SHAREHOLDERS’MEETINGS JUNE 17, 2004
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Transcript of SHAREHOLDERS’MEETINGS JUNE 17, 2004
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SHAREHOLDERS’MEETINGS
JUNE 17, 2004
SHAREHOLDERS’MEETINGS
JUNE 17, 2004
Presentation of 2003 resultsPresentation of 2003 results
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Summary
DYNACTION today Fine and Speciality Chemicals (70 %-owned by Dynaction)
CMD Engrenages et Réducteurs (virtually 100 %-owned by Dynaction)
Dynaction financial performance Business strategy and outlook
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DYNACTION today
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DYNACTION : An industrial Group
with an international vocation
An industrial Group generating EUR 257 in turnover
A Group firmly focused on a single industrial sector, Fine
Chemicals (74 % of turnover) and Exports (55 % of turnover)
A pro-active posture to face the downturn
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Significant events in 2003 and
first-half 2004
Economic difficulties in 2003 for fine chemicals (particularly pharmaceuticals synthesis)
PCAS acquisition of the Aventis VLG Chem site and signature of a medium-term partnership agreement 1 June 2004
PCAS disposes of non-strategic asset in early 2004 (Vernolab)
Creation of a new corporate entity in the U.S. (PCAS Inc) CMD continues to develop and gain international market shares
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DYNACTION
Growth focus in fine chemicalsDYNACTION Group
ChairmanChristian MORETTI
PCASJean-Paul BOUTELLIER
69.72 %
S.B.SSt Jean
Photochimie
Expansia
Créapharm
Other industrial activities
PCAS Finland
CMD Gmbh
V L G
CMD E&RRené BERNARDI
99.75 %
Fine and Speciality Chemicals
PCAS - turnover : EUR 191 million, work force : 1.372CMD - turnover : EUR 66 million, work force : 447
P.C.F
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Financial performance : Turnover
2001 2002 2003
290 272 25
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In EUR millions
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Financial performance :
Operating income
2001 2002 2003
17.5
18.7
6.8
In EUR millions
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Financial performance :
Consolidated net profit (loss)
-15
-10
-5
0
5
10
15
20
2001 2002 2003
Consolidated
In EUR millions
Attributable to the Group
-7.7-11.3
-0.7 -1.2
16.512.8
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110
9299
2001 2002 2003
Shareholders’ equityNet bank borrowings
73
8984
2001 2002 2003
Shareholders’ equity
Bank borrowings
Financial performance :Group liabilities
151%
104%
117%
In EUR millions
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DYNACTION Business Strategy
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Group Business Strategy A pro-active posture to face the downturn
Focus exclusively on fine chemicals (disposing of CMD)
Expand partnership arrangements (Aventis)
Seek new markets (USA)
Contain cost (workforce reduced by 99 employees in 2003) and optimise investments
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Fine and Speciality Chemicals
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Fine and Speciality Chemicals
The businesses of PCAS
Fine chemicals- Molecule fabrication- High technological content- Small and medium-scale production- High-margin products – selling at over EUR 30/kg- Diversified customer base
Speciality chemicals- Broader concept than fine chemicals- Molecules and products- Performance products- Product and technology orientation, versus customer
orientation
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PCAS corporate profile
Fine chemicals (and « fine » speciality chemicals)
Very broad scope international activity
Customers who are leaders in their markets, and with solid footing
High R & D factor (6 to 8 % of turnover/p.a.)
Very flexible, high-quality productive assets
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PCAS
Quality industrial plant
11 specialised production units
4 cGMP sites (with VLG)
3 sites approved by the FDA
750 cubic meters of reactors, 350 of which under cGMP
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Flexible and multi-functional industrial
capacity
Medium-size plants in low-population areas
Certain plant specialities tailored to customers business :
- 3 cGMP plants inspected by FDA for pharmaceuticals manufacturing
- 1 low metal plant for electronics
- 1 plan specialised in olfaction Other entirely multi-functional for intermediate substances
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PCAS
Significant events 2003 - 2004
Economic difficulties in 2003 for pharmaceutical synthesis due to :
- Penury of authorisations for market introductions (especially in the U.S.)
- More stringent health spending by public authorities
- De-stocking by certain pharmaceutical laboratories
- The dollar’s weakness
Continuing recovery in electronics and photo-chemicals, begum during the second half of 2003
Disposal in February 2004 of the analytical services activity
Completion of a major medium-term co-operation agreement with Aventis
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PCAS
Operational organisation
Pharmaceutical Synthesis and Formulation
Aroma Chemicals - Cosmetics
Photochemistry – New Technologies
Fine Inorganic
Chemistry
Industrial Speciality Chemicals
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Pharmaceutical Synthesis and
Formulation
Customers :Pharmaceuticals industryFine chemicals
Products :Advanced intermediatesActive ingredients
Clinical batchesFormulations
Group sales breakdown
Pharmaceutical synthesis41 %
Pharmaceuticals
57 %
Pharmaceutical formulation16 %
Others43 %
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Main customers
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Aroma chemicals – Cosmetics
Customers :Users of perfume productsDetergent manufacturers
Cosmetics industry
Products : Fragrance molecules Active cosmetics
ingredients
Group sales breakdown
Aroma cosmetics12 %
Others88 %
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Main customers
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Photochemistry
New Technologies
Customers : Electronics
Graphic arts New technologies
Photography
Products :Organometallics
Photosensitive molecules and resinsSynthesis intermediates
Group sales breakdown
Photochemistry – New technologies
11 %
Others89 %
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Main customers
KIWO
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Industrial speciality chemicals
Customers : Petroleum industry
Industrial lubricant manufacturers Anticorrosion specialists
Products : Additives Technical fluids Lubricants compatibles with food
contact
Group sales breakdown
Industrial speciality chemicals 10 %
Others90 %
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Main customers
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Fine Inorganic Chemistry
Group sales breakdown
Fine inorganic chemistry 7 %
Others93 %
Customers : Electrical industry Electronics industry Pharmaceuticals industry
Products :Metal oxides
(electroceramics and varistance)
Metallic nitrates Pharmaceutical salts (bismuth – magnesium)
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Main customers
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PCAS – Profit and Loss Account
In EUR millions
2003 2002Turnover 190.6 210.1
Gross margin 128.3 142.3
% of turnover 67.3 % 67.7 %
Depreciation and provisions 17.9 15.6
Operating profit 5.3 18.4
Net financial result -4.2 -4.0
Net income before goodwill amortisation
0.9 9.5
Net income excluding minority interests
-0.8 6.8
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PCAS – Liabilities
2003 2002
Consolidated shareholders’ equity 60.5 63.9
Current account (quasi equity) 15.2 15.2
Total shareholders’ equity 75.7 79.1
Financial debt, excluding current account 73.7 68.0
Debt to equity ratio 97 % 86 %
In EUR millions
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CMD Engrenages et Réducteurs
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CMD – Engrenages et réducteurs
A clear business strategy
CMD Engrenages et réducteurs : one of the world leaders in high-torque power transmission units for heavy industry
Its business : to design, manufacture and install high-torque, low-speed systems
Five major target markets : - cement and mining - metallurgy - energy - sugar - rubberWorld-wide presence
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CMD – Significant events
Encouraging results
2003 turnover was 7 % greater than it was in 2002
Operating income expanded by 44 % and net income doubled compared with the previous year’s figure
CMD’s enjoys a healthy balance sheet structure, with a debt to equity ratio of 30 %
The outlook for 2004 is in with 2003, despite a foundry closing
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CMD – Profit and Loss Account
In EUR millions 2003 2002Turnover 65,9 61,6Gross margin 36,6 35,2
% of turnover. 56 % 57 %Depreciation and provisions 3,7 3,1Operating profit 3,2 2,4Net financial result -0,5 -0,4Net income attributable to the Group 2,3 1,1
And increasingly profitable enterprise
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CMD – Liabilities
2003 2002
Shareholders’ equity 22,3 20,7
Financial debt 6,7 8,3
Debt to equity ratio 30 % 40 %
In EUR millions
A healthy balance sheet
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DYNACTION financial performance
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Financial performance
Profit and Loss Account
In EUR millions 2003 2002
Turnover 256.5 271.9
Gross margin 151.3 161.7
% of turnover 59.0% 59.5 %
Operating expenses 144.5 143.0
Operating profit 6.8 18.7
% of turnover 2.7 % 6.9 %
Net financial result -5.9 -4.7
Extraordinary items 1.2 -8.1
Net income -0.7 16.5
Of which attributable to the Group -1.2 12.8
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Financial performance
Liabilities trend
In EUR millions
Consolidated Dynaction SA
2003 2002 2003 2002
Shareholders’ equity 84.2 88.5 58.7 61.9
Cash and cash equivalents
12.2 25.7 2.9 10.1
Bank borrowings 111.0 117.6 19.5 25.4
Net bank borrowings 98.8 91.9 16.6 15.3
Debt to equity ratio 117 % 104 % 28 % 25 %
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Share Ownership
and Market Capitalisation
Public47 %
Union Etudes et Investissements
5 %
Treasury stock9%
Adroit Private Equity AG
16 %
C.Moretti15 %
Anblan SA8 %
7,5%
Number of shares : 3,357,276
Market capitalisation EUR 65 millionsShareholders’ equity EUR 84 millions
Shareholder structure at 30 May 2004
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Business Strategy and Outlook
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Business Strategy and Outlook
At the Group level
Projected merger with PCAS
Other activities
Anticipated disposal of CMD
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Business Strategy and Outlook
Short-term challenges :• Obstacles remain for certain products (rebates withheld)• Some major players are still very cautious
Yet :• Restructuring of major laboratories underway, full of promise
for the future• Agreement signed with Aventis securing the medium term• Establishment of a U.S. operation with promise of future
revenues• Improved Group R & D efficiency• Continued cost containment and investment optimisation
Pharmaceutical activities
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Business Strategy and Outlook
• Despite the dollar’s weakness, second-half 2003 recovery is holding up in 2004
• Projects underway suggest a growth upturn in 2005
• Promising development of acrolein chemistry, proficiency in which is confirmed (raw material used in the synthesis of products for aroma chemicals, pharmaceuticals and the graphic arts, whose handling requires special safety equipment)
Non-pharmaceutical activities
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Strengths
Sound fundamentals
• Promising market fundamentals :
- an ageing population and growing health needs - increasingly complex molecules - upswing in outsourcing - bio-tech companies and start-ups provide a growth relay for
the future - inevitable development of generic and super generic products• World renowned, state of the art technologies• A high-quality Regulatory Affairs department• Customers who are market leaders, and on solid footing• Flexible and high-performance production assets
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