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Group profile and key figures 2009
1
GROUPE SEB IN 2009
Milestones in the history of the Group
Business sectors
Group strategy and industrial policy
Management report on 2009
Outlook for 2010
Risk management
Social performance indicators
Environment performance indicators
2
60
61
62
67
125
128
130
131
132
143
ANNUAL GENERAL MEETING
Report of the Board of Directors
on the resolutions proposed
to the Annual General Meeting of 12 May 2010
Auditors’ special report on related
party agreements and commitments
Proposed resolutions
6
41
44
51
56
57
COMPANY FINANCIAL STATEMENTS
Balance sheet – at 31 December
Income statement – years ended 31 December
Notes to the Company financial statements
Statutory auditors’ report
on the Company financial statements
5
34
CONSOLIDATED FINANCIAL
STATEMENTS
Financial summary
Consolidated ratios
Financial statements
Notes to the consolidated financial statements
on the consolidated financial statements
4
4
6
8
10
17
18
25
31
CORPORATE GOVERNANCE
Board of Directors
Organization and operation
of the Board of Directors
Group management bodies
Chairman’s report on internal control
Statutory auditors’ report on internal control
Statutory auditors
3
1
146
149
151
ADDITIONAL INFORMATION
General information concerning SEB SA
Share Capital Breakdown and Changes
Financial authorizations
Employee stock ownership
Stock market and dividend information
Consultation of legal documents
Notes
160
163
167
168
172
174
175
Group
profile and
key figures
2009
Groupe SEB, in touch with changing times
Over the years, Groupe SEB has earned strong positions on all continents
through a wide, diversified product range and an exceptional brand portfolio.
Today it is the world leader in small household equipment.
Our success is rooted in our ability to innovate and invent for your daily life
in tomorrow’s world.
SALES
A multi-specialist group
3,176 MILLION
€
Cookware
frying pans, saucepans, casseroles, bakeware, oven dishes, pressure cookers, low-pressure
steam pots, kitchen utensils etc.
Kitchen electrics
Electric cooking: deep fryers, table-top ovens, rice cookers, induction hobs, electric pressure
cookers, barbecues, informal meal appliances, waffle makers, meat grills, toasters, steam
cookers, bread makers etc.
Preparation: food processors, beaters, mixers, blenders, centrifugal juice extractors, small
food-preparation equipment, coffee makers (pod, filter and espresso), electric kettles, hotwater dispensers, home beer-tapping machines etc.
Personal & home care
Personal care: hair care equipment, depilators, bathroom scales, foot massage appliances,
baby care (bottles, bottle-heaters, sterilizers, nightlights) etc.
Linen care: steam irons and steam systems, semi-automatic washing machines, garment
steam brushes etc.
Home care: vacuum cleaners (upright or canister, with and without dust bag, compact and
cordless), fans, heaters and air-conditioners etc.
1
No.2
No.3
No.
OPERATING
MARGIN
355 MILLION
€
146 MILLION
€
-4%
NET DEBT
243 MILLION
Cookware – pressure cookers – irons and steam systems – electric kettles – steam cookers
– food-preparation equipment – toasters – deep fryers – bread makers – informal meal appliances
+4%
NET INCOME
€
World ranking
-1.7%
-€406 MILLION
CAPITAL
EXPENDITURE
109 MILLION
€
-6%
Table-top ovens – electric barbecues – waffle makers and sandwich makers
Filter coffee and espresso machines
EMPLOYEES
at 31/12/2009
20,663
WORLDWIDE
OUR MARKET LEADERSHIP IS SUPPORTED BY FAMOUS BRANDS:
a world brands: All-Clad, Krups, Lagostina, Moulinex, Rowenta and Tefal;
a regional brands: Calor and Seb (France and Belgium), T-Fal, Mirro WearEver, AirBake, Regal (North America), Arno, Panex, Rochedo, Penedo,
Clock, Samurai (South America), and Supor (China).
FINANCIAL REPORT AND REGISTRATION DOCUMENT 2009
GROUPE SEB
1
This Registration Document was filed with the French Financial Markets Authority (Autorité des marchés financiers or AMF) on 7 April 2010, in
accordance with Article 212-13 of AMF general regulations. It may be used as a basis for financial transactions if it is accompanied by an AMF
information memorandum. This document was drawn up by and is the responsibility of the issuer and the Chairman and CEO.
This Registration Document is available on the Groupe SEB website, www.groupeseb.com.
2
GROUPE SEB
GROUPE SEB IN 2009
GROUP PROFILE AND KEY FIGURES 2009
MILESTONES IN THE HISTORY
OF THE GROUP
1
4
4
SOCIAL PERFORMANCE INDICATORS
25
Payroll and charges
Breakdown of employees by geographical zone
Breakdown of employees by category
Breakdown of changes in staffing
Breakdown of employees by type of contract
Persons with disabilities
Absenteeism
Breakdown by gender and category
External manual labour
Paid overtime
Workplace safety: frequency and severity
Training (staff and training hours)
Training budget
Groupe SEB academy training
Bonuses and profit sharing
25
25
26
26
27
27
27
28
28
28
29
29
30
30
30
External growth: a dynamic acquisition strategy
Organic growth: innovation
and international expansion
5
BUSINESS SECTORS
6
A constantly evolving industry
Distinct economic models
Multiple forms of competition
6
7
7
GROUP STRATEGY
AND INDUSTRIAL POLICY
8
A long term strategy
Industrial policy
8
8
ENVIRONMENT
PERFORMANCE INDICATORS
31
MANAGEMENT REPORT ON 2009
10
2009 highlights
Comments on 2009 sales
Comments on 2009 results
10
12
14
Energy consumption
Emissions
Waste
ISO certification
31
31
32
32
OUTLOOK FOR 2010
17
RISK MANAGEMENT
18
Risks inherent to operations
Dependency risks
Legal risks
Financial market risks
Sensitivity analysis
Insurance
Exceptional events and litigation
18
21
22
22
23
23
24
GROUPE SEB
1
3
1
GROUPE SEB IN 2009
1
Groupe SEB dates from 1857 with the creation of the company Antoine
Lescure, in Burgundy, France. Beginning as a tinware company specialized
in making buckets and watering cans, it gradually expanded its activities to
include kitchen utensils, zinc tubs and other articles. It began to mechanize
production when it bought its first press at the beginning of the 20th century.
At that time, the company’s business was confined to its local region.
It took a major stride forward in 1953 when it launched the pressure cooker.
This gave the company, thereafter called Société d’Emboutissage de
Bourgogne, a new national dimension.
The subsequent history of the Group would take shape through successive
phases of acquisition and organic growth.
External growth: a dynamic acquisition strategy
A series of acquisitions over the last 40 years has enabled Groupe SEB to
diversify its activities and expand internationally.
CREATION OF THE GROUP
In 1968, SEB acquired Tefal, a company specialized in non-stick cookware;
in 1972, it took over the Lyon-based company Calor, a maker of irons, hair
dryers, small washing machines and portable radiators. This established SEB
as a leading operator in small household equipment in France. In 1973, it
decided to form a group structure under a lead holding company, SEB S.A.,
which would be listed on the Paris Stock Exchange in 1975.
WORLDWIDE STATUS
The 1988 acquisition of Rowenta, whose German and French factories made
irons, electric coffee makers, toasters and vacuum cleaners, was a crucial
step in the Group’s international expansion. In 1997-1998, the takeover of
Arno, Brazil’s market leader in small electrical appliances, established the
Group in South America. Arno was a specialist in the manufacture and sale
of food-preparation appliances (mixers/blenders), non-automatic washing
machines and fans. At the same time, the Group acquired Volmo, a leading
producer of small electrical appliances in Colombia and Venezuela, with its
own offer in food-preparation appliances (mixers/blenders), fans and irons.
September 2001 saw Moulinex, the Group’s main rival in France, file for
bankruptcy. The Group’s offer of a partial takeover of the assets of Moulinex
and its subsidiary Krups was accepted by the Nanterre Commercial Court in
October 2001. The integration of Moulinex-Krups began at that point, giving
birth to a bigger and stronger Groupe SEB worldwide. After much legal
debate at the European Commission and in France, the final authorizations
for the takeover were obtained in 2005.
4
REINFORCEMENT OF COOKWARE OPERATIONS
Meanwhile, in the summer of 2004 the Group took the opportunity to
strengthen its base in the United States with the acquisition of All-Clad,
a premium-range cookware specialist whose product offer was an ideal
complement to the T-Fal brand in the US market. In May and June 2005,
the Group once again enhanced its cookware offer with two more takeovers:
Lagostina in Italy and Panex in Brazil. Lagostina, Italy’s leader in top-range
stainless steel cookware (saucepans, frying pans and pressure cookers) has
a prestige brand image that affords the Group access to new markets. Panex,
with its brands extending over several segments, helped us to penetrate
the cookware market in Brazil and instantly occupy a front-rank position.
In August 2006, the Group embarked on a new phase of consolidation in
cookware when it bought selected assets of the American company Mirro
WearEver. This made Groupe SEB the North American leader in cookware,
adding to its mid-range T-Fal offer and All-Clad premium-range offer.
In the same year, the Group initiated a process to buy a majority stake
in Supor, China’s domestic market leader in cookware and number 3 in
small electric cooking appliances. As Supor is listed on the Shenzhen
Stock Exchange and as this kind of transaction was without a precedent in
China, the deal required various authorizations from China’s Trade Ministry
(MOFCOM) and the country’s securities regulator (CSRC).
Having acquired an initial 30% stake in Supor’s capital on 31 August 2007,
the Group raised this to a 52.74% controlling stake in Supor on
21 December 2007 following a successful public share purchase offer.
GROUPE SEB
GROUPE SEB IN 2009
1
Organic growth: innovation and international expansion
1
New product development and the conquest of new markets are two key
pillars of our strategy. Innovation affords the Group the leading edge needed
to establish solid market positions. In parallel, international expansion opens
up new opportunities: a better geographic spread of sales and high growth
potential in emerging markets.
bread-making machines. In 2008, other completely new functional features
were introduced in linen care, such as a self-cleaning iron soleplate and an
anti-scaling system for steam generators.
A STRONG INNOVATION POLICY
In the 1970s, Groupe SEB turned its attention to international growth.
Building on its culinary expertise, it began by penetrating the Japanese
and American markets. In 1992 and 1993, it took advantage of the opening
of Eastern Europe, creating marketing operations to make inroads into
these countries and gain greater access to the Russian market. From 1994
to 2000, it focused on building up its commercial operations worldwide
and, where appropriate, its industrial presence by setting up factories in
South America, China and elsewhere. Over the years, the Group expanded
its activities to all the continents and built its international manufacturing
bases. It continued expanding in Asia with marketing subsidiaries created
in Thailand and Taiwan in 2003, and in Singapore and Malaysia in 2004. It
then reinforced its presence in South America by opening a subsidiary in
Peru. In 2005, the Group created a subsidiary in Switzerland to manage
its operations in that country directly. Meanwhile, to accompany emerging
markets in Northern, Central and Eastern Europe, the Group strengthened
its presence in these zones by setting up subsidiaries in Romania in 2005,
Ukraine and Slovenia in 2006, Latvia in 2007. This drive continued in Bulgaria
in 2008, while, in Southeast Asia, Supor opened a new factory in Vietnam.
Both SEB and Moulinex, ever since they were founded, have set out to offer
innovative products that contribute to the daily well-being of consumers.
Emblematic products such as the Seb pressure cooker and the Moulinex
puree hand-press paved the way for the first electrical appliances in the 50s
and 60s: irons, coffee grinders, odourless fryers, and the famous Charlotte
and Marie multipurpose appliances. The 70s and 80s would see the advent of
more sophisticated functions, with electronic components in many products
such as bathroom scales and programmable coffee makers. This era also
saw the emergence of new lifestyles, reflected in the launch of convivial
products such as the raclette grill and home espresso coffee maker. In the
decade up to 2000, both Groupe SEB and Moulinex brought new simplicity
to the world of small household equipment: a pressure cooker with fingertouch lid closing, a compact vacuum cleaner with a triangular head, a
coffee maker incorporating a grinder-doser, a frying pan with a visual heat
indicator, and a food processor designed for easy storage. Then, in 2006,
the Group adopted a new approach to promoting its product offer: its first
partnerships with leading food-industry operators gave it access to new
product categories such as pod coffee makers and draught beer tapping
machines. The following year saw the Group launch new concepts to meet
new consumer needs. These led to major commercial successes with, for
example, the Quick & Hot instant hot-water dispenser, the Actifry minimal-oil
electric fryer, the quiet, yet powerful Silence Force vacuum cleaner and
HEADING FOR NEW MARKETS
The strength of Groupe SEB lies in its ability to blend innovation – a key
factor of success – with international operations that bring it closer to its
retail clients and customers. These are the two pillars upon which the Group
continues to build its future.
GROUPE SEB
5
1
GROUPE SEB IN 2009
Business sectors
Business sectors
1
As a global leader in small household equipment, Groupe SEB deploys its
strategy via a portfolio of diversified and complementary brands on multiregion or local markets. Groupe SEB stands out from its main rivals by
being present in both the small electrical appliance sector (which accounts
for 70% of its sales) – estimated to be worth €26.5 billion – and cookware
(a sector worth around €6.5 billion).
❙ BREAKDOWN OF THE SMALL DOMESTIC EQUIPMENT MARKET,
BY PRODUCT FAMILY
5%
7%
Linen care
Food preparation
22%
Home cleaning
9%
All in all, the small domestic equipment sector shows regular growth,
supported by:
Beverage preparation
a the emerging economies of certain countries (first equipment markets);
11%
a a strong innovation dynamic (creation of new products, new concepts);
Personal care
a the appearance of new consumers of more status-related products
19%
Cookware
(upgrading);
a shorter product use cycles (renewal markets).
12%
Home comfort
15%
Electric cooking
Source: Estin, 2008 market.
A constantly evolving industry
The small household equipment sector is in constant movement, affected
by marked background trends for over 10 years:
a a high-end segment showing recent high growth and with major potential
for development, even if this segment remains highly dependent on the
economic environment;
a the proportion of manufacturing relocated to low production cost countries
(notably China) continues to grow. Products are mainly assembled rather
than produced and benefit from cheap labour resources. Their small size
means that long-distance transport is not penalizing. This phenomenon
is more evident on entry level or low value-added products;
a the inevitable growth of partnerships. Industrial producers of household
a the rapid development of emerging countries, the main contributors to
Market participants are continuously adapting their strategies to these
developments.
the growth currently seen in the sector. A developing property market,
low equipment rates, increasing purchasing power of demanding middle
classes and the progressive construction of retail networks, are major
growth levers for players in the domestic equipment market – in particular
at the lower end and mid-price ranges;
a a complex and multiple retail distribution which depends on the regions,
the maturity of markets, targets or product ranges: hyper/supermarkets,
specialist retailers, department stores, traditional points of sale, highend boutiques, etc. with rapid and recent development of alternative
distribution channels – internet, factory shops, own-brand stores,
discounters, etc.;
a progressive stabilization of entry level ranges, non-branded or distributor
brand products, after years of high growth;
appliances and manufacturer of mass-market goods are developing
partnerships to propose new ranges and services. Single-portion coffee
(pods, capsules, etc.) is a notable example.
On one hand, we observe the presence of major groups, especially European,
such as Groupe SEB, Philips, Braun, Bosch Siemens or DeLonghi, which
are providing the impetus behind the dynamic market. They are setting up
in new locations or are bringing out new product categories. By doing this,
they are winning market share, enjoying economies of scale and improving
their competitiveness in terms of production, R&D and distribution. The
industry’s ten biggest operators account for between €0.9 billion and over
€3 billion in sales. Together they represent over 40% of the global market
for small electrical appliances.
In parallel, there are many local operators of smaller size and whose
development remains limited on a geographical basis. They mainly rely on
outsourcing to low-cost countries.
a the mid-level segment remains the strongest, despite shrinkage in favour
of higher-end and entry level products (hour-glass effect);
6
GROUPE SEB
GROUPE SEB IN 2009
Business sectors
1
Distinct economic models
1
Three juxtaposed economic models prevail in the market:
a basic, plain, low-priced products comprised almost entirely of finished
articles procured in countries with low-cost production factors and which
are used for rapid renewal of product ranges. Research is non-existent,
development is short and simplified, marketing and sales budgets are
cut to a minimum;
a the development of good-quality mid-price products. The idea is to
propose a full range for consumers to differentiate and renew their
equipment: breakout products with innovative functions and unique
benefits, resulting from a robust innovation approach, calling on structured
point-of-sale promotions with the support of marketing and advertising
policies and an established customer service;
The mid-range segment uses innovation and expertise to re-dynamize
markets with products that stand out from cheaply, mass-produced and
increasingly commonplace articles. These ranges offer genuine product
benefits: breakthrough innovations, ease of use, high-tech performance,
timesaving, ergonomics, elegant design, handy storage and many other
“plus” features that are tangible for the consumer. Innovation thus raises the
general standards of the market, and helps manufacturers to have a better
product mix. This is clearly the stance adopted by Groupe SEB which, as
a leader in its sector, strives not only to enhance the quality of its products,
but also to develop the potential of the small household equipment market.
In parallel, the top-range segment is a promising market for the future and
where Groupe SEB intends to be a major player.
a focus on the high end market segment with carefully conceived
products which fulfill strict criteria of quality, results or appearance.
These articles are aimed at demanding consumers and/or experts, looking
for status symbols or high-value service. These ranges are marketed
by dedicated sales teams who work closely with select retail networks.
Multiple forms of competition
In our sector of activity, competitors are many but very few of them are
globally present on all our markets, whether geographically or in terms of
products proposed. In particular we can identify:
a American groups focusing almost entirely on the American continent:
a major groups active in several segments (major electrical appliances and
a Asian groups manufacturing and marketing their products on their own
consumer electronics) including small domestic appliances: Philips – which
acquired the Italian company Saeco this year – specialist in automatic
espresso machines, Proctor & Gamble (Braun), Electrolux, Bosch Siemens
or Japan’s Panasonic – which acquired Sanyo – with extensive coverage
in Asia and North America;
behalf in China (in addition to acting as subcontractors): Midea, Joyoung,
Povos, Airmate;
a American or European groups, specializing in small electrical appliances or
cookware, with an international presence: Salton/Applica, Conair, Meyer,
DeLonghi, Glen Dimplex, etc.;
Jarden Corp (Sunbeam, Mister Coffee, etc.) Hamilton Beach/Proctor Silex,
Newell/Rubbermaid (Calphalon), World Kitchen;
a high-end specialists concentrating on one or two product segments:
Dyson, Vorwerk, Jura, Laurastar, Magimix, Breville, etc.
In parallel, in recent years we have observed another form of competition
from distributor brands and no-brand products, which basically consist
of price-aggressive, entry-level products, mostly manufactured in China.
GROUPE SEB
7
1
GROUPE SEB IN 2009
1
A long term strategy
The Group pursues a long-term strategy based on four key priorities:
a customer service: this has become a crucial issue today, facing wellorganized, powerful and demanding distribution on global markets, the
Group must offer impeccable service, whether concerning product quality,
on-time delivery, replenishment or logistics, etc. through the Group’s Joint
Supply Management system;
a product leadership: Groupe SEB is a world leader in ten product families
(cookware, pressure cookers, irons and steam systems, electric fryers,
toasters, electric kettles, food-preparation appliances, bread makers,
informal meal equipment and steam cookers); it is second in electric
barbecues, table-top ovens and sandwich makers, and ranks third
worldwide in filter and espresso coffee makers;
a competitiveness: the Group’s future depends on its ability to constantly
adapt its industrial, logistics, administrative and other structures, so that
it can ensure the highest standards of excellence and remain competitive
in the future.
a geographical leadership: thanks to worldwide presence, steadily and
patiently built up, and its strong regional market-leader positions based
on powerful well-known brands;
This strategy is an integral part of the Group’s sustainable development
approach.
Industrial policy
The Group’s industrial policy aims to continuously improve competitive
performance and quality over the long term. It uses a three-pronged
approach:
❙ ORIGIN OF PRODUCTION FOR SALES AS AT 31 DECEMBER 2009
(INCLUDING SUPOR)
a Europe-based manufacturing for products when economies of scale
are feasible and where the Group is a market leader, protecting its own
product concepts using specific technologies (enabling a better product
mix and justifying higher prices), or where the Group’s manufacturing
process generates cost savings;
31%
Sourcing
40%
a use of its own plants outside Europe for economic mass-production where
the Group wishes to retain control of its specific technologies in products
and processes – these same factories also make products destined for
local markets;
a sourcing of certain basic everyday products or articles in which the Group
cannot exploit economies of scale.
In 2009, in the iron and steam system segment, the erosion of average
prices due mainly to entry-level products from low labour-cost countries
persuaded the Groupe to adapt its sites, focusing on linen care products.
On its Pont-Evêque site in Isère, France, a plan to reduce operating costs
and better integration of the seasonal effect was implemented, while, on the
Erbach site in Germany, production was reoriented to producing mid-range
and high-end irons.
2%
North America
3%
Other Europe
The Group’s industrial presence includes a total of 21 industrial sites
(27 plants) which produce 69% of products the Group sells around the
world. The other 31% are outsourced, in particular to China. This portion
decreased slightly in 2009 with the reintegration of certain products to be
produced by Supor.
8
France
GROUPE SEB
7%
South America
17%
China
GROUPE SEB IN 2009
The Group has also deployed a global Supply Chain Management system
intended to rationalize stocks of finished products, optimize the quality of
these stocks and to implement a process to improve customer service.
RESEARCH & DEVELOPMENT
The Group has responded to the trend of bland products by continuous
innovation, which provides genuine added value for consumers (new
functions, new experiences, etc.) and which is an efficient means of
differentiating, winning market share and conquering new markets. It
therefore pursues an active Research and Development policy (1) and a
structured approach to creating product ranges that involves teams from
R&D, industry, purchasing, logistics, strategic marketing, design and quality.
To this end, Groupe SEB has consolidated its Research, Marketing and
Sourcing teams for Food Preparation, Beverage Preparation and Electric
Cooking segments into one “Kitchen Electrics” cluster. The aim is to
consolidate all the resources required within one entity and to share best
practices between the teams, in order to create a determining competitive
advantage in these sectors of activity.
Regarding patents, 2009 showed less activity than 2008, which was a
particularly active year. With 70 patents registered, 269 “Soleau” preliminary
patent applications and 147 trademarks and designs protected, the Group
focused on major inventions or on barring entry to others. Nonetheless, the
first Innovation Days held in October generated around 60 promising ideas
that will be worked on by innovation committees. R&D expenditure was
maintained at €64 million, including Research Tax Credit (Crédit d’Impôt
Recherche) to the tune of €5 million and capitalized R&D expenditure
(€9 million).
1
PARTNERSHIPS
1
Groupe SEB pursues an active approach to build solid partnerships
in order to stimulate sales. It works closely with companies engaged in
complementary activities which help provide quality services to consumers.
Such is the case with major names in the food & beverage industry, with
Nestlé for Nespresso and Dolce Gusto, or Lesaffre for bread makers, for
example. Also, the Group works with top chefs throughout the world to
develop culinary products, or with prestigious brands such as Elite for
personal body care. Representing around 9% of sales, these partnerships
are major growth levers for the Group.
In parallel, the Group enjoys partnerships with universities or research
institutes, working together on major projects which enable it to widen
its field of activities and benefit from additional tools and skills. Notable
examples are projects concerning health and nutrition with Nutrition-SantéLongévité, Vitagora or Q@limed.
PURCHASING
To better tackle the issues involved in Purchasing and to ensure stronger
coordination between the various parties involved, 2009 saw the Group
implement a new organization of its purchasing activities. It created a
corporate Finished Product Purchasing department, a finished Product
Purchasing Function in all business areas and increased the size of dedicated
teams in our subsidiary SEB Asia. This reorganization will help strengthen
the purchasing quality processes for finished products, provide technical
and methodological assistance for Group teams with suppliers. In parallel,
it demonstrates our desire to integrate suppliers upstream in the product
development process in order to foster greater fluidity in creating products.
In 2009, the Group used 90 finished-product suppliers.
The Group also uses a panel of 320 suppliers for its production needs, 86
of which are Chinese. All are rigorously tested and selected by the Group
according to their performance (deadlines, quality, costs) and to their
corporate social and environmental responsibility (environmental footprint,
respect of human rights, etc.).
(1) Detailed information concerning Research and Development is provided in Note 15 in appendix to the financial statements.
GROUPE SEB
9
1
GROUPE SEB IN 2009
1
Information on risk management, social performance and the environment is presented in the following sections.
2009 highlights
GENERAL ENVIRONMENT
Since the latter part of 2008, the Group has been affected by the worldwide
crisis touching many economies around the world. It has therefore been
confronted with marked variations in monetary parity (depreciation of many
currencies against the Euro) and in raw materials, a credit shortage and
slower consumption to different degrees depending on the country. This
situation has caused major disruptions, in particular in distribution channels,
resulting in massive drawdown of stocks, limited restocking, financial
difficulties and even bankruptcy for certain parties. After a first half-year
that was penalized by the unfavourable situation, signs of easing appeared
on certain markets in the summer, with a renewal of activity in the fourth
quarter, a traditionally strong period for the Group.
Several factors contributed to the Group’s solid resistance in its performance
in light of the crisis:
a relatively strong resistance for Small Household Equipment, in particular
due to the low investment value that a mid-range purchase represents
for consumers;
half-year was brutal. Not only did certain currencies depreciate or become
weaker, the Dollar and the Yuan abruptly reversed their trends in the third
quarter. In the third quarter, the combined impact amounted to a €15 million
loss, but this worsened to €45 million in the fourth quarter. For the year as
a whole, the Group incurred a €63 million loss due to foreign exchange.
Amongst our operating currencies, the average exchange rates for the US
dollar, the Chinese Yuan and the Japanese Yen were respectively 6, 7 and
17% higher against the Euro in 2009 compared to 2008. And this is even
with their gradual depreciation against the Euro in 2009 and a reversal of
trend for the Dollar and the Yuan in the latter months. In parallel, the Group’s
other major currencies suffered extensive losses in a continuation of the
2008 situation, especially the Rouble (-17%), the Turkish Lira (-12%), Sterling
(-11%) and the Korean Won (-10%). The Brazilian Real gained in value until
August but rapidly and severely depreciated over the last four months of
the year.
This erratic evolution of parities has created major disruptions in the Group’s
activity and has led us to raise our prices in order to maintain local profitability
in certain countries where the currency has severely depreciated.
a profitable consumer trends centering on the home, home-made food
or health;
a our rapid response to the brutal deterioration of the situation involving
adjustments in production and purchasing, cost-saving measures, stock
reduction, etc.;
a a genuine product development effort alongside advertising campaigns
targeted according to the responsiveness of the markets.
The Group was nonetheless affected by a difficult environment in the USA,
especially on high-end segments, a highly unfavourable situation in Russia
and a contrasted outlook in Europe. On certain markets, this unfavourable
context also resulted in a greater number of consumers opting for cut-price
and promotional products.
CURRENCIES
After a 2008 financial year already marked by a negative currency effect on
sales (down €69 million), the situation did not evolve favourably in 2009.
The first half-year saw a slightly negative impact (-€3 million), but the second
10
RAW MATERIALS
The Group’s business exposes it to fluctuations in the price of certain raw
materials, including metals such as aluminium, nickel (used in stainless steel)
and copper. After three years of almost continuously rising metal prices, with
record peaks in 2007 and early 2008, the third quarter of 2008 saw a sharp
turnaround of this trend. After this low point towards the end of 2008, metal
prices progressively clawed their way back up throughout 2009 and finished
the year on a more marked upward trend. For 2009 as a whole, aluminium
shot up 48% with an average price of USD 1,668 per tonne. Copper posted
an incredible rise of 139%, with average prices of USD 5,164 per tonne.
As for nickel, it also increased by 45%, reaching an average price of USD
14,700 per tonne with high price volatility: in 2009 its lowest point was at
USD 9,405 and its highest at USD 21,070. Nonetheless, average prices
for 2009 were down compared to 2008: aluminium – 35%, copper – 26%,
nickel -30%. The upward trend, which presages perspectives of economic
growth in emerging countries, especially China, will only have a slight effect
on the Group’s activities, as it has long-term coverage of its metal needs.
GROUPE SEB
GROUPE SEB IN 2009
Concerning plastics, the trend is downward. In 2009, the Group sourced
polypropylene (majority component in our products) at an average 35% less
than in 2008, despite a shoring-up of prices and costs since the start of 2009.
For Brent oil, the average price for 2009 was only 9% higher than in 2008
but this change had barely any impact on our road and sea freight costs,
which were lower due to the effect of global demand in 2009.
PURSUANCE OF CONCERTED ACTION
The FÉDÉRACTIVE and VENELLE INVESTISSEMENT family holdings,
representing together with their associates 58.34% of voting rights,
confirmed their intention to implement a sustainable management policy
for Groupe SEB by letter to the AMF (French Markets Authority) dated 11
and 12 May 2009, with a view to ensuring the longevity of their control and
thus pursuing the concerted action in place between the members of the
Founder Group since May 1989.
The non-renewal of the shareholder agreement signed on 5 November 2005
ending on 5 November 2009 does not therefore terminate the concerted
action existing between the parties to the agreement under the terms of
L. 233-10 of the French Commercial Code (AMF decision no. 209C0644
dated 12 May 2009).
The representatives of the two family holdings have also declared to the
Board of Directors their willingness to discuss matters prior to all major
decisions and to maintain their prior agreement concerning the composition
of the Board as determined by the 2005 agreement. In this respect,
FÉDÉRACTIVE may propose the appointment of five Board members
and VENELLE INVESTISSEMENT may propose the appointment of four
members.
1
In France, the reorganization project involved the elimination of 95 positions
at the Linen Care Activity in Isère which employs a total 1,020 people.
Under the GPEC (employment and skills management) agreement, the
Group offered the employees in question an end-of-career package. This
arrangement avoided the obligation of economic redundancies.
1
In Germany, to cope with reduced volumes and reduced productivity, the
Erbach site was reorganized to refocus on the production of mid-range
and high-end irons. Subsequent to an agreement between management
and labour organizations, this repositioning resulted in the elimination of 99
out of 290 positions on the site and the reorganization of working methods.
NEW ORGANIZATION “KITCHEN ELECTRICS”
The Group decided to consolidate its external Research, Marketing and
Purchasing teams involved in Food Preparation, Beverage Preparation and
Electric Cooking, thereby creating a single sector of activity called “Kitchen
Electrics” on the Selongey and Is-sur-Tille sites. This consolidation is based
on a shared universe – food industry – subject to similar evolutions and
identical consumer trends. It will enable the creation of new synergies,
especially in terms of R&D. It will involve the closure of sites in La Défense
and Caen, with employees being transferred to the remaining sites. The
purpose of this reorganization is to heighten the Group’s competitiveness in
these areas by consolidating all the resources required within a single entity
and sharing best practices between segments.
Faithful to its social commitments, Groupe SEB will manage the consequences
of this reorganization in full respect of human rights, professional experience,
personal and family situations.
A NEW REPRESENTATIVE IN SAUDI ARABIA
CANCELLATION OF SEB SHARES
On 30 March 2009, SEB S.A. cancelled one million SEB shares held as
treasury stock, following the proposition of the Board of Directors on
27 February 2009 and the authorization given by the Annual General Meeting
on 13 May 2008. This measure has an accretive effect on holdings in the
Group’s capital. The difference between the purchase value of the cancelled
shares and their nominal value is booked to the premiums and reserves
available.
RESTRUCTURING OF LINEN CARE PRODUCTION
SITES
Subsequent to the bankruptcy of our importer agent in Saudi Arabia, on
9 April Groupe SEB signed a contract with a new exclusive distributor who
is responsible for the marketing of its products in this country. This company
is a leader in Saudi Arabia in several segments of industrial products and
consumer goods; it is also present in all distribution channels throughout
the country. After a period of almost no activity, the Group’s activity once
again took off in spring 2009. Its products are once again on display shelves
and business is up and running, with Moulinex in food preparation, Tefal in
cookware and irons, Krups for coffee machines. The outlook is encouraging.
ACTIVITY OF GROUPE SEB FOUNDATION
The structural developments of the world market for irons – erosion of
average prices, especially due to entry level irons mostly produced in China
– have led the Group to rationalize its manufacturing base and to resize its
production sites in Pont Evêque in France and Erbach in Germany to recover
a good level of competitiveness.
Created in 2007, the Groupe SEB Foundation’s vocation is to combat
exclusion. It supports projects to help people in difficulty reintegrate into
society, with three focuses: employment, housing, education and training,
with an annual €500,000 in cash and €100,000 in product donations. In 2009,
it was involved in 29 major projects including 3 outside France. Beyond the
financial support and product donations, it organizes volunteer actions and
skills patronage with the participation of Group employees.
GROUPE SEB
11
1
GROUPE SEB IN 2009
It is involved in long-term partnerships, in France where it participates in
particular in rehabilitation initiatives – the Envie network, Fondation de la
2e Chance, Habitat et Humanisme, Fondation d’Auteil or the Ateliers de la
Garenne (member of SOS Village d’Enfants) – and internationally in the form
1
of educational and social programmes – with UNESCO in Burundi, with
Enfants du Mékong in Cambodia, with Essor in Brazil.
On 10 March, it confirmed its support for the Agence du Don en Nature
whose vocation is to develop product patronage.
Comments on 2009 sales
Variation 2009/2008 en %
(in € millions)
2008
2009 Current exchange rates Constant exchange rates
France
668
685
+2.6
+2.6
Other Western European countries
734
728
-0.9
+0.4
-12.6
North America
394
349
-11.4
South America
269
262
-2.8
+2
Asia & Pacific
499
600
+20.3
+13.2
Central Europe, CIS and other countries
666
552
-17
-5
3,230
3,176
-1.7
+0.3
TOTAL
Rounded figures.
% based on exact figures.
After a slow first quarter, a slightly better second quarter and a half-hearted
third quarter, the last three months of the year – particularly December –
were marked by a strong upturn in several of the Group’s major markets.
The fourth quarter ended on organic growth of 6.7% (1.3% in Q4 2008),
reflecting more regular replenishment of distribution in a sustained consumer
sales environment.
SALES PERFORMANCE OF PRODUCTS
Annual Group sales amounted to €3,176 million, showing limited shrinkage
of 1.7% at current parities and very slightly up (0.3%) at constant exchange
rates. Globally this performance is highly satisfactory, in consideration of
the difficulties in certain major countries, proof of the resistance of the Small
Domestic Equipment sector and the Group’s capacity to maintain its course
in spite of a harsh environment. It takes into account:
Strong contributors to Group organic growth included:
a negative exchange effect of €63 million, much greater than the €18 million
loss at the end of September and related to the accelerated appreciation
of the Dollar, the Yuan and the Yen, resulting in a highly-penalizing impact
in the fourth quarter;
a domestic comfort, although still a small category in terms of sales,
sales volumes markedly down for the year (€145 million down), essentially
due to downturns in Russia, the USA, Ukraine and Turkey, but offset by
vigorous price-cutting and the good resistance of the product mix.
With some 200 new products launched in 2009, Groupe SEB innovation has
been dynamic and positive in all sectors despite the economic environment.
Nonetheless market performance is contrasted according to the product
families.
a home care posted another year of growth and the Group won noteworthy
market shares through an exceptional product momentum present for the
last two years: international deployment and extension of the Rowenta
Silent Force range, creation of a new growth market with the Air Force
upright vacuum cleaner;
posted good performance in 2009. Clement weather in South America
and a renewed, attractive product offer pushed ventilator sales.
Stable markets:
a cookware, where negative performance of the high-end ranges, which
were strongly affected by the crisis (especially All-Clad in the USA), was
offset by robust progress in sales of mid-range products: readjustment
in the USA and increase in pressure cooker sales in France and Japan,
for example;
a food preparation which, despite a crumbling Russian market, is stable
on a constant parity basis. This category fully benefited from a return to
12
GROUPE SEB
GROUPE SEB IN 2009
home-made food, especially in France and Germany, sustained activity in
blenders in Brazil and Columbia, along with a positive contribution from
Saudi Arabia and Turkey;
a linen care. The iron market ended up being less energetic in 2009 but
our product ranges remain extensive and innovations are always proof of
success. Steam iron systems are also a major growth segment, especially
in mature markets.
Less favourable:
a beverage preparation, where coffee is a major vector. Sales in this sector
are slightly up, supported by pod systems – partnerships with Nespresso
and Dolce Gusto – while filter coffee is stable. Excluding coffee, the drop
in sales is more obvious. Kettles have suffered from the deterioration of
Russian and British markets, which the excellent results posted by Japan
could not offset;
a for electric cooking appliances the year was tense, with a large slide in
bread machine sales (equipment rate already high in France, our main
market, and development of an entry-level segment), steam cookers
(Russia) and informal meal appliances. Actifry nonetheless registered high
growth once again, supported by investment in advertising, deployment
on new markets, etc., and has pulled the fryer activity upwards while
Supor rice cookers posted strong growth in South East Asia.
GEOGRAPHICAL PERFORMANCE
Breakdown of 2009 sales by geographical zone
In France, the household appliance market shrunk during the year, pulled
down by large appliance segments that suffered greatly under the crisis
(less consumer credit available, space availability etc.). The small electrical
appliance segment managed to remain stable and even post a slight
gain, being supported by several factors: low prices facilitating pleasure/
impulse purchases or gifts; rich, replenished ranges; visible innovations;
advertising support; a return to “home-made” food and refocus on the
home environment, amplified by the tough environment. In this context, the
Group’s activity, up 2.6%, outperformed the market. It showed improvement
throughout the year, with a particularly vigorous fourth quarter, boosted by
enthusiastic consumption, replenishment of product displays after several
months of clear-outs, sustained advertising campaigns prior to the holiday
season (18 press, Internet and TV campaigns, exclusive screenings on the
TF1 television channel etc.). The Group posted good performance for its
flagship products: Actifry – a driver for the whole family of fryers –, vacuum
cleaners, steam iron systems, Clipso pressure cookers or Fresh Express,
the new Moulinex multipurpose chopper.
In other Western European countries, the economic environment was
contrasted from country to country. With stable sales (-0.4% at constant
exchange rates, -0.9% at current exchange rates), the Group posted
satisfactory performance, nonetheless marked by discrepancies over the
year and from a geographical standpoint. Spain finished the year with a
strong boost in sales despite a severe recession. Activity was supported
by a strong customer/product current that enabled the Group to win market
share in fryers, linen care, Nespresso and Dolce Gusto, but especially
in vacuum cleaners with the immense success of the Air Force upright
1
vacuum cleaner. In Greece, despite the national crisis, the Group posted
good performance thanks mainly to Nespresso, cookware or steam iron
systems. It was also a good year in Belgium, where the Group registered
strong sales for its flagship products, vectors for winning market share.
In Germany, a country hit severely by a recession, the small electric
appliance and cookware segments held up remarkably well. The Group
posted sustained progression, especially in the fourth quarter, due to ironing
equipment – our products won awards from the most influential consumer
test groups –, toasters, Nespresso or the Tefal Moulinette. Lastly, Portugal
also registered improved sales with outstanding success in bread makers
and vacuum cleaners, new introductions to the market. However, Italy had
a more contrasted year with, on one hand, a major downturn for Lagostina
cookware – constant regression of the wedding gift list market, insufficient
product offer – and, on the other, robust activity in small electrical appliances
supported by numerous launches and a positive product dynamic: including
fryers, vacuum cleaners and Nespresso machines. In the UK, a country
severely affected by the crisis and where price wars are ravaging the markets,
our activity was under pressure. The successful products (Actifry, toasters,
multipurpose choppers, coffee machines, etc.) could not offset the drop in
sales of other product families. The situation is similar in the Netherlands
and Scandinavian countries.
1
In North and Central America, the outlook was grim in the three major
countries: consumption under pressure, high unemployment, flagging
confidence. In the USA, the year was especially difficult on the high-end
segment in the full grip of the crisis. Due to its positioning on this market,
the Group was on the front line and its brands Rowenta, Krups and more
so All-Clad were hit hard. In Linen care, a favourite market of Rowenta,
the market was pulled down – sacrificial prices by some new competitors
– and distributors vastly reduced their product ranges. Krups suffered
from a restricted product range and a marked slowdown in the traditional
espresso machine market in favour of pod systems, dominated by a few
competitors. All-Clad, positioned on the very high-end market, was directly
affected by the drop in consumer activity and a lack of consumers visiting
selective distribution circuits. Conversely, T-Fal held up well on the mid-range
segment. It benefited from new retailer stock listings in distribution and a
strong product demand in cookware. In addition, after a difficult start to
the year, the WearEver brand had a good second half-year. In Canada, the
market turned out to be hard-going, with relentless competition and a highly
promotional strategy adopted by distributors. To offset the depreciation
of the Canadian Dollar, the Group was obliged to increase prices, which
weighed heavily on its activity. In Mexico, the situation was similar: a
shrunken market, aggressive pricing strategies, falling Mexican peso, which
penalized the Group compared to local competitors.
In South America, after a slow start to the year, the situation gradually
improved for the Group and it posted a satisfactory end of year. In Brazil
in particular, the situation improved as the year progressed, inflation was
brought under control and household consumption gradually took off again,
offering new opportunities to the Group. The Arno range of small electrical
appliances registered good results, especially in food preparation (blenders)
and beverages (good start for Dolce Gusto), semi-automatic washing
machines and ventilators. On the cookware side, Panex remained in a tough
situation due to a higher price positioning than some of its very aggressive
competitors. In Colombia, the Group posted a good year, despite an agitated
GROUPE SEB
13
1
GROUPE SEB IN 2009
political and economic environment, thanks to key products such as fans
or rice cookers and the expansion of its blender and iron ranges. Another
Andean Pact country, Venezuela, recorded a drop in sales due to social
instability and a policy deploying high barriers to imports. This phenomenon
was accentuated by the inclusion in our 2009 sales of the recent devaluation
of the Bolivar. In South-East America, Argentina ended the year with solid
growth. Groupe SEB won new market share, recorded excellent results in
cookware and successfully launched fans and depilators.
1
In Asia-Pacific, most markets posted higher sales. China represents over
half the Group’s sales in the region and enjoyed an excellent year-end,
confirming the positive signals of the third quarter. Boosted by a recovery
in consumption, an expanded range, developed partly with the Group’s own
teams and the opening of further Supor Lifestores (661 points of sale at the
end of December), Supor posted a high increase in sales, especially in the
fourth quarter, and won market share. The Supor brand was also successfully
launched in Hong Kong, Singapore, Malaysia and Thailand, providing a boost
for South-East Asia sales. In Japan, Group performance was outstandingly
good and totally in opposition to the economic environment. Impacted by a
long-lasting major crisis, consumption slowed dramatically and distribution
channels are under pressure. Proof of a return to firm values, the Group
benefited from its mid-range positioning, the popularity of its T-fal brand and
a unique product offering, in terms of kettles, steam cookers or pressure
cookers (new category). It also saw the benefits of consumers refocusing
on home life. In Korea, the situation gradually improved from the third
quarter onwards, providing a boost to sales activity, in particular for kitchen
equipment and personal care. In Australia, the economic outlook remained
grim and the Group suffered in several areas, due to a limited product offer
and penalizing price hikes.
In Central Europe, CIS, Africa and other countries, markets were difficult in
2009, disturbed by low exchange rates against the Euro, a shortage of credit
and free-falling consumption in certain cases. This was the case in Russia,
where the market had a very bad year and where retail activity suffered
intensely. Unfortunately, the Group was not able to offset the negative effect
of the severe recession and 2009 ended on a marked drop in sales but with
very little loss in market share, despite price increases to compensate for
the devaluation of the Rouble. Ukraine saw a sharp drop in the market
with nonetheless a better end of year than expected. In Central Europe,
activity held up well throughout the year despite a slowdown over the last
months of 2009. The Group benefited from the popularity of its brands,
a genuine advantage for distributors. The Group won market share over
the whole region and posted some excellent results: vacuum cleaners in
Slovakia and the Czech Republic, cookware in Hungary or Dolce Gusto. In
Turkey, in a well-entrenched crisis, the Group managed to offset the effects
of depreciation of the Turkish Lira through price increases. Despite these
efforts, the Group defended its positions on a weakened market and even
won market share in Linen care. In Saudi Arabia, the Group restarted its
activities through a new distributor agent and the first results are promising.
Comments on 2009 results
INCOME STATEMENT
a a currency effect, which was positive in 2007 (€15 million) and 2008
At €355 million, Groupe SEB’s 2009 operating margin rose 4% over 2008,
representing 11.2% of sales compared to 10.6% the previous year. This
positive result in a harsh economic environment is due of a combination of
factors that are once again heterogeneous:
a a positive effect of around €40 million from the very slight organic increase
in sales, due to an energetic fourth quarter (+6.7%) and which made a
major contribution to improving profitability. Over the year, the strongly
negative impact of falling sales was offset by the price effect – the
Group upped its prices in many countries to counterbalance currency
depreciations – and by a favourable product mix effect relating to the
quality of sales;
14
GROUPE SEB
(€5 million) turned out to be extremely negative in 2009, at €87 million.
This massive reversal of trend had several origins:
a to a large extent, the US dollar, for which the exchange rate was
favourable to sales until September but detrimental for purchases,
these being made for the most part using this currency. Despite its
continuous depreciation throughout the year, the 2009 average dollar
value was higher than in 2008, which seriously harmed the Group’s
procurement conditions,
a the remaining impact was caused by degraded parities for many
of the Group’s operating currencies (Rouble, Real, Sterling, Turkish
Lira, Korean Won, Polish Zloty, Hungarian Forint, etc.) against the
Euro, despite a few rebounds towards the year end (Real and Won in
particular). Although the local profitability of our commercial subsidiaries
was defended through higher prices, the conversion of these margins
into Euro currency for the consolidation of our accounts was harshly
affected, due to their lower contributions,
GROUPE SEB IN 2009
1
a inversely, the Yuan and Yen were stronger than in 2008 for most of the
a asset impairments amounting to €30 million affected, on the one hand, the
year and helped improve contributions from Chinese and Japanese
subsidiaries to the Group’s operating margin, in spite of a trend reversal
in September/October;
Mayenne site in France, where production volumes were hard hit in 2009
by the crisis in Central Europe/Russia and by the lack of sales for many
months in Saudi Arabia and, on the other hand, the Omegna industrial
site in Italy in parallel to the restructuring. In addition, the goodwill of AllClad was written off to the tune of €20 million, as its activity had been
severely disrupted for almost 2 years, with a marked impact in 2009 due
to the brutal collapse of demand for high-end products in the USA. This
depreciation does not shed doubt on the value of the All-Clad brand,
which has retained its power and medium-term potential.
a a drop of €41 million in purchasing costs, due to several factors:
a lower production purchasing, with multiple origins for the fallback
compared to 2008: metals (mainly stainless steel and copper, prices of
which collapsed and where the Group had little coverage; the favourable
effect was nonetheless limited for aluminium, due to the Group’s hedge
policy which did not allow it to benefit from easing prices), electric and
metal components, motors, plastics, etc. The crises caused a brutal
slide in demand, with a deflationist phenomenon to boot,
a indirect purchasing, with a strong positive impact on sea freight, where
prices were practically halved in 2009,
a outsourced products with much lower volumes due to the outlook
and for which prices were renegotiated downwards by the Group after
being extremely high in 2008. This reduction was mainly visible in the
second half-year;
a a significant reduction (€19 million) in structure costs, mainly due to the
general environment and the low receptiveness of certain major markets to
advertising expenditure. After a slow first six months, the Group targeted
its campaigns in order to optimize the effect: in Russia for example,
which is suffering a major recession and where demand has withered, it
remained in the background and intensified its fourth quarter efforts in
France to boost its sales in a relatively expanding market. For the world as
a whole, advertising expenditure for the 12 months slid from €119 million
in 2008 to €95 million in 2009. The Group also significantly reduced its
travel expenditure and fees paid to external service providers. Excluding
Supor, where it continued to invest in operating structures, the Group also
tightened up its commercial expenditure by around €20 million, adapting
its policy to the morosity of certain markets and cut back on administrative
and general management expenditure;
a we would nonetheless like to point out that the Group has not cut
back on Research & Development, with total investment of €64 million
(including industrial property costs), identical to 2008, with €50 million
being effectively booked on the income statement (research tax credit
of €5 million and capitalized research expenditure of €9 million).
Operating profit amounted to €248 million, down 11.1% from €279 million
in 2008. Although Bonus and Profit-Sharing dropped by €5 million to
€33.5 million – due mainly to reduced profitability in France after restructuring
– Other income and charges amounted to -€74 million in 2009, three times
the amount for the previous year. This high level can be broken down as
follows:
a restructuring charges of €41 million, much higher than in 2008 (€14 million)
and of which half is attributable to reorganization in France (linen care and
creation of kitchen electrics cluster), almost €8 million to the resizing of
the Erbach site (irons) in Germany and almost €6 million to rationalization
in the Italian Lagostina plant in Omegna. The rest is divided into smaller
amounts, mainly concerning adjustments in Brazil, Spain, the USA, UK
and Scandinavian countries;
1
The net financial expense amounted to €27 million, a much better
performance than the €49 million expense in 2008. This improvement can
be explained by a major reduction in interest expense (-€23 million compared
to -€38 million in 2008), due to both a €150 million reduction in average
debt over the year and to a lighter financing face rate, down from 6.11%
to 4.81%. Other financial expense also showed noteworthy improvement
(-€11 million in 2008 to -€5 million in 2009) due to exchange rate gains made
in 2009 (+€2 million) against the exchange rate losses incurred in 2008 due
to the dramatic depreciation of certain currencies against the Euro in the
fourth quarter.
Net profit Group share was down 3.7% to €146 million. This is calculated
after taxes of €58 million, representing a rate of 26.3%, an improvement
on the 28.9% incurred in 2008 due to lower pre-tax profits in France
(restructuring) and the partial activation of carry-over deficits in Germany.
It also integrates minority shareholder interests, in this case profit sharing
from Supor with minority shareholders, amounting to €17 million (€11 million
in 2008).
BALANCE SHEET
Consolidated equity, amounting to €1,038 million on 31 December 2008,
reached €1,220 million at the end of December 2009, an increase of 17.5%.
This includes Supor minority interests to the tune of €139 million (€132 million
at closure of 2008). This equity is understood to be net of treasury stock,
the amount of which decreased in 2009 after the cancellation of a million
shares in March 2009. The higher net equity is a result of the recorded profit,
less dividends paid in 2009 for the 2008 financial year (€50 million) and to
which derivative hedging instruments are added. The value of these items
increased by €42 million for 2009 compared to 2008, due to rising prices
of raw materials since summer 2009. The translation adjustments affecting
the value of the contribution of the net results of certain subsidiaries are
positive to the tune of €8 million at the end of 2009, with principally an
extensive re-evaluation of the Brazilian Real, partially compensated for by
a drop in the Chinese Yuan.
Elsewhere, net debt as of 31 December 2009 amounted to €243 million,
compared to €649 million for 2008. This reduction of €406 million reflects an
impressive cash-generating year, in particular through very tight control of
working capital requirements. This has dropped by €199 million, amounting
to €695 million at the end of the year and representing 21.9% of sales
(compared to 27.7% for 2008). The origin of this highly positive development
is an extensive reduction of stocks over the year (-€150 million) alongside an
improvement in the quality of these stocks and better rotation. In addition,
GROUPE SEB
15
1
GROUPE SEB IN 2009
restructuring expenses were relatively limited in 2009 (€25 million compared
to €32 million in 2008) and the Group did not make any new acquisitions.
1
On the basis of debt amounting to €243 million, the debt ratio amounts to
0.20, reflecting an extensive consolidation of the Group’s financial situation,
already healthy beforehand with a gearing ratio of 0.60. Net debt to EBITDA
has also shown marked improvement, dropping from 1.65 at the end of
2008 to 0.58 at the end of 2009, demonstrating extremely rapid, extensive
elimination of debt and a stronger capacity to reimburse debt.
❙ TRADING RESULTS/SALES
2009 investment amounted to €109 million, compared to €116 million in
2008, a limited easing despite the troubled situation. As in previous years,
this investment was principally in tangible assets (approx. 80%) with almost
equivalent distribution between moulds and tools for new products on
one hand and production equipment (installation of new assembly lines,
injection presses, etc.) and/or the renovation of buildings on the other hand.
The remaining 20% covered mostly capitalized development costs and
production-related computer software.
❙ RETURN ON SHAREHOLDERS’EQUITY
In %
In €M
12
1 400
In %
19.5
18.8
11.2
10.6
10.5
10
8.6
8.3
19.0
1 200
1 000
1,220
17.7
7.8
8
18.0
17.5
1,038
864
800
18.5
17.0
16.5
600
16.0
400
6
5.0
0
4
2007
2008
2009
14.5
14.0
2007
2008
2009
Net profit (n) / equity (n-1)
Equity as at 31/12
Operating margin
Operating profit
Net income (Group share)
❙ NET DEBT AND DEBT RATIO
❙ CASH FLOW AND INVESTMENT
In €M
In €M
500
700
400
600
398
368
1.0
649
585
0.8
0.7
500
300
15.0
200
4.6
4.5
15.5
15.7
300
0.6
400
300
200
116
109
92
100
0.6
0.4
243
200
0.2
0.2
100
0
2007
16
2008
0.0
0
2009
2007
2008
Investment
Net debt / equity ratio (gearing)
Cash flow
Net debt at 31/12
GROUPE SEB
2009
GROUPE SEB IN 2009
Outlook for 2010
1
Outlook for 2010
1
2009 was marked by the effects of the economic crisis on consumption,
credit and retail, as well as the volatility of currencies and raw materials.
These factors represented major challenges, especially in certain countries
that were hit by currency depreciations or collapses in demand. Although
the environment was extremely depressed during the first half year, signs
of recovery were observed starting in the third quarter, relayed by renewed
activity on certain markets. Groupe SEB had to adapt to this delicate, highly
contrasted climate from commercial, industrial and operational perspectives.
Its 2009 performance proves that the Group’s response to the crisis has
paid off.
2010 has started under a cloud of volatile currencies and raw material prices,
but despite remaining uncertainties concerning how consumption will hold
up, a recovery in the credit market and the distribution situation, the macroeconomic climate is nonetheless indicating a less gloomy outlook. The Group
started 2010 with robust advantages that it protected in 2009:
a an extensive product portfolio covering all segments;
a a balanced presence between mature and emerging markets;
a firm positions on many markets;
a varied and suitable distribution circuits, completed by a growing ownbrand store network;
a optimized processes, especially for purchasing and the supply chain,
with shared means;
a reduced and healthy stock levels;
a a comfortable financial margin for manoeuvre.
In this context, in 2010 the Group intends to further consolidate its positions
on these markets, relying on a dynamic product offer with multi-regional
and local brands. In parallel, it will pursue a strict cost control policy, with
the specific purpose of maintaining profitability. Controlling working capital
requirement is also a priority, with the purpose of generating cash flow.
Nonetheless, these short-term requirements are not a replacement for the
Group’s long-term objectives, which involve:
a innovation, a crucial differentiating factor and a growth lever;
a continued international development in order to take advantage of all
sources of expansion and rapid growth on some markets;
a further development of retail possibilities, especially with the opening of
new Home&Cook stores.
GROUPE SEB
17
1
GROUPE SEB IN 2009
Risk management
Risk management
1
Groupe SEB pursues a policy of active, prudent management of the risks
inherent in its business, the purpose of which is to defend the Group’s
assets and/or interests of its stakeholders: shareholders, employees, clients,
consumers, suppliers, etc., without forgetting environmental aspects. This
approach is based on a detailed mapping and analysis of the main risks
faced by the Company, which makes it possible to rank them on the basis of
their potential impact on the Group’s operations and performance, and on the
probability of such risks occurring. A global review of these risks is carried
out regularly with the Group Executive Committee and the Audit Committee.
Risks inherent to operations
COUNTRY-SPECIFIC AND ECONOMIC
ENVIRONMENT RISKS
The international nature of the Group’s activities exposes it to currency risk
(covered in Note 27.2.1 to the consolidated financial statements) but also
risks of political instability, economic, monetary or labour risks, especially in
Asia, the Middle East and South America. In addition to these risks, certain
countries have under-developed legal systems or which offer little in the
way of intellectual property protection, import taxes (e.g. Turkey for certain
household electrical products), restrictive measures, exchange controls, etc.
These factors may disturb or even penalize the Group’s activities or financial
situation. Nonetheless, a large international presence also offers protection
through wide geographical coverage and risk diversification.
Alongside this, Group sales inevitably depend on the economic climate
and whether consumption holds up or not, which, in turn, is related to
consumer purchasing power and the financial health of our distribution
network. In this respect 2009 was a complex year, in which the Group
experienced many different situations in different countries: serious recession
and collapse of demand (Russia, USA, UK, etc.); serious recession but
resistance in small electrical appliances and high performance by the Group
(Spain, Greece, Japan, etc.); a moderate crisis and sustained consumption
(France, Germany, Brazil), etc. In consideration of the very nature of the
activity (focus on the home) and the limited investment represented by
small domestic equipment, the small household appliance sector held up
better than others and, in several markets, the Group’s results were even
totally opposite to the current climate. We cannot however systematically
extrapolate this phenomenon.
RISKS RELATING TO SOLD PRODUCTS
Risks of warranty or liability claims
Groupe SEB makes consumer safety an absolute priority. In this respect, it
affords maximum attention to safety precautions in terms of raw materials,
18
components and finished products. It is exposed to a risk of warranty
or liability claims from its clients and consumers; these risks have been
reasonably provided for. In particular, the impact of the change to a 2-year
guarantee for small electrical appliances in the European Union has been
integrated into these provisions. Additionally, to protect itself against cases
of defective products causing damage, the Group has taken out civil liability
insurance (see Insurance section).
Recovering and recycling end-of-life products
According to the European Directive 2002/96/CE on Waste Electrical
and Electronic Equipment (WEEE), which has been implemented in most
European countries since the end of 2005, it is mandatory to recover and
recycle electrical and electronic appliances at the end of their lifecycle. This
imposes new financial constraints on the industry.
In European countries concerned by this Directive, Groupe SEB decided
to participate in eco-organizations which will handle the recycling of “new”
and “historical” waste on behalf of manufacturers. The obligation to collect
and process WEEE is pro rata to the equipment put on the market during
the year of collection, and is payable in advance. In consequence, there is
no need to make provisions for this at the time the electrical products are
released on the market.
RISKS RELATING TO BRAND ASSETS
Groupe SEB has built its business on a powerful portfolio of brands, some
of which are treated as assets in its balance sheet. The total book value of
its brands at 31 December 2009 amounts to €297 million, and concerns
mainly Rowenta, All-Clad, Lagostina and Supor.
Moreover, as Groupe SEB regularly engages in external growth operations,
goodwill is shown in the consolidated financial statements at the end of 2009
for an amount of €387 million, most of this having been taken into account
at the time of the All-Clad and Supor acquisitions.
GROUPE SEB
GROUPE SEB IN 2009
Risk management
Under IFRS accounting standards, the value of brands and goodwill must
be reviewed annually to check that the value entered in the balance sheet
is consistent with the actual performance of the brands and the subsidiaries
in their own markets. Any significant disparities, notably with regard to
expected cash flow, a brand’s commercial under-performance, or increased
costs incurred by the subsidiaries concerned, could require an adjustment
in the balance sheet which may involve a partial or total depreciation of
the book value of the asset. The economic climate in 2009 had a high
impact on the activity and profitability of All-Clad in the USA, as the highend segment suffered greatly from a pullback in consumption and a drop in
visits to premium distribution circuits. This under-performance led the Group
to depreciate its All-Clad assets (goodwill) to ensure prudence against the
extent of the crisis period. This has no effect on the value of the brand, of
which the reputation, power and potential remain intact.
In addition, the Group is pursuing its R&D activities, to replenish its offer
with innovative, breakout products, alongside marketing and advertising
campaigns to boost its sales, open new categories and strengthen its current
market positions.
Supplementary information is provided in Note 11 to the consolidated
financial statements.
CLIENT RISKS
The variety and sheet number of the Group’s distribution networks limit risk
and the probability of major impact on a consolidated level. On a country
level however, a client bankruptcy (especially a major client) may have
significant consequences on the activity of the subsidiary in question. The
financial and economic climate in 2008 and 2009 amplified this risk, in
particular due to the fall-off in consumption in many countries and the lack
of credit availability, which strongly affected certain retail chains. Over these
two years, the Group suffered the closure of Linens ’N’ Things in the USA
and Canada (385 stores in all), the discontinuation of Karstadt in Germany
and financial difficulties for Comercial Mexicana in Mexico.
In this context, it was also drawn to modify its relationships with its distributor
clients. The Group’s policy is to ensure clients have insurance coverage.
Due to the crisis and the increase in claim rates, client coverage has been
drastically reduced – by COFACE in this case – in 2009, especially in certain
countries that suffered greatly from the harsh economic climate. In light of this
situation, and with a view to the long-term management of its distributors, in
certain cases Groupe SEB allowed client receivables to exceed the covered
amounts and increased the non-insured portion (in the past insignificant)
on one hand and the amount of provisions for risks of non-recovery of
receivables on the other hand. Nonetheless, these risks are very tightly
managed on a Group level: the Credit Management department has been
ramped up and any COFACE coverage of client receivable balances must
now be systematically validated by two members of the Group Executive
Committee. The risk of a major impact subsequent to inadequate results
should therefore be limited.
1
RISKS RELATING TO COMPETITION
1
In recent years, the competitive climate has become more severe in both
mature and emerging markets, though the issues we face differ in both.
In mature markets where the equipment rate is high, our activity is mostly
supply-led rather than demand-led, with an hour-glass market structure:
contracted mid-range activity with higher entry-level and high-end activity
over the last few years. Competition is lively: major established brands,
whether national, regional or international, compete alongside entry-level,
low-cost no-brand products and distributor brands, which are growing
stronger particularly in difficult times. Retail chains often play a catalyst
role in competition. Groupe SEB is long-established and occupies strong
front-rank positions in mature markets thanks in particular to its powerful
brand portfolio and extensive offer which allows it to cover all segments.
Emerging markets are still in an equipment phase. The development of a
middle class with higher purchasing power generally fosters rapid growth
in demand for higher-value product ranges. This phenomenon is supported
by the increasing implantation of modern retail circuits in these markets.
Aware from the start that these countries had high potential and that their
consumers sought status through products, top brands built up strong
positions – in particular Groupe SEB, which is a leader in many of these
countries today. These markets have a pyramid structure, with a broad
though shallow base in entry-level products, a substantial mid-range section,
and a niche high-end segment. Competition has developed strongly and is
closing in on the standards of mature markets.
It is essential to gain market share in this highly competitive climate. This
can be achieved by brand reputation and the relevance of the product offer,
spurred by innovation alongside strong advertising and marketing support.
The economic crisis has simply amplified competition between market
players in 2009, with in certain cases an accentuated price war to boot.
A capacity to develop and launch genuinely differentiating, added-value
innovations at the right time is therefore fundamental. An entire product family
can be affected both brutally and for longer periods by the introduction of a
new concept requested by consumers, with a significant impact on results:
highly positive for the breakout product in question, highly negative for its
competitor(s). Groupe SEB therefore strives to limit the risk of competition
by boosting its R&D efforts in order to stay ahead and lead the market (this
area has seen growing budget allocations over the last three years in both
skills and investment).
GROUPE SEB
19
1
GROUPE SEB IN 2009
Risk management
INDUSTRIAL RISKS
1
As in all industrial processes, Groupe SEB is exposed to events of varying
origins (natural catastrophes, fire, technical failures, contamination, etc.)
that can affect or interrupt the activity of a plant or even endanger the
safety of its production resources, with major consequences for people
and equipment. It has therefore always implemented an active industrial
risk prevention approach through regular audits, investment in maintenance
and optimization of certain processes in order to limit the probability of
occurrence of such risks.
In practice, European and American sites are in general not, or only slightly,
exposed to major natural risks (tornadoes, floods, earth tremors, etc).
In addition, the industrial activity itself does not generate any particular
risks. Besides metal pressing (pressure cookers, frying pans etc.), surface
treatments (non-stick) and the production of certain components that occupy
less than 10% of total industrial resources, most of Groupe SEB’s production
involves assembly. The most sensitive processes are closely monitored. In
assembly processes, the most likely risks are minor bodily injuries or injuries
due to handling, as well as musculoskeletal disorders for which the Group
takes all precautions to minimize their occurrence.
Concerning the Chinese company Supor, integrated in the Group since
1 January 2008, a detailed audit carried out in 2008 enabled us to measure
potential areas for improvement in terms of safety (personnel, manufacturing
or storage processes, etc.) on production sites in China. Although no
major breaches were pinpointed in terms of industrial risk management, it
nevertheless failed to meet the Group’s standards. The initial aims of the
action we have taken over the past two years are to reduce the discrepancies
and to bring Supor up to the Group’s standards in this matter.
In parallel and conscious of environmental issues, the Group has for a long
time prioritized safeguarding the environment through its eco-production
policy, which involves ISO 14001 certification of its industrial sites around
the world. By the end of 2009, 89% of all its factories and logistics units
which had been part of the Group for more than five years had obtained
this certification.
RAW MATERIALS RISKS
Groupe SEB operations involve the use of several major raw materials in
its industrial processes: aluminium (for cookware), nickel (for certain steel
alloys), copper (mainly wire for motors and electric cables), plastic (a key
material in small electrical appliances) and paper or cardboard for printed
documents and packaging. These materials weigh variably on the Group’s
purchasing budget, Supor excluded: in 2009 aluminium represented
approximately 16% of direct purchases for production (15% in 2008), steel
5% (6% in 2008) and plastic materials/parts 21% (22% in 2008).
20
Groupe SEB is therefore exposed to risks concerning the availability of raw
materials and fluctuations in their prices insofar that it could suffer from a
shortage and/or not be able to pass any price increases – whether partially
or totally – on to its retail prices. This would have a potential impact on
profitability and cash flow. Since 2007, the trend is one of high price volatility
for raw materials and metal prices in particular. The phenomenon did not
change in 2009 with a scissor effect between a low point at the end of 2008
and a rebound, initially progressive then more abrupt from summer 2009
onward. Nevertheless, average prices for 2009 remain well below those of
2008 for aluminium, nickel, copper, plastics, etc.
To face this intrinsic exposure related to its industrial activity, Groupe SEB
deploys a rolling 12-month hedging policy, the purpose of which is to protect
it against the effects of abrupt variations in raw materials prices and to enable
it to forecast any price hikes that it may have to pass on to its clients. This
policy is not for speculative purposes but, for any given year and in relation
to actual market prices, may produce:
a positive results when raw material prices are rising;
a negative results when the same prices are dropping.
While these operations were positive for several years, they turned out to
be a drawback in 2008 and 2009 when faced with rapidly falling commodity
prices, even if there was no material basis for this phenomenon. For 2010,
the hedging operations put in place by the Group concerning most of the
year’s needs in aluminium, nickel and copper, are in line with current prices.
The hedging and sensitivity of commodity risks are dealt with in Note 27.2.3
to the Consolidated Financial Statements.
RISKS CONCERNING INFORMATION SYSTEMS
The Group continues to deploy coherent IT systems in all its subsidiaries to
ensure better management and client service and to minimize the innate risks
of obsolete local systems. It concentrates its IT budget on a limited number
of software packages used selectively throughout the Group, depending on
the size of each subsidiary (SAP R/3 for larger entities, or those participating
in clusters, and SAP Business One for more compact entities). This targeted
deployment reduces setting-up and operating risks.
This increased dependency on Group-wide information system generates
risks concerning the integrity and confidentiality of data and possible
interruption of IT services. To avoid temporary breakdowns which might
involve loss of data, errors or delays that could impede the proper functioning
of the Company and affect its results, thorough testing prior to the
deployment of new systems and a strict information system security policy
(monitored by a steering committee) aim to ensure that systems are fully
reliable, secure and accessible. The Group regularly organizes campaigns
to increase employee awareness of IT security.
GROUPE SEB
GROUPE SEB IN 2009
Risk management
On 1 January 2009, the deployment of an integrated management tool
for the Group, designed internally and referred to as GPS (Group Piloting
System) enabled us to refine analyses and improve the internal control
process in accordance with requirements. GPS is a worldwide project
requiring generalized mobilization and coordination and it is used by almost
600 people. This has also enabled us to homogenize management culture
within the Group.
1
redundancies. The elimination of 95 positions on the Pont-Evêque site was
part of a GPEC skills and employment management agreement, which
resulted in no outright redundancies.
1
The Group gives high priority to the quality of ongoing dialogue with
employee representatives to solve difficult labour issues responsibly and in
the best possible conditions for everyone.
RISKS RELATING TO ACQUISITIONS
LABOUR RELATIONS RISKS
Groupe SEB is constantly adapting its structures, particularly its factories,
to ensure that it remains competitive. Despite a responsible approach
to restructuring, plant closures remain a serious and disagreeable task
which can affect the quality of relations between management, employees
and labour unions, and which could have repercussions on the Group’s
operations, performance and results.
Over the past few years, Groupe SEB has carried out several industrial
restructuring plans in France and elsewhere, featuring site closures and
downsizing which led to job losses. These operations have had a disruptive
effect on the Group’s activity, but it has endeavoured to complete them
fully in keeping with our ethical standards. The Group has put in place
substantial and often costly resources to ensure a solution for every
employee concerned: measures such as internal mobility, help with personal
projects, assistance with external re-employment, age-related measures,
or long-term training schemes meant that the vast majority of employees
succeeded in finding a solution. In parallel, the Group managed to ensure the
reindustrialization of the employment zones involved by helping to identify
new operators and support the set-up of business activities to create jobs
at the sites concerned.
The restructuring plan concerning the Pont-Evêque and Erbach sites in
February 2009 (with a total of 194 job losses) was completed with these
same intentions. The objective was to restore the competitive performance
of these two plants and Management once again succeeded in limiting
Over the last 40 years, while pursuing its leadership strategy, Groupe SEB has
alternated its development through organic growth and acquisitions. Today,
it continues to play a key active role in consolidating the still-fragmented
small household equipment sector.
External growth requires an ability to integrate new acquisitions effectively
and generate synergies. With its many acquisitions over the years, Groupe
SEB has built up experience in integrating newly acquired companies. Having
integrated Moulinex-Krups in 2001-2002, it acquired All-Clad in the United
States in 2004, Panex in Brazil and Lagostina in Italy in 2005 and Mirro
WearEver in the United States in 2006. It went on to take majority control of
the Chinese company Supor at the end of 2007. This latest operation stands
out by the major challenges it presents: physical separation, different cultures,
a language barrier, a more complex integration than usual, coordination of
communications by two listed companies, harnessing synergies, etc. All
these integration and synergy creation efforts are coordinated by a special
steering committee and made highly satisfactory progress in 2009, in line
with expectations despite the slowdown in China in the first half of 2009.
Nonetheless, success is never guaranteed from the outset and may depend
on external factors, even with every effort and the allocation of resources
to the integration process. Regular monitoring of progress on projects and
synergies created by an integration committee is a way of limiting the risk of
failure and allows us to retarget our actions in the event of delays. Groupe
SEB implements this approach consistently to optimize the integration of
companies recently acquired.
Dependency risks
DEPENDENCE ON SUPPLIERS
As part of its policy of bulk buying, Groupe SEB has drawn up a panel of
suppliers who, numbering 320 in 2009 (312 in 2008) accounted for 85%
of all its European plant manufacturing supplies and 80% of its worldwide
needs last year. Excluding sourcing, the top 50 suppliers accounted for
41% of direct production purchases in value (45% in 2008). On the basis
of 2009 figures, the top three suppliers each represented around 2% of the
total value of purchases. These low numbers show that the Group’s policy
of optimizing purchasing procedures (in particular sourcing from a smaller
number of suppliers) did not result in the concentration of risks. The Group is
effectively dependent on external suppliers, where a late service or delivery
or even bankruptcy could be highly prejudicial to its activity; it is therefore
especially vigilant in spreading its risk base and limiting its reliance. Its priority
is to ensure continuity of production in optimum economic conditions in the
event of a supply failure, through the use of substitute products, for example.
GROUPE SEB
21
1
1
GROUPE SEB IN 2009
Risk management
DEPENDENCE ON CLIENTS
a greater risk in the event of business failure.
The retailer is Groupe SEB’s direct client, and the consumer is its final
customer. The recent concentration of major international retail chains over
the past few years (and which is ongoing, i.e. the agreements signed between
CBD/Ponto Frio and Casas Bahia in Brazil in December 2009) has altered
relations with these distributors:
In 2009, the Group’s top ten clients represented almost 33% of consolidated
sales (35% in 2008) with strong results from specialist retailers. Our biggest
client, Metro, represents just over 6% of total sales, while the second,
Carrefour, accounts for almost 6% of Group sales. The Group’s international
presence and the diversity of the distribution channels it uses around the
world help to dilute its exposure to risk.
a fewer clients;
a altered negotiating power, the trend being to tighten conditions
(requirements concerning suppliers, financial conditions, logistics or
other services);
Legal risks
RISKS RELATING TO INDUSTRIAL PROPERTY
Groupe SEB sells its products throughout the world, based on a portfolio of
internationally or regionally well-known brands and on innovation. It must
therefore constantly defend these brands and protect its business assets
by filing patents, registering trademarks and designs. These measures
are not always sufficient on a global scale, as some countries offer less
protection than the Group’s traditional markets in Europe and North America.
As a result, sales are often “appropriated” by copied and counterfeited
products and this can have a significant effect on growth and profitability.
This obliges the Group to defend its rights by being actively vigilant in the
most critical zones (China and the Middle East), by having these products
seized and destroyed by the local authorities, or by taking legal action. Such
measures inevitably come at a cost, in addition to the loss of earnings as a
result of counterfeiting. For this reason, the Group works pre-emptively in
collaboration with customs authorities to limit the impact of these practices
on its business.
In 2009, the Group’s investment in industrial property remained at an almost
constant level, but with different allocations to each action.
Financial market risks
FINANCING RISK AND LIQUIDITY RISK
INTEREST-RATE RISK AND CURRENCY RISK
Groupe SEB business is based on a short-term cycle and does not demand
heavy capital investment.
The Group sells its products in more than 150 countries. With a substantial
proportion of our manufacturing still based in Europe (43% of products sold),
the Group’s business is strongly export-oriented. Exchange-rate swings thus
affect our ability to be competitive, so that these must be effectively managed
from a long-term perspective. To limit the direct impact of currency variations,
Groupe SEB strives to balance incoming flows (such as sales revenue) and
outgoing flows (such as costs) in each currency and especially in terms of
procurement, by diversifying sources geographically. However, this cannot
fully redress imbalances, as the Group’s dollar position is short-term, while
for several other currencies it is long-term. The Group also uses financial
instruments to cover transaction risks.
Financing risk and liquidity risk is managed centrally by the Finance
and Treasury Department. The Group’s financing policy is to ensure the
liquidity needed to finance its assets, working capital requirements and
business development on a sound financial basis. This is structured around
diversified short and medium-term financing sources, a blend of treasury
bills, syndicated loans, private Schuldshein-type investments, without
restriction on their use. Groupe SEB also has permanent access to unused
confirmed medium-term credit lines with leading banks. In this way, the
Group’s financing is assured over the long-term.
Details of the maturity dates of the instruments used and the financing
sources available are provided in Notes 25, 26 and 27 to the consolidated
accounts.
22
Since the end of 2008, the brutal collapse of several currencies (Rouble,
Korean Won, Turkish Lira, Mexican Peso, etc.) against the Euro and the
volatility of parities have disrupted the activity of certain subsidiaries and led
GROUPE SEB
GROUPE SEB IN 2009
Risk management
them to increase retail prices to maintain their local margins. The continuation
of this trend throughout 2009 impacted the Group’s sales (currency effect
-€63 million) and its margins.
Group financing uses mostly variable-rate loans in currencies that correspond
to its needs (mainly the Euro and the US Dollar). Hedging operations
covering part of the Company’s debt – the longest-term extending to 2015
– make it possible for the Group to protect itself against the likelihood of
interest-rate rises.
Details of interest rate and exchange rate risks are given in Notes 27.2.1
and 27.2.2 to the Consolidated Financial Statements.
RISKS RELATING TO SHARES
At 31 December 2009, Groupe SEB held 3,149,443 of its own shares for
a total amount of €108.8 million. This treasury stock is deducted from
shareholders’ equity at acquisition cost.
1
On the basis of the closing price of the SEB share at 31 December 2009
(€39.70), the market value of treasury stock was €125 million (this market
value has no impact on the Group’s consolidated financial statements). An
increase or decrease of 10% in the value of the SEB share would therefore
lead to a variation of €12.5 million in the market value of treasury stock.
This variation has no impact on the consolidated income statement or
shareholders’ equity.
1
Subsequent to the worldwide stock market collapse at the end of 2008-start
of 2009 and the marking of the lowest ever price of a SEB share at €16.44
on 21 January 2009, stock markets progressively worked their way back up
and SEB shares largely outperformed indexes, finishing 2009 on an 85%
increase for the year.
Further information on share risks is given in Note 27.2.4 to the Consolidated
Financial Statements. This data also takes account of risk on the Supor share
which is quoted on the Shenzhen stock market.
Sensitivity analysis
Groupe SEB conducted a sensitivity analysis of data published in 2009 to
assess the impact of euro-dollar parity variations on its operating margin
and the effect of interest-rate variations on pre-tax profit.
Concerning the euro-dollar exchange rate, as a regular buyer of dollars or
in “dollar zones” (raw materials, products sourced in Asia, etc.), Groupe
SEB has held a short-term position in this currency for several years. The
sensitivity analysis shows that a 1% variation in the euro-dollar exchange
rate would have an impact of about €3 million on the Group’s operating
margin. However, other important operating currencies for the Group could
also have a significant impact on operating income. These include the Yen,
the Rouble, Sterling, the Turkish Lira, the Korean Won, the Polish Zloty, the
Brazilian Real and the Mexican Peso. The extensive depreciation of the
majority of the currencies mentioned above in late 2008-early 2009 and the
fact that they remained at low levels afterwards, had a highly significant
impact on 2009 operating margin, despite the progressively favourable effect
of a falling dollar on purchases.
This sensitivity analysis does not take into account the impact of currency
exchange variations on the competitive capacity of our European plants,
which still represent a large share of the Group’s production: a strong euro
in relation to most other currencies, notably the US dollar, makes European
manufacturing more expensive than production in dollar zones, and thus
acts as a curb on exports. Inversely, a stronger dollar could be a source of
better competitiveness for our European production sources.
With regard to interest rates, the analysis shows that the impact of a variation
of 100 base points in short-term interest rates on pre-tax profit would be
€4 million (€6 million in 2008).
Notes 27.2.1, 27.2.2 and 27.2.3 to the Consolidated Financial Statements
provide additional information on the Group’s sensitivity to currency
fluctuations, variations in interest rates and raw materials prices.
Insurance
GROUP GENERAL INSURANCE COVER
INTEGRATED WORLDWIDE COVER
Groupe SEB’s policy concerning insurance cover is to protect its assets
against risks which could affect the Group. This transfer of risk to our insurers
is nonetheless accompanied by risk protection and prevention measures.
The Group has established a worldwide insurance plan with major
international insurers to cover it against the main risks, which include damage
to property and loss of earnings, civil liability, client and transport risks.
GROUPE SEB
23
1
1
GROUPE SEB IN 2009
Risk management
Damage to assets and loss of earnings
ENVIRONMENT
Cover for risk of damage to property and consequent loss of earnings due
to the customary risks (fire, explosion, etc.), amounts to €250 million per
claim for factories and warehouses.
A multi-risk environmental insurance policy covers environmental risks.
This cover ceiling was calculated on the basis of the maximum possible
risk, in consultation with the insurers and their assessors. This valuation
assumes total destruction, in a single year, of one of the Group’s main
production sites. Lower thresholds are fixed for other categories of more
specific or localized risk, such as risk of earthquake in certain zones where
the Group operates abroad.
a accidental and gradual pollution;
This insurance cover takes into consideration additional risk protection
measures at Group sites, which are regularly visited by specialist risk
prevention assessors from the insurance companies concerned.
Civil liability
Cover applies to:
a damage to biodiversity;
a depollution costs.
Transport
The Group’s transport insurance covers damage to transported merchandise
for all types of transport: sea, road/rail or air transport anywhere in the world.
This insurance covers transport risks up to an amount of €6 million per
loss occurrence.
Client risk
All the Group’s subsidiaries are included in a worldwide civil liability insurance
scheme that covers liability relating to their operations, the products made
and the cost of product recalls.
The Group’s subsidiaries subscribe to credit risk insurance to cover their
risk on client receivables.
Cover amounts are based on reasonable estimates of the risks incurred by
the Group in view of its activities.
LOCAL INSURANCE POLICIES
The Group also guarantees the civil liability of its management under a
specific insurance policy.
More specific insurance policies are subscribed to locally by each of the
Group’s companies, as appropriate.
Exceptional events and litigation
There were no exceptional events or litigation proceedings other than those
referred to in Note 30.1 to the Consolidated Financial Statements.
There were no other governmental, legal or arbitration procedures, including
any of which the Group has knowledge and which are suspended or
24
threatened, likely to or to have been likely to have a significant effect on the
financial situation or the profitability of the Group over the last 12 months
other than those reflected in the accounts or mentioned in the notes.
GROUPE SEB
GROUPE SEB IN 2009
1
The Groupe SEB human resources policy is based on major factors such as
the respect of Human Rights, the development of skills, health and safety
in the workplace, dialogue with labour organizations, diversity and equal
opportunities.
All data provided below concern our worldwide operations, except for
information marked with an asterisk, which does not include Supor.
1
Data concerning this subsidiary will be included progressively, as and when
it is integrated into the Group’s processes.
The social indicators published by the Group now include the absentee rate.
One notable fact for 2009: the improvement in the severity rate of workplace
accidents, through focused efforts in this area by the Group.
Payroll and charges
(Worldwide)
2009
2008
2007
World
France
World
France
World*
France
Payroll (a)
381.2
210.8
384.1
210.3
354.1
210.1
Employer contributions (b)
104.0
59.8
105.0
63.6
106.2
64.9
37.8
33.8
34.9
29.2
36.6
30.3
(in € million)
Pension provisions
* 2007 excluding Supor.
(a) Excludes bonuses and profit sharing – includes provisions for paid vacation, excluding individual benefits.
(b) Includes provisions for employer contributions on paid vacation.
Breakdown of employees by geographical zone
(Worldwide)
(headcount)
2009
2008
2007*
France
5,944
6,267
6,759
1,502
1,405
1,506
North America
649
670
786
South America
2,026
2,156
2,355
Asia/Pacific
9,976
7,571
986
663
709
660
20,663
18,879
13,048
Central Europe, CIS and other countries
TOTAL
*
2007 excluding Supor.
The Group continued its industrial restructuring. In France: 5.2% reduction
in staff.
Headcount was 6.7% lower in Western Europe due to restructuring in Werke
(Germany) and a slight drop in Central Europe was due to the closure of a
subsidiary in Iran.
The variation in staffing in Asia can for the most part be explained by an
increase in Supor staffing in China: the recovery of activity in 2009 resulted
in an increased labour requirement for Supor and a significant increase in
the employee population compared to December 2008.
GROUPE SEB
25
1
GROUPE SEB IN 2009
Breakdown of employees by category
1
(Worldwide)
(as a %)
2009
2008
Direct manual labour
48.7
44.6
41
Admin & office staff
41.3
44.4
45.6
Managers
10.0
11.0
13.4
TOTAL
100
100
100
*
2007*
Increase in manual labour force due to the integration of Supor.
Excluding Supor, the proportion of managers has increased over the last three years (2007: 13.4; 2008: 15.4; 2009: 16.4), in particular concerning women.
Breakdown of changes in staffing
(Worldwide excluding Supor)
(number of individuals)
2009
2008
2007
RECRUITMENT 1,799
1,289
1,921
Fixed term contracts
614
630
755
Open term contracts
675
1,291
1,044
1,974
2,505
2,527
Economic redundancies
388
300
427
Terminations for other reasons
216
429
265
AVERAGE RATE OF STAFF TURNOVER (b) (%)
3.6
4.7
4.8
(a)
DEPARTURES (a)
(a) Excluding internal transfers.
(b) Number of resignations of open-term contract employees/Average number of open-term employees in 2009.
26
GROUPE SEB
1
GROUPE SEB IN 2009
Breakdown of employees by type of contract
1
(Worldwide)
(as a %)
2009
2008
2007*
OPEN-TERM CONTRACTS
56.1
63.0
92.8
Full-time
91.8
92.5
92.5
Part-time
8.2
7.5
7.5
FIXED-TERM OR OTHER SHORT TERM CONTRACTS
43.3
36.3
6.4
Full-time
99.3
97.3
83
Part-time
0.7
2.7
17
APPRENTICESHIPS
0.6
0.7
0.8
100
100.0
100
TOTAL
*
The integration of Supor has generated an increase in fixed-term or other short-term contracts, very common in China and in particularly in manual labour.
Persons with disabilities
(Worldwide)
2009
World
Number of employees with disabilities
% of employees with disabilities (a)
2008
France
World
2007*
France
World
France
431
290
526
335
592
388
3.66
4.88
2.79
5.35
4.54
5.74
(a) Ratio between the number of employees with disabilities and total employee population as at 31 December 2008, excluding temp employees and ESAT sheltered employment.
Absenteeism
2009
Absenteeism rate (a)
2008
2007
World
France
World
France
4.11
4.98
4.26
5.40
NA
(a) Ratio between number of days of absence and theoretical number of days of attendance.
GROUPE SEB
27
1
GROUPE SEB IN 2009
Breakdown by gender and category
1
(Worldwide)
(as a %)
2009
2008
2007*
Manual labour
28.6
25.4
19.7
24.0
25.6
24.8
6.9
7.6
9.6
59.5
58.6
54.1
MALE
Managers
TOTAL
FEMALE
Manual labour
20.1
19.3
21.3
17.3
18.8
20.7
3.1
3.3
3.9
40.5
41.4
45.9
Managers
TOTAL
*
With the integration of Supor in 2008, the portion of male manual labour
increased: over 65% of Supor employees are in manual labour and for the
most part are men.
Excluding Supor, the portion of employees in management positions in
the Group has increased over the last three years, in particular for women,
representing 3.9% of Group managers in 2007 and 5.3% in 2009.
External manual labour
(Worldwide)
Temporary staff at 31 December 2009 was equivalent to 481 full-time posts in France (2008: 482 posts) and 2,434 posts worldwide (2008: 2,212 posts).
NB: In China, this type of contract does not exist.
Paid overtime
(Worldwide)
2009: In France, 28,793 hours, or 16 full time-equivalent (FTE) (2008: 41,810
hours or 23 FTE).
2009: Worldwide excluding Supor, 255, 999 hours, or 70 FTE (2008: 372,691
hours or 180 FTE).
28
Reduction in overtime worldwide (excluding Supor), especially in Central
Europe (closure of Iran subsidiary) and in South America (Colombia) due to
unfavourable economic climate.
2009: 4,069,516 hours for Chinese subsidiary Supor, or 1,778 FTE (due to
local context).
GROUPE SEB
GROUPE SEB IN 2009
1
Workplace safety: frequency and severity
1
2009
2008
2007
FRANCE (MONTHLY INDICATORS)
Number of workplace accidents with subsequent absence
118
110
174
Number of days lost
5,772
6,733
6,660
Frequency rate (a)
13.66
12.25
18.55
0.67
0.75
0.71
Severity rate (b)
WORLD (QUARTERLY INDICATORS)
Number of workplace accidents with subsequent absence
Number of days lost
169
182
249
6,652
8,525
10,425
Frequency rate (a)
8.51
8.33
9.31
Severity rate (b)
0.33
0.39
0.39
(a) Number of workplace accidents with absence per million hours worked.
(b) Number of days lost per thousand hours worked.
In France, we can see a slight increase in the workplace accident frequency
over 2008, mainly due to accidents when on sales activities. The sector as
a whole continued to show improved ratios.
Worldwide in 2009:
a frequency rate stable: number of accidents with subsequent absence is
down (from 176 in 2008 to 169 in 2009) but the number of hours worked
dropped to a greater extent;
a severity rate down 15% worldwide compared to 2008.
Training (staff and training hours)
(France)
2009
2008
2007
127,027
148,907
153,913
Number of staff trained
3,946
4,346
4,294
Of which women
1,656
1,865
1,878
Of which men
2,290
2,481
2,416
794
1,139
1,041
2,024
2,594
2,280
Number of training hours (a)
Number of employees trained in environment protection
Number of employees trained in workplace safety
(a) Based on the number of employees trained multiplied by the number of training hours (including environment and safety training).
Of the 127,027 training hours dispensed in France, 22,339 hours concern training for the least qualified posts (4158 hours in 2008).
191,599 training hours were dispensed to Groupe SEB employees worldwide in 2009.
GROUPE SEB
29
1
GROUPE SEB IN 2009
Training budget (a)
1
(as a % of total payroll)
2009
2008
France
2.53
2.65
2007
2.75
0.49
1.78
1.00
North America
0.52
1.16
1.86
South America
1.16
2.12
1.69
Asia/Pacific
1.29
2.36
1.97
Central Europe, CIS, other countries
1.50
2.63
1.97
TOTAL
1.85
2.38
2.30
(a) Cost of training + expenses, excluding trainee salaries for non-direct labour.
The uncertainty of the economic climate in 2009 caused training expenditure to be restructured.
Groupe SEB academy training
Number of trainees
Number of training sessions
Number of training hours (a)
2009
2008
2007
2,186
2,740
1,076
164
263
116
41,537
37,935
21,056
(a) Based on the number of people trained multiplied by the number of training hours per session.
Bonuses and profit sharing
(Worldwide)
(in € thousand)
2009
2008
2007
Provision for bonuses
15,500
14,787
10,791
Provision for profit-sharing
22,059
18,574
14,898
TOTAL
37,559
33,361
25,689
Amounts paid in the year indicated in respect of the previous trading year
30
GROUPE SEB
GROUPE SEB IN 2009
1
Groupe SEB has worked for many years to improve the environmental
performance of its factories and logistics platforms. Its worldwide
Environment Management System put in place in 2003 aims in particular to
reduce waste and emissions and limit the consumption of water and energy.
1
The latest entities to join the Group progressively adopt an environmental
certification approach that respects Groupe SEB standards.
Apart from its own production units, Groupe SEB ensures that its suppliers
are also actively seeking environmental certification.
Energy consumption
(Worldwide excluding Supor and All Clad)
2009
2008
2007
World
France
World
France
World
France
Total consumption of gas (in gWh)
157.8
144.3
178.3
164.3
182.8
167.9
Total consumption of electricity (in gWh)
148.4
99.1
168.6
115.5
173.9
117.7
1,026.0
859.4
1,178.4
968.7
1,266.4
955.1
306.2
243.4
346.9
279.8
356.7
285.6
Total consumption of water
(in thousands of cubic meters)
Direct energy consumption, broken down by
primary source (gas + electricity) (in gWh)
Emissions
(in tonnes of CO2)
Greenhouse gas emissions
Greenhouse gas emissions from industrial and logistics sites are down over
the last three years and remain relatively modest due to the predominance
of assembly processes in our activities.
2009
2008
2007
30,320
33,961
34,776
The first carbon assessment for global logistics was carried out in 2009. It
evaluated CO2 emissions due to the transport of products, materials and
components at a maximum of 150,000 tonnes.
GROUPE SEB
31
1
GROUPE SEB IN 2009
Waste
1
2009
Ordinary Industrial Waste (OIW) (tonnes)
OIW recycled excluding metals (%)
2008
2007
World
France
World
France
World
France
11,110
7,682
12,357
8,874
11,972
8,279
79
82
80
83
78
79
Special Industrial Waste (SIW) 100%
treated (tonnes)
1,476
943
1,555
960
1,440
1,024
Wastewater plant sludge disposed of in class II
landfills (tonnes)
4,169
4,169
5,583
5,583
6,063
6,060
ISO certification
(Worldwide)
(%)
Sites holding ISO 14001 certification (a)
2009
2008
2007*
75
75
89
(a) Based on industrial and logistics entities at the end of the year concerned (including Group head office).
Starting in 2008, the Chinese subsidiary Supor was integrated in the ISO
14001 certification process.
32
NB: In this table, the three Supor sites holding environmental certification
awarded by a Chinese organization are not considered as ISO 14001-certified
under Groupe SEB terms. An action plan is under way to ensure these sites
progressively evolve to reach Groupe SEB standards.
GROUPE SEB
BOARD OF DIRECTORS
34
Chairman and Chief Executive Officer
Board members
Founder family links
Absence of conviction for fraud, involvement
in bankruptcy or official public sanction
Absence of potential conflict of interest
Service contracts
34
34
40
CHAIRMAN’S REPORT
ON INTERNAL CONTROL
51
Group internal control environment
Internal control participants
Accounting and financial information procedures
51
52
54
STATUTORY AUDITORS’ REPORT
ON INTERNAL CONTROL
56
41
STATUTORY AUDITORS
57
Board of Directors
Board of Directors meetings
Attendance fees
Board of Directors committees
Evaluation of Board of Directors
Directors’ charter and internal regulations
of the Board of Directors
Keeping Board members informed
41
41
42
42
43
Titular statutory auditors
Substitute statutory auditors
Fees paid to statutory auditors
57
57
58
GROUP MANAGEMENT BODIES
44
Group Executive Committee
Continental General Management
General Management- Business Areas
Remuneration of management
(Group Executive Committee)
Remuneration of Chief Executive Officer
Share transactions carried out by members of SEB
management during 2009 (Article L. 621-18-2
of the French Monetary and Financial Code)
44
44
44
ORGANIZATION AND OPERATION
OF THE BOARD OF DIRECTORS
40
40
40
2
2
43
43
45
45
50
GROUPE SEB
33
2
Board of Directors
Board of Directors
2
FOUNDING CHAIRMEN
HONORARY CHAIRMAN
Frédéric Lescure †
Emmanuel Lescure
Henri Lescure †
Chairman and Chief Executive Officer
THIERRY DE LA TOUR D’ARTAISE
Appointment: 1999 - Expiration of term: 2012.
Aged 55.
CEO of SEB S.A. since 2000.
Entered Groupe SEB in 1994 when he joined Calor, of which he became Chairman and was appointed Deputy Chairman of SEB S.A. in 1999.
Number of SEB shares held: 113,963 shares.
Other current mandates and functions:
Board member of Club Méditerranée S.A., Plastic Omnium and Legrand.
Permanent representative of Sofinaction on the Board of Lyonnaise de
Banque.
Mandates in Groupe SEB companies: Chairman of SEB Internationale; Board
member of Supor (China).
Expired mandates and functions exercised in the last five years (excluding Groupe
SEB companies):
Board member of Siparex Associés.
Board members
TRISTAN BOITEUX
Member of the Founder Group, member of FÉDÉRACTIVE.
Appointment: 2002 - Expiration of term: 2010 (1).
Aged 47.
Having occupied various functions in Alcatel for 11 years, he has been with Gemalto since November 2000 where, before being appointed Product
Manager, he held the post of Commercial Engineer.
Number of SEB shares held: 102,162 (of which 98,855 bare-owner shares).
Expired mandates and functions exercised in the last five years:
Member of the Advisory Board of FÉDÉRACTIVE.
Member of the Management Board of VENELLE INVESTISSEMENT.
Member of Management Board of the Mireille and Pierre Landrieu Foundation.
(1) Renewal proposed to AGM on 12 May 2010.
34
GROUPE SEB
Board of Directors
2
DAMARYS BRAIDA
Member of the Founder group, member of VENELLE INVESTISSEMENT.
2
Aged 42.
Head of L’Oréal hair colour R&D laboratory.
Chairperson of VENELLE INVESTISSEMENT.
Managing Director of VENELLE PLUS.
NORBERT DENTRESSANGLE
Independent director.
Aged 55.
In 1979, founded Groupe Norbert Dentressangle, specialized in transport and logistics – of which he was Chairman until 1998, and now presides its
Supervisory Board. Since its creation in 1988, he has also been Chairman of Financière Norbert Dentressangle (SAS), a family holding company which,
in addition to its majority holding in Groupe Norbert Dentressangle, also holds stakes in real estate, industrial and business services companies.
Chairman of Financiere de Cuzieu (SAS),
Chairman of Financiere Norbert Dentressangle (SAS),
Co-manager of Versailles Richaud ND (SARL),
Deputy Chairman of the Supervisory Board of AXA,
Board member of Sogebail.
Chairman of the Supervisory Board of Groupe Norbert Dentressangle,
Chairman of ND Investissements (SAS),
Member of Supervisory Board of FINAIXAM,
Managing Director of Sofade (SAS),
Permanent representative of Financiere Norbert Dentressangle, Board
member of Financiere Egnatia.
PHILIPPE DESMARESCAUX
Aged 71.
Former Managing Director of Groupe Rhône-Poulenc.
Chairman of the Supervisory Board of Eurotab.
Vice-Chairman of the Board of Directors of CPE.
Co-President of the Biovision Foundation – Academy of Science.
Member of the Supervisory Board of Auriga Partner.
Chairman of Fondation Scientifique de Lyon et du Sud-Est.
Board member of Therascope AG.
(2) Mandate not renewed.
GROUPE SEB
35
2
Board of Directors
FÉDÉRACTIVE
Appointment: 2005 (co-opted by Board Meeting of 16 December 2005) – Expiration of term: 2010 (1).
2
Shareholder investment company, represented by its Chairman, Pascal Girardot, member of the Founder group.
Pascal Girardot, aged 54, is a member of the Institute of Actuaries. After 15 years in financial markets and financial engineering with the Caisse des
Dépôts et Consignations as Financial Markets Manager, and with CPR as Risk Manager responsible for its New York operations, he has been, since
1997, Founder-Chairman of Certual, specialized in financial engineering.
Former Chairman of the Obligatory Standards Committee consulted by the Treasury Department.
Number of SEB shares held by FÉDÉRACTIVE: 9,923,742 (of which 9,923,739 usufruct shares).
Other current mandates:
Expired mandates and functions exercised by FÉDÉRACTIVE in the last five years:
Board member of Gaggione SA, Babylone SA, and NewCore SA.
None.
HUBERT FÈVRE
Aged 45.
Chartered accountant.
Based in Geneva, he is Financial Officer for Pasche Bank.
Previously, in London, he held financial positions with the following groups: Sonatrach Petroleum Corporation, VSNL International, Addax & Oryx and Finacor.
SOCIÉTÉ FONCIÈRE, FINANCIÈRE ET DE PARTICIPATIONS - FFP
A holding company listed on the Paris stock exchange and majority-held by the Peugeot family group.
FFP is represented by Christian Peugeot. A HEC graduate, Christian Peugeot, aged 56, has spent his whole professional career in the PSA group. He
was Marketing and Quality Director from 1998 to 2005 and is now the Central Marketing Director for Groupe PSA.
Number of SEB shares held by FFP: 2,901,522 shares.
FFP is also a member of the Supervisory Boards of Immobilière Dassault SA,
IDI S.C.A., Zodiac Aérospace and Onet S.A. It also holds the chairmanship
of Société Financière Guiraud SAS and manages the real estate companies
SCI FFP-Les Grésillons and SCI Valmy-FFP.
Board member of Marco Polo Investissements SA.
Manager of real estate company Marne-FFP.
36
GROUPE SEB
Board of Directors
2
JACQUES GAIRARD
2
Aged 70.
Entered Groupe SEB in 1967. He was appointed Managing Director of SEB SA in 1976, Deputy Chairman in 1988, and Chairman and Chief Executive
Officer from 1990 to 2000.
Member of the Supervisory Board of Soparind SCA.
Member of the Supervisory Board of Siparex Associés.
Board member of Maison Rouge contemporary art foundation.
Member of the Supervisory Board of Groupe Norbert Dentressangle.
Board member of Bongrain SA.
PHILIPPE LENAIN
Aged 71.
Former Deputy Chairman, Managing Director and Board member of the Danone Group.
None.
Board member of Carlson Wagons Lits France, Nord Est and EcoEmballages.
FRÉDÉRIC LESCURE
Aged 49.
A graduate of CESEM then Harvard University, Fréderic Lescure is Chairman of Groupe Méaban, specialized in surface treatment.
Chairman of Socomor GmbH (Germany), Socomor SA (Spain) and Socomor
Ltd (England), Socomore shanghai Ltd (Chine), Socomore OOO (CIS) et
Socomore Ltd (Hong Kong) and Groupement des Fédérations Industrielles
Bretagne.
Board member of CBB Développement.
Board member of Magchem (Canada) and Dysol (Fort Worth, Texas).
GROUPE SEB
37
2
Board of Directors
JEAN-DOMINIQUE SENARD
2
Aged 57.
Jean-Dominique Senard began his career in various posts of responsibility in finance and operations with Groupe Total, from September 1979 to
September 1987, and then with Saint Gobain from 1987 to 1996.
From September 1996 to March 2001, he was Chief Financial Officer and a member of the Groupe Péchiney Executive Council. He was head of Péchiney’s
Primary Aluminium Division until 2004. As a member of Alcan’s Executive Committee, he was responsible for the integration of Péchiney, and served as
Chairman of Péchiney SA.
Jean-Dominique Senard joined Michelin in March 2005 as Chief Financial Officer and a member of Michelin’s Executive Council.
In May 2007 became a Managing Partner of Groupe Michelin.
None.
None.
VENELLE INVESTISSEMENT
Member of the Founder group.
VENELLE INVESTISSEMENT a family company formed in 1997, is represented by Olivier Roclore.
After six years as Legal Affairs Manager with CAD software company Cisigraph, Olivier Roclore, aged 55, was appointed Legal and Finance Director of
Groupe Ortec in 1992.
Number of SEB shares held by VENELLE INVESTISSEMENT: 7, 461,243 (of which 7,443,341 usufruct shares).
Other current mandates:
Expired mandates and functions exercised by VENELLE INVESTISSEMENT in the
last five years:
None.
None.
JÉRÔME WITTLIN
Aged 50.
Jérôme Wittlin began his career with Groupe Crédit Lyonnais, notably as Director of Clinvest (a subsidiary specialized in mergers and acquisitions),
and from 2004 was Executive Director of the Investment Banking Department of Calyon, a financial and investment bank in the Crédit Agricole group.
Until 2009, he was Executive Director of the Private Wealth Management Division of Goldman Sachs in France.
Number of SEB shares held: 6,338 (of which 330 bare-owner shares).
Managing Director of VENELLE INVESTISSEMENT.
Manager of Trois Rivières Holding.
Board member of Trajectoire.
38
GROUPE SEB
Board of Directors
2
CEDRIC LESCURE (3)
2
Expiration of term: 2011.
Aged 42.
Veterinary doctor.
Current mandates:
Manager of Sarl Rallye Charmoy.
Manager of Groupe Forestier La Pépine.
Manager of Sarl Vetshop Création.
JEAN-NOEL LABROUE (3)
Aged 62.
Has spent almost all his career in the Darty group. Successively appointed to Chairman of the Board of Directors of Groupe Darty, Managing Director of
Kingfisher UK and Managing Director of Kesa Electricals UK until 2009.
Jean Noël Labroue is a qualified engineer, specializing in atomic physics.
Current mandates:
None.
Managing Director and Board member of Kesa Electricals Plc UK.
Member of Supervisory Board of Établissements Darty et Fils.
Chief Executive Officer of Kesa France.
Chairman of Board of Directors of New Vanden Borre and Kesa International plc.
Board member of Datart Investments SA, Datart Megastore S.R.O. Datart
International as, Kesa Holding Ltd, Kesa Electricals plc, Kesa Sourcing Ltd,
Kesa Spain Ltd, Kesa Turquey Ltd, Kesa Electricals Asia Ltd.
At 31 December 2009, directors held 41.17% of share capital and 54.76% of voting rights.
Each Board member is required to hold a number of shares in the SEB SA nominal share register equivalent to about two years of attendance fees.
(3) Nomination proposed at the AGM of 12 May 2010.
GROUPE SEB
39
2
Board of Directors
Founder family links
2
a All Board members belonging to the Founder group are descendants,
a There is no family connection between Board members and members of
directly or by marriage, of Founder-Chairmen Frédéric Lescure or Henri
Lescure.
the Group Executive Committee, with the exception of Thierry de La Tour
d’Artaise, who is a member of the Founder group.
Absence of conviction for fraud, involvement in bankruptcy or official
public sanction
To the Company’s knowledge:
a no member of the Board of Directors or Group Executive Committee
has been the subject of any official charge or sanction by statutory or
regulatory authorities;
a no member of the Board of Directors or Group Executive Committee has
been convicted for fraud in the last five years;
a no member of the Board of Directors or Group Executive Committee has
a no member of the Board of Directors or Group Executive Committee
been the subject of a bankruptcy, strike-off notice or liquidation in the
last five years;
has been in the last five years subject to any court order or constraint
on serving as a member of a Management Board, Board of Directors or
Supervisory Board, or of being involved in the management or affairs of
an issuer of securities.
Absence of potential conflict of interest
As far as the Company is aware, there is no potential conflict between their duties with regard to SEB SA and the individual interests of any member of the
Board or general management.
Service contracts
No member of the Board of Directors or Group Executive Committee has any contractual service relationship with SEB SA or its subsidiaries, the terms of
which would bestow advantages on the member.
40
GROUPE SEB
Organization and operation of the Board of Directors
2
Organization and operation of the Board
of Directors
The activities of the Group’s governing and management bodies are
compliant with corporate governance rules generally applied by French
companies whose shares are traded on the regulated market.
2
Groupe SEB complies with the AFEP-MEDEF Corporate Governance Code
for listed companies, issued in December 2008.
Board of Directors
a The Board of Directors is a collective body which represents all the
shareholders and acts solely in the interests of the Company.
On the proposal of the Chairman and Chief Executive Officer, the Board
of Directors decides on Group strategy, capital expenditure and budgets,
deliberates on the management structures of the Group and decides on
acquisitions.
In light of the fact that the capital is controlled by two major shareholders, the
Board of Directors has slightly less than one third of independent members,
as recommended by the AFEP-MEDEF Corporate Governance Code.
To be considered independent, a director must have no relationship with
the Company, the Group or its management, which could compromise the
impartiality of the director’s judgment (AFEP-MEDEF Code definition).
The Board of Directors has made it an internal rule that, in view of their
importance, decisions on the cancellation of shares or the possible use
of AGM authorizations to increase capital should be subject to a qualified
majority vote of 12/15ths of the members present or represented.
After examining the Board member situation, the Board considers that
Philippe Desmarescaux*, Norbert Dentressangle, Philippe Lenain and
Jean-Dominique Senard are independent members under the terms of the
AFEP-MEDEF code.
a The Board of Directors comprises 15 members:
a The term of office of Board members is four years.
a the Chairman;
a Board membership is renewed by rotation, so that shareholders can
a Nine Board members representing the Founder group: five Board
members are proposed by FÉDÉRACTIVE and four by VENELLE
INVESTISSEMENT;
a the company FFP;
a four independent directors;
decide more frequently on the makeup of the Board.
a In June 2002, the Board of Directors confirmed the unitary organization
of management authority. The Chairman, Thierry de La Tour d’Artaise,
therefore assumes the function of Chief Executive Officer. This choice is
made for reasons of efficiency.
The Board of Directors does not restrict the authority of the Chief Executive
Officer.
Board of Directors meetings
The Board of Directors met on eight occasions in 2009. Average attendance
was 92.5%.
These occasions enable Board members to meet personnel in the
subsidiaries and better understand local problems in their context.
The Board of Directors has met on several occasions in recent years at
Groupe SEB sites outside France – for example in Italy in 2006 and Portugal
in 2008.
*
Replaced by Jean-Noël Labroue at the AGM of 12 May 2010.
GROUPE SEB
41
2
Attendance fees
The maximum amount of attendance fees authorized by the 2007 Annual
General Meeting was €420,000.
2
Each Director receives annual pay of €24,000.
Members participating in the work of the Board committees receive an
additional €8,000 or, in the case of committee chairmen, €12,000.
Due to the high attendance rate for Board and Committee meetings, it was
not judged necessary to introduce a variable portion of annual pay based
on attendance.
The total amount of attendance fees allocated to Board members in 2009
amounted to €410,000.
This represents attendance fees due for the period from 1 May 2008 to
30 April 2009, and paid in May 2009.
Board of Directors committees
To assist it in specialist matters, the Board formed two committees in 1995,
drawn from its members:
a presentation to the new Chairman of the Audit Committee of the role
performed by this committee, its activity and the topics covered in
recent years,
a Since 11 December 2009, the Audit Committee comprises four members:
a changes to legislation and standards,
Philippe Lenain, Chairman, Norbert Dentressangle, Hubert Fèvre
representing FÉDÉRACTIVE and Jérôme Wittlin representing VENELLE
INVESTISSEMENT.
a risk management policy and tools,
a changes to Group management and consolidation tools,
The Chairman of the Committee is an independent director and has a
deciding vote in the event of a split vote.
This committee informs the Board on the identification, evaluation and
handling of the main financial risks to which the Group may be exposed.
Its role is to ensure the conformity of financial reporting methods. It assists
the Board with observations or recommendations and participates in the
preparatory procedure for appointing Statutory auditors.
a closure deadlines,
a insurance policies, exchange risk management policies.
a Since 11 December 2009, the Nominations and Remuneration
Audit Committee activity
The Audit Committee met on four occasions in 2009 with an attendance
rate of 83%.
In 2009, the committee examined the following recurring items:
a the draft annual accounts as at 31 December 2008 and the draft halfyear accounts in for 30 June 2008, prior to their submission to the
Board of Directors,
a the Chairman’s report on internal control,
a the nature and results of the work done by the Statutory auditors along
with their comments and recommendations on internal control,
a a review of the main findings of the internal audits carried out in 2009,
Committee comprises four members: Philippe Desmarescaux, Chairman,
Philippe Lenain, Pascal Girardot representing FÉDÉRACTIVE and Olivier
Roclore representing VENELLE INVESTISSEMENT.
The Chairman of the Committee is an independent director and has a
deciding vote in the event of a split vote.
The committee reports on its work to the Board of Directors and makes
recommendations on the composition of the Board, on the terms of office
of directors, and on the Group’s organization and structures; it also makes
proposals to the Board concerning the executive officer remuneration
policy, as well as the introduction of stock option plans and the applicable
terms and conditions.
The Nominations and Remuneration Committee met on four occasions
in 2009, with 92% attendance.
Nominations and Remuneration Committee activity
a proposed internal audit schedules for 2010,
The Nominations and Remuneration Committee dealt with the following
matters in 2009:
a a review and analysis of major risks;
a review of a stock option plan for certain members of Group management,
In 2009 the Audit Committee also covered the following specific subjects:
a examination of the 2008 bonus and fixed remuneration for 2009 for
a analysis of proposals and nominations for appointment as Statutory
the Chairman and other members of the Group Executive Committee,
a re-evaluation of the Chairman’s remuneration elements,
auditors, arriving at term for both co-auditors,
a review of the makeup of the Board of Directors.
42
GROUPE SEB
All the items dealt with by the Audit Committee and the Nominations and
Remuneration Committee are the subject of a report to the Board of Directors.
The Group was not able to fully respect the provisions of the AFEP-MEDEF
code which recommend two-thirds independent directors on the Audit
2
Committee and a majority of independent directors on the Nominations
and Remuneration Committee, due to it being controlled by two major
shareholder groups.
2
Evaluation of Board of Directors
Each year from 2003 to 2008, the Board performed an evaluation of its activity
and operations either in the form of a detailed questionnaire completed by
each director, or in the form of a round table and discussions.
In 2009, due to a lack of available time, the Board was not able to evaluate
its performance. This will be covered on the agenda in its April 2010 meeting.
As most suggestions submitted by directors were implemented, these
evaluations have significantly improved the activity of the Board and its
Committees.
Directors’ charter and internal regulations of the Board of Directors
Reaffirming its commitment to the principles of corporate governance, at
its meeting of 18 June 2003, the Board approved a Directors’ Charter and
Internal Regulations, combined in a single document.
DIRECTORS’ CHARTER
The main points of the Charter cover: respect for and defence of the interests
of the Company, regular attendance at meetings, attention to possible
conflicts of interest, access to information, confidentiality, objective analysis,
and vigilance with regard to the regulations governing privileged information.
INTERNAL REGULATIONS
This Charter was drawn up to ensure that Board members have a clear
understanding of their role, rights and duties.
The Internal Regulations cover the makeup and functioning of the Board,
the role and mission of the Board and its committees and Board member
remuneration policy.
Keeping Board members informed
When a new member is appointed to the Board, he or she is given a dossier
containing comprehensive information on the Group and its working context.
This includes the Company bylaws, the Directors’ Charter and Internal
Regulations, a draft agenda of each meeting of the Board and its committees,
data on its manufacturing and marketing subsidiaries, human resources
policy, a breakdown of employees by continent and by subsidiary company,
brand strategy, information on competition, and a review of our main clients.
Also, each Board member periodically receives data concerning monthly
sales figures and results, press reviews, meeting minutes of the Board of
Directors and of the Audit and Nominations and Remuneration Committees,
as well as the results of studies published by financial analysts concerning
the Group.
In 2006, a documentary database for SEB directors was made available via a
secure link on the Internet. This database includes all the above documents
and any other information of interest to the directors.
GROUPE SEB
43
2
2
Group Executive Committee
Thierry de La Tour d’Artaise
Chairman and Chief Executive Officer
Jean-Pierre Lac
Executive Vice-president, Finance
Stéphane Laflèche
Executive Vice-president, Industrial Operations
Bertrand Neuschwander
Executive Vice-president, Activities
Harry Touret
Executive Vice-president, Human Resources
Frédéric Verwaerde
Executive Vice-president, Continental structures
Continental General Management
Marcio Cunha
President, South America
Luc Gaudemard
President, Western and Southern Europe
Volker Lixfeld
President, Northern and Central Europe
Patrick Llobregat
President, Asia and Rest of World
Marc Navarre
President, North America
General Management- Business Areas
Cyril Buxtorf
President, Linen and Personal care, Home comfort and Home care
Philippe Crevoisier
President, Electric cooking, Food and Beverage preparation
Christian Ringuet
President, Cookware
Jean-Christophe Simon
President, Innovation
The Group Executive Committee defines and implements overall Group
strategy. It meets twice a month to define consolidated goals, monitor
strategic plans, decide on priorities and allocate the resources needed for
Strategic Business Areas, Continental Structures and Group Functions.
44
The Group Management Board comprises the members of the Group
Executive Committee, the Presidents of the Strategic Business Areas and
Continental Structures and the President in charge of Innovation. It meets on
average every two months to monitor the Group’s performance and results,
and if necessary, adjust its commercial or industrial strategy. A forum for
exchanging views and reflection, the Group Management Board plays a
supervisory role and ensures the proper overall functioning of Groupe SEB.
GROUPE SEB
2
Remuneration of management (Group Executive Committee)
Following the recommendations of the Nominations and Remuneration
Committee, the Board of Directors has laid down the following management
remuneration policy:
anywhere from 0 to 175% of the basic fixed remuneration for the Chief
Executive Officer and from 0 to 100% for the other members of the Group
Executive Committee.
a remuneration is determined according to market practice. Salaries include
On this basis, the Committee proposes to the Board of Directors the fixed
amount of remuneration for each executive officer, and the targets to be
used in calculating the variable component.
a fixed base and a variable component;
a the fixed amount takes into account the level of responsibility and
experience, as well as performance and potential;
a the variable portion or “bonus” is related to the achievement of quantitative
and qualitative goals defined annually by the Committee. It may represent
2
For 2009, remuneration of the current members of the Group Executive
Committee amounted to €4,779,526 of which €2,669,766 for the fixed
amount and €2,109,760 for the variable component.
Remuneration of Chief Executive Officer
The information given below covers all remuneration (fixed and variable
components) and benefits of every kind (subscription or purchase options,
departure indemnities, in- kind benefits and supplementary pension
provisions) concerning Thierry de La Tour d’Artaise, the only company officer
to receive remuneration (the other Board members receiving attendance
fees only).
In respect of his mandate as Chairman and Chief Executive Officer of SEB
SA, Thierry de La Tour d’Artaise receives:
These annual objectives are discussed then proposed by the Nominations
and Remuneration Committee, before being confirmed by the Board of
Directors.
The variable component bonus paid in 2009 in respect of the 2008 trading
year was €1,031,000.
The variable component bonus paid in 2010 in respect of the 2009 trading
year will be €1,120,000.
The qualitative criteria applied to the calculation of this component for 2009
are:
a a basic annual salary;
a a variable component bonus payment, up to a maximum of 175% of his
basic salary.
He receives no other remuneration from the Company or other Groupe SEB
companies, apart from attendance fees for his membership of the SEB SA
Board of Directors, amounting to €24,000 in 2009.
FIXED REMUNERATION
The amount of annual salary is discussed and then proposed by the
Nominations and Remuneration Committee to the Board of Directors.
In 2009, the fixed salary component for Thierry de La Tour d’Artaise
amounted to €800,330, identical to 2008 and 2007.
VARIABLE REMUNERATION
The annual bonus of Thierry de La Tour d’Artaise is established in the same
way as for the other Group executives, according to the following rules:
This is calculated on the basis of the fixed annual salary. The variable
component is related to the amount of 40% to the achievement of qualitative
targets (which evolve each year) and for 60% to the achievement of
quantitative targets concerning growth in Group sales and operating margin.
a responsive management in a crisis climate;
a Group management.
IN-KIND BENEFITS
Thierry de La Tour d’Artaise is provided with a company car, being equivalent
to a benefit of €9,060 for the year, and €14,580 for the use of an apartment
in Paris.
SUPPLEMENTARY PENSION PLAN
Thierry de La Tour d’Artaise benefits from a collective supplementary
pension plan, open to the company’s executives (members of the Group
Executive Committee and Board of Directors) which is in addition to the
statutory pension scheme. This supplementary pension scheme comprises
a differential plan which guarantees to the beneficiary 25% of their annual
remuneration, including the statutory pension. This amount is calculated
on their average remuneration (fixed salary + target bonus) over the three
previous years.
In addition to this, he benefits from a fixed benefit scheme (French Tax Code
Article 39) and a fixed contribution scheme (Article 83). This arrangement,
which is shared by Groupe SEB executives, comprises a target pension
GROUPE SEB
45
2
amount equivalent to 16% of their average annual remuneration (fixed
component + target bonus) over the last three years. The pension level
accrued each year is equivalent to 0.8% of the annual remuneration;
consideration of length of service cannot exceed 20 years.
2
This ensures a maximum salary replacement rate of 41% of annual
remuneration (fixed salary + target bonus), including statutory regimes. The
reference salary of Thierry de La Tour d’Artaise will be limited to 36 times the
annual Sécurité Sociale maximum applicable at the time of his retirement.
To benefit from this arrangement, Groupe SEB executives must have
occupied functions within the Group Executive Committee or Group
Management Board for at least eight years.
The Group plans to externalize the whole of this commitment between now
and the retirement due date, by means of contributions to a fund into which
payments were already made in 2008 and 2009.
SEVERANCE ALLOWANCE
RETIREMENT INDEMNITY
The total retirement indemnity entitlement of Thierry de La Tour d’Artaise
amounts to €305,222.
STOCK OPTIONS - PERFORMANCE SHARES
71,250 share purchase options and 5,938 performance shares were allocated
to Thierry de La Tour d’Artaise in respect of the 2009 trading year.
The Board of Directors decided that 50% of the stock options and 100% of
performance shares allocated to Thierry de La Tour d’Artaise shall be subject
to performance conditions related to the growth of sales and operating
margin as is the case for the bonus.
Performance will be measured over the unavailability period of four years
for options and the two-year acquisition period for performance shares.
Performance will be calculated as follows:
Thierry de La Tour d’Artaise shall not benefit from any compensation payment
by the Board of Directors in the event of termination of his mandate as a
director.
The employment contract under which he joined the Group in 1994, which
would eventually lead to his appointment as Chief Executive Officer of the
Group, was suspended on 1 March 2005 for the duration of his mandate
as a director.
This contract stipulates that (as for other members of the Group Executive
Committee) in the event of termination of his contract by the employer
(except for reasons of serious professional misconduct, or in the event of
a change in the control of the Group), he would benefit from a severance
payment equal to two years of his total remuneration. In application of the
TEPA law, a new rider to this contract defines the conditions of performance
to which this indemnity is subject. It is fixed at two years of remuneration
(basic pay + bonus), which can vary according to the extent of achievement
of targets over the previous four trading years, as follows:
a if the average rate of target achievement is less than 50%, no indemnity
a if the achievement rate of sales targets and operating margin is equal or
greater than 100% in one year, one quarter of the stock options and one
half of the performance shares will be irrevocably acquired;
a if the achievement rate of sales targets and operating margin is lower
than 50% in one year, one quarter of the stock options and one half of
the performance shares will be suspended;
a if the achievement rate of sales and operating margin targets is between
50 and 100%, stock options and performance shares will be allocated
on a proportional basis.
In addition, shares originating from the exercise of stock options and
free shares allocated to Thierry de La Tour d’Artaise will be subject to an
obligation to conserve them in his name for the duration of occupancy of
his post, in the following amounts:
a for shares originating from exercised stock options, a quantity of shares
corresponding to 50% of the net gain on acquisition, net of tax and
statutory deductions, realized at the time of exercise of the options;
a for shares allocated free of charge, a quantity of shares corresponding to
50% of the net gain after taxes, statutory deductions and costs.
is payable;
a if the average rate is between 50% and 100%, the indemnity shall be
between 75% and 100%, based on a linear calculation;
a if the average rate is above 100%, the indemnity shall remain at 100%.
This indemnity shall be made up of the sum of the two total cash annual
salaries (basic + bonus) received in the previous two trading years.
These amounts will be reduced to 20% of the net gain as soon as the number
of shares held by Thierry de La Tour d’Artaise reaches the equivalent of
2 years of remuneration.
As a reminder, hedging instruments are prohibited and to the knowledge of
the Company, no such instrument has been put in place.
The Board of Directors reserves the right to reduce this indemnity by a
maximum of one-half if the last trading year showed a net loss; however, the
indemnity may not be less than the fixed basic salary plus bonus for the last
trading year if application of the performance criteria based on achievement
of targets gives entitlement to payment of an indemnity.
The employment contract binding Thierry de La Tour d’Artaise includes no
indemnities concerning a non-competition clause.
This employment contract shall be terminated at the latest upon the
completion of his term as a Director, i.e. in 2012.
46
GROUPE SEB
2
❙ TABLE 1
Remuneration, stock options and shares allocated to the Chief Executive Officer
2008
2009
€1,878,960
€1,967,970
€925,680
€410,297
-
€139,823
€2,804,640
€2,518,090
2
Thierry de La Tour d’Artaise – Chairman and Chief Executive Officer
Remuneration due for the year (details in table 2)
Valuation of stock options allocated during the year (details in table 4)
Valuation of performance-related shares allocated during the year (details in table 6)
TOTAL
❙ TABLE 2
Breakdown of remuneration of Chief Executive Officer
Amounts in respect of 2008
Thierry de La Tour d’Artaise Chairman
and Chief Executive Officer
Fixed pay component
Variable component
Exceptional remuneration
Attendance fees
In-kind benefits: – Car allowance
– Accommodation
TOTAL
Amounts in respect of 2009
Due
paid
Due
paid
€800,320
€800,320
€800,330
€800,330
€1,031,000
€1,296,000
€1,120,000
€1,031,000
-
-
-
-
€24,000
€24,000
€24,000
€24,000
€9,060
€9,060
€9,060
€9,060
€14,580
€14,580
€14,580
€14,580
€1,878,960
€2,143,960
€1,967,970
€1,878,970
❙ TABLE 3
Attendance fees and other remuneration received by members of the Board of Directors excluding the Chairman and CEO
Attendance fees paid
in 2008
Attendance fees paid
in 2009
Tristan Boiteux
€24,000
€24,000
Damarys Braida
€24,000
€24,000
Pascal Castres Saint Martin
€36,000
€36,000
Norbert Dentressangle
€32,000
€32,000
Philippe Desmarescaux
€32,000
€32,000
Hubert Fevre
€18,000
€18,000
Jacques Gairard
€24,000
€24,000
FÉDÉRACTIVE (Pascal Girardot)
€36,000
€36,000
Philippe Lenain
€32,000
€32,000
Antoine Lescure
€24,000
€24,000
Frédéric Lescure
€24,000
€24,000
FFP (Christian Peugeot)
€24,000
€24,000
VENELLE INVESTISSEMENT (Olivier Roclore)
€24,000
€24,000
Jérôme Wittlin
€32,000
€32,000
€386,000
€386,000
Board members
TOTAL
GROUPE SEB
47
2
❙ TABLE 4
Share subscription or purchase options allocated to Chief Executive Officer in 2009
2
Number
Valuation of options
of options
based on the
allocated
method used in the
consolidated accounts during the year
Type of option
(purchase or
Date of the plan subscription)
Purchase
options
12/06/2009
€5.76
Exercise
price
Exercise
period
28.05
from
12/06/2013
to 12/06/2017
71,250
❙ TABLE 5
Subscription or purchase options exercised by the Chief Executive Officer in 2009
Date of the plan
Number of options
exercised during the
year
Exercise
price
Year of allocation
19/04/2002
49,500
€27.88
2002
❙ TABLE 6
Performance shares allocated to the Chief Executive Officer in 2009
Date of the
plan
11/06/2009
Number
of shares
allocated
5,938
Unit
value
€23.55
Date of
acquisition
Date of
availability
Performance
conditions
11/06/2011
Achievement
of sales and
operating
11/06/2013 margin targets
❙ TABLE 7
Performance shares becoming available for the Chief Executive Officer in 2009
Name of Chief Executive Officer
Date of the plan
48
Number of shares
becoming available
None
GROUPE SEB
Conditions of
acquisition
2
❙ TABLE 8
History of allocations of stock subscription or purchase options to Chief Executive Officer
At 31 December 2008
Subscription
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
Date of AGM
04/04/2000 03/05/1999 14/05/2002 14/05/2002 06/05/2004 06/05/2004 11/05/2006 11/05/2006 13/05/2008 13/05/2009
Date of Board
Meeting
14/06/2001 19/04/2002 17/10/2002 18/06/2003 18/06/2004 08/04/2005 16/06/2006 20/04/2007 13/05/2008 12/06/2009
Total options
allocated (a)
493,500
417,450
598,125
612,150
539,100
554,700
589,798
579,150
1,005,900
371,300
66,000
49,500
6,600
115,516
104,989
105,000
105,012
105,000
105,000
71,250
Of which options
allocated to CEO
Thierry de La Tour
d’Artaise (a)
Option exercise date
14/06/2005 19/04/2006 17/10/2006 18/06/2007 18/06/2008 08/04/2009 16/06/2010 20/04/2011 13/05/2012 12/06/2013
Expiry date
14/06/2009 19/04/2010 17/10/2010 18/06/2011 18/06/2012 08/04/2013 16/06/2014 20/04/2015 13/05/2016 12/06/2017
Subscription or
purchase price (in €) (a)
18.18
27.88
25.15
24.24
31.67
28.00
29.33
44.00
38.35
28.05
Average of last 20
prices prior to Board
Meeting (in €) (a)
17.95
27.78
26.65
24.03
31.52
28.20
29.01
43.73
38.35
28.05
Number of options
exercised (a)
66,000
49,500
0
60,000
0
0
0
0
0
0
Number of options
cancelled (a)
0
0
0
0
0
0
0
0
0
0
Balance of options
remaining to
be exercised (a)
0
0
6,600
55,516
104,989
105,000
105,012
105,000
105,000
71,250
2
(a) Takes into account the allocation of free shares in March 2004 (1 for 10) and the three-way split on 16 June 2008.
❙ TABLE 9
Options allocated in 2009 – Ten highest allocations of Subscription options or purchase options to non-executive officers
Total number of options allocated
Weighted average price
Plan in question
144,000
€28.05
13/05/2009
Options exercised in 2009 – Ten highest exercises of Subscription options or purchase options by non-executive officers
Date of plan
14/06/2001
19/04/2002
17/10/2002
18/06/2003
18/06/2004
08/04/2005
Type of option
Subscription
Purchase
Purchase
Purchase
Purchase
Purchase
Accumulated
total
Option price
€18.18
€27.88
€25.15
€24.24
€31.67
€28.00
€25.80
Quantity of options exercised
39,688
35,500
11,106
90,115
33,599
81,000
291,008
GROUPE SEB
49
2
❙ TABLE 10
General information concerning the Chief Executive Officer
2
Employment contract
Yes
No
(suspended)
Complementary pension
scheme
Yes
No
Indemnities or benefits
due or likely to be
due subsequent to
the termination or
modification of functions
Yes
X
No
Indemnity concerning
non-competition clause
Yes
X
No
X
Share transactions carried out by members of SEB management
during 2009 (Article L. 621-18-2 of the French Monetary
and Financial Code)
Number of
shares bought
Function or subscribed
Name
Jacques Alexandre
Number of
shares sold
Average sale
price
33,005
€38.47
11,700
€37.60
3,916
€38.27
9,900
€38.23
Executive Vice-president
33,005
€24.24
Tristan Boiteux
Board member
852
€27.92
Persons linked to Tristan Boiteux
Board member
62
€28.02
Persons linked to Damarys Braida
Board member
14,248
€23.51
Chairman & CEO
9,500
€27.88
Persons linked to Thierry de La Tour d’Artaise
Chairman & CEO
Hubert Fèvre
Board member
1,096
€27.92
Jacques Gairard
Board member
6,000
€26.86
Persons linked to Jacques Gairard
Board member
1,740
€28.19
Pascal Girardot, permanent representative
of FÉDÉRACTIVE
Board member
1,623
€24.31
Persons linked to Pascal Girardot, rep.
of FÉDÉRACTIVE
Board member
8
€28.18
9,900
€27.88
Frédéric Lescure
Board member
522
€27.92
Persons linked to Frédéric Lescure
Board member
56
€27.80
Board member
13,399
€22.21
Persons linked to VENELLE INVESTISSEMENT
Board member
900
€18.56
1800
€33.60
11,552
€24.24
11,552
€35.95
Board member
500
€17.99
Jean-Pierre Lac
Frédéric Verwaerde
Persons linked to Jerôme Wittlin
50
Average
acquisition
price
GROUPE SEB
2
In accordance with Article 117 of the French Financial Securities Act of
1 August 2003, and the provisions of Article L. 225-37 of the Commercial
Code, as amended on 3 July 2008 (law No 2008-649), the object of this
report is to describe the organization of the work of the Board of Directors,
and the internal control procedures adopted by Groupe SEB for the year
ended 31 December 2009.
This report, drawn up under the supervision of the Chairman, is essentially
based on the coordinated work of the Group’s Audit and Organization
2
department, in liaison with the Finance department and the main corporate
support functions and operational management. It also takes account of
consultations with the Audit Committee and the Statutory auditors.
This report was approved by the Board of Directors on 19 February 2010.
In accordance with the new provisions of the law of 3 July 2008 which
requires each company to identify to which Corporate Governance Code it
abides by, Groupe SEB hereby indicates that it abides by the AFEP-MEDEF
Corporate Governance Code of December 2008.
Group internal control environment
In the course of its operations and in pursuit of its business strategy, Groupe
SEB is exposed to a number of risks and unknown factors, both internal
and external. To tackle this situation, it has set up an organization and
procedures, the aim of which is to identify, quantify, anticipate and manage
these risks in order to reduce their negative impact as much as possible
and thus help to achieve the Company’s operational and strategic goals.
The internal control system is a process defined and implemented by the
Group under its own responsibility to ensure:
a compliance with laws and regulations;
a application of instructions and guidelines, and conformity with the Group’s
internal practices;
a the proper functioning of the Company’s internal processes;
a the quality, integrity and relevance of its internal and external information,
particularly financial information;
a organizational adaptation to changes in standards and regulations;
a consistency between identified risks, objectives and expected benefits;
a reduced exposure to risks of fraudulent behaviour;
applies clearly-defined operational and delegation rules. It also benefits from
a well-established corporate culture which is rooted in shared fundamental
values that foster an ethical working environment: high-quality work, mutual
respect, team spirit, loyalty and thoroughness.
The internal control process is based on a structured Quality Management
System defining twelve key functional areas which integrate the demands
and requirements of Sustainable Development.
A signatory of the Global Compact since 2003, Groupe SEB supports
the values set out in this document and promotes them throughout the
Company. The Group Human Resources Department states in is guiding
principles that: “The Group is a community of men and women who share
the same objectives and values.”
Against this background, Groupe SEB enjoins all its employees to uphold
ethical standards and act in accordance with them.
The integrity of the control function is also assured by an internal control
manual, detailing the main internal control guidelines for each Group
structure:
a use of a delegation manual and definition of power limits;
a prevention, and if necessary punishment of unethical conduct.
As with any control system, it can not provide an absolute guarantee that
these risks are totally eliminated.
Groupe SEB is an international entity, whose organization is firstly divided into
geographical zones for continents, each with their own ranges of products
to sell. In addition, operations are organized by activity, covering specific
product lines and commercial brand. This mode of operating depends on
decentralization of operational responsibilities and extensive delegation.
But in parallel, to guarantee efficient overall management, Groupe SEB
a internal control rules governing commercial operations, the management
of customer credit and settlement methods, relations with banking
institutions, payroll management, purchasing control, financial asset
management and the protection of corporate property and assets;
a respect for rules governing division of responsibilities;
a policies applying to insurance cover and hedging;
a financial reporting audit principles.
GROUPE SEB
51
2
designed to identify possible weak points and encourage the practice
of self-evaluation at all levels, with a view to making Group operations
more efficient.
The risk analysis and internal control processes use two basic tools:
a an annual top-down review and analysis of the main risks. In 2009 this
process was retargeted to focus on the Group Executive Committee
members, the Director of legal affairs and the Director of IT systems, who
were interviewed individually to help identify and analyze the top ten risks
that Groupe SEB is or could be exposed to. Estimating a probability, an
impact and a degree of preparation for the Group to be ready to manage
each of these risks enables us to establish an annual map of the major
risks for Groupe SEB;
2
a a bottom-up process involving self-assessment questionnaires, based
on processes. These are sent out to each operational entity and are
In 2009 the self-assessment process was completed as in previous years,
with one questionnaire every two years for each Group entity.
Added to these two methods of evaluation are regular internal audits of all
entities and of all the Group’s functions, as well as the annual and half-yearly
reviews carried out by the Statutory auditors.
A crisis prevention and management procedure was also established in 2009,
defining the composition of a crisis unit. Its purpose is to be able to detect
and manage potential crisis situations before they become too serious.
Internal control participants
THE BOARD OF DIRECTORS, THE AUDIT
COMMITTEE AND THE NOMINATIONS AND
REMUNERATION COMMITTEE
In the area of risk management, the Internal Audit department draws up a
chart of high-level risks.
The role of these bodies is described in the “Organization and Operation of
the Board of Directors” section.
Their role is described in the “Group Management Bodies” section.
THE INTERNAL AUDIT DEPARTMENT
Internal audit, as defined by professional standards, consists of “an
independent and objective process which ensures that the Group has
adequate control of its operations and which offers advice on improving the
latter while contributing to added value. The internal audit function helps the
Group to achieve its objectives by systematically and methodically evaluating
its risk management, control and corporate governance procedures, and
through recommendations for their improvement.”
The role of the Groupe SEB Internal Audit department is fully consistent
with this approach.
The Internal Audit department is responsible for evaluating, at all locations
where the Group is established and for all functions, compliance with Group
Internal Rules and procedures and any non-compliance with legislation, and
for ensuring that Group assets are protected. It is also required to evaluate
the efficient conduct of operations and to ensure that all business risks are
anticipated and controlled.
This plan is submitted to the Audit Committee.
Each internal audit – adapted to circumstances and conducted locally
by an average of three Auditors over a two-week period – gives rise to
an audit report which is sent to the audited structures and their upline
management, to the members of the Group Executive Committee and to
the Group Chairman and CEO, describing the basic organization of each
process and making recommendations.
GROUP EXECUTIVE COMMITTEE AND GROUP
MANAGEMENT BOARD
52
Based on this chart, on the self-assessment questionnaires and on the
principle of an audit in each entity every three or four years, the Audit
department proposes an internal audit plan for the following year.
Steps are then taken by operational management to remedy identified
shortcomings in internal control, and to make any other necessary
improvements. The implementation of resulting action plans is subjected
to a systematic internal audit review within 12 months of the audit.
The results of these audits are compared with the results of the selfassessments, thus completing the full circle of the internal audit process.
In order to ensure continuous improvement of internal control and company
efficiency, the main recommendations issued by the Audit department for
each process are shared yearly with the Group Management Committee for
the main Group divisions: purchasing, IT, quality, finance, human resources,
logistics, production, customer service.
The Internal Audit department draws up an annual report of work done which
is presented the Group Executive Committee and the Audit Committee.
The Audit Committee reviews the resources needed by the Internal
Audit department to carry out its work, and makes observations or
recommendations as required. Internal Audit department staffing amounts
to eight people.
GROUPE SEB
2
LEGAL AND INSURANCE DEPARTMENT
a select tax consultants and monitor the services provided along with their
The role of the Group Legal department is to ensure that the Group complies
with legal and regulatory requirements wherever it operates, to protect the
Group’s assets and to defend the interests of the Group, its management
and employees in carrying out their functions. The Legal department is
concerned with three main areas of internal control:
In 2009, the Finance department heightened its role concerning the client
receivables risk, with the establishment of a Credit Management committee
and a prior authorization process involving the Group Executive Committee
concerning any significant excessive client receivable balances covered by
COFACE or any other credit insurance organization.
cost.
2
a it drafts and updates model contracts and their related procedures
for frequently recurring transactions (purchase of goods and services,
conditions of sale, advertising campaigns, damages claims, etc.);
a it makes recommendations to the Group Executive Committee on rules for
delegating authority, and on the circulation and protection of confidential
information, and it applies and monitors these rules;
a it selects external legal advisors, monitors their services and performance,
and oversees invoicing follow-up in liaison with the Management Control
department.
The role of the Legal department in the area of insurance is to ensure that
there is adequate insurance cover of the risks to which the Group is exposed.
Groupe SEB insurance cover is managed on a worldwide consolidated basis.
Worldwide insurance cover is arranged in partnership with leading insurance
pools; additional specific policies can be subscribed to locally.
THE GROUP MANAGEMENT CONTROL
DEPARTMENT
The Group Executive Committee attaches great importance to the Group’s
planning procedures. These prepare the ground for the annual budget, which
makes it possible to define the Group’s strategic priorities and draw up
operational plans.
The Management Control department is responsible for issuing appropriate
directives and guidelines for those involved in drawing up the budget.
It coordinates budget planning and control, using a handbook of management
procedures and rules applicable to all entities, including Group budgeting,
forecasting and management reporting methods.
The management reporting system uses a consolidation management tool
for calculating the Group results.
FINANCE, TREASURY AND TAX DEPARTMENT
The role of this department is to ensure the security, transparency and
efficiency of treasury and financial transactions, and to ensure compliance
with regulations and tax obligations in all the countries where the Group
is based.
Its responsibilities in this area cover:
a financial resource management, in consultation with the Executive Vicepresident, Finance, to ensure the Group’s liquidity;
a cash flow management;
a financial risk assessment and hedging (particularly in the areas of foreign
exchange and raw materials prices);
Physical or financial controls make it possible to verify balance sheet items
such as components of the working capital requirement and cash flow.
These various aggregates are budgeted at the end of the year and monitored
monthly.
The Management Control department draws up a Group budget forecast
chart and distributes this, with an analysis of significant variances and trends
based on the information provided by the Group’s entities in their monthly
business reports.
2009 was the first full year of use of the Group’s new consolidated accounting
and management tool. It has enabled a significant improvement in the quality
of analysis possible and better suitability to operational needs.
a ongoing relations with banks;
a financial management support for subsidiaries, and support for the
Group’s General Management.
In financial planning for new projects. This department has a triple
responsibility in the area of internal control:
a monitor tax inspections carried out by taxation authorities in all the Group’s
entities;
a ensure consistency in the tax procedures used by the Group’s entities
and in liaison with tax consultants, verify the compliance of the Group’s
main activities with current legislation;
THE INFORMATION SYSTEMS DEPARTMENT
The Group’s IT system is designed to guarantee the security, integrity,
availability and traceability of information.
To ensure the proper use of these tools and the utility of data, an operating
manual adapted to the needs of users has been drawn up.
The Group has also introduced procedures to ensure the security and
integrity of its information systems.
GROUPE SEB
53
2
2
An Information Systems Steering Committee is responsible for drawing up
an IT master plan which corresponds to the Group’s organizational needs
and general development policy. This committee, chaired by the Executive
Vice-president, Industry, comprises the Information Systems department and
representatives of user entities (including Continental General Management,
General Management Strategy and SBA’s, the Group Finance department
and the Human Resources department). Within this framework, it determines
the nature of IT system projects and decides on priorities for resource
allocation and IT security.
The Group uses a Quality Management System (QMS) with Group-wide
standards that are posted on the Company’s intranet.
The IT security Committee, of which the Audit Department is part, meets
regularly to ensure the level of IT risk within the Group and its subsidiaries
is adequately managed and that appropriate informational and sensitization
measures are taken to prevent the risk of piracy of our systems.
a operational support functions, covering human resources, information
Internal audit missions now include more detailed scrutiny of IT security risk
areas, in particular concerning integrated software: user profile management
and the risk of system access rights within an enterprise function.
The risk of intrusion into the network and/or into a centralized application
is periodically evaluated and tested.
Data security audits were also conducted in some supplier companies.
Documentation for this system includes reference to all procedures, tools
and methods relating to the Group’s key processes:
a management procedures, definition of Group policy, strategic planning,
constant improvement in quality, and safeguarding the environment;
a operational processes including strategic marketing, R&D, sales and
marketing, client order processing and production transfers;
systems, purchasing, finance, after-sales service and customer assistance.
The Quality department uses monthly feedback reporting to fine-tune its
action plans, which are then submitted to the Group Executive Committee.
THE FINANCIAL COMMUNICATIONS DEPARTMENT
Each year, this department draws up a schedule of the Group’s regular
financial communications for financial markets and institutional investors.
It identifies, in collaboration with the Legal department, legal and regulatory
requirements for publication of Group financial notices.
THE QUALITY DEPARTMENT
The desire to improve the quality of its products and processes has always
been a central concern of Groupe SEB.
Accounting and financial information procedures
Internal control procedures for accounting and financial information aim to
ensure the quality of the financial information provided by the consolidated
subsidiaries, and the fairness and accuracy of the financial information
issued by the Group, while safeguarding against risks of error, inaccuracy
or omission in the Group’s financial statements.
This centralization of operations allows the Finance department to:
Groupe SEB uses internal control guidelines based on AMF framework
guidelines and accounting and financial audit principles.
a anticipate and manage currency risk inherent to commercial and financial
Local regulations permitting, the Group Finance department ensures the
financing of its subsidiaries via cash pooling, inter-company financing
contracts and the use of currency flows for payments and receipts.
a manage the risk rate inherent with the contracted debt;
a finance its subsidiaries in their local currency where regulations permit;
flows.
Another important element of internal control is the Group’s centralized
choice of working-partner banks and effective long-term management of
these relations.
CENTRALIZED TREASURY AND FINANCE
OPERATIONS
54
a control external debt and monitor its development;
This organization enables the Finance department to ensure overall control
of the Group’s treasury operations.
GROUPE SEB
CONSOLIDATED ACCOUNTS MANAGEMENT
AND CONTROL
a provisions for the depreciation of tangible fixed assets,
a provisions relating to sales (e.g., warranties and unsold returns),
We have already described the role of Group Management Control in
overseeing monthly consolidated financial management information.
Budgetary control identifies variances between targets and results, on a
monthly consolidation basis, by comparison with an analysis of Group
operational directives. This makes it possible to identify any changes or
discrepancies in relation to financial budget data and previous years.
This decentralized statutory consolidation includes all the companies in
the Group that are directly or indirectly controlled by the Group’s holding
company, SEB SA.
Each consolidated subsidiary prepares a set of accounts, restated to comply
with the Group’s accounting procedures and based on accounting data from
local information systems. All the Group’s entities apply IFR accounting
standards.
The finance managers of the subsidiaries prepare the restated accounts
on the basis of the Group’s accounting procedures manual, which sets out
rules for accounting entries and evaluation.
This manual describes the principles used to draw up financial statements.
The principles cover areas such as preparation of accounts on the
assumption of operational continuity, compliance with accounting periods,
and ensuring the integrity of the information in the financial statements.
It is regularly updated to integrate changes in legislation and regulations
governing the preparation of consolidated accounts in France.
The accounting procedures manual also gives a precise description of the
principles used by the Group for accounting entries, and evaluation and
presentation of the main items in the financial statements:
a descriptions of constituent items of the consolidated income statement
with their definitions, as well as consistency tests for the purpose of
taxation;
a rules governing balance sheet and off-balance sheet items and their
presentation;
a regulations concerning the valuation of certain estimated items, such as:
a provisions for the depreciation of receivables,
a provisions for the depreciation of stocks of raw materials and finished
products,
2
a other provisions for risks and charges and in particular, provisions for
restructuring;
2
a accounting principles applied to reporting intra-Group transactions.
Prior to each consolidation period, the Group Consolidation Department
issues a reminder of the reporting deadline and indicates any newly
applicable changes in standards, rules and principles.
On receiving the sets of accounts for consolidation, the Group Consolidation
Department conducts the usual verifications before carrying out the actual
consolidation. This review of the accounts submitted is an opportunity to
verify the evaluation and accounting methods used for large, unusual or
exceptional transactions.
To ensure the integrity of the financial data received from the subsidiaries,
the Group Consolidation Department refers to the covering letter sent in by
the management of each subsidiary (whether or not consolidated), at the
time of closure of the half-yearly and annual accounts. In this covering letter,
the official representative and the finance director of the entity concerned
jointly certify the compliance of the financial statements with the Group’s
accounting rules and principles, the effectiveness of the internal control
procedures used to process and draw up the financial statements and the
absence of irregularities involving personnel or management. In addition,
they comment on any significant events occurring during the accounting
period under review and describe all elements which, in themselves or in their
overall effect, influence the comprehension and evaluation of the financial
statements of the entity concerned.
FINANCIAL COMMUNICATION
The Group’s financial statements, accounts and notes to the accounts are
drawn up on the basis of the final data processed by the consolidation
software. These are then integrated into the annual or half-year reports.
The texts of all the Group’s financial publications (annual and half-year
reports, letters to shareholders, shareholder guide, etc.), are drawn up
by reference to information gathered throughout the year and specific
interviews conducted at least twice a year (or more frequently as dictated
by current concerns or special issues) with the senior management of the
SBAs, Continental Structures and Corporate Support Functions. They are
validated by the latter and by the Group Executive Committee.
GROUPE SEB
55
2
2
To the Shareholders,
In our capacity as Statutory auditors of SEB SA and in accordance with Article L. 225-235 of the French Commercial Code (Code de Commerce), we hereby
report to you on the report prepared by the Chairman of your Company in accordance with Article L. 225-37 of the French Commercial Code for the year
ended 31 December 2009.
It is the Chairman’s responsibility to prepare and submit to the Board of Directors for approval, a report on the internal control and risk management procedures
implemented by the Company and which contains all other disclosures required by Article L. 225-37 of the French Commercial Code, particularly in terms
of corporate governance.
It is our responsibility to:
a report to you on the information contained in the Chairman’s report in respect of the internal control procedures relating to the preparation and processing
of accounting and financial information; and to
a attest that this report contains the other disclosures required by Article L. 225-37 of the French Commercial Code, it being specified that we are not
responsible for verifying the fairness of these disclosures.
We conducted our work in accordance with professional standards applicable in France.
INFORMATION ON THE INTERNAL CONTROL PROCEDURES RELATING TO THE PREPARATION AND
PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION
Professional standards require that we perform the necessary procedures to assess the fairness of the information provided in the Chairman’s report in
respect of the internal control and risk management procedures relating to the preparation and processing of accounting and financial information. These
procedures mainly consisted in:
a examination of the internal control procedures concerning the preparation and processing of accounting and financial information on which the information
presented in the Chairman’s report is based, along with the existing documentation;
a examination of the work involved in the preparation of this information and the existing documentation;
a determining whether any significant weaknesses in the internal control procedures relating to the preparation and processing of accounting and financial
information that we noted in the course of our engagement are properly disclosed in the Chairman’s report.
On the basis of our work, we have nothing to report on the information in respect of the Company’s internal control procedures relating to the preparation
and processing of accounting and financial information provided in the report prepared by the Chairman of the Board of Directors in accordance with Article
L. 225-37 of the French Commercial Code.
OTHER DISCLOSURES
We hereby attest that the report of the Chairman of the Board includes all other disclosures required by Article L. 225-37 of the French Commercial Code.
Lyon and Villeurbanne, 26 March 2010
The Statutory auditors
PricewaterhouseCoopers Audit
Deloitte & Associés
Bernard RASCLE
Dominique VALETTE
This is a free translation into English of the Statutory auditors’ report issued in French prepared in accordance with Article L. 225-235 of the French Commercial
Code on the report prepared by the Chairman of the Board of Directors of SEB SA on the internal control procedures relating to the preparation and processing
of accounting and financial information issued in French and is provided solely for the convenience of English speaking users.
This report should be read in conjunction with, and construed in accordance with, French law and the relevant professional standards applicable in France
56
GROUPE SEB
Statutory auditors
2
Statutory auditors
2
Titular statutory auditors
a PricewaterhouseCoopers Audit, 63 rue de Villiers,
a Deloitte & Associés, 185 avenue Charles de Gaulle,
92200 Neuilly-sur-Seine, France.
92200 Neuilly-sur Seine, France.
appointed at the ordinary AGM of 13 May 2009,
appointed at the ordinary AGM of 13 May 2009,
represented by Bernard Rascle
represented by Dominique Valette
Term: Ordinary AGM of 2015.
Each of these Statutory auditors is a member of the Compagnie Régionale des Commissaires aux Comptes de Versailles.
Substitute statutory auditors
a For PricewaterhouseCoopers Audit:
a For Deloitte & Associés
Pierre Coll, 63 rue de Villiers, 92200 Neuilly-sur-Seine, France.
BEAS - 7/9 Villa Houssaye, 92200 Neuilly-sur-Seine, France.
appointed at the ordinary AGM of 13 May 2009.
appointed at the ordinary AGM of 13 May 2009.
GROUPE SEB
57
2
Statutory auditors
Fees paid to statutory auditors
The breakdown of fees paid to Statutory auditors and members of their networks is as follows:
2
Audit
Amount (Ex. VAT)
(In € thousand)
As a %
2009
2008
SEB S.A., issuer coordination
and consolidation
153
Fully integrated subsidiaries
2009
Amount (Ex. VAT)
2008
As a %
2009
2008
2009
2008
140
106
101
1,085
1,157
1,397
1,134
1,238
1,297
1,503
1,235
95%
99%
64
96
35
5
97
14
3
2
161
110
12%
8%
74
7
5%
1%
1,399
1,407
100%
100%
1,577
1,242
100%
100%
AUDIT
Audit and certification
of parent company and
consolidated accounts
Other procedures and services
directly relating to audit
assignment
SEB S.A., issuer coordination
and consolidation
Fully integrated subsidiaries
SUB-TOTAL
88%
92%
OTHER SERVICES PERFORMED
BY THE NETWORKS FOR FULLY
INTEGRATED SUBSIDIARIES
Legal, fiscal, corporate
Information systems
Others
SUB-TOTAL
TOTAL
58
GROUPE SEB
CONSOLIDATED FINANCIAL
STATEMENTS
FINANCIAL SUMMARY
CONSOLIDATED RATIOS
60
61
FINANCIAL STATEMENTS
62
Consolidated income statements
Statement of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in equity
62
62
63
64
65
NOTES TO THE CONSOLIDATED
67
Years ended 31 December, in millions of euros
67
3
3
STATUTORY AUDITORS’ REPORT
ON THE CONSOLIDATED
FINANCIAL STATEMENTS 125
Opinion on the consolidated financial statements
Justification of our assessments
Specific verification
125
125
126
GROUPE SEB
59
3
CONSOLIDATED FINANCIAL STATEMENTS
Financial summary
Financial summary
(in € millions)
3
2009
2005
2008 2007 (i) 2006 (i) IFRS (c) (i)
2004
IFRS (b) 2004 (b)
2003 2002 (a)
2001
2000
RESULTS
Sales in France
685
668
640
595
591
624
636
660
660
527
485
Sales outside France
2,491
2,562
2,230
2,057
1,872
1,665
1,703
1,688
1,836
1,328
1,340
Total sales
3,176
3,230
2,870
2,652
2,463
2,289
2,339
2,348
2,496
1,855
1,825
Operating margin
355
342
301
262
262
261
248
234
217
175
153
Operating profit
248
279
237
153
183
187
175
196
143
119
132
Profit attributable to equity holders of the parent
146
152
145
87
102
131
123
148
118
74
51
Depreciation, amortisation and impairment losses
124
110
88
97
114
85
91
86
95
83
87
Employee benefits expense (d)
549
563
540
534
516
499
506
514
536
424
425
Discretionary and non-discretionary profit sharing
and matching contributions to employee savings
plans
33
38
33
26
29
34
34
36
51
29
20
EBITDA (e)
372
388
329
247
291
270
259
278
230
196
211
Adjusted EBITDA (h)
416
394
351
324
323
310
296
279
252
222
211
1,169
992
814
770
757
644
642
557
471
464
437
BALANCE SHEET (AT 31 DECEMBER)
Equity attributable to equity holders of the parent
Net debt
Non-current assets
243
649
658
422
423
331
331
189
327
404
393
1,163
1,184
1,060
766
773
679
624
476
481
535
509
Investments
109
116
92
85
99
99
87
99
85
81
72
Inventory
466
615
528
517
450
386
387
359
415
352
317
Trade receivables
627
646
627
646
630
552
552
544
580
471
466
20,663
18,879
13,048
13,741
14,396
14,500
14,500
14,690
15,780
13,939
12,474
Total number of shares outstanding (in thousands)
49,952
50,912
50,881
51,057 50,940
51,228
51,228
46,347
46,317
46,320
46,320
Weighted average number of shares, excluding
treasury stock (in thousands)
46,477
47,326 48,620
Number of employees at 31 December
PER SHARE DATA (IN €) (j)
48,610 48,888 48,468 48,468
48,369 48,306
48,276 48,828
Adjusted diluted earnings per share (g)
3.13
3.18
2.92
1.78
2.07
2.67
2.52
3.02
2.42
1.53
1.16
Dividend per share 1.04
0.94
0.93
0.85
0.80
0.80
0.80
0.76
0.65
0.61
0.58
Dividend yield per share (in %) (f) (g)
2.62
4.38
2.26
2.37
2.61
3.04
3.04
2.52
2.56
3.19
3.28
Share price: High (g)
40.53
44.00
48.15
38.07
30.88
35.73
35.73
32.12
29.11
20.85
27.88
Low (g)
16.44
19.71
35.33
26.70
26.10
24.45
24.45
20.92
18.48
11.85
16.67
Share price at 31 December
39.70
21.46
41.33
35.87
30.67
26.30
26.30
30.00
25.64
18.98
17.56
Stock market capitalisation (in € millions)
1,983
1,093
2,103
1,831
1,562
1,347
1,347
1,529
1,306
967
895
88,830 117,527 127,638
75,681
63,243
87,183
87,183 85,608
74,664
65,547
75,708
(g)
Average daily trading volume (number of shares)
(a)
(b)
(c)
(d)
(e)
Including the new Moulinex subsidiaries since 1 January 2002.
Including All-Clad since 28 July 2004.
Including Lagostina since 1 May 2005 and Panex since 1 June 2005.
Excluding discretionary and non-discretionary profit sharing and matchin.
Earnings before interest, taxes, depreciation and amortisation (including amortisation and impairment of trademarks and goodwill, and depreciation, amortisation and impairment
losses reported under “Other operating income and expense”).
(f) Dividend for the year expressed as a percentage of the closing share price at the year-end.
(g) Adjusted for the March 2004 1-for-10 bonus share issue.
(h) Earnings before interest, taxes, depreciation and amortisation (excluding depreciation, amortisation and impairment losses reported under “Other operating income and expense”).
(i) Adjustments made to the reported balance sheet and income statement in order to present restated information for 2005, 2006 and 2007 are described in Note 2.
(j) Adjusted for the three-for-one stock-split.
60
GROUPE SEB
3
Consolidated ratios
Consolidated ratios
(in %)
2009
2008
2007
2006 (d)
2005 (c)
2004
IFRS (b)
2004
2003
2002 (a)
2001
2000
1999
15.69
18.85
17.71
10.88
14.83
21.90
20.60
29.33
23.66
15.79
10.87
6.83
4.59
4.69
5.04
3.28
4.13
5.72
5.26
6.33
4.71
3.99
2.81
2.04
3
PROFITABILITY RATIOS
Return on equity
Net margin
FINANCIAL RATIOS
Net debt/equity ratio
22.52
71.64
76.12
51.70
52.85
48.14
48.28
31.64
64.65
81.43
83.86
80.63
Finance costs, net/Revenue
0.86
1.50
1.21
1.15
1.02
0.54
0.33
0.33
0.37
1.11
1.52
0.92
Net debt/Adjusted EBITDA
0.59
1.65
1.87
1.30
1.31
1.07
1.11
0.68
1.30
1.83
1.87
2.11
3.44
3.60
3.20
3.21
4.03
4.33
3.71
4.20
3.40
4.37
3.95
4.59
99.60
70.38
59.22
73.53
78.79
69.08
79.61
89.30
77.20
73.30
71.21
72.13
INVESTMENT RATIOS (e)
Investments/Revenue
CASH RATIOS
Realisable and liquid assets/
short-term debt
(a)
(b)
(c)
(b)
(e)
Including the new Moulinex subsidiaries.
Including All-Clad since 28 July 2004.
Including Lagostina since 1 May 2005 and Panex since 1 June 2005.
Including Mirro WearEver since 16 August 2006.
Excluding purchases of property, plant and equipment and software.
GROUPE SEB
61
3
Consolidated income statement
3
Year ended 31 December
(in € millions)
2009
Revenue (Note 4)
2008
2007
restated (a)
3,176.3
3,230.2
2,869.6
(2,820.9)
(2,888.5)
(2,568.5)
355.4
341.7
301.1
Discretionary and non-discretionary profit sharing (Note 6)
(33.5)
(38.2)
(33.3)
RECURRING OPERATING PROFIT
321.9
303.5
267.8
Operating expenses (Note 5)
OPERATING MARGIN
Other operating income and expense (Note 7)
(73.8)
(24.3)
(30.4)
OPERATING PROFIT
248.1
279.2
237.4
Finance costs (Note 8)
(22.6)
(37.9)
(32.3)
(4.6)
(10.7)
(2.6)
0.0
(1.3)
2.9
PROFIT BEFORE TAX
220.9
229.3
205.4
Income tax expense (Note 9)
(58.1)
(66.5)
(60.9)
PROFIT FOR THE PERIOD
162.8
162.8
144.5
Minority interets (Note 21)
(16.8)
(11.2)
0.0
PROFIT ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT
146.0
151.6
144.5
Basic earnings per share (Note 10)
3.14
3.20
2.97
Diluted earnings per share (Note 10)
3.13
3.18
2.92
Other financial income and expense (Note 8)
Share of profits (losses) of associates (Note 31)
EARNINGS PER SHARE (IN €)
(a) Adjustments made to the reported income statement in order to present restated data for 2007, with a positive impact of €1.6 million, are described in Note 2.
The accompanying Notes 1 to 33 are an integral part of these consolidated financial statements.
Statement of comprehensive income
(in € millions)
2009
2008
2007
restated
Profit for the period
162.8
162.8
144.5
8.2
23.9
(5.0)
41.7
(35.3)
(13.2)
Exchange differences on translating foreign operations
Gains (losses) on cash flow hedges
Other comprehensive income
62
49.9
(11.4)
(18.2)
COMPREHENSIVE INCOME
212.7
151.4
126.3
Minority interets
(12.0)
(25.8)
COMPREHENSIVE INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
200.7
125.6
GROUPE SEB
126.3
3
Consolidated balance sheet
At 31 December
Assets
2008
2007
restated (a)
(in € millions)
2009
Goodwill (Note 11)
386.6
419.8
111.1
Other intangible assets (Note 11)
372.2
368.9
261.1
Property, plant and equipment (Note 12)
391.4
381.2
328.9
0.1
342.7
Other investments (Note 14)
0.5
0.7
0.8
Other non-current financial assets (Note 14)
7.2
9.9
9.5
38.1
48.2
24.9
Other non-current assets (Note 18)
5.0
2.9
6.2
Non-current derivative instruments - assets (Note 26)
0.0
0.3
Investments in associates (Note 14)
Deferred tax assets (Note 9)
NON-CURRENT ASSETS
1,201.0
1,232.0
1,085.2
Inventories (Note 16)
466.3
614.6
528.2
Trade receivables (Note 17)
627.1
645.6
627.2
Other receivables (Note 18)
48.1
54.9
53.7
Current tax assets
15.1
38.8
11.4
5.2
11.7
4.1
307.8
224.6
134.0
CURRENT ASSETS
1,469.6
1,590.1
1,358.6
TOTAL ASSETS
2,670.6
2,822.1
2,443.8
2009
2008
2007
restated (a)
Current derivative instruments - assets (Note 26)
Cash and cash equivalents (Note 19)
Equity and liabilities
(in € millions)
Share capital (Note 20)
50.0
50.9
50.9
1,140.1
1,005.7
921.7
Treasury stock (Note 20)
(108.8)
(150.7)
(108.6)
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
1,081.3
905.9
864.0
138.8
131.6
-
1,220.1
1,037.5
864.0
Reserves and retained earnings (Note 20)
MINORITY INTERESTS (NOTE 21)
EQUITY
Deferred tax liabilities (Note 9)
55.3
91.8
37.1
Long-term provisions (Note 22)
111.3
102.3
109.2
Long-term borrowings (Note 25)
301.1
213.5
65.9
23.7
17.9
15.3
2.7
21.5
494.1
447.0
86.9
77.2
85.8
Trade payables (Note 24)
398.0
366.3
333.4
Other current liabilities (Note 24)
176.7
Other non-current liabilities (Note 24)
Non-current derivative instruments - liabilities (Note 26)
NON-CURRENT LIABILITIES
Short-term provisions (Note 22)
227.5
195.7
177.3
Current tax liabilities
18.0
25.6
16.7
Current derivative instruments - liabilities (Note 26)
11.1
29.7
10.4
Short-term borrowings (Note 25)
246.7
661.5
729.3
CURRENT LIABILITIES
956.4
1,337.6
1,352.3
2,670.6
2,822.1
2,443.8
TOTAL EQUITY AND LIABILITIES
3
(a) The 2007 balance sheet has been adjusted (as explained in Note 2) compared with that published previously. The adjustments had the effect of increasing consolidated equity
by €1.6 million, which is not material.
The accompanying Notes 1 to 33 are an integral part of these consolidated financial statements.
GROUPE SEB
63
3
Consolidated cash flow statement
Year ended 31 December
3
(in € millions)
2009
2008
2007
Restated (a)
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
146.0
151.6
144.5
Depreciation/amortisation and impairment losses (Notes 11 and 12)
123.6
110.3
88.3
17.6
(22.5)
(24.5)
Unrealised gains and losses on financial instruments (Note 26)
7.1
1.8
(5.5)
Income and expenses related to stock options (Note 20.2)
6.0
7.2
4.4
Gains and losses on disposals of assets
0.4
0.7
2.1
Other
0.1
2.9
(2.4)
16.8
11.2
-
Current and deferred taxes (Note 9)
58.1
66.5
60.9
Finance costs, net (Note 8)
22.6
37.9
32.3
CASH FLOW (b)
398.3
367.6
300.1
Change in inventories (Note 16)
155.9
(66.8)
(22.2)
Change in trade receivables (Note 17)
31.3
(24.3)
16.9
Change in trade payables (Note 24)
28.1
0.6
(6.8)
Change in provisions (Note 22)
Minority interets (Note 21)
Change in other receivables and payables (Notes 18 and 24)
24.8
(0.3)
34.1
Income taxes paid
(58.3)
(76.7)
(61.8)
Interest paid and received, net
(22.5)
(35.6)
(32.8)
NET CASH FROM OPERATING ACTIVITIES
557.6
164.5
227.5
6.5
8.6
4.8
Purchases of property, plant and equipment (Note 12)
(92.2)
(96.0)
(76.3)
Purchases of software and other intangible assets (Note 11)
(17.0)
(20.3)
(15.5)
Purchases of financial assets (Note 14)
0.4
(2.8)
(4.3)
Acquisitions of subsidiaries, net of the cash acquired (Note 3)
0.0
26.4
(319.7)
Proceeds from disposals of assets (Note 12)
Effects of other changes in scope of consolidation (Note 3)
0.1
(0.8)
0.7
NET CASH USED BY INVESTING ACTIVITIES
(102.2)
(84.9)
(410.4)
Change in long-term borrowings (Note 25)
87.6
146.7
(14.3)
330.0
Change in short-term borrowings (Note 25)
(419.4)
(65.2)
Proceeds from issue of share capital, including minority interets (Note 20)
0.7
4.9
1.9
Change in treasury stock (Note 20.4)
8.8
(43.5)
(40.3)
(50.2)
(46.3)
(43.0)
(372.5)
(3.4)
234.3
Dividends paid, including to minority shareholders
NET CASH FROM/(USED BY) FINANCING ACTIVITIES
Effect of changes in foreign exchange rates
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
0.3
14.4
28.6
83.2
90.6
79.9
Cash and cash equivalents at beginning of period (Note 19)
224.6
134.0
54.1
Cash and cash equivalents at end of period (Note 19)
307.8
224.6
134.0
(a) Restatements of 2007 balance sheet and income statement items compared with the reported figures are presented in Note 2. The amounts involved were not material.
(b) Before interest paid and received and before income taxes paid.
64
GROUPE SEB
3
Consolidated statement of changes in equity
Share
Share premium
capital account
(in € millions)
AT 31 DECEMBER 2006 (a)
51.1
113.3
Profit/(loss) for the period
0.0
0.0
0.1
1.7
Dividends paid
Issue of share capital
704.2
21.2
(73.9)
144.5
Comprehensive income
Equity
Reserves
attributable
and
to equity
retained Translation Treasury holders of
earnings
reserve
stock the parent
815.9
(13.2)
(5.0)
131.3
(5.0)
(0.3)
126.3
AT 31 DECEMBER 2007 (a)
50.9
107.3
0.0
0.0
Dividends paid
1.8
0.0
(42.7)
(42.7)
1.6
1.6
4.4
4.4
(0.3)
(0.3)
798.2
16.2
(108.6)
(35.3)
9.3
116.3
9.3
0.0
864.0
0.0
864.0
151.6
11.2
162.8
(26.0)
14.6
(11.4)
125.6
25.8
151.4
(46.1)
(0.2)
(46.3)
0.6
Changes in treasury stock
(42.1)
Exercise of stock options
Other movements (c)
AT 31 DECEMBER 2008
50.9
107.9
0.6
0.6
0.0
0.0
(42.1)
(42.1)
(1.0)
(1.0)
5.9
5.9
1.3
7.2
(1.0)
(1.0)
104.7
103.7
905.9
131.6
1,037.5
146.0
16.8
162.8
54.7
(4.8)
49.9
200.7
12.0
212.7
(45.4)
(4.8)
(50.2)
872.3
25.5
(150.7)
146.0
0.0
0.0
Dividends paid
41.7
13.0
187.7
13.0
0.0
(45.4)
0.7
Reduction of share capital
(0.9)
(43.0)
0.0
Gains (losses) on sales of treasury stock, after tax
126.3
4.4
(46.1)
(18.2)
0.0
(0.3)
151.6
(34.7)
(29.7)
0.7
0.7
0.0
0.0
11.3
11.3
(2.5)
(2.5)
6.0
6.0
Other movements
4.7
4.7
(0.1)
4.6
138.7
1,220.1
138.7
1,169.1
AT 31 DECEMBER 2009 (NOTE 20)
50.0
78.9
1,022.8
50.0
78.9
971.8
2009 recommended dividend (b)
AT 31 DECEMBER 2009 AFTER APPROPRIATION
41.9
(1.0)
(2.5)
38.5
(108.8)
1,081.4
38.5
(108.8)
1,030.4
(51.0)
3
144.5
1.8
1.6
Other movements
815.9
(43.0)
(7.7)
0.0
(18.2)
0.0
(43.0)
Equity
144.5
Minority
interests
6.0
(51.0)
(51.0)
(a) Adjustments made to reported equity in order to present restated data at 31 December 2006 and 31 December 2007 are described in Note 2.
(b) Including the €2.1 million estimated supplementary dividend for 2009.
(c) “Other movements” for 2008 mainly correspond to minority interests in ZJ Supor, which was fully consolidated as from 1 January 2008.
GROUPE SEB
65
3
CONTENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.1. Basis and scope of consolidation
1.2. Foreign currency translation
1.3. Use of estimates
1.4. Accounting policies and valuation methods
1.5. Income statement presentation
67
68
68
69
69
73
NOTE 2
RESTATED FINANCIAL INFORMATION (2007)
74
NOTE 3
CHANGES IN THE SCOPE OF CONSOLIDATION
3.1. Changes in 2009
75
75
75
76
NOTE 4
SEGMENT INFORMATION
4.1. Geographical segment information (by location of assets)
4.2. Revenue by geographical location of the customer
77
77
80
NOTE 5
OPERATING EXPENSES
80
NOTE 24
TRADE AND OTHER PAYABLES
107
NOTE 6
EMPLOYEE BENEFITS EXPENSE
80
NOTE 25
NOTE 7
OTHER OPERATING INCOME AND EXPENSE
7.1. Restructuring costs
7.2. Impairment losses
7.3. Gains and losses on asset disposals and other
81
81
82
83
BORROWINGS
25.1. Total borrowings
25.2. Net debt
107
107
109
NOTE 26
FINANCE COSTS AND OTHER FINANCIAL INCOME AND
EXPENSE, NET
110
110
112
84
FAIR VALUE OF FINANCIAL INSTRUMENTS
26.1. Financial instruments
26.2. Derivative instruments
26.3 Information on financial assets and liabilities measured at fair
value
NOTE 9
INCOME TAX
9.1. Income tax expense
9.2. Effective tax rate
9.3. Deferred tax assets and liabilities
9.4. Other information
84
84
85
85
86
NOTE 27
MARKET RISK MANAGEMENT
27.1. Risk management
27.2. Market risks
27.3. Liquidity risk
27.4. Credit risk
114
114
114
117
118
NOTE 10
EARNINGS PER SHARE
86
NOTE 28
ENVIRONMENTAL EXPENDITURE
118
NOTE 11
INTANGIBLE ASSETS
87
NOTE 29
NOTE 12
PROPERTY PLANT AND EQUIPMENT
90
OFF-BALANCE SHEET COMMITMENTS
29.1. Specific commitments
29.2. Commitments arising in the ordinary course of business
119
119
119
NOTE 13
LEASES
93
NOTE 30
NOTE 14
INVESTMENTS IN ASSOCIATES, OTHER INVESTMENTS
AND OTHER NON-CURRENT FINANCIAL ASSETS
14.1. Investments
14.2. Other non-current financial assets
94
94
94
CONTINGENT ASSETS AND LIABILITIES
30.1. Contingent assets
30.2. Contingent liabilities
120
120
120
NOTE 31
NOTE 15
PRODUCT DEVELOPMENT COSTS
94
RELATED PARTY TRANSACTIONS
121
31.1. Transactions with associates and non-consolidated companies 121
31.2. Management remuneration and benefits
121
NOTE 16
INVENTORIES
95
NOTE 32
SUBSEQUENT EVENTS
122
NOTE 17
TRADE RECEIVABLES
95
NOTE 33
NOTE 18
OTHER RECEIVABLES
96
LIST OF CONSOLIDATED COMPANIES
33.1. Fully consolidated companies
33.2. Associates
33.3. Non-consolidated companies
122
122
124
124
NOTE 19
CASH AND CASH EQUIVALENTS
96
NOTE 20
EQUITY
97
20.1. Share capital
97
20.2. Stock options and performance shares
97
20.3. Reserves and retained earnings (before appropriation of profit) 99
20.4. Treasury stock
99
3
NOTE 8
66
NOTE 21
MINORITY INTERESTS
100
NOTE 22
PROVISIONS
22.1. Product warranties
22.2. Claims and litigation and other contingencies
22.3. Restructuring provisions
100
101
101
101
NOTE 23
PENSION AND OTHER POST-EMPLOYMENT BENEFIT
OBLIGATIONS
23.1. Assumptions
23.2. Analysis of pension and other post-employment benefit
obligations
23.3. Recognised cost
23.4. Movements in provisions
23.5. Pension and other post-employment benefit obligations
23.6. Analysis of plan assets
23.7. Early retirement schemes
GROUPE SEB
102
102
103
104
104
105
106
106
113
Notes to the consolidated financial statements
3
Years ended 31 December, in millions of euros
SEB S.A. (“the Company”) and its subsidiaries (together “Groupe SEB” or
“the Group”) are a world leader in the design, manufacture and marketing
of cookware and small household appliances such as pressure cookers,
irons and steam generators, kettles, coffeemakers, deep fryers, toasters
and food processors.
3
SEB S.A.’s registered office is at Chemin du Petit Bois, Ecully (69130
Rhône, France). The Company is listed on Eurolist by Euronext Paris (ISIN
FR0000121709).
NOTE 1 I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements were approved for publication by the
Board of Directors on 19 February 2010.
As a company listed in a European Union country and in compliance with
European Commission regulation 1606/2002/EC dated 19 July 2002, the
2009 consolidated financial statements and the 2008 and 2007 comparative
information have been prepared in accordance with the International
Accounting Standards (IASs) and International Financial Reporting
Standards (IFRSs) adopted by the European Union as of 31 December 2009,
including the interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC) and its predecessor, the Standing
Interpretations Committee (SIC). These documents can be downloaded from
the European Commission’s website, http://ec.europa.eu/internal_market/
accounting/ias_en.htm.
New IFRSs applicable in 2009
similar to the geographical segments representing the Group’s primary
segment reporting format under IAS 14. Consequently, adoption of IFRS 8
has not led to any change in the structure of reported segment information
or in the amount of goodwill attributed to each business segment;
a amendment to IFRS 7 – Improvements to Financial Instruments
Disclosures. This amendment requires additional disclosures about the
observable or unobservable nature of inputs used in measuring the fair
value of financial instruments. These disclosures are made in the notes
to the financial statements (Note 26.3.).
Application since 1 January 2009 of the following standards, amendments
to existing standards and interpretations had no impact on the Group’s
financial statements:
a IAS 23 (revised) – Borrowing Costs;
a IFRS 2 (revised) – Share-Based Payments: Vesting Conditions and
The following accounting standards applicable in annual periods beginning
on or after 1 January 2009 only affect the format of the accounting information
included in the financial statements:
a IAS 1 (revised) – Presentation of Financial Statements. This standard
introduces a statement of comprehensive income, showing the change
in equity during a period resulting from transactions and other events,
other than those changes resulting from transactions with owners in their
capacity as owners. The Group decided to present total comprehensive
income through two separate statements, the consolidated income
statement and the statement of comprehensive income;
Cancellations;
a IAS 38 (revised) – Intangible Assets: Advertising and Promotional Activities;
a IFRIC 13 – Customer Loyalty Programmes;
a IFRIC 14 – IAS 19: The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction.
New standards not early adopted
The new standards, interpretations and amendments to existing standards
that are applicable for annual periods beginning on or after 1 January 2010
and were not early adopted in 2009 are as follows:
a IFRS 8 – Operating Segments. This standard, which replaces IAS 14 –
a IFRS 3 (revised) – Business Combinations. The revised standard
Segment Reporting, requires the presentation of segment information
based on the segments used for internal reporting whose operating results
are reviewed regularly by the chief operating decision-maker to make
decisions about resources to be allocated to each segment and assess
their performance. The Group’s operating segments under IFRS 8 are
introduces a number of changes that could have a significant impact on
the recognition of business combinations as of 1 January 2010. These
changes notably include the immediate recording of acquisition costs as
expenses, the option of applying the full goodwill method and the potential
recognition of more intangible assets;
GROUPE SEB
67
3
a IAS 27 (revised) – Consolidated and Separate Financial Statements. Under
the revised standard, in the case of a change in ownership interest that
leads to the loss or acquisition of control, the previously held interest will
be measured at the disposal or acquisition date fair value and the resulting
gain or loss will be recognised in the income statement. Increases and
decreases in ownership interest that do not affect control will be treated
as a redistribution of equity between the Group and minority interests
and no goodwill will arise on any increase and no gain or loss will be
recognized on any decrease. Application of the revised standard could
have a significant impact on the Group’s financial statements in the event
of any partial disposals or buyouts of minority interests in 2010. At present,
IFRS 3R and IAS 27R are not applicable retrospectively to financial periods
prior to 1 January 2010 and the acquisition of control of ZJ Supor in
January 2008 (see Note 2) will remain under the former standard;
3
a amendment to IAS 39 – Financial Instruments: Recognition and
Measurement: Exposures Qualifying for Hedge Accounting. This
amendment describes the circumstances in which hedge accounting is
permitted. It will be applied retrospectively and is not expected to have
a material impact on the consolidated financial statements.
New French tax rules, applicable as of 1 January 2010
Under France’s 2010 Finance Act, passed on December 30, 2009, effective
from 2010 the Taxe Professionnelle business tax is being replaced by the
Cotisation Economique Territoriale (CET), which comprises two parts:
a Cotisation Foncière des Entreprises (CFE) is assessed on the rental value
of the property occupied by the business (currently used to calculate
Taxe Professionnelle).
a Cotisation sur la Valeur Ajoutée des Entreprises (CVAE) is assessed on
the value added or wealth created by the business each year.
Where necessary, the financial statements of subsidiaries are restated to
comply with Group accounting policies.
Material companies over which SEB S.A. exercises significant influence,
directly or indirectly, are accounted for by the equity method.
Certain companies fulfilling the above criteria are accounted for by the equity
method or are not consolidated because they are not material in relation
to the Group as a whole. The materiality criteria applied by the Group are
as follows:
a revenue of at least €10 million;
a total assets of at least €10 million;
a total debt of at least €5 million.
The list of consolidated companies is presented in Note 33.
All material intra-group transactions have been eliminated in consolidation.
1.2.
FOREIGN CURRENCY TRANSLATION
1.2.1. Translation of the financial statements of foreign
operations
The financial statements of foreign entities are prepared in their functional
currency, corresponding to the currency of the primary economic environment
in which the entity operates. The functional currency of most foreign entities
is their local currency.
The financial statements of foreign entities are translated into euros by the
closing rate method, as follows:
a assets and liabilities in a functional currency other than the euro are
Taxe Professionnelle is accounted for under operating expenses. The
Group has concluded that the CET corresponds essentially to a change
in the basis of assessment of French business tax and not to a change
in the tax’s substance, and has therefore decided to apply the same
accounting treatment to the CFE and CVAE as was previously applied to
Taxe Professionnelle.
a the resulting exchange differences are recognised as a separate
1.1.
a non-monetary assets and liabilities (non-current assets, inventories and
BASIS AND SCOPE OF CONSOLIDATION
translated at the closing rate at the balance sheet date and income
statement items are translated at the weighted average rate for the year;
component of equity, under “Translation reserve”.
The financial statements of subsidiaries whose functional currency is not the
local accounting currency are initially translated into the functional currency
using the historical rate method, as follows:
securities) and the corresponding movements recorded in the income
statement are translated at the historical exchange rate;
Material companies that are exclusively controlled by SEB S.A. either directly
or indirectly are fully consolidated.
Identifiable assets and liabilities and contingent liabilities acquired in
business combinations are measured at fair value at the acquisition date.
Minority interests are measured based on their proportionate share of the
fair value of the underlying assets and liabilities.
The profits of subsidiaries acquired or disposed of during the year are
recognised in the consolidated income statement from the acquisition date
or up to the disposal date.
a monetary assets and liabilities (cash, short and long-term loans and
borrowings, operating receivables and payables) are translated at the
closing rate at the balance sheet date;
a income statement items are translated at the weighted average rate for
the year, apart from depreciation, amortisation and impairment losses
on non-monetary items;
a the resulting exchange differences are recognised in the income statement.
These financial statements in the functional currency are then translated
into euros using the closing rate method.
68
GROUPE SEB
In accordance with the option available to first-time adopters under IFRS 1,
Groupe SEB elected to reset to zero at 1 January 2004 the cumulative
translation differences arising on consolidation of foreign entities.
1.2.2. Translation of foreign currency transactions
Foreign currency transactions are recognised and measured in accordance
with IAS 21 – The Effects of Changes in Foreign Exchange Rates.
Transactions in currencies other than the euro are initially recognised at
the exchange rate prevailing on the transaction date. Monetary assets and
liabilities denominated in currencies other than the euro are translated at the
closing exchange rate, and the resulting exchange differences are recognised
in the income statement.
The effect of changes in exchange rates on the fair value of non-monetary
financial assets and liabilities is recognised by the accounting method
applied to the category of financial assets or liabilities concerned.
Monetary financial assets classified as available-for-sale are measured
at amortised cost in the original currency and changes in amortised cost
corresponding to exchange differences are recognised in the income
statement, while other changes are recognised directly in equity.
The Group’s exposure to certain currency risks is hedged using forward
contracts and options (see Note 1.4.4 c) Derivative Instruments).
1.3.
3
The assumptions used – which mainly concern impairment tests on noncurrent assets – and the sensitivity of reported amounts to changes in these
assumptions are presented in the relevant notes to these consolidated
financial statements, in accordance with IAS 36.
Estimates are adjusted following any change in the circumstances on which
they were based or when any new information comes to light. Actual results
may differ from these estimates and assumptions.
3
The main estimates and assumptions used to prepare the consolidated
financial statements concern the measurement of pension and other postemployment benefit obligations (Note 23.1), deferred taxes (Note 1.4.9),
property, plant and equipment (Note 1.4.3), intangible assets (Notes 1.4.1
and 11), investments in associates and other investments, impairment
of current assets (Notes 1.4.5 and 1.4.6), short and long-term provisions
(Notes 1.4.10 and 1.4.11), certain financial instruments (Note 1.4.4 c)
Derivative instruments) and share-based payments (Note 1.4.10).
1.4.
ACCOUNTING POLICIES AND VALUATION
METHODS
The financial statements of Group companies are prepared in accordance
with local generally accepted accounting principles.
They are restated where necessary to comply with Group accounting
policies.
USE OF ESTIMATES
The preparation of consolidated financial statements in accordance with
IFRS requires the use of estimates and assumptions that have an impact
on the reported amounts of assets and liabilities – such as accumulated
depreciation, amortisation and impairment losses – and contingent assets
and liabilities at the balance sheet date and income and expenses for
the year.
All such estimates are made on a going concern basis using the information
available when the financial statements are drawn up. They reflect amounts
and assumptions that management considers relevant and reasonable given
the Group’s operating environment and past experience. In the current
economic environment, short and medium-term forecasting has become
more difficult. The estimates and assumptions used to prepare the 2009
consolidated financial statements reflected the economic and financial
crisis and the financial parameters shaping the market at 31 December.
The immediate effects of the crisis were taken into account, particularly
in measuring assets – such as inventories and trade receivables – and
liabilities. In valuing non-current assets, such as goodwill and trademarks,
the assumption was made that the crisis would last for only a limited period.
The value of these assets was estimated at the year-end based on the
long-term economic outlook and management’s best estimates, taking into
account the reduced visibility of future cash flows.
The notes to the consolidated financial statements include analyses of assets
and liabilities by maturity where disclosure of this information is required
under IFRS. The methods used to measure intangible assets, property, plant
and equipment, inventories and trade receivables are described below.
1.4.1. Intangible assets
A) DEVELOPMENT COSTS
Under IAS 38 – Intangible Assets, research costs are recognised as an
expense and development costs are recognised as an intangible asset when
the Group can demonstrate (IAS 38, paragraph 57):
a its intention to complete the development project;
a that it is probable that the expected future economic benefits attributable
to the asset will flow to the Group;
a its ability to measure reliably the cost of the asset.
Development costs that do not fulfil the above criteria are expensed as
incurred.
In the consolidated financial statements, qualifying development costs
incurred after the advance design phase and before the manufacturing
phase are recognised as intangible assets.
Development costs are amortised on a straight-line basis over three to
five years, corresponding to the same useful life as that applied to specific
tooling.
GROUPE SEB
69
3
B) OTHER INTANGIBLE ASSETS
Software licences and internal software development costs are recognised as
intangible assets when it is probable that they will generate future economic
benefits. They are amortised by the straight-line method over periods ranging
from three to five years. Other software licences and software development
costs are expensed as incurred.
Patents, licences and trademarks with a finite useful life are amortised over
the shorter of the period of legal protection and their expected useful life,
not to exceed fifteen years.
3
The cost of property, plant and equipment includes borrowing costs when
the amounts involved are material.
No items of property, plant or equipment have been revalued.
Trademarks with an indefinite useful life are not amortised but are tested
for impairment.
In accordance with IAS 17 – Leases, finance leases that transfer substantially
all the risks and rewards incidental to ownership of an asset are recognised
in property, plant and equipment for an amount corresponding to the lower
of the fair value of the leased asset and the present value of the minimum
lease payments.
C) GOODWILL
A liability for the same amount is recorded under “Finance lease liabilities”.
Goodwill, corresponding to the excess of the Group’s interest in the net
fair value of identifiable assets, liabilities and contingent liabilities acquired
in a business combination over the cost of the business combination, is
recognised as an asset under “Goodwill”.
In accordance with IFRS 3 – Business Combinations, goodwill is not
amortised but is tested for impairment at least once a year. For impairment
testing purposes, goodwill is allocated to a Cash-Generating Unit (CGU),
defined as the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other assets
or groups of assets.
The method used to test CGUs for impairment is described in Note 1.4.3.
When a CGU is found to be impaired, an impairment loss corresponding
to the difference between the carrying amount of the goodwill and its
recoverable amount is recognised in “Other operating expense”. Impairment
losses on goodwill are not reversible.
Negative goodwill is recognised directly in the income statement for the
period of acquisition.
1.4.2. Property, plant and equipment
Property, plant and equipment are initially recognised at cost and are
depreciated by the straight-line method over their estimated useful lives.
Maintenance and repair costs are expensed as incurred.
The main useful lives are as follows:
a buildings:
10 to 40 years;
a plant and machinery:
a office equipment:
10 years;
3 to 10 years;
a vehicles:
4 to 5 years;
a tooling:
1 to 5 years.
Each significant part of an item of property, plant and equipment with a
useful life that is different from that of the asset to which it belongs is
70
depreciated separately. Useful lives are reviewed at regular intervals and
the effect of any adjustments – corresponding to a change in accounting
estimates – is applied prospectively.
1.4.3. Impairment of long-lived assets
Under IAS 36 – Impairment of Assets, the recoverable amount of property,
plant and equipment and intangible assets must be measured at each
period-end or whenever there is an indication that the asset may be impaired.
Assets with an indefinite life – corresponding in the case of Groupe SEB to
goodwill and trademarks – are tested for impairment at least once a year.
Assets with a finite life are tested whenever events or circumstances indicate
that their carrying amount may not be recovered.
Impairment tests are performed at the level of each Cash-Generating Unit
(CGU). A CGU is defined as the smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash inflows
from other assets or groups of assets. The fair value of CGUs is determined
by the discounted cash flows method. An impairment loss is recognised
for any excess of an asset’s carrying amount over its recoverable amount.
Recoverable amount corresponds to the higher of the asset’s fair value less
costs to sell and its value in use. The impairment loss is allocated to reduce
the carrying amount of goodwill and then rateably to the other assets of the
CGU based on their respective carrying amounts.
The capitalised amount of development projects in progress is also tested
for impairment.
Impairment losses on CGUs and on assets with an indefinite useful life are
recorded in “Other operating expense”.
At Groupe SEB, CGUs correspond to individual production sites, broken
down where appropriate by product family. The assets allocated to
each CGU correspond mainly to tooling and other manufacturing assets
(primarily buildings and machinery). Marketing subsidiaries and integrated
manufacturing and sales entities are each treated as separate CGUs, but
marketing subsidiaries that share resources are combined in a single CGU.
Provisions for impairment of non-financial assets other than goodwill are
reviewed at each annual and interim period-end and adjusted as necessary.
GROUPE SEB
1.4.4. Financial instruments
3
a a cash flow hedge is a hedge of the exposure to variability in cash flows
Financial instruments are accounted for in accordance with IAS 39 – Financial
Instruments: Recognition and Measurement.
Financial assets and liabilities are recognised in the balance sheet when
the Group becomes a party to the contractual provisions of the instrument.
They are initially recognised at cost, corresponding to the fair value of the
consideration paid or received plus external transaction costs that are
directly attributable to the acquisition or issue of the financial asset or
financial liability.
A) FINANCIAL ASSETS
that is attributable to a particular risk associated with a recognised asset
or liability or a highly probable forecast transaction and could affect profit.
The gain or loss arising from remeasurement at fair value of derivative
instruments designated as fair value hedges is recognised in profit, offsetting
all or part of the gain or loss recognised on the hedged item.
In the case of cash flow hedges, the effective portion of the gain or loss
arising from remeasurement of the derivative instrument at fair value is
recognised in equity and the ineffective portion is recognised in profit. The
cumulative gains and losses on cash flow hedges recognised directly in
equity are reclassified into profit when the hedged item affects profit.
Financial assets consist of non-current financial assets, as well as operating
receivables, debt securities and other cash equivalents classified as current
assets.
Hedge accounting is applied when:
Available-for-sale financial assets are assets that are intended to be held
for an indefinite period but which may be sold in response to changes in
market interest rates or liquidity needs. They comprise investments in nonconsolidated companies.
a the hedge is expected to be highly effective and is determined actually
At each period-end, they are measured at fair value and the resulting
unrealised gain or loss is recognised directly in equity. When the assets are
sold or there is objective evidence of impairment, the cumulative gains and
losses previously recognised in equity are reclassified to profit.
Held-to-maturity investments are financial assets with a fixed maturity that
the Group has the positive intention and ability to hold to maturity. They are
measured at amortised cost, determined by the effective interest method.
B) FINANCIAL LIABILITIES
Financial liabilities comprise borrowings and other financing, including bank
overdrafts, and operating liabilities.
Borrowings and other financial liabilities are measured at amortised cost,
determined by the effective interest method.
When interest rate risks on financial liabilities are hedged by swaps qualifying
as cash flow hedges, the swaps are also recognised in the balance sheet at
fair value. The effective portion of changes in their fair value is recognised
directly in equity and the ineffective portion is recognised in profit.
C) DERIVATIVE INSTRUMENTS
Market risks (interest rate, currency and commodity price risks) are hedged,
generally through the use of derivative instruments.
3
a the hedging relationship is formally designated and documented at the
inception of the hedge;
to have been highly effective throughout the financial reporting periods
for which it was designated.
At the inception of each hedge, the hedging relationship is formally
documented, specifying in particular the Group’s risk management objective
and strategy for undertaking the hedge. The initial documentation also
includes details of how the Group will assess the hedging instrument’s
effectiveness. In subsequent periods, the hedging instrument’s actual
effectiveness in offsetting the exposure to changes in the hedged item’s fair
value or cash flows attributable to the hedged risk is also fully documented.
Hedge accounting is discontinued prospectively when the derivative
instrument ceases to be a highly effective hedge or when it expires or is
sold, terminated or exercised.
Changes in the fair value of derivative instruments that do not qualify for
hedge accounting are recognised in profit.
1.4.5. Inventories
Raw materials and goods purchased for resale are measured at purchase
cost, using the weighted average cost method.
Work-in-progress and finished products are measured at cost, including raw
materials and labour and a portion of direct and indirect production costs.
In accordance with IAS 2, inventories are measured at the lower of cost,
determined as explained above, and net realisable value.
In accordance with IAS 32 and IAS 39, derivative instruments are measured
at fair value.
Net realisable value corresponds to the estimated selling price in the ordinary
course of business less the estimated costs of completion and the estimated
costs necessary to make the sale (mainly distribution costs).
The accounting treatment of changes in fair value depends on the future use
of the derivative and the resulting accounting classification.
The carrying amount of inventories does not include any borrowing costs.
Derivative instruments designated as the hedging instrument in a hedging
relationship may be classified as either fair value or cash flow hedges.
a a fair value hedge is a hedge of the exposure to changes in fair value of
a recognised asset or liability or an unrecognised firm commitment that
is attributable to a particular risk and could affect profit;
GROUPE SEB
71
3
1.4.6. Trade receivables
1.4.10.Employee benefits
Trade receivables are measured at the lower of their nominal amount – which
approximates fair value due to their short maturity – and their estimated net
realisable value. Provisions for impairment are determined on the basis of
the age of the receivables, taking into account any identified recovery risks.
A) PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS
1.4.7. Cash and cash equivalents
3
Cash and cash equivalents comprise cash at bank and on hand and shortterm investments in money market instruments. These instruments have
maturities of less than three months; they are readily convertible into known
amounts of cash and are not exposed to any material price risk.
In some countries, the Group is required to pay length-of-service awards to
employees on retirement or pension benefits under formal pension plans.
The Group also pays contributions to government-sponsored pension
schemes in its various host countries. The accounting treatment of these
pension and other post-employment benefit plans depends on the type of
plan, as follows:
Defined contribution plans
Contributions to these plans are recognised as an expense for the period
to which they relate.
Defined benefit plans
1.4.8. Treasury stock
Treasury stock is deducted from equity at cost. Any gains or losses
arising from the purchase, sale, issue or cancellation of treasury stock are
recognised directly in equity without affecting profit.
1.4.9. Income taxes
Income tax expense reported in the income statement corresponds to
current tax for the period and changes in deferred taxes.
In accordance with IAS 12 – Income Taxes, deferred taxes are recognised by
the liability method for temporary differences between the carrying amounts
of assets and liabilities and their tax base. They are determined using tax
rates (and tax laws) that have been enacted or substantively enacted by
the balance sheet date.
Temporary differences include:
a) taxable temporary differences, which are temporary differences that will
result in taxable amounts in determining taxable profit (tax loss) of future
periods when the carrying amount of the asset or liability is recovered or
settled; and
b) deductible temporary differences, which are temporary differences that
will result in amounts that are deductible in determining taxable profit (tax
loss) of future periods when the carrying amount of the asset or liability
is recovered or settled.
Deferred tax assets are recognised for deductible temporary differences and
tax loss carryforwards to the extent that it is probable that future taxable
profits will be available against which they can be utilised, generally within
five years.
In accordance with IAS 12, deferred tax assets and liabilities are not
discounted.
In accordance with IAS 19 – Employee Benefits, obligations under defined
benefit plans are calculated annually by qualified actuaries using the
projected unit credit method based on final salaries. The projected unit
credit method sees each period of service as giving rise to an additional
unit of benefit entitlement and measures each unit separately to build up the
final obligation, which is then discounted. The actuarial assumptions used
to calculate the obligation include staff turnover rates, mortality rates, the
discount rate and the expected retirement age.
The assumptions vary according to local laws and regulations in the host
countries concerned.
Actuarial gains and losses arising from the effects of changes in actuarial
assumptions and experience adjustments on plan obligations and assets are
recognised in profit by the corridor method. Under this method, the portion
of the net cumulative unrecognised actuarial gains and losses that exceeds
the greater of 10% of the present value of the defined benefit obligation and
10% of the fair value of any plan assets at that date is amortised over the
remaining service lives of the employees concerned.
A provision is recorded in the balance sheet for any unfunded obligations,
corresponding to defined benefit obligations not covered by plan assets,
net of unrecognised gains and losses.
For plans that have a surplus – corresponding to the excess of plan assets
over the defined benefit obligation – an asset is recognised only when the
criteria specified in IAS 19 are fulfilled.
B) OTHER LONG-TERM BENEFIT PLANS
Certain subsidiaries pay jubilees to employees who have completed a certain
number of years’ service or offer employees “time savings accounts”. The
cost of these long-term benefits is calculated on an actuarial basis and
recognised in profit over the service lives of the employees concerned.
Actuarial gains and losses are recognised immediately in profit during
the period in which they are generated, as their deferral is not allowed
under IFRS.
Pension and other post-employment benefit costs are classified as operating
expenses, except for the interest cost, which is included in other financial
income and expense in accordance with the alternative treatment allowed
under IAS 19.
72
GROUPE SEB
In accordance with IFRS 1 – First-Time Adoption of IFRS, cumulative
actuarial gains and losses at 1 January 2004 were included in provisions
for pensions and other post-employment benefit obligations at that date by
adjusting equity. Groupe SEB has elected not to use the option available
in the amended version of IAS 19 whereby entities may recognise actuarial
gains and losses under defined benefit pension plans directly in equity as
from 1 January 2006.
C) SHARE-BASED PAYMENTS
Stock option plans are measured and recognised in accordance with IFRS 2
– Share-Based Payment. Stock options represent a benefit for the grantee
and, accordingly, are treated as part of the Group’s compensation costs.
Option grants are not cash-settled, and the benefit is therefore recognised
as an expense over the vesting period by adjusting equity, for an amount
corresponding to the fair value of the underlying equity instruments. Stock
options granted to employees of Group subsidiaries that are exercisable for
SEB S.A. shares are deemed to be equity-settled share-based payments.
Fair values are determined using the Black & Scholes option pricing model.
This model takes into account the option exercise price and period, market
data at the grant date (risk-free interest rate, share price, volatility, expected
dividends) and grantee behaviour assumptions.
IFRS 2 has been applied only to stock options granted after 7 November
2002 that had not yet vested at 1 January 2005. As allowed under IFRS 1,
options granted prior to 7 November 2002 have not been restated.
3
valid expectation in those affected that it will carry out the restructuring by
starting to implement that plan or announcing its main features and no inflow
of economic benefits is expected that would offset the costs of the plan.
The amount of the related provision corresponds to forecast cash outflows
under the plan.
1.4.12. Off-balance sheet commitments
3
For several years now, the Group’s reporting system has included detailed
reporting of off-balance sheet commitments. The process provides for the
reporting by consolidated subsidiaries, in their consolidation packages, of
information about the following commitments that they have given:
a guarantees, endorsements and bonds;
a security interests (mortgages and pledges);
a commitments under non-cancellable operating leases and firm orders
for fixed assets;
a other commitments.
1.4.13. Changes in minority interests
The Group has elected to recognise changes in minority interests as follows:
a when additional minority interests are acquired, the excess of the
purchase price over the Group’s additional share of the fair value of the
net identifiable assets of the entity is allocated to goodwill;
1.4.11. Provisions
a previously acquired assets and liabilities are not remeasured at fair value
In accordance with IAS 37 – Provisions, Contingent Liabilities and Contingent
Assets, a provision is 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 a reliable estimate can be made of the amount of the
obligation.
a transactions that lead to a reduction in the Group’s interest – but not to
at the acquisition date;
A) PROVISIONS FOR WARRANTY COSTS
The Group provides a warranty on its products. The estimated costs of the
warranty are accrued at the time of sale, based on historical data.
a loss of control – are treated as a sale of minority interests of which the
resulting gain or loss is recognised in the income statement.
Under the revised version of IFRS 3 – Business Combinations applicable
for annual periods beginning on or after 1 January 2010 on a prospective
basis, changes in minority interests that do not result in a change of control
of the acquired entity will be recognised in equity, thereby eliminating the
possibility of recognising additional goodwill.
This item also includes provisions for product recalls, which are set up when
the recall is decided.
1.5.
B) PROVISIONS FOR CLAIMS AND LITIGATION
1.5.1. Revenue
As a general principle, all known claims and litigation involving the Group
are reviewed by management at each period-end. All necessary provisions
have been recorded to cover the related risks, as estimated after obtaining
advice from outside legal advisors.
Revenue corresponds to the value, excluding tax, of goods and services
sold by consolidated companies in the course of their ordinary activities,
after eliminating intra-group sales.
C) RESTRUCTURING PROVISIONS
The Group is considered as having a constructive obligation when
management has a detailed formal plan for the restructuring, has raised a
INCOME STATEMENT PRESENTATION
Revenue is recognised when the significant risks and rewards of ownership
are transferred to the buyer – generally when the customer receives a product
– for an amount corresponding to the fair value of the consideration received
or receivable as determined after deducting rebates and discounts.
GROUPE SEB
73
3
3
Advertising expense contributions billed by customers and the cost of
consumer promotions that do not fulfil the criteria for recognition as operating
expenses are recognised as a deduction from revenue. The reported amount
of revenue also includes miscellaneous revenues.
are unusual in terms of their amount. Non-recurring operating income and
expenses mainly include the following items (see Note 7 for details of the
main items):
Freight and other costs billed to customers are treated as an integral part
of revenue.
a impairment losses on property, plant and equipment and intangible assets,
Accruals are booked for deferred rebates granted to customers on the basis
of contractual or constructive commitments identified at the period-end.
a gains and losses on very exceptional events (litigation, asset disposals,
1.5.2. Operating margin and operating expenses
The Group’s main performance indicator is operating margin, which
corresponds to revenue less operating expenses. Operating expenses
comprise the cost of sales, research and development costs, advertising
costs and distribution and administrative expenses. Statutory and
discretionary employee profit-sharing and non-recurring operating income
and expenses, as defined in Note 1.5.4, are excluded from the calculation.
a costs of significant restructuring plans;
including goodwill;
etc. involving unusually large amounts) and changes in provisions booked
for these types of events.
1.5.5. Other income statement items
Accrued interest on interest-bearing instruments is recognised by the
effective interest method based on the purchase price.
Dividend income is recognised when the shareholder’s right to receive
payment is established.
Finance costs are recognised in the income statement on an accruals basis.
1.5.3. Recurring operating profit
Recurring operating profit corresponds to operating margin less statutory
and discretionary employee profit sharing.
1.5.4. Operating profit
Operating profit comprises all the recurring and non-recurring income and
expenses generated in the course of the Group’s ordinary activities, including
income and expenses resulting from one-off decisions or transactions that
1.5.6. Earnings per share
Basic earnings per share correspond to profit attributable to equity holders
of the parent divided by the weighted average number of shares outstanding
during the period, excluding treasury stock.
Diluted earnings per share are calculated by adjusting the weighted average
number of shares outstanding to take into account the dilutive effect of stock
options and other equity instruments issued by the Company.
NOTE 2 I RESTATED FINANCIAL INFORMATION (2007)
Under IFRS, reported prior-period data must be restated for:
a corrections of accounting errors.
a operations meeting the criteria in IFRS 5 – Non-current Assets Held for
As a result, certain financial information relating to 2007 has been restated.
These adjustments, described below, were already included in the
comparative data published in the 2008 Registration Document.
Sale and Discontinued Operations;
a business combinations (recognition of the definitive fair value of assets
acquired and liabilities and contingent liabilities assumed when such fair
value was determined on a provisional basis at the previous balance
sheet date);
Goodwill arising on the acquisition of shares in Supor was accounted for
provisionally at 31 December 2007. During 2008, further analyses were
carried out to identify and value the acquired intangible assets.
a changes in accounting methods (subject to any transitional provisions to
the contrary applicable on first-time adoption of new standards);
74
GROUPE SEB
3
These analyses led to an adjustment to the share of Supor’s profit accounted for by the equity method in 2007, with the following impact on opening
consolidated equity:
(in € millions)
Reported
EQUITY AT 1 JANUARY 2007
Income and expenses recognised directly in equity
Business combinations
and other
Restated
815.9
815.9
(7.2)
(7.2)
142.8
Other movements
(89.1)
EQUITY AT 31 DECEMBER 2007
862.4
1.6
3
144.4
(89.1)
1.6
864.0
NOTE 3 I CHANGES IN THE SCOPE OF CONSOLIDATION
3.1.
CHANGES IN 2009
a on 21 December 2007, following a public tender offer for part of the
No subsidiaries were acquired or divested in 2009. The only change in
the scope of consolidation concerned Groupe SEB Retailing, which was
accounted for by the equity method in 2008 and fully consolidated from
1 January 2009. This change in consolidation method did not have a material
impact on the financial statements.
3.2.
remaining shares launched in November, SEB acquired a further 22.74%
of the capital and voting rights for €228.8 million.
For the preparation of the 2007 consolidated financial statements, the
Group considered that it exercised significant influence over ZJ Supor from
1 September 2007. ZJ Supor was therefore accounted for by the equity
method in the last four months of 2007, based on the Group’s 30% interest.
In January 2008, Groupe SEB acquired control of ZJ Supor following a
General Meeting at which the company’s shareholders elected the five
directors nominated by Groupe SEB (four Groupe SEB executives and one
independent director) to the nine-member Board of Directors, thereby giving
Groupe SEB the majority. ZJ Supor and its subsidiaries have therefore been
fully consolidated from 1 January 2008.
CHANGES IN 2008
3.2.1. Supor
DESCRIPTION OF THE COMPANY
Supor is China’s leading cookware manufacturer, with a very broad
product range that includes pressure cookers, woks and frying pans. It
also manufactures small home equipment, such as rice cookers, electric
pressure cookers, slow-cookers and induction hotplates, which are sold
mainly under the Supor brand. Supor employs roughly 6,600 people, of
whom 80% are production workers based at the company’s four plants in
mainland China, in Yuhan, Wuhan, Hangzhou and Dongguan. A significant
portion of its revenue is generated internationally through sub-contracting
agreements with major small household equipment manufacturers, including
Groupe SEB.
The following table analyses the fair value of the assets acquired and
liabilities assumed and provides a reconciliation with the corresponding
cash flows:
(in € millions)
1 January 2008
Non-current assets (a)
153.3
Inventories
38.5
Trade and other receivables
31.9
Net cash and cash equivalents
73.2
Supor reported revenue of €351 million in 2008 and €281 million in 2007.
Trade and other payables
(32.5)
Supor’s contribution to consolidated operating margin was €30 million
in 2008.
Other liabilities (including deferred taxes)
(36.8)
Minority interests
(16.6)
Acquisition of control of Supor on 1 January 2008
TOTAL NET ASSETS
211.0
Groupe SEB acquired 52.74% of the capital of Supor in two stages:
PERCENT INTEREST
52.74%
a on 28 August 2007, SEB acquired 30% of the voting rights in the
group’s parent company Zhejiang Supor Co. Ltd. (ZJ Supor), listed on
the Shenzhen stock exchange under code 002032.SZ, at a total cost of
€115.8 million;
NET ASSETS ACQUIRED
111.3
COST OF THE BUSINESS COMBINATION
344.6
Goodwill
233.3
(a) Including the Supor brand, valued by independent experts at €75.1 million.
GROUPE SEB
75
3
Goodwill corresponds mainly to market shares and projected synergies,
particularly in terms of manufacturing, supply chain operations and product
development that cannot be separately identified.
Acquisition of minority interests in certain ZJ Supor subsidiaries
During the second quarter of 2008, Groupe SEB acquired Hong Kong-based
Grain Harvest Development Ltd, which holds significant stakes in three ZJ
Supor subsidiaries, as follows:
3
a 25% of Wuhan Supor Cookware;
a 30% of Dongguan Supor Electrical Appliances.
This transaction, which enabled the Group to increase its share of ZJ
Supor’s profit, was accounted for based on the three companies’ fair
values at 31 March 2008, leading to the recognition of additional goodwill
of €35.7 million.
Exercise of stock options by certain Supor Group executives
Prior to the acquisition, certain Supor Group senior executives were granted
options to purchase new ZJ Supor shares that were exercisable upon the
change of control of Supor. Following administrative processing by the
Chinese authorities, the options were exercised at the end of June 2008
for a total of 12 million Supor shares, lowering Groupe SEB’s share in the
company to 51.31%.
All the options were exercised, and there are no remaining stock options
likely to have a dilutive impact on Groupe SEB’s stake in ZJ Supor.
3.1.2. Other changes
Two newly-created subsidiaries, Groupe SEB Bulgaria and Groupe SEB
Baltic, were fully consolidated from 1 January 2008. Both companies are
wholly owned by Groupe SEB. Their consolidation did not have a material
impact on the consolidated financial statements.
3.3.
CHANGES IN 2007
3.3.1. Supor
a 25% of Zhejiang Supor Electrical Appliances;
76
Groupe SEB Retailing (France) was accounted for by the equity method for
the first time in 2008, leading to the recognition in the income statement
for the period, under “Share of profits/(losses) of associates”, of a negative
amount of €1.2 million corresponding to the cumulative losses generated
by the company since its formation.
As explained in Note 3.2.1, the purchase of the initial 30% stake gave Groupe
SEB significant influence over ZJ Supor’s operating and financial policies
as from 1 September 2007. Consequently, in compliance with IAS 28 and
IFRS 3, ZJ Supor was accounted for by the equity method as from that
date. The purchase of the additional 22.74% in December 2007, although
it gave Groupe SEB a majority interest in the capital and voting rights of
ZJ Supor, did not result in exclusive control over the company in 2007. At
31 December 2007, Groupe SEB had neither de jure nor de facto control
over the company’s operating and financial policies, having no seats on
the Board of Directors or on other decision-making bodies. Consequently,
in the 2007 financial statements the second transaction was treated as a
bolt-on acquisition that strengthened the Group’s significant influence in
Supor at 31 December 2007.
3.3.2. Other changes in 2007
Two new subsidiaries were fully consolidated at 31 December 2007 –
Groupe SEB Ukraine, which was set up at the end of 2006, and Groupe
SEB Slovenia, set up in early 2007. Both of these companies are wholly
owned by Groupe SEB and their consolidation had no material impact on
the 2007 consolidated financial statements.
Two wholly owned subsidiaries in Brazil, Arno and Panex, were merged on
1 January 2007 to form Groupe SEB do Brasil. The merger had no impact
on profit for the period or on equity at 31 December 2007.
GROUPE SEB
3
NOTE 4 I SEGMENT INFORMATION
Adoption of IFRS 8 – Operating Segments as of 1 January 2009 has no
impact on the presentation of operating segments compared with prior years.
4.1.
The internal information reviewed and used by the chief decision maker is
also based on geographical segments.
GEOGRAPHICAL SEGMENT INFORMATION (BY LOCATION OF ASSETS)
3
France
Other
Western
European
countries (a)
North
America
South
America
Asia/Pacific
Central
Europe
and other
countries
Inter-segment revenue
684.7
706.1
342.4
259.5
596.9
529.8
External revenue
557.7
44.2
0.6
14.6
477.0
4.9
(1,042.1)
56.9
TOTAL REVENUE
1,242.4
750.3
343.0
274.1
1,073.9
534.7
(1,042.1)
3,176.3
38.9
(0.7)
(28.6)
19.9
127.3
91.3
(in € millions)
Intra-group
transactions
Total
2009
Revenue
3,119.4
Profit/(loss)
Operating profit
248.1
Finance costs and other financial
income and expense, net
(27.2)
Share of profit of associates
0.0
Income tax expense
(58.1)
162.8
Balance sheet
Segment assets
567.9
443.0
319.4
245.2
758.1
200.7
(237.6)
Financial assets
320.7
Tax assets
53.2
TOTAL ASSETS
Segment liabilities
2,296.7
2,670.6
381.4
266.0
42.5
70.7
177.6
78.8
(201.4)
Borrowings
815.6
561.7
Tax liabilities
73.2
Equity
1,220.1
2,670.6
Other information
Capital expenditure and
purchases of intangible assets
60.8
Depreciation and amortisation
expense
58.4
4.3
Impairment losses
9.0
2.2
8.0
28.1
1.2
109.3
8.3
3.8
8.4
13.8
1.3
94.0
5.0
20.4
29.7
(a) “Other Western European countries” correspond to the 15 countries other than France comprising the pre-enlargement European Union. The new EU countries are included in the “Central
Europe and other countries” segment.
GROUPE SEB
77
3
France
Other
Western
European
countries (a)
North
America
South
America
Asia/Pacific
Central
Europe
and other
countries
666.0
706.4
376.2
263.1
498.8
642.7
External revenue
693.8
48.8
2.8
26.9
594.9
1.2
(1,291.4)
77.0
TOTAL REVENUE
1,359.8
755.2
379.0
290.0
1,093.7
643.9
(1,291.4)
3,230.2
62.7
3.5
0.1
24.3
84.2
104.4
(in € millions)
Intra-group
transactions
Total
2008
Revenue
3
3,153.2
Profit/(loss)
Operating profit
279.2
(48.6)
(1.3)
Income tax expense
(66.5)
162.8
Balance sheet
Segment assets
641.5
514.4
370.7
214.5
731.4
239.6
(224.4)
Financial assets
Tax assets
247.3
-
-
-
-
-
-
TOTAL ASSETS
Segment liabilities
2,487.7
87.1
2,822.1
364.4
237.3
39.9
56.1
150.7
(200.9)
740.9
Borrowings
-
-
-
-
-
93.4
-
926.2
Tax liabilities
-
-
-
-
-
-
117.4
Equity
-
-
-
-
-
-
1,037.6
2,822.1
Other information
59.7
13.2
expense
54.4
2.3
Impairment losses
5.5
10.5
24.7
2.7
116.3
10.5
4.1
8.4
11.1
1.3
89.8
14.3
3.9
20.5
78
GROUPE SEB
3
Asia/Pacific
Central
Europe
and other
countries
273.3
207.5
603.9
23.4
450.6
0.7
(1,207.5)
46.9
402.9
296.7
658.1
604.6
(1,207.5)
2,869.6
7.7
27.5
54.4
86.0
France
Other
Western
European
countries (a)
North
America
South
America
637.5
702.1
398.4
External revenue
720.2
55.0
4.5
TOTAL REVENUE
1,357.7
757.1
37.9
23.8
(in € millions)
Intra-group
transactions
Total
2007
Revenue
2,822.7
3
Profit/(loss)
Operating profit
237.3
(34.8)
2.9
Income tax expense
(60.9)
144.5
Balance sheet
Segment assets
635.6
526.1
377.7
253.9
132.2
219.4
(228.6)
Financial assets
491.2
Tax assets
TOTAL ASSETS
Segment liabilities
Borrowings
1,916.3
36.3
-
-
-
-
-
401.5
235.4
52.0
68.2
68.6
-
-
-
-
-
101.7
2,443.8
(207.0)
720.4
-
805.5
Tax liabilities
-
-
-
-
-
-
53.9
Equity
-
-
-
-
-
-
864.0
-
-
-
-
-
-
2,443.8
58.2
11.2
4.4
9.2
6.8
2.0
91.8
expense
53.0
11.1
3.8
8.5
4.6
1.0
82.1
0.4
0.3
5.5
Other information
Impairment losses
6.2
Inter-segment transactions correspond to sales to external customers
located within the geographical segment.
Intragroup transactions are carried out on an arm’s length basis.
External transactions correspond to total sales (within the Group and
to external customers) generated outside the geographical segment by
companies within the geographical segment.
GROUPE SEB
79
3
4.2.
3
REVENUE BY GEOGRAPHICAL LOCATION OF THE CUSTOMER
(in € millions)
2009
2008
2007
France
685.3
668.1
640.3
Other Western European countries (a)
728.3
734.6
717.9
North America
348.9
393.7
401.1
South America
261.5
269.1
274.4
Asia/Pacific
599.9
498.8
210.1
Central Europe and other countries
552.4
665.9
625.8
3,176.3
3,230.2
2,869.6
TOTAL
NOTE 5 I OPERATING EXPENSES
(in € millions)
Purchased raw materials and goods
2009
2008
2007
(1,414.1)
(1,423.2)
(1,226.4)
Labour costs
(125.4)
(126.0)
(123.4)
Freight costs
(22.1)
(24.0)
(21.2)
(240.8)
(274.7)
(254.2)
(1,802.4)
(1,847.9)
(1,625.2)
Other production costs
COST OF SALES (SUB-TOTAL)
Research and development costs
(50.0)
(49.8)
(49.3)
Advertising expense
(95.2)
(119.8)
(113.4)
(873.3)
(871.0)
(780.6)
(2,820.9)
(2,888.5)
(2,568.5)
Distribution and administrative expenses
OPERATING EXPENSES
NOTE 6 I EMPLOYEE BENEFITS EXPENSE
(in € millions)
2009
2008
2007
Wages and salaries (excluding temporary staff costs)
(381.2)
(384.1)
(354.1)
Payroll taxes
(104.1)
(105.0)
(106.2)
(38.3)
(34.9)
(36.6)
Pension and other post-employment benefit plan costs
Service cost under defined benefit plans
Discretionary and non-discretionary profit sharing
TOTAL EMPLOYEE BENEFITS EXPENSE
80
GROUPE SEB
(5.0)
(5.3)
(4.3)
(33.5)
(38.2)
(33.3)
(562.1)
(567.5)
(534.5)
Breakdown by geographical
segment 2009
Other Western
European
countries (a)
France
Employee benefits expense
(excluding temporary staff costs)
(343.7)
6,077
Central Europe
and other
countries
Asia/Pacific
3
North
America
South
America
(72.9)
(34.6)
(39.1)
(51.7)
(20.1)
(562.1)
1,461
638
1,997
9,313
227
19,713
segment 2008
Other Western
European
countries (a)
France
North
America
South
America
(344.8)
(73.7)
(35.6)
(42.2)
(52.4)
(18.8)
(567.5)
6,422
1,451
746
2,289
6,535
607
18,050
segment 2007
Other Western
European
countries (a)
France
North
America
South
America
Central Europe
and other
countries
Asia/Pacific
Total
(339.1)
(74.2)
(41.0)
(42.3)
(18.8)
(19.1)
(534.5)
6,907
1,426
929
2,405
936
579
13,182
Average number of employees
Central Europe
and other
countries
Asia/Pacific
Total
3
Total
Employees by category (%)
2009
2008
2007
Direct labour
48.6
44.5
40.8
Other workers
41.4
44.5
45.7
Managers
10.0
11.0
13.5
100.0
100.0
100.0
2009
2008
2007
TOTAL
NOTE 7 I OTHER OPERATING INCOME AND EXPENSE
(in € millions)
Restructuring costs
(41.3)
(13.9)
(18.9)
Impairment losses
(29.7)
(19.6)
(4.8)
(2.8)
9.2
(6.7)
(73.8)
(24.3)
(30.4)
Gains and losses on asset disposals and other
OTHER OPERATING INCOME AND EXPENSE, NET
7.1.
RESTRUCTURING COSTS
totalled €7.9 million for the redundancy plan at the Erbach site in Germany;
a in France, the reorganisation of iron manufacturing sites resulted in a
2009
pre-retirement plan at the Pont-Evêque site;
Restructuring costs for the year amounted to €41.3 million as follows:
a provisions were also booked following the decision to combine the R&D
a on 11 February 2009, the Group announced a plan to reorganise European
iron manufacturing operations. The related costs recognised in 2009
and Marketing teams from the La Défense and Caen sites at a facility in
Burgundy to create a single, optimised “Electric Cooking Appliances” unit;
GROUPE SEB
81
3
a an additional provision was recorded in relation to the closure of the
former Vosges site in 2006;
a the total cost of these measures in France in 2009 was €20.4 million;
a in Italy, the Group announced job cuts in September 2009 at the Omegna
site, for which a €5.8 million provision was booked;
a in light of the severe economic crisis in a number of markets, the Group
continued to realign its industrial (Brazil, United States), administrative
(Spain) and sales (Norway, United Kingdom) organisations, giving rise to
restructuring costs of €7.2 million in 2009.
3
2008
Restructuring costs for the year amounted to €13.9 million and mainly
concerned plans in the following countries:
a France, for €5 million, corresponding to the additional costs of three plant
closures launched in 2006, mainly the increase in payroll taxes on early
retirement benefits and the cash cost of measures to assist the affected
employees for which provisions could not be booked according to IFRS.
a The United Kingdom, for €6.6 million, related to the outsourcing of logistics
operations.
a The United States, for €2.2 million, following the closure of the Medford,
Los Angeles and Budd Lake offices and the transfer of their sales and
marketing activities to the West Orange and Millville sites.
2007
7.2.
IMPAIRMENT LOSSES
2009
In application of the principle described in Note 1.4.3, certain manufacturing
CGUs were tested for impairment by comparing the carrying amount of
the assets of each CGU with their value in use, defined as the sum of
discounted future cash flows for the 5-year period covered by the business
plan, assuming a residual value based on the expected future cash flows
to be derived from the assets in the last year of the plan. CGUs comprising
intangible assets with indefinite useful lives were tested for impairment on
a regular basis and CGUs comprising depreciable or amortisable assets
were tested only when there was an indication that they may have been
impaired. The main impairment tests and CGUs concerned are discussed
in Note 11 – Intangible Assets.
As a result of the fall in demand in the United States, especially in the highend segment, a €20.4 million impairment loss was recognised on All-Clad
goodwill in 2009. The assumptions used in the impairment test and the
sensitivity of test results to changes in the main assumptions are described
in Note 11.
Impairment losses were also recorded on certain European manufacturing
assets:
a Omegna (Italy), for €5.0 million, due to the reorganisation announced in
September that will result in a significant reduction in production capacity;
a Mayenne (France), for €2.5 million, following the downgrading of
production forecasts for coffee makers and instant hot water fountains;
Restructuring costs for 2007 amounted to €18.9 million, as follows:
a Rumilly Drinks unit (France), for €1.2 million, due to the downgrading of
a France, for €14.9 million, of which:
production forecasts for instant hot water fountains;
a €7.4 million in additional charges following the reassessment of costs
and provisions for three plant closures launched in 2006, reflecting
higher than anticipated early-retirement plan costs, mainly due to the
increase in the payroll tax rate on early retirement benefits from 24.5%
to 50%,
a €7.5 million in non-recurring manufacturing costs following the effective
closure of the plants in 2007;
a Rumilly Scales unit (France), for €0.6 million.
The main assumptions used in 2009 for impairment tests on the manufacturing
CGUs in Europe were as follows:
a the weighted average cost of capital was estimated at 8.66% (vs. 8.83%
in 2008 and 8.46% in 2007);
a he long-term growth rate beyond the 5-year period covered by the
business plan was set between 0% and 2%, depending on the business
of the CGU concerned.
a Mexico, for €1.8 million, following the closure of the Celaya plant in the
last quarter of 2007;
a Belgium, for €1.0 million, related to the first-quarter 2007 reorganisation
of supply chain operations.
The sensitivity of the test results to changes in these assumptions was as
follows:
a a one-point increase in the weighted average cost of capital would have
increased the impairment charge by €2.4 million;
a a one-point decrease in the long-term growth rate would have increased
the impairment charge by €1.6 million;
a a 10% decrease in volumes, compared with current assumptions for the
last year of the business plan used to calculate terminal values, would
have increased the impairment charge by €3.1 million.
82
GROUPE SEB
2008
2008
In 2008, impairment tests led to the recognition of impairment losses totalling
€16.1 million on the following European manufacturing CGUs:
The main gains and losses include:
a Erbach (Germany), for €9.3 million;
a Omegna (Italy), for €5.0 million, due to the plant operating significantly
below capacity;
a Mayenne (France), for €1.8 million, due to inadequate margins, particularly
on coffeemakers.
In addition, a further impairment loss of €3.5 million was recognised on the
Mirro, WearEver and Airbrake brands.
2007
Impairment losses of €4.7 million were recorded in the 2007 financial
statements mainly in respect of the Mirro, WearEver and AirBake brands
following the impairment tests conducted at the end of the year on the CGU
containing these assets.
7.3.
GAINS AND LOSSES ON ASSET DISPOSALS
AND OTHER
2009
In 2009, the Group booked a €1.2 million provision for a dispute with a
Chinese importer (see Note 30.1). The Group’s German companies paid
exceptional contributions €1.0 million to the pension guarantee fund due to
the bankruptcy of certain companies participating in the plans in early 2009.
3
a the reversal of a provision for €8.0 million, following the abolition, in
the 2009 Social Security Financing Act, of employer contributions to
the fund for early retirement benefits payable to workers exposed to
asbestos in the course of their work. Certain sites that were acquired
in 2001 after Moulinex filed for bankruptcy met the Act’s asbestos plan
criteria. A provision of €11.6 million was therefore set aside in 2004 and
2005, corresponding to the discounted present value of Groupe SEB’s
contribution to the early retirement benefit fund. Following abolition of
the funding obligation, the corresponding provision was reversed, with
the exception of an amount of €0.8 million required to cover the 2008
contribution;
3
a proceeds of €1.5 million from the out-of-court settlement of a trademark
infringement claim made against a competitor.
2007
In 2007, this item included the €1.6 million cost of terminating a licence for the
use of the Lagostina brand granted by Lagostina SpA to its North American
distributor and the €1.5 million final cost resulting from an investigation by
the German competition authorities into Groupe SEB Deutschland and Krups
GmbH pricing policies following a complaint regarding the prices charged
by a Groupe SEB selective distribution network in Germany. It also included
€2.3 million in non-recurring expenses arising from the halting of production
of certain Mirro WearEver products at the Groupe SEB USA plant in Mexico
and of T-Fal products in the United States.
GROUPE SEB
83
3
NOTE 8 I FINANCE COSTS AND OTHER FINANCIAL INCOME AND EXPENSE, NET
(in € millions)
2009
2008
2007
FINANCE COSTS
(22.6)
(37.9)
(32.3)
(6.4)
(6.2)
(5.9)
1.7
(0.2)
1.8
(1.8)
(3.8)
2.7
1.9
(0.5)
(1.2)
(4.6)
(10.7)
(2.6)
Interest cost on long-term employee benefit obligations
3
Exchange gains and losses
Income and expenses from financial instruments
Other
OTHER FINANCIAL INCOME AND EXPENSE, NET
The interest cost on long-term employee benefit obligations corresponds
to the difference between the discounting adjustment for the year – arising
from the fact that benefit payments are one year closer to being paid –
and the expected return on the corresponding plan assets. Discounting
adjustments to other long-term liabilities and provisions are also included
under this caption.
Exchange gains and losses on foreign currency transactions are included
in operating margin. Gains and losses on hedges of foreign currency
borrowings are reported under “Other financial income and expense.”
Income and expenses from financial instruments correspond to amortisation
of the time value of hedging instruments, and derivative instruments for
which the hedging relationship has not been documented.
NOTE 9 I INCOME TAX
9.1.
INCOME TAX EXPENSE
(in € millions)
2009
2008
2007
Current taxes
73.2
55.3
61.2
Deferred taxes, net
INCOME TAX EXPENSE
Current income tax expense corresponds to taxes paid or payable in the
short term on profit for the year, based on local tax rates and tax laws in
the Group’s host countries.
Group companies in France, Germany, Italy and the United States have
elected for group relief. The companies in each tax group record in their
84
(15.1)
11.2
(0.3)
58.1
66.5
60.9
accounts the income tax charge or benefit that they would have paid or
received if they had been taxed on a stand-alone basis (Note 33). Tax savings
resulting from the election for group relief are not material; the main benefit
lies in the fact that any tax losses can be set off immediately against the
taxable income of other companies in the tax group.
GROUPE SEB
9.2.
3
EFFECTIVE TAX RATE
The following table provides a reconciliation between the Group’s effective tax rate of 26.3% (29.0% in 2008 and 29.9% in 2007) and the statutory French
tax rate of 34.43%:
(in %)
2009
STATUTORY FRENCH TAX RATE
Effect of different tax rates
Unrecognised and unrelieved tax loss carryforwards
Prior period tax loss carryforwards recognised and utilised during the
period
Other (a)
EFFECTIVE TAX RATE
2008
2007
34.4
34.4
34.4
(12.4)
(9.6)
(7.4)
2.3
3.5
3.9
(2.7)
0.0
(1.0)
4.7
0.7
0.0
26.3
29.0
29.9
3
(a) The caption “Other” primarily includes unrecognised deferred tax assets other than for tax losses, and changes in deferred tax assets not recognised in prior periods. In 2009, it
includes the impact of the non-deductibility of the impairment loss on All-Clad goodwill (3.1%).
9.3.
DEFERRED TAX ASSETS AND LIABILITIES
(in € millions)
31 December 2009
31 December 2008
31 December 2007
(56.4)
Intangible assets (brands)
(80.2)
(82.7)
Capitalised development costs
(6.3)
(6.5)
(7.4)
Property, plant and equipment
(24.6)
(27.6)
(23.3)
Net tax loss carryforwards
11.8
24.8
12.7
Provisions for pensions and other employee-related liabilities
32.7
30.9
37.0
Elimination of intra-group gains
14.5
14.2
12.0
Other timing differences (net)
34.9
3.3
13.2
(17.2)
(43.6)
(12.2)
Deferred tax assets
38.1
48.2
24.9
Deferred tax liabilities
55.3
91.8
37.1
NET DEFERRED TAX ASSET/(LIABILITY)
Of which:
Deferred taxes on other timing differences essentially include deferred taxes on the non-deductible portion of provisions.
The following table shows changes in net deferred taxes recognised in the balance sheet:
(in € millions)
NET DEFERRED TAX LIABILITY AT 31 DECEMBER 2008
(43.6)
Deferred tax charges and benefits for the period recognised in profit
15.1
Effect of deferred taxes recognised in equity
6.7
Effect of changes in foreign exchange rates
1.5
Effect of changes in the scope of consolidation
1.0
Other
2.1
NET DEFERRED TAX LIABILITY AT 31 DECEMBER 2009
(17.2)
Deferred taxes recognised in equity essentially include deferred taxes on derivative hedging instruments and deferred taxes on gains and losses on treasury
shares.
GROUPE SEB
85
3
9.4.
OTHER INFORMATION
At 31 December 2009, the Group had unrecognised deductible temporary differences and tax losses expiring in the following periods:
At 31 December 2009
Deductible
temporary differences
(in € millions)
3
Tax losses
Total
2010
0.5
0.5
2011
0.2
0.2
2012
0.2
0.2
2013
0.1
0.1
2014 and beyond
4.3
4.6
8.9
67.2
67.2
71.9
77.2
Available indefinitely
TOTAL
5.3
Unrecognised tax loss carryforwards fell slightly from €73 million in 2008 to
€72 million in 2009. As in prior years, they primarily concerned operations in
Germany (€39 million in 2009, €42 million in 2008 and €39 million in 2007),
0.2
Spain (€11 million in 2009, €13 million in 2008 and €15 million in 2007) and
the United Kingdom (€9 million in both 2009 and 2008 and €6 million in 2007).
NOTE 10 I EARNINGS PER SHARE
(in € millions)
2009
2008
2007
146.0
151.6
144.5
146.0
151.6
144.5
46,476,548
47,325,540
48,620,100
86,774
366,772
792,134
49,412,234
Numerator
After tax effect of dilutive potential shares
Profit used to calculate diluted earnings per share
Denominator
Weighted average number of ordinary shares
used to calculate basic earnings per share
Effect of dilutive potential shares
Weighted average number of ordinary shares
used to calculate diluted earnings per share
86
46,563,322
47,692,312
BASIC EARNINGS PER SHARE (IN €)
3.14
3.20
2.97
DILUTED EARNINGS PER SHARE (IN €)
3.13
3.18
2.92
GROUPE SEB
3
NOTE 11 I INTANGIBLE ASSETS
In accordance with IAS 38, intangible assets with an indefinite useful life –
corresponding to trademarks and goodwill – are no longer amortised but
are tested for impairment at each year-end. The impairment testing method
is described in Note 1.4.
Intangible assets with a finite useful life are amortised by the straight-line
method over their estimated useful life. Amortisation expense is deducted
from operating margin.
3
The Group also holds certain trademarks – such as the Tefal international brand and the SEB and Calor regional brands – which are not recognised in the
balance sheet.
2009
(in € millions)
Patents and
licences Trademarks
Goodwill
Software
Development
costs
Other
Total
419.8
54.1
35.6
52.8
881.7
1.8
3.6
11.4
17.0
(2.1)
(0.7)
(0.2)
(3.0)
Cost
At 1 January
Acquisitions and addditions
18.6
300.8
0.2
Disposals
Other movements (a)
Translation adjustment
AT 31 DECEMBER
0.1
4.4
(3.8)
0.7
0.3
3.2
(13.4)
1.9
0.1
(0.9)
(8.8)
19.1
304.0
406.4
55.8
43.0
59.3
887.6
39.5
23.3
7.1
93.1
(0.2)
0.1
Amortisation and impairment losses
At 1 January
16.3
6.9
0.1
(0.3)
Amortisation for the period
0.2
(0.6)
1.1
5.5
Impaiment losses
20.4
written off on disposals
8.1
3.4
0.9
17.2
21.3
(2.1)
(0.6)
(0.5)
0.1
0.4
(0.2)
19.8
43.5
31.8
10.7
128.8
293.9
419.8
14.6
12.3
45.7
788.6
297.4
386.6
12.3
11.2
48.6
758.8
Other movements (a)
(0.2)
AT 31 DECEMBER
16.4
6.6
Carrying amount at 1 January
2.3
CARRYING AMOUNT AT 31 DECEMBER
2.7
(2.7)
(a) Including changes in scope of consolidation.
GROUPE SEB
87
3
2008
Patents and
licences Trademarks
(in € millions)
Goodwill
Software
Development
costs
Other
Total
111.1
51.2
29.9
19.2
447.6
20.3
Cost
At 1 January
18.5
217.7
0.2
4.3
2.6
13.2
(1.0)
(2.2)
(0.5)
(3.7)
269.0
1.9
5.4
17.6
369.0
Disposals
3
Other movements (a)
75.1
(0.1)
8.0
39.7
(2.3)
(0.1)
3.3
48.5
AT 31 DECEMBER
18.6
300.8
419.8
54.1
35.6
52.8
881.7
4.4
0.0
36.3
16.3
At 1 January
14.5
0.4
1.0
Impaiment losses
0.8
(b)
3.9
75.4
0.4
(0.6)
8.1
1.7
16.4
0.9
0.6
4.4
(1.4)
5.6
2.1
(1.0)
(2.0)
Other movements (a)
AT 31 DECEMBER
(3.0)
0.5
0.5
16.3
6.9
0.0
39.5
23.3
7.1
93.1
4.0
213.3
111.1
14.9
13.6
15.3
372.2
2.3
293.9
419.8
14.6
12.3
45.7
788.6
Goodwill
Software
Development
costs
Other
Total
118.9
49.2
26.3
20.8
461.3
8.7
15.5
(b) Corresponding to impairment of the Mirro brand and other intangibles within the CGUs referred to in Note 7.
2007
(in € millions)
Patents and
licences Trademarks
Cost
At 1 January
Disposals
Other movements (a)
18.6
227.5
0.1
4.7
2.0
(0.1)
(3.3)
(3.7)
0.3
5.3
(9.3)
(2.5)
(1.0)
(19.6)
19.2
447.6
0.1
1.1
(0.2)
(9.8)
(8.9)
0.3
AT 31 DECEMBER
18.5
217.7
111.1
51.2
29.9
38.4
11.3
(7.1)
At 1 January
14.0
(0.3)
0.6
Impaiment losses
5.0
67.0
(0.6)
1.0
15.1
4.7
4.7
(0.1)
(7.1)
(3.5)
(0.1)
AT 31 DECEMBER
14.5
4.4
0.0
36.3
16.3
3.9
75.4
4.6
227.5
118.9
10.8
15.0
17.5
394.3
4.0
213.3
111.1
14.9
13.6
15.3
372.2
88
8.5
3.3
(0.3)
GROUPE SEB
(10.8)
In 2008, other movements mainly comprised the effect of acquiring control
of Supor, which was fully consolidated for the first time during the period,
and included recognition of the trademark for €75.1 million and goodwill for
€269 million (see Note 3.2).
In 2007, a €1.1 million increase in goodwill was recognised on All-Clad
following an additional earn-out payment to the former owner of the
business, bringing to an end the arbitration procedure launched in 2006.
Trademarks and goodwill were tested for impairment according to the
method described in Note 1.4.3. by comparing their carrying amount to
their value in use, with the exception of the trademarks mentioned below,
which were valued using the relief from royalty method.
3
The sensitivity of test results to changes in the individual assumptions used
in 2009 to determine the value in use of the All-Clad CGU is as follows:
a a one-point decrease in the discount rate would mean that no impairment
loss would have been booked in 2009;
a 0.5- and 1-point increases in the discount rate would result in an additional
impairment loss of €12.8 million and €23.8 million, respectively;
a a one-point decrease in the growth rate to perpetuity would result in an
a a one-point decrease in operating margin in the last year of the business
plan – used to calculate terminal value – would result in an impairment
loss of €7.6 million;
The discount rates used were determined based on the weighted average
cost of capital, taking into account market interest rates, and debt ratio,
beta and average equity risk premium based on historical data. The equity
risk premium used for 2009 was 5.25% (5.65% in 2008). Specific equity risk
premiums ranging from 0.5% to 4.0% were applied to the Group’s different
CGUs, according to their size, region and other specific characteristics.
a as regards the sales trends for 2010-2014, several scenarios were applied
Impairment tests carried out in 2009 were generally based on:
In 2007 and 2008, impairment losses of €4.7 million and €3.5 million were
recognised respectively on the Mirro WearEver brands (Mirro, WearEver and
AirBake) and other related intangible assets, following an impairment test of
the Mirro WearEver CGU (see Note 7), reflecting lower-than-expected profits
and their impact on the business plan for future years.
a a 2010 budget similar to the budget for 2009;
a the assumption that the economy will recover in time to enable the Group
to meet the medium-term targets set out in the business plan prepared
prior to the crisis.
In 2009, an impairment loss of €20.4 million was booked against the AllClad goodwill (Note 7).
The All-Clad CGU – including the trademark for €100.0 million and goodwill
for €79.0 million at 31 December 2009 – was tested for impairment by
comparing its carrying amount to its value in use, defined as the sum of
discounted future cash flows for the 5-year period covered by the business
plan plus a terminal value determined based on the expected future cash
flows to be derived from the assets in the last year of the plan. The main
assumptions used for the test were as follows:
a discount rate of 9.02%, down slightly on the 2008 rate of 9.37% and 2007
rate of 9.36%, due to the fall in risk-free rates;
a long-term growth rate of 3%, in line with forecasts for the high-end
household equipment market, and similar to the rate used since All-Clad
was acquired.
Following the test at 31 December 2009, an impairment loss of €20.4 million
was recorded in the consolidated financial statements due to the downward
revision of US growth forecasts, as the current economic crisis is more
severe and is lasting longer than the scenario applied at the end of 2008.
3
additional impairment loss of €17.5 million;
based on average annual growth rates of between 2% and 15%. Group
Management currently considers the most probable scenario to be 5%
growth in 2010 then 8% per year for 2011-2014. Compared to these
forecasts, a 10% downward revision of forecast sales over the entire
period would result in an additional impairment loss of €36.0 million.
The carrying amount of these brands stood at €4.2 million at 31 December
2009. The test performed at that date on the CGU that owns these brands did
not result in any impairment losses in addition to those booked previously.
The main actuarial assumptions applied for this test were as follows:
a discount rate after tax of 9.37%;
a long-term growth rate of 2%.
A 1-point increase in the discount rate, a 1-point decrease in the long-term
growth rate or a 2% downward revision of forecast sales for 2010-2014
would result in the carrying amount of the brands being written down in full.
Impairment tests on other brands and goodwill in 2009, 2008 and 2007 did
not result in the recognition of any impairment losses.
The carrying amount of the Supor CGU – including the brand for €82.2 million
and goodwill for €294.4 million – was compared to its market value at
31 December 2009, as ZJ Supor is listed on the Shenzen stock exchange
and there is a liquid market for its shares. At 31 December 2009, Supor’s
share price was RMB 21.11, while its carrying value was RMB 17 per share.
GROUPE SEB
89
3
The Arno, Lagostina, Rowenta, Panex, Krvps and Moulinex brands, which
are carried in the balance sheet at 31 December 2009 for €35.6 million,
€30.4 million, €23.2 million, €12.6 million, €7.8 million and €1.0 million
respectively, were tested by discounting estimated future royalty revenues
that would be obtained from licensing the brands (relief from royalty method).
The main assumptions used in 2009 were as follows:
a royalty rate: 2% to 5.5%, unchanged from 2008 and 2007;
3
a discount rate after tax: 8.30% (Rowenta) to 14.90% (Arno) versus 8.70%
to 15.39% in 2008;
For all of these assets, the sensitivity of value in use to different scenarios was
analysed for the period between 2010 and 2014, including their sensitivity
to a one-point increase in the discount rate and one-point decrease in
the growth rate to perpetuity. The decreases in value in use under each
of these simulations would not result in the recognition of any impairment
losses on goodwill or brands in the balance sheet except for the Lagostina
brands for which a one-point increase in the discount rate would result
in an impairment loss of €0.2 million. The test margin on the Lagostina
brand would be reduced to zero if current 2010-2014 sales forecasts were
reduced by 15%.
a long-term growth rate: 1% to 3%, unchanged from 2008 and 2007.
NOTE 12 I PROPERTY PLANT AND EQUIPMENT
2009
(in € millions)
Land
Buildings
Machinery and
equipment
Other
Assets in
progress
Total
24.4
253.2
662.0
0.1
13.1
38.2
103.9
44.3
1,087.8
8.4
32.4
92.2
Cost
At 1 January
Disposals
(0.1)
(3.6)
(36.1)
(7.2)
(0.8)
(47.8)
Other movements (a)
0.6
8.0
29.4
(4.4)
(34.7)
(1.1)
1.7
1.6
10.1
1.2
0.5
15.1
26.7
272.3
703.6
101.9
41.7
1,146.2
6.7
136.7
494.0
69.2
-
1.7
7.3
0.8
9.8
0.3
10.6
55.1
10.7
76.7
2.2
6.1
0.1
8.4
(32.5)
(6.7)
(42.8)
AT 31 DECEMBER
Depreciation and impairment losses
At 1 January
Depreciation for the period
Impaiment losses
Depreciation and impairment losses written off on
disposals
(0.1)
(3.5)
Other movements (a)
(0.6)
3.0
AT 31 DECEMBER
6.3
150.7
530.0
67.8
0.0
754.8
17.7
116.5
168.0
34.7
44.3
381.2
20.4
121.6
173.6
34.1
41.7
391.4
90
706.6
GROUPE SEB
(6.3)
(3.9)
2008
(in € millions)
3
Land
Buildings
Machinery and
equipment
Other
Assets in
progress
Total
26.7
223.6
613.9
95.2
31.7
991.1
Cost
At 1 January
Disposals
Other movements (a)
0.1
4.3
34.3
13.7
43.6
96.0
(1.1)
(10.9)
(38.2)
(11.7)
(0.7)
(62.6)
0.1
34.6
55.3
8.5
(30.7)
67.8
(1.4)
1.6
(3.3)
(1.8)
0.4
(4.5)
AT 31 DECEMBER
24.4
253.2
662.0
103.9
44.3
1,087.8
5.4
129.4
461.1
66.2
662.1
(0.7)
(3.3)
(2.0)
(6.0)
3
At 1 January
0.3
9.8
53.1
11.0
74.2
Impaiment losses
1.4
5.6
8.7
0.5
16.2
(0.4)
(7.4)
(35.4)
(10.9)
(54.1)
9.8
4.4
disposals
Other movements (a)
AT 31 DECEMBER
14.2
6.7
136.7
494.0
69.2
0.0
706.6
21.3
94.2
152.8
29.0
31.7
329.0
17.7
116.5
168.0
34.7
44.3
381.2
Land
Buildings
Machinery and
equipment
Other
Assets in
progress
Total
27.3
229.5
660.8
95.4
24.7
1,037.7
0.7
4.6
31.1
10.9
29.0
(1.7)
(10.8)
(95.7)
(11.9)
2007
(in € millions)
Cost
At 1 January
Disposals
76.3
(120.1)
Other movements (a)
0.1
2.2
18.3
2.0
(21.9)
0.7
0.3
(1.9)
(0.6)
(1.1)
(0.1)
(3.5)
26.7
223.6
613.9
95.2
31.7
991.1
At 1 January
5.4
127.6
503.8
68.4
0.0
(0.5)
(0.7)
(0.8)
(2.1)
0.4
11.8
45.3
9.4
66.9
0.9
0.6
(0.4)
(10.3)
(87.9)
(10.8)
AT 31 DECEMBER
Impaiment losses
disposals
AT 31 DECEMBER
705.2
1.5
(109.4)
5.4
129.4
461.1
66.2
0.0
662.1
21.9
101.9
157.0
27.0
24.7
332.5
21.3
94.2
152.8
29.0
31.7
328.9
GROUPE SEB
91
3
The Group’s operations are mainly carried out at 21 major plants worldwide, as follows:
Region
FRANCE
Country
Plant
Main products
France
Rumilly
Cookware, informal meal appliances, scales
Selongey
Pressure cookers
Pont-Evêque
Irons, steam generators, epilators
Is-sur-Tille
Deep fryers, ovens
Lourdes
Food processors and choppers
Mayenne
Food processors, blenders
Saint-Lô
Electronic components
Vernon
Vacuum cleaners
Germany
Erbach
Steam irons
Italy
Omegna
Cookware
NORTH AMERICA
United States
Canonsburg
Cookware
SOUTH AMERICA
Brazil
Sao Paulo
Blenders, fans
3
WESTERN EUROPE
ASIA/PACIFIC
OTHER COUNTRIES
Sao Bernardo
Cookware
Colombia
Cajica
Blenders, fans
China
Shanghai
Steam irons, steamers, kettles
Yuhuan
Cookware
Wuhan
Cookware
Hangzhou
Rice cookers
Shaoxing
Electric pressure cookers, induction hotplates
Vietnam
Vietnam
Cookware
Russia
Saint Petersburg
Cookware
The Group owns all of its plants, except the Sao Bernardo (Brazil) and
Shanghai (China) sites.
Logistics warehouses and commercial and office buildings are generally
leased, except for the Group’s headquarters building in Ecully and another
office building in Lyon.
All leases are with unrelated lessors and reflect normal market terms.
At 31 December 2009, the aggregate carrying amount of property, plant and
equipment held for sale was €3.7 million (€3.8 million at 31 December 2008
and €8.4 million at 31 December 2007).
92
These items correspond primarily to assets one of the facilities (Le Syndicat)
affected by the restructuring plan announced in France in 2006 and an office
building in Germany. They are measured at fair value less costs to sell.
They also include manufacturing assets in Brazil for which the sale was
agreed in 2008. The actual sale will take place once the site decontamination
certificates are obtained (see Note 30.1.).
Other movements for 2008 reflected mainly the first-time consolidation
of Supor.
GROUPE SEB
3
NOTE 13 I LEASES
Finance leases can be analysed as follows:
(in € millions)
31 December 2009
31 December 2008
31 December 2007
Buildings
0.3
0.2
2.6
Machinery and equipment
2.5
2.9
3.0
Other
0.1
0.1
0.1
CARRYING AMOUNT
2.9
3.2
5.7
Finance leases
Operating leases
Due within one year
1.1
24.0
Due in one to five years
1.6
51.9
Land
3
These amounts are included in the tables in Note 12 – Property, plant and equipment.
Groupe SEB does not have any finance leases related to intangible assets or investment property.
Commitments under finance leases and non-cancellable operating leases are as follows:
2009
(in € millions)
LEASE COMMITMENTS
Due beyond five years
13.5
TOTAL MINIMUM FUTURE LEASE PAYMENTS
2.7
89.4
2.7
89.4
2009
2008
2007
32.8
33.4
31.1
Future interest costs
DISCOUNTED PRESENT VALUE OF LEASE COMMITMENTS
Lease costs recorded in expenses for the year are as follows:
(in € millions)
Lease costs
GROUPE SEB
93
3
NOTE 14 I INVESTMENTS IN ASSOCIATES, OTHER INVESTMENTS AND OTHER NON-CURRENT
FINANCIAL ASSETS
14.1. INVESTMENTS
14.1.1. Investments in associates
3
(in € millions)
31 December 2009
31 December 2008
31 December 2007
Groupe SEB Retailing
-
0.1
-
ZJ Supor
-
-
342.7
0.0
0.1
342.7
COMPANY
At 31 December 2008, investments in associates corresponded to Groupe
SEB Retailing, a wholly-owned French company that has been fully
consolidated as from 1 January 2009.
Investments in associates at 31 December 2007 corresponded to ZJ Supor,
which was fully consolidated as of 1 January 2008.
14.1.2. Other investments
Since 2007, there have been no material changes in Groupe SEB’s other
investments.
14.2. OTHER NON-CURRENT FINANCIAL ASSETS
These assets mainly comprise guarantee deposits, mainly for property
leases.
NOTE 15 I PRODUCT DEVELOPMENT COSTS
(in € millions)
2009
2008
2007
RESEARCH AND DEVELOPMENT EXPENDITURE
59.1
58.1
55.7
as a % of revenue
1.9%
1.8%
1.9%
CAPITALISED DEVELOPMENT COSTS
(9.0)
(8.3)
(6.4)
as a % of R&D costs
15.3%
14.30%
11.50%
RESEARCH AND DEVELOPMENT COSTS RECOGNISED DIRECTLY
IN THE INCOME STATEMENT (NOTE 5)
(50.0)
(49.8)
(49.3)
(8.1)
(8.1)
(8.6)
(58.1)
(57.9)
(57.9)
1.8%
1.8%
2.0%
AMORTISATION FOR THE PERIOD RECOGNISED IN COST OF SALES
TOTAL COST RECOGNISED IN THE INCOME STATEMENT
as a % of revenue
Research and development expenditure totalled €59.1 million in
2009, including €8.9 million in industrial property costs reclassified
from administrative costs. To facilitate year-on-year comparisons, the
corresponding amounts for 2008 and 2007 have also been reclassified.
Research and development expenditure amounted to €58.1 million in 2008
and €55.7 million in 2007. As of 2008, research tax credits are deducted
from research and development expenditure rather than from income tax
expense. The research tax credit deducted from the amounts above stood
94
at €5.4 million in 2009 and €5.9 million in 2008. The €1 million tax credit
recorded in 2007 was not material and therefore not reclassified.
Capitalised development costs amounted to €9 million, versus €8.3 million
in 2008 and €6.4 million in 2007.
In all, research and development costs recognised in the income statement
came to €58.1 million, versus €57.9 million in 2008 and 2007.
GROUPE SEB
3
NOTE 16 I INVENTORIES
31 December 2009
31 December 2008
(in € millions)
Cost
Provisions
Carrying
amount
Raw materials
137.4
(12.2)
125.2
119.4
(11.1)
13.7
(0.6)
13.1
40.6
(0.4)
Finished products
350.7
(22.7)
328.0
490.4
TOTAL
501.8
(35.5)
466.3
650.4
Work in progress
31 December 2007
Cost
Provisions
Carrying
amount
Carrying
amount
Cost
Provisions
108.3
95.5
(10.8)
84.7
40.2
40.8
(0.6)
40.2
(24.3)
466.1
427.5
(24.3)
403.2
(35.8)
614.6
563.8
(35.7)
528.1
3
NOTE 17 I TRADE RECEIVABLES
(in € millions)
31 December 2009
31 December 2008
31 December 2007
Trade receivables (including discounted bills)
650.0
656.4
636.6
Provisions for doubtful debts
(22.9)
(10.8)
(9.4)
TOTAL
627.1
645.6
627.2
The fair value of trade receivables is equivalent to their carrying amount, in view of their short maturities.
A receivables aging analysis is presented in Note 27.4.
GROUPE SEB
95
3
NOTE 18 I OTHER RECEIVABLES
(in € millions)
3
2009
2008
2007
OTHER NON-CURRENT RECEIVABLES
5.0
2.9
6.2
Prepaid expenses
8.9
8.5
7.1
Prepaid and recoverable taxes and other receivables
39.2
46.4
46.6
OTHER CURRENT RECEIVABLES
48.1
54.9
53.7
Current
Non-current
Total
8.9
1.7
10.6
39.2
3.3
42.5
48.1
5.0
53.1
(in € millions)
2009
2008
2007
Cash
227.9
224.3
77.6
79.9
0.3
56.4
307.8
224.6
134.0
The fair value of prepaid and recoverable taxes and other receivables is equivalent to their carrying amount.
At 31 December 2009, other receivables broke down as follows:
(in euro millions)
Prepaid expenses
Prepaid and recoverable taxes and other receivables
NOTE 19 I CASH AND CASH EQUIVALENTS
Cash equivalents
Cash equivalents at 31 December 2009 consist mainly of very short-term investments, such as SICAV money market funds, measured at market value at
the balance sheet date.
96
GROUPE SEB
3
NOTE 20 I EQUITY
20.1. SHARE CAPITAL
One class of shares carries double voting rights and the right to a
supplementary dividend.
At 31 December 2009, the share capital was made up of 49,951,826 shares
with a par value of €1. In accordance with the decision of the Board of
Directors on 27 February 2009, SEB S.A. cancelled 1,000,000 treasury
shares on 31 March 2009.
At 31 December 2008, the share capital was made up of 50,912,138 shares
with a par value of €1 after approval of the three-for-one stock split at the
General Meeting on 13 May 2008. At 31 December 2007, the share capital
was made up of 16,960,186 shares with a par value of €3.
After deduction of treasury shares, the weighted average number of shares
outstanding for the year was 46,476,548 (47,325,540 in 2008 and 48,620,100
in 2007).
3
At 31 December 2009, the family group owned 43.85% of the capital (of
which 23.86% by Fédéractive and 19.99% by Venelle Investissement) and
58.15% of the voting rights.
20.2. STOCK OPTIONS AND PERFORMANCE SHARES
20.2.1. Stock options
Information about stock option plans at 31 December 2009 is provided below:
❙ STOCK OPTIONS
At 31 December 2009
Type of option
Number of options**
Option grant
Option
date*** exercise date
Option
expiry date
Granted
Exercised
Cancelled
Outstanding
Exercise
price**
(in €)
To purchase new shares
14/06/2001
14/06/2005
14/06/2009
493,500
473,692
19,808
0
18.18
To purchase existing shares
19/04/2002
19/04/2006
19/04/2010
417,450
325,750
21,450
70,250
27.88
17/10/2002
17/10/2006
17/10/2010
598,125
365,809
82,080
150,236
25.15
18/06/2003
18/06/2007
18/06/2011
612,150
390,037
32,021
190,092
24.24
18/06/2004
18/06/2008
18/06/2012
539,100
54,059
17,400
467,641
31.67
08/04/2005
08/04/2009
08/04/2013
554,700
119,480
20,100
415,120
28.00
16/06/2006
16/06/2010
16/06/2014
589,798
0
11,105
578,693
29.33
20/04/2007
20/04/2011
20/04/2015
579,150
0
6,000
573,150
44.00
13/05/2008
13/05/2012
13/05/2016
1,005,900
0
14,100
991,800
38.35
12/06/2009
12/06/2013
12/06/2017
371,300
0
1,050
370,250
28.05
5,761,173
1,728,827
225,114
3,807,232
TOTAL*
*
Of which, movements in 2009
Total options to purchase existing shares
Total options to purchase new shares
371,300
428,331
21,947
(79,978)
5,267,673
1,255,135
205,306
3,807,232
493,500
473,692
19,808
0
** The number of options and the exercise price for plans prior to 16 June 2008 were adjusted following the three-for-one stock split that took place on 16 June 2008.
*** The grant date corresponds to the date of the Board meeting when the option grants were decided.
In accordance with IFRS 2 – Share-Based Payment, stock options are
measured at the grant date. The valuation method used is based on the
Black & Scholes option pricing model. The initial valuation is not adjusted
for any subsequent changes in value after the grant date.
IFRS 2 has been applied only to stock options granted after 7 November
2002 that had not yet vested at 1 January 2005. As allowed under IFRS 2,
options granted before 7 November 2002 have not been measured or
recognised in the accounts.
The value is recognised in employee benefits expense on a straight-line
basis over the option vesting period by adjusting equity.
GROUPE SEB
97
3
The amount recognised in employee benefits expense in 2009 in respect of stock options was €5.8 million, versus €4.7 million in 2008 and €4.4 million in
2007. The assumptions used to value options under the Black & Scholes model are as follows:
2009 Plan
2008 Plan
2007 Plan
2006 Plan
2005 Plan
2.1
8.7
6.8
2.5
2.1
0.5
2.6
1.9
0.7
0.1
INITIAL VALUE (IN € MILLIONS)
AMOUNT RECOGNISED IN EMPLOYEE BENEFITS EXPENSE IN 2009
(IN € MILLIONS)
3
ASSUMPTIONS
Share price at the option grant date (in €)
29.7
37.6
44.0
29.3
28.4
Volatility
26.0%
25.00%
30.00%
20.00%
19.50%
Risk-free interest rate
3.50%
4.50%
442%
3.80%
3.62%
Exercise price (in €)
28.05
38.35
44.00
29.33
28.00
Life of the options (in years)
(a)
Dividend rate
5
5
5
5
5
3%
3%
2%
3%
3%
(a) orresponding to the average exercise period.
20.2.2. Performance shares
At its meeting on 12 June 2009, the Board of Directors decided, for the
first time, to grant performance shares to certain employees and corporate
officers.
growth in revenue and operating margin and are the same as those used
to determine senior management bonuses. Vested shares are subject to a
two-year lock-up.
Further information on the 2009 performance share plan is provided in the
table below:
Shares granted under the plan are subject to a two-year vesting period
and certain performance obligations. The performance targets concern
Dates
Type of grant
Grant date*
Performance
shares
12/06/2009
*
**
Number of shares
Vesting date End of lock-up
12/06/2011
12/06/2013
Vested
50,472
0
Cancelled Outstanding
263
50,209
Share price at
grant date**
30.08
The grant date corresponds to the date of the Board meeting when the performance share grants were decided.
Opening price on the day of Board of Directors' meeting.
The fair value of performance shares includes a discount to reflect the impact
of the lock-up period. The measurement method used to determine this
discount is based on a strategy that consists of selling the shares under
a four-year forward contract (corresponding to the vesting/lock-up period)
98
Granted
and immediately purchasing an equivalent number of shares free of any
restrictions, with the purchase financed by debt that is repayable at the
end of the lock-up using the proceeds from the forward sale and dividends
received during the lock-up period.
GROUPE SEB
3
The main assumptions applied to determine the fair value of performance shares are as follow:
2009 Plan
ASSUMPTIONS
Share price on the grant date (in €)
30.08
Four-year risk-free interest rate
2.50%
Average interest rate on a four-year general purpose loan
6.90%
Dividend rate
3
3.28%
Cost of lock-up (in % of the price on the vesting date)
21.72%
INITIAL VALUE (IN € MILLIONS)
1.2
COST RECOGNISED IN EMPLOYEE BENEFITS EXPENSE IN 2009 (IN € MILLIONS)
0.3
20.3. RESERVES AND RETAINED EARNINGS (BEFORE
APPROPRIATION OF PROFIT)
20.4. TREASURY STOCK
Reserves and retained earnings comprise the reserves recorded in the
balance sheet of SEB S.A. (including €753 million available for distribution
at 31 December 2009, versus €742 million at 31 December 2008 and
€635 million at 31 December 2007), and SEB S.A.’s share of the postacquisition retained earnings of consolidated subsidiaries.
a for cancellation in order to reduce the Company’s capital;
The Group’s share buyback policy is to acquire shares:
SEB S.A.’s share of the retained earnings of foreign subsidiaries is considered
as being permanently reinvested and withholding taxes or additional taxes on
distributed income are recognised only when distribution of these amounts
is planned or considered probable.
a for allocation to employees, managers or senior executives of the
Company or of related companies upon exercise of stock options;
a for delivery on redemption, conversion, exchange or exercise of share
equivalents.
Shares buybacks are carried out based on market opportunities and only
when the Group has sufficient cash to fund the transactions.
In 2009, the Group bought back 727,208 SEB shares on the market at a
weighted average price of €28.19 and sold 953,865 shares on the market
at an average price of €29.29. The after-tax loss on the sales, in the amount
of €2.5 million, was recognised directly in equity without affecting profit
for the period. In accordance with the decision of the Board of Directors
on 27 February 2009, SEB S.A. cancelled 1,000,000 treasury shares on
31 March 2009.
At 31 December 2009, the Group held 3,149,443 shares in treasury, acquired
at an average price of €34.54.
Movements in 2009, 2008 and 2007 were as follows:
(in number of shares)
2009
2008
2007
4,376,100
2,983,515
2,446,350
Buyback plan
149,072
1,518,500
1,227,384
Liquidity contract
578,136
438,302
374,850
Shares held in treasury at 1 January
Purchases
Sales
Shares sold on the market
(570,601)
(433,718)
(375,762)
Shares allocated on exercise of stock options
(383,264)
(130,499)
(415,947)
SHARES CANCELLED DURING THE PERIOD
SHARES HELD IN TREASURY AT 31 DECEMBER
(1,000,000)
3,149,443
(273,360)
4,376,100
2,983,515
GROUPE SEB
99
3
NOTE 21 I MINORITY INTERESTS
Changes in minority interests are as follows:
3
(in € millions)
2009
2008
2007
AT 1 JANUARY
131.6
0.0
-
Minority interests in profit
16.8
11.2
Dividends paid
(4.8)
1.3
Minority interests in share issues by subsidiaries
4.3
Changes in scope of consolidation
100.2
AT 31 DECEMBER
Minority interests since 31 December 2008 concern ZJ Supor and the
2009 change mainly reflected changes in ZJ Supor’s retained earnings,
corresponding essentially to recognition of profit for the period and the effect
of translating the company’s financial statements. In the future, changes may
(4.8)
14.6
138.8
131.6
0.0
occur exceptionally as a result of purchases, sales or any other voluntary
adjustments to the Group’s interest in ZJ Supor.
There were no minority interests at 31 December 2007.
NOTE 22 I PROVISIONS
Provisions are classified as short-term or long-term according to whether the obligation is expected to be settled within or beyond one year.
Provision movements (other than provisions for pension and other post-employment benefit obligations) were as follows:
31 December 2009
(in € millions)
Long-term
Pension and other post-employment benefit
obligations (Note 23)
Product warranties (Note 22.1)
31 December 2008
Short-term
Long-term
76.4
7.6
3.4
35.6
Short-term
Long-term
Short-term
72.2
12.3
74.5
9.7
1.1
38.3
1.0
33.4
Claims and litigation and other contingencies (Note 22.2)
17.5
14.4
13.4
16.3
19.0
13.8
Restructuring provisions (Note 22.3)
14.0
29.3
15.6
10.3
14.7
28.9
111.3
86.9
102.3
77.2
109.2
85.8
1 January
2009
Increases
Reversals
Utilisations
Other (a)
31 December
2009
39.4
32.5
1.7
31.2
TOTAL
(in € millions)
39.0
29.7
24.1
6.1
15.4
(0.3)
32.0
26.0
27.5
1.2
10.2
1.2
43.3
TOTAL
95.1
84.1
9.0
56.8
0.9
114.3
(a) “Other movements” include translation adjustments and the effect of changes in the scope of consolidation.
100
31 December 2007
GROUPE SEB
3
(in € millions)
1 January
2008
Increases
Reversals
Utilisations
Other (a)
31 December
2008
39.4
34.4
37.3
32.4
0.1
32.8
10.1
10.9
4.7
2.4
29.7
43.6
11.0
2.9
24.9
(0.8)
26.0
110.8
58.4
13.8
62.0
1.7
95.1
TOTAL
3
1 January
2007
Increases
Reversals
Utilisations
Other (a)
31 December
2007
27.2
33.7
0.4
25.8
(0.3)
34.4
34.8
7.7
3.1
4.4
(2.2)
32.8
74.9
10.6
2.3
39.7
0.1
43.6
136.9
52.0
5.8
69.9
(2.4)
110.8
(in € millions)
TOTAL
22.1. PRODUCT WARRANTIES
Provisions are recorded for the estimated cost of repairing or replacing
products sold under warranty to customers and consumers. The warranty,
which is either legal or contractual, is generally for a period of one or two
years. Provisions for product recalls are recorded as soon as the recall
is decided.
22.2. CLAIMS AND LITIGATION AND OTHER
CONTINGENCIES
Certain subsidiaries are involved in claims and litigation with third parties. The
corresponding provisions are determined in accordance with the principle
described in Note 1.4.
At 31 December 2009, 2008 and 2007 the main provisions were as follows:
(in € millions)
2009
2008
2007
Supplier claims and litigation
2.6
1.5
0.5
Local government claims, litigation and contingencies
6.4
8.6
6.6
Commercial claims, litigation and contingencies
1.1
2.3
4.1
15.1
11.3
16.0
Sales returns
3.2
5.7
5.2
Other claims, litigation and contingencies
3.5
0.3
0.4
31.9
29.7
32.8
2009
2008
2007
Severance costs
36.8
17.0
37.7
Site closure costs
6.5
9.0
5.9
43.3
26.0
43.6
Employee claims, litigation and contingencies
TOTAL
22.3. RESTRUCTURING PROVISIONS
Restructuring provisions break down as follows:
(in € millions)
TOTAL
The short-term portion of the 2009 restructuring provision amounted to €29.3 million. The remaining €14.0 million concern costs expected to be incurred
over the next one to five years, mainly for early retirement schemes and for rent on sites no longer being used.
GROUPE SEB
101
3
NOTE 23 I PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS
23.1. ASSUMPTIONS
Provisions for pension and other post-employment benefit obligations,
determined as explained in Note 1.4, mainly concern France and Germany.
The obligations are estimated by qualified actuaries using a certain number
of assumptions. These assumptions are revised once a year.
3
Discount rates are determined based on the yields of investment grade
corporate bonds with maturities that match the remaining life of the
obligations at the measurement date.
Assumptions
France 2009
Germany 2009
Economic assumptions
Rate of salary increases
3%
2.50%
Discount rate
5.25%
5.25%
Expected rate of return on plan assets
4.50%
Average remaining service life of participating employees
7 to 10 years
Demographic assumptions
Retirement age
60 to 65 (a)
Staff turnover
RRG 2007
0% to 11% (a)
Mortality tables
INSEE TV 2004-2006
HEUBECK 2005 G
France 2008
Germany 2008
3.00%
2.00%
Discount rate
5.60%
6.10%
4.75%
(a) Depending on the age of employees and their category (management or other).
Assumptions
8 to 10 years
Retirement age
60 to 65 (a)
Staff turnover
RRG 2007
0% to 7% (a)
Mortality tables
INSEE TV 2004-2006
HEUBECK 2005 G
France 2007
Germany 2007
3% to 3.4%
2.50%
Discount rate
5.10%
5.10%
4.50%
Assumptions
8 to 18 years
8 to 10 years
Retirement age
60 to 65 (a)
Staff turnover
0% to 7% (a)
Mortality tables
INSEE TV 2003-2005
102
GROUPE SEB
HEUBECK 2005 G
3
23.2. ANALYSIS OF PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS
The total obligation breaks down as follows:
2009
(in € millions)
Projected benefit obligation based on final salaries
Present value of plan assets
DEFICIT
Unrecognised gains and (losses)
France
Germany
Other countries
Total
68.7
56.7
20.0
145.4
(26.2)
(2.3)
(10.8)
(39.3)
42.5
54.4
9.2
106.1
(19.6)
(1.6)
(0.9)
(22.1)
Initial benefit obligation
0.0
Unrecognised past service costs
Recognised liability
0.0
22.9
52.8
8.3
84.0
Recognised asset
NET
3
0.0
22.9
52.8
8.3
84.0
Total
2008
(in € millions)
DEFICIT
France
Germany
Other countries
67.7
52.5
18.9
139.1
(24.4)
(2.4)
(9.0)
(35.8)
43.3
50.1
9.9
103.2
(21.2)
3.1
(0.6)
(18.7)
0.0
0.0
22.1
53.2
9.3
84.4
Recognised asset
NET
0.0
22.1
53.2
9.3
84.4
2007
(in € millions)
DEFICIT
France
Germany
Other countries
Total
66.8
57.4
15.8
140.0
(27.4)
(2.0)
(10.5)
(39.9)
39.4
55.4
5.3
100.1
(16.7)
(1.1)
2.0
(15.9)
22.7
54.3
7.3
84.2
22.7
54.3
7.3
84.2
Recognised asset
NET
Obligations for the payment of jubilees, calculated using the same assumptions as for pension obligations, amounted to €5.7 million at 31 December 2009,
€5.5 million at 31 December 2008 and €5.7 million at 31 December 2007.
GROUPE SEB
103
3
23.3. RECOGNISED COST
The cost recognised in the income statement for pension and other post-employment benefit plans breaks down as follows:
2009
(in € millions)
3
France
Germany
Other countries
Total
Service cost
3.6
Interest cost
3.6
0.3
1.1
5.0
3.1
0.5
7.2
(1.2)
(0.5)
(1.7)
Recognised (gains) and losses and other
2.3
0.2
2.5
COST FOR THE PERIOD
8.3
3.4
1.3
13.0
France
Germany
Other countries
Total
3.7
0.4
1.2
5.3
3.2
2.8
Expected return on plan assets
2008
(in € millions)
Service cost
Interest cost
1.1
7.1
(1.2)
(0.5)
(1.7)
0.9
0.1
1.0
COST FOR THE PERIOD
6.7
1.9
11.8
Total
3.2
2007
(in € millions)
France
Germany
Other countries
Service cost
3.1
0.4
0.8
4.3
Interest cost
2.6
2.7
0.7
6.0
(0.4)
(1.8)
(1.4)
1.5
0.2
COST FOR THE PERIOD
5.8
3.3
1.7
1.1
10.2
2009
2008
2007
Net at 1 January
84.4
84.2
82.8
Cost for the period
13.0
11.7
10.2
Contributions paid
(14.3)
(13.2)
(7.4)
Other movements
0.9
1.7
(1.4)
84.0
84.4
84.2
23.4. MOVEMENTS IN PROVISIONS
Movements in provisions for pension and other post-employment benefit obligations break down as follows:
(in € millions)
NET AT 31 DECEMBER
104
GROUPE SEB
3
23.5. PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS
❙ 2009 PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS
(in € millions)
France
Other countries
Total
67.7
71.4
139.1
Service cost
3.6
1.4
5.0
Interest cost
3.6
3.6
7.2
Benefits paid
PROJECTED BENEFIT OBLIGATION AT 1 JANUARY 2009
(10.0)
(4.7)
(14.7)
Plan amendments
0.5
0.1
0.6
Changes in assumptions
4.8
4.6
9.4
Curtailments/settlements
(0.2)
(0.2)
Actuarial gains and losses and other
(1.5)
0.5
(1.0)
PROJECTED BENEFIT OBLIGATION AT 31 DECEMBER 2009
68.7
76.7
145.4
France
Other countries
Total
66.8
73.2
140.0
5.3
3
(in € millions)
Service cost
3.7
1.6
Interest cost
3.2
3.9
7.1
Benefits paid
(6.4)
(5.3)
(11.7)
Plan amendments
0.0
(2.3)
(2.3)
0.0
2.7
(2.0)
0.7
67.7
71.4
139.1
France
Other countries
Total
140.3
(in € millions)
58.3
82.0
Service cost
3.1
1.2
4.3
Interest cost
2.6
3.4
6.0
Benefits paid
(5.8)
(5.3)
(11.1)
Plan amendments
7.0
7.0
1.1
(0.3)
0.8
(0.4)
0.0
(0.4)
0.9
(7.8)
(6.9)
66.8
73.2
140.0
GROUPE SEB
105
3
23.6. ANALYSIS OF PLAN ASSETS
❙ CHANGE IN PLAN ASSETS IN 2009
(in € millions)
PLAN ASSETS AT 1 JANUARY 2009
3
Contributions paid
Benefits paid
France
Other countries
Total
24.4
11.4
35.8
3.3
0.6
3.9
4.0
1.4
5.4
(5.5)
(0.3)
(5.8)
0.0
PLAN ASSETS AT 31 DECEMBER 2009
26.2
13.1
39.3
France
Other countries
Total
27.3
12.6
39.9
(4.7)
0.5
(4.2)
(in € millions)
Contributions paid
Benefits paid
6.2
1.6
7.8
(4.4)
(0.3)
(4.7)
(3.0)
(3.0)
24.4
11.4
35.8
France
Other countries
Total
30.3
11.5
41.8
1.3
0.4
1.7
(in € millions)
Contributions paid
1.3
1.4
2.7
Benefits paid
(5.2)
(1.0)
(6.2)
(0.4)
0.3
(0.1)
27.3
12.6
39.9
Plan assets in France are managed by an insurance company and are
invested as follows:
a approximately 15% in the general assets of the insurance company,
primarily composed of government bonds, corporate bonds mostly rated
AAA or AA, shares in international blue-chip companies (managed directly)
and high-yield office property;
a approximately 50% in corporate bond funds;
a the balance in equity funds.
The actual return on plan assets for 2009 should be in line with the expected
rate of 4.75%. Actuarial gains and losses generated in 2009 are not expected
to be material.
Plan assets in other countries primarily comprise funds invested with an
insurer amounting to €9.3 million, relating to the obligations of Groupe SEB
Nederland.
106
23.7. EARLY RETIREMENT SCHEMES
As part of the employee support measures implemented in connection with
the industrial reorganisation carried out in France (see Note 7), in mid-2006
Groupe SEB offered eligible employees the possibility of early retirement. The
programme was in addition to the early retirement scheme described below
for workers exposed to asbestos at the Fresnay site, which formed part of
the assets acquired from Moulinex SA in 2001. A total of 332 employees
benefited from the «asbestos scheme» as of 31 December 2008.
A provision was recorded at 31 December 2006 to cover the Group’s
obligations under the programme, discounted at a rate of 3.75% as the
amounts will be paid out in the medium term. At 31 December 2009, the
provision amounted to €11.1 million, versus €14.5 million at 31 December
2008 and €17.4 million at 31 December 2007.
GROUPE SEB
3
NOTE 24 I TRADE AND OTHER PAYABLES
(in € millions)
31 December 2009
31 December 2008
TRADE PAYABLES
398.0
366.3
333.4
Accrued taxes and employee benefits expense
198.9
177.8
180.1
Due to suppliers of fixed assets
8.8
10.5
9.8
Other payables
11.7
6.8
2.1
219.4
195.1
192.0
Current
Non-current
Total
OTHER PAYABLES
31 December 2007
3
At 31 December 2008, trade and other payables broke down as follows:
TRADE PAYABLES
398.0
-
398.0
Accrued taxes and employee benefits expense
175.9
23.0
198.9
Due to suppliers of fixed assets
Other payables
OTHER PAYABLES
8.8
-
8.8
11.0
0.7
11.7
195.7
23.7
219.4
Non-current accrued taxes and employee benefits expense correspond mainly to employee time savings accounts in France.
NOTE 25 I BORROWINGS
25.1. TOTAL BORROWINGS
(in € millions)
31 December 2009
31 December 2008
31 December 2007
274.6
193.0
46.1
Finance lease liabilities
1.7
2.0
2.1
Other debt
2.3
1.9
1.1
22.5
16.6
16.6
Bank borrowings
Non-discretionary profit sharing liability
LONG-TERM BORROWINGS
301.1
213.5
65.9
Bank borrowings
113.3
246.0
305.1
100.0
394.0
402.0
33.4
21.5
22.2
SHORT-TERM BORROWINGS
246.7
661.5
729.3
TOTAL BORROWINGS
547.8
875.0
795.2
Commercial paper
Current portion of long-term borrowings
At 31 December 2009, the Group’s borrowings were comprised of short-term
and long-term borrowings.
a a Schuldschein loan for €113.5 million due in 2013;
Bank borrowings consist of:
a a private placement credit facility for €117 million expiring in 2014, of
a a €30 million credit line set up in France, of which €20 million due beyond
a a Schuldschein loan for €47.5 million due in 2015;
which €23.4 million available for short-term drawdowns.
one year;
GROUPE SEB
107
3
At 31 December 2009, the weighted average interest rate on long-term
borrowings denominated in euros was 3.40%, compared with 5.23% at
31 December 2008.
The Group’s traditional source of financing is its €600 million commercial
paper programme, with an A2 rating by Standard & Poor’s since 2007.
Outstanding commercial paper under this programme totalled €100 million
at the year-end.
❙ CHARACTERISTICS OF BORROWINGS (NOMINAL AMOUNTS)
3
Due
Issuing
currency
Due
Outstanding
balance
in less than
1 year
French loan
EUR
2012
30.0
10.0
Schuldschein loan
EUR
2013
55.0
Schuldschein loan
EUR
2013
58.5
58.5
Schuldschein loan
EUR
2015
30.0
30.0
Fixed
Schuldschein loan
EUR
2015
17.5
17.5
Floating Euribor
French loan
EUR
2014
117.0
23.4
Commercial paper
EUR
2010
100.0
100.0
At 31 December 2009
(in € millions)
in 1 to 5
in more
years than 5 years
Original
interest rate
Rate after
hedging
20.0
Floating Euribor
Fixed
55.0
Fixed
93.6
-
111.2
108.9
2.0
Finance lease liabilities
-
-
2.7
1.0
1.7
EUR
-
25.9
3.4
22.5
547.8
246.7
253.3
TOTAL
Floating Euribor
Floating Eonia
Other bank borrowings,
incl. overdrafts
Non-discretionary profit
sharing liability
Floating Euribor
0.3
Floating (a)
Floating
47.8
(a) A portion of issued commercial paper is hedged by floating-rate cross-currency swaps in order to cover subsidiaries’ financing needs in their functional currency. Consequently,
interest rates on this financing are those applicable to borrowings in the main currencies concerned – US dollars, pounds sterling and Mexican pesos (Note 27.2).
All commercial paper is repayable in less than three months.
❙ LOAN MATURITIES (UNDISCOUNTED NOMINAL AMOUNTS, INCLUDING ACCRUED INTEREST)
Due
Scheduled
repayments
in less
than 1 year
in 1 to 5 years
2012
30.9
10.3
20.6
2013
62.8
1.2
61.6
EUR
2013
67.1
2.0
65.1
Private placement
EUR
2014
124.6
26.6
98.0
Schuldschein loan
EUR
2015
19.5
0.4
1.3
17.8
Schuldschein loan
EUR
2015
40.6
1.1
7.6
31.9
345.5
41.6
254.2
49.7
At 31 December 2009
(in € millions)
Issuing
currency
Due
French loan
EUR
Schuldschein loan
EUR
Schuldschein loan
TOTAL
108
GROUPE SEB
in more
than 5 years
3
❙ CONFIRMED CREDIT FACILITIES
The Group also has unused, confirmed credit facilities that break down as follows by maturity:
Confirmed credit
facilities 2009*
At 31 December (in € millions)
2009
536
2010
536
2011
536
2012
486
2013
486
2014
-
*
3
Unused confirmed lines of credit at 31 December 2009, of which:
a syndicated credit facility for €456.1 million, expiring in June 2011;
bank lines of credit set up in 2007 for €50 million expiring in 2011 and for €30 million expiring in 2013.
The syndicated credit facility includes an option to extend the expiry date by two years until 2013.
None of these credit lines include any acceleration clauses.
25.2. NET DEBT
(in € millions)
2009
2008
Long-term borrowings
301.1
213.5
65.9
Short-term borrowings
246.7
661.4
729.3
TOTAL BORROWINGS
547.8
874.9
795.2
(307.8)
(224.6)
(134.0)
3.4
(1.3)
(3.5)
243.4
649.0
657.7
Cash and cash equivalents, net
Derivative instruments, net
NET DEBT
Net debt corresponds to total long and short-term borrowings less cash
and cash equivalents and derivative instruments used for Group financing
purposes that are readily convertible into cash.
2007
At 31 December 2009, no borrowings were subject to acceleration clauses.
Only two medium-long-term loans in France were subject to a net debtto-EBITDA ratio that could have an impact on the interest rate of the debt.
Shifting to a different tranche would enable the Group to reduce its interest
payments. The amount of the saving would be less than €0.1 million.
GROUPE SEB
109
3
NOTE 26 I FAIR VALUE OF FINANCIAL INSTRUMENTS
26.1. FINANCIAL INSTRUMENTS
31 December 2009
3
Financial instruments by category
At fair value
through
profit (excl.
derivatives)
Available for
sale
Loans and
receivables
Carrying
amount
Fair value
Investments in non-consolidated
companies
0.5
0.5
Other non-current financial assets
7.3
7.3
7.3
Other non-current assets
5.0
5.0
5.0
627.1
627.1
627.1
44.3
44.3
44.3
5.2
5.2
Cash and cash equivalents
307.8
307.8
307.8
TOTAL FINANCIAL ASSETS
997.2
997.2
307.8
301.1
312.1
(in € millions)
Held to
maturity
Derivative
instruments
ASSETS
Trade receivables
Other current receivables, excl.
prepaid expenses
Derivative instruments
0.5
5.2
0.5
683.7
0.0
5.2
LIABILITIES
Other non-current liabilities
23.7
23.7
23.7
Trade payables
398.0
398.0
398.0
Other current liabilities
195.7
195.7
195.7
13.8
13.8
246.7
246.7
1,179.0
1,190.0
TOTAL FINANCIAL LIABILITIES
110
312.1
GROUPE SEB
13.8
246.7
0.0
0.0
0.0
1,176.2
13.8
3
31 December 2008
At fair value
through
profit (excl.
derivatives)
Available for
sale
Loans and
receivables
Carrying
amount
Fair value
companies
0.7
0.7
9.9
9.9
9.9
3.2
3.2
3.2
(in € millions)
Held to
maturity
Derivative
instruments
ASSETS
Trade receivables
0.7
3
645.6
645.6
645.6
prepaid expenses
46.0
46.0
46.0
12.0
12.0
224.6
224.6
224.6
942.0
942.0
224.6
213.5
213.5
36.4
36.4
36.4
Trade payables
366.3
366.3
366.3
158.8
158.8
158.8
12.0
0.7
704.7
0.0
12.0
LIABILITIES
51.2
51.2
661.5
660.6
1,487.7
1,486.8
213.5
51.2
660.6
0.0
31 December 2007
0.0
0.0
51.2
At fair value
through
profit (excl.
derivatives)
Available for
sale
Loans and
receivables
Carrying
amount
Fair value
companies
0.8
0.8
9.5
9.5
6.1
6.1
6.1
627.2
627.2
627.2
46.6
46.6
46.6
(in € millions)
1,435.6
Held to
maturity
Derivative
instruments
ASSETS
Trade receivables
prepaid expenses
0.8
9.5
3.3
3.3
134.8
134.8
134.8
3.3
828.3
828.3
134.8
65.8
65.8
15.3
15.3
15.3
Trade payables
333.4
333.4
333.4
176.7
176.7
176.7
10.4
10.4
729.3
728.9
1,330.9
1,330.5
0.8
689.4
0.0
3.3
LIABILITIES
65.8
10.4
728.9
0.0
0.0
0.0
1,320.1
GROUPE SEB
10.4
111
3
The fair value of trade and other receivables (classified as held-to-maturity
investments) is equivalent to their carrying amount, in view of their short
maturities.
Borrowings that are not quoted in an active market are measured by the
discounted cash flows method, applied separately to each individual facility,
based on market rates observed at the period-end for similar facilities and
the average spread obtained by the Group for its own issues.
Non-current financial assets consist mainly of investments in nonconsolidated companies, certain receivables related to those investments
and operating receivables due beyond one year.
Other financial liabilities consist mainly of accrued taxes and employee
benefits expense, which are due within one year.
Financial assets that are not quoted in an active market are recognised in
the balance sheet at cost, which is representative of their fair value.
3
26.2. DERIVATIVE INSTRUMENTS
The fair value of derivative instruments is as follows:
31 December 2009
Assets
Nominal
amount
Fair value
FAIR VALUE HEDGES
20.5
0.7
Forward sales of foreign
currencies
77.4
1.3
(in € millions)
31 December 2008
Liabilities
Assets
Nominal
amount
Fair value
Nominal
amount
Fair value
Nominal
amount
Fair value
51.9
(1.5)
71.5
5.2
14.2
(0.2)
29.3
1.5
25.0
(1.8)
Forward purchases of foreign
currencies
TOTAL
Liabilities
2.0
(1.5)
6.7
(2.0)
SUPERHEDGES AND TRADING
TRANSACTIONS
Currency swaps
EUR
6.8
(0.2)
GBP
9.0
(0.1)
HUF
MXN
6.7
USD
13.0
TOTAL
0.1
3.0
2.5
254.2
2.6
14.6
(0.3)
12.0
-
(0.1)
(3.2)
(3.6)
83.1
5.3
145.5
5.3
(3.6)
(3.9)
CASH FLOW HEDGES
Floating/fixed rate swaps
Aluminium derivatives
Nickel derivatives
40.0
(0.4)
(8.5)
93.7
(39.0)
0.5
(0.1)
8.6
(3.2)
2.8
(0.1)
4.7
(2.7)
58.1
3.6
0.6
Copper derivatives
TOTAL
0.6
(8.7)
0.0
(45.3)
TOTAL DERIVATIVE INSTRUMENTS
5.2
(13.8)
12.0
(51.2)
NET IMPACT ON EQUITY
(INCLUDING FAIR VALUE
ADJUSTMENTS RECOGNISED
IN PROFIT)
112
(8.6)
GROUPE SEB
(39.2)
3
The only derivatives with maturities beyond one year are cash flow hedges. The non-current portion of the fair value of these hedges is as follows:
At 31 December 2009
Expiring in less
than 1 year
Expiring in
1 to 5 years
(5.8)
(2.7)
Nickel derivatives
0.6
(0.1)
Copper derivatives
(0.1)
TOTAL
(5.3)
Expiring in more
than 5 years
Total
(8.5)
0.5
(0.1)
(2.8)
0.0
3
(8.1)
The fair value of derivative instruments is determined by the discounted cash flows method using forward exchange rates, market interest rates and aluminium
prices at 31 December 2009.
26.3 INFORMATION ON FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE
In accordance with the amended IFRS 7, fair value measurements are
classified using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. The hierarchy breaks down into
three levels, as follows:
a level 2: quoted prices in active markets for similar assets or liabilities or
other valuation techniques for which all significant inputs are based on
observable market data;
a level 3: valuation techniques for which any significant input is not based
on observable market data.
a level 1: quoted prices in active markets for the same instrument;
31 December 2009
(in € millions)
Total
Level 1
Level 2
Level 3
ASSETS
5.2
5.2
307.8
307.8
TOTAL FINANCIAL ASSETS MEASURED
AT FAIR VALUE
313.0
307.8
5.2
0.0
LIABILITIES
13.8
TOTAL FINANCIAL LIABILITIES MEASURED
AT FAIR VALUE
13.8
13.8
0.0
13.8
0.0
The portfolio of derivatives used by the Group to manage risk mainly includes forward currency contracts, interest rate and currency swaps and commodities
options. These instruments are classified as Level 2, as their fair value is calculated using internal valuation models based on observable data.
GROUPE SEB
113
3
NOTE 27 I MARKET RISK MANAGEMENT
27.1. RISK MANAGEMENT
Similarly, goods purchased for resale billed in US dollars are bought from
Asian suppliers by SEB Asia whose functional currency is also the US dollar.
Risks are managed by Corporate Finance, based on financial market
conditions and in accordance with procedures established by the Group.
3
Hedging transactions are carried out in the financial markets with a
limited number of high-quality partners in order to avoid counterparty risk.
Subsidiaries’ risks are hedged at corporate level when this is allowed under
the laws and regulations of the country concerned and when the hedges
can be arranged on the financial markets.
Subsidiaries that are prevented from hedging financial risks through
Corporate Finance due to local laws and regulations enter into hedging
transactions directly with local banks in compliance with Group procedures
and policies.
27.2. MARKET RISKS
27.2.1 Currency risks
The majority of Group sales are billed in currencies other than the euro,
mainly the US dollar, pound sterling, Brazilian real and Japanese yen. Most
billing currencies correspond to the functional currencies of the subsidiaries
concerned and do not give rise to any transactional currency risk at the
local level.
The main sources of transactional currency risks therefore arise from:
a intra-group billings between two Group companies with different functional
currencies, as follows:
a exports by manufacturing subsidiaries in the euro zone billed in the
local currency of the marketing subsidiaries,
a imports of goods from SEB Asia billed in US dollars by marketing
subsidiaries whose functional currency is not the US dollar;
a purchases of industrial components from external suppliers by the
manufacturing subsidiaries that are billed in a currency other than their
functional currency (for example, components purchases by French
subsidiaries that are billed in US dollars).
These risks are managed at Group level by SEB S.A., which acts as the
subsidiaries’ sole counterparty except where this is not possible due to
local regulations. The resulting balance sheet currency positions in the main
currencies are partly hedged by means of forward sales and purchases of
foreign currency against the euro. Part of SEB Asia’s US dollar billings to
subsidiaries is hedged. In 2008, 2007 and 2006 the Group was a net buyer
of US dollars.
The Group’s overall currency risk management policy sets very strict rules
for the hedging of currency risks associated with highly probable future
transactions.
ANALYSIS OF CURRENCY RISKS ON INTER-COMPANY TRANSACTIONS
The Group’s net exposure to transactional currency risks primarily concerns the following currencies (excluding the functional currencies of Group companies):
At 31 December 2009 (in € millions)
USD
Total assets
Total liabilities
GBP
HUF
JPY
Other
4
20
6
38
4
20
70
38
(4)
(15)
(69)
(32)
0
5
1
6
(48)
Future transactions
NET POSITION BEFORE HEDGING
64
(48)
Forward purchases of foreign currencies
20
Forward sales of foreign currencies
NET POSITION AFTER HEDGING
114
(28)
GROUPE SEB
USD
Total assets
GBP
HUF
JPY
5
14
15
3
Other
51
Total liabilities
(34)
Future transactions
(29)
4
2
0
6
(63)
9
16
15
56
(8)
(15)
0
(12)
(1)
53
(10)
1
1
15
44
USD
GBP
HUF
JPY
Other
48
6
16
7
30
Total assets
Total liabilities
(63)
Future transactions
(16)
5
1
7
4
(31)
11
17
14
33
(7)
(14)
(12)
(17)
4
3
2
16
3
(1)
29
(2)
At 31 December 2009, the euro was trading at USD 1.441, GBP 0.888, HUF
270.42 and JPY 133.16.
The appreciation of these currencies, assuming all other variables remained
the same, would have a positive impact on profit, except for the US dollar,
whose appreciation would result in an expense.
At 31 December 2009, the sensitivity analysis of the net position after
hedging was as follows:
(in € millions)
Hypothetical currency appreciation
IMPACT ON PROFIT
The sensitivity analysis was similar at end-2008 and end-2007.
CURRENCY RISKS ON FINANCING
SEB S.A. is the main provider of financing for its subsidiaries. Current
account advances are made in the subsidiaries’ functional currency. As
SEB S.A. raises long-term financing in euros, it is exposed to currency risks
USD
GBP
HUF
JPY
Other
1%
1%
1%
1%
1%
(0.3)
0.0
0.1
0.0
0.1
on these advances. To hedge these risks, the Company borrows or lends
funds in the subsidiary’s currency, according to whether the current account
balance is a debit or a credit, or uses currency swaps to refinance its debt
in the subsidiary’s local currency. Currency risks on financing are therefore
systematically hedged.
The Group does not however apply hedge accounting to these transactions.
USD
GBP
Other
Total assets
290
8
25
228
8
17
(267)
(9)
(17)
(39)
(1)
0
Total liabilities
62
8
GROUPE SEB
115
3
USD
GBP
Other
Total assets
340
15
53
Total liabilities
138
3
Total assets
Total liabilities
2
202
15
51
(209)
(15)
(12)
(7)
0
39
USD
GBP
Other
237
40
45
222
40
44
(224)
(43)
(10)
(2)
(3)
34
15
2
The appreciation or depreciation of these currencies, assuming all other variables remained the same, would have an impact on profit.
At 31 December 2009, the sensitivity analysis of the net position after hedging was as follows:
(in € millions)
Hypothetical currency appreciation
IMPACT ON PROFIT
The sensitivity analysis was similar at end-2008 and end-2007.
USD
GBP
Other
1%
1%
1%
(0.3)
0.0
0.0
rates for the subsidiaries’ functional currencies on SEB S.A.’s share in their
net assets. These risks are not hedged.
CURRENCY RISKS ON NET INVESTMENTS IN FOREIGN OPERATIONS
Groupe SEB is also exposed to currency risks on its net investment in
foreign operations, corresponding to the impact of changes in exchange
27.2.2 Interest rate risks
Group policy consists of hedging interest rate risks based on trends in market interest rates and changes in the Group’s overall debt structure. These risks
are not hedged systematically.
The following table analyses financial assets and liabilities at 31 December 2009, based on interest rate re-set dates:
Overnight to 1 year
Total assets
Floating rate
1 to 5 years
More than 5 years
Fixed rate
Fixed rate
Fixed rate
307.8
Total liabilities
(462.8)
(10.0)
(105.0)
(155.0)
(10.0)
(105.0)
0.0
Interest payable between January 2007 and March 2012 is hedged by a floating/fixed rate swap. This swap qualifies for hedge accounting under IAS 39.
AT 31 DECEMBER 2009
Expiring within
one year 2009 Expiring in 1 to 5 years
(in € millions)
Floating/fixed rate swap
116
10
GROUPE SEB
20
Expiring beyond
5 years
0
3
Based on total debt at 31 December 2009, assuming debt remains constant
throughout the year and is denominated in the same currencies as at
that date, a 1-point increase in interest rates would lead to an estimated
€4.3 million increase in interest expense.
SENSITIVITY ANALYSIS
The impact of the interest rate swap on equity at 31 December 2009 would
be as follows:
A 10% increase or decrease in metal prices versus their average prices in
2009 would have a €5.5 million positive or negative impact on operating
margin.
(in € millions)
2009
FAIR VALUE AT 1 JANUARY
(0.4)
Change in fair value
(0.1)
Amount reclassified into profit
(0.1)
FAIR VALUE AT 31 DECEMBER
(0.6)
A 10% increase in metal prices at 31 December 2009 would have a
€5.2 million positive impact on equity, while a 10% decrease would have a
€5.2 million negative impact, assuming all other variables remained constant.
3
27.2.4. Equity risk and treasury stock
It is not Group policy to hold significant portfolios of equities or equity funds.
The Group does, however, hold a portfolio of SEB shares, purchased in
connection with:
The ineffective portion recognised in profit is not material.
a a liquidity contract set up in order to ensure that there is a sufficiently liquid
27.2.3. Commodity risks
a the share buyback programme, mainly for allocation on exercise of
market for SEB shares and to stabilise the share price, and;
Commodity risks arising from changes in the prices of certain raw materials
used by the Group – mainly aluminium, copper and nickel used to produce
stainless steel – are hedged by derivative instruments. The Group anticipates
its needs for the coming year and hedges them on a conservative basis,
covering 70% of its estimated purchases for the next twelve months. At
31 December 2009, 26,296 tonnes of aluminium purchases, 351 tonnes
of copper purchases and 382 tonnes of nickel purchases were hedged.
Prices are fixed in advance using zero-premium collars, swaps and average
monthly price options.
These hedges of raw material purchases are qualified as cash flow hedges
under IAS 39 when the criteria listed in Note 1.4.4 are met.
At 31 December 2009, remeasurement of commodity hedges at fair value
led to the recognition in equity of an unrealised loss of €8.1 million. At yearend 2008 and 2007, the unrecognised losses amounted to €44.9 million and
€12.3 million respectively.
Derivatives that expired in 2009 led to a loss of €20.4 million versus a
€6.0 million loss in 2008. Gains on hedged metal purchases amounted to
€14.1 million compared with a €4.3 million gain in 2008.
The ineffective portion of commodity hedges recorded under “Other financial
income and expense” represented an €0.8 million loss in 2009, including the
reclassification as trading instruments of copper derivatives in the United
States. These instruments were reclassified given that actual purchases were
well below forecasts, and the quantities concerned no longer qualified for
hedge accounting under IAS 39. As a result, the Group recognized a related
expense of €0.3 million. The 2009 figure compares with a €1.0 million loss
in 2008 and a €2.7 million gain in 2007.
employee stock options.
Treasury stock is deducted directly from equity. Profits and losses from sales
of treasury stock are also recognised in equity.
Based on the closing share price on 31 December 2009 (€39.70), the fair
value of shares held in treasury at that date stood at €125 million. A 10%
increase or decrease in the share price would therefore lead to a €12.5 million
change in the fair value of treasury stock.
ZJ Supor, which is 51.31%-owned by Groupe SEB, is listed on the Shenzen
stock exchange. At 31 December 2009, ZJ Supor’s share price was RMB
20.70, valuing Groupe SEB’s investment at €479.6 million. The change in the
Supor share price had no impact on Groupe SEB’s consolidated financial
statements, as ZJ Supor is fully consolidated. Similarly, the change in the
share price had no impact on the company accounts of SEB Internationale
because its interest in ZJ Supor is classified as a long-term investment and
is not marked to market.
27.3. LIQUIDITY RISK
To manage the liquidity risk that may arise due to financial liabilities reaching
maturity or needing to be settled early, the Group implements a financing
strategy based on:
a maintaining cash and cash equivalents at a certain level at all times
(€307.8 million at 31 December 2009);
a a €600 million commercial paper programme, with €100 million outstanding
at 31 December 2009;
GROUPE SEB
117
3
a other debt facilities, including:
a a Schuldschein loan, repayable in two instalments in 2013 and 2015
for €113.5 million and €47.5 million, respectively.
a €147 million in medium-term loans, amortised until 2014,
Cash and cash equivalents and debt are discussed in Note 19 and Note 25,
respectively.
a a €456.1 million syndicated credit facility expiring in 2011, which had
not been drawn down at 31 December 2009,
With currency swaps, the notional amounts are exchanged at maturity, while
with interest rate swaps, only the interest differential is paid or received.
a a €30 million bank line of credit expiring in 2011, which had not been
drawn down at 31 December 2009,
3
27.4. CREDIT RISK
At 31 December 2009, trade receivables broke down as follows based on their age:
Past due
(in € millions)
Net trade receivables
Current
0-90 days
91-180 days
Over 181 days
Total
527.4
94.8
2.4
2.5
627.1
To avoid default risks, Groupe SEB sets individual credit limits that are regularly
updated based on the customer’s financial position and payment history.
The Group’s main customers are well-known international retailers. In 2009,
no single customer accounted for more than 6% of total revenue.
For more than five years, the risk of losses has been covered by credit
insurance taken out with Coface. At 31 December 2009, 71% of net trade
receivables were covered by insurance that would apply in the event of
non-recovery.
NOTE 28 I ENVIRONMENTAL EXPENDITURE
Environmental expenditure amounted to €4.5 million in 2009, compared with
€4.3 million in 2008 and €4.4 million in 2007.
These amounts include routine environmental management system costs,
covering areas such as water and waste management. They do not include
taxes on packaging or the cost of disposing of waste electrical and electronic
equipment.
The main costs are presented below, including the breakdown between amounts recognised as expenses and as capital expenditure.
2009
2008
Expenses
Capital
expenditure
Total
Expenses
Capital
expenditure
Total
Expenses
Capital
expenditure
Total
Ambient air quality
0.3
0.2
0.5
0.3
0.2
0.5
0.3
0.2
0.5
Waste water
management and water
saving systems
0.9
0.4
Waste management
1.5
Soil protection and
decontamination
0.1
Other environmental
protection measures
(in € millions)
1.3
0.7
0.2
0.9
0.8
0.4
1.2
1.5
1.7
0.1
1.8
1.5
0.1
1.6
0.1
0.2
0.1
0.2
0.3
0.1
0.1
0.2
0.9
0.1
1.0
0.7
0.1
0.8
0.6
0.3
0.9
3.7
0.8
4.5
3.5
0.8
4.3
3.3
1.1
4.4
There were no provisions for environmental risks at year-end 2009, 2008 or 2007.
118
2007
GROUPE SEB
3
NOTE 29 I OFF-BALANCE SHEET COMMITMENTS
29.1. SPECIFIC COMMITMENTS
Specific commitments are discussed in the following notes:
a Note 23 – Pension and other post-employment benefit obligations;
3
a Note 25 – Borrowings;
a Note 26 – Fair value of financial instruments.
29.2. COMMITMENTS ARISING IN THE ORDINARY COURSE OF BUSINESS
(in € millions)
Firm orders for property, plant and equipment
2009
2008
2007
10.2
16.3
14.6
Forward purchases of raw materials, components and bought-in products
1.0
1.8
7.3
Guarantees and bonds given
2.7
4.9
6.2
89.4
67.7
60.1
1.3
11.3
5.9
110.7
100.2
89.7
16.3
14.6
10.2
1.0
1.8
7.3
442.8
424.7
468.8
89.4
67.7
60.1
1.3
8.9
5.9
550.8
517.6
552.3
Commitments under non-cancellable operating leases
Miscellaneous financial commitments
TOTAL COMMITMENTS GIVEN
Firm orders for property, plant and equipment
Forward purchases of raw materials, components and bought-in products
Guarantees received from customers
Commitments under non-cancellable operating leases
Miscellaneous financial commitments
TOTAL COMMITMENTS RECEIVED
It is not the Group’s policy to sell receivables to factoring companies or banks.
The French companies in the Group are committed to funding Fondation Groupe SEB over several years. At 31 December 2009, their remaining commitment
amounted to €1.2 million.
GROUPE SEB
119
3
NOTE 30 I CONTINGENT ASSETS AND LIABILITIES
30.1. CONTINGENT ASSETS
Supplier dispute
A provision for contingencies was set aside following a dispute with a
Chinese supplier concerning a shipment (see Note 7.3). The Group’s
maximum exposure is estimated at €5 million, but the entire claim is being
contested and the related legal proceedings are expected to be lengthy.
3
30.2. CONTINGENT LIABILITIES
Pentalpha dispute
In April 2006, a jury in New York returned a verdict in favour of Groupe SEB
in relation to a patent infringement suit filed against Hong Kong companies
Pentalpha Enterprises Ltd. and Global-Tech Appliances, Inc. (hereinafter
referred to as Pentalpha), concerning a deep fryer marketed in the United
States. This New York District Court ruling on 9 October 2008 found that
Groupe SEB was entitled to a reasonable royalty payment of $4.7 million.
Pentalpha challenged this ruling by filing:
a an appeal before the Federal Circuit Court of Appeal (FCCA) in Washington,
which fully upheld the District Court ruling on 5 February 2010;
a a suit against the SEB patent with the US Patent and Trademark Office
(USPTO). The suit was overruled as the USPTO upheld all the claims of
the SEB patent in December 2009.
Pentalpha has recently submitted a request for the FCCA to review its
decision. Pentalpha has also submitted a $1 million claim against SEB and
its lawyer before the New York State Court for inaccurate and misleading
statements made during the patent case. These two claims have little
chance of materialising, having essentially been engaged to delay or interfere
with the payment of damages. Damages currently amount to $5.1 million
(including interest) and are guaranteed by the same amount held in escrow by
SEB’s lawyer pursuant to the 2005 court ruling. To date, Groupe SEB has not
recognised this dispute in its financial statements pending the termination
of all current legal proceedings.
Sale of Plant 3 in Brazil
In August 2008, Groupe SEB do Brasil signed an agreement to sell Plant 3 in
Sao Paulo, Brazil. The sale will be deemed complete once a decontamination
certificate is presented to the buyer. The site was decontaminated in 2009,
and the Group is currently awaiting the delivery of the decontamination
certificate from the local authorities. Based on the year-end exchange rate
of the BRL, the agreed sale price would total €15.1 million, with the site’s
carrying amount recognised as €1.1 million at 31 December 2009. The
transaction was not recognised in the financial statements, as title had not
yet been transferred.
120
In the past twelve months, apart from what is reflected in the financial
statements and described in the accompanying notes, there have been
no other government, legal or arbitration proceedings (including any such
proceedings which are pending or threatened of which the Group is aware)
which may have or have had in the recent past significant effects on the
Group and/or its financial position or profitability.
Recycling end-of-life products
European directive 2002/96/EC on waste electrical and electronic equipment
adopted in February 2003 requires Member States to recycle end-of-life
household appliances. This directive was transposed into the national laws
of EU member countries during 2006.
The directive states that household appliance manufacturers and importers
are responsible for financing the cost of collecting, sorting and reusing/
recycling end-of-life electrical and electronic equipment. Concerning
products sold to private households before the directive was transposed into
national legislation (historical waste), the directive requires that all producers
contribute to financing the costs in proportion to their respective share of
the equipment put on the market during a “reference period”, generally the
year the waste was collected and recycled. This system is known as “one
for one” (one product recycled for every one sold) or “pay as you go”.
IFRIC interpretation no. 6 adopted by the European Union in a regulation
published in the Official Journal of the European Communities on 27 January
2006, which was early adopted by Groupe SEB in 2005, states that no
provision is required for historical waste, other than in respect of recycling
costs incurred during the reference period. As these costs are or will be offset
in most countries by an environmental charge payable by the consumer
until 2011, the net cost of recycling historical waste will not have a material
impact on the Group’s income statement.
Concerning the treatment of products put on the market after the date of
transposition (13 August 2005 in the case of France), the directive states
that producers are individually responsible for guaranteeing financing for
the recovery and recycling of the related waste.
To meet these obligations, Groupe SEB has joined collective pay-as-yougo schemes similar to those in place for financing historical waste. These
schemes are managed by coordinating organisations, such as Eco-Systèmes
SAS in France, in which Groupe SEB plays an active role.
The financial guarantees generally take the form of advances to these
organisations, based on the expected costs. While joining these schemes
does not exempt Groupe SEB from its individual liability, no provision (within
the meaning of IAS 37) is recognised as new products are brought to market,
because a producer can withdraw from the market concerned without
GROUPE SEB
having to individually fulfil its guarantee obligations, leaving the remaining
producers to jointly cover the costs of recycling. For this reason, provisions
are recognised not when a product is introduced but when it has been on
the market during the period of reference. The provisions recorded in 2009
only covered the contributions called by the above organisations, which can
adjust contribution amounts in later periods based on actual recycling costs.
Costs of recycling “new waste” are expected to rise in coming years with
the probable increase in return rates and gradual introduction of recycling
schemes. These costs will also reflect average product life cycles, changes
in sorted collection logistics costs and technological improvements related
to product design and recycling techniques.
3
Statutory employee training rights
Employees of Groupe SEB in France with permanent contracts are entitled to
20 hours’ training per year, which may be carried forward for up to six years.
If all or part of this entitlement is not used within six years, it is capped at 120
hours. The costs of supplying training as a result of this entitlement and of the
training allowances paid to employees who follow courses outside working
hours are covered by the employer. As the decision to incur these costs is
made by Group management and they relate to employee services to be
received in future periods, they are expensed as incurred. At 31 December
2009 the total amount of unused training hours accumulated by Groupe
SEB employees stood at 593,294 versus 552,678 at 31 December 2008
and 459,779 at 31 December 2007.
3
NOTE 31 I RELATED PARTY TRANSACTIONS
31.1. TRANSACTIONS WITH ASSOCIATES AND NON-CONSOLIDATED COMPANIES
The consolidated financial statements include transactions carried out in the normal course of business with associates and non-consolidated companies.
All of these transactions are carried out on arm’s length terms.
(in € millions)
Revenue
2009
2008
2007
1.8
10.9
6.7
Other income
2.2
Purchases
11.5
0.2
3.2
2.9
Trade receivables
0.2
3.3
1.3
Trade payables
2.5
In 2007, purchases and trade payables corresponded to transactions with Supor as from the acquisition date.
31.2. MANAGEMENT REMUNERATION AND BENEFITS
Details on members of the Board of Directors and the Executive Committee, including members who retired in 2009, are provided in the Corporate Governance
section of this document. The following table provides an analysis of the remuneration and benefits paid to the members of the Board of Directors and the
Executive Committee in 2009, 2008 and 2007:
(in € millions)
2009
2008
2007
Fixed remuneration
2.7
2.4
2.3
Variable remuneration
2.1
2.5
1.8
Directors’ fees
0.4
0.4
0.3
Post-employment benefits
2.4
2.0
1.3
Share-based payments (stock options)
2.7
1.8
2.0
10.3
9.1
7.7
SHORT-TERM BENEFITS
OTHER BENEFITS
TOTAL
GROUPE SEB
121
3
NOTE 32 I SUBSEQUENT EVENTS
To the best of Groupe SEB’s knowledge, no significant event has taken place since 31 December 2009 that would have a material impact on the Group’s
consolidated financial statements.
3
NOTE 33 I LIST OF CONSOLIDATED COMPANIES
(showing the % interest held by the Group)
33.1. FULLY CONSOLIDATED COMPANIES
Companies
Core business (b)
Headquarters
Siren no. % interest
FRANCE
Parent company
France
300 349 636
Calor SAS (a)
*
France
956 512 495
100
SAS SEB (a)
*
France
302 412 226
100
Tefal SAS (a)
*
France
301 520 920
100
Rowenta France SAS (a)
*
France
301 859 880
100
SEB S.A. (a)
*
France
407 982 214
100
SIS SAS (a)
***
France
399 014 216
100
SEB Développement SAS (a)
***
France
16 950 842
100
Groupe SEB France SAS (a)
**
France
440 410 637
100
100
Groupe SEB Moulinex SAS (a)
Groupe SEB Retailing (a)
SEB Internationale SAS (a)
Groupe SEB Export (a)
**
France
440 410 884
Holding company
France
301 189 718
100
**
France
421 266 271
100
OTHER EU COUNTRIES
Rowenta Werke GmbH
*
Germany
100
Krups GmbH
**
Germany
100
Groupe SEB Deutschland GmbH
**
Germany
100
Holding company
Germany
100
**
Austria
100
Rowenta Deutschland GmbH
SEB Osterreich GmbH
Groupe SEB Belgium SA NV
**
Belgium
100
Groupe SEB Nordik AS
**
Denmark
100
Groupe SEB Iberica SA
**
Spain
99.8
Groupe SEB UK Ltd.
**
United Kingdom
100
Dormant
United Kingdom
100
Groupe SEB Hellados S.A.
**
Greece
100
Groupe SEB Italia SpA
**
Italy
100
Tefal UK
Lagostina SpA
*
Italy
100
Casa Lagostina s.r.l
**
Italy
100
Groupe SEB Nederland BV
**
Netherlands
100
Holding company
Netherlands
100
**
Portugal
99.9
Rowenta Invest BV
Groupe SEB Portugal Ltd.
122
GROUPE SEB
Companies
Core business (b)
Headquarters
3
AMERICAS
Groupe SEB Canada Inc.
**
Canada
100
Groupe SEB USA
**
United States
100
Holding company
United States
100
All Clad USA, Inc. Delaware
All Clad Metal-Crafters LLC
*
United States
100
***
United States
100
Groupe SEB Holdings USA
Holding company
United States
100
Groupe SEB Argentina SA
**
Argentina
100
100
Clad Holdings Corp. Delaware
Grupo SEB do Brasil
Groupe SEB Chile Ltda.
Groupe SEB Colombia SA
G.S.E.B. Mexicana S.A. de CV
*
Brazil
**
Chile
100
*
Colombia
100
**
Mexico
100
*
Mexico
100
***
Mexico
100
**
Venezuela
100
Groupe SEB Schweiz GmbH
**
Switzerland
100
Groupe SEB Australia Ltd.
**
Australia
100
*
China
100
Vistar S.A. de CV
Groupe SEB Servicios Mexico
Groupe SEB Venezuela SA
3
OTHER COUNTRIES
SSEAC Co. Ltd.
SEB Trading Co. Ltd.
**
China
100
Groupe SEB Korea
**
South Korea
100
**/***
Hong Kong
100
Groupe SEB Thailand
**
Thailand
100
Groupe SEB Singapore Pty Ltd
**
Singapore
100
Groupe SEB Malaysia SDN. BHD
**
Malaysia
100
Groupe SEB Central Europe
**
Hungary
100
Groupe SEB Japan Co. Ltd.
**
Japan
100
Groupe SEB Polska Zoo
**
Poland
100
Groupe SEB CR s.r.o/Groupe SEB Slovensko s.r.o
**
Czech Republic/
Slovakia
100
Groupe SEB Romania
**
Romania
100
Groupe SEB Baltic
**
Latvia
100
Holding company
Hong Kong
100
Groupe SEB d.o.o.
**
Slovenia
100
Groupe SEB Bulgaria EOOD
**
Bulgaria
100
Groupe SEB Istanbul A.S.
**
Turkey
100
Groupe SEB Ukraine
**
Ukraine
100
Groupe SEB Vostok
*
Russia
100
Holding company
China
51.31
*
China
65.92
SEB Asia Ltd.
Grain Harvest Development Ltd
ZJ Supor
Zehjiang Supor Co., Ltd
DG Supor
Dongguan Supor Electrical Appliances
SX Supor
Shaoxing Supor Domestic Appliance Co., Ltd
*
China
51.31
Vietnam Supor
Supor (Vietnam) Co., Ltd
*
Vietnam
51.31
WH CKW
Wuhan Supor Cookware Co., Ltd
*
China
63.10
WH Pressure
Wuhan Supor Pressure Cooker Co., Ltd
Holding company
China
50.80
GROUPE SEB
123
3
Companies
3
Headquarters
WH Supor
Wuhan Supor Co., Ltd
***
China
49.77
WH Waste
Wuhan Supor Waste Recovery Co., Ltd
***
China
51.31
YH Waste
Yuhuan Supor Waste Recovery Co., Ltd
***
China
30.79
ZJ Rubber
Zhejiang Supor Rubber & Plastics Products Co., Ltd.
*
China
47.82
ZJ Lesu
Zhejiang Lesu Metal Material Co. Ltd.
*
China
26.17
ZJ Supor EA
Zhejiang Supor Electrical Appliances Manufacturing Co., Ltd
*
China
63.48
(a)
(b)
*
**
***
Core business (b)
A member of the French tax group.
Core business:
manufacturing, sales and marketing;
sales and marketing;
service.
33.2. ASSOCIATES
Companies
Core business (b)
Headquarters
Dormant
Russia
Core business (b)
Headquarters
Iran SEB (not material in relation to the Group as a whole)
Dormant
Iran
70
Tefal India
Dormant
India
100
**
Iran
72
Tefal & KV St Petersbourg A/O
Siren no.
% interest
100
33.3. NON-CONSOLIDATED COMPANIES
Companies
Groupe SEB Pars (not material in relation to the Group as a whole)
(a)
(b)
*
**
***
124
A member of the French tax group.
Core business:
manufacturing, sales and marketing;
sales and marketing;
service.
GROUPE SEB
Siren no.
% interest
Statutory auditors’ report on the consolidated financial statements
3
on the consolidated financial statements
3
YEAR ENDED 31 DECEMBER 2009
In compliance with the assignment entrusted to us by your Annual General
Meeting, we hereby present our report for the year ended 31 December
2009 on:
a the audit of the accompanying consolidated financial statements of
SEB S.A.;
a the justification of our assessments;
a the specific verification required by law.
The consolidated financial statements have been approved by the Board of
Directors. Our role is to express an opinion on these consolidated financial
statements, based on our audit.
Opinion on the consolidated financial statements
We conducted our audit in accordance with professional standards
applicable in France. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis or by selection, evidence supporting the amounts
and disclosures in the consolidated financial statements. An audit also
includes assessing the accounting policies used and significant estimates
made by management, as well as evaluating the overall financial statements
presentation. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair
view of the assets and liabilities and of the financial position of the Group
as at 31 December 2009 and of the results of its operations for the year then
ended in accordance with the IFRSs as adopted by the European Union.
Without qualifying the above opinion, we would like to draw your attention to
Note 1 to the consolidated financial statements which describes the impact
of the application of new financial reporting standards as of 1 January 2009
(the revised IAS 1, IFRS 8 and the amended IFRS 7).
Pursuant to Article L. 823-9 of the French Commercial Code on the
justification of our assessments, we would like to bring to your attention
the following information:
ACCOUNTING ESTIMATES
a At each balance sheet date, the Group assesses whether there is any
indication that non-current assets belonging to various cash-generating
units (CGUs) may be impaired and performs annual impairment tests on
goodwill and assets with indefinite lives, as described in Notes 1.4.1 and
1.4.3 to the consolidated financial statements. The estimates used were
determined based on the information available at the time the consolidated
financial statements were prepared, and in light of the financial crisis,
which made forecasting and medium-term planning more difficult, as
described in Note 1.3 to the consolidated financial statements.
We have examined the impairment testing methods as well as the cash flow
forecasts and assumptions used and we have verified that Notes 7.2 and
11 contain the appropriate disclosures.
GROUPE SEB
125
3
Statutory auditors’ report on the consolidated financial statements
ACCOUNTING POLICIES
methods, their correct application by the Company and the disclosures
provided in the notes to the consolidated financial statements.
a Note 1.4.9 to the consolidated financial statements describes the
These assessments were made in the context of our audit of the consolidated
financial statements taken as a whole, and therefore contributed to the
opinion we formed which is expressed in the first part of this report.
accounting methods used for deferred taxes and Note 9 sets forth their
impacts on the financial statements.
As part of our assessment of the accounting policies used by your Company,
we have verified the appropriateness of the above-mentioned accounting
3
Specific verification
We also verified the information disclosed in the Group’s management report
in accordance with the law and professional standards applicable in France.
We have no matters to report as to its fair presentation and consistency with
the consolidated financial statements.
The Statutory Auditors
Bernard RASCLE
Dominique VALETTE
This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience of English speaking users.
The statutory auditors’ report includes information specifically required by French law in such reports, whether modified or not. This information is presented
below the opinion on the consolidated financial statements and includes an explanatory paragraph discussing the auditors’ assessments of certain significant
accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the consolidated financial statements
taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the consolidated financial statements.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
126
GROUPE SEB
COMPANY
BALANCE SHEET – AT 31 DECEMBER 128
INCOME STATEMENT
– YEARS ENDED 31 DECEMBER 130
REPORT OF THE BOARD OF DIRECTORS 131
Financial review
Significant events of the year
131
131
4
NOTES TO THE COMPANY
STATUTORY AUDITORS’
REPORT ON THE COMPANY
Opinion on the financial statements
Specific verifications and disclosures
4
143
143
144
GROUPE SEB
127
4
31 December 2009
Assets
(in € millions)
Gross
31 December 2008
Depreciation/
amortisation
Net
Net
0.1
0.1
NON-CURRENT ASSETS
4
Intangible assets
0.1
Patents, licenses and other rights
7.3
7.3
Shares in subsidiaries and affiliates
755.8
71.4
Loans to subsidiaries and affiliates
790.3
TOTAL
0.5
1,554
78.7
684.4
690.4
790.3
1,106.40
0.5
13.9
1,475.3
1,810.8
CURRENT ASSETS
Trade receivables
0.4
0.4
0.4
Other receivables
42.1
42.1
62.5
188.6
188.6
84
60.6
60.6
69.3
Marketable securities
PREPAID EXPENSES
TOTAL
Conversion losses
TOTAL ASSETS
128
0.2
291.9
0
3.3
1,849.2
GROUPE SEB
78.7
0.2
0.2
291.9
216.4
3.3
7.3
1,770.5
2,034.5
Liabilities and shareholders’ equity (before appropriation of profit)
(in € millions)
31 December 2009
4
31 December 2008
SHAREHOLDERS’ EQUITY
Share capital
49.9
50.9
Additional paid-in capital
90.3
107.8
Revaluation reserve
16.9
16.9
Legal reserve
5.2
5.2
Regulated reserves
0.8
0.8
Revenue reserves
7.9
7.9
Retained earnings
580.1
472.6
74.1
152.9
825.2
815
Net profit for the year
TOTAL
4
PROVISIONS FOR CONTINGENCIES AND CHARGES
Provisions for contingencies
3.3
7.3
114.7
97.1
118
104.3
Bank borrowings
389.9
354.5
Other borrowings
417.7
733.2
1.6
1.1
2
1.1
Provisions for charges
TOTAL
LIABILITIES
Trade payables
Accrued taxes and payroll costs
Other payables
TOTAL
13.5
17.7
824.7
1,107.7
2.6
7.5
1,770.5
2,034.5
Conversion gains
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
GROUPE SEB
129
4
(in € millions)
2009
2008
OPERATING REVENUES
0.0
Service revenues
4
Reversals of depreciation, amortisation and provisions, expense transfers
0.1
0.7
Other income
0.4
0.4
TOTAL
0.5
1.1
Other purchases and external charges
5.1
5.0
Taxes other than on income
0.7
1.0
Wages and salaries
2.4
1.5
OPERATING EXPENSES
Payroll taxes
2.7
2.7
0.3
0.2
Other expenses
TOTAL
LOSS FROM ORDINARY ACTIVITIES BEFORE NET FINANCIAL INCOME
0.5
0.4
11.7
10.8
(11.2)
(9.7)
79.1
179.4
FINANCIAL REVENUES
Dividends from subsidiaries and affiliates
1.1
3.4
Reversals of provisions, expense transfers
50.4
51.2
Gains on foreign exchange
99.5
224.8
Interest income
0.1
0.7
230.2
459.5
Charges to provisions for impairment of financial assets
28.3
66.8
Interest expense
20.3
44.1
Loss on foreign exchange
101.3
224.1
TOTAL
149.9
335.0
NET FINANCIAL INCOME
80.3
124.5
PROFIT FROM ORDINARY ACTIVITIES
69.1
114.9
Other income from revenue transactions
0.0
30.1
Other income from capital transactions
0.8
2.5
Reversals of provisions, expense transfers
1.0
2.3
TOTAL
1.8
34.9
Net income from sales of marketable securities
TOTAL
FINANCIAL EXPENSES
OTHER INCOME
OTHER EXPENSES
130
Other expenses on revenue transactions
0.1
1.9
Other expenses on capital transactions
4.6
4.0
Charges to provisions
18.6
30.1
TOTAL
23.3
36.0
NET OTHER INCOME/(EXPENSES)
(21.5)
(1.1)
Income tax
(26.5)
(39.1)
NET PROFIT
74.1
152.9
GROUPE SEB
4
Financial review
SEB S.A., the parent company of Groupe SEB, is a holding company whose
activities are largely confined to overseeing the manufacturing and sales
activities carried out by its subsidiaries.
a expenses:
As a result, SEB S.A.’s earnings only partly reflect the performance of the
Group and year-on-year changes in the Group’s performance are not visible
at the level of the Company’s results until the following year, because its
revenues consist essentially of dividends received from subsidiaries.
Since 1 January 2005, SEB Développement has taken over the market
prospecting, international sales promotion and development, administrative,
financial, research, innovation and industrial property services previously
supplied by the Company to subsidiaries.
The main items reflected in the Company’s accounts are as follows:
The Company ended the year with net profit of €74.1 million versus
€152.9 million in 2008.
a income:
a fees for services provided by SEB Développement, a subsidiary of
4
SEB S.A., for an amount of €1.6 million (€1 million in 2008).
a dividends from subsidiaries, in the amount of €71.2 million
(€142.5 million in 2008);
Significant events of the year
In accordance with the decision of the Board of Directors made at its
27 February 2009 meeting, SEB S.A. cancelled 1,000,000 treasury shares
in 2009, resulting in a capital decrease of €1 million and a reduction in
additional paid-in capital of €18.2 million.
The Company obtained a new €117 million loan repayable in annual
instalments of €23.4 million through to September 2014.
GROUPE SEB
131
4
Notes to the Company financial statements
NOTE 1 I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.1.
4
PRINCIPLES
The Company financial statements have been prepared in line with the
principle of prudence and in compliance with the preparation and presentation
rules set out in French law and France’s Plan Comptable Général of 1999.
The estimates and assumptions used to prepare the 2009 financial
statements reflected the economic and financial crisis and the financial
parameters shaping the market at 31 December. The immediate effects of the
crisis were taken into account in valuing current assets such as marketable
securities. In valuing non-current assets, such as shares in and loans to
subsidiaries and affiliates, the assumption was made that the crisis would
last for only a limited period. The value of these assets was estimated at the
year-end based on the long-term economic outlook and management’s best
estimates, taking into account the reduced visibility of future cash flows.
1.2.
At the year-end, an impairment loss is recognised whenever the shares’
purchase price is lower than the average share price for the last month of
the year.
1.5.
CASH AND CASH EQUIVALENTS AND
FINANCIAL INSTRUMENTS
SEB S.A. manages cash and cash equivalents and currency risk on behalf
of the Group.
a The Company meets the short-term financing needs of virtually all Group
subsidiaries. A daily bank balance reporting system has been set up to
monitor the financing needs of the French, German, Spanish, Italian,
Hungarian, Austrian, Swiss and Hong Kong subsidiaries. Current account
advances to and from the cash pool pay interest at the overnight rate for
the currency concerned plus 0.15 bps.
INTANGIBLE ASSETS
Commercial paper is issued in euros under a €600 million programme
rated A2 by Standard & Poor’s and is converted into the functional
currency of the subsidiaries concerned outside the euro zone by means
of swaps, thereby limiting the Company’s exposure to currency risks on
these financing transactions. A provision may be set aside to cover the
unhedged portion of the risk.
Intangible assets are stated at acquisition cost, excluding transaction costs
and interest expense.
They mainly consist of patents amortised over periods ranging from five
to ten years.
a SEB S.A. fixes the exchange rates for intercompany import and export
1.3.
SHARES IN SUBSIDIARIES AND AFFILIATES
Shares in subsidiaries and affiliates are stated at the lower of cost and net
realisable value. Cost corresponds to acquisition cost, except for shares
acquired before 31 December 1976 and included in the legal revaluation
which are stated at valuation. Net realisable value is determined based
on the Company’s equity in the investee’s net assets, market value or the
investee’s earnings outlook.
1.4.
OWN SHARES
The contango or backwardation is recorded in the income statement
when the swap expires.
SEB S.A. shares held by the Company are classified as follows:
a shares bought back for allocation on exercise of existing or future stock
options are classified under “Marketable securities”;
a all other SEB S.A. shares held by the Company – mainly under the liquidity
contract – are classified under “Other non-current assets”.
132
transactions on behalf of its subsidiaries. Net currency positions (arising
when exports exceed imports) are hedged by forward foreign exchange
contracts, allowing the hedged transactions to be recognised directly in
the subsidiary’s local currency at the hedging rate. The unrealised gain
or loss, i.e. the difference between the hedging rate and the closing rate,
is recognised in the financial statements of SEB S.A. at the period-end.
Any unrealised losses arising on such transactions are recognised on
the assets side of the balance sheet under “Conversion losses” and lead
to the recognition of a provision for contingencies. Unrealised gains are
recognised in liabilities under “Conversion gains” without affecting profit
for the year.
GROUPE SEB
1.6.
CONVERSION AND MEASUREMENT OF CASH
AND SHORT-TERM BANK LOANS IN FOREIGN
CURRENCY
1.7.
4
INCOME TAX
SEB S.A. and its French subsidiaries file a consolidated tax return under
the group relief system provided for in Article 223-1 et seq. of the General
French Tax Code (Code Général des Impôts).
Cash and short-term bank loans denominated in foreign currency at the
period-end are converted into local currency at the exchange rate on the
last business day of the period, and conversion differences are recognised
in profit for the period under “Exchange gains” or “Exchange losses”.
No group relief agreement has been signed and each member of the tax
group therefore calculates the income tax charge or benefit they would have
paid or received if they had been taxed on a stand-alone basis. As the parent
company, SEB S.A. recognises in its income statement any tax savings or
additional tax expense arising on the consolidation of the French subsidiaries’
taxable results. Tax savings resulting from group relief for tax losses incurred
by companies in the tax group are initially recognised by SEB S.A. and are
transferred back to the companies concerned when they return to profit.
4
NOTE 2 I MOVEMENTS IN NON-CURRENT ASSETS
2.1.
INTANGIBLE ASSETS
2.2.
There were no material acquisitions or disposals of intangible assets during
the period.
2.3.
PROPERTY, PLANT AND EQUIPMENT
There were no material acquisitions, disposals or retirements of property,
plant and equipment during the period.
NON-CURRENT FINANCIAL ASSETS
(in € millions)
31 December 2008
Additions
736.8
19.0
1,106.4
157.3
Own shares
Other investments
TOTAL COST
Provisions for impairment of shares in subsidiaries
and affiliates
Provisions for impairment of own shares
TOTAL PROVISIONS
TOTAL CARRYING AMOUNT
(in € millions)
21.9
Disposals
31 December 2009
755.8
473.4
790.3
21.9
(0.0)
495.3
1,546.5
0.0
(71.4)
0.4
0.4
1,865.5
176.3
(46.4)
(25.0)
(8.4)
(8.4)
(0.0)
(54.8)
(25.0)
(8.4)
(71.4)
1,810.7
151.3
486.9
1,475.1
Disposals
31 December 2008
31 December 2007
Additions
710.8
26.0
949.5
229.0
72.0
1,106.4
26.5
14.9
19.5
21.9
Own shares
Other investments
TOTAL COST
Provisions for impairment of shares in subsidiaries
and affiliates
Provisions for impairment of other investments
TOTAL PROVISIONS
TOTAL CARRYING AMOUNT
736.8
0.4
0.4
-
-
1,687.2
269.9
91.5
1,865.5
(90.4)
(6.0)
(50.0)
(46.4)
0.0
(8.4)
(90.4)
(14.4)
(50.0)
(54.8)
1,596.8
255.4
41.5
1,810.7
(8.4)
GROUPE SEB
133
4
Loans to subsidiaries and affiliates include advances by the parent company
SEB S.A. to its subsidiaries under the Group’s financial policy (see 1.5).
The revaluation reserve in shareholders’ equity relates mainly to non-current
financial assets.
At 31 December 2009, the Company held 3,149,443 SEB S.A. shares
acquired at an average price of €34.54 per share (before impairment). The
shares are being held mainly for allocation on exercise of stock options
4
(220,486 options under the 2002 plan, 190,092 under the 2003 plan, 467,641
under the 2004 plan, 415,120 under the 2005 plan, 578,693 under the 2006
plan, 573,150 under the 2007 plan, 991,800 under the 2008 plan and 370,250
under the 2009 plan).
In 2009, SEB S.A. bought back 727,208 shares on the market at a weighted
average price of €28.19, sold 953,865 shares on the market at an average
price of €29.29 and cancelled 1,000,000 shares for a value of €30,629,143.
NOTE 3 I LIST OF SUBSIDIARIES AND AFFILIATES
3.1.
INFORMATION CONCERNING SUBSIDIARIES AND AFFILIATES
3.1.1. Subsidiaries (more than 50%-owned)
(in € millions)
Shareholders’
equity
% interest
Carrying
amount of
investment
Loans and
advances
given
Guarantees
and bonds
given
Dividends
received
during the
period
Calor SAS
11.0
100%
39.6
20
0.3
SAS SEB
23.0
100%
101.1
0
-
-
Tefal SAS
37.2
100%
9.4
50.1
-
-
7.6
100%
10.6
0
-
-
(0.8)
100%
5.7
8.2
-
-
Rowenta France SAS
SEB Développement SAS
Rowenta Invest BV
157.7
100%
183.5
0
-
-
SEB Internationale SAS
275.9
100%
215.4
332.8
-
0
Groupe SEB France
202.7
98%
73.9
0
-
62.9
Groupe SEB Export
35.5
100%
38
0
-
7.8
Groupe SEB Moulinex
(24.9)
100%
20.5
22.3
-
Groupe SEB Retailing
2.1
100%
3
2.5
-
-
Shareholders’
equity
% interest
Carrying
amount of
investment
Loans and
advances
given
Guarantees
and bonds
given
Dividends
received
during the
period
4.4
46.81%
0.5
4.4
-
0.5
(0.8)
24.75%
0.1
-
-
-
3.1.2. Affiliates (10% to 50%-owned)
(in € millions)
S.I.S.
Domaine de Seillac SA
(at 31 December 2003)
As allowed by Article 24 paragraph 11 of decree 83.1020 dated 29 November
1983, the results of individual subsidiaries are not disclosed because the
Company considers that disclosure of this information could be seriously
prejudicial to its interests. Additional information analysed by geographic
3.2.
segment is provided in the notes to the consolidated financial statements
(Note 4 – Segment Information). Consolidated Group revenue generated
by direct and indirect subsidiaries and affiliates totalled €3,176.3 million
while net income attributable to the parent came to €145.9 million in 2009.
GENERAL INFORMATION CONCERNING OTHER SUBSIDIARIES AND AFFILIATES
Carrying amount of investments: €0.4 million.
134
GROUPE SEB
4
NOTE 4 I OTHER RECEIVABLES
Other receivables correspond to income tax prepayments for €37.9 million.
NOTE 5 I PROVISIONS FOR CONTINGENCIES AND CHARGES
Changes in provisions for contingencies and charges for the period were
as follows:
In line with the principles described in Note 1.5, a provision for currency
risks of €3.33 million was recorded at 31 December 2009.
(in millions)
Provisions for claims and litigation
Provisions for currency risks
TOTAL PROVISIONS FOR CONTINGENCIES
Tax savings resulting from group relief for tax losses incurred by certain
companies in the tax group will be transferred back to the companies
concerned if and when they return to profit. They are covered by a provision
for an aggregate amount of €114.7 million at 31 December 2009.
31 December
2008
Increases
3.3
18.6
TOTAL PROVISIONS FOR CHARGES
97.1
18.6
104.3
31 December
2007
Provisions for currency risks
TOTAL PROVISIONS FOR CONTINGENCIES
7.3
3.3
0
7.3
Provisions for claims and litigation
31 December
2009
3.3
97.1
(in € millions)
Utilisations
0
7.3
Provisions for group relief
TOTAL
Reversals
7.3
3.3
1
114.7
0
1
114.7
21.9
0.0
8.3
118.0
Increases
Reversals
Utilisations
31 December
2008
0.4
0.6
1
1.2
4
0
7.3
1.2
1.6
0
7.3
2.2
7.3
0.6
7.3
Provisions for group relief
68.3
30.1
1.3
97.1
TOTAL PROVISIONS FOR CHARGES
68.3
30.1
1.3
97.1
TOTAL
70.5
37.4
1.9
104.3
1.6
GROUPE SEB
135
4
NOTE 6 I MATURITIES OF RECEIVABLES AND PAYABLES
All receivables are due within one year, with the exception of a €15.9 million
subordinated loan to Groupe SEB Iberica and a €2.1 million long-term loan
to Groupe SEB Schweiz.
a the €30 million balance outstanding at 31 December 2009 on the CALYON
loan repayable in annual instalments of €10 million through to March 2012;
a the Schuldschein in-fine loan, repayable in two instalments in August 2013
and August 2015 for €113.5 million and €47.5 million, respectively;
All payables are due within one year, with the exception of:
a the €117 million Club Deal loan due in September 2014, repayable in
a employee profit-sharing accounts of €2.9 million due in 2011, €3.3 million
annual instalments of €23.4 million.
due in 2012, €6.1 million due in 2013 and €10.2 million due in 2014;
4
(in € millions)
Due
31 December
2008
31 December
2009
within 1 year
354.5
389.9
115.3
394
100
100
319.8
291.5
291.5
Bank borrowings
Commercial paper
Intra-group borrowings
Other borrowings
The Group’s main source of financing is its €600 million commercial paper
programme, which has enjoyed an A2 rating by Standard & Poor’s for three
consecutive years. Outstanding commercial paper under this programme
totalled €100 million at the year-end. All commercial paper is repayable in
less than three months.
274.6
0.3
0.3
19.2
25.9
4.3
21.6
1087.8
807.6
511.1
296.2
Non-discretionary profit sharing liability
TOTAL
in 1 to 5 years beyond 5 years
0.3
0.3
At 31 December 2009, no borrowings were subject to acceleration clauses.
Only two medium-long-term loans were subject to a debt-to-EBITDA ratio
that could have an impact on the interest rate of the debt. Shifting to a
different tranche would enable the Group to reduce its interest payments.
The amount of the saving would be less than €0.1 million.
NOTE 7 I RELATED PARTY TRANSACTIONS
Certain balance sheet items contain amounts concerning related party transactions, as follows:
2009
(in € millions)
Direct investments
Related parties
Direct investments
342.5
447.9
491.3
615.1
Non-current financial assets
Receivables
136
2008
Related parties
0.2
1.9
0.1
2.1
Payables
108.5
190.7
101.3
226.2
TOTAL
451.2
640.5
592.7
843.4
GROUPE SEB
4
NOTE 8 I INCOME AND EXPENSES CONCERNING RELATED PARTIES
(in € millions)
2009
2008
1.6
1
0.2
0.4
1.2
8.4
71.2
142.5
7.9
36.9
OPERATING EXPENSES
Management fees
OPERATING INCOME
Royalties
FINANCIAL EXPENSES
Interest expense
4
FINANCIAL INCOME
Investment income
Income from receivables
NOTE 9 I PREPAID EXPENSES AND DEFERRED INCOME
9.1.
DEFERRED CHARGES
Category (in € millions)
2009
2008
Financial expenses
1.4
0.7
TOTAL
1.4
0.7
9.2.
PREPAID EXPENSES
2009
2008
Operating expenses
0.1
0.2
Financial expenses
0.1
1.5
TOTAL
0.2
1.7
2009
2008
1,102
7,546
125
124
9.3.
DEFERRED INCOME
Trade receivables
Interest on VAT credits and swaps
10
25
Cash equivalents
21
98
1,258
7,793
TOTAL
GROUPE SEB
137
4
9.4.
ACCRUED EXPENSES
4
2009
2008
Bank borrowings
4.1
4.3
Other borrowings
0.2
0.2
Trade payables
0.2
0.1
Accrued taxes and payroll costs
0.5
0
Other payables
0.4
0.2
TOTAL
5.4
4.8
2009
2008
NOTE 10 I OTHER INCOME AND EXPENSE, NET
(in € millions)
Group relief
Provisions for group relief to be transferred to subsidiaries
Gains and (losses) on sales of own shares
(Charges to)/reversals of provisions for contingencies
Other
TOTAL
1.0
28.7
(18.6)
(28.7)
(3.8)
(1.5)
0.0
1.0
(0.1)
(0.6)
(21.5)
(1.1)
A total of 953,865 SEB S.A. shares were sold during the year, generating a net loss of €3.9 million.
Group relief is discussed in Note 11 and provisions for contingencies in Note 5.
NOTE 11 I GROUP RELIEF
The tax group reported a net tax profit in 2009, which was recognised
as a tax benefit in SEB S.A.’s accounts for the net tax savings generated
by neutralising transactions within the tax group for €26.5 million at
31 December 2009.
The tax loss reported in 2008 corresponded to the difference between the
tax group’s income tax expense (€0) and the sum of the income tax expense
recorded in the individual financial statements of the members of the tax
group (€39.2 million).
138
Tax savings resulting from group relief for tax losses incurred by companies
in the tax group are initially recognised by SEB S.A. and are transferred
back to the companies concerned when they return to profit. Following
the return to profit of SEB International and Groupe SEB Retailing in 2009
and SEB Développement in 2008, the Company transferred back to these
subsidiaries the tax saving realised in prior years through the use of its tax
losses in an amount of €1 million in 2009 and €1.3 million in 2008. This
transfer is reported in the income statement under “Other expenses” and
is offset by the reversal of the corresponding provision in the same amount,
reported under “Other income”.
GROUPE SEB
4
NOTE 12 I INCOME TAX ANALYSIS
Income tax for 2009 can be analysed as follows:
(in € millions)
Profit from ordinary activities
Net other income/(expense)
Before tax
Tax expense/
(benefit)
69.1
(7.5)
61.6
(21.5)
0.6
(20.9)
Tax loss carryforwards
Group relief
TOTAL
47.6
After tax
6.9
6.9
26.5
26.5
26.5
74.1
4
“Group relief” corresponds to utilization of tax losses incurred by subsidiaries for an amount of €26.5 million.
NOTE 13 I OFF-BALANCE SHEET COMMITMENTS
31 December 2009
(in € millions)
31 December 2008
Notional amount
Market value
Notional amount
Market value
203.2
(3.4)
243.9
1.2
MARKET CONTRACTS
Currency swaps (foreign currency borrower)
Currency swaps (foreign currency lender)
13.6
0
8.2
0.1
186.0
(0.9)
85.8
5.0
20.5
0.7
54.3
(1.5)
Interest rate swaps
30.0
(0.6)
40.0
(0.4)
Aluminium derivates
45.0
(6.5)
77.2
(32.2)
3.6
0.8
7.0
(2.5)
Nickel derivates
CONTRACTS WITH SUBSIDIARIES
Currency swaps (foreign currency lender)
9.7
0
3.6
0
19.8
(0.1)
51.1
(3.1)
45.0
6.5
77.2
32.2
3.6
(0.8)
7.0
2.5
Nickel derivatives
The use and accounting treatment of financial instruments are discussed
in Note 1.5.
31 December 2009. It is estimated based on the exchange rate and interest
rate on 31 December 2009 or obtained from the counterparty banks.
The market value of financial instruments represents the gain or loss
that would be recognised if the contracts were settled on the market on
Notional amounts represent the notional amounts of the contracts.
GROUPE SEB
139
4
NOTE 14 I PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS
Thierry de La Tour d’Artaise participates in the top-hat pension scheme for
members of the Executive and Management Committees, which guarantees
a replacement rate of 25% of the executive’s average annual compensation
(basic salary and target bonus) for the last three years, taking into account
benefits paid under statutory plans.
The top-hat plan is in addition to an “Article 39” defined benefit plan and
an “Article 83” defined contribution plan. These plans, which cover all
Groupe SEB senior executives, are based on a target pension equal to
16% of the executive’s average annual compensation (basic salary and
target bonus) for the last three years. Benefit entitlements vest at the rate
of 0.8% of annual compensation per year, up to a maximum of 20 years,
providing a total replacement rate, including the top-hat plan, of up to 41%,
limited to 36 times the French Social Security annual limit.
4
To qualify for the plans, Thierry de La Tour d’Artaise, like other senior
executives, must have been a member of the Executive or Management
Committee for at least eight years.
SEB S.A.’s objective is for the entire benefit obligation to be funded by
external funds by the time the plan participants reach retirement age.
Contributions to these external funds are recorded as an expense for the
year under “Payroll taxes”.
TERMINATION BENEFITS
Thierry de La Tour d’Artaise will not be entitled to any compensation for loss
of office when he ceases to be a corporate officer.
His employment contract, signed when he joined the Group in 1994 and last
amended when he was appointed Chief Executive Officer, was suspended
on 1 March 2005 for the duration of his term as corporate officer.
In the same way as for other Executive Committee members, the contract
stipulates that in the event of termination of his employment contract at
Groupe SEB’s initiative, except as a result of gross negligence or serious
misconduct, or at his own initiative following a change of control of
Groupe SEB, Thierry de La Tour d’Artaise will be eligible for a total termination
benefit equal to two years’ remuneration. Following adoption of France’s
TEPA Act, an addendum to this contract was signed making the termination
benefit subject to performance conditions. The revised contract stipulates
that the termination benefit, set at a maximum of two years’ gross salary and
bonus, will be adjusted based on actual performance in relation to targets
over Thierry de La Tour d’Artaise’s last four years of service, as follows:
a if average actual performance falls short of the targets by 50% or more,
no termination benefit will be paid;
a if average actual performance represents 50% to 100% of the targets,
between 75% and 100% of the termination benefit will be paid;
a if average actual performance exceeds the targets, the termination benefit
will be paid in full.
The maximum termination benefit will be equal to the sum of the salaries
and cash bonuses paid to Thierry de La Tour d’Artaise in his last two years
of service.
The Board of Directors may, at its discretion, reduce the termination benefit
by as much as 50% if the Group reports a loss for the year preceding the
one in which he is removed from office, provided that the termination benefit
does not represent less than his salary and bonus for his final year of service
if average actual performance is at least equal to 50% of targets.
The no-compete clause was deleted from Thierry de La Tour d’Artaise’s
employment contract on 12 December 2008, by mutual agreement.
NOTE 15 I UNRECOGNISED DEFERRED TAXES
At 31 December 2009, the Company had an unrecognised deferred tax asset of €0.9 million (€2.6 million at 31 December 2008), corresponding to non-deductible
provision charges and unrealised exchange gains deductible in the following year.
140
GROUPE SEB
4
NOTE 16 I STOCK OPTION PLANS
Information about stock option plans at 31 December 2009 is provided below:
At 31 December 2009
Options exercisable for
Number of options**
Option grant
date***
Option
exercise date
Option expiry
date
Granted
Exercised
Cancelled Outstanding
Exercise
price**
(in €)
New shares
14/06/2001
14/06/2005
14/06/2009
493,500
473,692
19,808
0
18.18
Existing shares
19/04/2002
19/04/2006
19/04/2010
417,450
325,750
21,450
70,250
27.88
Existing shares
17/10/2002
17/10/2006
17/10/2010
598,125
365,809
82,080
150,236
25.15
Existing shares
18/06/2003
18/06/2007
18/06/2011
612,150
390,037
32,021
190,092
24.24
Existing shares
18/06/2004
18/06/2008
18/06/2012
539,100
54,059
17,400
467,641
31.67
Existing shares
08/04/2005
08/04/2009
08/04/2013
554,700
119,480
20,100
415,120
28.00
Existing shares
16/06/2006
16/06/2010
16/06/2014
589,798
0
11,105
578,693
29.33
Existing shares
20/04/2007
20/04/2011
20/04/2015
579,150
0
6,000
573,150
44.00
Existing shares
13/05/2008
13/05/2012
13/05/2016
1,005,900
0
14,100
991,800
38.35
Existing shares
12/06/2009
12/06/2013
12/06/2017
371,300
0
1,050
370,250
28.05
5,761,173
1,728,827
225,114
3,807,232
371,300
428,331
21,947
(79,978)
5,267,673
1,255,135
205,306
3,807,232
493,500
473,692
19,808
0
TOTAL*
*
Of which, movements in 2009
Total options to purchase existing shares
Total options to purchase new shares
4
** The number of options and the exercise price for plans prior to 16 June 2008 were adjusted following the three-for-one stock split that took place on 16 June 2008.
*** The grant date corresponds to the date of the Board Meeting when the option grants were decided.
GROUPE SEB
141
4
NOTE 17 I EQUITY
a Share capital
At 31 December 2009, the share capital amounted to €50 million made up of 49,951,826 shares with a par value of €1, representing 73,157,874 voting rights.
a Changes in shareholders’ equity (in € millions)
4
SHAREHOLDERS’ EQUITY AT 31 DECEMBER 2007 BEFORE APPROPRIATION OF PROFIT
707.5
2007 dividend paid in 2008
(46.1)
152.9
Shares issued on exercise of stock options (gain)
0.1
Corresponding issue premium (gain)
0.6
SHAREHOLDERS’ EQUITY AT 31 DECEMBER 2008
815
SHAREHOLDERS’ EQUITY AT 31 DECEMBER 2008 BEFORE APPROPRIATION OF PROFIT
815
2008 dividend paid in 2009
(45.4)
74.1
Changes in share capital - Shares issued on exercise of stock options (gain)
(1)
Corresponding issue premium (loss)
(17.5)
SHAREHOLDERS’ EQUITY AT 31 DECEMBER 2009
825.2
a Potential ordinary shares at 31 December 2009
There are no convertible bonds or equity notes outstanding or securities not representing capital.
NOTE 18 I EMPLOYEES
The Company had one employee in 2009 and 2008.
NOTE 19 I SUBSEQUENT EVENTS
There were no significant post-balance sheet events likely to have a material impact on the financial statements for the year ended 31 December 2009.
142
GROUPE SEB
Statutory auditors’ report on the Company financial statements
4
on the Company financial statements
a the justification of our assessments;
In accordance with our appointment as Statutory auditors at your Annual
General Meeting, we hereby report to you for the year ended December 31,
2009 on:
a the audit of the accompanying financial statements of SEB SA;
4
a the specific verifications and disclosures required by law.
The financial statements have been approved by the Board of Directors.
Our role is to express an opinion on these financial statements, based on
our audit.
Opinion on the financial statements
We conducted our audit in accordance with professional standards applicable
in France. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, using sample testing
techniques or other selection methods, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made, as well as
evaluating the overall financial statement presentation. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a
reasonable basis for our opinion.
In our opinion, the financial statements give a true and fair view of the financial
position and the assets and liabilities of the Company as of December 31,
2009 and the results of its operations for the year then ended in accordance
with accounting principles generally accepted in France.
The estimates used have been determined on the basis of the information
available at the time the financial statements were prepared and in the current
context of economic crisis where the medium-term activity forecasts and
planning are rendered more difficult, as described in Note 1.1 to the financial
statements. It is in this context and in accordance with the requirements
of Article L. 823-9 of the French Commercial Code (Code de Commerce)
that we conducted our own assessments, which we bring to your attention:
As indicated in Note 1.3 to the financial statements, the Company records
provisions for impairment of its equity investments when their carrying value
falls below their historical cost. Provisions are determined based on the
share of equity held, the market value of the securities, when it can be
known and the medium and long-term profitability outlook of the equity
investments concerned. Our procedures consisted in assessing the data
and assumptions on which such provisions are based and verifying the
Company’s calculations.
These assessments were made as part of our audit of the financial statements
taken as a whole, and therefore contributed to the opinion expressed in the
first part of this report.
GROUPE SEB
143
4
Statutory auditors’ report on the Company financial statements
Specific verifications and disclosures
We also performed the specific verifications required by law and professional
standards applicable in France.
We have no matters to report as to the fairness of the information given
in the Board of Directors’ management report and the information sent to
shareholders on the Company’s financial position and the annual financial
statements, or the consistency of this information with the financial
statements.
4
Regarding the information provided in application of Article L. 225-102-1
of the French Commercial Code on the remuneration and benefits paid to
corporate officers and benefits that would be paid under certain conditions,
we have verified its consistency with the financial statements, the data used
in preparing these financial statements and, as required, with information
provided by companies with a controlling interest in the Company or in which
the Company has a controlling interest. Based on our audit, we hereby certify
the accuracy and fairness of this information.
In application of the law, we have verified that information about the identity
of shareholders and voting rights has been disclosed in the management
report.
Bernard RASCLE
Dominique VALETTE
This is a free translation into English of the Statutory auditors’ report issued in French and is provided solely for the convenience of English speaking users.
The Statutory auditors’ report includes information specifically required by French law in such reports, whether modified or not. This information is presented
below the opinion on the Company financial statements and includes an explanatory paragraph discussing the auditors’ assessments of certain significant
accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the Company financial statements taken
as a whole and not to provide separate assurance on individual account captions or on information taken outside of the Company financial statements. This
report should be read in conjunction and construed in accordance with French law and professional auditing standards applicable in France.
144
GROUPE SEB
REPORT OF THE BOARD OF
DIRECTORS ON THE RESOLUTIONS
PROPOSED TO THE ANNUAL GENERAL
MEETING OF 12 MAY 2010 146
Trading in the Company’s shares
Dividends
Agreement governed by Article L. 225-42-1
of the French Commercial Code
Board of Directors
Stock options – performance-based stock grants
Financial authorisations
Employee share issue
5
PROPOSED RESOLUTIONS 151
Ordinary resolutions
Extraordinary resolutions
151
153
146
146
147
147
147
148
148
5
AUDITORS’ SPECIAL REPORT
ON RELATED PARTY AGREEMENTS
AND COMMITMENTS 149
Agreements and commitments authorised
during the year
Agreements and commitments authorised
in previous years and having continuing
effect during the year
Agreements and commitments entered into
and authorised after the balance sheet date
149
149
150
GROUPE SEB
145
5
Report of the Board of Directors on the resolutions proposed to the Annual General Meeting of 12 May 2010
on the resolutions proposed to
the Annual General Meeting of 12 May 2010
Trading in the Company’s shares
5
At 31 December 2009, the Company held 3,149,443 of its own shares with
a par value of €1.00, acquired at a total cost of €108,782,308.70. These
shares represent 6.3% of the Company’s capital.
As allowed under Article L. 225-209 of the French Commercial Code, in
2009 the Company purchased 149,072 SEB S.A. shares on the market at an
average price of €18.45 per share, for allocation on exercise of stock options.
Shareholders are asked to authorise the Company to trade in its own shares
in compliance with the new European regulations. Under the terms of the
resolution, the Company would be authorised to buy back the maximum
shares allowed by law in order to:
a maintain a liquid market for the Company’s shares through an investment
service provider acting on a fully independent basis;
A total of 388,643 shares were sold during the year upon exercise of stock
options, at an average price of €29.18 per share.
a purchase shares for allocation to eligible employees and officers of the
Transaction costs for shares purchased under the buyback programme
amounted to €5,500.70.
a purchase shares for cancellation, in order to increase return on equity and
In March 2009, the Company cancelled 1,000,000 shares, leading to an
increase in earnings per share.
On 20 September 2005, the Company signed a liquidity contract with the
Gilbert Dupont stockbroking firm. The contract complies with the Ethical
Charter drawn up by AFEI (French association of investment firms), which
was approved by the French securities regulator (Autorité des Marchés
Financiers) on 22 March 2005.
During 2009, 578,136 SEB S.A. shares were purchased and 570,601
shares were sold under this contract. The transaction costs amounted to
€34,468.80.
Company;
earnings per share or to offset the dilutive impact of any capital increases
on existing shareholders’ interests;
a purchase shares for delivery or exchange in connection with any future
external growth transactions;
a purchase shares for allocation on exercise of rights attached to securities
that are convertible, exercisable, redeemable or otherwise exchangeable
for Company shares.
The purchase price per share would be capped at €65, and the amount
invested in the buyback program would therefore not exceed €324,686,869.
Dividends
146
We recommend raising the dividend to €1.04 per share, representing a
10.6% increase.
No single shareholder will be entitled to the supplementary dividend on any
shares in excess of 0.5% of the Company’s capital stock.
For the fifteenth year running, shareholders will be entitled to a supplementary
dividend on all shares registered in their name prior to 31 December 2007
and still held in their portfolio on the ex-dividend date (17 May 2010). More
than 55.14% of the Company’s shares will be entitled to a supplementary
dividend in respect of 2009.
The dividend will be paid as from 20 May 2010.
Under the new tax rules applicable since 1 January 2005, the dividend will
not give rise to any avoir fiscal tax credit.
GROUPE SEB
5
Agreement governed by Article L. 225-42-1
of the French Commercial Code
Members of the Executive and Management Committees, including Thierry
de La Tour d’Artaise, participate in a top-hat pension plan guaranteeing
a replacement rate of 41% after taking into account benefits paid under
statutory plans.
Based on the current social security cap, Thierry de La Tour d’Artaise would
receive an annual pension of €510,991, representing around 22% less than
under the current plan rules, and the cost to be recognised in 2010 would
be €150,000 below the 2009 figure.
At its meeting on 19 March 2010, the Board decided to amend the plan
terms by limiting the reference salary used to calculate pension benefits to
an amount equivalent to 36 times the annual cap applicable for calculating
social security contributions on the retirement date.
As this plan amendment concerns Thierry de La Tour d’Artaise, an officer
of the Company, it is subject to the procedure governing related party
agreements. Shareholders are therefore asked to approve the amendment.
5
Board of Directors
a The terms as director of Tristan Boiteux, Norbert Dentressangle and
FÉDÉRACTIVE will expire at this General Meeting and shareholders will
be asked to re-elect them for a further four-year term.
Tristan Boiteux, 47, a member of the founder group, is a Product Manager
at Gemalto.
Norbert Dentressangle, 55, independent director, is Chairman of the
Supervisory Board of Groupe Norbert Dentressangle which he set up
in 1979.
Jean-Noël Labroue, 62, spent almost all of his career with the Darty Group,
where he successively held the positions of Chairman of the Darty Group
Management Board, Managing Director of Kingfisher UK and Managing
Director of Kesa Electricals UK before retiring in 2009.
He will qualify as an independent director based on the definition contained
in the AFEP-MEDEF Corporate Governance Code for listed companies.
We would like to thank Philippe Desmarescaux for his exceptional
contribution to the Board and to the Nominations and Remuneration
Committee over the past fourteen years.
FÉDÉRACTIVE, a member of the founder group, is the holding company
set up to hold the founder group’s interests in Groupe SEB.
a Shareholders will be asked to ratify the appointment as director of
FÉDÉRACTIVE will continue to be represented by Pascal Girardot, founder
and Chairman of Certual, a financial engineering company.
Cédric Lescure, to replace Antoine Lescure, decided by the Board on
11 December 2009.
a On the recommendation of the Nominations and Remuneration
Cédric Lescure, 42, is a veterinary surgeon. He is a member of the founder
group.
Committee, shareholders will be asked to elect Jean-Noël Labroue as
director to replace Philippe Desmarescaux.
We would like to thank Antoine Lescure for giving the Board the benefit
of his expertise and experience over the past five years.
Stock options – performance-based stock grants
In order to provide an ongoing incentive to key Group employees by
offering them an opportunity to share in the Group’s development and
results, shareholders will be asked to authorise the Board to grant stock
options exercisable for a number of shares not representing more than
1.3% of the Company’s capital, with a limit of 0.16% applicable to options
granted under the plan to the executive officer. In line with the AFEP-MEDEF
recommendations published on 6 October 2008, a certain proportion of
the options granted to the executive officer and to Executive Committee
members will be subject to performance obligations related to growth in the
Group’s revenue and operating margin.
Shareholders will also be asked to authorise the Board to make stock
grants representing up to 0.325% of the Company’s share capital, in the
form of existing shares bought back for this purpose by the Company. The
grants would be made to all or some employees of the Company and its
subsidiaries, to certain categories of those employees and/or to officers
as provided by Article L. 225-197-1 II of the French Commercial Code. All
stock grants will be subject to the same performance obligations related
to growth in the Group’s revenue and operating margin as stock options.
GROUPE SEB
147
5
The number of shares granted to the executive officer will not exceed 0.04%
of the Company’s share capital. The stock grants would be subject to a
two-year vesting period and a two-year lock-up.
For grantees resident outside France, in accordance with the law, the
minimum vesting period would range from two to four years, with no lockup period applying where the vesting period was four years.
The limits of 1.3% of capital for stock options and 0.325% of capital for stock
grants would not be cumulative, nor would the limits of 0.16% and 0.04%
respectively on stock options and stock grants for the executive officer.
Shareholders will be asked to give the Board full powers to set the stock
grant terms, particularly to draw up the list of grantees.
Financial authorisations
At the Annual General Meeting, we will ask shareholders to give the Board
the necessary powers to issue shares and share equivalents, in order to
enable us to raise financing to support our Group’s ongoing development as
and when required, based on opportunities arising in the financial markets.
5
The aggregate par value of shares issued under the authorisation would be
capped at €5 million for issues with pre-emptive subscription rights.
In addition, to allow us to efficiently take up any opportunities that may
arise, we are also seeking an authorisation to issue hybrid securities without
pre-emptive subscription rights. The aggregate par value of shares issued
on conversion, exchange, redemption or exercise of these hybrid securities
would also be capped at €5 million. At the Board’s discretion, shareholders
could be given a priority right to subscribe each issue pro rata to their existing
shareholdings, for a period and on terms to be decided by the Board.
The aggregate nominal amount of any debt securities issued under the
authorisation would be capped at €150 million.
If and when the authorisations are used, we will draw up an additional report
describing the final terms of the issue, including the basis for setting the
issue price, the impact of the issue on the situation of existing shareholders
and the estimated impact on the share price, as required by law.
In a separate resolution, we are also seeking an authorisation to issue up to
€10 million worth of bonus shares, to be paid up by capitalizing reserves,
profits or additional paid-in capital.
Lastly, we are recommending that the maximum aggregate amount of share
issues that may be carried out under these authorisations with or without
subscription rights be set at €5 million.
All of these authorisations are being sought for a period of 14 months.
Under Article L. 225-129-6 of the French Commercial Code, we are required
to submit to shareholders a proposal to authorise the Board to carry out
issues of shares and/or share equivalents without pre-emptive subscription
rights for existing shareholders, reserved for members of a corporate savings
plan (Plan d’Épargne d’Entreprise). The total number of shares that would be
issued under this authorisation would be capped at 1% of the Company’s
share capital as at the close of this Meeting. Any shares and/or share
equivalents issued under this proposed resolution would not be deducted
148
from the ceilings specified in the other financial authorisations granted by
shareholders. In application of Articles 443-5 and 443-6 of the French Labour
Code, shares issued directly or indirectly under this authorisation would be
offered at a discount of up to 20%, or 30% if they were subject to a lock-up
of ten years or more.
This authorisation is being sought for a period of 14 months.
GROUPE SEB
Auditors’ special report on related party agreements and commitments
5
Auditors’ special report on related party
agreements and commitments
In accordance with our appointment as Statutory auditors by your Company,
we hereby report on regulated agreements and commitments with third parties.
The terms of our engagement do not require us to identify such agreements
and commitments, if any, but to communicate to you, based on information
provided to us, the principal terms and conditions of those agreements and
commitments brought to our attention, without expressing an opinion on
their usefulness and appropriateness. It is your responsibility, pursuant to
Article R. 225-31 of the French Commercial Code (Code de Commerce), to
assess the interest involved in respect of the conclusion of these agreements
for the purpose of approving them.
5
Agreements and commitments authorised during the year
We hereby inform you that we have not been advised of any agreement or commitment entered into during the year and governed by Article L. 225-38 of
the French Commercial Code.
Agreements and commitments authorised in previous years
and having continuing effect during the year
In addition, pursuant to the French Commercial Code, we have been advised
that the following agreements and commitments authorized in previous years
have had continuing effect during the year.
With Thierry de La Tour d’Artaise
1. Nature and purpose: The employment contract of M. Thierry de La Tour
d’Artaise, Chairman of SEB SA, it being understood that such contract has
been suspended for the duration of his term of office as corporate officer.
Terms and conditions:
a In the event such employment contract is terminated at the employer’s
initiative, except on grounds of serious misconduct or gross negligence,
or at M. Thierry de La Tour d’Artaise’s initiative as a result of a change
in the control of the SEB Group, his overall termination benefits shall
be equivalent to two years’ compensation, payable subject to the
performance criteria described in the agreement below.
a In the event M. Thierry de La Tour d’Artaise’s employment contract is
terminated except for serious misconduct or gross negligence, he will be
entitled to all the share purchase or subscription options granted to him
under the same exercise terms and conditions had he remained in office.
This provision shall also apply in the event M. Thierry de La Tour d’Artaise’s
employment contract is terminated pursuant to his resignation from the
Group, were such resignation to arise from a change in the control of the
Group. However, he shall forfeit the options that will have been granted
to him over the 18 months prior to the termination of his term of office
as corporate officer.
2. Nature and purpose: Determination of the performance criteria governing
the Chairman’s termination benefits.
Terms and conditions: The Chairman’s termination benefits, equivalent
to two years’ earned compensation plus bonuses, are adjusted for the
percentage of objectives achieved over the 4 previous year-ends:
a if the average percentage achieved is below 50%, no termination benefits
shall be paid;
a if the average percentage achieved is between 50% and 100%, termination
benefits shall range from 75% to 100% of the base used for calculation,
determined on a straight-line basis;
a if the average percentage achieved is higher than 100%, termination
benefits shall equal 100% of the base used for calculation.
The Board of Directors retains the right to reduce, by a maximum of half,
such termination benefits if the previous year-end net result is a net loss,
without such benefits falling below the fixed compensation plus bonuses
of the previous year-end, if applying the performance criteria based on
achieving the objectives entitles M. Thierry de La Tour d’Artaise to receive
termination benefits.
GROUPE SEB
149
5
Auditors’ special report on related party agreements and commitments
3. Nature and purpose: Individual life insurance plan in favor of M. Thierry
de La Tour d’Artaise, Chairman of SEB SA.
the supplementary and mandatory AGIRC and ARCCO (management)
retirement entitlements;
Terms and conditions: In addition to senior management’s Group death,
disability and related benefit insurance, M. Thierry de La Tour d’Artaise is
the beneficiary of an individual life insurance policy with a capital totaling
€3,418,000. The expense recorded over the year ended 31 December 2009
totals €10,219.
a M. Thierry de La Tour d’Artaise shall only receive the guaranteed rate upon
leaving the Group to claim his retirement benefits. However, he shall be
entitled to benefits in the event his employment contract is terminated
after he is 55, if he subsequently stops working;
a M. Thierry de La Tour d’Artaise must have sat on the Executive or the
Management Committee for 8 years. The maximum duration of the vesting
period is 20 years;
4. Nature and purpose: Supplementary and top-up retirement plan.
Terms and conditions: As all other members of the Executive and
Management Committees, M. Thierry de La Tour d’Artaise is entitled to a
supplementary and top-up retirement plan guaranteeing annuities equivalent
to a 41% income replacement rate, including the benefits of statutory
retirement plans. Guaranteed payment is subject to the following conditions:
5
The supplementary and top-up plan actuarial expenses relating to M. Thierry
de La Tour d’Artaise and recorded in the financial statements of SEB SA for the
year ended 31 December 2009 total €756,338 plus a €532,481 amortization
charge, primarily arising from the recent setting up of the top-up plan.
a M. Thierry de La Tour d’Artaise must be at least 60 years of age, having
definitively stopped working and having obtained the calculation of
Agreements and commitments entered into and authorised
after the balance sheet date
We have been informed of an amendment to the supplementary retirement
plan covering all members of the Executive and Management Committees,
and M. Thierry de La Tour d’Artaise. This amendment was authorized by
your Board of Directors in its 19 March 2010 meeting and will be submitted
to your approval.
With Thierry de La Tour d’Artaise
Nature and purpose: Amendment to the supplementary retirement plan.
annual French Social Security ceiling prevailing on the date of calculation.
On the basis of the current Social Security ceiling, capping would decrease
M. Thierry de La Tour d’Artaise’s pension by approximately 22%.
We conducted our procedures in accordance with the professional guidelines
of the French National Institute of Statutory auditors (Compagnie Nationale
des Commissaires aux Comptes) relating to this engagement. Those
procedures consisted in verifying the information provided to us with the
relevant source documents.
Terms and conditions: The objective of this amendment is to cap the
notional salary used as a basis for calculating pensions at 36 times the
Bernard RASCLE
Dominique VALETTE
This is a free translation into English of the Statutory auditors’ special report on regulated agreements and commitments with third parties that is issued in
the French language and is provided solely for the convenience of English speaking readers. This report on regulated agreements and commitments should
be read in conjunction and construed in accordance with French law and professional auditing standards applicable in France. It should be understood that
the agreements reported on are only those provided by the French Commercial Code and that the report does not apply to those related party transactions
described in IAS 24 or other equivalent accounting standards.
150
GROUPE SEB
5
Annual General Meeting of 12 May 2010
Ordinary resolutions
FIRST RESOLUTION
Approval of the Company financial statements
The Annual General Meeting, having considered the reports of the Board of Directors, the Chairman and the Auditors on the Company’s operations and
results for the year ended 31 December 2009, approves the annual financial statements as presented, which show net profit of €74,107,845.72.
5
SECOND RESOLUTION
Income appropriation
The Annual General Meeting resolves to appropriate net profit for the year as follows:
(in €)
Net profit
74,107,845.72
Retained earnings
580,127,783.53
Dividends on treasury shares credited to retained earnings
4,352,330.85
Total available for distribution
658,587,960.10
Dividend
51,949,899.04
Supplementary dividend
2,864,760.60
Retained earnings
603,773,300.46
The dividend per share amounts to €1.04.
The ex-dividend date will be 17 May 2010 and the dividend will be paid as
from 20 May 2010.
As provided for in Article 48 of the bylaws, a supplementary dividend of
€0.104 per share, corresponding to 10% of the ordinary dividend, will be
paid on shares registered in the name of the same holder throughout the
period between 31 December 2007 and the ex-dividend date (17 May 2010).
However, no single shareholder will be entitled to the supplementary dividend
on any shares in excess of 0.5% of the Company’s capital.
Dividends for the last three years were as follows:
2008
(in €)
Dividend amount
2007
Ordinary Supplementary
dividend
dividend
0.94
0.094
2006
dividend
dividend
0.93
0.093
dividend
dividend
0.85
0.085
THIRD RESOLUTION
FOURTH RESOLUTION
The Annual General Meeting, having considered the reports of the Board of
Directors and the Auditors, approves the consolidated financial statements
for the year ended 31 December 2009, which show net profit of €145,913,000.
The Annual General Meeting, having considered the Auditors’ special report
on related party agreements, approves the agreement with Thierry de La
Tour d’Artaise, whose purpose is to reduce the basis for calculating his
pension by limiting it to 36 times the annual cap applied for calculating
social security contributions.
Approval of the consolidated financial statements
Approval of a related party agreement
GROUPE SEB
151
5
FIFTH RESOLUTION
a to adopt the program described below and accordingly:
Re-election of Tristan Boiteux as Director
for four years
a to authorise the Board of Directors, or any representative of the
The Annual General Meeting re-elects Tristan Boiteux as Director for a period
of four years expiring at the close of the Annual General Meeting to be called
to approve the 2013 financial statements.
Board empowered to act on the Board’s behalf in accordance with
Articles 225-209 et seq. of the French Commercial Code, to buy back
shares of the Company subject to the limits set down by law;
a that the shares may be bought back for the following purposes:
a to maintain a liquid market for the Company’s shares through an
independent investment service provider under a liquidity contract
that complies with the AFEI code of ethics recognized by the Autorité
des Marchés Financiers,
SIXTH RESOLUTION
Re-election of Norbert Dentressangle as Director
for four years
a to purchase shares for allocation to eligible employees and officers of the
Company upon exercise of stock options governed by Articles 225-179
et seq. of the Commercial Code, or in the form of stock grants governed
by Articles 225-197-1 et seq. of the Commercial Code, or in payment
of statutory employee profit-shares or in connection with an employee
stock ownership or stock savings plan,
The Annual General Meeting re-elects Norbert Dentressangle as Director for
a period of four years expiring at the close of the Annual General Meeting
to be called to approve the 2013 financial statements.
5
SEVENTH RESOLUTION
a to purchase shares for cancellation, in order to increase return on
Re-election of FÉDÉRACTIVE as Director
for four years
equity and earnings per share and/or to offset the dilutive impact of any
capital increases on existing shareholders’ interests, provided that such
cancellation is authorized by the Extraordinary Shareholders’ Meeting,
The Annual General Meeting re-elects FÉDÉRACTIVE as Director for a period
of four years expiring at the close of the Annual General Meeting to be called
a to purchase shares for delivery or exchange in connection with any
FÉDÉRACTIVE will be represented at Board Meetings by Pascal Girardot.
a to purchase shares for allocation on exercise of rights attached to
future external growth transactions,
securities that are convertible, exchangeable, redeemable or otherwise
exercisable for Company shares, in accordance with the applicable
securities regulations;
EIGHTH RESOLUTION
Election of Jean-Noël Labroue as Director
for four years
a that shares may not be bought back under this authorization at a price
of more than €65 per share, excluding trading fees;
The Annual General Meeting elects Jean-Noël Labroue* as Director for a
period of four years expiring at the close of the Annual General Meeting to
be called to approve the 2013 financial statements.
a that the Board of Directors may adjust the above price, in the case of
any change in the shares’ par value, any bonus share issue paid up by
capitalizing reserves, any stock-split or reverse stock-split, any return of
capital or capital reduction, any distribution or reserves or assets, or any
other corporate action, to take into account the effect thereof on the share
price. In this case, the price will be adjusted based on the ratio between
the number of shares outstanding before and after the corporate action;
NINTH RESOLUTION
Ratification of the appointment of Cédric Lescure
The Annual General Meeting ratifies the appointment as Director of Cédric
Lescure, appointed by the Board of Directors on 11 December 2009 to
replace Antoine Lescure, for the remainder of his predecessor’s term of
office, which expires at the close of the Annual General Meeting to be called
a that the total amount invested in the share buyback program may not
exceed €324,686,869;
a that the shares may be bought back by any appropriate method and
TENTH RESOLUTION
Authorisation to trade in the Company’s shares
The Annual General Meeting, having considered the Board of Directors’
report, resolves:
a to terminate the share buyback program authorised at the Annual General
Meeting of 13 May 2009;
152
GROUPE SEB
accordingly that all or part of the program may be implemented on the
market or through block purchases – and, if appropriate, through overthe-counter sales – or by means of public buyback or exchange offers,
or through the use of options and derivative instruments, other than
written puts. The buybacks may be carried out at any time at the Board’s
discretion, including while a public tender offer is in progress, subject
to compliance with the applicable securities regulations. The shares
purchased under this authorisation may be kept, sold or transferred by
any method, including block sales, at any time including while a public
tender offer is in progress;
a to give full powers to the Board of Directors, including the power of
delegation, to:
5
a enter into any and all agreements for the keeping of a register of share
purchases and sales or for any other purpose,
a carry out the transactions and set the related terms and conditions,
a fulfil any and all reporting obligations with the Autorité des Marchés
Financiers and any other organizations,
a place any and all buy and sell orders, on or off-market,
a adjust the maximum purchase price of the shares to take into account
the effect on the share price of any of the corporate actions referred
to above,
a carry out any and all formalities;
a that this authorisation is given for a period expiring at the Annual General
Meeting to be called to approve the financial statements for the year
ending 31 December 2010 or fourteen months, whichever is shorter.
Extraordinary resolutions
ELEVENTH RESOLUTION
5
occasions during the period. The exercise price of the options may not be
less than the average of the prices quoted for SEB shares over the twenty
trading days preceding the date of grant of the options.
Authorisation to cancel shares
The Extraordinary General Meeting, having considered the report of the
Board of Directors and the Auditors’ special report:
a authorises the Board of Directors to cancel, through one or several
transactions at its discretion, all or some of the shares currently held or
that may be held in the future by the Company following share buybacks
carried out pursuant to Article L. 225-209 of the Commercial Code,
provided that the number of shares cancelled in any 24-month period
may not exceed 10% of the total shares outstanding. The difference
between the purchase price of the cancelled shares and their par value
will be deducted from additional paid-in capital and retained earnings,
with an amount corresponding to 10% of the capital reduction being
deducted from the legal reserve;
a authorises the Board of Directors to place on record the capital
reduction(s), amend the bylaws to reflect the new capital and carry out
any and all necessary formalities;
a authorises the Board of Directors to delegate all necessary powers to
The life of the options may not exceed 10 years with a vesting period of at
least 4 years and the total number of options granted may not be exercisable
for a number of shares exceeding 1.3% of the Company’s current share
capital.
The number of options granted to an executive director may not exceed
0.16% of the current share capital and part of these options will be subject
to performance criteria based on meeting revenue and operating margin
targets.
The limits of respectively 1.3% and 0.16% described in this resolution are
not cumulative with the 0.325% and 0.04% ceilings set in the thirteenth
resolution.
The Meeting gives full powers to the Board of Directors to set the terms and
conditions of the stock option plan or plans.
This authorisation cancels and replaces an earlier authorisation to the same
effect given at the Extraordinary General Meeting of 13 May 2009.
permit the implementation of its decisions, subject to compliance with
the laws and regulations in force when this authorisation is used;
a resolves that this authorisation may be used within a fourteen-month
period from the date of this Meeting;
a resolves that this authorisation cancels and replaces the authorisation to
the same effect given at the General Meeting of 13 May 2009.
THIRTEENTH RESOLUTION
Authorisation to make performance-based stock grants
a The Extraordinary General Meeting, having considered the report of the
Board of Directors and the Auditors’ special report:
a authorises the Board of Directors, in accordance with Articles
TWELFTH RESOLUTION
Authorisation to grant stock options
The Extraordinary General Meeting, having considered the reports of the
Board of Directors and the Auditors, authorises the Board of Directors to
grant options to purchase shares of the Company to certain employees of
the Company and its subsidiaries. The authorisation is given for a period of
14 months from the date of this Meeting and may be used on one or several
L. 225-197-1 to L. 225-197-5 of the Commercial Code, to make stock
grants on one or more occasions, to employees of the Company or
certain categories of employee and/or to the senior executives referred
to in Article L. 225-197-1 II of the Commercial Code, and to employees
and senior executives of companies or economic interest groupings
related to the Company within the meaning of Article L. 225-197-2 of
the Commercial Code;
GROUPE SEB
153
5
a resolves that the total number of shares that may be granted shall not
a The Extraordinary General Meeting gives full powers to the Board of
exceed 0.325% of the Company’s share capital on the grant date, with
the number of shares granted to the executive officer not exceeding
0.04%.
Directors, within the limits set out above, to:
a draw up the list of grantees or decide the category/categories of
grantees, provided that no stock grants may be made to employees
or officers who individually hold over 3% of the capital and that the
stock grants would not have the effect of raising the interest held by
any employee or officer to above the 3% ceiling,
The limits of 0.325% and 0.04% described in this resolution are not
cumulative with the 1.3% and 0.16% ceilings set in the twelfth resolution.
a The Extraordinary General Meeting authorises the Board of Directors to
make the stock grants, within the limits set out in the preceding paragraph,
using shares bought back by the Company in accordance with Articles
L. 225-208 and L. 225-209 of the Commercial Code.
a determine the amounts and timing of the stock awards,
a set the criteria and any other conditions of eligibility for stock grants,
including but not limited to years of service and continued employment
by the Company throughout the vesting period,
a The Extraordinary General Meeting resolves:
A) in respect of stock grants made to grantees resident in France:
a set the vesting period and lock-up period, within the limits specified
above,
a to set a minimum vesting period of two years with effect from the date
5
of grant by the Board of Directors, during which the rights shall not be
transferable pursuant to Article L. 225-197-3 of the Commercial Code.
At the end of the vesting period, the rights shall be fully acquired by
the grantee, provided that the performance criteria based on revenue
and operating margin targets have been met,
a record the shares in a registered share account opened in the name
of their holder, with a lock-up clause specifying the lock-up period,
a if any corporate actions governed by Article L. 228-99, first paragraph,
of the Commercial Code are carried out during the vesting period, take
any and all appropriate measures to protect and adjust the rights of
recipients of stock grants, on the basis prescribed in the third paragraph
of said Article.
a to set a lock-up period of two years with effect from the vesting date,
during which the vested shares may not be sold. However, the shares
shall be freely transferable in the event of the grantee’s death or second
or third degree disability within the meaning of Article L. 341-4 of the
Social Security Code;
B) in respect of stock grants made to grantees not resident in France:
In accordance with Articles L. 225-197-4 and L. 225-197-5 of the Commercial
Code, the Board of Directors shall report to each Annual General Meeting
on the transactions carried out under this authorisation.
This authorisation is given for a period of fourteen (14) months.
a to set a minimum vesting period of between two and four years with
effect from the date of grant by the Board of Directors, during which
the rights shall not be transferable pursuant to Article L. 225-197-3
of the Commercial Code. At the end of the vesting period, the rights
shall be fully acquired by the grantees, provided that the performance
criteria based on revenue and operating margin targets have been met,
a if the vesting period is set at four years, to waive the lock-up period
such that the shares shall be freely transferable with effect from their
vesting date in accordance with Article L. 225-197-1 paragraph 7 of
the Commercial Code.
However, for stock grants made pursuant to both paragraphs A and
B above, in the event of the grantee’s death, the shares shall vest
immediately in the heirs should they so request no later than six months
after the date of death. Furthermore, the shares shall vest immediately
in the event of the grantee’s second or third degree disability within the
meaning of Article L. 341-4 of the Social Security Code.
154
FOURTEENTH RESOLUTION
Authorisation to issue shares and share equivalents
with pre-emptive subscription rights
Board of Directors and the Auditors’ special report, resolves, in accordance
with Articles L. 225-129-2 and L. 228-91 of the Commercial Code:
a to give the Board of Directors the necessary powers, if such decision
is approved by 12 of the 15 members present or represented by proxy,
to issue shares and securities convertible, exchangeable, redeemable
or otherwise exercisable for shares, denominated in euros or in foreign
currencies, in France or on the international market, and to determine
the timing and amounts of said issues within the limits prescribed below;
a that the aggregate par value of the shares to be issued directly and/or
GROUPE SEB
on conversion, exchange, redemption or exercise of share equivalents
pursuant to this authorisation shall not exceed €5,000,000, not including
the par value of any additional shares to be issued to protect the rights
of holders of existing share equivalents pursuant to the law;
a that the aggregate nominal value of debt securities issued pursuant to
this authorisation shall not exceed €150,000,000 or the equivalent of this
amount in the case of issues denominated in foreign currencies;
a that shareholders will have a pre-emptive right to subscribe the shares
and/or share equivalents issued under this authorisation, pro rata to
their existing interest in the Company’s capital. In addition, the Board of
Directors may grant shareholders a pre-emptive right to subscribe any
shares and/or share equivalents not taken up by other shareholders. If
the issue is oversubscribed, such additional pre-emptive right shall also
be exercisable pro rata to the existing interest in the Company’s capital
of the shareholders concerned.
If the issue is not taken up in full by shareholders exercising their preemptive rights as described above, the Board of Directors may take one
or other of the following courses of action, in the order of its choice:
a limit the amount of the issue to the subscriptions received provided
that at least three-quarters of the issue is taken up,
a freely allocate the remaining shares or share equivalents,
5
if appropriate, the conditions under which the securities may be bought
back on the open market or the conversion, exchange, redemption or
exercise rights attached to the share equivalents may be suspended,
provided that said rights are not suspended for more than three months,
and the method by which the rights of holders of share equivalents will
be protected pursuant to the applicable laws and regulations. The Board
of Directors or the Chairman shall also have full powers to charge any
and all amounts against the issue premium, including the issuance costs,
and to take all necessary or appropriate measures and enter into any and
all agreements in connection with the placement of the issues, to place
on record the resulting capital increase(s) and to amend the bylaws to
reflect the new capital.
In the case of any issue of debt securities, the Board of Directors shall have
full powers, including the right to delegate such powers to the Chairman,
to decide whether to issue subordinated or unsubordinated debt, to set
the interest rate, the life of the securities, the redemption price – which
may be fixed or variable and may or may not include a call premium – the
terms of early redemption depending on market conditions and the basis
on which the debt securities are convertible, exchangeable, redeemable
or otherwise exercisable for shares of the Company;
5
a that this authorisation cancels and replaces all earlier authorisations to
a offer all or some of the remaining shares or share equivalents for
subscription by the public;
issue shares and share equivalents with pre-emptive subscription rights.
a that warrants to subscribe the Company’s shares may be offered for
subscription on the above basis or allocated among holders of existing
shares without consideration;
a that, having noted that this authorisation will automatically entail the waiver
of shareholders’ pre-emptive right to subscribe the shares to be issued
on conversion, exchange, redemption or exercise of share equivalents,
decides that said pre-emptive right will be cancelled;
a that the amount to be received by the Company for each share issued
directly or indirectly under this authorisation shall not represent less than
the share’s par value. In the case of shares issued on exercise of standalone warrants or other primary securities, the amount received by the
Company shall be determined after taking into account the issue price
of said warrants or other primary securities;
a that the Board of Directors shall have full powers to use this authorisation
and to delegate such powers to the Chairman, subject to compliance
with the law. In particular, the Board of Directors or the Chairman shall
have full powers to set the date and terms of the issues, as well as the
form and characteristics of the securities to be issued, the issue price
and terms, the amount of each issue, the cum-rights date which may be
set retrospectively, the terms of settlement of the subscription price and,
FIFTEENTH RESOLUTION
Authorisation to issue share equivalents without
pre-emptive subscription rights
with Articles L. 225-129-2, L. 225-136 and L. 228-91 of the Commercial
Code:
a to give the Board of Directors the necessary powers, if such decision
is approved by 12 of the 15 members present or represented by proxy,
to issue hybrid securities convertible, exchangeable, redeemable or
otherwise exercisable for shares, denominated in euros or in foreign
currencies, in France or on the international market, and to determine
the timing and amounts of said issues within the limits prescribed below.
This authorisation only concerns issues of hybrid securities and not direct
issues of ordinary shares;
a that the aggregate par value of the shares to be issued on conversion,
exchange, redemption or exercise of share equivalents pursuant to this
authorization may not exceed €5,000,000. The par value of any additional
GROUPE SEB
155
5
shares to be issued to protect the rights of holders of existing share
equivalents pursuant to the law shall not be taken into account in the
computation of the value of said issues;
variable and may or may not include a call premium – the terms of early
redemption depending on market conditions and the basis on which the
debt securities are convertible, exchangeable, redeemable or otherwise
exercisable for shares of the Company;
a that the aggregate nominal value of debt securities issued pursuant to
this authorisation shall not exceed €150,000,000 or the equivalent of this
amount in the case of issues denominated in foreign currencies;
a that existing shareholders shall not have a pre-emptive right to subscribe
the share equivalents issued under this authorisation, but that the Board
of Directors may grant shareholders a priority right to subscribe all or
part of each issue, for a period and on terms to be decided by the Board,
provided that the right is exercisable during at least three trading days.
Said priority right shall not be transferable but the Board of Directors
may allow shareholders to subscribe the issue and to any securities not
taken up by other shareholders pro rata to their existing shareholdings;
5
a that if any issue of share equivalents is not taken up in full by existing
shareholders and the public, the Board of Directors may limit the amount
of the issue to the value of the subscriptions received, provided that at
least three-quarters of the issue is taken up;
a that, having noted that this authorisation will automatically entail the waiver
of shareholders’ pre-emptive right to subscribe the shares to be issued
on conversion, exchange, redemption or exercise of share equivalents,
decides that said pre-emptive right will be cancelled;
a that the amount to be received by the Company for each share issued
indirectly under this authorisation shall not represent less than the
minimum amount prescribed by law. In the case of shares issued on
exercise of stand-alone warrants or other primary securities, said amount
shall be determined after taking into account the issue price of said
warrants or other primary securities;
a that the Board of Directors shall have full powers to use this authorisation
and to delegate such powers to the Chairman, subject to compliance
with the law. In particular, the Board of Directors or the Chairman shall
have full powers to set the date and terms of the issues, as well as the
form and characteristics of the securities to be issued, the issue price
and terms, the amount of each issue, the cum-rights date which may be
set retrospectively, the terms of settlement of the subscription price and,
if appropriate, the conditions under which the securities may be bought
back on the open market or the conversion, exchange, redemption or
exercise rights attached to the share equivalents may be suspended,
provided that said rights are not suspended for more than three months.
The Board of Directors or the Chairman shall also have full powers to
charge any and all amounts against the issue premium, including the
issuance costs, and to take all necessary or appropriate measures and
enter into any and all agreements in connection with the placement of the
issues, to place on record the resulting capital increase(s) and to amend
the bylaws to reflect the new capital.
The Board of Directors shall have full powers, including the right to
delegate such powers to the Chairman, to decide whether to issue
subordinated or unsubordinated debt securities, to set the interest rate,
the life of the securities, the redemption price – which may be fixed or
156
a that this authorisation cancels and replaces all earlier authorisations to
the same effect.
SIXTEENTH RESOLUTION
Authorisation to issue shares to be paid up by
capitalizing retained earnings, profit or additional
paid-in capital
The Extraordinary General Meeting, voting in accordance with the quorum
and majority voting rules applicable to Ordinary Meetings, having considered
the report of the Board of Directors, gives the Board the necessary powers
to increase the capital on one or several occasions by a maximum aggregate
amount of €10,000,000 to be paid up by successively or simultaneously
capitalizing all or part of the Company’s retained earnings, net profit or
additional paid-in capital, and to issue bonus shares and/or raise the par
value of existing shares.
The Meeting resolves that the Board of Directors shall have discretionary
powers to decide that fractional shares will be non-transferable and that
the corresponding shares will be sold, with proceeds of such sale attributed
to holders of rights to fractional shares no later than 30 days following the
date on which the whole number of shares allocated to them are recorded
in their securities account.
The Meeting gives full powers to the Board of Directors, including the right
to delegate such powers to the Chairman subject to compliance with the
law, to determine the timing and terms of the capital increases, as well as
the amounts thereof, to take the necessary action to protect the rights of
existing holders of share equivalents, to deduct from the issue proceeds the
amounts necessary to increase the legal reserve to 10% of the new capital,
to take all appropriate measures to permit the execution of the operation, to
carry out all actions and formalities required to effect the capital increase(s)
and to amend the bylaws to reflect the new capital.
SEVENTEENTH RESOLUTION
Blanket ceiling on financial authorisations
Board of Directors, resolves, pursuant to the adoption of the 14th and 15th
resolutions, to set at €5,000,000 the maximum aggregate par value of shares
to be issued directly or on conversion, exchange, redemption or exercise
of share equivalents pursuant to the fourteenth and fifteenth authorisations
above, provided that said ceiling shall not include the par value of any
additional shares to be issued to protect the rights of existing holders of
share equivalents as required by law.
GROUPE SEB
Consequently, the value of each issue carried out under either of the two
above authorisations shall be deducted from this ceiling.
5
reduce the discount or offer the shares at their market price, subject to
compliance with the applicable legal and regulatory limits;
a that the Board of Directors may make matching payments to the employee
stock ownership plan, in the form of shares or share equivalents, within
the limits prescribed by Article L. 443-5 of the Labour Code;
EIGHTEENTH RESOLUTION
a to give this authorisation for a period of fourteen months;
with Articles L. 225-129 to L. 225-129-6 and L. 225-138-1 of the Commercial
Code and Articles L. 443-1 et seq. of the Labour Code:
a to authorise the Board of Directors to issue shares and share equivalents,
on one or several occasions at its discretion, including in separate
tranches, for subscription by members of an employee stock ownership
plan set up for this purpose. The aggregate par value of shares issued
directly or indirectly, on conversion, exchange, redemption or exercise
of share equivalents, pursuant to this authorisation, shall not exceed
€499,518. These powers may be delegated to any legally authorised
person;
a that, having noted that this authorisation will automatically entail the
waiver of shareholders’ pre-emptive right to subscribe shares and share
equivalents issued under the authorisation in favour of members of the
employee stock ownership plan, decides that said pre-emptive right will
be cancelled;
a that – in accordance with Article L. 443-5 of the Labour Code – the shares
may be offered for subscription at a 20% discount to the average of the
prices quoted for the Company’s shares on Eurolist by Euronext™ Paris
SA over the twenty trading days preceding the Board’s decision setting the
opening date of the subscription period, or a 30% discount if the shares
are offered to members of an employee stock ownership plan governed
by Article L. 443-6 of the Labour Code provided that the lock-up period
under the plan is at least ten years. The Board of Directors may replace
all or part of the discount with a grant of shares or share equivalents, or
a to grant full powers to the Board of Directors, including the power of
delegation, to set all the terms and conditions of the issues. In particular,
the Board shall be authorised to:
a decide to offer shares and share equivalents to employees of selected
entities among the companies whose employees are eligible to invest
in the employee stock ownership plan,
a set the terms and conditions of the issues to be carried out pursuant
5
to this authorisation, decide the amount of each issue, the issue price
and date, the subscription period and other terms and conditions, the
terms and conditions of settlement and delivery, and the cum-rights
dates of the shares or share equivalents,
a at its discretion, after each share issue, charge the issuance costs
against the related premium and deduct from the premium the amount
necessary to increase the legal reserve to one-tenth of the new capital,
a carry out any and all formalities in order to place on record the capital
increase(s) effected pursuant to this authorisation, amend the bylaws
to reflect the new capital and generally take all necessary or useful
measures.
NINETEENTH RESOLUTION
Powers to carry out formalities
The General Meeting gives full powers to the bearer of an original, extract
or copy of the minutes of this Meeting to carry out any and all formalities
required by law.
GROUPE SEB
157
5
5
158
GROUPE SEB
GENERAL INFORMATION
CONCERNING SEB SA 160
Corporate objects (Article 3, Company bylaws)
Statutory allocation of profits
(Article 48, Company bylaws)
General Meetings of Shareholders
(Article 30 and following, Company bylaws)
Double voting rights
Limitation of voting rights
Statutory threshold clause
Identity of bearer shareholders
Share capital at 31 December 2009
Elements which could affect
a hypothetical takeover bid
160
160
160
161
161
161
161
161
162
SHARE CAPITAL BREAKDOWN
AND CHANGES 163
Shareholders and voting rights
at 31 December 2009
Changes in shareholdings
and voting rights over last three years
Share capital over the last five years
Potential share capital at 31 December 2009
Changes in shareholding structure
over the last three years
163
6
EMPLOYEE STOCK OWNERSHIP 168
Staff mutual investment fund
and direct stock ownership
Bonuses and profit-sharing
Stock option and performance share
allocation policy
History of share purchase
or subscription option allocations
Performance shares allocated to staff
168
168
168
170
171
STOCK MARKET
AND DIVIDEND INFORMATION 172
Stock market
Stock market transactions over the last 18 months
Dividends – loyalty premiums
172
172
173
6
CONSULTATION OF LEGAL DOCUMENTS 174
NOTES 175
165
166
166
166
FINANCIAL AUTHORIZATIONS 167
Authorization to issue shares and other securities
Authorization for the Company
to trade in its own shares
167
167
GROUPE SEB
159
6
Corporate name: SEB SA
Status: limited company
Registered head office: Les 4M, Chemin du Petit Bois, 69130, Ecully, France
Trading year: 1 January to 31 December
Tel.: +33 (0)4 72 18 18 18 | Fax: +33 (0) 4 72 18 16 55
Governing law: French
Business registration number: 300.349.636 RCS Lyon
Duration: 99 years from 1973
Industrial classification (NACE) code: 6420 Z
Corporate objects (Article 3, Company bylaws)
6
The object of the Company in France and abroad covers:
a the acquisition and registration of patents or inventions and the granting
of all forms of licences for the use of these patents;
a investment in any company involved in any form of business and, in
consequence, the acquisition or subscription of all types of shares,
warrants, capital holdings and interests, all types of securities, as well
as the disposal of the said investments and marketable securities;
a the acquisition, construction and management of real estate and its
disposal;
a all operations contributing to the development of the Company and to
the achievement of the objects specified above.
a all operations concerning the financing of its subsidiaries and other
companies in which it owns or may acquire a holding;
Statutory allocation of profits (Article 48, Company bylaws)
Profits are allocated in accordance with legal requirements and regulations.
Payment of dividends is done in priority over distributable profits.
The Annual General Meeting may offer shareholders an option to choose
payment of dividends in cash or in the form of new shares.
A supplementary dividend payment of 10% of the unit value of the dividend
in question, which may be rounded down to the nearest even number of euro
cents, shall be paid in respect of shares registered without interruption by
the same shareholder in the nominal register for at least the two preceding
accounting periods, and still registered on the date of detachment of the
coupon. For any one shareholder, this supplement is limited to a number of
shares which may not exceed 0.5% of share capital. This supplement can
be altered or cancelled by decision of an Extraordinary General Meeting
of Shareholders which will then decide on any new terms and conditions.
The shareholder assembly also has the power to decide on the distribution
of amounts to be drawn from the reserves at its disposal. In this case, the
reserve accounts from which funds are to be drawn.
General Meetings of Shareholders
(Article 30 and following, Company bylaws)
Shareholders are notified of the AGM in accordance with legal requirements.
All shareholders, irrespective of the number of shares they hold, may attend
or be represented at General Assembly Meetings.
To have the right to attend the AGM, shareholders who own nominal shares
should have these shares registered at least five clear days prior to the meeting.
160
Shareholders who own bearer shares must, within the same time limit,
deposit with the registered office of the Company, or at any place indicated
in the convening notice, a receipt showing that their shares have been lodged
until after the meeting.
GROUPE SEB
6
Double voting rights (Article 37, Company bylaws)
Each member attending the meeting is entitled to exercise one vote for every
share they hold or represent. However, double voting rights are conferred
on fully subscribed, registered nominal shares held by the same person
for at least five years (decision by the General Shareholder Assembly of
15 June 1985). Entitlement to double voting rights expires if the shares
concerned are converted to bearer status or if their ownership is transferred,
except in cases where the transfer involves a change of name in the nominal
register subsequent to family inheritance or endowment. In the event of an
increase in capital by incorporation of reserves, income or issue premiums,
double voting rights are conferred, from the time of issue, on nominal shares
allocated free of charge to a shareholder on the basis of shares already held
which bear this entitlement.
Limitation of voting rights
There is no statutory limitation on voting rights.
6
Statutory threshold clause (Article 8, Company bylaws)
There exists an obligation to disclose any holding which exceeds a threshold of 2.5% (or any multiple thereof) of the Company’s capital or voting rights.
Identity of bearer shareholders
The Company may at any time, in accordance with legal provisions and
regulations in force, ask the Euroclear France securities settlement agency
to provide:
a the personal name or company name, address and nationality of holders
a the quantity of shares held by each of them;
a where applicable, any restrictions to which these shares may be subject.
SEB S.A. made such a request to know the identity of its shareholders on
31 December 2009.
of shares in the Company;
Share capital at 31 December 2009
At 31 December 2009, share capital stood at €49,951,826 and was made up of 49,951,826 shares, representing 76,307,317 total voting rights, and 73,157,874
effective voting rights (excluding treasury stock).
GROUPE SEB
161
6
Elements which could affect a hypothetical takeover bid
In compliance with Article L. 225-100-3 of the French Commercial Code,
elements which could affect a hypothetical takeover bid are stated below:
SHAREHOLDER AGREEMENTS OF WHICH
THE COMPANY IS AWARE
CAPITAL STRUCTURE OF THE COMPANY
See below: “Shareholder agreements – Concerted Action”.
See following page: “Breakdown of share capital and voting rights on
31/12/2009.”
POWERS OF THE BOARD OF DIRECTORS
IN THE EVENT OF A TAKEOVER BID
The General Shareholder Assembly of 13 May 2009 authorized the Board
of Directors to launch a share buy-back operation in the event of a takeover
bid, subject to legal and regulatory provisions.
6
162
GROUPE SEB
6
Shareholders and voting rights at 31 December 2009
Capital
Voting rights
OGM
EGM
OGM
EGM
FÉDÉRACTIVE
9,923,742
19.87%
3
0.00%
19,258,564
26.32%
3
0.00%
FÉDÉRACTIVE associates
1,995,833
3.99%
11,919,572
22.95%
3,575,716
4.89%
22,834,277
31.21%
31.21% 22,834,280
31.21%
SUB-TOTAL
11,919,575
23.86% 11,919,575
22.95% 22,834,280
7,461,243
14.94%
17,902
0.01%
14,882,997
20.34%
17,905
0.02%
VENELLE INVESTISSEMENT associates
2,044,700
4.09%
9,964,903
19.95%
3,872,901
5.30%
19,691,717
26.92%
SUB-TOTAL (1)
9,505,943
19.03%
9,982,805
19.99% 18,755,898
25.64% 19,709,622
26.94%
42.89% 21,902,380
43.85% 41,590,178
56.85% 42,543,902
58.15%
FOUNDER GROUP
21,425,518
FFP
2,901,522
5.81%
2,901,522
5.81%
5,473,533
7.48%
5,473,533
7.48%
Employees
1,729,023
3.46%
1,730,547
3.46%
3,284,984
4.49%
3,288,032
4.49%
French investors
9,600,572
19.22%
9,123,710
18.26%
10,626,432
14.53%
9,672,708
13.23%
Foreign investors
8,343,123
16.70%
8,343,123
16.70%
8,434,630
11.53%
8,434,630
11.53%
Individual French shareholders
2,802,625
5.61%
2,801,101
5.61%
3,748,117
5.12%
3,745,069
5.12%
Treasury stock
3,149,443
6.31%
3,149,443
6.31%
TOTAL
49,951,826 SHARES
6
73,157,874 VOTES
(1) The usufruct of 476,862 SEB shares representing 953,724 voting rights, of which the bear ownership belongs to the associates of Venelle Investissement, is held partially by the
Fondation de France (462,000 shares and 924,000 voting rights) and by the Association Canoniale (14,862 shares, 29,724 voting rights). It is also stated that the before each SEB
AGM until 12 May 2013, the Fondation de France has undertaken to assign power of proxy of its voting rights to the associates of Venelle Investissement for a total of 577,000
shares (including the 462,000 previously stated) and 1,155,000 voting rights.
The term “Founder Group” used in the table above refers to a group of natural
persons who are direct descendants or by marriage of the LESCURE family.
The natural person members of the Founder Group hold SEB shares either:
a in full ownership;
a or in bare ownership where the corresponding usufruct has essentially
been temporarily assigned to their respective holding company i.e.:
a FÉDÉRACTIVE: a usufruct shareholder investment company for natural
person shareholders who are members of FÉDÉRACTIVE,
a VENELLE INVESTISSEMENT: a family shareholder company for natural
person shareholders, members of VENELLE INVESTISSEMENT.
As a reminder, voting rights attached to divided shares belong to the bare
holder for decisions concerning the Extraordinary General Meeting (EGM)
and to the usufruct holder for those concerning the Ordinary General Meeting
(OGM).
The voting rights indicated in the table above, a total of 73,157,874, are
“effective” voting rights. This number excludes shares without voting rights,
such as SEB S.A. treasury stock.
The total number of “theoretical” voting rights is 76,307,317. This number
includes, under the terms of Article 223–11 of the AMF general regulations,
all shares with voting rights attached, as well non-voting shares (shares held
by SEB S.A. or treasury stock).
On the basis of this total number of “theoretical” voting rights and for
illustrative purposes:
a the FÉDÉRACTIVE sub-total amounts to 29.92 of the OGM and EGM
voting rights;
a the VENELLE INVESTISSEMENT sub-total amounts to 24.58% of the
OGM voting rights and 25.83% of the EGM voting rights;
a as a whole, the Founder Group sub-total amounts to 54.50% of the OGM
voting rights and 55.75% of the EGM voting rights.
Registered nominal shares held by the same person for at least five years
give entitlement to double voting rights.
GROUPE SEB
163
6
SHAREHOLDER AGREEMENTS – CONCERTED
ACTION
The FÉDÉRACTIVE and VENELLE INVESTISSEMENT family holdings,
representing together with their associates 58.15% of voting rights,
confirmed their intention to implement a sustainable management policy
for Groupe SEB by letter to the AMF (French Markets Authority) dated 11
and 12 May 2009, with a view to ensuring the longevity of their control and
thus pursuing the concerted action in place between the members of the
Founder Group since May 1989.
The non-renewal of the shareholder agreement signed on 5 November 2005
ending on 5 November 2009 does not therefore terminate the concerted
action existing between the parties to the agreement under the terms of
L. 233-10 of the French Commercial Code (AMF decision no. 209C0644
dated 12 May 2009).
6
binding exit clause. The provisions also envisage the participation of
other investors willing to accompany the FÉDÉRACTIVE Founder-group
shareholders in supporting the long-term development of Groupe SEB (D&I
AMF no 208C1659 dated 11 September 2008).
VENELLE INVESTISSEMENT agreement
On 12 May 2009, VENELLE INVESTISSEMENT, its associates and
shareholder members concluded a shareholder agreement to ensure that
VENELLE INVESTISSEMENT, its associates and shareholder members
mutually agree to propose a prior-right to acquisition applicable to any
transfer or sale of share subject to pre-emptive rights (D&I AMF no 209C0743
dated 27 May 2009).
COLLECTIVE UNDERTAKING TO RETAIN SHARES
The representatives of the two family holdings have also declared to the
Board of Directors their willingness to discuss matters prior to all major
decisions and to maintain their prior agreement concerning the composition
of the Board as determined by the 2005 agreement. In this respect,
FÉDÉRACTIVE may propose the appointment of five Board members
and VENELLE INVESTISSEMENT may propose the appointment of four
members.
A collective share-retention agreement covering 22.66% of capital and
26.60% of voting rights of SEB SA, was signed on 28 December 2005 by a
number of SEB SA shareholders: VENELLE INVESTISSEMENT, Thierry de
La Tour d’Artaise in his capacity as Chairman and Chief Executive Officer,
individual family group shareholders, Foncière, Financière et de Participation
(FFP) and some other shareholders (AMF notification no. 206C0032 dated
5 January 2006).
FÉDÉRACTIVE agreement
This agreement was concluded for a period of six years under the terms
of Article 885 I b of the French Income Tax Code (a “Dutreil” agreement).
On 9 July 2008, SEB shareholder associates of FÉDÉRACTIVE signed an
agreement reinforcing their commitment to the Group.
FFP shall have prior rights in the event of a family shareholder signatory
deciding to sell more than 50,000 SEB shares to a third party.
The provisions of this agreement between its signatories foresee preferential
conditions for the sale or acquisition of SEB shares held, as well as a
164
GROUPE SEB
6
Changes in shareholdings and voting rights over last three years
31/12/2007
Capital
AGO
FÉDÉRACTIVE
FÉDÉRACTIVE
Associates
31/12/2008
Votes
AGE
19.18%
Capital
AGO
AGE
26.78%
31/12/2009
Votes
Capital
Votes
AGO
AGE
AGO
AGE
AGO
AGE
AGO
AGE
19.13%
0.00%
27.21%
0.00%
19.87%
0.00%
26.32%
0.00%
3.72%
22.90%
5.03%
31.81%
3.82%
22.95%
5.26%
32.47%
3.99%
23.86%
4.89%
31.21%
SUB-TOTAL
22.90%
22.90%
31.81%
31.81%
22.95%
22.95%
32.47%
32.47%
23.86%
23.86%
31.21%
31.21%
VENELLE
INVESTISSEMENT
13.09%
13.09%
0.01%
18.90%
0.01%
14.94%
0.04%
20.34%
0.02%
VENELLE
INVESTISSEMENT
Associates
18.54%
5.54%
19.57%
7.56%
27.43%
5.74%
19.75%
7.85%
28.10%
4.09%
19.95%
5.30%
26.92%
SUB-TOTAL
18.63%
19.57%
26.10%
27.43%
18.83%
19.76%
26.75%
28.11%
19.03%
19.99%
25.64%
26.94%
FOUNDER GROUP
58.15%
41.53%
42.47%
57.91%
59.24%
41.78%
42.71%
59.22%
60.58%
42.89%
43.85%
56.85%
FFP
5.05%
5.05%
3.58%
3.58%
5.70%
5.70%
4.12%
4.12%
5.81%
5.81%
7.48%
7.48%
Employees
3.57%
3.57%
4.73%
4.73%
3.54%
3.54%
4.83%
4.83%
3.46%
3.46%
4.49%
4.49%
French Investors
24.78%
23.84%
18.96%
17.63%
21.27%
20.34%
16.87%
15.51%
19.22%
18.26%
14.53%
13.23%
Foreign Investors
14.10%
14.10%
10.05%
10.05%
13.76%
13.76%
9.99%
9.99%
16.70%
16.70%
11.53%
11.53%
Individual French
shareholders
5. 11%
5.11%
4.77%
4.77%
5.35%
5.35%
4.97%
4.97%
5.61%
5.61%
5.12%
5.12%
Treasury Stock
5.86%
5.86%
8.60%
8.60%
6.31%
6.31%
50,880,558
SHARES
71,837,256
VOTES
50,912,138
SHARES
Although the Company is controlled, the organization and operating methods
of the Board of Directors and the Committees ensure balanced control
and effective management of conflicts of interest. Effectively, excluding
the Chairman:
a five directors, of whom four are independent, are not members of the
70,491,203
VOTES
49,951,826
SHARES
6
73,157,874
VOTES
At 31 December 2009, almost 5,200 shareholders owned registered SEB
shares and 12,000 shareholders hold SEB bearer shares.
To the knowledge of the Company, there are no other shareholders who
own directly, indirectly, or jointly with others, 5% or more of share capital
or voting rights.
Founder Group;
a the nine members of the Board representing the Founder Group are
subject to the same regulations as other directors, concerning the interest
of the Company and the rules stated in the charter and internal regulations.
In addition, each year (except in 2009 due to a lack of time) since 2003,
the Board has assessed its operations, ensuring that all rules applicable to
good corporate governance are respected.
SHARES IN THE SEB SA NOMINAL REGISTER USED
AS COLLATERAL, AT 31 DECEMBER 2009
During the year, 18 individual shareholders used SEB shares registered
in the SEB S.A. nominal register as collateral for loans in favour of their
financial intermediaries. This concerned a total of 176,389 shares, or 0.35%
of share capital.
GROUPE SEB
165
6
Share capital over the last five years
Year
Type of capital increase
Nominal (€)
Additional
paid-in
capital (€)
Total share
capital (€)
Issue of shares arising from the exercise
of share subscription options
117,558
352,674
6,148,766
51,581,160
Cancellation of shares
(213,680)
(641,040)
(13,266,806)
50,940,120
2006 December
38,780
116,340
2,052,227
51,056,460
2007 December
32,486
97,458
1,764,999
51,153,918
(273,360)
(7,719,631)
2005 December
6
Amount of
increase in shares
(91,120)
2008 June
3-for-1 split of the nominal share price
33,920,372
December
31,580
31,580
581,463
50,912,138
(1,000,000)
(1,000,000)
29,629,143
49,912,138
39,688
39,688
681,840
49,951,826
2009 March
December
50,880,558
50,880,558
Potential share capital at 31 December 2009
No stock options proposed to personnel and exercisable continue to exist.
There are no convertible bonds which can be exchanged for or converted into shares giving access to the Company’s capital, nor instruments that do not
represent capital.
Changes in shareholding structure over the last three years
There was no significant change in the distribution of the Company’s capital during 2007, 2008 or 2009.
166
GROUPE SEB
6
Authorization to issue shares and other securities
Type of operation
Capital increase by incorporation of reserves,
income, shares or other premiums
Issue of all types of securities with preferential
subscription rights
Used at
Maximum amount
authorized 31/12/2009
Date of
authorization
Expiry of
authorization
05/2009
07/2010
€10,000,000
-
07/2010
Capital increase: €20,000,000
Bond issue: €600,000,000
-
05/2009
Issue of all types of securities without preferential
subscription rights
05/2009
07/2010
Capital increase: €5,000,000
Bond issue: €150,000,000
Purchase of its own shares by the Company at a
maximum price of €40
05/2009
07/2010
€199,648,520
0
Cancellation of its own shares by the Company
05/2009
07/2010
10% of nominal capital:
4,991,213 shares per 24-month period
1,000,000
07/2010
Nominal capital of €510,000:
510,000 shares
371,300
50,472
Issue of shares reserved for employees participating
in Company savings scheme
05/2009
Share purchase options
05/2009
07/2010
1.2% of nominal capital:
598,945 shares
Allocation of free shares
05/2009
07/2010
0.4% of nominal capital on the date
of the operation
6
Authorization for the Company to trade in its own shares
Pursuant to the authorization given to the Board of Directors by the last
Annual General Meeting, under the terms of Article 225–209 of the French
Commercial Code, the Board acquired 149,072 shares at an average price
of €18.45 in 2009 to cover share purchase option plans, and 388,643 shares
were sold on the occasion of exercise of purchase options, at an average
price of €27.08.
Moreover, 578,136 shares were acquired and 565,222 shares were sold
under a liquidity agreement.
Lastly, 1,000,000 shares were cancelled.
At 31 December 2009, the Company owned 3,149,443 of its own shares,
or 6.31% of share capital.
The Company will renew its request to the Annual General Meeting of 12 May
2010 to authorize it to trade in its own shares.
GROUPE SEB
167
6
Staff mutual investment fund and direct stock ownership
At 31 December 2009, employees of the Group’s companies held 1,173,773
shares in a company savings scheme mutual investment fund, being 2.35%
of share capital and 3.19% of voting rights. With the addition of directly
owned shares, employees held a total of 3.46% of share capital and 4.49%
of voting rights.
Bonuses and profit-sharing
6
To attract competent and career-oriented employees at all levels and in
addition to its dynamic salary and career management policies, Groupe SEB
has for many years pursued an active policy of employee shareholding and
staff participation in profits.
In France, the employee profit-sharing agreement is a Group contract
which associates all employees with the results. The arrangement is largely
exceptional: depending on the year, the exceptional part represents between
2 and 4 times the legal amount of profit-sharing.
In addition, since the start of the 2000s and in order to foster equitable
distribution of bonus sums between the employees of all entities, Groupe
SEB has gradually harmonized the existing profit-sharing scheme.
In 2009, charges posted for bonuses and profit-sharing amounted to
33.5 million Euros.
Over the past five years, the sums assigned were as follows:
(in € million)
*
2009
2008
2007
2006
2005
2004
33.5*
38.2*
33.3
25.7
29.2
34.1
Including €1.3 million in social taxes in 2009 and €0.7 million in 2008.
Stock option and performance share allocation policy
CHARACTERISTICS OF OPTIONS ALLOCATED
Groupe SEB operates two types of stock option scheme:
a periodically, an allocation of stock options to members of management,
extended to the Group’s different entities, taking account of individual
potential, responsibilities and performance;
a occasionally, a broader allocation with a view to mobilizing employees
around a specific project.
The exercise price is equal to the average of the last 20 stock market prices
preceding the date of allocation by the Board. No discount is proposed on
this average price.
The options last for eight years. They can only be exercised until four years
from their date of allocation.
Half of the stock options allocated to the CEO and one third of the options
allocated to the Group Executive Committee are subject to performance
conditions concerning the achievement of sales and operating margin
objectives.
168
GROUPE SEB
CHARACTERISTICS OF PERFORMANCE SHARES
ALLOCATED
6
a for shares allocated free of charge, a quantity of shares corresponding
to 50 of the net gain after taxes, statutory deductions and costs.
In 2009, performance-related shares were allocated for the first time.
Beneficiaries will receive shares after an acquisition period of two years,
subject to performance and attendance-related conditions. Recipients will
be obliged to retain the shares for a period of two years subsequently.
Performance conditions concern the achievement of sales and operating
margin objectives.
RETENTION CONDITIONS APPLICABLE TO CHIEF
EXECUTIVE OFFICER AND OTHER MEMBERS OF
THE GROUP EXECUTIVE COMMITTEE
These quantities will be reduced to 20% of the net gain as soon as the
number of shares held by Thierry de La Tour d’Artaise reaches the equivalent
of 2 years of remuneration.
As a reminder, coverage instruments are prohibited and to the knowledge
of the Company, no such instrument has been put in place.
a Shares originating from the exercise of stock options and free shares
allocated to other members of the Group Executive Committee will be
subject to an obligation to conserve them in their name for the duration
of occupancy of their posts, in the following amounts:
a Shares originating from the exercise of stock options and free shares
a for shares allocated free of charge, a quantity of shares corresponding
allocated to Thierry de La Tour d’Artaise will be subject to an obligation
to conserve them in his name for the duration of occupancy of his post,
in the following amounts:
a this option to retain the shares will continue to apply for as long as the
to 20% of the net gain after taxes, statutory deductions and costs;
6
number of shares held has not reached the equivalent of one year’s
remuneration (basic + bonus).
GROUPE SEB
169
6
History of share purchase or subscription option allocations
At 31 December 2009
Date of AGM
Number of options
authorized by AGM
Duration of authorization
Date of Board of
Directors meeting
Number of options
allocated (a)
6
Subscription
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
Purchase
plan
04/05/2000 03/05/1999 14/05/2002 14/05/2002 06/05/2004 06/05/2004 11/05/2006 11/05/2006 13/05/2008 13/05/2009
1,157,976
1,387,356
1,389,573
1,389,573
1,529,454
1,529,454
1,529,355
1,529,355
1,017,761
598,945
5 years
5 years
3 years
3 years
3 years
3 years
3 years
3 years
3 years
14 months
14/06/2001 19/04/2002 17/10/2002 18/06/2003 18/06/2004 08/04/2005 16/06/2006 20/04/2007 13/05/2008 12/06/2009
493,500
417,450
598,125
612,150
539,100
554,700
589,798
579,150
1,005,900
371,300
of which to Board
of Directors
234,300
214,500
44,055
334,290
310,500
318,600
357,000
346,350
261,600
254,250
of which to company
officers (a)
66,000
49,500
6,600
115,516
104,989
105,000
105,012
105,000
105,000
71,250
of which to top ten
employee recipients (a)
171,600
145,200
43,230
237,600
210,000
222,000
234,000
234,000
104,400
144,000
82
76
645
103
111
110
111
109
395
111
Number of recipients
Option exercise date
14/06/2005 19/04/2006 17/10/2006 18/06/2007 18/06/2008 08/04/2009 16/06/2010 20/04/2011 13/05/2012 12/06/2013
Expiry date
14/06/2009 19/04/2010 17/10/2010 18/06/2011 18/06/2012 08/04/2013 16/06/2014 20/04/2015 13/05/2016 12/06/2017
SUBSCRIPTION PRICE
OR PURCHASE PRICE (€) (a)
18.18
27.88
25.15
24.24
31.67
28.00
29.33
44.00
38.35
28.05
Average of last 20
prices prior to Board
Meeting (€) (a)
17.95
27.78
26.65
24.03
31.52
28.20
29.01
43.73
38.35
28.05
Number of options
exercised (a)
473,692
325,750
365,809
390,037
54,059
119,480
0
0
0
0
Number of options
cancelled (a)
19,808
21,450
82,080
32,021
17,400
20,100
11,105
6,000
14,100
1,050
0
70,250
150,236
190,092
467,641
415,120
578,693
573,150
991,800
370,250
BALANCE OF OPTIONS
REMAINING (a)
(a) Takes into account allocation of free shares in March 2004 (1 for 10) and three-way split on the nominal on 16 June 2008.
170
Purchase
plan
GROUPE SEB
6
Performance shares allocated to staff
Performance
shares
At 31 December 2009
Date of AGM
13/05/2009
Number of shares authorized by AGM
199,649
Duration of authorization
14 months
Date of Board of Directors meeting
12/06/2009
Number of shares allocated
50,472
of which to Board of Directors
21,188
of which to company officers
5,938
of which to the top ten employees
13,250
Number of recipients:
111
of whom current members of the Board of Directors
14
of whom top ten employee recipients
13
GROUPE SEB
6
171
6
Stock market
The Company’s shares are listed on the Paris Euronext Market, compartment A, under the code ISIN FR0000121709. They are included in the Euronext
3722 Durable Household Products index.
Stock market transactions over the last 18 months
6
Number of shares exchanged
Capital exchanged (€ thousands)
Highest (€)
Lowest (€)
2008
44.00
19.71
109,961.6
Daily averages
2,833.8
8
38.30
33.26
101,458
3,597
9
39.84
28.70
107,670
3,789
10
31.43
21.12
151,576
3,979
11
29.48
22.11
96,153
2,427
12
25.29
19.71
102,601
2,306
2009
40.53
16.44
89,441
2,494.0
1
23.28
16.44
126,821
2,501
2
21.81
17.15
91,586
1,777
3
21.26
17.66
110,689
2,145
4
28.41
20.02
117,418
2,918
5
28.97
24.06
134,734
3,463
6
31.48
26.64
89,393
2,610
7
34.10
28.62
67,581
2,096
8
36.81
33.00
67,029
2,310
9
39.40
34.32
81,754
3,022
10
39.40
34.67
91,936
3,420
11
40.53
36.30
58,379
2,275
12
39.75
37.05
35,974
1,389
48.88
39.15
111,363
5,040
2010
1
Source: Euronext Paris.
172
GROUPE SEB
6
Dividends – loyalty premiums
It is the policy of the Group to ensure that its shareholders are given a fair
return on the capital they invest in the Group. The Board of Directors aims
to ensure regular and continuous growth in dividend payments.
31 December 2007 and still held on the date of coupon detachment. This
supplement to the dividend is limited to a number of shares which may not
exceed 0.5% of share capital for any single shareholder.
A 10% loyalty supplement, rounded down to the nearest equal number
of euro cents, will be paid in 2010 to long-term shareholders in respect of
shares held by the same shareholder in the nominal register since at least
The term of dividend limitation is five years, as from the payment date. After
this time, unclaimed dividends are paid over to the state.
Years
Number of shares remunerated
Dividend per share (€)
2004
Dividend
48,594,438
0.80000
Loyalty premium
18,997,974
0.08000
2005
Dividend
48,656,769
0.80000
Loyalty premium
18,439,968
0.08000
Dividend
48,806,556
0.85000
Loyalty premium
16,489,335
0.08500
6
2006
2007
Dividend
47,469,969
0.93333
Loyalty premium
18,782,508
0.09333
2008
Dividend
46,370,641
0.94000
Loyalty premium
19,305,528
0.09400
Data adjusted to take account of the 3-for-1 split on 16 June 2008.
A net dividend of €1.04 per share based on the 2009 results will be proposed at the Annual General Meeting of 12 May 2010. The coupon will be detached
on 17 May for payment as from 20 May 2010.
GROUPE SEB
173
6
The Company bylaws, reports on General Shareholder Meetings and other company documents may be consulted at the Company’s registered offices:
Chemin du Petit Bois, 69130 Écully, France.
Company regulatory documents may be consulted on the Groupe SEB website: www.groupeseb.com.
6
174
GROUPE SEB
Notes
6
Notes
6
GROUPE SEB
175
6
Notes
6
176
GROUPE SEB
This document was printed in France by an Imprim’Vert certified printer on recyclable, elementary chlorine free
and PEFC certified paper produced from sustainably managed forests.
Photos: Dreamstime, Groupe SEB, Dixdix, Olix Wirtinger - Gettyimages, Asia Images Group / collection Asiapix.
Groupe SEB
les 4 M chemin du Petit Bois – BP 172
69134 Écully Cedex France
www.groupeseb.com

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