Financial report for the

3 months ended 31 March 2010

FINANCIAL REPORT FOR THE 3 MONTHS ENDED 31 MARCH 2010

1. REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE

MONTHS ENDED 31 MARCH 2010................................................................................... 1

2. CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS ....................................... 9

1. REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED 31 MARCH 2010 1.1 Preparation and publication dates The Group’s condensed consolidated financial statements for the three months ended 31 March 2010 were approved by the Executive Committee on 19 April 2010 and presented to the Supervisory Board on 26 April 2010. The Group issued a press release after the stock market closed on 27 April 2010 commenting on its results and financial position at 31 March 2010. 1.2 Highlights and outlook

In the first quarter of 2010, volumes distributed totalled 110,059 tonnes, up 7.0% relative to the first quarter of 2009 and up 15.1% relative to the fourth quarter of 2009. Turnover totalled €206.1 million. The upturn in activity was particularly strong in the stainless steel business, where volumes rose by 16.4% relative to the first quarter of 2009. Stronger business levels were accompanied by a sharp increase in gross margin, which recovered in all product lines due to inventory renewal. Gross margin totalled €41.4 million in the first quarter of 2010, as opposed to €100.3 million for the whole of 2009. The stainless steel business was boosted by higher prices of alloying elements from February onwards, while the engineering and wear-resistant steel businesses are likely to benefit from significant price rises starting in the second quarter. Efforts to lower fixed costs in 2009 resulted in savings of €7.1 million in the first quarter of 2010, in line with the full-year target of €28 million. Given these results and the outlook for the months ahead, the Group is confident that it will break even at the operating level this year, based on its current scope of consolidation. Net debt rose from €158.1 million at 31 December 2009 to €200.8 million at 31 March 2010. The increase was driven by trade receivables arising from higher business levels. With inventories remaining under control, IMS has confirmed its target of reducing debt to less than €150 million at end-2010. On 9 February 2010, the IMS Supervisory Board authorised a capital increase of €20 million for IMS SpA in Italy through partial incorporation of the cash pooling receivable held by IMS SA in its subsidiary. On 17 February 2010, the remaining 22,000 stock options were exercised. Since that occurred, there is no longer any instrument that dilutes the share capital of the Company. On 3 February 2010, the IMS Supervisory Board took due note that an unsolicited proposed public exchange offer initiated by Jacquet Metals was filed, and that all three Jacquet Concert representatives resigned. In a joint press release published on 10 March 2010, IMS and Jacquet Metals announced an agreement in principle regarding a merger, with IMS acquiring Jacquet Metals through an offer of 20 IMS shares for every 7 Jacquet Metals shares. The merger is likely to be accompanied by a capital increase, the terms of which will be determined at a later date. The memorandum of understanding was signed on 20 April 2010. A specific press release will be issued by the two companies, commenting on the memorandum of understanding and specifying the conditions required for the deal's completion, such as AMF authorisation and agreements with banks.

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The Group is currently in talks with its banks to discuss its medium-term financing. The aim is to set up a new credit facility for the merged entity, and to ensure that IMS retains the benefit of existing financing in the meantime. The new facility will refinance facilities on which covenants have been or are likely to be breached. The refinancing will enable the Group to increase the maturity of its debt and to increase financial flexibility in the next few years. 1.3 Activity In the first quarter of 2010, volumes distributed totalled 110,059 tonnes, up 7.0% relative to the first quarter of 2009 and up 15.1% relative to the fourth quarter of 2009. Growth was driven by stainless steels, where volumes were boosted by price rises. Engineering products were again dragged down by the Italian subsidiary, which continued to account for a large proportion of sales volumes in the first quarter of 2009. Turnover in the first quarter of 2010 totalled €206.1 million, down 2.8% year-on-year but up 18.7% relative to the fourth quarter of 2009 and up 16.3% relative to the second quarter of 2009. The breakdown of turnover by product line was as follows:

(in thousands of euros) First quarter

2009* First quarter

2010 Change

Stainless 96,371 110,293 +14.4%

Wear resistant 28,711 26,793 -6.7%

Engineering 74,634 59,514 -20.3%

Other and direct mill business 12,204 9,467 -22.4%

Total 211,920 206,066 -2.8%

(in tonnes) First quarter

2009* First quarter

2010 Change

Stainless 26,194 30,500 +16.4%

Wear resistant 14,611 17,188 +17.6%

Engineering 55,987 55,623 -0.7%

Other and direct mill business 6,037 6,748 +11.8%

Total 102,829 110,059 +7.0%

* "Direct mill business" sales for all product lines are recognised in the "Other" category, in addition to non-ferrous metal sales. Non-material reclassifications were carried out between product lines relative to figures for the first quarter of 2009.

Volume, price and scope effects in each product line were as follows:

First quarter 2010 / First quarter 2009 *

Volume effect

Price effect

Constant scope

Scope effect

Actual change

Stainless +16.4% -2.0% +14.4% - +14.4%

Wear resistant +17.6% -24.3% -6.7% - -6.7%

Engineering -1.7% -18.5% -20.3% - -20.3%

Other and direct mill business ns ns -22.4% - -22.4%

Total 9.6% -12.4% -2.8% - -2.8%

* "Direct mill business" sales for all product lines are recognised in the "Other" category, in addition to non-ferrous metal sales. Non-material reclassifications were carried out between product lines relative to figures for the first quarter of 2009.

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o Stainless steel (storage & distribution sales) - The volume effect, having been negative throughout 2009 (from -28.2% in the first quarter to

-5.9% in the fourth quarter) turned positive in the first quarter of 2010, at +16.4%. Volumes distributed rose particularly sharply at the end of the quarter, with 11,754 tonnes sold in March 2010 as opposed to 9,459 tonnes in February 2010, 9,287 tonnes in January 2010 and 9,574 tonnes in November 2009.

- Despite the ongoing increase in average selling prices from the low reached in the second

quarter of 2009, the price effect, which relates to the same period for the previous year, was -2.0%. The average selling price fell from €3,679 per tonne in the first quarter of 2009 to €3,042 per tonne in the second quarter, before rising to €3,356 per tonne in the third quarter, €3,584 per tonne in the fourth quarter and €3,616 per tonne in the first quarter of 2010. These movements mainly reflect the change in the alloy surcharge and the price of alloying elements (nickel, molybdenum and chromium), with a time lag of around two months. Based on average monthly prices, nickel prices rose from $9,696 per tonne in March 2009 to $18,439 per tonne in January 2010 and $18,976 per tonne in February 2010. The March 2010 price of $22,461 per tonne will affect selling prices from April onwards.

o Wear resistant steel (storage & distribution sales) - IMS had a volume effect of +17.6% in the first quarter of 2010 after a -45.2% volume effect in

full-year 2009. Monthly movements in volumes showed a jump in March as buyers acted ahead of price rises announced for the second quarter. Sales volumes totalled 4,679 tonnes in November 2009, 5,105 tonnes in January 2010, 5,258 tonnes in February and 6,825 tonnes in March.

- Price effects have negative since the second quarter of 2009, and the decrease accelerated to

-24.3% in the first quarter of 2010, due to the still high base for comparison in the first quarter of 2009. After stabilising in mid-2009, average selling prices have fallen slightly in the last two quarters: €1,971 per tonne in the first quarter of 2009, €1,672 per tonne in the second quarter, €1,687 per tonne in the third quarter, €1,635 per tonne in the fourth quarter and €1,559 per tonne in the first quarter of 2010.

o Engineering steel (storage & distribution sales, including tool steel) - The volume effect was -1.7% in the first quarter of 2010. The decline in business levels was

due mainly to the situation in Italy, where volumes have failed to recover in engineering and tool steels, unlike the situation in wear-resistant steels. Outside Italy, volumes of engineering steels (including tool steels) increased by 5% between the first quarter of 2009 and the first quarter of 2010.

- Average selling prices have been near-flat since mid-2009. They were €1,070 per tonne in the

first quarter of 2010 versus €1,082 per tonne in the fourth quarter of 2009, €1,084 per tonne in the third quarter of 2009, €1,168 per tonne in the second quarter of 2009 and €1,333 per tonne in the first quarter of 2009.

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1.4 Profitability In the first quarter of 2010, the Group generated an operating loss of €7.5 million, with a €8.1 million loss at its Italian subsidiary IMS SpA. In Italy, the manufacturing environment was still badly affected by the recession, and IMS SpA continued to reduce its inventories, which remained excessive in terms of both volume and price at end-2009. The €8.1 million loss includes €3.2 million of inventory provisions and only partly reflects the savings generated by the restructuring plan adopted in 2009. The plan has been almost entirely implemented and has led to a 30% cut in the workforce relative to end-2008. Outside Italy, only IMS France and Noxon continued to generate significant operating losses in the first quarter of 2010. These companies have adopted initiatives to adjust costs in line with business levels, and to ensure operational efficiency. 1.4.1 Pro forma financial statements Since there has been no change in the scope of consolidation, the Group has not prepared any pro forma financial statements. 1.4.2 Gross margin Gross margin came in at €41.4 million in the first quarter of 2010, versus €35.8 million in the year-earlier period and €100.3 million in full-year 2009. First-quarter gross margin includes a €1.6 million net addition to inventory provisions, including a €3.2 million addition in Italy. Gross margin in the stainless business started to rise in February due to price increases. In wear-resistant and engineering steels, the increase in gross margin was weaker, and was driven by the renewal of inventories, which are now in line with market prices in most of the Group's geographical markets. The expectation of price rises in the second quarter helped to boost sales volumes at the end of the first quarter, but did not have any impact on gross margin. Gross margin by product line (excluding changes in provisions):

(euros per tonne) Wear resistant Stainless Engineering*

Q3 08 629 706 376

Q4 08 570 587 362

Q1 09 595 271 280

Q2 09 346 156 156

Q3 09 409 567 150

Q4 09 427 608 145

Q1 10 448 750 212

* excluding tool steel Adjusted for the sales of IMS SpA, which has continued to run down inventories bought at higher prices in the still-depressed Italian market, gross margin figures in engineering steels (excluding tool steel) have risen strongly: €324 per tonne in the first quarter of 2009, €195 per tonne in the second quarter, €224 per tonne in the third quarter, €228 per tonne in the fourth quarter and €259 per tonne in the first quarter of 2010.

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1.4.3 Operating expenses In the following analysis, direct mill business volumes (across all companies) are ignored since the business does not generate material operating costs (mainly administrative costs relating to the sourcing of steel for end-customers). 2010 expenses have been translated at 2009 exchange rates.

(in thousands of euros) First quarter

2009 First quarter

2010 Change

Total net expenses 50,649 48,626 -4.0% Tonnes sold ex direct mill business 97,820 104,525 +6.9% Net expenses (euros per tonne) 518 465 -10.2%

Personnel expenses* 26,160 24,026 -8.2% Fixed costs (leasing/depreciation) 8,832 8,143 -7.8% Transport 6,527 7,104 +8.8% Maintenance/consumables 4,999 4,624 -7.5% Commissions on sales 458 333 -27.3% Adjustable fixed costs 3,184 2,873 -9.8% Cost of accounts receivable risk 1,231 289 -76.5% Other expenses 1,975 1,655 -16.2% Gain from sale of property -2,836 -19 -99.3% Restructuring 119 -402 ns

* Personnel expenses also include temporary employment costs, other related expenses and changes in pension provisions.

Variable costs automatically adjust to business levels to some extent: - transport costs rose by €0.6 million or 8.8%; - maintenance/consumables and commissions on sales fell despite the increase in volumes.

As regards adjustable fixed costs, the Group's efforts led to additional savings of 9.8% in professional fees, advertising/marketing and travel expenses relative to 2009. Finally, fixed costs that cannot quickly be adjusted (rent and depreciation/amortisation) fell due to closures and reorganisations that took place in 2009. The other main changes were as follows:

- the cost of accounts receivable risk (credit insurance + net losses on bad debts + change in provisions) returned to normal, falling by €0.9 million;

- in 2009, IMS realised a €2.8 million capital gain on a property sale. Unadjusted for changes in scope and exchange rates, net operating expenses fell from €59.6 million in the first quarter of 2008 to €48.9 million in the first quarter of 2010, a decrease of €10.7 million. Changes in the scope of consolidation between 2008 and 2010 have generated additional expenses of €1.2 million, while lower volumes have pushed expenses down by €4.8 million. Efforts to lower the breakeven point in 2009 had an estimated impact of €7.1 million in the first quarter of 2010 relative to 2008, 60% of which related to lower personnel costs. 1.4.4 Net profit Net financial expenses totalled €2.0 million in the first quarter of 2010, down from €3.4 million in the year-earlier period. The reduction in average debt levels from €269.4 million in the first quarter of 2009 to €202.5 million in the first quarter of 2010, including factoring, led to a decline in interest expenses from €2.7 million in 2009 to €2.2 million in 2010. The average cost of debt was 4.35% in the first quarter of 2010, versus 3.98% in the year-earlier period. The rest of the change between 2009 and 2010 is explained by foreign exchange gains of €0.5 million in the first quarter of 2010, compared with an equivalent loss in the year-earlier period.

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After tax income of €2.4 million, the Group made a net loss of €7.1 million in the first quarter of 2010 as opposed to a €14.2 million loss in the year-earlier period. 1.5 Consolidated financial position 1.5.1 ROCE In the first quarter of 2010, ROCE was -14.4%, due to operating losses. ROCE was 7.9% in 2008 and 15.7% in 2007, and the Group's after-tax ROCE target, stated in 2007, is 13%. 1.5.2 Fund flows and working capital requirement Net debt (including factoring) totalled €200.8 million at 31 March 2010, up from €158.1 million at 31 December 2009. The increase in debt relative to end-2009 was mainly due to the upturn in financing provided to customers. Fund flows during the first quarter of 2009 and 2010 were as follows:

(in millions of euros) First quarter

2009 First quarter

2010

Consolidated net debt (opening) 182.2 148.3

Factoring (opening) 23.2 9.8

Opening net debt + factoring 205.4 158.1

Net cash flow 16.3 9.2

Change in WCR including tax and factoring 1.4 33.4

Gross capital expenditure (including financing leases) 3.9 1.0

Acquisitions (including debt of companies acquired) 5.1 0.1

Operating divestment (4.6) (0.1)

Other movements (2.0) (0.9)

Consolidated debt (closing) 206.3 191.3

Factoring (closing) 19.3 9.5

Closing net debt + factoring 225.6 200.8

N.B.: the change in factoring has been added back to the change in WCR for each year presented.

At 31 March 2010, the net working capital requirement (including factoring) was €283.2 million, up 13.8% relative to 31 December 2009 (€248.8 million):

- the gross value of inventories fell by €4.9 million. There was a +€2.0 million volume effect due to the increased proportion of stainless steels within total volumes, which was more than offset by a €6.9 million negative price effect (lower average cost of engineering and wear-resistant steels);

- gross accounts receivable (including factoring) increased financing requirements by €36.3 million (+24.6% relative to 31 December 2009), in line with the strong sales generated in March 2010;

- trade payables were near-flat, falling by €4.4 million relative to 31 December 2009. On the one hand, purchases rose in the first quarter of 2010, and on the other, the practice among German subsidiaries of paying suppliers early in return for discounts, suspended at 31 December 2009, resumed in 2010;

- provisions for inventories and trade receivables increased by €1.6 million, with most of the increase relating to inventories.

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Net operating WCR (including factoring) represented 142 days of turnover on a rolling 12-month basis at 31 March 2010, versus 123 days at 31 December 2009 and 121 days at 31 March 2009.

- Inventory volume amounted to 145,558 tonnes at 31 March 2010, almost unchanged relative to end-2009. On a rolling 12-month basis, inventory volume equalled 144 days of sales at 31 March 2010, as opposed to 147 days at end-2009 and 148 days at 31 March 2009.

- Accounts receivable (including factoring) equalled 66 days of turnover at 31 March 2010 as opposed to 69 days at end-2009 and 78 days at 31 March 2009.

- Trade payables equalled 48 days of purchases at 31 March 2010 versus 80 days at end-2009 and 76 days at 31 March 2009.

Shorter average client and supplier payment times reflect the focus of business growth on Germany and Eastern European countries, where the local practice is to give shorter payment terms and to pay earlier in return for discounts. 1.5.3 Net debt At 31 March 2010, IMS had total authorised unused credit facilities of around €190 million, around half of which were confirmed. However, only part of these facilities are usable, since they are linked to activity (discounting or factoring). At 31 March 2010, IMS' debt totalled €200.8 million and broke down as follows:

- €20.3 million of debt not yet due on financing leases; - €9.5 million of confirmed factoring, which operate on a revolving basis; - €50.0 million of drawings on a syndicated Group facility with an original amount of

€100 million, which usable amount was €62 million at 31 March 2010. This facility includes: - an amortisable tranche of €40 million, with an outstanding amount of €12 million at

31 March 2010, due in February 2011; - a revolving tranche of €50 million repayable at maturity in February 2012, €38 million of

which was used at 31 March 2010; - a €30 million term loan due in December 2011; - €25.2 million of medium-term facilities granted to the Group's holding company and

subsidiaries, including €15 million granted to IMS SpA subject to covenants: - €65.8 million (net of cash) of partially confirmed revolving bilateral facilities, including

discount, granted to the Group's local companies primarily in exchange for passing their commercial money flows through the same banks.

Banking covenants based on conformity with two ratios calculated for the Group consolidated financial statements at the end of each half-year period apply to the syndicated facility and the €30 million term loan. The first ratio, referred to as leverage, consists in the ratio of net financial debt, calculated as the sum of IFRS net debt plus the assignments of receivables without recourse, to EBITDA (sum of operating income, depreciation and amortisation and the changes in provisions for contingencies), and must remain below 3. The second ratio, referred to as gearing, consists in the ratio of net financial debt, calculated as stated above, to shareholders’ equity, and must remain below 90%.

As regards the syndicated facility, the leverage covenant was renegotiated and replaced with an absolute net debt ceiling in 2009. At 30 June 2010, the leverage ratio must be less than 3 but based on EBITDA equal to twice the amount of EBITDA for the 1st half of 2010 (not EBITDA for the 12 preceding months). At 31 December 2010, the original banking covenants shall once again apply. As regards the €30 million term loan, the original covenants continue to apply, i.e. leverage of 3x EBITDA and gearing of 90%. When covenants are breached for two consecutive half-year periods, as was the case at 31 December 2009, early immediate payment of the loan may be requested.

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IMS SpA took out a bank loan of €10 million in 2008 and a bank loan of €5 million in 2009. These two loans, which both have a 3-year maturity, are subject to a covenant regarding the ratio of net debt (excluding inter-company financing) to EBITDA, which must be lower than 3.5. IMS SpA did not comply with these covenants at 31 December 2009. As a result, the medium-term borrowings of IMS SpA subject to covenants (€15 million) and IMS SA's €30 million term loan have been classified as interest-bearing current liabilities since 31 December 2009. On 10 March 2010, IMS and Jacquet Metals made a statement regarding the projected merger of Jacquet Metals with and into IMS. The change in control resulting from this combination, as defined by article L.233-3 of the French Commercial Code, is liable to cause the Group's syndicated facility and €30 million term loan to fall due immediately. IMS has asked its banks to waive this change-of-control clause. A response is expected from the banks on 27 April 2010. The Group is currently in talks with its banks to set up a new credit facility for the merged entity, and to ensure that IMS retains the benefit of existing financing in the meantime. The new facility will refinance facilities on which covenants have been or are likely to be breached. The refinancing will enable the Group to increase the maturity of its debt and to increase financial flexibility in the next few years. 1.5.4 Shareholders' equity Shareholders' equity totalled €242.4 million at 31 March 2010, a decline of €5.1 million relative to 31 December 2009. Aside from purchases and sales under the liquidity agreement until 3 February 2010, IMS did not buy any of its own shares in the first quarter. 1.6 Risk factors See section 2.4 of the 2009 reference document (filed with the AMF on 4 March 2010 under number D.10-0086).

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2. CONDENSED FIRST-QUARTER CONSOLIDATED FINANCIAL STATEMENTS Statement of comprehensive consolidated income (in thousands of euros) 31/03/2009 31/03/2010 Change

Turnover 211,921 206,066 -2.8%

Income from ordinary activities 211,921 206,066 -2.8%

Purchases (146,822) (157,329) -7.2%Net change in inventories (29,331) (7,309) 75.1%

Gross margin 35,768 41,428 15.8%

Other operating income and releases from provisions 4,499 4,374 -2.8%

Personnel expenses (25,228) (25,533) -1.2%Additions to depreciation and amortisation (3,834) (3,626) 5.4%Additions to provisions (1,597) (934) 41.5%Other expenses (24,491) (23,220) 5.2%

Total expenses (55,150) (53,313) 3.3%

Operating profit (14,883) (7,511) 49.5%

Financial income 425 667 56.9%Financial expenses (3,780) (2,673) 29.3%Net financial expenses (3,355) (2,006) 40.2%

Share in the net profit of equity-accounted companies

Profit before tax (18,238) (9,517) 47.8%

Taxes 4,084 2,410 -41.0%

Net profit from continuing ordinary operations (14,154) (7,107) 49.8%

Profit from discontinued operations

Consolidated net profit (14,154) (7,107) 49.8%Attributable to the Group (14,154) (7,107) 49.8%

Minority interests

Other components of comprehensive net income

Impact from foreign exchange translation differences (1,694) 1,032 160.9%

Comprehensive net consolidated income (15,848) (6,075) 61.7%Attributable to the Group (15,848) (6,075) 61.7%

Minority interests

Earnings per share attributable to the Group -0.78 -0.39 49.8%Earnings per share attributable to the Group, excluding treasury shares -0.82 -0.41 50.0%

Statement of consolidated financial position (in thousands of euros) 31/03/2010 31/12/2009

gross dep. / prov. net netACTIF

Goodwill 91,951 91,951 91,800Intangible fixed assets 16,612 13,551 3,061 3,354Tangible fixed assets 181,738 107,168 74,570 76,316Equity investments 13 13 13Shares in equity-accounted companiesAssets available for saleOther long-term assets 2,794 176 2,618 2,547Deferred tax assets 38,425 38,425 35,482

Total non-current assets 331,533 120,895 210,638 209,512

Inventories 236,898 19,063 217,835 224,389Trade receivables 174,228 14,635 159,593 122,831Other receivables 8,252 8,252 7,784Corporate income tax receivables 3,308 3,308 4,075Derivative instrumentsEmbedded interest-rate derivativesCash and cash equivalents 23,075 23,075 50,920

Total current assets 445,761 33,698 412,063 409,999

Assets held for sale 8,004 3,837 4,167 4,167

Total Assets 785,298 158,430 626,868 623,678

LIABILITIES

SHAREHOLDERS’ EQUITYShare capital 27,528 27,528Consolidated reserves 221,092 306,944Foreign exchange translation differences 913 (119)Net profit (7,107) (86,870)Minority interests

Total shareholders' equity 242,426 247,483

Interest-bearing non-current liabilities 65,124 71,421Deferred tax liabilities 5,764 5,728Provisions for contingencies 922 1,079Pension provisions 23,959 23,845Other non-current liabilities 464 509

Total non-current liabilities 96,233 102,582

Trade creditors 103,702 108,236Other creditors 29,692 29,550Corporate income tax owed 312 322Interest-bearing current liabilities 149,267 127,685Derivative instruments 2,199 2,182Embedded interest-rate derivatives 476 630Current provisions for contingencies 2,211 5,008

Total current liabilities 287,859 273,613

Liabilities held for sale 350

Total Liabilities 626,868 623,678

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Statement of consolidated cash flow (in thousands of euros) 31/03/2009 31/03/2010Opening net cash

Cash and cash equivalents 18,462 50,920Accrued interestCash and cash equivalents adjusted for accrued interest 18,462 50,920

Operating activities

Net profit (14,154) (7,107)Depreciation and amortisation expense 3,834 3,626Change in provisions (3,350) (5,669)Other items 187(Gain) or loss on asset disposals (2,836) (20)Cash flow after taxes and cost of financial debt (16,319) (9,170)

Cost of financial debt 2,991 2,545Taxes 249 394Cash flow before taxes and cost of financial debt (13,079) (6,231)

Change in working capital requirements before income taxes (4,566) (34,541)Cash flow from operations before taxes and financing costs (17,645) (40,772)

Income taxes paid (1,015) 364Cash flow from operations after taxes and before financing costs (18,660) (40,408)

Investing activities

Investments in tangible and intangible assets (excl. financing leases) (3,321) (689)Divestment of tangible and intangible assets 4,570 99Financial investments (5,060) (135)Net cash of companies acquired/reclassified under IFRS 5Proceeds from the sale of consolidated securities, net of cashOther financial divestments 65 15Cash flow from investing activities (3,746) (710)

Financing activities

Capital increaseTreasury shares 83 1,018Dividends paidNew medium and long-term borrowings (excl. financing leases) 8,000Repayment of medium and long-term borrowings (excl. financing leases) (12,324) (2,042)Repayment of financing leases (676) (828)Change in other financial debt (79) (45)Change in short-term debt 39,232 9,403Assets available for saleNet financial interest paid (2,674) (2,585)Other 49Cash flow from financing activities 23,611 12,921

Change in cash 1,205 (28,197)

Foreign exchange translation difference (259) 130

Closing net cash 19,408 22,853

Cash and cash equivalents 19,408 23,075Accrued interest (222)Cash and cash equivalents adjusted for accrued interest 19,408 22,853

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Statement of changes in debt (in thousands of euros) 31/03/2009 31/03/2010Opening net debt

Cash and cash equivalents (18,462) (50,920)Assets available for sale (48)Derivative instruments 514 630Interest-bearing current liabilities 107,226 127,685Interest-bearing non current liabilities 93,139 71,421

adjusted for accrued interest (assets and liabilities) (184) (564)Total 182,185 148,252

Operating activities

Net profit (14,154) (7,107)Depreciation and amortisation expenses 3,834 3,626Change in provisions (3,350) (5,669)Other items 187(Gain) or loss on asset disposals (2,836) (20)Cash flow after taxes and cost of financial debt (16,319) (9,170)

Cost of financial debt 2,991 2,545Taxes 249 394Cash flow before taxes and cost of financial debt (13,079) (6,231)

Change in operating working capital requirements (9,155) (33,636)Change in other working capital requirements items 4,589 (905)Total change in working capital requirements (4,566) (34,541)

Cash flow from operations before taxes and financing costs (17,645) (40,772)

Income taxes paid (1,015) 364Cash flow from operations after taxes and before financing costs (18,660) (40,408)

Investing activities

Investments in tangible and intangible assets (excl. financing leases) (3,321) (689)Divestment of tangible and intangible assets 4,570 99Financial investments (5,060) (135)Net debt of companies acquired/reclassified under IFRS 5Proceeds from the sale of consolidated securities, net of cashOther financial divestments 65 15Cash flow from investing activities (3,746) (710)

Financing activities

Capital increaseTreasury shares 83 1,018Dividends paidNew financing leases (592) (321)Net financial interest paid (2,674) (2,585)Other 262 355Cash flow from financing activities (2,921) (1,533)

Change in debt 25,327 42,651

Foreign exchange translation difference (1,237) 416

Closing net debt 206,275 191,319

Cash and cash equivalents (19,408) (23,075)Assets available for saleEmbedded interest rate derivatives 501 476Interest-bearing current liabilities 145,282 149,267Interest-bearing non current liabilities 80,401 65,124

adjusted for accrued interest (assets and liabilities) (501) (473)Total 206,275 191,319

Statement of changes in consolidated shareholders' equity

(in thousands of euros)

Shareholders' equity

Share capital

Issue premiums

Treasury shares

Group share of foreign

exchange translation differences

Group share of accumulated

profits

Group share total

Minority Interests

At 1 st January 2009 333,523 27,528 28,287 (15,327) (747) 293,782 333,523

Correction of error (230) (230) (230)

Adjusted shareholders' equity at 1st January 2009 333,293 27,528 28,287 (15,327) (747) 293,552 333,293

Change in shareholders' equity

Dividends paidTreasury shares 83 83 83Bonus share plan 187 187 187

Comprehensive net income over the period (15,848) (1,694) (14,154) (15,848)

At 31 st March 2009 317,715 27,528 28,287 (15,244) (2,441) 279,585 317,715

At 1 st January 2010 247,483 27,528 28,287 (14,746) (119) 206,533 247,483

Correction of error

Adjusted shareholders' equity at 1st January 2010 247,483 27,528 28,287 (14,746) (119) 206,533 247,483

Change in shareholders' equity

Dividends paidTreasury shares 1,018 1,018 1,018Bonus share plan

Comprehensive net income over the period (6,075) 1,032 (7,107) (6,075)

At 31 st March 2010 242,426 27,528 28,287 (13,728) 913 199,426 242,426

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES In accordance with European regulation 1606/2002 of 19 July 2002 on international standards, the IMS Group summary consolidated financial statements for the period ended 31 March 2010 have been prepared under IAS/IFRSs as applicable at 31 March 2010 and approved by the European Union. These are available on the European Commission website: http://ec.europa.eu/internal_market/accounting/ias_fr.htm#adopted-commission.

The accounting principles and methods applied at the balance sheet date of 31 March 2010 are the same as those applied when preparing the 2009 annual financial statements under IFRS.

The condensed interim financial statements have been prepared in accordance with IAS 34.

New texts and amendments adopted by the European Union and with mandatory effect from 1 January 2010 were applied, including the amendment to IFRS 3 (business combinations) and the amendment to IFRS 2 (Group Cash-settled Share-based Payment Transactions). The application of these texts had no impact on the consolidated financial statements at 31 March 2010.

The Group has not applied early any standards or interpretations, application of which was not compulsory at 1 January 2010.

The Group’s consolidated financial statements have been prepared using the historical cost convention, except for derivative financial instruments and assets available for sale, which were recorded at their fair value. The book value of assets and liabilities covered by fair-value-risk hedges is adjusted to reflect movements in fair value attributable to the risks hedged.

The preparation of financial statements requires that the Group’s management or that of its subsidiaries make estimates and assumptions which affect the amounts disclosed as assets or liabilities on the consolidated balance sheet, as well as information relating to any possible assets and liabilities on the date this financial information was prepared and the amounts disclosed as income and expenses for the period.

Management reviews these estimates and assumptions on an ongoing basis (at least once every six months), based on past experience and various other factors deemed to be reasonable. These estimates constitute the basis for its assessments of the book value of assets and liabilities. Actual results may differ significantly from these estimates under different assumptions or conditions.

The main estimates made by management when preparing the consolidated financial statements for the three months ended 31 March 2010 include:

- Inventory depreciation assessments. The methodology used to determine the net realisable value of inventory is based on the best estimate, on the date the financial statements are prepared, of selling prices in the normal course of business less, if applicable, estimated costs necessary to complete the sale.

- Invoices not received. Invoices not received mainly relate to orders received for a known up-front amount, but for which the invoice has not been received.

- Employee benefit liabilities. These are measured using statistical actuarial assumptions.

2. SPECIFIC INFORMATION ABOUT PREPARATION OF THE INTERIM FINANCIAL STATEMENTS The consolidated financial statements for the first three months of 2010 have been prepared on the basis of the standards used at the end of the 2009 financial year, to which should be added the following detail regarding income tax: for the interim financial statements, tax expense (current and deferred) is calculated by applying to interim taxable income the estimated average annual tax rate for the financial year in progress for each entity or tax group.

3. SCOPE OF CONSOLIDATION

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There has been no change to the scope of consolidation since 31 December 2009 or 31 March 2009.

As a result, there is no need to present pro forma balance sheet and income statement information for the three months ended 31 March 2010.

4. GOODWILL

Changes in goodwill since 31 December 2009 are due entirely to foreign exchange translation differences on goodwill denominated in foreign currencies:

(in millions of euros)

Value at 1 January 2010 91.8

Foreign exchange translation difference 0.2

Value at 31 March 2010 92.0

At 31 March 2010, goodwill broke down as follows between the operational hubs:

(in millions of euros) Goodwill % total

Bilbao hub (Spain) 20.5 22%

Milan hub (Italy) 12.0 13%

Paris hub (France) 40.7 44%

Düsseldorf hub (Germany) 18.8 21%

Group total 92.0 100%

Goodwill impairment tests were carried out at 31 December 2009. The tests showed no need to write down goodwill, except for a €3.5 million write-down on goodwill concerning Lithuanian company Antera UAB after local development conditions were adjusted relative to the initial assumptions made when Antera was acquired. Since the business plan has not been amended since 31 December 2009, these tests were not repeated at 31 March 2010.

5. INVENTORY

(in millions of euros) 31 March 2010 31 December 2009

Gross value 236.9 241.8

Provisions on inventory (19.1) (17.4)

Net value 217.8 224.4

The main changes in inventory provisions are as follows:

(in millions of euros) 31 March 2010 31 December 2009

At 1 January 17.4 12.2

Additions to provisions 3.8 7.4

Releases of provisions (2.2) (2.4)

Other 0.1 0.2

Final balance 19.1 17.4 Inventory is recorded on the balance sheet at its average weighted cost. Depreciation is booked to bring the value of inventory in line with its net realisable value, which is defined as the estimated selling price in the normal course of business less estimated selling costs. Provisions are calculated for each individual product.

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6. DEFERRED TAX

The origin of deferred taxes is as follows: (in millions of euros) 31 March 2010 31 December 2009 Temporary differences 1.6 2.2

Consolidation entries (0.1) (0.2)

Capitalisation of tax losses carried forward 31.1 27.8

Deferred tax balance 32.6 29.8

Of which deferred tax liabilities (5.8) (5.7)

Of which deferred tax assets 38.4 35.5 Deferred tax income of €2.8 million was recognised at 31 March 2010. This includes €3.3 million relating to the capitalisation of tax losses carried forward.

A study on the possibility of using these tax losses carried forward was performed at 31 December 2009 based on business plans prepared for each subsidiary up to 2014. This indicated that they could be used in the near future, except for those in Switzerland. Sensitivity tests were conducted relating to the non-realisation of the assumptions used in the business plans. In the worst-case scenarios, IMS SpA (Italy) would not use its tax losses carried forward until 2014. Given that the 5-year period for using them runs until 2014, the Group decided to recognise all of IMS SpA's tax losses carried forward as assets. Since business plans have not been amended since 31 December 2009, these tests were not repeated at 31 March 2010.

7. PROVISIONS FOR CONTINGENCIES

Changes in all provisions (current and non-current) in the first three months of 2010 break down as follows:

(in millions of euros) Initial

balance Addition

Release used

Release unused

Final balance

Provision for disputes 0.4 0.4 Provision for restructuring and individual departures 3.8 (2.7) (0.2) 0.9 Other provisions 1.9 0.1 (0.2) 1.8 Total 6.1 0.1 (2.9) (0.2) 3.1 Of which non-current portion Of which current portion

1.1 5.0

0.1

(2.9)

(0.2)

0.9 2.2

The main release during the period concerns costs relating to the reorganisation of certain depots in Italy (€1.4 million), France (€0.7 million) and Belgium (€0.6 million).

8. NON-CURRENT INTEREST-BEARING LIABILITIES The changes during the period were as follows. The totals set out below include the €68.7 million of liabilities falling due in less than one year and classified as current interest-bearing liabilities.

(in millions of euros) 31 March 2010 31 December 2009

At 1 January 141.4 124.5 New borrowings 8.0 29.2 Embedded interest-rate derivative instrument 0.1 (0.1) New financing leases 0.3 0.8 Repayments of borrowings (including short-term portion) (14.8) (10.3) Valuation at amortised cost 0.0 0.9 Repayments of financing leases (including short-term portion)

(0.8) (3.6)

Foreign exchange translation difference and other (0.4)

Final balance 133.8 141.4

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Non-current interest-bearing liabilities at 31 March 2010 include a revolving credit facility on which IMS SA has drawn €38 million (as opposed to €30 million at 31 December 2009), because the facility is expected to be used for more than one year. The €8 million change features in the "new borrowings" caption of the table above.

The Group is currently in talks with its banks to discuss its medium-term financing. The aim is to set up a new credit facility for the merged entity, and to ensure that IMS retains the benefit of existing financing in the meantime.

9. OFF-BALANCE SHEET COMMITMENTS

Factoring programmes Factoring programmes exist. At 31 March 2010, €9.5 million of accounts receivable had been sold in Germany and France, and have therefore been taken off the balance sheet (deconsolidating programmes under IFRS). Banking covenants Banking covenants based on conformity with two ratios calculated for the Group consolidated financial statements at the end of each half-year period apply to the syndicated facility and the €30 million term loan. The first ratio, referred to as leverage, consists in the ratio of net financial debt, calculated as the sum of IFRS net debt plus the assignments of receivables without recourse, to EBITDA (sum of operating income, depreciation and amortisation and the changes in provisions for contingencies), and must remain below 3. The second ratio, referred to as gearing, consists in the ratio of net financial debt, calculated as stated above, to shareholders’ equity, and must remain below 90%.

As regards the syndicated facility, the leverage covenant was renegotiated and replaced with an absolute net debt ceiling in 2009. At 30 June 2010, the leverage ratio must be less than 3 but based on EBITDA equal to twice the amount of EBITDA for the 1st half of 2010 (not EBITDA for the 12 preceding months). At 31 December 2010, the original banking covenants shall once again apply. As regards the €30 million term loan (due December 2011), the original covenants continue to apply, i.e. leverage of 3x EBITDA and gearing of 90%. When covenants are breached for two consecutive half-year periods, as was the case at 31 December 2009, early immediate payment of the loan may be requested. IMS SpA took out a bank loan of €10 million in 2008 and a bank loan of €5 million in 2009. These two loans, which both have a 3-year maturity, are subject to a covenant regarding the ratio of net debt (excluding inter-company financing) to EBITDA, which must be lower than 3.5. IMS SpA did not comply with these covenants at 31 December 2009. As a result, the medium-term borrowings of IMS SpA subject to covenants (€15 million) and IMS SA's €30 million term loan have been classified as interest-bearing current liabilities since 31 December 2009. On 10 March 2010, IMS and Jacquet Metals made a statement regarding the projected merger of Jacquet Metals with and into IMS. The change in control resulting from this combination, as defined by article L.233-3 of the French Commercial Code, is liable to cause the Group's syndicated facility and €30 million term loan to fall due immediately. IMS has asked its banks to waive this change-of-control clause. A response is expected from the banks on 27 April 2010. The Group is currently in talks with its banks to set up a new credit facility for the merged entity, and to ensure that IMS retains the benefit of existing financing in the meantime. The new facility will refinance facilities on which covenants have been or are likely to be breached. The refinancing will enable the Group to increase the maturity of its debt and to increase financial flexibility in the next few years.

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10. EARNINGS PER SHARE

Earnings per share are calculated in two ways: • Based on total shares in issue: using the total number of shares making up IMS International

Metal Service's capital, i.e. 18,057,010, as the denominator; • Based on total shares in issue excluding treasury stock: using the total number of shares

(18,057,010) minus the number of held as treasury stock (652,742), as the denominator.

11. SEGMENT REPORTING

Business segments (i.e. product lines) are the only segments now used in reporting, and are the main focus for management’s analysis of the financial statements. The indicators monitored are turnover (revenue from ordinary activities), gross margin and the value of inventory. The figures presented are measured in accordance with IFRSs, with the only reconciliation required deriving from entries relating to the revaluation of inventory at companies acquired, elimination of internal margins included in inventory which are not allocated to product lines, and inventory provisions. Segment revenue (there is no inter-segment revenue), segment profit (gross margin) and segment assets (gross inventory) by product line are as follows: Three months ended 31 March 2010 (thousands of euros)

Turnover

Gross margin

Inventory (gross value)

Wear resistant 26,793 7,697 31,381

Stainless 110,293 22,885 111,535

Engineering 59,514 12,078 88,592 Other and direct mill business 9,466 916 5,248 Entries relating to the revaluation of inventory at companies acquired, internal margins and inventory provisions

(2,148) 142

Total 206,066 41,428 236,898

Three months ended 31 March 2009 (thousands of euros)

Turnover

Gross margin

Inventory (gross value)

Wear resistant 28,711 8,670 58,095

Stainless 96,372 7,090 141,237

Engineering 74,634 16,179 150,935

Other and direct mill business 12,204 2,140 4,075 Entries relating to the revaluation of inventory at companies acquired, internal margins and inventory provisions

1,689 734

Total 211,921 35,768 355,076

Non-material reclassifications were carried out between product lines relative to figures for the first quarter of 2009.

12. INFORMATION ON RELATED PARTIES

Related parties are defined as the key management personnel of the parent company (the Group's holding company). Other managers who are members of the Group Management Committee are not considered as related parties since their responsibility is limited to a portion of the Group's revenues or assets (subsidiaries and/or product lines).

As a result, the only related parties are members of the Supervisory Board and the Executive Committee.

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Links between the Group and these related parties are limited to compensation paid and regulated agreements made with Messrs Jean-Yves Bouffault, Pierre-Yves Le Daëron and Philippe Brun covering provisions applicable in the event of their departure.

13. CASH FLOW STATEMENT

The cash flow statement can be summarised as follows (in millions of euros):

Cash at the beginning of the period 50.9

Cash from operating activities (40.4)

Cash from investing activities (0.7)

Cash from financing activities 13.1

Change in cash position (28.0)

Cash at the end of the period 22.9 The change in the working capital requirement, included in cash from operating activities, broke down as follows in the first three months of 2010 (in millions of euros):

Inventory 7.3

Accounts receivable (36.0)

Other receivables (0.4)

Accounts payable (4.9)

Other payables (0.5)

Total change (excluding income tax) (34.5)

14. POST CLOSING EVENTS

On 3 February 2010, the IMS Supervisory Board took due note that an unsolicited proposed public exchange offer initiated by Jacquet Metals was filed, and that all three Jacquet Concert representatives resigned. In a joint press release published on 10 March 2010, IMS and Jacquet Metals announced an agreement in principle regarding a merger, with IMS acquiring Jacquet Metals through an offer of 20 IMS shares for every 7 Jacquet Metals shares. The merger is likely to be accompanied by a capital increase, the terms of which will be determined at a later date. The memorandum of understanding was signed on 20 April 2010. A specific press release will be issued by the two companies, commenting on the memorandum of understanding and specifying the conditions required for the deal's completion, such as AMF authorisation and agreements with banks.

When the merger is complete, the Company's corporate governance structure will change, involving a Board of Directors. Merger-related expenses are likely to total around €2.2 million. These expenses includes fees paid to advisors on legal, banking, finance and accounting matters, and to "commissaires à la fusion" (certified public accountants appointed to assess M&A transactions).

When the change of governance structure takes place and when their terms of office end, Executive Committee members will receive severance pay according to terms summarised in section 5.2.2 of the 2009 management report, included in the 2009 reference document (filed with the AMF on 4 March 2010 under number D.10-0086). Severance pay will amount to €1,191,000 overall.

In addition, the memorandum of understanding includes payments of €288,000 in return for 12-month non-compete undertaking by Jean-Yves Bouffault, and €275,000 of compensation for the termination of Pierre-Yves Le Daëron and Philippe Brun's employment contracts.

IMS International Metal Service Immeuble Le Carillon 5, Esplanade Charles de Gaulle 92733 Nanterre Cedex │ France Tel: +33 (0)1 41 92 04 44 Fax: +33 (0) 1 46 24 05 96 Société anonyme (public limited company)

governed by an Executive Committee and a Supervisory Board with capital of €27,527,740.73 RCS Nanterre B 311 361 489