to improve road safety for all road users, customers and site users. At thesame time, it is reducing occupational risks and improving employee work conditions. The Group is also reinforcing the management of environmentalrisks linked to road and industrial accidents.
The indicator chosen by the Group is the number of kilometres travelled by a driver without an accident with a third party beingdeclared and for which our driver is responsible. This figure was 593,000km in 2005 and 500,000km in 2004.
The Group aims to reach the 550,000km mark in 2007.In 2006, despite the incorporation of companies with an inferior road safety performance, the Group reached an average per driver of
540,000km without being responsible for an accident with a third party.
After 15 years of successful commitment to road safety under its “Safe Driving Plan”, the Group signed the European road safety charteron Wednesday 29 November 2006 in Brussels, in the presence of Mr Jacques Barrot, Vice-President of the European Commission in charge of transport.The Norbert Dentressangle Group is France’s first representative in this sector to sign.
The “Safe Driving Plan” is a solid commitment on the part of Norbert Dentressangle’s managers.Its aim is to reduce the number of road accidents, based on the principle that 70% of accidents are preventable insofar as they result
from an error in the behaviour of the driver.The concept of the “Safe Driving Plan” is based on defensive driving, i.e. a driving reference system to avoid accidents.
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1990 19941992 1996 1998 2000 2002 2004 2006
Change in the frequency of accidents when at fault at Norbert Dentressangle
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III – REPORT CONCERNING RESOLUTIONS PRESENTED TO COMBINED GENERAL MEETING
Net income appropriation
You must decide on the appropriation of the net income for the financial year, to wit:
Income for the financial year € 15,244,656.62
Plus amounts carried forward from previous years € 30,552,430.67
Representing a total available amount of € 45,797,087.29
Appropriated as follows:- to a special reserve account in accordance with
the provisions of article 238 bis AB of the Generaltax code (business sponsorship) € 7,166.00
- to shareholders by way of dividends € 9,835,693.00- to the non-restricted reserve to bring it up to € 95m € 5,000,000.00- the balance to “Retained earnings” € 30,954,228.29
i.e. a total of: € 45,797,087.29
Therefore, each share shall provide entitlement, in respect of the financial year, to a dividend of 1 Euro, which grants individuals residentin France the 40% allowance provided for by Article 158, 3-2° and 4° of the French General Tax Code. Said dividend shall be paid to shareholders on6 June 2007. It is hereby reiterated that the amounted of dividends paid in respect of the last three financial years, and the amount of the correspondingtax credit per share, were as follows:
Table summarising the currently-valid delegations granted by General Shareholders’ Meetings to the Executive Board in respect of capitalincreases under articles L.225-129-1 and L.225-129-2 of the French Commercial Code.
Date of Meeting granting Content of the authorisation Validity Actual use of these the authorisation end date authorisations
24 May 2005 (13th resolution) Issue of ordinary shares, sundry securities, giving access to the equity or giving entitlement to debt securities, with maintenance of the shareholders’ pre-emptive subscription rights. 23 July 2007 -
24 May 2005 (14th resolution) Issue of ordinary shares, sundry securities, giving access to the equity or giving entitlement to debt securities, with waiver of the shareholders’ pre-emptive subscription rights. 23 July 2007 -
24 May 2005 (15th resolution) Delegation to increase the share capital by capitalising premiums, reserves, profits or others. 23 July 2007 -
24 May 2005 (16th resolution) Issue of ordinary shares or securities, giving access to the equity, without shareholders’ pre-emptive subscription right, as compensation for contributions in kind relating to equity securities or securities giving access to equity. 23 July 2007 -
24 May 2005 (17th resolution) Delegation to increase the number of securities to be issued in the event of a capital increase, with or without pre-emptive subscription rights. 23 July 2007 -
2006 FINANCIAL REPORT76
Financial Year Net amount Tax credit Allowance Number of sharesin € in € in €
2005 0.89 - 0.356 9,783,9932004 0.84 - 0.42 9,539,7932003 0.70 0.35 - 9,490,774
Dividends not paid under Article L.225-210 of the French Commercial Code, i.e. those related to treasury shares, shall be appropriatedto the “retained earnings” account (4th resolution).
Supervisory Board member’s resignationWe ask you to note that Mr. Jacques Gairard has tendered his resignation for his duties as member of the Supervisory Board, with effect
from the day of the General Meeting (5th resolution). We wish to thank him sincerely for his involvement and work on the board for almost 9 years.
Appointing of new member of Supervisory BoardWe ask you to appoint as new member of the Supervisory Board, for a period of four years, Mr Bruno Rousset, 51 years old, founder in
1988 of April Group, listed on the Euronext Paris Eurolist, specialising in insurance products, and for whom he has chaired the Supervisory Boardsince 2003.
He also created investment capital firm Evolem in 2001 (6th resolution).
Total sum of annual directors’ feeThe Executive Board proposes setting the total annual directors’ fee at € 75,000 as of the current financial year (7th resolution).
Trading of own shares – authorisation to grant During the Combined General Meeting of 23 May 2006 (8th resolution), you gave your company the authority to trade its own shares
on the stock market. During FY 2006, our Company acquired 127,114 shares. No own shares were sold, and 160,913 own shares were cancelled. Atthe end of FY 2006, the total number of own shares owned was 250,114 i.e. 2.54% of our corporate capital on 31 December 2006.
The average price of shares acquired during the financial year was 57.26 euros. In total, 10,917.24 euros of trading fees were incurredin this respect.
All of these shares are allocated to the objective to distribute stock options or free shares to corporate officer employees.
We propose, through the 8th resolution, to authorise the Executive Board, for a period of 18 months, to acquire the company’s shares,within the legal limit of 10% of the number of shares comprising the capital (5% for shares acquired to hold or exchange or use as payment in theevent of a merger, split or for a capital contribution), taking into account shares already acquired. In any event, this authorisation will end at the GeneralMeeting called to approve the accounts of the financial year ending 31 December 2007. The maximum share purchase price would be € 100 per share.This new authorisation cancels the previous one. We remind you that these shares, which are required to be nominative and do not carry righting votes,do not entitle holders to dividends.
Cancellation of own shares ownedWe propose authorising the Executive Board to cancel own shares owned by the Company within a limit of 10% of the corporate capital.
This authorisation is requested for 18 months and will end at the Annual General Meeting held in 2008 (9th resolution).
Financial authorisationsWe also ask that you delegate to your Executive Board the authority to issue securities giving immediate or later access to the capital, or
to the allocation of debt securities, with or without pre-emptive rights, so that the Company can benefit, when the opportunity arises, from a meansto pursue Group development (10th, 11th, 12th, 13th and 14th resolutions).
You are therefore asked to authorise the Board to increase your Company’s capital at one time or in instalments, within a total nominallimit of € 20,000,000. The nominal amount of securities issued may not exceed € 400,000,000.
This double ceiling is not applicable in the case of an issue in the form of benefits in kind concerning equity securities or instrumentsgiving access to capital.
These authorisations are requested for duration of twenty-six months.
The ability to increase capital while withdrawing pre-emptive rights serves to abridge formalities and regulatory timelines required forpublic issues. However, the Executive Board must, in such cases, give shareholders priority over the public in subscribing. Furthermore, in the eventof an issue that excludes pre-emptive rights, the sum owed to the company shall be at least equal to the average weighted share price of the last threetrading sessions preceding the price setting, possibly less a maximum discount of 5%, if necessary, after adjustments.
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In order to meet the provisions of article L.225-129-6 of the commercial code, we ask you to authorise the Executive Board to increasethe capital by a maximum nominal value of € 393,000, representing around 2% of the current corporate capital, by issuing new shares for Groupemployees to subscribe to in cash (15th resolution). The issue price will be at least equal to 80% of the average of the initial prices listed during thetwenty trading sessions preceding the board’s decision, or 30% of this average when the unavailability duration is at least ten years.
Stock options - Free allocation of sharesIn order to interest certain Group employees in the Group’s results, we propose authorising the Executive Board to grant stock options
and free shares (16th and 17th resolutions).
The total number of options may not represent more than 250,000 shares and the free shares allocated may not exceed 3% of the capital.
Company’s merger with Stockalliance, through absorption of the latter by the formerYou are asked to consider your Company’s merger-take-over of Stockalliance, a PLC with a capital of € 30,568,860 with head offices at
55, rue Louis Bréguet, 31000 Toulouse, and registered under Toulouse trade register number 558 800 033 (18th resolution).
This merger operation is one of a number of measures to streamline and simplify the structures of the French companies related to theNorbert Dentressangle Group. To date, the Company owns 242,104 of the 242,610 shares comprising the capital of Stockalliance.
The merger would be governed by article 210 A of the General tax code and would take retroactive effect from 1 January 2007.
The assets contributed by the company taken over reach an estimated total of € 18,968,404. Liabilities taken over reach € 1,580,090and the net value of contributions reaches € 17,388,314.
The merger operation would result in:- a € 1,096 increase in our corporate capital, through the creation of 548 shares at a nominal value of € 2 each, entirely freed up and
allocated to the shareholders of the company taken over other than the Company, according to a parity of 13 Company shares for 12 Stockallianceshares,
- the creation of a merger premium of € 36,474.88 in the Company’s balance sheet liabilities,- the creation of a merger bonus of € 7,388,831.82.
The merger regulator, Cabinet Mazars, appointed by order of the President of the Romans commercial court, will inform you of itsfindings regarding the evaluation of contributions made and the appropriateness and fairness of the trade ratios.
Statutory modificationsLastly, we propose modifying the current statutes (19th resolution) to:- take into account the latest legal provisions, particularly those concerning participation in meetings,- reduce the duration of the term of office of Supervisory Board members from six to four years and consequently foresee a renewal rate
of one half rather than one third.
IV – PROPOSED RESOLUTIONS
The texts of the resolutions which we propose to submit to you for your approval are appended to this report.All documents provided for under effective regulations are also appended hereto. We thank you in advance for the trust that you will
surely place in your Executive Board.
The Executive Board
SPECIAL EXECUTIVE BOARD REPORT REGARDINGSTOCK OPTIONS AND SHARE WARRANTS ALLOCATEDOR EXERCISED FROM 1 JANUARY 2006 TO 31 DECEMBER 2006
• Options and warrants allocated:
To corporate officers:
General Date of Type Beneficiary Quantity Date PriceMeeting allocation of maturity in €
23/05/2006 17/07/06 warrant Jean-Claude MICHEL 40,000 31/05/09 51.6823/05/2006 17/07/06 warrant Hervé MONTJOTIN 25,000 31/05/09 51.6823/05/2006 17/07/06 warrant Patrick BATAILLARD 25,000 31/05/09 51.6823/05/2006 17/07/06 warrant François BERTREAU 25,000 31/05/09 51.68
To non-corporate officer employees:
General Date of Type Beneficiary Quantity Date PriceMeeting allocation of maturity in €
25/05/2004 20/01/06 purchase 4 9,500 21/02/11 50.8125/05/2004 16/10/06 purchase 2 7,500 17/11/11 61.81
• Options and warrants exercised:
By corporate officers:
General Date of Type Beneficiary Quantity Date PriceMeeting allocation of maturity in €
27/05/2003 30/06/03 warrant François BERTREAU 10,000 31/05/06 22.31
By non-corporate officer employees:
General Date of Type Beneficiary Quantity Date PriceMeeting allocation of maturity in €
24/05/2000 09/10/00 subscription 10 36,000 09/10/06 15.1124/05/2000 03/09/01 subscription 2 8,000 03/09/07 21.00
(*): 10 or more biggest allottees if a same quantity was allocated to several of them..
2006 FINANCIAL REPORT78
79
Dear Sir or Madam,
The Supervisory Board has now read the report submitted by the Executive Board for 2006.
2006 was a good year, above and beyond the growth in business and profitability levels; it enabled the Norbert Dentressangle Groupto progress significantly towards the “Challenge 2008” business plan objectives.
The Group focused on international development, benefiting from internal growth in Central and Eastern Europe, both in transportand logistics, and two judiciously targeted external growth operations, Romanian transport firm Transcondor and Spanish logistics firm CCH.
Sustainable development is now a reality for our employees and our customers, the French authorities and European institutionsalike acknowledge our commitments.
The broadening of the range of transport and logistics services has been the driving force behind internal growth, making increasinguse of new information management technologies. Our operating model, based on sound management of transport and logistics means, has onceagain proved its efficacy.
Overall, our Group has increased its strengths to capitalise on the market’s potential and seize new external growth opportunitiesin 2007.
The Supervisory Board invites you to approve the corporate and consolidated accounts for the financial year ending 31 December2006 and adopt the resolutions proposed by the Executive Board, including the 12% increase in dividend distribution and the changes to ourSupervisory Board. Mr Jacques Gairard is leaving the Supervisory Board this year and Mr Bruno Rousset is proposed as new member.
The resolutions proposed include extraordinary resolutions and more specifically:- the authorisation requested by the Executive Board to cancel the shares held by the Company by reducing the corporate capital,- granting delegations to the Executive Board to increase our corporate capital to enable it, if necessary and without any excessive
formalities, to seize the best opportunities to raise capital,- authorisations to facilitate Group employee shareholding,- lastly, statutory modifications to meet legislative provisions and reinforce the application of corporate governance regulations
within the Group.
We wish to thank you in advance for the trust that you bestow upon your Executive Board and Supervisory Board.
The Supervisory Board
COMMENTS BY THE SUPERVISORY BOARD
2006 FINANCIAL REPORT80
REPORT BY THE CHAIRMAN OF THE SUPERVISORYBOARD ON THE CONDITIONS IN WHICH THE BOARD’SPROCEEDINGS WERE PREPARED AND ORGANISED AND ON IN-HOUSE AUDIT PROCEDURES SET-UP BY THE COMPANY
The aim of this report, in accordance with article L.225-68 of the commercial code, is to present to the Annual General Meeting thepreparation and organisation of the Supervisory Board’s work and internal control procedures. It also presents the principles and regulations chosenby the Supervisory Board to determine pay and benefits of any kind to corporate officers, in accordance with article 62 of the legislation governing thedevelopment of profit-sharing and employee shareholding, published in the Official Journal of 31 December 2006 and codified in the last paragraphof article L.225-68 of the commercial code.
• Conditions in which the proceedings of the Supervisory Board are prepared and organised
The Supervisory Board, in order to fulfil its legal role of permanent supervision of your Company’s management, implements therecommendations of the AMF as well as those of the joint report by the “Association Française des Entreprises Privées” and the MEDEF of October 2003.
However, since our Company’s decision, in March 1998, to operate with both an Executive Board and a Supervisory Board, internalregulations have governed the relations between the Executive Board and the Supervisory Board. In particular, said regulations specify the ExecutiveBoard’s obligations in terms of providing information to the Supervisory Board and its Chairman, and the decisions which require an authorisationfrom, or the prior opinion of, the Supervisory Board.
The sale or acquisition of businesses, holdings, buildings and un-budgeted investments above a pre-defined limit require prior consentfrom the Supervisory Board. There is also a Group Investment and Commitment Committee comprised of members of the Executive Board, whichrefers to me for significant investments.
The terms and conditions under which the Executive Board provides information to the Supervisory Board and its Chairman relating,in particular, to decisions and events deemed to be the most important, and also to operational activities and financial considerations, are set forth inthe internal regulations.
This regulation also contains ethical provisions and gives the Executive Board the power of internal control.
The regulations to determine corporate officers’ pay are those provided by the Law and Statutes; we remind you that:- payments to the Chairman of the Supervisory Board are set by the Supervisory Board,- payments to members of the Executive Board, all currently under an employment contract, are also set by the Supervisory Board and
include a set part and a part that varies according to budget achievements.
The Group’s corporate officers do not receive any particular benefits in kind.
The members of the Supervisory Board of the company Groupe Norbert Dentressangle act in accordance with the regulations governingownership and operations involving securities by managers of listed companies, particularly making shares nominative or depositing shares owned,conforming with company share dealing abstention periods and declaring transactions concerning company shares as and when they are performed.
Over the past financial year, the Supervisory Board met each quarter to debate issues subject to its authority and also to hear theExecutive Board’s report on the business of the Company and its subsidiaries. All members of the Executive Board attend these meetings. TheCompany’s statutory auditors attend the Supervisory Board meetings concerning the accounts of the first half-year and the past year.
The Executive Board closes the accounts and presents them to the Supervisory Board.
So as to ensure the effective participation of members of the Supervisory Board, a complete file is sent out to them prior to each meeting.This contains all useful and generally required information needed to ensure that discussions during said meetings are as fruitful as possible, and toensure that said meetings make decisions with full knowledge of the facts.
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• Control environment
The Norbert Dentressangle Group’s business continued to develop in 2006. The sharp growth in the Logistics sector was sustained bythe upturn in internal growth. Two types of external growth were achieved abroad this year.
The Group’s objective in terms of internal control throughout the year was to continue to apply its own management rigour and controlprinciples and continue its improvements on existing systems. The Group has followed the market references published by the AMF on 22 January2007, particularly the general principles, regarding the ongoing structuring of internal control, relayed through the creation of an internal audit unit.
A reminder that the internal control system, although comprehensive, can only offer reasonable assurance and does not serve as anabsolute guarantee against the risks to which the Group is exposed.
Meeting the regulations regarding ethics and procedures, which have been distributed to each employee and relayed via ourcommitment charter and code of ethics, remained a priority for the Group in 2006.
In addition, the Group makes increasing use of the Intranet as a tool to distribute its management regulations and procedures. Themajority of the departments now have one or more databases that are constantly updated and developed.
An Intranet recapping the Group’s financial regulations and procedures has also been set up in order to run a new Group consolidationand reporting system.
The Group’s operational organisation remains decentralised but the use of centralised communication tools, such as the Intranet, enablesthe Group to diffuse clear control procedures from the management throughout the network. Improving and developing our computer tools contributesto the structuring of our internal control.
Over the year, in addition to improving its tools, the Group also maintained regular, precise control over the performances of eachmanagement unit, which is one of the bases of its internal control system.
The Group’s businesses are still divided into two Divisions, Transport and Logistics, under the responsibility of two differentManagement Committees.
The tightening of the internal control system remained a constant priority for the Group in 2006. To this end, the Group has continuedto strengthen measures by increasing the number of procedure documents and introducing additional indicators.
Furthermore, the Group has decided to create an Internal audit department, currently comprised of 2 experienced employees, underthe authority of the Group’s financial management. Due to the small hierarchical structure, there is a good level of reactivity in decision-making and inthe correction of any weaknesses identified. Post-audit meetings are organised systematically for each of the Internal Audit’s assignments. Thesemeetings are designed to present findings and related recommendations, and to consider actions to pursue in order to guarantee an efficient internalcontrol system.
The Group’s Internal Audit department is responsible for risk mapping. In 2006, the mapping system was updated following 24 interviews with the operating and functional managers of each Division and with cross-Divisional functional managers. This mapping is anopportunity to verify the quality of hedges against identified risks and the audit programme is established accordingly. It is validated by the Chairmanof the Supervisory Board and the Group’s Finance Director.
Lastly, in an ongoing aim to firmly ground its internal control within its long-standing entities, the Group has continued to strengthennot only Group management, but also Division management, to perpetuate existing practices.
• Players in the Group’s in-house audit and operational and functional procedures
The Supervisory Board and the Executive BoardThe Group operates with a Supervisory Board and an Executive Board. The presence of independent Board members (2 out of 6), and
the system of delegation between the Supervisory Board and the Executive Board is one of the strong and structuring elements of the Group’s in-houseaudit. Management considers advice from and verifications carried out by Board members to be important for the purpose of defining the Group’sstrategic guidelines.
Divisional Management Committees and Divisional Steering CommitteesImportant operations and events, and the performance levels of the various management units are reviewed, in each Division, at monthly
Steering Committee meetings, attended by the members of the Divisional Management Committee, the operational managers and their managementcontrollers.
In addition, each Division’s Management Committee meets every two months to discuss and plan both businesses’ strategic directions.
2006 FINANCIAL REPORT82
Major events and operations and the performances of each Division are discussed during monthly Divisional steering committeemeetings attended by the Divisions’ General Managers, Finance Directors and HR Directors, the Chairman of the Executive Board, Group FinanceDirector and Group HR Director.
Group and Division Investment and Commitment CommitteeThe aim of the Group Investment and Commitment Committee is to validate significant contractual investments and commitments. We
remind you that this committee is comprised of members of the Executive Board. It generally meets every two weeks. Investment and commitmentrequests are submitted by Division operating managers according to a standard procedure pre-defined by the committee, including a strategic andfinancial presentation of the project. The committee validation criteria were updated in 2005, to take into account the Group’s size and new issues.
At the same time, each Division has a Division Investment and Commitment Committee for investments that do not meet the criteriarequiring validation from the Group Investment and Commitment Committee. This committee meeting is held at the Divisional ManagementCommittee meetings.
Divisional legal and insurance departmentsThe legal departments of each Division are centralised and are responsible for managing contractual and legal commitments. They are
involved from the early stages of business negotiations with customers and suppliers alike.Furthermore, our Company and subsidiaries’ legal secretarial services are outsourced to legal firms. The management of our insurance policies, with well-known international insurance brokers, is centralised by the Group’s legal
department and is subject to regular calls for tenders.
Divisional Operational Management Control The Divisional Operational Management Control Department, which reports to the Divisional Finance Department, is composed of
management controllers, who are decentralised vis-à-vis the various operational managers in each Division. Operational Management Control is a keyelement in the Group’s in-house audit procedures.
The Operational Management Control Department is responsible for the budgetary process. Every month, it is involved in establishingthe various financial reports to be sent to the Group and, in particular, participates in the accounts reporting / management reporting reconciliationprocedure. The Management Control Department comments on the results at Steering Committee meetings, in particular, as regards the analysis of theactual / budgeted figure and the actual / historical figure divergences. Where applicable, audits of procedures, analyses and other specific studies maybe ordered by the Divisional Department following these Steering Committee meetings.
Conclusions are followed up at the next Steering Committee meetings.
Credit ManagementThe management of Group commitments with third parties is centralised within each Division, under the responsibility of Financial
management. A centralised Group Credit Management department enables the Group to pool together the information from Divisional CreditManagement departments.
The procedures and indicators implemented by Group Credit Management (regular credit analyses, determination of commitmentthresholds authorised, customer restrictions, etc.) ensure permanent monitoring of outstanding receivables and enable a good level of reactivity in theevent of a problem. Indicators are distributed to managers to maintain awareness and ensure coordinated action.
PurchasingEach Division has a centralised Purchasing department, guaranteeing the quality and optimisation of strategic purchases. These
departments are also responsible for diversifying supplier exposure.A system aimed at harmonising and sharing suppliers for certain product ranges was created in 2006 to increase the consistency of
purchasing practices and ensure broader implementation of good practices.
Quality – Safety – EnvironmentControl of quality and safety are key facets of our two activities, Transport and Logistics. The Quality – Safety – Environment
Departments report to the respective Managers of the two Divisions and guarantee said control. In the Logistics Division, the teams of “quality andsafety” co-ordinators are responsible for deploying safety and prevention procedures at each warehouse.
In 2006, the Group continued its certification process and, in particular, its target concerning the certification of its entire network underthe ISO 14001 environmental standard.
The efforts focused on the “Safe Driving Plan” were intensified, with the major aims being to reduce the accident rate and maintain ahigh level of quality in our transport services.
ITBoth Divisions’ IT departments have continued to ensure the smooth running and continuity of our systems and have been given greater
responsibilities since the dematerialisation of customer relations (EDI, customer portal, etc.), internal Group relations (Intranet, mails, etc.) and theincorporation of information systems in general. The security of on-line systems and the ability of our networks to contend with faults are of increasingimportance. They are closely monitored and are subject to strict procedures (protection, back-up, etc.).
83
Statutory auditorsThe work of our auditors is an additional means of verifying the reliability of our financial information and the appropriateness of our
control procedures. They make an ongoing contribution to the Group’s control process.Furthermore, the presence of two firms with different yet complementary working methods, adapted to the Group’s strategy, serves as
a further guarantee.The statutory auditors can also provide recommendations regarding the internal control process and validate the integrity and
traceability of information and financial systems.
External consultancy firmsThe Group regularly calls upon external consultants to validate a number of processes. These external audits concern issues as broad as
sustainable development, sales force or taxation.
• Procedures concerning accounting and financial information
Financial verifications and the compiling of financial and accounting information are based on the Group’s operational organisation.For decentralisation purposes, each legal entity is responsible for submitting a package of pre-defined financial information to the Group
on a monthly and quarterly basis. These data are reviewed half-yearly by the statutory auditors.
Cash and financing transactionsThe accounts department, which is centralised at Group level, maintains a strong control over transactions.The payment and financing of French and foreign subsidiary activities are centralised within each Division.Credit lines, loans and cash investment options are handled by the Group’s accounts department and approved by the Executive Board.The Group accounts department also manages the Group’s exchange and rate risks, applying limits set by Financial management, with
deliberately limited recourse to the market.Furthermore, the Finance Director reviews simplified reports submitted by the accounts department, which are also forwarded to me,
and comprehensive reports are reviewed by members of the Executive Board every quarter.
Management reporting and Group Management Control The reporting procedure is a key facet of the Group’s management and in-house audit.The Group Management Control Division consolidates management reporting, drawn up on a monthly basis by the Operational
Management Control Department, in a single tool. The reporting is reconciled with accounting results, compared with the budgetary and historicaldata, every month.
The data (operational and financial indicators) is constantly available for the Group and Divisional Departments and operationalmanagers and operational management controllers on the Group’s intranet, together with comparative budgetary and historical data.
Management reporting is systematically reconciled with the audited accounting data. Every month, the Finance Department presents monthly management reports to the Executive Board.Where applicable, audits of procedures, analyses and other specific studies may be ordered by the Finance Department or the Executive
Board.
Regulatory consolidation A consolidated balance sheet, a profit and loss account and cash-flow table are produced each quarter and published each half-year.The Group’s consolidation unit gives instructions each quarter, setting the timetable for tasks and reiterating the methods for preparing
consolidation bundles, for the accounting departments / shared accounting department centres of each country.The consolidation bundles are verified by the consolidation unit prior to integration. Every quarter, the results are reconciled with those
of the management reporting together with the Group Management Control Division.The Executive Board submits the management reporting and consolidation to the Supervisory Board every quarter. The consolidation is
published and thus approved by the Statutory Auditors every half-year.In order to meet the new standards and related legal obligations and to further harmonise its regulations and practices, in 2006 the Group
decided to set up a new statutory consolidation and reporting tool to be used in 2007. This centralised computer tool will contribute to the ongoingimprovements in internal control prioritised by the Group.
Norbert DentressangleChairman of the Supervisory Board
2006 FINANCIAL REPORT84
REPORT BY THE STATUTORY AUDITORS, DRAWN UPACCORDING TO ARTICLE L.225-235 OF THE FRENCH COMMERCIAL CODE, ON THE REPORT BY THE CHAIRMANOF THE SUPERVISORY BOARD OF GROUPE NORBERT DENTRESSANGLE S.A, CONCERNING THE IN-HOUSE AUDIT PROCEDURES RELATING TO THE PREPARATIONAND PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION
FINANCIAL YEAR ENDED 31 DECEMBER 2006
Ladies and Gentlemen,
In our capacity as Statutory Auditors of Groupe Norbert Dentressangle SA and pursuant to the provisions of Article L.225-235 ofthe French Commercial Code, we hereby submit our report on the report drawn up by the Chairman of your Company under the provisions ofArticle L.225-68 of the French Commercial Code, for the financial year ended 31 December 2006.
In his report, the Chairman of the Supervisory Board is responsible for reporting, inter alia, on the conditions in which theproceedings of the Supervisory Board were prepared and organised and on the in-house audit procedures set up within the Company.
It is our duty to comment on the information given in the Chairman’s report on the in-house audit procedures relating to thepreparation and processing of accounting and financial information.
We conducted our audit in accordance with the professional accounting principles applicable in France, which require theimplementation of procedures to assess the accuracy of the information given in the Chairman’s report on in-house audit procedures relating tothe preparation and processing of accounting and financial information. Said procedures involve, inter alia:
- becoming acquainted with the goals and general organisation of the in-house audits, as well as of in-house audit proceduresrelating to the preparation and processing of accounting and financial information submitted in the Chairman’s report;
- becoming acquainted with the work underlying the information thus given in the report.
Based on said procedures, we have no comments to make on the information given relating to the in-house audit procedures of theCompany relating to the preparation and processing of accounting and financial information contained in the report by the Chairman of theSupervisory Board, drawn up under the provisions of the last paragraph of Article L.225-68 of the French Commercial Code.
Lyon, 13 April 2007
The Statutory Auditors
Alain Bonniot & Associés Alain Bonniot
Ernst & Young AuditDaniel Mary-Dauphin
85
n K€ note 31/12/2006 % 31/12/2005 % 31/12/2004 %
n REVENUE 1,607,905 100.0 1,399,316 100.0 1,303,440 100.0
Operating expenses before allowances and reversals d (1,460,382) (90.8) (1,281,019) (91.5) (1,177,774) (90.4)Allowances for (reversals of) amortisation, depreciation and provisions d (64,435) (4.0) (66,878) (4.8) (60,604) (4.6)
n OPERATING RESULT (E.B.I.T.A)(1) d 83,088 5.2 51,419 3.7 65,062 5.0Amortisation of goodwill and negative goodwill k 0 0.0 35,566 2.5 (1,088) (0.1)
n OPERATING RESULT (E.B.I.T)(2) 83,088 5.2 86,985 6.2 63,974 4.9Financial income e 10,093 0.6 5,764 0.4 5,500 0.4Finance costs e (16,674) (1.0) (11,553) (0.8) (13,035) (1.0)
n INCOME BEFORE TAX 76,507 4.8 81,196 5.8 56,439 4.3
Income tax expense f (27,159) (1.7) (16,764) (1.2) (17,759) (1.4)Share of profit of associates 444 0.0 291 0.0 264 0.0Net income from discontinued operations andheld-for-sale assets 0.0 0.0 1,311 0.1
n NET INCOME/(LOSS) 49,792 3.1 64,723 4.6 40,255 3.1
Minority interests 0 0 (46)Group share 49,792 64,723 40,209
n EARNINGS PER SHARE gBasic EPS for financial year 5.19 6.77 4.23Basic EPS from continuing operations 5.19 6.77 4.08Diluted EPS for financial year 5.12 6.72 4.12Diluted EPS from continuing operations 5.12 6.72 3.99
(1) This result equates to EBITA as defined in the accounting policies in note w.(2) This result equates to EBIT as defined in the accounting policies in note x.
CONSOLIDATED INCOME STATEMENT
2006 FINANCIAL REPORT86
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
ASSETS
n K€ Note 31/12/2006 31/12/2005 31/12/2004Restated Restated
Goodwill k 78,058 70,700 55,510Intangible assets i 5,665 6,643 6,229Property, plant and equipment j 408,864 391,069 350,373Investments in associates l 1,491 1,148 710Other non-current financial assets m 19,337 19,835 16,464Deferred tax assets t 18,344 26,163 9,523
n NON-CURRENT ASSETS 531,759 515,558 438,809
Inventories n 7,390 6,366 5,955Customers o 330,104 345,983 286,118Other accounts receivable o 80,331 85,549 65,938Other current financial assets p 1,425 396Cash and equivalents p 255,706 194,627 159,015
n CURRENT ASSETS 674,956 632,921 517,026
Non-current assets held for sale j 717 990
n TOTAL ASSETS 1,207,432 1,149,469 955,835
EQUITY AND LIABILITIES
n K€ Note 31/12/2006 31/12/2005 31/12/2004Restated Restated
Share capital q 19,671 19,847 19,533Share premium 18,433 21,852 19,116Foreign-exchange differences 760 (225) (627)Consolidated reserves 208,561 153,616 122,496Net income/(loss) for the financial year 49,792 64,723 40,209Minority interest 511
n EQUITY q 297,217 259,813 201,238
Long-term borrowings r 198,397 187,439 170,094Long-term provisions s 51,224 51,850 19,804Deferred tax liabilities t 37,065 36,902 37,516
n NON-CURRENT LIABILITIES 286,686 276,191 227,414
Short-term provisions s 11,796 26,366 0Trade payables u 238,980 229,707 197,384Short-term borrowings r 120,169 114,867 99,404Bank overdrafts p 58,609 50,922 58,514Current tax payable 4,919 3,715 3,640Other accounts payable u 189,056 187,888 168,241
n CURRENT LIABILITIES 623,529 613,465 527,183
Liabilities directly associated with non-current assets held for sale 0 0 0
n TOTAL EQUITY AND LIABILITIES 1,207,432 1,149,469 955,835
87
CONSOLIDATED CASH FLOW STATEMENT
n K€ 31/12/2006 31/12/2005 31/12/2004
Restated
n Group share of net income 49,792 64,723 40,209• Amortisation, depreciation and provisions 64,462 68,948 61,963• Gain/(loss) on disposal of non-current assets (6,270) (3,788) (2,727)• Minority interests in income/(loss) 46• Deferred tax charges/(income) 7,635 1,142 (6,016)• Share of profit of associates net of dividends received (320) (291) (264)• Other non-monetary expenses and revenues 542• Cancellation of negative goodwill (37,168)
Elimination of expenses and revenues not affecting cashflow 66,049 28,843 53,002
Change in operating assets and liabilities excluding effect of acquisitions(including impact of interest-rate fluctuations) 37,636 (33,185) 13,672Of which:• Inventories (917) (160) (367)• Accounts receivable 30,731 (58,472) (19,984)• Current liabilities 7,822 25,447 34,023
CASH FLOW FROM OPERATING ACTIVITIES 153,477 60,381 106,883
• Disposal of non-current assets 50,944 65,184 90,053• Acquisition of property, plant and equipment and non-current financial assets (134,007) (144,911) (137,476)• Acquisitions of companies, net of cash acquired (14,883) 62,038 (1,831)• Disposals of companies, net of cash transferred 324 (2,298)
CASH FLOW FROM INVESTING ACTIVITIES (97,622) (17,689) (51,552)
• New loans 138,764 93,200 100,731• Dividends paid to parent company shareholders (8,490) (7,979) (6,644)• Net purchase and sale of treasury shares (7,278) (1,506) 76• Loan repayment (127,526) (85,857) (122,547)• Issue of share capital and share premiums 1,284 3,050 990
CASH FLOW FROM FINANCING ACTIVITIES (3,246) 908 (27,394)
• Impact of the change on cash and others 387
CHANGES IN CASHFLOW OVER THE FINANCIAL YEAR 52,996 43,600 27,937
n Increase (decrease) in cashflow• Opening cashflow 144,101 100,501 72,564• Closing cashflow 197,097 144,101 100,501
52,996 43,600 27,937
The “Acquisition of companies net of cash acquired” line stems both from the acquisition of the Spanish companies CCH and GPL andof the Romanian company Transcondor. These two acquisitions respectively contributed €14,094K and €789K to the amount in this heading.
STATEMENT OF CHANGES IN CONSOLIDATED EQUITY
n K€ Share Share Treasury Retained Other Minority TotalCapital premium shares earnings interests
1 JANUARY 2004 15,566 22,111 (6,892) 137,653 (500) 465 168,403
Corrections to IFRS transitions (*) (2,649) (2,649)1 JANUARY 2004 - after restatements 15,566 22,111 (6,892) 135,004 (500) 465 165,754Net income for the financial year 2004 40,209 46 40,255Foreign-exchange differences (127) (127)Change in financial instrument revaluation reserve 0
n Total period income and expenses 0 0 0 40,209 (127) 46 40,128
Dividends paid for 2003 (6,644) (6,644)Cancellation of treasury shares acquired (435) (435)Increase in share face value from € 1.60 to € 2 3,907 (2,995) (912) 0Share issues for share subscription options 60 924 984Cost of share option based payment 485 485Effect of variations in the scope of consolidation 0Minority interest purchase commitments 0Other variations 967 967
31 DECEMBER 2004 Published 19,533 19,116 (7,327) 169,548 (142) 511 201,239
Net income for the financial year 2005 64,723 64,723Change in financial instrument revaluation reserve 257 257Foreign-exchange differences 402 402
n Total period income and expenses 0 0 0 64,723 659 0 65,382
Total period income and expensesDividends paid for 2004 (7,979) (7,979)Cancellation of treasury shares acquired (1,533) (1,533)Share issues for share subscription options 314 2,736 3,050Cost of share option based payment 434 434Effect of variations in the scope of consolidation 0Minority interest purchase commitments (511) (511)Other variations (269) (269)
31 DECEMBER 2005 19,847 21,852 (8,860) 226,292 682 0 259,813
Group share of net income for the financial year 2006 49,792 49,792Change in financial instrument revaluation reserve 675 675Foreign-exchange differences 1,012 1,012
n Total period income and expenses 0 0 0 49,792 1,687 0 51,479
Dividends paid for 2005 (8,491) (8,491)Cancellation of treasury shares acquired (322) (4,557) (2,399) (7,278)Share issues for share subscription options 146 1,138 1,284Cost of share option based payment 542 542Effect of variations in the scope of consolidation 0Minority interest purchase commitments 0Other variations (132) (132)
31 DECEMBER 2006 19,671 18,433 (11,259) 267,593 2,779 0 297,217
* Please see section III-b
2006 FINANCIAL REPORT88
89
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSUNDER IFRS
I - GENERAL INFORMATION ON THE ISSUER
Name: Norbert Dentressangle Group.Registered office: “Les Pierrelles” 26240 BEAUSEMBLANT.Legal form: public limited company (Société Anonyme) with an Executive Board and Supervisory Board, subject to the provisions of the French
Commercial Code (Code de Commerce).The parent company of the Group is Groupe Norbert Dentressangle S.A.It is subject to French law.The General Meeting that is to adopt the financial statements for 2006 shall be held on 30 May 2007.The consolidated financial statements were established by the Executive Board on 2 March 2007.The businesses of the Group involve transport and logistics.
Three types of company can be distinguished within the Norbert Dentressangle Group:- Logistics operating companies, of which the role in France and abroad is to provide warehousing services, to which can be added
complementary up-stream activities (order preparation, product customisation and tracing, return management, quality control and so on) and downstreamservices (distribution channel management and reverse logistics).
- Transport operating companies, of which the role is to operate a fleet of vehicles with drivers to carry physical merchandise flows in accordancewith customer requirements.
- Service companies, of which the task is to provide the operating companies with services enabling them to focus on their core activities. Theseinclude the holding company and country holding companies, which have the role of providing assistance, particularly in the communication strategy.
The weightings of the two Group businesses can be assessed using the segment information contained below in the Notes.
II– ACCOUNTING POLICIES AND METHODS
a) Consolidation principles• Context and basis for preparation of consolidated financial statements
In application of the European Regulation 1606/2002 of 19 July 2002 on international standards, the consolidated financial statementsof the Norbert Dentressangle Group for the year ended 31 December 2006 have been prepared in accordance with the international accountingstandards (hereinafter, “IFRS”) applicable on that date as adopted by the European Union on the preparation date of the financial statements.
Some of these standards may be subject to changes or interpretations of which the application may be retrospective. As a result of suchmodifications, the Group may subsequently restate the consolidated financial statements to comply with IFRS.
The accounting policies and methods are the same as those applied in the consolidated financial statements to 31 December 2005, withthe exception of the following standards, amendments and interpretations, adopted by the European Union, which are mandatory from 1 January 2006:
- Amendment to IAS 19 “Employee Benefits” on actuarial gains and losses, Group plans and disclosures. The Group did not elect torecognise actuarial gains and losses in equity,
- Amendments to IAS 39 “Financial Instruments” firstly relating to the fair value option and secondly to cash flow hedging for futureinter-company transactions,
- IFRS 6 “Exploration for and Evaluation of Mineral Resources”,- IFRIC 4 on determining whether an arrangement contains a lease,- IFRIC 5 “Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds”,- IFRIC 6 “Liabilities Arising from Participation in a Specific Market – Waste Electrical and Electronic Equipment”.
Following analysis, these new standards and interpretations were found to have no impact on the Group’s financial statements, with theexception of various additional notes that are indicated in the notes to the financial statements.
Similarly, the Group didn’t decide to adopt any standard early, in particular the following standards that have already been publishedand which are mandatory from 31 December 2006:
- Amendment to IAS 1 relating to the disclosures on the capital, mandatory from 1 January 2007,- IFRS 7: “Financial Instruments – Disclosures” applicable from 1 January 2007,- IFRS 8: Operating Segments,- IFRIC 7: “Applying the Restatement Approach under IAS 29”,- IFRIC 8: “Scope of IFRS 2”,- IFRIC 9: on the reassessment of embedded derivatives,- IFRIC 10: “Interim Financial Reporting and Impairment”,- IFRIC 11: “Group and Treasury Share Transactions”,- IFRIC 12: “Service Concession Arrangements”.The Group is currently analysing the practical consequences of these new regulations and the impact of their application on the financial
statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In preparing its financial statements, the Group has to make certain estimates and assumptions that can affect the financial statements.The Group regularly reviews its estimates and assessments to take account of past experience and other factors considered relevant in respect ofeconomic conditions. Depending on changes in these various assumptions or conditions, the amounts appearing in its future financial statements maydiffer from current estimates.
The main headings in the financial statement that may be subject to estimates are as follows:- Impairment of doubtful accounts receivable;- Fair value of assets and identifiable and contingent liabilities acquired as part of a business combination;- Impairment of goodwill, the measurement of which is largely based on assumptions regarding future cash flows, discount rates,
terminal values,- Valuations of options related to share subscription plans granted to employees and retirement commitments, the measurement of which
is based on a series of actuarial assumptions,- Valuation of financial instruments,- Deferred taxes and tax expenses.
The financial statements reflect the best estimates based on available information as of the balance sheet date.They have been prepared using the historical cost principle, except for certain items, in particular financial assets and liabilities, which
have been measured at fair value.The individual financial statements of each Group company are prepared in accordance with the accounting policies and regulations in
force in their respective countries. They are adjusted to comply with the consolidation policies applied in the Group.The Norbert Dentressangle Group has applied IAS 39 “Financial Instruments: Recognition and Measurement” and IAS 32 “Financial
Instruments: Disclosure and Presentation” as from 1 January 2005.The impact of the first-time adoption of these standards after tax effects can be summarised as follows:- Recognition of the purchase commitment for the minority interests in Thier (cancellation of € 511K in minority interests and the
recognition of a debt of € 1,411K and € 900K in goodwill).- Recognition of the fair value of cash flow hedges with a net impact of € 552K on net worth.
• First-time application of IFRSIn preparing its opening balance sheet as of 1 January 2004, the Group complied with the provisions of IFRS 1 “First-time adoption of
IFRS” which covers the first-time application of the international financial reporting standards and exceptions to the requirement of retrospectiveapplication of all IFRS.
The Group has elected to use the following options provided for in IFRS 1:- Business combinations prior to 1 January 2004 have not been retrospectively restated;- Actuarial gains and losses on retirement commitments were recognised and offset in equity for their accumulated total as of 1 January
2004,- The historical cost method was retained for all assets,- IAS 32 and IAS 39 were applied as from 1 January 2005,- Foreign-exchange differences were retained in the opening balance sheet.- Share-based payments were only recognised for equity instruments granted after 7 November 2002 and vesting after 1 January 2005;
• Scope of consolidationThe consolidated financial statements include the financial statements of companies controlled exclusively, whether directly or indirectly,
by Groupe Norbert Dentressangle S.A., the Group’s parent company.The various companies share the same balance sheet date as the Group.The scope of consolidation is set out in Note III aa.
Exclusive controlControl is the power to, directly or indirectly, dictate the financial and operating policies of a company so as to profit from its activities.
Control is generally assumed to exist where the Group holds in excess of half the voting rights in the controlled company. The financial statements ofsubsidiaries are included in the consolidated financial statements as from the date of effective transfer of control and until control ceases to exist.
All material transactions between the consolidated companies, as well as inter-company gains and losses, have been eliminated.
The Group consolidates French special purpose entities designed solely to finance road tractors (see Note III-z).These are called “Locad” entities, are in the form of economic interest groupings (EIGs) and are majority owned by a banking pool.They buy a fleet of vehicles matching Group requirements and finance them through loans from a banking pool. The vehicles are leased
exclusively to the various French companies that use them.In line with SIC 12, these special purpose vehicle financing entities have been fully consolidated as from 1 January 2004.The Group has firm vehicle buy-back commitments from the manufacturers of these motor vehicles.
2006 FINANCIAL REPORT90
91
Joint controlCompanies over which the Group exercises joint control with a limited number of partners under a contractual agreement are
consolidated using the proportional integration method.The assets, liabilities, revenues and expenses are consolidated in proportion to the Group’s interest.
Significant influence Associates are companies in which the Group exercises significant influence over its financial and operational policies, but does not exercise
control. Where an investor holds, directly or indirectly, 20% or more of the voting rights in the company held, it is assumed to have significant influence,except where it is clearly shown that this is not the case.
Companies over which the Group exercises significant influence are recognised using the equity method.Goodwill relating to these entities is included in the carrying amount of the investment.
Every company in which the Group holds majority control is consolidated.
b) Foreign exchange translationThe consolidated financial statements as of 31 December are prepared in euros, which is the Group’s functional currency.
• Recognition of foreign currency transactions in the financial statements of consolidated companiesForeign-currency transactions recognised in the income statement are translated at the exchange rate on the date of the transaction.
Foreign-currency monetary items recognised in the balance sheet and not subject to hedging are translated at the exchange rate on the balance sheetdate. Any resulting foreign exchange differences are recognised in income.
• Translation of financial statements of foreign subsidiariesThe balance sheets of foreign companies with functional currencies other than the euro are translated into euros at the exchange rate
on the balance sheet date and their income statements at the average rate for the financial year. Any resulting translation difference is recognised inequity, under the “Foreign-exchange differences” heading.
In the event of disposal of an entity, the foreign-exchange differences are recognised in income for the period.Goodwill is tracked in the currency of the subsidiary in question.None of the Group’s material subsidiaries are located in a high-inflation country.
c) Business combinationsWhen entering the scope of consolidation, the identifiable assets, liabilities and contingent liabilities of the acquired entity, satisfying
the criteria for recognition under IFRS are recognised at the fair value determined on the date of acquisition, with the exception of non-current assetsclassed as assets held for sale, which are recognised at fair value net of disposal costs.
Only identifiable liabilities in the acquired entity that satisfy the criteria for recognition as a liability are recognised in a businesscombination. Accordingly, a restructuring liability is only recognised as a liability of the acquired entity where it is under an obligation, as of the dateof the acquisition, to carry out this restructuring.
Goodwill is calculated as the difference between the sum of the identifiable assets, liabilities and contingent liabilities of the acquiredentity measured separately at their fair value and the cost of acquisition of the interest in the company in question.
Adjustments to the values of assets and liabilities stemming from acquisitions recognised provisionally (because of ongoing appraisalwork or additional analysis) are recognised as retrospective goodwill adjustments where they occur within twelve months of the date of acquisition.
After this period, the impact is recognised directly in income except where it relates to error correction.
Newly acquired companies are consolidated from the effective date of taking of control.
Purchases of minority interests are not currently covered by IFRS and the IASB’s current deliberations on the recognition of suchtransactions are part of the expected amendments to be made to IFRS 3 “Business Combinations”. So, in the absence of specific rules, the Groupcontinues to apply the method used under French GAAP. In the event of acquiring additional ownership interests in a subsidiary, the difference betweenthe price paid and the carrying amount of minority interests acquired, as calculated from the Group’s consolidated financial statements prior to theacquisition, is recognised as goodwill.
The current formulation of IAS 27 and IAS 32 results in the Groups recognising commitments to purchase minority interests as financialliabilities. The Group has elected to recognise in goodwill the difference between the discounted fair value of the exercise price of the options and theamount of minority interests cancelled in equity.
This goodwill is readjusted each year to reflect the change in the exercise price of the options and changes to minority interests. Thistreatment, which is the one that would be applied were the options exercised now, is the one that best reflects the reality of the transaction.
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d) GoodwillGoodwill is measured at cost, this being the excess cost of the investment in consolidated companies over the acquirer’s proportional
ownership of the net fair value of identifiable assets, liabilities and contingent liabilities.
From 1 January 2004 onwards, goodwill is no longer amortised on a straight-line basis but subject to impairment tests at least onceannually, or more often when events or changes in circumstances indicate impairment may have occurred. Any impairment recognised is irreversible.
Negative differences between the purchase cost and the acquirer’s ownership interest in the net fair value of identifiable assets andliabilities (negative goodwill) is recognised directly in period results after verification of its amount.
Goodwill is then allocated to the Cash Generating Units to which it relates.
Goodwill for equity reported companies is recognised in the item "Investments in associates".
e) Intangible assetsIntangible assets consist essentially of software, which is amortised over between 12 to 60 months on a straight-line basis.
Internally developed software is recorded on the balance sheet when the following two conditions apply:- it is probable that the entity shall receive the corresponding future economic benefits; and- its cost or value can be measured with sufficient reliability.The conditions defined by IAS 38 regarding the capitalisation of development costs must be respected, in particular the technical feasibility
of the project, as well as the intention and availability of resources to conclude the software.
Two types of cost are used for internally developed software:- outside expenses, such as for licences and specialist firms; and- the direct costs of employees associated with the project in the design, parameterisation and delivery stages.The total cost thus recorded is carried as the recoverable amount of the software. This analysis may give rise to impairment.
f) Property, plant and equipment• Haulage equipment
The Group carries out an annual review of market conditions and the buy-back terms agreed to by its suppliers. These terms dependon the year of purchase and type of vehicle, for example tractors, trailers and truck tractors.
Using these criteria, the estimated period over which the vehicles are expected to be used is projected on a straight-line basis and adepreciation period thus obtained. Accordingly, vehicles are currently depreciated on a straight-line basis over a period of between 80 to 150 months.
Residual values of other non-current assets are reviewed each year. Impairment tests are carried out in line with the procedure set outin section h (Impairment tests).
• Other items of property, plant and equipmentInvestments in property, plant and equipment are initially recognised at purchase cost.
Depreciation is calculated on a straight-line basis over the estimated period in which the various categories of non-current assets areexpected to be used.
The main periods over which assets are expected to be used are as follows:- Buildings: straight-line over a period of between 15 to 30 years,- Building fixtures and fittings: straight-line over 10 years,- Plant, machinery and equipment: straight-line over 5 years,- Other items of property, plant and equipment: straight-line over a period of between 5 to 10 years.
Given the nature of the non-current assets held by the Group, no major components were identified.
Residual values of non-current assets are reviewed annually. Impairment tests are carried out where there are indications of same(market value for capitalising it).
Subsequent expenditure is capitalised where it satisfies the asset recognition criteria set out in IAS 16 and in particular where it is likelythat future economic benefits will flow to the company. These criteria are assessed prior to incurring the expense.
93
An item of property, plant and equipment is derecognised upon disposal or where no future economic benefit is expected from its useor disposal. Any gain or loss resulting from the derecognition of an asset (calculated as the difference between the net proceeds of disposal and thecarrying amount of this asset) is recognised in income in the period in which the asset is derecognised.
g) Lease contractsThe Group recognises its finance lease contracts in balance sheet assets on inception of the lease.
The balance sheet carrying amount is the lesser of the fair value of the asset and the discounted value of the minimum lease payments.
Finance leases are those that transfer substantially all risks and benefits inherent in ownership to the lessee. They comply with the mainindicators applying under IAS 17, that is:
- option for transfer of ownership at the end of the lease term, with exercise conditions such that the transfer of ownership appearshighly probable on the date of concluding the contract;
- the term of the lease covers most of the life of the asset in the usage conditions of the lessee; and- the discounted value of minimum lease payments is similar to the fair value of the leased asset on conclusion of the lease.
Lease payments are broken down into the finance charge and the reduction of the outstanding liability, in order to obtain a constantperiodic interest rate on the remaining balance of the liability. The finance charges are taken directly to the income statement.
Contracts qualifying as operating leases are not restated.Operating lease payments are recognised in expenses, in most cases on a straight-line basis until the end of the contract.
Non-current items acquired under finance leases are recognised as assets in the balance sheet and depreciated over the same periods asthose described above where the Group expects to obtain ownership of the asset at the end of the lease. Otherwise, depreciation is calculated over theshorter of the period over which the asset is expected to be used and the term of the lease.
The Group sometimes sells and leases back assets.Pursuant to IAS 17, the accounting treatment for these transactions particularly depends on the following items:- Subsequent classification of the lease (operating lease or finance lease),- Terms of sale of the previously held asset (selling price at market terms).
h) Impairment testsIAS 36 defines the procedures an enterprise must follow to ensure that the net carrying value of its assets does not exceed their
recoverable amount, that is, the amount that would be recovered from their use or sale.
Apart from goodwill and intangible assets with an indefinite life that must be subject to systematic annual impairment tests, therecoverable amount of an asset is estimated each time there are signs it may have experienced an impairment loss.
The recoverable amount of an asset is the larger of the fair value less costs to sell and its value in use.
The net sale price is the amount that can be obtained from selling an asset in an arm’s length transaction between informed and willingparties, less the costs of disposal.
The value in use is the discounted value of the estimated future cash flows expected from the continued use of the asset and its disposalat the end of its economic life.
The recoverable amount is estimated for each asset individually.
If this is not possible, the assets are grouped by cash generating unit (CGU) for which the recoverable amount can then be determined.A CGU is the smallest asset group of which the continued use generates cash inflows largely independent of those generated by other
assets or group of assets.For this purpose, all profit centres arising from past acquisitions of companies have been identified and the developments in the related
assets tracked.The recoverable amount of a CGU is the larger of its fair value less costs to sell and the value in use.The value in use is determined from cash flows estimated based on plans or budgets.These cash flows are projected over five years in accordance with the historical organic growth rates observed for the Group.The residual value of a CGU is a multiple of the last cash flow.The discount rate is based on a level calculated for the entire Group. It is determined from intrinsic and market data and supported by
work of financial analysts. The risk component of this rate is identical for the Logistics and Transport businesses. The recoverable amount is thencompared with the carrying amount of the CGU.
If this amount is greater than the net carrying amount of the CGU on the balance sheet date, no impairment is recorded.
2006 FINANCIAL REPORT94
If on the other hand this value is less than the net carrying amount, impairment is recognised for the difference and this must berecorded on a priority basis in goodwill, with such impairment being considered definitive.
For other intangible and tangible assets with a determinate economic life, a previously recognised impairment loss is reversed if therehas been a change in the estimates used to determine the recoverable amount since an impairment loss was last recognised. If so, the carrying amountof the asset is increased to its recoverable amount. A carrying amount increased due to reversal of an impairment loss should not exceed the carryingvalue that would have applied net of depreciation or amortisation if no impairment loss had been recognised for this asset in prior periods. Impairmentloss reversals are recognised in results, unless the asset is recognised at its revalued amount, in which case the impairment loss is considered as apositive revaluation. After an impairment loss reversal is recognised, the allocation to amortisation and depreciation is adjusted for future periods sothat the revised carrying amount of the asset, reduced by any possible residual value, is apportioned systematically over the remaining economic life.
i) InventoriesInventories are recognised at purchase cost using the average weighted cost method. An allowance for impairment is recognised when
the purchase cost exceeds the market value.
j) Trade and other receivablesTrade receivables are valued at their nominal value. Impairment is recorded for these via an allowance based on risks of non-recovery,
assessed on a case-by-case basis.
k) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and its amount can be estimated reliably.Provisions are discounted if the effect is considered material. The effects of this discounting are recognised in operating results.Provisions for restructuring are recognised in accordance with IAS 37, that is:- if there is a detailed formal plan, identifying at least:• the business or part of business concerned;• the location;• the function and approximate number of employees who are to be compensated;• expenditures to be undertaken;• when the plan is to be implemented; and- if the enterprise has raised a valid expectation in those affected that it will carry out the restructuring.Contingent liabilities relate to potential obligations stemming from past events, the existence of which are contingent on the occurrence
of certain uncertain future events that are beyond the control of the entity, and to present obligations for which an outflow of resources is not likely.Apart from those stemming from business combinations, they are not recognised but are disclosed in the notes.
l) Employee benefits• Post-employment benefits
There are various Group retirement benefit plans for certain employees. Retirement plans, related payments and other employee benefitsconsidered as defined-benefit plans, that is, where the Group commits itself to guarantee a certain amount or level of defined benefit, are recognisedon the balance sheet based on an actuarial valuation of the commitments on the balance sheet date, less the fair value of the related assets.
Payments made for plans considered as defined-contribution, that is, when the Group has no obligation after paying the contribution,are recognised in period expenses.
Defined-benefit retirement and related commitments contracted by the Norbert Dentressangle Group companies are:- termination benefit plans for all French companies in accordance with collective agreements in force (road transport, automobile
services, knowledge-based economic sectors and cleaning companies);- end-of-service benefits for the Italian companies (trattamento di fine rapporto).
Only the termination benefit plan of the company ND Inter-Pulvé is financed via an insurance contract.On first-time adoption of IFRS on 1 January 2004, actuarial gains and losses were recognised with an entry in equity.Pursuant to IAS 19, actuarial gains and losses based on experience adjustments or changes to actuarial assumptions are amortised in
future expenses for each company over the average probable remaining period of service of the employees concerned, after applying a 10% corridorof the greater of the value of the commitments and the plan assets.
The past service cost is recognised in expenses on a straight-line basis over the average time remaining until the corresponding rightsbecome vested for the employees. If benefit entitlements are already vested on adoption or modification of the retirement plan the past service cost isrecognised immediately.
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• Other long-term benefitsOther long-term benefits mainly relate to bonus plans for long-service awards, this only being for French companies in the Logistics
Division. Commitments to pay long-service bonuses to serving employees are recognised as provisions.
Expenses incurred in respect of Individual Training Rights (ITR) are expensed in the period and are not provided for, except wherethese expenses can be said to remunerate past service and where the obligation vis-à-vis the employee is likely or definite.
The notes include information on the number of hours vested, as well as the number of hours having been requested by employees.
m) Loans and borrowing costsOn initial recognition, bond loans and other debts are measured at fair value, to which are allocated transaction costs directly
attributable to the issuance of the liability.
The fair value generally corresponds to the proceeds received.
After initial recognition, loans are accounted for based on amortised cost and using the effective interest method.
Loan issue premiums and expenses as well as bond redemption premiums are taken into account in the calculation of amortised cost,using the effective interest method, and so recorded in results on a discounted basis over the term of the liability.
Loan interest is recorded in period expenses.
n) Share-based paymentCertain Group employees and senior company officers hold warrants, call share options and share subscription options.
These operations are valued on the allotment date using the Black-Scholes model, a valuation model enabling the fair value to beobtained on the allotment date and in particular taking into account in various specific parameters such as the share price, exercise price, expectedvolatility, forecast dividends, risk-free interest rate and the term of the option.
The cost thus determined is recorded in expenses in the period the rights are vested, with an offsetting entry in a separate balance sheetaccount.
No expenses are recognised for instruments that are not ultimately acquired, except for those of which the acquisition depends onmarket conditions. These are considered acquired, whether market conditions are met or not, if the other performance criteria are fulfilled.
If the terms of any remuneration in the form of equity instruments are amended, an expense is recorded, at a minimum, for the amountthat would have been recognised had no change taken place.
An expense is also recognised to take into account the effects of changes that increase the total fair value of the share-based paymentagreement or are favourable to personnel in another way. This is measured on the date of modification.
In accordance with the transitional provisions of the standard, only option plans after 7 November 2002 have been recognised and aresubject to valuation pursuant to the principle described above.
o) Deferred taxesDeferred tax assets and liabilities are measured at the tax rate expected to be applied for the year in which the asset shall be realised or
liability settled, based on the tax rates and regulations enacted or substantially enacted on the balance sheet date.
Deferred tax is calculated on all temporary differences that occur between the tax base and carrying amount of assets and liabilitiesappearing on the consolidated balance sheet.
Deferred tax receivables relating to tax loss carryforwards are only recorded to the extent there is a reasonable likelihood they will berealised or recovered.
Deferred tax assets are recognised for tax loss carryforwards in accordance with the criteria defined in IAS 12, that is, when:- the entity has sufficient taxable temporary differences relating to the same taxation authority and taxable entity which will result in
taxable amounts against which the unused tax losses or credits can be utilised before they expire;- it is probable that the entity will generate taxable profits before the unused tax losses or credits expire;- the unused tax losses result from identifiable causes which are unlikely to recur; and- tax planning opportunities are available to the entity that will create taxable profit in the period in which the unused tax losses or
credits can be utilised.To the extent it is not probable that taxable profit will be available against which the unused tax losses or credits can be utilised, the
2006 FINANCIAL REPORT96
deferred tax asset is not recognised.
p) Derivative financial instrumentsThe Group has chosen to apply IASs 32 and 39 as from 1 January 2005.Pursuant to these standards, when derivatives are designated as hedging instruments, their treatment depends on whether they are
designated as a:- fair-value hedge;- cash flow hedge; or- hedge of a net investment in a foreign entity.
All derivative financial instruments are measured at fair value. Fair value is either the market value, for instruments listed on a securitiesexchange, or a value provided by financial institutions using traditional criteria (over-the-counter market).
Derivative financial instruments consist mainly of interest-rate swap contracts.The special purpose entities’ debts are contracted at variable rates and rents invoiced by these entities also benchmarked to a variable
rate, so the Group has set up hedging instruments to limit its exposure to interest-rate risk.Derivatives qualifying as cash flow hedges are recognised on the balance sheet in current financial assets or liabilities with an offset in
equity.
q) Other financial assetsFinancial assets are classified in four categories depending on their nature and the reasons for holding them:- held-to-maturity investments;- financial assets at fair value through profit and loss;- available-for-sale financial assets; and- loans and receivables (excluding clients).Financial assets are initially recognised at cost, corresponding to the fair value of the price paid plus purchase expenses.Other financial assets consist mainly of deposits and guarantees paid to lessors of premises where the Group conducts its business.
r) Non-current assets held-for-sale and discontinued operationsWhen assets are held for sale under the principles of IFRS 5, that is, when their carrying amount is recovered mainly through a sale
transaction rather than continuing use, the Group values these assets at the lesser of the carrying amount and fair value less costs to sell and ceases toamortise or depreciate them.
Held-for-sale assets are presented separately in the balance sheet and income statement.A discontinued operation is a component that the Group has disposed of or is classified as held for sale. These activities are, in
particular, presented in a specific caption of the income statement.
s) Treasury sharesRegardless of the purpose for which treasury shares are held, they are eliminated from equity in consolidation.No gain or loss should be recognised in income upon the purchase, sale, issue or cancellation of Group equity instruments.
t) Cash and equivalentsCash corresponds to bank accounts (credit balances and overdrafts) and cash at hand.Cash equivalents are mainly UCITS, relating to very liquid short-term investments that can easily be converted into a known amount
of cash and are subject to a negligible risk of a loss in value.They are classified in balance sheet assets in the caption "Cash and equivalents" and in liabilities in "Bank overdrafts".
u) Earnings per shareNet earnings per share are obtained by dividing net income for the financial year by the number of shares outstanding at year-end, less
the number of treasury shares.Consolidated diluted net earnings per share take into account shares issued as a result of the exercise of share subscription options less
treasury shares.
v) RevenueRevenue is recognised when it is probable that future economic benefits shall flow to the Group and this revenue can be measured
reliably. Revenue items are measured at the fair value of the consideration to be received.Revenues for services rendered as part of the logistics business are recognised when the contractually agreed tasks are completed.Transport business revenues are recognised when the service has been rendered.
w) EBITAEarning Before Taxes and Amortization: earnings before net financial results and income tax, amortisation of goodwill and the
recognition of negative goodwill (badwill).
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x) EBITEarnings Before Interest and Taxes: earnings before net financial results and income taxes. This equals EBITDA less depreciation,
amortisation and impairment (including that of goodwill).
III - NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2006
a) Events during the yearThe main events during the 2006 financial year were as follows:
• Change in capitalThe Executive Board meeting of 16 January 2006 authorised a reduction in the capital of Groupe Norbert Dentressangle S.A. by
cancelling treasury shares, as well as a capital increase following the exercise of share subscription options and share warrants.Following the Executive Board meeting, the capital of Groupe Norbert Dentressangle amounted to € 19,567,986, split into 9,783,993
shares of € 2 each, all in the same class.Following other capital transactions during the 2006 financial year, the capital amounted to € 19,671,386 as of 31 December.
• Variations in the scope of consolidation Disposal of operationsThe Norbert Dentressangle Group disposed of its Les Routiers Français subsidiary, this delivery business acquired from the TNT Group
proving a poor fit with the Group’s main business activities.The capital gains amounted to € 553K. The capital gains on disposal are recognised in operating results (EBITA).
Company acquisitionsOn 19 July 2006, the Norbert Dentressangle Group acquired the Romanian transport company Transcondor based in Arad.With annual revenue of around € 10m, Transcondor is developing an international transport business for packaged products and
temperature controlled products between Romania and European Union countries.Transcondor has 188 employees and manages a fleet of 110 tractors and 110 trailers.This acquisition is part of the strategy set out in the “Challenge 2008” business plan seeking in particular to strengthen the Norbert
Dentressangle Group transport network in Central and Eastern Europe in order to support its industrial customers and distributors.On 20 September 2006, the Norbert Dentressangle Group also acquired Spanish logistics companies CCH and GPL. These companies
have 360 employees and manage warehouses of some 40,000 sq.m.The core business activities of these companies are logistics of “high tech” products and reverse logistics.This acquisition provides it with a foothold in the Spanish market, a market with major potential.The breakdown of these acquisitions is set out in note y - Variations in the scope of consolidation.
Disposal of real-estate assetsThe Group disposed of two warehouses at Breguet in Toulouse and at Le Meux generating a total capital gain of € 3,763K, recognised
in operating results (EBITA).• VAT on road tolls
The Group took legal action on behalf of ND Services to obtain the repayment of VAT paid on toll rolls for companies within the scopein 2000.
This case was won at first instance in November 2005. The Finance Ministry waived its appeal challenging the initial decision of theadministrative court.
The Group thus included the principal and interest on arrears, net of expenses, in its financial statements for € 13,853K.The other companies that entered the Group after 2000 did the same as other road transporters by obtaining corrective invoices making
it possible to obtain repayment by offsetting it against 2006 VAT returns.
• Tracking the acquisition of certain businesses from the TNT Group, developments during the 2006 financial year2006 revenue from the businesses acquired from TNT amounted to € 100,857K.The impact of these businesses on operating results (EBITA) for the period was positive to the tune of € 7,380K.It breaks down as follows:- A current operating loss of € 2,081K,- Restructuring costs of € 4,878K,- Reversal of a provision for contingent liabilities of € 13,731K,- Capital gains of € 553K on the disposal of Les Routiers Français,- Miscellaneous adjustment of € 647K.
The reversal of the provision for € 13,731K is partly offset by the recognition of expenses, 50% comprised of rents paid during theyear.
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The positive impact is the result of the fact that the restructuring carried out and the actions taken to turn around the acquiredbusinesses were completed faster than anticipated at the time of the acquisition, while at the same time the risk of customer loss fell, resulting in thereversal of provisions for “contingent liabilities” as established in line with IFRS 3.
The carrying amount of the contingent liabilities identified at the time of the business combination in November 2005 was the subjectof a reappraisal. This reappraisal resulted in particular in the inclusion of items that existed at the date of acquisition that couldn’t initially be includedin the contingent liabilities identifiable at the time of the business combination. Pursuant to IFRS 3, the Group recognised adjustments to theseprovisional amounts as a result of the completion of the initial recognition. The initial amount of negative goodwill rose from € 35,094K to € 37,168K.
Pursuant to IFRS 3, the balance sheet and income statement in respect of the 2005 financial year were restated retrospectively to theinitial date of acquisition.
Moreover, the change in the position of the TNT businesses during 2006 resulted in the Group reclassifying certain provisions,previously included in contingent liabilities, under provisions for € 10,525K.
Additional information with in particular the list of statements affected is included in the “Goodwill and non-current asset impairmenttests” heading.
b) Retrospective restatements• IFRS restatements as of 1 January 2004
An additional analysis of the rules applicable to bringing the Group’s financial statements into line with IFRS resulted in the amountsinitially included in the financial statements for the opening IFRS balance sheet as of 1 January 2004 and the 2004 and 2005 financial years.
The changes made to the financial statements were recognised retrospectively in line with IAS 8.
Consolidation of special purpose entitiesThe Group consolidated special purpose entities in line with IAS 27 – SIC 12. A review of the restatement of these entities to bring
them into line with the depreciation rules applied in the Group for the similar assets resulted in a € 2,399K reduction in net worth as of 1 January2004 net of tax. The earnings impact in respect of 2005 and 2006 is not material.
Long-service bonusesThe Group also made provision for employee benefits under IAS 19. An in-depth analysis of long-service bonus and bonus plans in the
logistics business resulted in an additional provision of € 301K net of tax. € 250K of this amount was allocated to equity as of 1 January 2004 and€ 51K to income in respect of the 2005 financial year.
• Tracking the TNT acquisitionThe € 35,094K in negative goodwill initially recorded was adjusted by € 2,074K bringing it to € 37,168K (see section III a).
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• Summary table
ASSETS
n K€ 01/01/2004 Bonuses Special purpose 01/01/2004 31/12/2004IFRS Published entities IFRS Restated IFRS Restated
Goodwill 56,599 56,599 55,510Intangible assets 3,582 3,582 6,229Property, plant and equipment 369,381 (3,658) 365,723 350,373Investments in associates 435 435 710Other non-current financial assets 17,311 17,311 16,464Deferred tax assets 5,510 1,259 6,769 9,523
n NON-CURRENT ASSETS 452,818 0 (2,399) 450,419 438,809
Inventories 5,521 5,521 5,955Customers 268,046 268,046 286,118Other accounts receivable 61,758 61,758 65,938Other current financial assets 0 0Cash and equivalents 130,986 130,986 159,015
n CURRENT ASSETS 466,311 0 0 466,311 517,026
Non-current assets held for sale
n TOTAL ASSETS 919,129 0 (2,399) 916,730 955,835
EQUITY AND LIABILITIES
n K€ 01/01/2004 Bonuses Special purpose 01/01/2004 31/12/2004IFRS Published entities IFRS Restated IFRS Restated
Share capital 15,566 15,566 19,533Share premium 22,111 22,111 19,116Treasury shares 0 0 0Financial instrument revaluation reserve 0 0 0Foreign-exchange differences (500) (500) (627)Consolidated reserves 103,587 (250) (2,399) 100,938 122,496Net income/(loss) for the financial year 27,174 27,174 40,209Minority interests 465 465 511
n EQUITY 168,403 (250) (2,399) 165,754 201,238
Long-term borrowings 250,235 250,235 170,094Long-term provisions 23,097 381 23,478 19,804Deferred tax liabilities 43,283 43,283 37,516
n NON-CURRENT LIABILITIES 316,615 381 0 316,996 227,414
Short-term provisions 0 0 0Trade payables 189,231 189,231 197,384Short-term borrowings 38,231 38,231 99,404Bank overdrafts 58,422 58,422 58,514Current tax payable 2,440 2,440 3,640Other accounts payable 145,787 (131) 145,656 168,241
n CURRENT LIABILITIES 434,111 (131) 0 433,980 527,183
Liabilities directly associated with non-current assets held for sale 0 0 0
n TOTAL EQUITY AND LIABILITIES 919,129 0 (2,399) 916,730 955,835
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ASSETS
n K€ 31/12/2005 Bonuses Adjustment to TNT Special purpose 31/12/2005IFRS Published contingent liability entities IFRS Restated
Retraité
Goodwill 70,700 70,700Intangible assets 6,643 6,643Property, plant and equipment 394,727 (3,658) 391,069Investments in associates 1,148 1,148Other non-current financial assets 19,835 19,835Deferred tax assets 26,090 (1,186) 1,259 26,163
n NON-CURRENT ASSETS 519,143 0 (1,186) (2,399) 515,558
Inventories 6,366 6,366Customers 345,983 345,983Other accounts receivable 85,549 85,549Other current financial assets 396 396Cash and equivalents 194,627 194,627
n CURRENT ASSETS 632,921 0 0 0 632,921
Non-current assets held for sale 990 990
n TOTAL ASSETS 1,153,054 0 (1,186) (2,399) 1,149,469
EQUITY AND LIABILITIES
n K€ 31/12/2005 Bonuses Adjustment to TNT Special purpose 31/12/2005IFRS Published contingent liability entities IFRS Restated
Retraité
Share capital 19,847 19,847Share premium 21,852 21,852Foreign-exchange differences (225) (225)Consolidated reserves 156,265 (250) (2,399) 153,616Net income/(loss) for the financial year 62,708 (51) 2,066 64,723Minority interests
n EQUITY 260,447 (301) 2,066 (2,399) 259,813
Long-term borrowings 187,439 187,439Long-term provisions 54,595 507 (3,252) 51,850Deferred tax liabilities 36,902 36,902
n NON CURRENT LIABILITIES 278,936 507 (3,252) 0 276,191
Short-term provisions 26,366 26,366Trade payables 229,707 229,707Short-term borrowings 114,867 114,867Bank overdrafts 50,922 50,922Current tax payable 3,715 3,715Other accounts payable 188,094 (206) 187,888
n CURRENT LIABILITIES 613,671 (206) 0 0 613,465
Liabilities directly associated with non-currentassets held for sale 0 0
n TOTAL EQUITY AND LIABILITIES 1,153,054 0 (1,186) (2,399) 1,149,469
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n K€ 31/12/2005 Bonuses Ajustment to TNT 31/12/2005 31/12/2004IFRS Published contingent liability IFRS restated IFRS Published
n NET REVENUE 1,399,316 1,399,316 1,303,440
Other purchases and external services (845,459) (845,459) (750,636)Staff costs (408,328) (408,328) (394,272)Other taxes and similar payments (38,350) (38,350) (38,272)Income from disposals of operating assets 3,882 3,882 568Share of income/(loss) from joint ventures 63 63 11Other expenses (revenues) 4,094 4,094 4,358
Depreciation and amortisation charges (70,020) (70,020) (64,765)Allocation to (reversal of) provisions 3,231 3,231 4,161
n ORDINARY OPERATING RESULTS 48,429 0 0 48,429 64,593
Restructuring costs (2,721) (2,721)Real-estate capital gains or losses 2,094 2,094Reversal of TNT provisions 3,706 (89) 3,617Other non-current revenues and expenses 0 469Other allocations to and (reversals of) non-current provisions 0
n OPERATING RESULTS 51,508 0 (89) 51,419 65,062
Goodwill impairment (1,602) (1,602) (1,088)Reversal of “TNT” badwill 35,094 (51) 2,125 37,168
n EBIT 85,000 (51) 2,036 86,985 63,974
Net financial expenses (5,789) (5,789) (7,535)Discontinuing operations 0 2,029
n GROUP’S NET INCOME OR LOSS BEFORE TAX 79,211 (51) 2,036 81,196 58,468
Income tax expense (16,794) 30 (16,764) (18,477)Share of profit of associates 291 291 264
n GROUP’S NET INCOME OR LOSS 62,708 (51) 2,066 64,723 40,255
Minority interests 0 0 (46)
n EARNINGS ACCRUING TO THE NORBERT DENTRESSANGLE GROUP 62,708 (51) 2,066 64,723 40,209
c) Segment informationAs mentioned in the first part of the notes, the two Group businesses are Transport and Logistics.Transport activities include transport solutions (management of all of a customer’s transport flows), international groupage, domestic
distribution, outsourcing of customer fleets, contract distribution and logistics on customer sites.The main Logistics activities cover inventory management, quality control, order preparation, distribution, packing, customisation, sub-
assembly, co-packing, delivery to the end user, information management and real-time traceability control, as well as reverse logistics.The Group presents detailed primary segment information on the two businesses, Transport and Logistics, since these involve different
markets and levels of capital intensity.They also match the Group’s internal organisation.The geographic presentation offers an international view of the Group.
2006 FINANCIAL REPORT102
• Primary segment, by business: Information by business
n K€ Transport Logistics Not allocated Income
statement total
Total contributory revenue 31/12/2004 807,078 496,362 1,303,44031/12/2005 898,052 501,264 1,399,31631/12/2006 1,008,147 599,758 1,607,905Cash flow from operating activities31/12/2004 97,479 9,404 106,88331/12/2005 46,918 13,463 60,38131/12/2006 133,995 19,482 153,477Operating results31/12/2004 39,922 25,140 65,06231/12/2005 26,296 25,123 51,41931/12/2006 49,950 33,138 83,088Share of profit of associates31/12/2004 264 26431/12/2005 159 132 29131/12/2006 378 66 444
n K€ Transport Logistics Not allocated Income
statement total
Gross property, plant and equipment and intangible assets*31/12/2004 475,378 133,367 608,74531/12/2005 504,836 163,447 668,28331/12/2006 560,430 165,594 726,024Of which acquired during the year31/12/2004 100,407 37,069 137,47631/12/2005 109,475 35,436 144,91131/12/2006 108,559 25,448 134,007Badwill and goodwill impairment31/12/2004 (3,497) 141 (3,356)31/12/2005 48,324 (12,758) 35,56631/12/2006 0 0 0Investments in associates31/12/2004 710 71031/12/2005 544 604 1,14831/12/2006 925 566 1,491Other non-current assets31/12/2004 397,054 41,755 438,80931/12/2005 431,850 83,708 515,55831/12/2006 456,884 74,875 531,759Current assets31/12/2004 362,511 154,515 517,02631/12/2005 429,858 203,063 632,92131/12/2006 451,054 223,902 674,956Total assets31/12/2004 759,565 196,270 955,83531/12/2005 862,541 286,928 1,149,46931/12/2006 908,655 298,777 1,207,432Assets held for sale31/12/200431/12/2005 833 157 99031/12/2006 717 717Total liabilities31/12/2004 741,532 214,303 955,83531/12/2005 841,962 307,507 1,149,46931/12/2006 887,849 319,583 1,207,432
103
Workforce31/12/2004 7,276 4,816 12,09231/12/2005 8,587 5,309 13,89631/12/2006 8,721 5,887 14,608Number of motor vehicles31/12/2004 4,219 264 4,48331/12/2005 4,730 215 4,94531/12/2006 4,983 226 5,209Number in sq.m31/12/2004 55,744 2,224,813 2,280,55731/12/2005 139,475 2,532,201 2,671,67631/12/2006 124,814 2,642,078 2,766,892* Including non-current assets being disposed of
Segment vehicle financing liabilities are distributed on a statistical basis in proportion to vehicle numbers.Acquisitions break down as follows:- Transcondor is included in Transport,- CCH and GPL are included in Logistics.The various companies generate less than 10% of their revenue from the companies in the other business segment.Invoicing is at market prices.
• Secondary segment, by geographical area:
31/12/2006 31/12/2005 31/12/2004France Other France Other France Other
Total contributory revenue 1,273,417 334,488 1,087,887 311,429 1,002,468 300,972Non-current assets 529,757 196,267 518,056 150,227 86,527 122,218Of which acquired during the year 91,389 42,618 102,148 42,763 111,763 25,713Workforce 11,080 3,500 11,174 2,722 9,590 2,502Number in sq.m 1,966,240 800,652 1,959,550 712,126 1,632,889 647,668Number of motor vehicles 3,956 1,253 4,095 850 3,772 711
The “other” countries are the United Kingdom, Spain, Portugal, Italy, Germany, Switzerland, Poland, Romania, Czech Republic,Belgium, The Netherlands and Luxembourg.
d) Operating results• Breakdown of operating results: EBITDA — (Allocations)/Reversals
n K€ 31/12/2006 31/12/2005 31/12/2004
n Revenue 1,607,905 1,399,316 1,303,440Other purchases and external services (992,001) (845,459) (750,636)Staff costs (455,274) (408,328) (394,272)Other taxes and similar payments (47,416) (38,350) (38,272)Gain/(loss) on asset disposals 8,308 3,882 568Share of income/(loss) from joint ventures (3) 63 11Other expenses (9,936) (6,163) (119)Other revenues 35,940 13,336 4,946
n TOTAL EXPENSES EXCLUDING AMORTISATION/DEPRECIATION/IMPAIRMENT LOSSES (1,460,382) (1,281,019) (1,177,774)
n EBITDA 147,523 118,297 125,666
Amortisation and depreciation charges and allocations to provisions (98,651) (79,950) (64,765)Reversal of amortisation and depreciation charges and allocations to provisions 34,216 13,072 4,161
n TOTAL (CHARGES & ALLOCATIONS) / REVERSALS (64,435) (66,878) (60,604)
n OPERATING RESULTS (EBIT) 83,088 51,419 65,062
2006 FINANCIAL REPORT104
• Current/non-current operating results
n K€ 31/12/2006 31/12/2005 31/12/2004
n Revenue 1,607,905 1,399,316 1,303,440Other purchases and external services (992,001) (845,459) (750,636)Staff costs (455,274) (408,328) (394,272)Other taxes and similar payments (47,416) (38,350) (38,272)Income from disposals of operating assets 5,110 3,882 568Share of income/(loss) from joint ventures (3) 63 11Other expenses (3,306) (3,442) (3,244)Other revenues 22,087 11,242 8,071Depreciation and amortisation charges (79,535) (69,995) (65,114)Reversal of depreciation and amortisation 11 (25) 349Reversal of provisions 18,482 9,381 14,712Allocation to provisions (14,362) (9,856) (10,551)
n TOTAL RECURRING EXPENSES (1,546,207) (1,350,887) (1,238,378)
Restructuring costs (9,593) (2,721)Real-estate capital gains or losses 3,913 2,094Change in TNT provisions 13,731 3,617Gain on disposal of LRF 553Repayment of road toll VAT 13,853Other non-recurring expenses (1,268)Other allocations to non-current provisions (1,297)Other reversals of non-current provisions 1,498
n TOTAL NON-RECURRING (EXPENSES) REVENUES 21,390 2,990 0n OPERATING RESULTS (EBIT) 83,088 51,419 65,062
Restructuring costs relate to costs stemming from restructuring in the businesses acquired from TNT amounting to € 4,878K,restructuring of Vendilog (Logistics), amounting to € 1,325K, with the remainder relating to some restructuring of Transport companies.
The change in the TNT provision relates to contingent liabilities, statistical risks of customer loss calculated at the date of acquisitionand readjusted within twelve months of the acquisition of these businesses.
e) Net financial results
n K€ 31/12/2006 31/12/2005 31/12/2004
Interest and similar financial income 2,990 1,672 2,103Foreign-exchange gains 4,055 2,919 2,113Income from disposal of short-term investments 3,044 1,172 1,208Reversals of provisions for securities and non-current financial assets 3 1 76
n TOTAL FINANCIAL INCOME 10,092 5,764 5,500
Interest and similar financial expense (12,551) (9,490) (10,211)Foreign-exchange losses (4,122) (2,063) (2,815)Amortisation and depreciation charges and transfers to provisions 0 0 (9)
n TOTAL FINANCE COSTS (16,673) (11,553) (13,035)
n TOTAL (6,581) (5,789) (7,535)
105
f) Income tax expense
n K€ 31/12/2006 31/12/2005 31/12/2004
Net current income tax (expense) / revenue (19,524) (15,622) (24,828)Net deferred income tax (expense) / revenue (7,635) (1,142) 6,351Tax on discontinued operations and held-for-sale assets 718
n TOTAL (27,159) (16,764) (17,759)
n K€ 31/12/2006 % 31/12/2005 % 31/12/2004 %
Income/(loss) before tax 76,507 100 79,211 100 56,439 100Theoretical tax calculated at standard rate applicable in France (26,341) (34.43) (27,668) (34.93) (19,996) (35.43)Non-deductible expenses and non-taxable income (326) (0.41) 11,902 15.03 843 1.47Capitalisation of prior-year tax loss carryforwards 677 0.85 188 0.24 1,005 1.75Non-capitalisation of losses (724) (0.91) (2,085) (2.63) (195) (0.34)Difference in tax rate (443) (0.56) 899 1.13 584 1.02Other 0.00 0 0.00 0 0.00
n TOTAL (27,157) (33.61) (16,764) (20.75) (17,759) (30.88)
In 2004, total tax, namely € 17,759K, included tax of € 718K on assets disposed of or held for sale.Tax losses not giving rise to the calculation of a deferred tax asset amounted to € 5,284K and break down as follows over time:- 6 to 10 years: € 500K- 11 to 15 years: € 1,591K- Indefinite: € 3,192K
When there is no certainty that the tax loss of a subsidiary can be offset against its future tax charge, no deferred tax asset is recognised.The change in the tax rate is due to changes in applicable tax regulations.The amount of deferred taxes included in assets and liabilities stems from the application of IAS 39, to the tune of € 354K.
g) Earnings per share
n K€ 31/12/2006 31/12/2005 31/12/2004
Consolidated net income/(loss) 49,792 64,723 40,209Net income from continuing operations 49,792 64,723 38,898Average number of shares 9,818,243 9,812,773 9,766,953Average number of treasury shares (215,506) (258,857) (252,918)Earnings per share 5.19 6.77 4.23Earnings per share from continuing operations 5.19 6.77 4.09Earnings per share from discontinued operations and assets being disposed of N/A N/A 0.14Warrants 115,000 10,000 129,900Share subscription options 0 65,300 105,000Total average number of diluted shares 9,717,737 9,629,216 9,748,935Diluted earnings per share 5.12 6.72 4.12Diluted earnings per share from continuing operations 5.12 6.72 3.99Diluted earnings per share from discontinued operations and assets being disposed of N/A N/A 0.13
Earnings per share are calculated based on the post-tax net income of the Group.The calculation method used is that of IAS 33.On 16 January 2006, the Executive Board authorised a reduction of share capital in the amount of 160,913 shares.
2006 FINANCIAL REPORT106
h) Workforce
At year-end 31/12/2006 31/12/2005 31/12/2004
Managers 876 866 805Employees and supervisors 3,434 3,177 2,791Drivers 6,554 6,112 5,533Manual workers 3,744 3,741 2,963
n TOTAL 14,608 13,896 12,092
i) Intangible assets• Changes in non-current assets
n K€ Gross values Amortn/depn Net values
Goodwilln Gross value on 1 January 2004 56,599 56,599
Acquisitions/(Allocations) (1,088) (1,088)(Disposals)/Reversals 112 (112) 0Foreign-exchange differences (2) 1 (1)Variations in the scope of consolidation 0
n Value on 31 December 2004 56,709 (1,199) 55,510Acquisitions/(Allocations) 16,707 (1,602) 15,105(Disposals)/Reversals 0Foreign-exchange differences 140 (55) 85Variations in the scope of consolidation 0
n Value on 31 December 2005 73,556 (2,856) 70,700Acquisitions/(Allocations) 7,295 7,295(Disposals)/Reversals 0Foreign-exchange differences 103 (40) 63Variations in the scope of consolidation 0
n Value on 31 December 2006 80,954 (2,896) 78,058
Concessions, patents, licencesn Value on 1 January 2004 9,806 (6,519) 3,287
Acquisitions/(Allocations) 4,464 (1,358) 3,106(Disposals)/Reversals (1,359) 927 (432)Foreign-exchange differences 0Variations in the scope of consolidation (1) (18) (19)
n Value on 31 December 2004 12,910 (6,968) 5,942Acquisitions/(Allocations) 2,690 (2,256) 434(Disposals)/Reversals 227 227Foreign-exchange differences (19) (19)Variations in the scope of consolidation 0
n Value on 31 December 2005 15,600 (9,016) 6,584Acquisitions/(Allocations) 1,321 (2,207) (886)(Disposals)/Reversals (38) 32 (6)Foreign-exchange differences 0Variations in the scope of consolidation 59 (132) (73)
n Value on 31 December 2006 16,942 (11,323) 5,619
Other intangible assetsn Value on 1 January 2004 2,826 (2,530) 296
Acquisitions/(Allocations) 37 (71) (34)(Disposals)/Reversals (19) 23 4Foreign-exchange differences (38) 40 2Variations in the scope of consolidation 19 19
107
n Value on 31 December 2004 2,825 (2,538) 287Acquisitions/(Allocations) 26 (67) (41)(Disposals)/Reversals (314) 20 (294)Foreign-exchange differences 21 21Variations in the scope of consolidation (653) 739 86
n Value on 31 December 2005 1,905 (1,846) 59Acquisitions/(Allocations) 96 (1) 95(Disposals)/Reversals (196) 87 (109)Foreign-exchange differences 8 (10) (2)Variations in the scope of consolidation 19 (16) 3Value on 31 December 2006 1,832 (1,786) 46
Value on 31 December 2005 91,061 (13,718) 77,343Value on 31 December 2006 99,728 (16,005) 83,723
Concessions, patents, licences and software are largely comprised of software, and more specifically a net sum of € 5,749K relates tothe implementation of an ERP system depreciated over a 5-year period.
There are no restrictions on the Group’s use of its non-current assets.Apart from goodwill, no other intangible asset has an indefinite life.
j) Property, plant and equipment• Changes in property, plant and equipment
n K€ Gross values Amortn/depn Net values
Land and site developmentn Gross value on 1 January 2004 13,368 (803) 12,565
Acquisitions/(Allocations) 858 (1) 857(Disposals)/Reversals (4,459) 349 (4,110)Foreign-exchange differences 0Variations in the scope of consolidation 114 114
n Value on 31 December 2004 9,880 (455) 9,425Acquisitions/(Allocations) 775 (13) 762(Disposals)/Reversals (740) 2 (738)Foreign-exchange differences 0Assets held for sale (490) (490)Variations in the scope of consolidation 620 620
n Value on 31 December 2005 10,045 (466) 9,579Acquisitions/(Allocations) (63) (63)(Disposals)/Reversals (417) 106 (311)Foreign-exchange differences 39 39Assets held for sale 0Variations in the scope of consolidation 444 444
n Value on 31 December 2006 10,111 (423) 9,688
Buildingsn Value on 1 January 2004 113,406 (50,149) 63,257
Acquisitions/(Allocations) 6,753 (3,818) 2,935(Disposals)/Reversals (57,293) 18,771 (38,522)Foreign-exchange differences (125) 6 (119)Variations in the scope of consolidation 2,787 (504) 2,283
n Value on 31 December 2004 65,528 (35,694) 29,834Acquisitions/(Allocations) 14,198 (4,262) 9,936(Disposals)/Reversals (7,793) 1,382 (6,411)Foreign-exchange differences 182 (28) 154Assets held for sale (3,255) 2,799 (456)Variations in the scope of consolidation 19,133 (1,869) 17,264
2006 FINANCIAL REPORT108
n Value on 31 December 2005 87,993 (37,672) 50,321Acquisitions/(Allocations) 4,948 (4,380) 568(Disposals)/Reversals (10,922) 3,551 (7,371)Foreign-exchange differences 220 (59) 161Assets held for sale 273 273Variations in the scope of consolidation 841 (310) 531
n Value on 31 December 2006 83,353 (38,870) 44,483
Plant, machinery and equipmentn Gross value on 1 January 2004 41,013 (25,520) 15,493
Acquisitions/(Allocations) 9,440 (5,343) 4,097(Disposals)/Reversals (12,130) 4,323 (7,807)Foreign-exchange differences 53 (20) 33Variations in the scope of consolidation 20,963 (13,681) 7,282
n Value on 31 December 2004 59,339 (40,241) 19,098Acquisitions/(Allocations) 17,674 (9,459) 8,215(Disposals)/Reversals (8,060) 5,617 (2,443)Foreign-exchange differences 69 (37) 32Variations in the scope of consolidation 644 25 669
n Value on 31 December 2005 69,666 (44,095) 25,571Acquisitions/(Allocations) 15,941 (11,167) 4,774(Disposals)/Reversals (7,590) 5,327 (2,263)Foreign-exchange differences 131 (84) 47Variations in the scope of consolidation 1,683 (236) 1,447
n Value on 31 December 2006 79,831 (50,255) 29,576
Haulage equipmentn Gross value on 1 January 2004 344,639 (113,669) 230,970
Acquisitions/(Allocations) 93,503 (47,492) 46,011(Disposals)/Reversals (82,875) 42,589 (40,286)Foreign-exchange differences (29) 28 (1)Variations in the scope of consolidation 38,571 (14,009) 24,562
n Value on 31 December 2004 393,809 (132,553) 261,256Acquisitions/(Allocations) 96,005 (47,529) 48,476(Disposals)/Reversals (95,737) 51,899 (43,838)Foreign-exchange differences 1,311 (150) 1,161Variations in the scope of consolidation 21,155 (7,601) 13,554
n Value on 31 December 2005 416,543 (135,934) 280,609Acquisitions/(Allocations) 97,294 (53,112) 44,182(Disposals)/Reversals (69,057) 38,574 (30,483)Foreign-exchange differences 1,798 (930) 868Variations in the scope of consolidation 11,579 (8,751) 2,828
n Value on 31 December 2006 458,157 (160,153) 298,004
Other property, plant and equipemntn Gross value on 1 January 2004 43,877 (27,721) 16,156
Acquisitions/(Allocations) 13,129 (8,289) 4,840(Disposals)/Reversals (5,909) 2,358 (3,551) Foreign-exchange differences 5 (5) 0Variations in the scope of consolidation 4,500 (35) 4,465
109
n Value on 31 December 2004 55,602 (33,692) 21,910Acquisitions/(Allocations) 10,212 (7,473) 2,739(Disposals)/Reversals (3,931) 2,765 (1,166)Foreign-exchange differences 20 (11) 9Assets held for sale (288) 244 (43)Variations in the scope of consolidation (1,404) 659 (745)
n Value on 31 December 2005 60,211 (37,508) 22,704Acquisitions/(Allocations) 11,687 (9,301) 2,386(Disposals)/Reversals (3,473) 2,710 (763)Foreign-exchange differences 32 (13) 19Assets held for sale 0Variations in the scope of consolidation 1,507 (813) 694
n Value on 31 December 2006 69,964 (44,925) 25,040
Advance paymentsn Gross value on 1 January 2004 2,440 2,440
Acquisitions/(Allocations) 8,878 8,878(Disposals)/Reversals (244) (244)Foreign-exchange differences 33 33Variations in the scope of consolidation (2,257) (2,257)
n Value on 31 December 2004 8,850 0 8,850Acquisitions/(Allocations) 4,349 4,349(Disposals)/Reversals (6,367) (6,367)Foreign-exchange differences 11 11Variations in the scope of consolidation (4,557) (4,557)
n Value on 31 December 2005 2,286 0 2,286Acquisitions/(Allocations) 1,694 1,694(Disposals)/Reversals (1,906) (1,906)Foreign-exchange differences 0Variations in the scope of consolidation 0
Value on 31 December 2006 2,074 0 2,074
Value on 31 December 2005 646,744 (255,675) 391,069Value on 31 December 2006 703,490 (294,626) 408,864
• Capitalised and leased assetsGross values Amortisation and depreciation
n K€ 31/12/2006 31/12/2005 31/12/2004 31/12/2006 31/12/2005 31/12/2004
Land and site development 8,179 3,695 3,695 0 0 0
Buildings 24,676 10,349 10,261 (7,894) (6,104) (6,024)
Plant, machinery and equipment 2,754 2,754 2,754 (2,201) (1,660) (1,109)
Haulage equipment 17,466 21,099 12,716 (9,441) (10,004) (7,364)
Other property, plant and equipment 42 42 42 (42) (42) (42)
n TOTAL 53,118 37,939 29,468 (19,578) (17,810) (14,539)
There are no restrictions on the Group’s use of its non-current assets.As mentioned in III-bb, there are buy-back commitments from motor vehicle manufacturers.
2006 FINANCIAL REPORT110
k) Goodwill and non-current asset impairment testsThe main assumptions used for the impairment tests are as followss:
n % 2006 2005 2004
Risk-free rate 3.40 3.40 4.16Discount rate 4.50 4.50 4.75Growth rate 2.50 2.50 3.00Beta 1.16 1.16 0.76Cost of borrowings 4.23 4.00 3.90Tax rate 35.00 35.00 35.00Long-term growth rate 1.50 1.50 1.00
The beta is the combined ratio of the share’s performance and its volatility. This is a sector ratio calculated on a statistical basis.The terminal value of a CGU is calculated as a multiple of the final cash flow.The calculations made in this regard in respect of 2006 did not give rise to any impairment losses on goodwill being recognised.
n K€ Goodwill for Goodwill for TotalTransport Logistics
Net goodwill on 01/01/2004 11,145 45,454 56,599
Impairment 2004 (1,087) (1,087)
Foreign-exchange differences (2) (2)
Net goodwill on 31/12/2004 10,056 45,454 55,510
Variation in goodwill 2005 17,273 (566) 16,707
Impairment 2005 (1,602) (1,602)
Foreign-exchange differences 85 85
Net value on 31/12/2005 25,812 44,888 70,700
Variation in goodwill 2006 109 7,186 7,295
Impairment 2006 0 0
Foreign-exchange differences 63 63
Net value on 31/12/2006 25,984 52,074 78,058
Changes in the scope of consolidation during the year resulted in the recognition of € 7,186K in additional goodwill stemming fromthe acquisition of CCH and GPL.
An in-depth analysis of the Venditelli goodwill calculation resulted in an adjustment of € 109K, bringing it to € 15,916K. Negative goodwill of € 35,094K, stemming from the purchase of part of the TNT group’s French business, was also recognised as of
31 December 2005.The overall amount of this goodwill was adjusted as a result of the refinement of the underlying calculations over the twelve months
following the acquisition of the companies in line with IFRS 3.There was a resulting adjustment to the initial negative goodwill of € 2,074K in respect of 2005, resulting in a retrospective restatement
in this year’s financial statements.The following statements are affected:- Income statement in respect of the “Impairment of goodwill and negative goodwill” heading,- Cash flow statement in respect of the “Cancellation of negative goodwill” heading,- Earnings per share,- Deferred tax.
Pursuant to the principles set out in Note II-a, goodwill of € 900K was recognised as of 1 January 2005 in respect of the commitmentto buy out the minority interests in Thier.
The impairment tests done on other non-current assets did not result in any additional impairment.
111
l) Information on investments in associates Investments in Company Revenue Net income /
associates equity (loss)
n K€
CSND31/12/2006 328 645 7,591 14931/12/2005 277 531 6,612 15531/12/2004 234 470 4,580 196Centrale des Franchisés31/12/2006 71 141 16,881 9731/12/2005 22 44 3,530 631/12/2004NDB Logistica Romania31/12/2006 477 1,662 3,333 50631/12/2005 198 395 2,496 14331/12/2004 452 902 2,459 321Salto31/12/2006 21 62 9,998 (15)31/12/2005 26 77 9,182 831/12/2004 24 72 9,390 16LGL31/12/2006 566 1,157 6,211 13431/12/2005 604 1,239 5,309 26931/12/2004MNS31/12/2006 28 67 169 1631/12/2005 21 51 233 1131/12/2004
m) Other financial assets
n K€ Due in Due in Due in 31/12/2004 31/12/2005 31/12/2006 less than 1 to 5 years more
1 year than 5 years
Loans 1,776 1,835 1,665 1,494 171
Deposits and guarantee deposits/other
accounts receivable 14,561 17,854 17,606 17,224 382
Shares of non-consolidated undertakings 127 146 67
TOTAL (Net value) 16,464 19,835 19,338 0 18,718 553
The loans bear interest, whereas deposits and guarantee deposits do not.
n) InventoriesInventories amounted to € 7,390K as of 31 December 2006 (€ 6,366K and € 5,955K respectively as of 31 December 2005 and
31 December 2004). They are primarily comprised of diesel (€ 1,595K as of 31 December 2006, € 1,273K as of 31 December 2005, € 1,326K as of31 December 2004), parts and supplies for vehicle and wagon maintenance (€ 2,521K as of 31 December 2006, € 1,828K as of 31 December 2005,€ 1,711K as of 31 December 2004) as well as miscellaneous supplies (film for palettes, listings…) (€ 898K as of 31 December 2006, € 559K as of31 December 2005, € 561K as of 31 December 2004).
o) Trade and other receivables
n K€ 31/12/2006 31/12/2005 31/12/2004
Trade receivables 334,960 351,325 290,089Provisions for impairment (4,856) (5,342) (3,971)Customers 330,104 345,983 286,118Tax and social security 49,050 67,086 49,291Advance payments 6,035 3,251 4,336Prepaid expenses 6,250 6,743 6,195Other miscellaneous accounts receivable 18,996 8,469 6,116Other receivables 80,331 85,549 65,938
2006 FINANCIAL REPORT112
Accounts receivable in more than one year totalled € 2,393K on 31 December 2006 (€ 2,400K on 31 December 2005 and € 2,248Kon 31 December 2004). These accounts do not bear interest.
Tax receivables mainly relate to deductible VAT and tax paid on account.
p) Cash and equivalents
n K€ 31/12/2006 31/12/2005 31/12/2004
Short-term investments 178,422 119,086 82,133Cash at bank and at hand 77,284 75,541 76,882Cash and equivalents 255,706 194,627 159,015Banks (credit balances) (58,609) (50,922) (58,514)Net cash 197,097 143,705 100,501
In 2005, the € 144,101K net cash figure in the cash flow table includes € 396K for derivatives.Short-term investments include units in money market Sicav vehicles - open-ended investment companies - at their daily NAV.There are no restrictions on the Group’s use of its cash.
q) Capital issued and reserves
n Year Nature of operation Variation in capital Capital after operationNumber Face Share Amount Number of shares value premiums in € in euros of shares
1 January 2004 15,565,930 9,728,706
January 2004 Exercise of warrants 38,000 60,800 922,640 15,626,730 9,766,706
May 2004 Increase in face value from € 1.66 to € 2 3,906,682 19,533,412 9,766,706
31 December 2004 19,533,412 9,766,706
June 2005 Exercise of warrants 10,000 2 204,100 20,000 9,776,706
August 2005 Exercise of warrants 75,000 2 1,530,750 150,000 9,851,706
October 2005 Exercise of warrants 10,000 2 204,100 20,000 9,861,706Exercise of share subscription options 42,600 2 558,486 85,200 9,904,306
November 2005 Exercise of share subscription options 9,300 2 121,923 18,600 9,913,606
December 2005 Exercise of share subscription options 9,700 2 127,167 19,400 9,923,306
31 December 2005 19,846,612 9,923,306
January 2006 Exercise of share subscription options 21,600 2 283,176 43,200 9,944,906Cancellation of shares (160,913) 2 (4,557,628) (321,826) 9,783,993
February 2006 Exercise of warrants 10,000 2 204,100 20,000 9,793,993Exercise of share subscription options 3,500 2 45,885 7,000 9,797,493
March 2006 Exercise of share subscription options 1,500 2 19,665 3,000 9,798,993
April 2006 Exercise of share subscription options 8,000 2 104,880 16,000 9,806,993
May 2006 Exercise of share subscription options 4,600 2 60,306 9,200 9,811,593
June 2006 Exercise of share subscription options 4,000 2 52,440 8,000 9,815,593
September 2006 Exercise of share subscription options 6,600 2 86,526 13,200 9,822,193
October 2006 Exercise of share subscription options 13,500 2 224,105 27,000 9,835,693
31 December 2006 19,671,386 9,835,693
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The capital consists of shares with a face value of € 2 each.Each share gives the right to one vote. Meanwhile, a double voting right - compared with that of other shares in respect of the portion
of share capital represented - is allocated for:a) all fully paid-up shares in registered form and recorded in the name of the same shareholder for at least four years; andb) registered shares allocated free to a shareholder in the event of a capital increase through the capitalisation of reserves, income or
share premiums by virtue of existing shares owned carrying this entitlement.This double voting right shall be fully discontinued for any share converted into bearer form - if the shares were admitted to trading
on an official securities exchange - or for shares of which ownership has changed. However, the above period shall not be curtailed or the right shallbe maintained through transfer by inheritance, liquidation of communal estate of husband and wife, donations between living persons in favour of apartner or a person within a degree of relationship carrying title to share in intestate estate.
As well as voting rights, each share gives an interest proportional to the number and value of existing shares in the company assets,income or merger premium.
In order for all shares to receive the same net sum indistinctly and be listed as the same investment, and unless legally prohibited, thecompany assumes responsibility for the proportional amount of tax that may be due only for certain shares on the occasion of, in particular, thewinding-up of the Company or a capital reduction; however, it shall not do so when the tax applies to all shares in the same category in the sameconditions, if there are several categories of shares with which the various rights are associated.
Whenever a certain number of shares must be owned to exercise a right, it falls to the owners not individually in possession of thisnumber to group together the required shares.
c) Notwithstanding any regulations governing legal disclosures, any shareholder acting alone or with others and holding at least 2% ofequity in the Company or a multiple of this percentage, up to 50%, who crosses one of these thresholds must inform the Company of same withinfive trading sessions of so doing by recorded delivery letter with proof of delivery.
Failure to comply with this obligation may result in the shareholder being deprived of voting rights for the shares exceeding theundeclared fraction for all shareholder meetings to be held within two years of the date from which notification is sorted out.
This penalty may only be enforced at the request, recorded in the minutes of the General Meeting, of one or more shareholders owningat least 5% of the capital or voting rights in the Company.
Shareholders are also required to inform the Company in the same manner within five days when their shareholding in the companyfalls below any of these thresholds.
These provisions were adopted by the Combined Ordinary and Extraordinary General Meeting of 23 December 1998 and amended bythe Meetings of 29 May 2002, 25 May 2004, 24 May 2005 and 23 May 2006.
n En € 2005 2004 2003 2002 2001 2000
Net dividend 0.89 0.84 0.70 0.64 0.60 0.40Tax assets 0.35 0.32 0.30 0.20
n Total income 0.89 0.84 1.05 0.96 0.90 0.60
n K€ 31/12/2006 31/12/2005 31/12/2004
Treasury shares (11,259) (8,860) (7,327)Retained earnings 267,219 226,023 169,548Foreign-exchange differences 760 (225) (627)Cost of share option based remuneration 1,461 919 485Fair value of cash flow hedges 932 257 0
n Total consolidated reserves 259,113 218,114 162,079
r) Financial liabilitiesMaturities more than
n K€ 31/12/2004 31/12/2005 31/12/2006 up to 1 year 1 to 5 years 5 yearsCURRENTShort-term borrowings 97,464 109,820 113,015 113,015
Finance leases 354 4,055 5,193 5,193Other borrowings 1,361 729 928 928Employee profit sharing 225 263 1,033 1,033
n TOTAL CURRENT 99,404 114,867 120,169 120,169
2006 FINANCIAL REPORT114
NON-CURRENTLong-term borrowings 155,606 169,335 170,579 141,219 29,360Finance leases 11,654 14,470 23,233 19,842 3,391Other borrowings 204 372 1,027 984 43Employee profit sharing 2,630 3,262 3,558 3,511 47
n TOTAL NON-CURRENT 170,094 187,439 198,397 165,556 32,841
n TOTAL 269,498 302,306 318,566 120,169 165,556 32,841
On 31 December 2006, 92% of loans agreed with financial institutions were benchmarked to variable rates and 8% to fixed rates(respectively, in 2005, 90% and 10% and in 2004, 98% and 2%).
All loans are expressed in euros, with the exception of one loan in GBP with a counter value of € 5,015K (€ 834K in 2005 and € 1,697K in 2004).
s) Provisions
n K€ Accidents Social security Employee Fines Other Totaland tax benefits provisions
disputesValue on 1 January 2004 8,971 5,637 5,757 413 2,700 23,478Allocations 1,832 1,579 483 172 2,951 7,017Reversals (3,285) (3,041) (12) (161) (4,213) (10,712)Variation in the scope of consolidation 21 0 21
Value on 31 December 2004 7,518 4,175 6,249 424 1,438 19,804Allocations 3,274 2,366 1,068 67 1,440 8,215Reversals (3,316) (1,976) (265) (211) (10,169) (15,937)Variation in the scope of consolidation (758) (54) 187 32 66,727 66,134
Value on 31 December 2005 6,718 4,511 7,239 312 59,436 78,216Allocations 5,419 2,468 2,361 25 16,700 26,973Reversals (4,308) (3,297) (578) (220) (33,850) (42,253)Variation in the scope of consolidation (19) 6 (101) 198 84
Value on 31 December 2006 7,810 3,688 8,921 117 42,484 63,020
There was no material reversal of unused provisions in respect of the financial years presented with the exception of the provision forcontingent liabilities. Given the new developments during 2006, the provision recognised as of 31 December 2005 was reversed by € 3,152K withoutbeing offset in identifiable expenses.
As part of the acquisition of the French businesses of the TNT Group in November 2005, the Group recognised a number of contingentliabilities the extent of which were calculated statistically. The recognition of these contingent liabilities, only recorded as part of business combinations,is in line with IFRS 3.
Being a potential obligation resulting from past events and contingent on uncertain future events not wholly within the Group’s control,contingent liabilities are only provided for as part of business combinations. They relate to possible expenses for breach of logistics or transportcontracts.
The contingent liabilities initially recognised as part of this deal amounted to €51,700K. Following retrospective adjustments, theidentifiable contingent liabilities recognised as of 30 November 2005 amounted to € 48,445K.
As of 31 December 2006, and prior to the reclassification set out below, the residual amount of provisions relating to the TNTacquisitions amounted to € 34,079K. € 11,796K of this represents a current provision.
Given the change in the nature of the risks, € 10,525K in provisions was reclassified in the balance sheet. Following this reclassification,the remaining balance of the provision for contingent liabilities amounted to € 23,554K.
t) Deferred tax
n K€ 31/12/2006 31/12/2005 31/12/2004
Deferred tax assets 18,344 26,163 9,523Deferred tax liabilities (37,065) (36,902) (37,516)
n Net deferred tax (18,721) (10,739) (27,993)
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The adjustment of the negative goodwill stemming from the former TNT businesses resulted in a reduction in deferred tax of € 1,186Kin 2005.
Most deferred tax liabilities are generated by differences between company and consolidated vehicle depreciation periods.The “Basis of results” gave rise to unrecognised deferred tax assets of € 5,284K as of 31 December 2006.
u) Trade and other payables
n K€ 31/12/2006 31/12/2005 31/12/2004
Trade payables 238,980 229,707 197,384n Suppliers 238,980 229,707 197,384
Other tax and social security payables 170,755 166,312 150,071Other miscellaneous accounts payable 18,301 21,576 18,170
n Other payables 189,056 187,888 168,241
v) Information on related parties Related parties are:- parent companies;- entities exercising joint control or significant influence over the Company;- subsidiaries;- associates; - joint ventures.- members of the Executive Board and Supervisory Boards.
1. Transactions between the Group and companies belonging directly or indirectly to the majority shareholder of Groupe Norbert Dentressangle S.A,the company Financière Norbert Dentressangle S.A, are concluded in arm’s length conditions. These involve rental charges relating to land andbuildings in the amount of € 21,633K (€ 25,339K on 2005 and € 22,038K on 2004).
2. Amounts for enterprises over which the Norbert Dentressangle Group exercises significant influence, recognised using the equity method.
Freight revenues Other revenues Holding company Other expensesexpenses and
similar CCSND 3,158 12 3,816LGL 367NDB Logistica Romania 145SALTO 2,084 27 75Centrale des Franchisés 14,096 26 87 1,944MNS 1 127
The balance sheet amounts on 31 December 2006 were not material in respect of the size of the Group.
3. Gross remuneration awarded to the managerial bodies
n K€ 31/12/2006 31/12/2005 31/12/2004
n Nature of expenseAwarded remuneration 1,763 1,632 1,267Short-term employee benefits 38 38Post-employment benefits 0 0Other long-term benefits 0 0Termination benefits 0 0Share-based payment 236 146 351Attendance fees 51 51 48
2006 FINANCIAL REPORT116
4. Remuneration granted to managers in the form of shares Quantity
n 31/12/2006 31/12/2005 31/12/2004
Subscription in the yearShare subscription optionsCall share optionsWarrants 115,000Exercise in the yearShare subscription options 28,000Call share options 5,000Warrants 10,000 85,000Share held at year-end Share subscription optionsCall share options 5,000Warrants 115,000 10,000 95,000
w) Financial instruments and risk management • Financial instruments
The debt of the special purpose entity financing structures is agreed at the floating three-month Euribor rate. Accordingly, the Grouphas set up hedging instruments to limit its exposure to interest-rate risk. The hedges were still in place on 31 December 2006.
The hedging portfolio consists exclusively of rate swaps, exchanging a variable rate in the form of the three-month Euribor for a fixedrate, covering a total notional amount of € 140,000K (€ 102,622K on 31 December 2005 and € 90,245K on 31 December 2004). These contractsmature in periods of between one and three years. There are no embedded derivatives.
Any income or expense arising from the difference between the rates given and received is taken to the profit and loss for that financialyear. The result thus recorded for the 2006 period equalled a loss of € 86K (€ 946K in 2005).
In line with IAS 39, the fair value of the hedging instrument is recognised as a balance sheet asset, offset, for its amount net of tax, byan increase in equity of € 675K as of 31 December 2006 (€ 257K as of 31 December 2005).
• Risk managementForeign-exchange differenceGroup exposure to foreign-exchange risk is limited by its geographical positioning, which is mostly in the euro zone (8.03% of
consolidated sales are from outside).The Group generally uses self-hedging to limit its recourse to the market: in as much as it can, it aims for a balance between collections
and disbursements in each non-euro currency using centralised cash flow management and giving latitude for certain suppliers and sub-contractors tochoose the invoicing currency. Possible residual positions are sold using forward-based contracts.
In 2006, the Group had no need to use market hedging for its foreign-exchange risk.Residual foreign-exchange differences affecting the income statement mainly result from foreign-exchange differences for foreign-currency
assets and liabilities without specific hedging on the balance sheet date (€ 67K on 31 December 2006, € 856K on 31 December 2005).For each subsidiary, foreign-currency transactions are recorded in specific accounts. The Group’s centralised cash department
subsequently conducts weekly reporting and balancing of these accounts.
Interest-rate riskInterest-rate risk is managed centrally for all Group positions.Borrowings are concentrated in certain Group companies: Groupe Norbert Dentressangle S.A, ND Location, ND Logistics and UTL
Location. All contracts are negotiated by the Group’s cash department and validated by the Group Finance Director.
On 31 December 2006, 92% of loans agreed with financial institutions were benchmarked to variable rates and 8% to fixed rates.The maturity schedule for borrowings (€ 318,679K on 31 December 2006) is presented in section r). The amounts for “Trade payables”
(€ 238,980K) and “Other accounts payable” (€ 18,301K) are due in less than one year, except for € 6,967K in prepaid income due in between oneand five years.
Meanwhile, accounts receivable (€ 330,104K for trade accounts and € 31,281K for the others) mature in less than one year, exceptfor € 2,393K to be received in more than one year.
Based on the present outstandings, a 1% increase in interest rates would affect results in the amount of € 2,865K.
Liquidity riskGroup financing is based mainly on medium-term repayable loans, as well as leases, finance leases or similar and overdrafts that —
given the Group’s net cash situation — are used occasionally.The Group does not use revolving credit or securitisation.In June 2003, the Group took out a € 7,578K loan over 60 months (of which € 3,789K was outstanding on 31 December 2005). This
financing was subject to a maximum consolidated debt to equity gearing ratio of 100%, excluding special purpose entities. An amendment negotiatedto the contract in August 2005 removed this covenant.
117
Risk on UCITS investmentsTaking into account the composition of its short-term securities portfolio, the Group is not exposed to price risks, apart from on treasury
shares. A large change in the Group share price would not result in any capital loss.
x) Employee benefits• Retirement
The main actuarial assumptions used to value the retirement benefits are as follows:the retirement ages take account of the measures to extend active working lives set out in the Fillon Act of 21 August 2003 (Loi Fillon),
as well as the option for drivers to retire from the age of 55.
n In % 31/12/2006 31/12/2005 31/12/2004
Discount rate 4.50 4.00 4.50Rate of return on insurance funds 4.50 4.00 4.50Salary growth rates- Transport 3.00 3.00 3.00- Logistics 3.00 3.00 3.00Mobility rates- Transport 17.20 17.10 18.00- Logistics 10.50 15.60 7.80
n K€ 31/12/2006 31/12/2005 31/12/2004
Opening net provision 6,858 5,868 5,376Expenses for the period 1,395 1,136 937Additions to scope 463 187Use in the year (736) (333) (445)Other movements 559Closing net provision 8,540 6,858 5,868
n K€ 31/12/2006 31/12/2005 31/12/2004
Current service cost 1,074 860 700Discount cost 297 261 248Amortisation of plan changes 2 2 1Amortisation of actuarial gains and losses 30 22 0Expected return on plan assets (9) (10) (11)Expense for the period 1,395 1,136 937
n K€ 31/12/2006 31/12/2005 31/12/2004
Fair value of opening commitments 7,632 6,434 5,624
Current service cost 1,074 860 700Discount cost 297 261 248Amortisation of plan changes 2 2 1Amortisation of actuarial gains and losses 30 22 0Impact of business combinations 463 187Benefits paid out (763) (333) (445)Other movements 559 (16)Change in actuarial gains and losses (133) 198 328
Fair value of closing commitments 9,162 7,632 6,439
Fair value of plan assets at opening 222 218 214
Employer contributionsBenefits paid by the fund (27) (6)Impact of business combinationsActual return on plan assets 8 4 10
Fair value of plan assets at closing 203 222 218
2006 FINANCIAL REPORT118
Net value of obligations 8,959 7,410 6,221Unrecognised actuarial gains and losses (399) (530) (328)Unrecognised past service cost (20) (22) (25)Net value of recognised obligations 8,540 6,858 5,868
A one basis point change in the discount rise would increase or decrease the commitment by € 797K.
The estimated amount of benefits paid out in respect of employee benefits for 2007 amounted to € 1,502K.
Long-service bonuses amounted to € 151K as of 31 December 2006.Bonuses amounted to € 655K as of 31 December 2006.
• Share-based payment: subscription / purchase share plansShare purchase options
n Grant date Number Unit Number Cancelled Options End of option of purchase exercise exercised outstanding exercise period
options price as of 31/12/2006granted
29/03/2004 116,500 39.64 (21,000) 95,500 30/04/200909/09/2004 3,000 39.88 3,000 10/10/200913/12/2004 8,500 39.99 (1,500) 7,000 15/01/201020/01/2006 9,500 50.81 9,500 21/02/201116/10/2006 7,500 61.81 7,500 17/11/2011
145,000 0 (22,500) 122,500
Share subscription options
n Grant date Number Unit Number Cancelled Options End of option of subscription exercise exercised outstanding exercise period
options price as of 31/12/2006granted
09/10/2000 176,000 15.11 118,900 (57,100) 0 09/10/200603/09/2001 8,000 21.00 8,000 0 0 03/09/2007
184,000 126,900 (57,100) 0
Warrants
n Grant date Warrants Warrants Unit Number Cancelled Balance End of option (issues) (subscriptions) price exercised exercise period
30/06/2003 105,000 105,000 22.31 105,000 0 0 31/05/200617/07/2006 115,000 115,000 51.68 0 0 115,000 31/05/2009
220,000 220,000 105,000 0 115,000
The plan’s overall cost was calculated using the Black-Scholes formula and the gross annual expense deducted therefrom.This formula takes account of:- The share price on the grant date;- The exercise price;- The vesting period;- The market risk-free investment rate (the rate for risk-free zero coupon bonds with the same maturity); and- The stock’s volatility (the Group’s historical volatility).
These calculations gave rise to an expense in respect of 2003 with a € 209K impact on net worth, a € 485K expense in respect of 2004,a € 437K expense in respect of 2005 and a € 542K expense in respect of 2006.
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Historical share option overview
n Share Share Warrants Share Share Share Share Share Warrants subscriptions subscriptions purchases purchases purchases purchases purchases
Date of Meeting 24-mai-00 24-mai-00 27-mai-03 29-mai-02 25-mai-04 25-mai-04 25-mai-04 25-mai-04 23-mai-06Date of Executive Board meeting 09-oct-00 03-sept-01 30-juin-03 29-mars-04 09-sept-04 13-déc-04 20-janv-06 16-oct-06 17-juil-06Total number of shares that may be subscribedor bought 176,000 8,000 105,000 116,500 3,000 8,500 9,500 7,500 115,000
Total number of shares that may be subscribed or bought by:Senior Company officers 0 0 105,000 0 0 0 0 0 115,000First ten employee allottees(1) 41,000 8,000 0 32,000 3,000 8,500 9,500 7,500 0Option/warrant exercise periodcommencement date 10-oct-05 04-sept-06 01-juin-05 30-mars-08 11-sept-08 15-déc-08 21-janv-10 17-oct-10 01-juin-08Expiry date 09-oct-06 03-sept-07 31-mai-06 30-avr-09 11-oct-09 15-janv-10 21-févr-11 17-nov-11 31-mai-09Subscription/purchase price € 15.11 € 21.00 € 22.31 € 39.64 € 39.88 € 39.99 € 50.81 € 61.81 € 51.68 Warrants/options cancelled on 31/12/2006(2) 57,100 0 0 21,000 0 1,500 0 0 0Warrants/options exercised on 31/12/ 2006 118,900 8,000 105,000 0 0 0 0 0 0Warrants/options outstanding on 31/12/2006 0 0 0 95,500 3,000 7,000 9,500 7,500 115,000
(1) First ten allottees, or more if the same quantity has been allotted to several employees(2) after departure of beneficiaries
• Other benefitsNeither Group employees nor management receive any other benefits. There are no supplementary defined-benefit salary-based
pensions for senior management.
y) Variations in the scope of consolidation• Changes in 2004
Acquisition of new companiesAs part of the development of a major customers’ supply chain, the Group acquired the companies Loget et Jacquemain, Pont Monthion
and Dicivrac in January 2004. These specialise in transport of bulk building materials.The operation generated no goodwill.These companies have been fully consolidated since 1 January 2004.
First-time consolidation of special purpose entitiesPursuant to SIC 12, the special purpose entities (see below) for vehicle financing — Locad 98, Locad 99, Locad 01, Locad 02, Locad 03,
Locad 04 and Locad 05 — have been consolidated globally as from 1 January 2004.This operation has not generated any goodwill. It appeared in the consolidated financial statements as follows:- on the consolidated balance sheet, the recognition of property, plant and equipment and the corresponding financing ;- on the consolidated income statement, replacement of a rental charge (paid to these special purpose vehicles) with a vehicle depreciation
charge and the financial expenses associated with their financing costs.
2006 FINANCIAL REPORT120
RestructuringIn Italy, the logistics activities have been consolidated in ND Logistics Italia through the merger of SGI and Cidem.In addition, as part of the rationalisation of the Group’s real estate management, the company Immotrans absorbed the companies
Leclercq and Laurent in December 2004.Moreover, the activities of SEMGCA and CEMGCA, arising from the acquisition of the Stockalliance Group, were regrouped in the
company TND Rhône-Alpes, through a merger in December 2004, which was renamed MGCA.In order to consolidate all transport activities within a single company, NDT took over Financière de VSG, the SAVAM Group holding
company, in December 2004.Lastly, Stockalliance transferred its business to ND Logistics.
Company disposalsND Aéroservices, ND Vir, Les Landes de Cassantin and La Courtine Transit were wound up in November 2004.Corend, a captive reinsurance company which had ceased to be a strategic part of the Group’s business, was disposed of in November
2004. The resulting capital gain was € 2,029K. It is included on the income statement as a business disposal.
• Changes in 2005Acquisition of new companiesIn July 2005, the Group acquired ownership interests in the French companies Venditelli and Vendilog. Venditelli’s main business is
distribution transport “by the pallet” in France with specific expertise in electrodomestical goods.Vendilog focuses on warehouse management.This operation generated positive goodwill of € 15,807K.The results of these companies have been consolidated globally since 1 September 2005.Additional analysis on the breakdown of the goodwill resulted in a € 109K adjustment bringing it to € 15,916K.
In December, furthermore, the Group acquired part of the transport and logistics activities of the TNT company.In respect of logistics, this involves the assets and goodwill of the companies Aixor, Copal and Cemga.In transport, meanwhile, the deal concerned the assets and goodwill of the company Nord Mendy, the Clermont-Ferrand site of the
company Nicolas and the shares in the companies LRF and Barco.This deal generated an initial negative goodwill of € 35,094K and € 37,168K following adjustment (see sections III a and k).The results of these companies have been globally consolidated as from 1 December 2005.
RestructuringAs part of rationalising its transport and service activities, the following operations were conducted:- The company Transports Norbert Dentressangle absorbed Loget et Jacquemain and Entr’Alp Logistique. The merger took place on
14 November 2005 with retrospective effect to 1 January 2005.- The company United Savam absorbed Pont Monthion. This took place on 14 November 2005 with retrospective effect to 1 January 2005.- The company ND Iberica Este absorbed ND Iberica Oeste on 31 December 2005 with retrospective effect as from 1 January 2005.- All assets and liabilities of the companies Gyves and ALVI were transferred to Sonecovi on 19 November 2005.- Furthermore, all assets and liabilities of the company NDNF were transferred to TFND on 26 October 2005.All companies restructured are 100% owned and are, or were in the case of absorbed companies, globally consolidated.
• Changes in 2006Company acquisitionsOn 19 July 2006, the Norbert Dentressangle Group acquired the Romanian company Transcondor based in Arad.This company’s main business is the transport of packed goods and temperature controlled goods between Romania and the European
Union.The Group acquired 100% of this company.The results of this company have been fully consolidated as from 1 August 2006.The Company’s contribution to the Group’s net income since it entered the scope is -€ 536K, to its revenues € 2,528K, to the fair value
of its assets € 3,733K. The Company’s 2006 revenues are estimated at € 10m.There is no goodwill.
On 20 September 2006, the Norbert Dentressangle Group acquired the Spanish companies CCH and GPL based in Madrid and theCanary islands.
The core business activities of this company are logistics of “high tech” products and reverse logistics.The Group acquired 100% of this company.The results of this company have been fully consolidated as from 20 September 2006.The company’s contribution to the Group’s net income since it entered the scope is € 387K, to its revenues € 5,652K, to the fair value
of its assets € 10,952K. The Company’s 2006 revenues are estimated at € 20m.Goodwill amounted to € 7,186K.
121
Company disposalsThe Group disposed of Les Routiers Français in March 2006. Capital gains amounted to € 553K.
RestructuringSo as to achieve economies of scale and rationalise its Transport activities, ND Inter Pulvé acquired Intersilos on 1 April retroactive to
1 January. The two companies are both wholly owned and are fully consolidated by the Group.
Omega III was renamed THT and is responsible for 2 logistics contracts newly awarded by the Carrefour/Logidis Group.As part of a rationalisation of its Transport and Logistics businesses, the following transactions were carried out:- All of LMDI’s assets and liabilities were transferred to Logibal on 20 October 2006,- All of LTU’s assets and liabilities were transferred to ND Logistics on 4 October 2006.All restructured companies are wholly owned and are, or were in the case of absorbed companies, fully consolidated.
z) Special purpose entitiesThe Group uses special purpose entities to finance its French vehicle fleet.
These are called “Locad” entities, are in the form of economic interest groupings (EIGs) and are majority owned by a banking pool.Their purpose is to buy a fleet of vehicles matching Group requirements, finance them through loans from a banking pool, and lease
them exclusively to the various French companies in the Group that use them.At the end of 2006, the residual outstanding debts amounted to € 126,898K (€ 120,656K at end 2005).
aa) ScopeThe balance sheet date of all companies in the scope of consolidation is 31 December.
Percentage Percentage Taxinterest control integration
2006 2005 2004 2006 2005 2004
TRANSPORTAJG (Great-Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGHCSND (Czech Republic) 50 50 50 50 50 50Tr Marsala Malinovského 874 686 01 UHERSKE HRADISTEDICIVRAC Siren 690 802 079 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTHEINRICH THIER Gmbh (Germany) 100 100 90 100 100 90Nikolaus Otto Str. 6 Postfach 630 46282 DORSTENINTERSILOS Siren 380078 360 0 100 100 0 100 100Les Pierrelles 26240 BEAUSEMBLANTOMEGA 2 Siren 479 885 725 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTMNS Siren 480 073 766 42 42 42 42 42 42Les Pierrelles 26240 BEAUSEMBLANTLOGET ET JACQUEMAIN Siren 302 278 288(merger with the company Transports Norbert Dentressangle) 0 0 100 0 0 100Les Pierrelles 26240 BEAUSEMBLANTLOGIBAL Siren 425 018 975 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTMARQUISE BENNE Siren 399 099 936 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND ALIMENTAIRE Siren 377 722 814 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND BELGIUM (Belgium) 100 100 100 100 100 100INDUSTRIE Zone de Blauwe Toren Monnikenwerve 85 8000 BRUGGEND CHIMIE Siren 352 621 601 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND EASTERN EUROPE Siren 410 211 916 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT
2006 FINANCIAL REPORT122
ND IBERICA ESTE (Spain) 100 100 100 100 100 100 SPACalle Buena Ventura Munoz13-15 entresuelo 2A 08018 BARCELONAND IBERICA OESTE (Spain)(merger with the company ND IBERICA ESTE) 0 0 100 0 0 100 SPACalle Buena Ventura Munoz13-15 entresuelo 2A 08018 BARCELONAND INTER-PULVE Siren 328 802 913 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTND ITALIA (Italy) 100 100 100 100 100 100Sede in viar Vittor Pisani N16 20124 MILANOND MEDITERRANEE Siren 425 060 951 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND NATIONAL FRIGORIFIQUE Siren 399 510 189(merger with the company TRANSPORTS FRIGORIFIQUES ND) 0 0 100 0 0 100ZA Bords de la Durance880 av. de la 1ère division blindée 84300 CAVAILLONND PETRONALP Siren 326 445 392 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND PETRONORD Siren 425 090 735 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND POLSKA (Poland) 100 100 100 100 100 100UL GORNICZA 18/36 91765 LODZND PORTUGAL (Portugal) 100 100 100 100 100 100Terminal tir do Freixieiro ed Mastosinhos 4 PISO 4460 PERAFITAND SILO Siren 352 619 845 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND SILO BELGIUM (Belgium) 100 100 100 100 100 100INDUSTRIE Zone de Blauwe Toren Monnikenwerve 85 8000 BRUGGEND SILO IBERICA (Spain) 100 100 100 100 100 100 SPACarretera Taraganone KM 293.3E 08730 LA RAPITA MONJOSND TANKERS (Great-Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGHND UK LTD (Great-Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGHNDB Siren 414 642 249 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTNDFI LOGISTICA Y TRANSPORTES SL (Spain) 100 100 100 100 100 100 SPANave 8 Calle Mitjera Polygono ind MASALFASAR VALENCIAPONT MONTHYON Siren 662 026 152(merger with the company UNITED SAVAM) 0 0 100 0 0 100Les Pierrelles 26240 BEAUSEMBLANTSALTO Siren 441 587 888 34 34 34 34 34 34Zone Industrielle de Seyssuel 38200 VIENNESAVAM Lux (Luxembourg) 100 100 100 100 100 1001 Zone du Scheleck 3225 BETTEMBOURGSHEDDICK (Great-Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGHTFND Siren 352 210 640 100 100 100 100 100 100 FZA Bords de la Durance880 av. de la 1ère division blindée 84300 CAVAILLONTND BRETAGNE Siren 380 677 369 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTTND ILE DE France Siren 425 090 966 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTTND NORD Siren 380 631 929 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTTND NORMANDIE BRETAGNE Siren 311 686 703 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTTND OUEST Siren 414 642 272 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT
123
TND PACA Siren 343 189 460 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTTND SUD-EST Siren 327 861 506 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTTND SUD-OUEST Siren 692 720 477 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTTND VOLUME Siren 341 152 833 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTTRANSPORTS HARDY Siren 390 548 667 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTTRANSPORTS NORBERT DENTRESSANGLE Siren 332 588 995 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTUNITED SAVAM Siren 716 280 433 100 100 100 100 100 100 FZI Rue Les Moines 02200 VILLENEUVE SAINT GERMAINVENDITELLI Siren 429 660 822 100 100 100 100 F42 Route de Saint Symphorien d’Ozon 69800 SAINT PRIESTSNM VALENCIENNES Siren 484 833 827 100 100 100 100 FZI 1 Rue Galilée 59224 THIANTSNN CLERMONT Siren 484 829 262 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTTRANSCONDOR (Romania) 100 1001, Str. Dumbrava Rosie Zona Industrialavest Arad 310419 ARAD, jud AradBARCO Siren 379 852 742 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSELes Routiers Français Siren 399 008 838 0 100 0 1005-7 Voie les cosmonautes 94310 ORLYCentrale des Franchisés Siren 483 490 348 50 50 50 50Les Pierrelles 26240 BEAUSEMBLANT
LOGISTICSAUTOLOG Siren 393 072 277 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTENTR’ALP LOGISTIQUE Siren 415 002 146(merger with the company Transports Norbert Dentressangle) 0 0 100 0 0 100Zone Industrielle des Grives 74150 MARIGNY SAINT MARCELLGL (Switzerland) 49 49 49 49 49 49Via Mulini 6934 BIOGGIOMGCA Siren 425 091 014 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTLTU Siren 382 727 089 0 100 100 0 100 100 FLieudit Saint Paul Epagnay 74330 LA BALME DE SILLINGYND LOGISTICS Siren 378 992 895 100 100 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSEND LOGISTICS BV (The Netherlands) 100 100 100 100 100 100Markermer 1 5347 - 0 OSSND LOGISTICS CZESKA (Czech Republic) 100 100 100 100 100 100Tr. Marsala Malinovskeho 874 68601 UHERSKE HRADISTEND LOGISTICS HUNGARY (Hungary) 100 100 100 100 100 100Tablas U 36-38 1097 BUDAPESTND LOGISTICS ITALIA (Italy) 100 100 100 100 100 100Calepio di Settala via E. Fermi N 7 20090 CALEPPIOND LOGISTICS NEDERLAND BV (The Netherlands) 100 100 100 100 100 100Markermer 1 5347 - 0 OSSND LOGISTICS SWITZERLAND (Switzerland) 100 100 100 100 100 100World Trade Center - c.p. 317 - 6982 AGNOND LOGISTICS UK (Great-Britain) 100 100 100 100 100 100Distribution Center West Moor Park Yorkshire Way -Armthorpe DN3 3FB DONCASTERND LOGISTICS POLSKA (Poland) 100 100 100 100U. Niciarnina 50/52 92230 LODZ
2006 FINANCIAL REPORT124
NDB LOGISTICA ROMANIA (Romania) 50 50 50 50 50 50Parcul Industrial DN 7 Centura ARADCCH (Spain) 100 100Poligono Industrial “La Sendilla”Nave IE6 -km 33 de la carretera Andalucia 28350 CIEMPOZUELOGPL (Spain) 100 100Poligono Industrial “La Sendilla”Nave IE6 -km 33 de la carretera Andalucia 28350 CIEMPOZUELOSTOCKALLIANCE Siren 558 800 033 100 100 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSEUTL LOCATION Siren 434 043 766 100 100 100 100 100 10055 avenue Louis Breguet 31029 TOULOUSEVENDILOG Siren 453 196 370 100 100 100 100 FZI Nord 32 R Galilée 13200 ARLESCEMGA Logistics Siren 484 833 876 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSEAIXOR Logistics Siren 379 852 742 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSECOPAL Logistics Siren 484 833 884 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSETHT Logistics Siren 487 565 012 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTLMDI 0 100 100 0 100 100 F55 avenue Louis Breguet 31029 TOULOUSE
SERVICESGROUPE NORBERT DENTRESSANGLE Siren 309 645 539 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTAIR ND Siren 380 397 695 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTALVI Siren 378 525 182 (merger with the company SONECOVI) 0 0 100 0 0 100ZAC de l’Anjoly Ilot n°384 13127 VITROLLESND DEUTSCHLAND HOLDING (Germany) 100 100 100 100 100 100Nikolaus Otto Str. 6 Postfach 630 46282 DORSTENND FORMATION Siren 400 646 386 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND GESTION Siren 440 339 265 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND HOLDINGS (Great-Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGHND TRANSPORTS LTD (Great-Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGHND IBERICA (Spain) 100 100 100 100 100 100 SPACalle Buena Ventura Munoz 13-15 entresuelo 2A 08018 BARCELONAND INFORMATIQUE Siren 403 283 591 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND LOCATION Siren 329 414 858 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTND MAINTENANCE Siren 378 619 209 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTND SERVICES Siren 323 016 766 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTNDT Siren 386 220 123 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTSONECOVI Siren 315 199 448 100 100 100 100 100 100 FZone Portuaire Avenue de Rhone 69360 TERNAYTEXLOG Siren 424 670 321 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTOMEGA IV Siren 487 564 973 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT
125
OMEGA V Siren 487 565 046 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTOMEGA VI Siren 493 339 444 100 100Les Pierrelles 26240 BEAUSEMBLANTOMEGA VII Siren 493 339 493 100 100Les Pierrelles 26240 BEAUSEMBLANTND FRANCHISE Siren 479 885 717 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTLOCAD 98 Siren 417 625 860 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTLOCAD 99 Siren 422 184 358 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTLOCAD 01 Siren 433 062 619 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTLOCAD 02 Siren 441 333 432 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTLOCAD 03 Siren 445 037 948 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTLOCAD 04 Siren 452 071 467 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTLOCAD 05 Siren 452 071 467 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTLOCAD 06 Siren 488 777 517 100 100Les Pierrelles 26240 BEAUSEMBLANT
REAL ESTATESCI GYVES Siren 351 922 257 (merger with the company SONECOVI) 0 0 100 0 0 100ZAC de l’Anjoly Ilot n°384 13127 VITROLLESSCI IMMOTRANS Siren 333 600 625 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANTSCI LA TARNOSIENNE Siren 410 082 077 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTSCI TOURS TRANSIT Siren 349 020 354 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTSCI TRANSGEDO Siren 345 318 331 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTSNC BRIVE TRANSIT Siren 423 803 758 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTSNC CAVAILLON ENTREPOTS Siren 334 719 671 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTSNC PORT DE BOUC Siren 384 375 515 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANTSCI IMOTRANS Siren 414 322 396 100 100 100 100 FZI du Brezet Rue Pierre Boulanger 63100 CLERMONT FERRANDSCI LOGIS TRANS EUROPE Siren 353 565 963 100 100 100 100 FZI du Brezet Rue Pierre Boulanger 63100 CLERMONT FERRANDSCI LES VOLCANS Siren 339 504 052 100 100 100 100ZI du Brezet Rue Pierre Boulanger 63100 CLERMONT FERRANDTRANS IMMO PICARDIE Siren 527 221 030 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT
bb) Commitments and contingenciesThe Group’s commitments break down as follows:
• Commitments given Bank guaranteesBank guarantees amounted to € 24,543K on 31 December 2006 (€ 15,528K on 31 December 2005, € 2,620K on 31 December 2004).The Group had issued comfort letters to various partners in the sum of € 12,090K on 31 December 2006 (€ 1,961K on 31 December
2005, € 5,478K on 31 December 2004).
2006 FINANCIAL REPORT126
Commitments for property rentsCommitments for property lets amounted to € 296,136K. These concern rents falling due between 1 January 2007 and the earliest
legally possible opportunity of withdrawing from the lease agreement.The schedule is as follows:
In K€
one year 90,671years one to five 189,322more than five years 16,143
Vehicle commitmentsOperating lease commitments not consolidated on the balance sheet on 31 December 2006 equalled € 48,129K and could be broken
down as follows:In K€
one year 7,915one to five years 28,747more than over years 11,467
Individual training right commitmentsEmployees have gained entitlement to a total of 488,043 training hours in respect of individual training rights. During 2006, 106 hours
were used up by 5 employees.
Minority interest purchase commitmentsThe minority shareholders in the Group’s 90% owned subsidiary Thier Gmbh have a put option to sell the remaining 10% as from
1 July 2008. The acquisition price of these minority interests varies on the basis of criteria set out in the contract and may not be less than € 1,715Kor more than € 2,369K.
Pursuant to paragraph 23 of IAS 32, the Group recognised a debt on 1 January 2005 to represent such a purchase commitment inrespect of one globally consolidated subsidiary.
With IASs 32 and 39 being applied prospectively, the debt shall be discounted as from 1 January 2005.On this basis, the discounted liability totals € 1,411K.This accounting treatment may be modified to take into account future developments relating to the standards.
• Commitments receivedCommitments from manufacturersThe Group benefits from firm vehicle buy-back commitments from the manufacturers of some of its motor vehicles. On 31 December 2006, these commitments, involving the financing structures of the French special purpose entities, were estimated
at € 42,545K (€ 41,940K on 31 December 2005).
Liabilities guaranteesThe Group benefits from liabilities guarantees in relation to the acquisition of Loget et Jacquemain, Dicivrac, Pont Monthion, Cidem, Venditelli andVendilog, Transcondor and CCH.
cc) Events after the balance sheet dateOn 15 January 2007, the Executive Board increased the capital, as a result of the exercise of share subscription options and share
warrants, by € 103,400 bringing it to € 19,671,386, namely € 9,835,693 shares each with a face value of € 2.
127
REPORT OF THE STATUTORY AUDITORS ON THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2006
Dear Shareholders,
In performance of the work entrusted to us by the General Meetings, we audited the accompanying consolidated financialstatements of Groupe Norbert Dentressangle S.A. for the financial year ended 31 December 2006.
The consolidated financial statements were approved by the Executive Board. Our responsibility is to express an opinionon these financial statements on the basis of our audit.
I. Opinion on the consolidated financial statementsWe carried out our audit in line with the professional standards applicable in France. These standards require that we perform the
audit so as to obtain reasonable assurance that the consolidated financial statements are free of any material misstatement. An audit involves thereviewing, by means of probing, of the documentation underlying the information in these financial statements. It also includes an assessment ofthe accounting policies applied and any material estimates made in drawing up the financial statements, as well as an evaluation of theirpresentation as a whole. We believe that our audit provides a reasonable basis for our opinion expressed below.
We certify that, having regard to the IFRS accounting basis adopted by the European Union, the consolidated financial statementsfor the year give a true and fair picture of the net worth, financial position and results of the companies and entities within the scope ofconsolidation.
II. Justification of our assessmentPursuant to the provisions of Article L.823-9 of the French Commercial Code on the justification of our assessment, we would like
to bring the following to your attention:
Accounting policiesNote III.a) “Events during the year” to the consolidated financial statements sets out the impact on the presentation of the
comparative financial statements of the application of IFRS 3 in the context of the completion of the TNT business combination which took placein 2005.
In line with this standard, the comparative information on the 2005 financial year, set out in the consolidated financial statements,was restated to take account of the retrospective application of the provisions of this standard. As a result, the 2005 comparative information differsfrom the consolidated financial statements published in respect of the 2005 financial year. As part of our assessment of the accounting policiesapplied by the Company, we reviewed the proper restatement of the financial statements for the 2005 financial year and the information providedin this regard in notes III a) and III b) to the consolidated financial statements.
Accounting estimatesIn preparing its financial statements, the Group makes certain estimates and assumptions in order to determine and assess goodwill,
contingent liabilities and provisions for liabilities and charges. We reviewed the available documentation for all such estimates and checked thereasonableness of the resulting valuations.
The resulting assessments thus comprise part of our audit of the consolidated financial statements, taken as a whole, and accordinglycontributed to our opinion expressed in the first section of this report.
III. Specific checksIn line with professional standards applicable in France, we also reviewed the information set out in the Group’s management
report. We have no comments to add as to the accuracy of this information or its consistency with the consolidated financial statements.
Lyon, 13 April 2007
The Statutory Auditors
Alain Bonniot & Associés Alain Bonniot
Ernst & Young AuditDaniel Mary-Dauphin
2006 FINANCIAL REPORT128
ASSETS
n K€ 31/12/2006 31/12/2005 31/12/2004
Gross amount 511 511 493Amortisation and impairment (511) (505) (493)
n INTANGIBLE ASSETS 0 6 0
Gross amount 483 79 11Depreciation and impairment (21) (13) (8)
n PROPERTY, PLANT AND EQUIPMENT 462 66 3
Gross amount 184,180 181,356 178,114Impairment 0 0 0
n FINANCIAL NON-CURRENT ASSETS 184,180 181,356 178,114
n TOTAL NON-CURRENT ASSETS 184,642 181,428 178,117
Trade receivables 3,129 4,708 2,767Other receivables 10,143 36,280 4,028Cash 49,543 2,754 46,342
n TOTAL CURRENT ASSETS 62,815 43,742 53,137
n TOTAL ASSETS 247,457 225,170 231,254
EQUITY AND LIABILITIES
n K€ 31/12/2006 31/12/2005 31/12/2004
Share capital 19,671 19,847 19,533Reserves 141,056 137,975 137,223Net income/(loss) for the financial year 15,245 14,991 6,029
n EQUITY 175,972 172,813 162,785
Provisions for liabilities and charges 0 0 68Provisions for tax 0 0 0
n PROVISIONS AND OTHER LONG-TERM LIABILITIES 0 0 68
Bond loan 0 0 0Debt 0 0 0
n LONG-TERM BORROWINGS 0 0 0
Debt 0 0 0Trade payables 4,859 5,123 5,330Other payables 33,531 19,298 28,335Banks 33,095 27,936 34,736
n CURRENT LIABILITIES 71,485 52,357 68,401
n TOTAL EQUITY AND LIABILITIES 247,457 225,170 231,254
SUMMARY OF THE COMPANY FINANCIAL STATEMENTSAND NOTES
BALANCE SHEET(before appropriation of income)
129
INCOME STATEMENT
n K€ 31/12/06 % 31/12/05 % 31/12/04 %
n NET REVENUE 21,026 100 21,157 100 22,523 100
Operating expenses (21,537) (102.4) (22,546) (106.6) (19,895) (88.3)
n INCOME FROM OPERATIONS (511) (2.4) (1,389) (6.6) 2,628 11.7
Other operating revenues and expenses 40 0.2 88 0.4 31 0.1
n OPERATING PROFIT (471) (2.2) (1,301) (6.1) 2,659 11.8
Share of profit of associates and subsidiaries 602 2.9 612 2.9 341 1.5Net financial costs 12,778 60.8 9,889 46.7 5,778 25.7Non-recurring items 31 0.1 32 0.2 673 3.0
n INCOME BEFORE TAX 12,940 61.5 9,232 43.6 9,451 42.0
Income taxes 2,305 11.0 5,759 27.2 (3,422) (15.2)
n NET INCOME 15,245 72.5 14,991 70.9 6,029 26.8
EQUITY AND CHANGES IN NET POSITION
Changes in the net position over the financial year have been as follows:
n K€ 31/12/05 Appropriation Payment Other Net 31/12/06 before of 2005 net of dividends movements income /(loss) before
appropriation income /(loss) for 2006 appropriation
Capital 19,846 (175) 19,671Share premium 13,580 (3,477) 10,103Legal reserve 1,858 127 1,985Non-restricted reserves 86,000 4,000 90,000Retained earnings 28,186 2,367 30,553Merger premium 3,878 3,878Contribution premium 4,394 4,394Warrants 1 57 58Dividends 0 8,490 (8,490) 0Reserves for long-term capital gains 0 0Restricted reserves 79 7 86Net income/(loss) 2005 14,991 (14,991) 0Net income/(loss) 2006 15,245 15,245
n NET POSITION 172,813 0 (8,490) (3,595) 15,245 175,973
We remind you that the net income for 2005 was appropriated by the General Meeting in accordance with the proposals of the ExecutiveBoard, that is, a dividend of € 0.89 per share was distributed.
On 31 December 2006, the share capital was fully paid-up and represented by 9,835,693 shares each with a face value of € 2.00.
2006 FINANCIAL REPORT130
n 31/12/02 31/12/03 31/12/04 31/12/05 31/12/06
CAPITAL AT YEAR ENDShare capital 15,544,784 15,565,930 19,533,412 19,846,612 19,671,386Number of ordinary shares 9,715,490 9,728,706 9,766,706 9,923,306 9,835,693Number of non-voting preference sharesMaximum number of shares to be created: By bond conversion 0 0 0 0 0By subscription rights 415,500 279,200 234,900 75,300 115,000
OPERATIONS AND INCOME/(LOSS)Revenue (exc. tax.) 23,244,881 26,869,366 22,523,332 21,156,880 21,025,980Income/(loss) after tax, profit-sharing and allowances for amortisation, depreciation and provisions 10,658,193 14,003,662 9,477,091 9,180,875 12,952,943Income tax (2,673,089) (3,314,326) 3,421,813 (5,758,846) (2,305,183)Employee profit sharingNet income /(loss) 13,428,173 18,023,274 6,028,891 14,990,689 15,244,657Income distributed 6,217,913 6,810,094 8,204,033 8,707,754 9,835,693*
EARNINGS PER SHAREIncome/(loss) after tax and investments and before allowances for amortisation, depreciation and provisions 1.37 1.83 0.64 1.55 1.59Income/(loss) after tax, investments and allowances for amortisation, depreciation and provisions 1.38 1.91 0.63 1.56 1.59Dividend paid 0.64 0.70 0.84 0.89 1.00*
EMPLOYEESAverage number of employees 30 30 26 29 29
Total payroll 2,497,753 3,087,130 3,015,324 3,876,452 3,656,206
Amounts paid to social security agencies 903,856 1,100,735 1,069,359 1,400,200 1,387,250
* Proposed to the General Meeting on 30 May 2007 based on the number of shares on the balance sheet date.
As from 2003, earnings per share are calculated by deducting the amount of the treasury shares held by Groupe Norbert DentressangleS.A. If this method had been used in previous financial years, the results would have been as follows:
- Earnings after tax and before allowances 1.41
- Earnings after tax, allowances and provisions 1.42
SUBSIDIARIES AND PARTICIPATING INTERESTS
n K€
Subsidiaries Share Other % Gross Net value Current-account Guarantees Revenue Net Dividends capital equity owned value of of advances income/ collected
investment investment and loans (loss)
NDT 38,850 128,448 100 99,639 99,639 3,200 0 25,544 9,605 7,770ND LOGISTICS 31,171 40,769 100 59,303 59,303 0 0 355,631 8,272 4,052STOCKALLIANCE 30,569 (13,180) 99 9,962 9,962 (18,400) 0 239 3,678 0OMEGA 2 1,800 1,098 100 1,800 1,800 (6,500) 0 0 1,154 0TOTAL 102,390 157,135 170,704 170,704 (21,700) 0 381,414 22,709 11,822
The investment portfolio of Groupe Norbert Dentressangle S.A. is regularly valued to establish whether there is any need to allocate anallowance for impairment.
This is based on the consolidated value of the company, its present and future contribution to Group consolidated income and its presentand future capacity to generate positive cash flow.
An allowance is allocated when the valuation based on these different criteria gives rise to a value for the balance sheet securities inexcess of the company’s contributive capacity.
The full company financial statements of Groupe Norbert Dentressangle S.A. and notes thereto are available upon request. Theaccompanying statutory auditors’ reports refer to the abovementioned full company financial statements.
SUMMARY OF NET INCOME AND OTHER KEY COMPANY ASPECTS IN THE LAST FIVE FINANCIAL YEARS
131
REPORT OF THE STATUTORY AUDITORS ON THE ANNUAL FINANCIAL STATEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2006
Dear Shareholders,
In performance of the work entrusted to us by the General Meetings, we hereby present our report for the financial year ended 31 December 2006 on:
• The auditing of the accompanying annual financial statements of Groupe Norbert Dentressangle S.A.;• The justification of our assessment; • The specific checks and disclosures required by law.
The annual financial statements were approved by the Executive Board. Our responsibility is to express an opinion on thesefinancial statements on the basis of our audit.
I. Opinion on the annual financial statementsWe carried out our audit in line with the professional standards applicable in France. These standards require that we perform the
audit so as to obtain reasonable assurance that the annual financial statements are free of any material misstatement. An audit involves thereviewing, by means of probing, of the documentation underlying the information in these financial statements. It also includes an assessment ofthe accounting policies applied and any material estimates made in drawing up the financial statements, as well as an evaluation of theirpresentation as a whole. We believe that our audit provides a reasonable basis for our opinion expressed below.
We certify that, having regard to French GAAP and regulations, the annual financial statements give a true and fair picture of theCompany’s operating results for the past financial year as well as its financial position and net worth at the end of that financial year.
II. Justification of our assessmentPursuant to the provisions of Article L.823-9 of the French Commercial Code on the justification of our assessment, we would like
to bring the following to your attention:
Investments in subsidiaries have been measured in line with the accounting methods and regulations set out in the notes. As part ofour task, we reviewed the appropriateness of these accounting methods and, as regards estimates, we verified the reasonableness of the assumptionsused and the resulting valuations.
The resulting assessments thus comprise part of our audit of the annual financial statements, taken as a whole, and accordinglycontributed to our opinion expressed in the first section of this report.
III. Specific checks and disclosuresIn accordance with professional standards applicable in France, we also performed the specific checks required by law.
We have no comments to add as regards:• The accuracy and consistency with the annual financial statements of the information in the management report of the Executive
Board and the documents sent out to shareholders on the financial position and the annual financial statements.• The accuracy of the information set out in the management report on compensation and benefits paid to the corporate officers in
question as well as any commitments granted to them when they take up, leave or change positions or subsequent to same.
As required by law, we checked to ensure that the management report contains the required disclosures on the taking of equity andcontrolling interests and the identities of share capital holders.
Lyon, 13 April 2007The Statutory Auditors
Alain Bonniot & Associés Alain Bonniot
Ernst & Young AuditDaniel Mary-Dauphin
2006 FINANCIAL REPORT132
SPECIAL REPORT OF THE STATUTORY AUDITORS ON REGULATED UNDERTAKINGS AND AGREEMENTS
FINANCIAL YEAR ENDED 31 DECEMBER 2006
Alain Bonniot & Associés Alain Bonniot
Ernst & Young AuditDaniel Mary-Dauphin
Dear Shareholders,
In our capacity as statutory auditors, we hereby present our report on regulated undertakings and agreements.Our remit is not to establish whether any such undertakings and agreements exist but to inform you, on the basis of the information
given to us, of the character and the main terms and conditions of the agreements notified to us. We are not required to express an opinion on theusefulness or merits of those agreements and undertakings. It is incumbent on you, pursuant to the provisions of Article R225-58 of the FrenchCommercial Code, to assess the interest of entering into any such undertakings and agreements with a view to approving them.
We have not been informed of any agreement or undertaking entered into during the year that falls under Article L.225-68 of theFrench Commercial Code.
Furthermore, pursuant to the French Commercial Code, we have been informed that the following agreements and undertakings,approved in previous financial years, remained in force during the past financial year:
1. With Financière Norbert Dentressangle In July 2005, Mr. Norbert Dentressangle granted “Financière Norbert Dentressangle” the right to use the “Norbert Dentressangle”
trademark and the “ND” logo, registered in his name and previously assigned free of charge.As in the past, Financière Norbert Dentressangle has authorised the Company to use this trademark and logo free of charge.In this regard, on 13 July 2005, the two companies signed a 3-year renewable trademark licence agreement for which no charge
accrues.The Company shall reimburse the various costs relating to the maintenance and protection of the trademarks.
Total such expenses for the financial year ended 31 December 2006 amounted to € 707.
2. With Financière Norbert Dentressangle Financière Norbert Dentressangle continued to provide the Company with a range of services and in particular:• Advice on development opportunities in France and abroad;• Support with regard to Group acquisitions, in France and abroad,• Administrative and financial assistance and support in public and other relations,• And, moreover, to 31 August 2006, assistance to the Human Resources Department.
Total such expenses for the financial year ended 31 December 2006 amounted to € 1,055,700.
3. With FMV As part of its mergers and acquisitions advisory service, FMV et Associés, managed by Mr. François-Marie Valentin, continued to
provide support and advice to the Company.
Total such expenses for the financial year ended 31 December 2006 were as follows:
• Fees for consultancy services: € 62,000,
• Reimbursement of actual expenses: € 896.10.
We carried out our work in line with the professional standards applicable in France. These standards require checks to be carriedout to ensure that the information provided to us is consistent with the documents from which it is taken.
Lyon, 13 April 2007
The Statutory Auditors
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I – ORDINARY RESOLUTIONS
First resolution (Approval of the company financial statements for the 2006 financial year)The General Meeting, satisfying the quorum and majority requirements for Ordinary Meetings, having taken note of the reports of the
Executive Board, the Supervisory Board and the Statutory Auditors, approves in their entirety the report of the Executive Board and the companyfinancial statements for the financial year ended 31 December 2006, as presented, and all the transactions reflected or mentioned therein.
The meeting approves the management activities of the Executive Board during the past financial year and also notes that no expensescovered by Articles 39-4 and 213 d of the French General Tax Code have been added back for tax purposes.
Second resolution(Approval of the consolidated financial statements for the 2006 financial year)The General Meeting, satisfying the quorum and majority requirements for Ordinary Meetings, having taken note of the reports of the
Executive Board, the Supervisory Board and the Statutory Auditors, approves in their entirety the report of the Executive Board and the consolidatedfinancial statements for the financial year ended 31 December 2006, as presented, and all the transactions reflected or mentioned therein.
Third resolution(Agreements for 2006 covered by Section L.225-86 of the French Commercial Code)The General Meeting, satisfying the quorum and majority requirements for Ordinary Meetings, having heard the special report of the
Statutory Auditors on agreements in 2006 covered by Articles L.225-86 et seq. of the French Commercial Code, approves the content of this reportand the transactions reflected therein.
Fourth resolution(Appropriation of earnings)The General Meeting, satisfying the quorum and majority requirements for Ordinary Meetings, approves the appropriation of company
earnings put forward by the Executive Board and accordingly resolves that these company earnings for the year, which amount to € 15,244,656.62,shall be appropriated as follows:
Earnings for the financial year € 15,244,656.62
Plus amounts carried forward from previous years € 30,552,430.67
Representing a total available amount of € 45,797,087.29
Appropriated as follows:• To a special reserve pursuant to the provisions of
Article 238 B AB of the French General Tax Code (corporate patronage) € 7,166.00• To shareholders by way of dividends € 9,835,693.00• To the non-restricted reserve to bring it up to € 95m € 5,000,000.00• The balance, to "Retained earnings” € 30,954,228.29
Representing a total of: € 45,797,087.29
Accordingly, each share shall be entitled to a dividend of € 1 for the year, fully eligible if applicable to the 40% tax allowance providedfor envisaged in Article 158.3-2º and 4º of the French General Tax Code.
This dividend shall be paid out to shareholders on 6 June 2007.
DRAFT RESOLUTIONS PUT FORWARD BY THE EXECUTIVE BOARD
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The Meeting notes that the dividends per share distributed over the past three financial years and the corresponding tax credits wereas follows:
Financial Year Net amount Tax credit Allowance Number of shares2005 € 0.89 - € 0.356 9,783,9932004 € 0.84 - € 0.42 9,539,7932003 € 0.70 € 0.35 - 9,490,774
Dividends not paid out under Article L.225-210 of the French Commercial Code, namely those relating to treasury shares, shall beappropriated to the “retained earnings” account.
Fifth resolution(Resignation of Jacques Gairard from his position on the Supervisory Board)The General Meeting, satisfying the quorum and majority requirements for Ordinary Meetings, notes the resignation of Jacques Gairard
from his position on the Supervisory Board, effective from the date of this Meeting.
Sixth resolution(Appointment of a member of the Supervisory Board)The General Meeting, satisfying the quorum and majority requirements for Ordinary Meetings, resolves to appoint to the Supervisory
Board, for a period of four years expiring at the end of the General Meeting in 2011 called to approve the financial statements for the 2010 financialyear:
Mr. Bruno Rousset, born on 9 March 1956, of French nationality, residing at 83-85, boulevard Vivier Merle in Lyon (69003).
In the event of the failure to approve the amendment to Article 20 of the Articles of Association put forward in the nineteenth resolutionof this Meeting, the term of office will be set at six years.
Seventh resolution(Setting attendance fees for the Supervisory Board)The General Meeting, satisfying the quorum and majority requirements for Ordinary Meetings, elects to set the attendance fees granted
to the Supervisory Board in respect of 2007 and subsequent financial years at € 75,000, until otherwise decided by the Meeting.
Eighth resolution(Authorisation granted to the Executive Board to allow the Company to trade in its own shares)The General Meeting, satisfying the quorum and majority requirements for Ordinary Meetings, having taken note of the report of the
Executive Board and in line with the provisions of Articles L.225-209 of the French Commercial Code, authorises the Executive Board to buy back theCompany’s shares, with a view to:
• Granting share purchase options or free shares to its employees, senior company officers and/or those in its affiliates in the legallyprescribed manner;
• Cancelling shares, subject to approval of the ninth resolution put to the Extraordinary General Meeting;• Holding and using shares for the purposes of exchange or consideration as part of mergers and acquisitions; and• Putting in place or honouring obligations relating to the issuing of securities giving access to equity,• Using any market practice approved by the AMF and, more generally, carrying out any transaction acceptable under current
regulations.
The General Meeting sets the maximum purchase price at € 100 per share and the maximum number of shares to be purchased at 10%of the total amount of shares currently comprising the share capital, or 5% where it relates to shares acquired by the Company with a view to holdingand using them in mergers and acquisitions. It should be noted that the overall amount allocated to the share buyback programme may not exceed € 96,609,930.
In the event of a capital increase through the capitalisation of reserves and the allocation of free shares or any other transaction affectingequity as well as, if applicable, a share split or a reverse split, the € 100 price will be mathematically adjusted by the required proportion to takeaccount of the change in the total number of shares occasioned by the transaction.
The acquisition, disposal or transfer of these shares may be by any means, in the market, off the market or over the counter, in particularby share blocks, and at the timing of the Executive Board’s choosing, in line with applicable regulations. The portion of the programme that may becarried out through block trading is unlimited.
The authorisation is granted for a period of eighteen months from the date of this Meeting and shall in any event expire at the end ofthe Meeting called to approve the financial statements for the financial year ended 31 December 2007. It cancels and replaces that granted by theAnnual General Meeting of 23 May 2006 (eighth resolution) for the portion not yet used.
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The General Meeting grants full authorisation to the Executive Board, which may delegate this to its Chairman, to enter into anyagreements, carry out any and all formalities and filings with whatever authorities, in particular the AMF, and in general, take any and all actionrequired to implement decisions taken under this authorisation.
II – EXTRAORDINARY RESOLUTIONS
Ninth resolution(Authorisation granted to the Executive Board for the Company to cancel treasury shares)The General Meeting, fulfilling the quorum and majority conditions required for Extraordinary Meetings, having taken note of the
report of the Executive Board and the special report of the Statutory Auditors, pursuant to the provisions of Article L.225-209 of the FrenchCommercial Code and subject to approval by the General Meeting of the eighth resolution relating to the authorisation granted to the Company totrade in its own shares, authorises the Executive Board at its sole discretion, and on one or more occasions, to cancel all or part of the treasury sharesit holds by virtue of the authorisations to buy back Company shares.
The authorisation is granted for a period of eighteen months from the date of this General Meeting, for up to 10% of the share capital,per twenty-four month period, and shall in any event expire at the end of the General Meeting called to approve the financial statements for thefinancial year ended 31 December 2007. It cancels and replaces that granted by the Annual General Meeting of 23 May 2006 (ninth resolution) forthe portion unused at that time.
The General Meeting fully empowers the Executive Board to settle any objections, decide as to the cancellation of shares, record anyshare capital reduction, record the difference between the buy back value of the cancelled shares and their face value against premiums and availablereserves, accordingly amend the Articles of Association and, in general, take any appropriate measures and carry out all necessary formalities.
Tenth resolution(Authorisation granted to the Executive Board to increase the share capital through the issue of ordinary shares, various securities that may give
access to equity or give entitlement to debt securities, with retention of shareholders’ pre-emptive subscription rights)The General Meeting, satisfying the quorum and majority requirements for Extraordinary Meetings, having taken note of the report of
Executive Board, and in line with the provisions of Articles L.225-129 to L.225-129-6, L.228-91 and L.228-92 of the French Commercial Code:
- Delegates to the Executive Board, with the option to further delegate it in the legally prescribed manner, its right to, on one or moreoccasions, issue, in France or abroad, in euros, with retention of shareholders’ pre-emptive subscription rights, ordinary shares in theCompany or any form of security giving access to the Company’s equity or giving entitlement to the Company’s debt securities,including warrants for new or existing shares issued independently, free or for consideration; said securities may also be denominatedin foreign currencies or in any monetary unit established having regard to a basket of currencies. No form of preference share orsecurity giving rights to preference shares may be issued;
- Decides that the face value of all capital increases for cash that may take place, immediately and/or in the future under thisauthorisation, may not exceed a face value of € 20,000,000, adding to this sum, as the case may be, the face value of any additionalshares to be issued to preserve, in line with the law, the rights of holders of securities giving rights to ordinary shares in the Company,it being added that this capital increase ceiling covers the tenth, eleventh, fourteenth and fifteenth resolutions and that the total facevalue of the capital increase carried out under these resolutions shall be deducted from this overall ceiling;
- Decides that securities giving rights to ordinary shares in the Company accordingly issued may in particular consist of debt securitiesor be combined with the issue of said securities or even provide for their issue as intermediate securities. They may in particular takethe form of subordinated securities or otherwise, with a specified duration or not, be in euros, in foreign currencies or in any monetaryunit established with reference to a basket of currencies,
The face value of securities accordingly issued may not exceed € 400,000,000 or its euro equivalent as of the date of the decision to issue,it being noted that this amount does not include redemption premiums in excess of the par value, should any such exist. This amountcovers all securities that may be issued under the tenth, eleventh, fourteenth and fifteenth resolutions.The total face value of debt security issues, to which securities issued under this authorisation may give rise, may not exceed€ 400,000,000. Debt securities giving rights to the Company’s ordinary shares may bear a fixed and/or variable interest rate or even becapitalised, and be repaid with or without a premium, or redeemed, the shares moreover possibly being bought back by the Companyin the market or by means of a public offering,
- In the event that the Executive Board uses this authorisation, it resolves that:
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I) Shareholders shall be entitled, in proportion to the shares they hold, to subscribe pre-emptively as of right for ordinary shares andsecurities issued under this resolution,
II) The Executive Board may, moreover, grant shareholders the right to subscribe for excess shares in proportion to their rights and tothe extent of their requests,
III) Where subscriptions as of right and, as the case may be, for excess shares have not absorbed all the ordinary shares or securities tobe issued under this authorisation, the Executive Board may, at its discretion, limit the issue to the amount of subscriptions received,so long as they represent at least three quarters of the planned issue, and freely share out all or part of the unsubscribed shares andoffer all or part of them to the public.
- Notes that under this authorisation shareholders legally waive their pre-emptive subscription right for ordinary shares in the Companywhich may stem from securities issued under this authorisation,
- Decides that it is up to the Executive Board, with the option to further delegate, to set the issue price for ordinary shares or securitiesgiving access to the Company’s equity. The sum immediately received by the Company plus, as the case may be, that likely to besubsequently received by the Company shall, for each ordinary share issued as a result of the issue of these securities, be at least equalto its face value,
- Gives the Executive Board, with the option to further delegate, all the necessary powers to carry out this authorisation, in particularfor the purpose of setting the terms and conditions of issue, recording the completion of the resulting capital increases, making thecorresponding changes to the Articles of Association and allowing any expenses to be set against the issue premium,
- Sets the term of validity of this authorisation, which cancels the authorisation granted in the thirteenth resolution of the GeneralMeeting of 24 May 2005, at twenty-six months from this Meeting.
Eleventh resolution(Authorisation granted to the Executive Board to increase the share capital through the issue of ordinary shares, various securities that may give
access to equity or give entitlement to debt securities, with waiving of shareholders’ pre-emptive subscription rights and the obligation to grant a preferential right)The General Meeting, satisfying the quorum and majority requirements for Extraordinary Meetings, having taken note of the report of
the Executive Board as well as the special report of the Statutory Auditors, and in line with the provisions of Articles L.225-129 to L.225-129-6, L.225-135, L.228-91 and L.228-92 of the French Commercial Code:
- Delegates to the Executive Board, with the option to further delegate it in the legally prescribed manner, its right to, on one or moreoccasions, issue, in France or abroad, in euros, with waiving of shareholders’ preferential subscription rights, ordinary shares in theCompany or any form of security giving access to the Company’s equity or giving entitlement to the Company’s debt securities,including warrants for new or existing shares issued independently, free or for consideration; said securities may also be denominatedin foreign currencies or in any monetary unit established having regard to a basket of currencies. No form of preference share orsecurity giving rights to preference shares may be issued;
- Decides that the total face value of all capital increases for cash that take place, immediately and/or in the future under thisauthorisation, may not exceed € 20,000,000, adding to this sum, as the case may be, the face value of additional shares to be issuedto preserve, in line with the law, the rights of holders of securities giving rights to ordinary shares in the Company, this amount beingdeducted from the overall ceiling set in the tenth resolution,
- Decides that securities giving rights to ordinary shares in the Company accordingly issued may in particular consist of debt securitiesor be combined with the issue of said securities or even provide for their issue as intermediate securities. They may in particular takethe form of subordinated securities or otherwise, with a specified duration or note, be in euros, in foreign currencies or in any monetaryunit established with reference to a basket of currencies.The face value of securities accordingly issued may not exceed € 400,000,000 or its euro equivalent as of the date of the decision toissue, this amount being added to ceiling set in the tenth resolution, it being noted that this amount does not include redemptionpremiums in excess of the par value, should any such exist. The total face value of debt security issues, to which securities issued underthis authorisation may give rise, may not exceed € 400,000,000. Debt securities giving rights to the Company’s ordinary shares maybear a fixed and/or variable interest rate or even be capitalised, and be repaid with or without a premium, or redeemed, the sharesmoreover possibly being bought back by the Company in the market or by means of a public offering,
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- Decides to get rid of the pre-emptive subscription right of shareholders to these securities that will be issued in the legally prescribedmanner, the Executive Board being required to establish preferential subscription as of right and for excess shares for all shares to beissued, during the period and on the terms it sets in line with the legal and regulatory provisions, to subscribe for them pursuant tothe provisions of Article L.225-135 of the French Commercial Code. Where the subscriptions, including, as the case may be, thosefrom shareholders, don’t absorb the whole share issue, the Executive Board may, at its discretion, limit the issue to the amount ofsubscriptions received, so long as they represent at least three quarters of the planned issue, freely share out all or part of theunsubscribed shares and offer all or part of them to the public,
- Notes that under this authorisation shareholders legally waive their pre-emptive subscription right for ordinary shares in the Companywhich may stem from securities issued under this authorisation,
- Decides that the sum accruing or which should accrue to the Company for each of the shares issued or to be issued under thisauthorisation, less, as the case may be, where free-standing share warrants are issued, the issue price of said warrants, shall at least beequal to the minimum amount prescribed by the legal or regulatory regulations in force when this authorisation is used, namely atpresent the weighted average price of the share during the three trading sessions prior to it being set, with the option to reduce it byat most 5%, following, where applicable, any correction that may be required to take account of the dated date difference,
- Decides that it is up to the Executive Board, with the option to further delegate, to set the issue price for ordinary shares or securitiesgiving access to the Company’s equity,
- Gives the Executive Board, with the option to further delegate, all the necessary powers to carry out this authorisation, in particularfor the purpose of setting the terms and conditions of issue, recording the completion of the resulting capital increases, making thecorresponding changes to the Articles of Association and allowing any expenses to be set against the issue premium,
- Sets the term of validity of this authorisation, which cancels the authorisation granted in the fourteenth resolution of the GeneralMeeting of 24 May 2005, at twenty-six months from this Meeting.
Twelfth resolution(Authorisation granted to the Executive Board to increase the share capital by capitalising premiums, reserves, earnings or others).The General Meeting, satisfying the quorum and majority requirements for Extraordinary Meetings, having taken note of the report of
the Executive Board, and in line with the provisions of Article L.225-130 of the French Commercial Code:
- Authorises the Executive Board to increase the share capital, on one or more occasions, by the amounts and at the timing of itschoosing, via the capitalisation of premiums, reserves, earnings or other that may be capitalised either by law or under the Articles ofAssociation, in the form of free share grants or an increase in the face value of existing shares or through the combined use of bothmethods. The maximum face value increase resulting from the capital increases likely to be carried out in this regard may not exceed€ 20,000,000;
- In the event that the Executive Board uses this authorisation, provides it with the necessary powers, together with the option to furtherdelegate them in the legally prescribed manner, to implement this authorisation, for the purpose in particular of:
(a) Setting the amount and the type of sums to be included in the capital, setting the number of new shares to be issued and/or theamount by which the face value of existing shares is to be increased, setting the dated date, even retroactively, or the date from whichthe face value will be increased,
(b) Deciding, where free shares are granted:I) That fractional rights may not be traded and the corresponding shares sold; the sums resulting from the sale will be allocated to the
holders of the rights in the legally prescribed manner (at present, within thirty days of the registration in their name of the full numberof shares granted),
II) That those shares granted on the basis of existing shares that enjoy double voting rights will enjoy this right as from their issue date,III) Make all the adjustments necessary to take account of the impact of transactions on the Company’s capital, in particular in the event
of a change in the share’s face value, a capital increase through the capitalisation of reserves, free share grants, share splits or reversesplits, the distribution of reserves or of any other assets, capital reduction, or any other equity related transaction, and set out themanner in which the rights of holders of securities giving access to equity are to be preserved,
IV) Record the completion of each capital increase and make the corresponding changes to the Articles of Association,V) In general, sign any agreement, take any measures and carry out any formalities necessary for the issue, listing and the financial
servicing of the securities issued under this authorisation as well as the exercise of the related rights;
- Set at twenty-six months, from this Meeting, the term of validity of the issue authorisation that is the subject of this resolution, whichsupersedes and cancels the authorisation granted in the fifteenth resolution of the General Meeting of 24 May 2005.
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Thirteenth resolution(Authorisation granted to the Executive Board to issue ordinary shares or securities giving access to equity, without shareholders’ pre-emptive sub-
scription rights, in consideration for contributions in kind relating to equity securities or securities giving access to equity.)The General Meeting, satisfying the quorum and majority requirements for Extraordinary Meetings, having taken note of the report of
the Executive Board as well as the special report of the Statutory Auditors, and in line with the provisions of Articles L.225-129 et seq. of the FrenchCommercial Code, and in particular Paragraph 6 of Article L.225-147, grants, up to 10% of the share capital as adjusted following any transactionssubsequent to the General Meeting, the Executive Board all the necessary powers, with the option to further delegate them in the legally prescribedmanner, for the purpose of:
- Compensating all contributions in kind made to the Company and comprising equity securities or securities giving access to equity,where the provisions of Article L.225-148 of the French Commercial Code don’t apply,
- Implementing this authorisation, in particular to deliberate, on the report of the Statutory Auditors on the contributions mentioned inthe first two paragraphs of Article L.225-147 mentioned above, on the measurement of the contributions and the granting of specialbenefits and their values, setting the terms and conditions of the authorised transactions, setting the number of securities to issue,setting any expenses that may arise against the contribution premium, recording the completion of the capital increases, making thecorresponding changes to the Articles of Association, completing whatever formalities and filings are necessary and requesting all thepermissions that may be necessary to carry out these contributions.
This authorisation, which cancels the authorisation granted in the sixteenth resolution of the General Meeting of 24 May 2005, is validfor twenty-six months from this Meeting.
Fourteenth resolution(Authorisation granted to the Executive Board to increase the number of securities to be issued in a capital increase, with or without pre-emptive
subscription rights.)The General Meeting, satisfying the quorum and majority requirements for Extraordinary Meetings, having taken note of the report of
the Executive Board, delegates to the Executive Board, with the option to further delegate, its power to increase the number of securities to be issuedfor each issue of shares or securities giving access to equity with retention or waiving of pre-emptive subscription rights, decided pursuant to the tenthand eleventh resolutions, in line with the terms of Article L.225-135-1 of the French Commercial Code and up to the ceilings provided for in the tenthresolution.
The number of securities may be increased within thirty days of the end of subscription by up to 15% of the initial subscription and atthe same price as for the initial issue.
This authorisation, which cancels the authorisation granted in the seventeenth resolution of the General Meeting of 24 May 2005, isvalid for twenty-six months from this Meeting.
Fifteenth resolution(Authorisation to the Executive Board to carry out capital increases reserved for employees under the provisions of the French Commercial Code
and Articles L.443-1 et seq. of the French Labour Code).The General Meeting, satisfying the quorum and majority requirements for Extraordinary Meetings, having taken note of the report of
the Executive Board as well as the special report of the Statutory Auditors, decides, having regard to the above resolutions, to delegate to the ExecutiveBoard the power to increase the share capital, on one or more occasions, by at most € 393,000, through the issue of new shares to be paid for in cashby employees of the Company or related companies within the meaning of Article L.233-16 of the French Commercial Code who belong to one ormore company or group savings plans established by the company and satisfying any conditions that may be laid down by the Executive Board in linewith the provisions firstly of Articles L.225-129-2, L.225-129-6 and L.225-138-1 of the French Commercial Code and secondly of Articles L.443-1 etseq. of the French Labour Code.
The Extraordinary General Meeting accordingly decides to remove the shareholders’ pre-emptive subscription right and to reserve saidcapital increase(s) for the employees indicated above.
The Extraordinary General Meeting decides that the issue price of the shares, subscription for which is thereby reserved, issued underthis authorisation, shall be determined by the Executive Board, but may not be more than 20% below the average opening price over the twenty tradingsessions prior to the decision to commence the subscription, or 30% below this average where the lockout period in the plan pursuant to Article L.443-6is equal to or greater than ten years.
The General Meeting expressly authorises the Executive Board, should it feel it necessary, to reduce or remove the above-mentionedreductions in the legally prescribed manner, so as to, in particular, take account of locally applicable legal, accounting, tax or labour regimes.
It also authorises the Executive Board to issue, pursuant to this authorisation, any security giving access to the Company’s equity that ispermitted by law or regulations.
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As part of the authorisation granted to it, the Executive Board shall be required to:
- Set the terms and conditions that would have to be satisfied by the beneficiaries of the new shares stemming from the capital increasesthat are covered by this resolution,
- Set the terms and conditions of the issue,
- Decide on the amount to be issued, the issue price, the dates and terms of each issue, specifically deciding whether the shares will besubscribed for directly or via one or more Company or employee mutual funds or via any other entity permissible under applicablelegislation,
- Decide and set the means of granting free shares or other securities giving access to equity, in line with the above authorisation,
- Set the period provided to subscribers to pay up for their securities,
- Set the dated date, even retroactively, for the new shares,
- Record or have recorded the completion of the capital increase(s) for the amount of the shares that will actually be subscribed for, ordecide to increase the amount of said capital increase(s) so that all subscriptions received can effectively be satisfied,
- On its own initiative, set the costs of the share capital increases against the premiums stemming from these increases and deduct fromthis amount the sums necessary to bring the legal reserve to one tenth of the new capital following each increase,
- In general, take all the decisions necessary to carry out the capital increases, complete any resulting formalities and make thecorresponding changes to the Articles of Association.
The authorisation thus granted to the Executive Board is valid for a period of twenty-six months from this Meeting and cancels andsupersedes that granted in the eighteenth resolution of the General Meeting of 24 May 2005.
Sixteenth resolution(Authorisation given to the Executive Board to grant employees of the Company or its subsidiaries purchase or subscription options in the Company)The General Meeting, satisfying the quorum and majority requirements for Extraordinary Meetings, having taken note of the report of
the Executive Board and the special report of the Statutory Auditors, authorises the Executive Board in line with Articles L.225-177 et seq. of the FrenchCommercial Code to grant, on one or more occasions, purchase or subscription options in the Company to employees and senior corporate officers,both of the Company and companies or economic interest groupings that are directly or indirectly related to it within the meaning of Article L.225-180 of said Code. These options must be granted prior to the end of a thirty-eight month period from this Meeting.
In so far as required, the Executive Board is authorised to buy back the number of Company shares necessary to grant share purchaseoptions. For the purposes of granting the share options, it may, moreover, use shares acquired under current share buyback programmes.
The total amount of share purchase or subscription options may not exceed two hundred and fifty thousand (250,000) shares.
The price at which the purchase or subscription options will be granted may not be less than the value resulting from the applicationof the regulations in force when the option is granted.
The options must be exercised within at most ten years of being granted.The number of options may change, in the legally prescribed manner, as a result specifically of share capital changes.The General Meeting gives the Executive Board all the powers necessary to carry out these transactions up to the amounts and in line
with the terms and conditions set out above, pursuant to the legal and regulatory provisions in force when the options are granted, it being noted thatExecutive Board may in particular decide, in line with applicable laws and regulations, to:
- Extend the option exercise period provided for when they are granted but only up to the ten year period indicated above,
- Convert share purchase options into share subscription options and vice versa after they have been granted,
- Provide for the possible temporary suspension of option exercises for up to at most three months in the event of financial transactionsinvolving the exercise of some share related rights,
- Carry out or have carried out all acts and formalities necessary to complete the capital increase(s) that may result from the use of theauthorisation in this resolution; amend the Articles of Association accordingly and generally do whatever is necessary,
- On its own initiative should it feel it appropriate, set the costs of the share capital increases against the amount of premiums relatingto these increases and deduct from this amount the sums necessary to bring the legal reserve to one tenth of the new capital following each increase.
This resolution cancels, for those options that have not been granted, the previous authorisation granted at the Combined Ordinary andExtraordinary General Meeting of 25 May 2004 (seventeenth resolution).
Seventeenth resolution(Authorisation given to the Executive Board to grant free Company shares)The General Meeting, satisfying the quorum and majority requirements for Extraordinary Meetings, having taken note of the report of
the Executive Board and the special report of the Statutory Auditors:
- Authorises the Executive Board, pursuant to the provisions of Articles L.225-197-1 et seq. of the French Commercial Code, to makefree grants, on one or more occasions, of existing ordinary shares or to issue shares in Groupe Norbert Dentressangle S.A. to employeesand/or senior corporate officers of the Company and/or entities that are related to it within the meaning of Article L.225-197-2 of thesame Code, on the terms and conditions set out below,
- Decides that the shares granted under this authorisation may not represent more than 3% of the share capital as of the date of thisMeeting, the maximum face value of the capital increases likely to be made immediately or in the future not being included in theoverall ceiling set out in paragraph 2 of the tenth resolution put before this Meeting,
- Decides that share grants to beneficiaries shall vest at the end of a minimum two-year vesting period and that beneficiaries shall berequired to hold said shares for a minimum two-year period from the end of the vesting period, the Executive Board having the powerto extend the vesting and mandatory holding periods,
- Grants the Executive Board all the necessary powers to implement this authorisation, and in particular for the purpose of:(a) Selecting the beneficiaries from amongst the employees and/or senior corporate officers of the Company and/or entities that are
related to it in the above-mentioned manner,(b) Setting the terms and conditions and, as the case may be, the criteria for granting the shares,(c) Where new shares are issued, deduct from the reserves, earnings or issue premiums the sums necessary to pay up said shares, record
the capital increase(s) carried out under this authorisation and accordingly amend the Articles of Association,(d) Adjusting, up to the above-mentioned ceiling, the number of freely granted shares as a result of changes to the Company’s capital,
- Notes and resolves to the extent necessary that, having regard to the free shares to be issued, this decision gives rise to, at the end ofthe vesting period, a capital increase through the incorporation of reserves, earnings or issue premiums for the beneficiaries of saidshares and corresponding waiving by shareholders for the benefit of the beneficiaries of the portion of the reserves, earnings andpremiums thereby capitalised and their pre-emptive subscription rights over the ordinary shares that will be issued as the shares vest,and all other rights to ordinary shares that are freely granted under this authorisation,
- Sets the term of this authorisation at thirty-eight months.
The Meeting delegates all the necessary powers to the Executive Board to implement this authorisation, with the option to furtherdelegate them to its Chairman or one of its members with the agreement of the Chairman, in the legally prescribed manner.
Eighteenth resolution(Takeover of Stockalliance by Groupe Norbert Dentressangle S.A.)The General Meeting, satisfying the quorum and majority requirements for Extraordinary Meetings, having taken note of the report of
the Executive Board as well as the draft merger agreement of 28 March 2007 with Stockalliance, a public limited company with a capital of € 30,568,860 with its registered office at 55, rue Louis Bréguet, Toulouse (31000), registered in the Toulouse Trade Registry under number 558 800 033, under which Stockalliance transfers to Groupe Norbert Dentressangle S.A. all its assets calculated at € 18,968,404, with the taking onof all its liabilities calculated at € 1,580,090, representing some € 17,388,314 in net assets, having heard the report of the merger broker appointedby the Chairman of the Romans Commercial Court on 26 March 2007, approves all provisions of the draft merger agreement and of its appendixeswhich comprise the final merger agreement.
Given that Groupe Norbert Dentressangle S.A., holds 242,104 shares in Stockalliance, the General Meeting decides to waive any rightsGroupe Norbert Dentressangle S.A. may have as a result of its shareholding and decides to increase the share capital by € 1,096, raising it from € 19,671,386 to € 19,672,482, with the creation of 548 new shares with a face value of € 2 each, fully paid up, which are granted to shareholdersof Stockalliance other than Groupe Norbert Dentressangle S.A., on the basis of 13 shares in Groupe Norbert Dentressangle S.A. for every 12 shares inStockalliance, it being noted that, to avoid fractions, the number of shares issued by the company taking over, on the basis of this exchange ratio, wasdetermined by rounding the number of shares due to each shareholder of the company that is taken over to the next highest integer where it ends in“.5” or greater and otherwise to the next lowest integer.
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The new shares will be in the same class as the existing Groupe Norbert Dentressangle S.A. shares. They shall enjoy the same rights andbear the same responsibilities as the old shares.
The new shares issued by Groupe Norbert Dentressangle S.A. in exchange for the shares in Stockalliance will be listed on the EuronextParis Eurolist right from the merger.
The General Meeting specifically approves:
- The merger premium amounting to € 36,474.88 and corresponding to the difference between:I) The net asset value received by Groupe Norbert Dentressangle S.A. in respect of the interest held in Stockalliance by shareholders
other than Groupe Norbert Dentressangle S.A. (€ 37,570.88) andII) The face value of the new shares issued by Groupe Norbert Dentressangle S.A. in consideration for the contribution (€ 1,096),
- The merger surplus amounting to € 7,388,831.82 and representing the difference between:I) The net asset value received by Groupe Norbert Dentressangle S.A. in respect of its stake in Stockalliance (€ 17,350,743.68) andII) The carrying amount of the 242,104 shares in Stockalliance held by Groupe Norbert Dentressangle S.A. (€ 9,961,911.86).
This merger premium will be recognised in the financial results of Groupe Norbert Dentressangle S.A. for the portion of the resultsaccumulated by Stockalliance since the acquisition and not distributed, and in equity for the residual amount where the accumulated results cannotbe reliably calculated.
The General Meeting notes that the Extraordinary General Meeting of Stockalliance held previously approved this merger.
It notes that the conditions to which the merger was subject have been satisfied and that as a result the merger is completed andStockalliance dissolved without being liquidated, as of now.
The General Meeting accordingly decides to amend Article 6 of the Articles of Association as follows:
Article 6 - Contributions - share capital
Add the following section to the end of I:“25) The Combined Ordinary and Extraordinary General Meeting of 30 May 2007 decided to increase the share capital by one thousand
and ninety six euros (€ 1,096), to € 1,096.00 bringing the nineteen million, six hundred and seventy one thousand, three hundred and eighty sixeuros (€ 19,671,386) to nineteen million, six hundred and seventy two thousand, four hundred and eighty two euros (€ 19,672,482), following themerger with Stockalliance, the contribution being compensated by the issue of five hundred and forty eight (548) new shares, with a face value of twoeuros (€ 2) each.”
The first paragraph of II being replaced with: “The share capital amounts to nineteen million, six hundred and seventy two thousand,four hundred and eighty two euros (€ 19,672,482). It is split into nine million, eight hundred and thirty six thousand, two hundred and forty one(9,836,241) shares, with a face value of two euros (€ 2) each, all of the same class.”
The remainder of this Article is unchanged.
Nineteenth resolution(Amendments to Articles 10 “Paying up shares”, 20 “Terms of office – age restrictions” and 29 “Shareholders’ meetings” of the Articles of
Association)The General Meeting, satisfying the quorum and majority requirements for Extraordinary Meetings, resolves:
- To bring the Articles of Association into line with the legal provisions by replacing paragraph two of Article 10 “Paying up shares” with“calls for funds are brought to the attention of subscribers and shareholders in the legally prescribed manner”, and the first sentenceof the third paragraph of Article 29 “Shareholders’ Meetings” with “Any person holding shares may, in person or via a proxy, participatein the General Meeting upon presentation of his/her identity and ownership of his/her shares in line with legal and regulatoryprovisions”,
- To cut the term of office of members of the Supervisory Board and to accordingly change the renewal rate, by replacing in Article 20“Terms of Office – Age restrictions” the word “six” with “four” and the word “third” with “half”, it being added that the current termsof office will run for the periods set when they were appointed or renewed.
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III – COMBINED ORDINARY AND EXTRAORDINARY RESOLUTION
Twentieth resolution(Power of attorney to carry out formalities)The bearer of a copy of this document is hereby granted full authorisation to carry out any publication or other formalities required by law.
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