CHARGEURS : 2017 Interim Financial report

Interim Financial Report 2017

CONTENT

1. Interim Activity Report

2. Condensed Interim Consolidated Financial Statements

3. Related Party Transactions

4. Statement by the Person responsible for the Interim Financial Report

5. Statutory Auditors' Review Report on the Condensed Interim Consolidated Financial Statements

The Interim Financial Report 2017 is a translation from the original, which was prepared in French. In all matters of interpretation of information, views or opinions expressed therein, the original language version of the report takes precedence over this translation.

AN EXCELLENT PERFORMANCE AND STRONG CASH GENERATION FOR CHARGEURS IN FIRST-HALF 2017

PRESS RELEASE

Paris - September 7, 2017

• Recurring operating profit up 15.8% and net cash from operating activities up 87.1% year on year
• Interim dividend of €0.25, up 25.0%, with a reinvestment option
• Game Changer - a new-generation acceleration plan to further enhance the Group's performance over the long term

Michaël Fribourg, Chargeur's Chairman and Chief Executive Officer, said: "We are continuing to successfully build on the new Chargeurs Group to secure its place amongst the world leaders in high value-added niche businesses and double its size over the next five years. Our excellent results for the first half of 2017 clearly illustrate the success of the Chargeurs Business Standards. The period saw solid cash generation and a further acceleration in the Group's growth trajectory compared with first-half 2016 when performance had already moved up a gear. And to support the acceleration in our business development strategy, we are putting in place a new-generation plan to optimize our operations that we have called Game Changer."

The consolidated financial statements for the six months ended June 30, 2017 were approved by Chargeurs' Board of Directors at a meeting held on September 6, 2017 chaired by Michaël Fribourg.

Revenue for the six months ended June 30, 2017 was up 5.4% like-for-like compared with the first half of 2016. The main growth drivers were higher sales volumes and a further improvement in the product mix, notably for the Protective Films (CPF) division. Changes in exchange rates added 0.9% to revenue - reflecting the positive impact of the New Zealand dollar and US dollar - and changes in the scope of consolidation had a 4.9% favorable effect as a result of the July 2016 acquisition of Main Tape (CPF).

The "Performance, Discipline, Ambition" Plan added an additional €2.2 million to EBITDA in first-half 2017.

The Group's operating performance in the six months ended June 30, 2017 continued its steady upward trajectory. The year-on-year increase in recurring operating profit was 15.8% - almost three times higher than sales growth for the period - and this in turn fueled an 87.1% jump in net cash from operating activities, demonstrating the success of the Chargeurs Business Standards.

During the first half of 2017 the Group decided to put in place an acceleration plan ("Game Changer"), which takes over from the "Performance, Discipline, Ambition" plan and brings together all of the Group's teams worldwide at all levels of operations. The underlying aim is to help the Group reach its objective of doubling profitable revenue within the space of five years, subject to macro-economic conditions remaining constant.

Through the new Game Changer plan, Chargeurs intends to increase its measures to enhance operating performance, focusing on four main areas:

• Sales & Marketing: Chargeurs intends to give its various businesses new marketing tools to help them stand out and build even stronger customer relations, which will in turn consolidate their sales forces.

• Smart & Advanced Manufacturing: the Group is taking pro-active steps to improve the performance of its production assets and is working determinedly towards reducing non-quality rates and production costs.

• Distinctive Innovation: the Group is acting ahead of anticipated changes in its markets, increasing its innovation capacity by accelerating the development of game-changing products and extending its offerings to related markets.

• Talent Management: as human capital is one of the cornerstones of Chargeurs' distinctive business model, the Group plans to continue streamlining its organizational structure and to set up new talent development programs - the "Excellence Training Program" and "Young & Executive Programs".

First-half 2017 revenue reported by Chargeurs Protective Films (CPF) came to €143.3 million, representing an increase of 18.9% as reported and 8.7% like-for-like compared with the year-earlier period. The continued brisk pace of like-for-like growth was driven by record-high sales volumes and a better product mix.

CPF achieved a solid operating performance, which resulted in an increase of the recurring operating profit by 30.0% to

€18.2 million from €14.0 million in first-half 2016, and propelled its recurring operating margin to above 12%.

The integration of Main Tape, acquired in July 2016, is continuing as planned and has strengthened CPF's production capacity in the US dollar zone as well as substantially raising the high tech content of the division's products to cement its future.

Notching up revenue of €67.8 million, Chargeurs Fashion Technologies (CFT) turned in a solid performance for the period despite an unfavorable basis of comparison with first-half 2016 caused by a return to more normal delivery schedules compared with 2016 when sales for the winter season began earlier than usual.

The first six months of 2017 confirmed the division's strong operating performance, with operating margin maintained at a high 5.9%, the same as in the second half of 2016, despite the return to more normal delivery schedules during first-half 2017. For the purpose of comparison, operating margin for the first six months of 2016 surged to 6.5% from 3.5% in first-half 2015, thanks to the measures taken to streamline operations and a favorable currency and calendar effect. The operating margin for the first half of 2017, which is in line with the second half of 2016, is proof of the strength of the business line's recovery. At the same time, CFT's operating profit advanced 29% year on year, increasing to €4.0 million over the period from €3.1 million for the first half of 2016 and marking the completion of the division's restructuring plan.

In line with its strategy to move upmarket, CFT stepped up its capital spending in first-half 2017, opening a showroom in New York and introducing new marketing tools aimed at improving the division's knowledge of its increasingly prestigious clientele.