annual report Contents The Group Business sustainable development 2o1o FinanCial statements

Transcription

1 2010 annual report

2 2010 annual report Contents The Group 02 / Message from the Chief executive officer 04 / 2010 key figures 06 / Stock market 08 / Management and supervisory bodies Business 10 / rougier africa International 14 / France Import-Distribution 16 / Value development strategy sustainable development 20 / ambitious environmental policy 22 / Developing the value of forest resources 24 / protecting and safeguarding resources 26 / Concrete social achievements 30 / Commitment to local development 32 / Managing the environmental impact 36 / Certification as seen by rougier 2o1o FinanCial statements 38 / Consolidated income statement 39 / Consolidated statement of financial position 41 / Consolidated net cash flow statement ROUGIER S.A. French limited company (société anonyme) with a Board of Directors Capital: 7,097,879 Registered office: 155, avenue de La Rochelle B.P. 8826, Niort Cedex 09, France Niort trade and company register: B

3 Rougier 2010 annual report editorial Rougier, an African group, expert in certified tropical wood in BrieF 2 million hectares of forest concessions under development in 3 Central African countries (Gabon, Cameroon and Congo) Almost 100% of forest concessions audited by an independent third party 7 processing plants in Africa Almost 3,000 people 550,000 m 3 of logs produced in tropical wood species sold in nearly 50 countries worldwide Founded in 1923 by Alexandre Rougier, Rougier is a benchmark for the production and sale of certified tropical wood worldwide. The Group operates around two activities: Rougier Africa International (forest harvesting, processing industries and international trade), which represented 74% of revenues in 2010, and the importing and distribution of tropical woods from all origins in France. Drawing on its extensive experience in the long-term management of forest resources, Rougier is operating over two million hectares of forest concessions in the heart of Central Africa Gabon, Cameroon and Congo where it harvests, processes and markets logs, sawn timber and plywood from a wide range of timber species. The Group's strength lies in the integration of its activities, from the origin of products through to their release on the market. Products are marketed in line with a constant focus on optimizing resources and safeguarding the forest s heritage. Rougier applies a responsible management policy, aiming to meet the growing demands of its clients for certified wood products. This active certification policy guarantees the long-term viability of the business, serving the forest and the people. In 2010, Rougier generated 139 million in consolidated revenues. Rougier s share has been listed on the stock market for more than 50 years. 1

4 Group Message from the Chief executive officer Message from the Chief Executive Officer Our sound financial structure enables us to be in a healthy position to ramp up Our industrialization plan in africa. Dear Shareholders, In 2010, Rougier showed its ability to ensure a strong response following a particularly difficult year in Indeed, the earnings for the year confirm our ability to anticipate the key trends, including good forest management, industrialization and certification, and, looking forward, second transformation, waste reclamation and plantations. International Year of Biodiversity, 2010 was undeniably a year of environmentally-friendly growth for Rougier. Set against a gradual improvement in the construction sector in mature countries, combined with strong demand in emerging countries, the Group's sales have picked up in terms of both volumes and prices. This return to growth is reflected in million in consolidated revenues, up 11.2% in relation to Sales have also been driven by the active market diversification policy rolled out over the past few years, as well as the continued rise in demand for certified responsible forest management products. All activities have continued their recovery began during the second half of Revenue growth, combined with an increase across all the industrial and forest sites, contributed to a significant improvement in margins and profitability. However, performances over the year were affected by the change in the logging, industrial and commercial approach in Gabon, following the ban on log exports since early Faced with this new situation in Gabon, we have focused our efforts on investment in production capacity to immediately increase our creation of value added, benefiting from Rougier's international commercial positioning, especially in markets for processed products or requiring FSC certification. These structuring actions will enable Rougier Gabon to return to a better level of efficiency in Earnings show a strong rate of growth over 2010, with a net profit of 5.3 million. This increase stems from the improvement in our operational efficiency. It has also been positively 2

5 Rougier 2010 annual report Message from the Chief executive officer rougier's Objectives for the medium and long term are focused On rolling Out the largest possible rance Of certified products. impacted by the revision of asset values in Cameroon and Congo, with 2.0 million written back from the impairments recorded previously. The Group's healthy financial position can be seen in the further strengthening of the balance sheet and significant improvement in the debt ratio. Thanks to our sound financial structure, we are in a healthy position for the ramping up of industrialization in Africa has seen quite a dynamic start. Rougier is continuing to move forward with its long-term value creation strategy, capitalizing on the unique strengths of its positioning as a certified African producer. In this way, the Group is stepping up a major industrial competitiveness plan in Africa with a view to maintaining its leading edge during the necessary integration of the industry in the Congo Basin. This commitment has been confirmed with the creation of new industrial sites, the doubling of capacity at certain existing sites and the increase in the value added produced on site. Rougier's medium and long-term goals are also centered around deploying the widest possible range of certified products. Certification represents a differentiating factor, enabling us to satisfy the growing demand on end markets for products from sustainably managed forests. In this respect, the FSC certification achieved in Gabon in 2008 will gradually be extended to all the Group's concessions. Rougier's business model is built around strong and attractive values. The Group invests over the long term, developing the value of unique forest resources, in addition to carrying out more innovative projects which illustrate Rougier's ability to anticipate fundamental changes. In this way, Rougier created Lignafrica in 2010, a joint-venture whose business is linked to the development of industrial forest plantations in Africa. Various projects are also being looked into concerning waste processing and reclamation for the timber industries. The very essence of Rougier's ambition lies in its African roots and its passion for tropical woods. Its development is underpinned by the strength and stability of the family shareholders, whose history is central to its balanced, sustainable and profitable development. Rougier's stock market performance confirms the shareholders' support for our strategic vision. The dividend of 0.70 per share, which we are proposing for 2010, reflects our confidence in the future and our commitment to gradually returning to a payout policy that is more in line with the policy applied before the economic crisis. More specifically, I would like to thank all of our teams for their dedication and commitment to this vigorous turnaround, as well as our partners and shareholders for their continued trust, confidence and loyalty. Francis Rougier Chief Executive Officer 3

6 Group 2010 key figures 2010 key figures In 2010, Rougier achieved a strong improvement in its performances, highlighting its responsiveness following a year that was deeply affected by the economic crisis. BReakdown of Consolidated Revenue By Region Condensed income statement ' Change (%) Europe 85,499 70, % ' Revenue 138, ,761 Asia 30,856 41, % EBITDA 1 % of revenue 12, % (2,725) (2.2%) Mediterranean Basin and Middle East 12,186 9, % Income from ordinary operations % of revenue 4, % (12,140) (9.9%) America 2,319 1, % EBIT % of revenue 6, % (16,074) (12.9%) Sub-Saharan Africa 7,858 1,999 x 3.9 Net income 5,313 (15,561) GROUP REVENUE 138, , % Net income (Group share) % of revenue of which, impairment (charge) / reversal for assets 5, % 2,000 (15,524) (12.4%) (4,400) (1) EBITDA corresponds to income from ordinary operations excluding depreciation, amortisation and provisions. Change in Consolidated Revenue , , ,718 Change in ebitda ,272 12,111 Change in ebit 000 6, , ,074

7 Rougier 2010 annual report 2010 key figures key financials At December 31 st '000, Balance sheet total Non-current assets Shareholders' equity % of balance sheet total 46% 45% 49% 50% 50% Debt ratio 1 60% 65% 48% 34% 31% Cash flow from operations (4.3) Gross investments % Operating margin rate 6o% Net debt to equity ratio (1) Net financial debt/equity (Group share) (2) After cost of net financial debt and tax Change in net income (group share) 000 Change in Cash flow from operations 000 Change in workforce 9,871 3,038 2,681 2,952 5,343 6, , , ,524 5

8 Group Stock market Stock market For more than 50 years now, Rougier has had a strong shareholder culture. Rougier s share is listed on NYSE-Euronext Paris (Compartment C). shareholder dashboard Listing market ISIN Ticker Bloomberg code Reuters code NYSE-Euronext Paris FR RGR RGR RGR:FP ROUG.PA Rougier has an active information policy in relation to its individual and institutional shareholders, as well as the financial community in general. Its commitment to transparent financial communications makes it possible to further strengthen ties with its shareholders. In addition to its annual and half-year reports, Rougier offers a range of information tools, including a comprehensive and regularly updated internet site: Number of shares 1,396,771 Share price + High + Low Year-end Market capitalization (at Dec 31 st, 2010) 44,738,575 Change in the share price Rougier has a consistent payout policy that reconciles the company's ability to make payouts and the interests of its shareholders. With this in mind, the Board of Directors will be submitting a proposal at the General Meeting on 7 June 2011 to raise the dividend to 0.70 per share, compared with 0.30 in Volume in units 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Jan - 10 Feb - 10 Mar - 10 Apr - 10 Mai - 10 Jun - 10 Jul - 10 Aug - 10 Sep - 10 Oct - 10 Nov - 10 Dec - 10 Jan - 11 Fev - 11 Mar - 11 Apr In euros Volume Share price 6

9 Rougier 2010 annual report Stock market BReakdown of Capital and voting Rights at 31 december 2010 Change in the dividend per share ( ) Public Treasury stock Family group Staff % 3.4% 46.1% 46.7% 33.8% 61.2% shares 2.3% 1.6% gross voting Rights

10 Group Management and supervisory bodies Management and supervisory bodies Rougier pays great importance to the quality of its decision-making bodies, and more specifically the efficiency and effectiveness of its governance. In 2010, to further strengthen its efficiency and responsiveness, while ensuring an effective balance of powers, the company adopted a governance structure based on a Board of Directors, separating the functions of Chairman and Chief Executive Officer. BoaRd of directors Jacques ROUGIER Chairman Francis ROUGIER Chief executive officer Vice- Chairman Director Marie-Yvonne CHARLEMAGNE Chief Financial officer Director Nathalie AUGUIN Director Gilbert-Jean AUDURIER Independent director Hervé BOZEC Director François-Régis MOTTE Independent director two specialized Committees strategic Committee Main mission: reviewing, researching and accompanying Rougier s medium and long-term strategic development initiatives. Members: Jacques Rougier, Francis Rougier, Gilbert-Jean Audurier, François-Régis Motte and Marie-Yvonne Charlemagne party ResponsiBle for auditing the accounts incumbent statutory auditors: Ernst & Young Audit, represented by Mr. Philippe Blanc Pierre-Henri Scacchi & Associés, represented by Mr. Alain Zentar Compensation Committee Main mission: handling proposals for fixed and variable executive compensation, as well as other benefits associated with these functions. Members: Jacques Rougier, Gilbert-Jean Audurier, François-Régis Motte 8

11 Rougier 2010 annual report Management and supervisory bodies simplified structure ROUGIER S.A. 88% 1oo% 1oo% 1oo% 1oo% 1oo% 1oo% 5o% Rougier Gabon 10% treasury stock Gabon SFID Mokabi Rougier International SPS International Rougier Panneaux Rougier Sylvaco Lignafrica 1oo% SNC Eressa Cameroon Congo France France France France France ROUGIER AFRICA INTERNATIONAL Forest harvesting, wood processing industries and international trade Import and distribution Plantations Rougier s history has been built on a passion for wood, making it one of the leading players today for the production and marketing of certified tropical woods. Founded in 1923 in Niort, France, Rougier first developed as a producer of wooden cheese boxes for the dairy industry in the Poitou region, before moving into the production of plywood based on okoume imported from Gabon from In light of the growing use of exotic woods, the company established itself in Africa, acquiring a first timber harvesting permit in Gabon in 1952, before expanding to Cameroon in 1969 with the acquisition of a company producing small obeche boards in Dimako. After listing on the stock market in 1959, Rougier became Europe's leading producer of exotic plywood and chipboard in In 1981, Rougier realigned its business to focus on the production and processing of wood in Africa, selling off of its industrial and commercial activities in France to Compagnie de Saint Gobain. In 2000, Rougier established a presence in northern Congo-Brazzaville. Since then, the Group has continued to further strengthen its presence in Africa by obtaining forest concessions, as well as setting up processing sites and developing African concessions. This commitment has been accompanied by an active policy to get activities certified by independent auditors. 9

12 Business rougier africa International RougieR AfRicA international i na tiona Rougier is a benchmark for certified African tropical timber. From the forest concession to global marketing, Rougier has built up expertise throughout the industry and is focusing its development on building the value of its forest concessions and good forest management certification. RougieR R has two million hectares e of forests in operation in the congo Basin. integrated offering for CeRtified african tropical timber Present in Africa for over 50 years, Rougier has two million hectares of forest concessions in operation, spread across Gabon, Cameroon and Congo Brazzaville. With its responsible management of resources, it is committed to extracting the raw material - wood - in line with a carefully thought out approach, selling and processing at its seven facilities around 550,000 m 3 of logs produced in its forest concessions each year. As logs, sawn timber or plywood, the products are marketed and exported worldwide through Rougier International, the subsidiary specialized in international trade in tropical woods. Rougier's total expertise across the industry represents a guarantee of quality and value creation, enabling it to commit to a policy for regular deliveries in terms of deadlines and volumes. Control over the raw material at its source and its industrial integration ensure uninterrupted traceability, guaranteeing the quality and legality of the products sold. CommeRCial presence in around 50 ConsumeR CountRies Maintaining regular commercial relations in around 50 consumer countries, Rougier International exports and markets the Group's products worldwide, from Asia to Europe, the Middle East, North America and Africa. Its long track record, the high volumes handled and its privileged relations with leading transport firms make it a pivotal player on the international markets for tropical wood. The sales teams track changes in requirements and the various markets very closely. In this way, Rougier International sold some 143,000 m 3 of logs, 100,000 m 3 of sawn timber (from around 50 species) and 35,000 m 3 of okoume plywood in More specifically, commercial developments are being supported by the active regional market diversification policy, as well as the wide range of timber species available. Their good performance in 2010 has made it possible to optimize production in line with the new situation on the various markets, in both mature and emerging countries. 1o

13 Rougier 2010 annual report rougier africa International expertise ThrouGhouT The value Chain PRODUCTION PROCESSING INTERNATIONAL TRADE 55o,ooo m 3 of logs produced / year 1o5,ooo m 3 of sawn timber / year 35,ooo m 3 of plywood / year 143,ooo m 3 of logs / year 1oo,ooo m 3 of sawn timber / year 35,ooo m 3 of plywood / year FOREST HARVESTING INDUSTRIAL PROCESSING LOGISTICS IN SOURCE COUNTRIES INTERCONTINENTAL LOGISTICS From africa ROUGIER To international R Commitment to excellence with the ResponsiBle management of forest ResouRCes Drawing on its considerable experience with managing forest resources in Africa, Rougier approaches its business with the utmost respect for the raw material and its natural environment. Anticipating growing demand for wood products that meet the highest environmental standards, Rougier has for many years applied a voluntary approach to get its timber and industrial activities certified by independent auditors, enabling it to confirm that its products, services or procedures are compliant with the highest international standards, such as FSC, supported by the main environmental NGos. From the forest source through to production, Rougier sets itself demanding economic, social and environmental criteria. Contributing through its business towards safeguarding a genuine reservoir of biodiversity, the Group's approach is founded on a commitment to managing its concessions responsibly, which guides its production methods and more generally its relationship with the environment. over the last five years, this policy has been confirmed with the good forest management and traceability certificates achieved, increasingly sought after on mature consumer markets across Europe and America. Following the TLTV-LP certificate and FSC certificate obtained in Cameroon and Gabon in 2007 and 2008 respectively, the Congo forest concession was TLTV-VLo certified in AFRICA AND INTERNATIONAL: 74% OF REVENUES IN 2010 Breakdown of consolidated revenues by region 29% 11 % 7% 2% Europe Africa America Asia Mediterranean Basin 51% 11

14 Business rougier africa International RougieR AfRicA international i na tiona Firmly anchored in three Central African countries CAMEROON 624,971 ha of forest under TLTV-LP concessions 2 sawmills (Mbang and Djoum) TLTV-LP CoC Belabo Rail Road River Rougier has seven industrial units in the Congo Basin. To make this structure more competitive and effective, the Group makes regular investments in order to optimize industrial efficiency and increase the value added created from the raw material. GaBon EQUATORIAL GUINEA Owendo Libreville Port-Gentil Douala Yaounde GABON GABON 890,734 ha of forest under concessions (including 688,262 ha FSC certified) 2 sawmills (Mbouma Oyali and Mevang) and 1 plywood plant (Owendo) FSC CoC Haut-Abanga SDFC Mévang Moyabi SDFC Mbang Djoum Leke SDFC Franceville Mouale Mokabi-Dzanga FDU CONGO 586,330 ha of forest under TLTV-VLO concessions 1 sawmill (Moualé) TLTV-VLO CoC Plants Plant under construction Leased plant Annual log production volume m m m 3 FCSM: Forest Concession under Sustainable Management FMU: Forest Management Unit In 2010, the timber, industrial and commercial approach was significantly affected following the ban on log exports introduced at the start of the year. Helped by the FSC certification achieved in 2008 over 688,262 ha of forest concessions in Gabon, Rougier rapidly adapted its production and marketing tools faced with this new situation. All the forest concessions have been brought into operation, with the industrial units returning to full production and a third sawmill leased in Libreville. Lastly, the FSC certification has made it possible to replace part of the log sales for export with sales to local industrial exporters. In 2011, Rougier Gabon aims to successfully transform its business model within the new Gabonese system in order to return to a better level of profitability and consolidate its position as a major player in the sector. A new sawmill will be brought online in Ivindo during the third quarter of 2011, while the Mevang sawmill's production capacity will be doubled over the second half of the year. 12 Owendo plywood plant Two production lines, for a capacity of over 35,000 m³ / year, with 95% exported Principal timber species: Okoume FSC certified control chain Mbouma Oyali sawmill One production line, with a capacity of over 24,000 m³ / year Drying kiln volume: 1,200 m³ Principal timber species: Okoume FSC certified control chain Mevang sawmill One production line, with a capacity of over 14,000 m³ / year Drying kiln volume: 600 m³ Timber species: 50% Okoume, 50% other species FSC certified control chain

15 Rougier 2010 annual report rougier africa International RougieR is committed to successfully tr ansforming its industr ial model in af Rica. Cameroon In 2010, Rougier focused its efforts on improving resource scheduling and the efficiency of its industrial methods. The industrial sawn timber units returned to a more favorable breakeven point, benefiting from the still dynamic level of demand from emerging markets switching over from logs after Gabon banned log exports. In 2011, Rougier has continued to move forward with the modernization of the Mbang sawmill, where a second transformation unit will be added. In line with its strategic focus, the Group is also preparing to get the Eastern region certified based on the FSC criteria; 17% of production in log equivalents was already sold with a label in 2010 (TLTV and FSC Controlled Wood). Mbang sawmill Three sawn timber lines with a capacity of 50,000 m³ per year Second processing plant Drying kiln volume: 1,700 m³ Principal timber species: Ayous, Sapelli, Tali FSC and TLTV-LP certified control chain Djoum sawmill Two sawn timber lines with a production volume of 25,000 m³ / year Principal timber species: Movingui, Tali, Sapelli, Iroko, Ayous, Padouk, Kossipo TLTV-LP certified control chain ConGo En 2010, production rapidly returned to full capacity after activities were shut down for 10 months during The Moualé sawmill resumed its operations, with a greater drying capacity and more efficient processing tool. Authorized log exports, representing 30% of timber production, also benefited from the reduction in supply on the markets. In 2011, the Group is looking to optimize its industrial and timber production and will continue to increase its drying capacities, putting it in a position to be able to satisfy demand on the markets offering the highest returns. Moualé sawmill One sawn timber line, with a production capacity of 25,000 m³ / year Drying kiln volume: 1,050 m³ Principal timber species: Sapelli, Sipo, Bosse TLTV-VLO certified control chain 13

16 Business France Import-Distribution france import-distribution In France, Rougier is a leading player for the importing and marketing of wood from all origins. It operates through two dedicated subsidiaries: Rougier Sylvaco and Rougier Panneaux. strong position as an importer in france From the outset, the Rougier brand has become a hallmark for quality, with its know-how recognized as the benchmark across all wood industry sectors, from the management of forest resources through to the most sophisticated products. In France, Rougier has two import and marketing subsidiaries: Rougier Sylvaco, the specialist for tropical wood in all its forms (sawn timber and second transformation products). Rougier Panneaux, the specialist for plywood panels. production and finishing, and perfect control over regulatory compliance. RougieR sylvaco, tropical wood in all its forms Specialized in wood in all its forms, Rougier Sylvaco imports and sells in France sawn timber and processed products from several dozen species from around the world, with a primary focus on tropical woods. From polished wood to parquet and accessories, terrace strips, tiles and ledger strips, Rougier Sylvaco s comprehensive and constantly adapted range means that it is ideally positioned to meet all needs, from natural wood to finished products. Thanks to its two strategic sites in La Rochelle and Sète, it has a total storage area of 30,000 m² (including 8,500 sq.m of covered space) and is able to guarantee regular and rapid deliveries throughout France and certain border areas. FranCe import-distribution: 26% of revenues Importing tropical wood from around the world, with a constant focus on respect for the raw material, the two subsidiaries guarantee quality polished wood and plywood for their clients, from industrial woodworkers to parquet manufacturers, interior designers, and wood and materials merchants, in line with their specific needs, while ensuring stringent control over suppliers. Regularly extending their product ranges, Rougier Panneaux and Rougier Sylvaco guarantee wholesalers, regional distributors and industrial players a quality choice of products, an optimization of the properties of the different timber species, high standard 14

17 Rougier 2010 annual report France Import-Distribution RougieR panneaux, panels for all needs The plywood panel specialist, Rougier Panneaux offers a wide range of high-quality, reliable and high-performance solutions for all applications: building, decoration, interior design, coverings, boxing, signs, etc. From standard to high-end, ready to paint and technical, the products sold by Rougier Panneaux offer all the guarantees in terms of production, finishing and regulatory compliance. Its strategic depot in Gennevilliers, France, with a storage capacity of 6,000 m 3, is ideally positioned on a key crossroads for road transport and connected directly by the River Seine to the major port of Le Havre. In addition to ensuring a high volume of supplies, this structure makes it possible to guarantee continuous, quick and quality deliveries throughout France. Complete traceability for products Rougier's two French subsidiaries provide their clients with guarantees that the products bought come from responsibly managed forests, in accordance with the three components for sustainable development: environment, social and economic. To support this approach, they are committed to a process to get their traceability chain certified. The concrete efforts made were confirmed with the FSC and PEFC certification of Rougier Panneaux's control chain in 2008 and the FSC certification of Rougier Sylvaco's control chain in These certifications highlight the strict management of flows and require targeted training for the comprehensive monitoring of all the products sold. In 2010, significant progress was made; for instance, 58% of the plywood volumes purchased by Rougier Panneaux are now FSC or PEFC certified. This certification is making it possible to take on board the new situation facing the wood sector for the years ahead. More specifically, France, Europe's biggest importer of tropical wood, is seeing a rise in demand for certified products. environmental CommiTmenT In addition to FSC certification, Rougier Panneaux and Rougier Sylvaco signed up to the "environmental charter for the purchasing and sale of wood in Promoted by the French association of wood importers and distributors (Le Commerce du Bois), this charter sets out three main commitments, subject to an external audit by the French institute of technology for forest-based and furniture sectors (FCBA): increasing the percentage of eco-certified wood in their sales; selling wood from verified legal sources; providing information on the products offered. 15

18 Business Value development strategy VAlue DeVelopment strategy Developing industrial value added and enhancing the value of forest concessions are key to the strategy implemented by Rougier, aiming to establish its role as a major player in the certified tropical wood industry in Africa. rougier s development is underpinned by a continuous improvement process. Its integrated model, focused on the overall value added, represents a key profitability driver, with its voluntary commitment to certification consolidating the long-term viability of its assets. developing industrial value added Rougier is working to improve its product mix by offering more processed products and developing its second transformation products. Building up more in-depth ranges in this way must also make it possible to achieve an even better fit between supply and the requirements of the various markets and countries (dimensions, thicknesses and quality adapted for all uses). optimizing wood resources represents a key driver. Looking to optimize the material yield on processing activities (volume of finished or semi-finished products able to be produced per log), Rougier is taking concrete steps to develop byproducts and improve its industrial processes. The optimization of wood resources also involves the reclamation of processingrelated waste. While part of the waste is already reclaimed using the finger-jointing RougieR R is capitalizing on its assets to furthe R str engthen its position on the market for certified tr opical wood. technique (joining several planks together) and sawdust is used as fuel for powering the drying kilns, Rougier also plans to set up a cogeneration facility at its Mbang site in Cameroon, where it will produce electrical energy and thermal energy through the controlled combustion of waste wood. good forest management CeRtifiCation, a key differentiating factor Through its business, Rougier contributes towards the safeguarding and renewal of its raw material. This commitment to respecting the forest has, for several years now, been reflected in a long-term process aiming in time to certify 100% of the forest concessions in line with internationally recognized good forest management standards. In addition, ongoing initiatives are being carried out by public authorities and economic players to combat illegal wood and promote certified products. In this context, the development of certified products represents a key differentiating factor for Rougier. FSC and TLTV represent voluntary processes in which Rougier is making major investments in order to develop the value of its products on the various international markets. Following the results achieved in Gabon, verification audits have been carried out by SGS and made it possible to confirm the TLTV-LP status (Timber Legality and Traceability Verification Legal Production), covering 100% of the Group's forest concessions in Cameroon, as well as the two Mbang and Djoum plants; in addition to this approach, Mbang's industrial scope (Massif de l Est) has been FSC traceability certified, while FSC Controlled Wood certification has been awarded for 286,000 ha around the Mbang site. In Congo, the Group achieved the TLTV- VLo (Verification of Legal origin) label in These TLTV-LP and TLTV-VLo legality certificates represent a gateway towards getting FSC certified for good forest management. 16

19 Rougier 2010 annual report Value development strategy positions further strengthened In a still volatile environment, 2011 must enable Rougier to continue with the turnaround in its profitability that began in Confirming its ability to adapt, the Group aims to capitalize on a gradual rebalancing of demand from emerging countries in Southeast Asia for sawn timber, combined with the good level of mature markets, committed to a process for mandatory certification in time. Rougier's strategy, based on developing the value of forest concessions and ensuring good forest management certification, will be supported in 2011 by a major industrial investment program in order to further strengthen the competitiveness and adaptability of its range. In this way, Rougier is moving forward with the industrial transformation underway in Africa, while building up more in-depth product ranges and focusing over the short term on rigorous management, ensuring effective control over production costs. In this way, on the global market for tropical wood, Rougier aims to harness its unique strengths thanks to its positioning as a certified African producer, and has mapped out its ambition to further strengthen its position as a key player in the industry in the Congo Basin, based on a wide range of quality products, focusing in priority on certified products. ChanGe in The range of processed products (% of revenues) 27% 26% 23% 47% 37% % Logs Plywood and derivatives Sawn timber and derivatives 17

20 SuStainable development 18

21 Rougier 2010 annual report responsibility in action For several years now, Rougier has applied a strategy for the responsible development of its forest concessions in Central Africa. Effectively combining safeguarding resources for future generations, protecting biodiversity and enabling socioeconomic development: these are the driving forces behind our commitment, with the ultimate goal of achieving FSC certification for all our concessions in time.» Francis Rougier Chief Executive Officer 2,1o2,o35 hectares of ForesT concessions developed in the Congo Basin. 1oo% 1oo% 91% almost of development plans registered and approved by the forest supervisory authorities. of forest concessions audited by an independent third party. of total areas covered by labels: 688,262 ha FSC certified in Gabon 1,211,301 ha TLTV verified (LP in Cameroon and VLO in Congo) 19

22 sustainable development ambitious environmental policy Ambitious environmental policy In line with its continuous improvement approach, Rougier is setting out its commitment to responsible development by focusing on three fundamental principles: good governance, social and citizenly responsibility, and environmental responsibility. managing forests, enriching wood a vital resource for our planet's balance, the tropical forest represents one of the world's largest world heritage sites. the players involved in forest harvesting must safeguard its resources and rich assets, committed to harnessing its natural dynamics with a view to passing on the ecological capital they represent to future generations. as the timber concessionaire for an outstanding "forest capital" in the Congo Basin, rougier is perfectly aware of the responsibility entrusted to it in this way. rougier is recognized as a responsible player in connection with its activities, ensuring the responsible management of its forests. Rules for a strict environmental policy to structure its approach, rougier has set out rules for a strict environmental policy based around two pillars which dovetail together effectively: responsible forest management and responsible trade in wood products. ConCrete actions for harmonious CoexistenCe three pillars for sustainable development. at all levels of decisions, Rougier is committed to: Complying with all the laws and regulations in force in the producer and importer countries, in addition to applying the various international agreements and conventions; Harnessing its know-how to support moves to develop the value of products from forest harvesting, in line with development plans, notably by minimizing the volume of unusable waste products. in the forests entrusted to it, Rougier is committed to: across the entire Congo Basin, taking the harmonious coexistence of three priorities into consideration: economic ensuring the economic viability of timber and industrial activities, while supporting the financing of the environmental, social and operational costs relating to responsible harvesting. environmental Minimizing the impact on the environment: applying strict internal control procedures, actively participating in research actions in tropical areas, and protecting fragile ecosystems. societal Dialoguing with local communities and indigenous populations in order to respect their rights to land and the long-term use of forest resources, enabling harvesting operations in harmony with the various communities' practices. Gradually increasing the number of hectares with internationally recognized good forest management certification, such as FSC. 2o

23 Rougier 2010 annual report ambitious environmental policy model For CerTiFied wood Flows for more effective control chain management Step - Production of FSC -certified timber: Rougier complies with the 10 principles and 56 criteria of FSC. - Rougier Gabon awarded FSC certification for the responsible management of 688,262 hectares of forest. Step Rougier Gabon awarded certification for the chains of custody at its factories in Franceville (sawnwood) and Libreville-owendo (plywood). Step Export of FSC -certified timber from the country of production: chain of custody of Rougier International is certified. in terms of its purchases with third-party suppliers, Rougier is committed to: Increasing the proportion of volumes purchased with certification by an independent inspection body; In the absence of certification, carrying out systematic document-based checks, as provided for under certain international regulations (e.g. FleGt or lacey act), in order to endorse the legal origins of the products sold; Supporting actions to promote responsible trade in wood products. fsc, the highest standard for CeRtifying good forest management FSC or Forest Stewardship Council certification represents the highest level of commitment recognized by environmental ngos in the tropical woods industry. the FSC system covers more than 142 million hectares of certified forests, and 20,000 control chain certificates. Step - FSC -certified products now belong to the distributor. - Distribution requires no certification. Step Import and distribution of FSC -certified products by CoC-certified importers. Step - The FSC -certified products now belong to the trading companies, who must have their CoCs certified in order to sell FSC -certified wood. - The FSC -certified wood remains certified when it is transformed by CoC-certified manufacturers. 21

24 sustainable development Developing the value of forest resources DeVeloping the VAlue of forest ResouRces Rougier has developed a performance model based on developing the value of wood resources. By combining commercial objectives with the expectations for an active social and environmental responsibility policy, Rougier contributes towards creating value, while safeguarding forest resources across all of its concessions. growing demands for legality driving the development of CeRtified products Up until now, the legality of imported wood was not systematically checked on the markets. Major initiatives have been carried out by public authorities and economic players to establish increasingly strict requirements, supporting the development of certified products. The Lacey Act in the US requires importers to ensure that the wood they import is effectively legal. Australia and Japan have followed this move, while the European Union has just adopted the FLEGT European regulation (Forest Law Enforcement for Governance and Trade), which will be coming into force in March This European regulation will formally prohibit the importing of illegal wood, requiring players within the industry to ensure the legality of the wood products sold (due diligence system), at the risk of incurring financial and criminal penalties. Rougier has backed this initiative (through its production activities in Africa and its import and distribution activities in France). The development of certified products represents a key differentiating factor for Rougier, enabling it to develop the value of its products on the various international markets. CeRtifiCation approach Each day, Rougier works to comply with all the regulations in force in the countries where the Group operates. Anticipating the strengthening of legality and good governance controls at state and international levels, Rougier wanted to call on independent certifying bodies (SGS, Smartwood, Bureau Veritas) in order to guarantee the legality and traceability of its products as a minimum. In Cameroon in 2007, in Gabon in 2008 and in Congo in 2010, Rougier has embarked on voluntary processes in which the Group is making major investments with a view to developing the value of its products on the various international markets. Today, significant progress has been made, with the vast majority of the forest concessions controlled by Rougier covered by a legality and traceability certificate since mid The development of certified products based on the best standards represents a key factor for Rougier to stand out from its rivals, in line with its plans to effectively capitalize on a still limited responsible offering faced with growing demand for certified products. waste management With close to 3,000 staff, seven industrial sites and almost 80% of processed log production in the Congo Basin, rougier generates significant quantities of waste in africa at the production sites. Various initiatives are deployed, based on effective management systems and a major effort to get all staff on board. 22

25 Rougier 2010 annual report Developing the value of forest resources In 2010, 11 out of 12 sites had a functi onal system for sorti tng waste In africa, and at the FSC sites and concessions in particular, the Group is working to raise awareness and promote a sense of responsibility among all the staff and stakeholders to ensure the success and continued application of policies to: 1. Sort organic, metal and plastic waste, putting color-coded containers in place for the different types of waste, at the living areas, as well as the industrial and timber sites, 2. Store toxic or polluting elements in dedicated facilities (batteries, hydrocarbons, tires, old machines which have been decommissioned, processing products, soiled waste from the infirmary, etc.) to ensure the effectiveness of these sorting operations, staff are constantly made aware of these approaches through regular information sessions. rougier is capitalizing on its experience with the processes put in place at its FSC certified concessions to carry out similar work at the other sites which are currently getting certified (Cameroon and Congo). 23

26 sustainable development protecting and safeguarding resources protecting AnD safeguarding ResouRces The concrete actions implemented at the forest concessions and industrial sites confirm Rougier s commitments: guaranteeing the resource's future, effectively managing environmental risks and creating environmental performance through good forest management certification. From year to year, the rougier Group is ramping up its concrete actions making it possible to ensure the sustainability of its activities in africa. the Group's commitment to taking the forest's economic, societal and environmental roles into consideration with a balanced approach is reflected in two primary objectives which have been achieved: 1. g uaranteeing perfect legality and traceability across all production for customers. 2,088,552 ha audited by an accredited independent body at the end of 2010, with: Major actions have been launched with a view to guaranteeing the legality of wood sold from productions in all the Group's forest units. this objective was achieved in June 2010: 33% 30% 28% 33% fsc certified (Gabon) 3o% tltv-lp certified (Cameroon) 28% tltv-vlo certified (Congo) a ll the forest areas in Cameroon have been tltv-lp certified by the SGS, a ll the forest areas in Congo have also been tltv-vlo certified by the SGS, 688,000 hectares in Gabon are FSC certified, which goes well beyond the legality requirements. 24

27 Rougier 2010 annual report protecting and safeguarding resources these achievements represent decisive steps forward for the recognition of the technical, financial and human efforts made for more than 10 years now by rougier in terms of responsible development. they are helping rougier to stand out on the international markets. Strong company culture, built around respon Sible forest management. 2. p roviding customers with guarantees that all the forest concessions are managed responsibly. rougier is committed to FSC good forest management certification, achieved on around 688,000 hectares of its concessions in Gabon, with this process to be gradually extended to cover Cameroon and Congo. the application of this certification policy involves a global and participatory approach. this qualitative approach is based on the forest management expertise established and the major human and financial investments made. rougier has proven its ability to manage biodiversity-rich areas, while safeguarding them. the geographical, political and economic situations on site mean that it is even more engaged in environmental, social and societal matters: using resources with a carefully thought out approach, putting systems in place contributing towards improving the standard of living, developing the local economic fabric, etc. the FSC good management certification objective is ambitious for several reasons: t he area in which rougier operates is an extremely fragile environment with extremely rich biodiversity. Combining forest harvesting and the protection of this biodiversity represents a long-term initiative which requires numerous capabilities built up over time. In the socioeconomic context seen in countries across the Congo Basin, the forest areas are generally relatively remote and characterized by the absence of the State in many cases. In view of this, as the only economic operator, rougier very frequently has to take on the State's role in order to be able to provide local communities with all the basic services enabling a reasonable standard of living. t he cost of the actions to be taken is very high (several million euros for getting a concession FSC certified). these costs are covered in full by rougier and can have a significant impact on its economic profitability, particularly since this certification process is still voluntary and is not applied by all the players in the Congo Basin. Congo basin 5,o67,647 hectares FsC certified of which, 14% operated by rougier. source : FSC 15 February

28 sustainable development Concrete social achievements concrete social AchieVements In Africa, Rougier is developing a social model built around values for respecting human rights. The actions carried out cover both employees and their families, as well as communities living within the forest concessions in operation. In often remote regions, rougier performs a predominant social role. at its isolated living areas and industrial sites in rural settings, the Group has a responsibility to house and more generally care for its staff, enabling them to have access to all the basic services. In this way, rougier carries out a range of social actions focusing on safety, hygiene, housing, education, diet and health. to oversee these programs, the Group has recently set up dedicated teams, notably with hygiene, health and safety managers. there is one hygiene, health and safety manager per site in each country. In Gabon, each manager is linked to a coordinator who is responsible for maintaining and ensuring the quality of the ISo certification achieved several years ago. safety rougier is developing an active program to raise awareness on professional risks (safety signs, fire training and emergency evacuation procedures) and putting individual protective equipment in place at all its sites. While such individual equipment is not required by the regulations in Congo Basin producer countries, the various specifications (FSC, as well as tltv) have made it essential. In this way, all Ongoing safety awareness drive. employees concerned by the wearing of one or more items of individual protective equipment are provided with equipment that is regularly renewed for their work. For the sites in Gabon alone, annual safety costs represent almost 300,000 for around 1,500 staff. hygiene Hygiene aspects, a longstanding focus for the social policy, have been better formalized with the legality certifications and significantly improved with FSC certification. the hygiene, health and safety managers carry out ongoing actions to raise awareness and check living conditions in the remote bases and camps built by rougier. the primary goal is to lay out the living areas with a view to preventing any problems relating to stagnant water and the toilet or shower blocks not working properly or indeed not being in place. It also involves regularly raising awareness among all staff and their families on the importance of keeping the living areas clean in order to prevent the spread of diseases such as malaria. access to drinking water is provided and guaranteed at all the living areas. It is obtained by drilling wells, maintained and often supplemented when necessary by drinking water treatment units, as in Gabon. For reference, annual upkeep costs for the six wells in Gabon represent some 50,000, while the price of a drinking water treatment unit imported from europe is around 130,000. the collection and sorting of waste represent an integral part of the actions carried out in connection with the drive to raise awareness. health to compensate for the lack of healthcare structures and enable staff to receive first aid, rougier finances work to build health centers (infirmaries, dispensaries) and ensures that they are fully equipped, with all the basic medicines available. 26

29 Rougier 2010 annual report Concrete social achievements an average of 1 water point for 81 people (only in rural areas, in isolated living areas). to supplement its structures, in line with the needs identified, rougier recruits nurses and even doctors when the local conditions require and allow this. Vaccination and StD awareness campaigns are organized on a regular basis, together with medical checkups. For the FSC living areas in Gabon, rougier sets aside an annual health budget of around 120,000. In africa, rougier is developing a social model built around values for respecting human rights. the actions carried out cover both employees and their families, as well as communities living within the forest concessions in operation. 1oo% of the sites have an operational health service 27

30 sustainable development Concrete social achievements To dat Te e, 721 houses have been built for staff in The living areas housing rougier provides housing for its employees in remote living areas. In Gabon, 450 houses have been built in line with FSC standards over the last five years. In Cameroon, rougier has launched a major program to refurbish its living areas in Mbang. In Congo, staff benefited from new infrastructures in Moualé at the end of 2010, with around 50 houses delivered. these houses are combined with collective areas, generally including a television room with satellite dish, a company store and an infirmary. the cost of a house is estimated at 7,500. In Gabon, all of the staff housed in living areas have free and uninterrupted access to electricity, helping improve living conditions for the communities present. While the majority of the small towns and villages in the Congo Basin do not have access to electricity, this condition is systematically covered at the FSC certified sites in Gabon. education / training as for housing and healthcare, the environments in which rougier operates very often lack facilities for accommodating children. In this way, schooling for employees' children is covered by the Group's companies if there are no infrastructures providing primary-level education. in total, 1,325 children attend seven schools built and managed entirely by Rougier In remote areas, rougier builds schools, covers teachers' salaries and provides funds for school supplies. In other cases, rougier makes a financial contribution towards the running of public schools, by supplying school equipment for instance. In general, FSC certification requires communities to benefit from all the basic services which are not provided by the State. Within this framework, rougier takes on the State's missions. For adults, rougier focuses on risk prevention and rallies staff around a genuine health, safety and environment culture, mapping out professional development training plans. For reference, the training budget for Gabon represents around 170,000 per year. new education initiatives A certain number of education-related projects were launched in 2010, including: The "reading for all" project in Libreville, Gabon: collection of school books and textbooks, redistributed across the living areas. The organization of green classes with pupils from the bilingual high school in Mbang, Southeast Cameroon: Rougier is making its infrastructures and teams available in order to enable people to discover the core principles of good forest management through a series of educational activities, engaging them in safeguarding natural resources. The first series of green classes in 2010 involved visiting the responsible management section and a botanical pathway. 28

31 Rougier 2010 annual report Concrete social achievements food to guarantee food independence for communities living in the concessions, rougier has set up food supply centers within the living areas. alongside this, various actions are carried out in order to promote the development of subsistence crops and support local trade. these actions are required because hundreds of people arrive in forest sites when living areas are set up. Subsistence hunting, which was previously organized to support indigenous communities, can no longer be carried out based on the same rules for communities who arrive with the forest harvesting operations. not only must this hunting be strongly regulated in order to safeguard wildlife, but also alternative solutions must be developed, such as setting up supply centers, offering employees and their families all the basic food products at subsidized prices. these practices are relatively common among all timber firms; however, FSC certification involves a much stricter level of requirements, concerning cold chain control for instance (rougier has made significant investments to transport frozen goods from libreville to the forest sites). Haut Ogooué agricultural development support committee (CADAHO) Rougier Gabon has joined forces with agricultural partners in Haut ogooué, the Gabonese development support institute (IGAD) and the Caisse de Stabilisation et de Péréquation (CAISTAB) to set up a platform for consultation, coordination and communication, supporting this pilot region's agricultural development. The aim is to put in place a policy for the good management of natural resources and improve living conditions for communities in rural environments. Mvoung agricultural development support committee (CADAM) Within the framework of the government policy, the Mvoung agricultural development support committee (CADAM) is built around resources and talents to support local rural communities, with more than 150 sponsors (businesses, charities and associations), 100 active members, 12 hectares cultivated... To structure this voluntary approach, Rougier Gabon makes available one member of its teams, assigned to the project for eight months in order to oversee the implementation process for the various associations. 29

32 sustainable development Commitment to local development commitment to local DeVelopment A responsible forestry player on territories that are to be managed on a long-term basis, Rougier is engaged on the ground in Africa, investing with dedicated resources for the economic development of the regions where the Group is present. rougier's approach is founded on mutual respect in relation to local communities living in or around its forest concessions, whether they are indigenous or nomadic communities. these communities, who were there long before rougier's arrival, are impacted by forest harvesting operations. they have a customary right to use the land where they are located. as such, it is both legitimate and indeed vital to take them into consideration. in-depth approach to taking local Communities into ConsideRation: Respect for rights of use and acceptance of consensus-based zoning this in-depth approach to taking local communities into consideration is covered by two principles (out of 10) from the FSC frame of reference: FSC Principle 2: "Long-term tenure and use rights to the land and forest resources shall be clearly defined, documented and legally established [...].Local communities with legal or customary tenure or use rights shall maintain control, to the extent necessary to protect their rights or resources, over forest operations unless they delegate control with free and informed consent to other agencies [ ]. Appropriate mechanisms shall be employed to resolve disputes over tenure claims and use rights. The circumstances and status of any outstanding disputes will be explicitly considered in the certification evaluation. Disputes of substantial magnitude involving a significant number of interests will normally disqualify an operation from being certified". PFSC Principle 3: "The legal and customary rights of indigenous peoples to own, use and manage their lands, territories, and resources shall be recognized and respected [ ].Sites of special cultural, ecological, economic or religious significance to indigenous peoples shall be clearly identified in cooperation with such peoples, and recognized and protected by forest managers". the concept to seek a consensus at all times between stakeholders sharing the different uses of a given resource is linked exclusively to FSC certification, and goes much further than the development plans, which already include a socioeconomic section. In concrete terms, rougier's sociologists oversee a range of actions aimed at preventing any dispute with local communities (respecting the two principles set out above). they lead to the acceptance of a consensusbased breakdown of areas between the various stakeholders. In the FSC certified the social mapping process has been carried out in 60 villages concessions in Gabon, three main stages are involved in seeking this consensus: 1. Consultation with all the beneficiaries and stakeholders; 2. e stablishment of a contractual framework: mutual obligations, rights and conditions; 3. o ngoing support by rougier with the rollout of a system for monitoring the social section. 3o

33 Rougier 2010 annual report Commitment to local development active ContRiBution to local economic development under the forest codes in Congo Basin producer countries, taxes are paid by timber firms to the central authorities and then part of these taxes are redistributed to the local communities living in or around the forest concessions. In practice, this redistribution is not optimum, resulting in limited access to development for local communities. the local development fund represents an account opened with a local bank, with funds provided through: p rofits generated from the sale of byproducts from the facility, including charcoal (with profits from this production going towards the development fund); Subsidies from lessors in connection with projects; Various types of donations and bequests. the local development fund is administered by a management committee, while a technical unit oversees the implementation of projects. the criteria for selecting projects are in line with rougier's social policy, enabling the implementation of (a) projects relating to health, education and the sustainable use of natural resources, developing their value, (b) projects with a clear community focus, i.e. benefiting the largest number of people. the companies committed to FSC certification go beyond this framework and proactively contribute towards local development through the implementation of a certain number of innovative initiatives. Based primarily on a voluntary approach, they are sometimes suggested in regulations, but very often left to the interpretation of the companies in terms of their actual implementation. the initiatives rolled out by rougier include the creation of a local development fund (FDl) in Mbang, Southeast Cameroon. the local development fund involves a participatory approach aimed at contributing towards the local socioeconomic development of communities living in or around rougier's forest concessions in Cameroon. Its actions are focused primarily on financing for community projects, and it operates based on direct community participation. promoting development microprojects in djoum (southern Cameroon) SFID, the Cameroonian subsidiary, supports agriculture and livestock farming, the main activities of rural communities living in or alongside the forests it operates in around Djoum. More specifically, it has donated pesticides and materials for setting up cocoa tree nurseries and creating new plantations. In order to offer an alternative to poaching and contribute towards a balanced and healthy diet, SFID has also carried out a pilot project for rearing small ruminants (caprine goats), providing all the funding for a community pen. 31

34 sustainable development Managing the environmental impact managing the environmental impact Rougier performs its business while seeking insofar as possible to limit its impacts on the environment. Environmental impact management draws on the implementation of the good forest management certification approach. 624 kms of harvesting roads built in 2010 over 61,300 ha, representing 1 km per 100 ha protecting the environment represents a key focus for the Group. on a daily basis, rougier confirms its commitment through major initiatives at the living areas, industrial sites and forest production sites. on the living areas and industrial sites rougier structures and optimizes its approach by putting actions in place to prevent pollution risks, built around: Waste management: selective sorting, dedicated storage areas; Fitting of concrete slabs at sensitive locations (service stations, waste oil pits, batteries, oil barrels, generators, etc.) in order to prevent any potential run-off of toxic substances during periods of heavy rain; use of settling tanks / interceptors (waste water and oil interceptors); regular upkeep of machines to prevent leaks; use of engine / truck intervention kits in cases when pollution has been reported regular initiatives to raise awareness among staff on the considerable damage which can be caused by any pollution. these actions are in line with rougier's voluntary actions for its drive to get FSC certified. on the forest sites at each stage in forest harvesting, measures are taken to minimize the impacts on production sites. these actions, included within the framework of the development plan (required by the forest codes in Congo Basin countries), focus on three areas: Zoning forest concessions and marking out dedicated areas for a specific use (production, conservation, agriculture, pastoral, etc.) Increasing the harvesting diameter for a certain number of species for which regeneration based on the official diameter is considered to be sensitive rolling out low-impact harvesting techniques at every level of operations for forest harvesting: building and maintaining roads and bridges, clearing tracks, felling, forwarding, hauling, cutting into sections for batches of logs in forests, etc. While low-impact harvesting is becoming increasingly widespread across the Congo Basin, including in companies which have not yet been FSC certified, an additional 32

35 Rougier 2010 annual report Managing the environmental impact 32% of forest areas 1oo% inventoried at the end of 2o1o level is demanded for firms which have achieved forest certification. It covers the building of roads and bridges, as well as its production activities, such as felling and forwarding, which must minimize impacts on the resource. the most emblematic example of this approach concerns the need to regularly increase harvesting diameters, primarily with a view to increasing the regeneration rates. In this way, for okoume in Gabon's ogooué-ivindo region, the officially approved diameter has been raised from 70 cm to 80 cm (harvesting diameter for the development plan), then 90 cm (harvesting diameter for FSC certification). this increase in harvesting diameters, combined with a tracking rate (proportion of trees inventoried and considered suitable for commercial harvesting, but which will be left standing because they are located on a steep slope or near rivers), is reflected in a reduction in average production for all the Group's certified SDFCs, estimated at around 2 m 3 /hectare or 20%. ultimately, in accordance with the development plans, the timber extracted does not exceed an average of one to two trees per hectare, every 25 years. While the development plan represents one of the pillars for the FSC process, FSC certification requires a more in-depth approach to take a certain number of social aspects into consideration, as well as environmental factors, in terms of both fauna and flora. In the Congo Basin, 30% of the forest area is operated under the concession system, with practices that vary considerably. Harvesting under development with low-impact harvesting techniques is becoming increasingly widespread, contributing towards the preservation of forest carbon. Identifying and safeguarding high conservation value forests (HCVF) The Congo Basin's forest ecosystems represent the world's second largest reserves of dense rainforest. In order to safeguard this heritage, Rougier is mapping the areas classed as high conservation value forests. In connection with FSC certification in Southeast Cameroon, Rougier is carrying out an operation aimed at: Identifying high conservation value forests working with Nature+ (inventory, mapping and marking on the ground) Modeling a tracking protocol, with the creation of effective field indicators for high conservation value forests (wildlife, flora, local communities, endangered species, etc.) 33

36 sustainable development Managing the environmental impact Rougier is firmly committed to protecting wildlife. on wildlife Within the framework of the development plan, wildlife inventories are systematically drawn up with a view to being able to map the distribution of wildlife across the forest concessions as effectively as possible. Clear specifications are set for these inventories, ensuring that the maximum amount of information is collected by competent prospectors, who often receive dedicated training beforehand. active in the field to protect wildlife, rougier is working to structure an approach around: Building awareness among staff and local communities; recruiting forest rangers and wildlife technicians; p utting in place deterrent, repressive and conservation measures; e stablishing partnerships with wildlife management structures (ZSl in Cameroon or WWF and WCS in Gabon). a certain number of additional measures to protect wildlife are put in place by operators which are engaged in the FSC certification process, notably in connection with the definition and monitoring of type 1 high conservation value forests relating to wildlife: "Forest areas containing globally, regionally or nationally significant concentrations of biodiversity values". More specifically, measures are taken to: r egulate subsistence hunting (or village hunting), Ban commercial hunting activities, Control and crack down on any poaching practices in breach of the regulations in force. the aim is to pave the way for a development plan to emerge in line with the protection of the natural environment. In this way, rougier's bylaws formalize traditional hunting, define how it may be carried out and stipulate that it is authorized within the framework of rights of use, outside of protected areas. wcs is evaluating Good wildlife management In Gabon, a study conducted by the WCS (World Conservation Society) has assessed good wildlife management practices in forest concessions located in priority areas for the conservation of large monkeys: Lopé, Waka and Ivindo. Seven firms [two certified, including Rougier Gabon, and five non-certified] have been evaluated based on two principles: a) hunting management and b) forest harvesting planning". The findings reveal the greater commitment made by certified companies compared with non-certified firms in terms of compliance with and the application of the law, as well as the implementation of current international best practices. In this way, according to the WCS: "Only certified companies have a formal system for managing wildlife and hunting, including a supervision component and control activities". 34

37 Close partnerships with NGOs To carry out all the environmental and social actions, Rougier has set up partnership agreements with various local and international NGOs in order to ensure that both environmental and social projects are implemented in an appropriate way. ANTI-POACHING PROGRAM WITH THE WWF on its Haut-Abanga and ogooué-ivindo concessions, Rougier Gabon is committed to bringing hunting practices into line with standards. To support Rougier Gabon with the application of these commitments, a three-way program has been put in place between Rougier Gabon, the WWF and the Ministry of Water and Forests to combat poaching. More specifically, this program aims to carry out missions to combat poaching in Rougier Gabon's concessions, as well as neighboring villages and living areas, in addition to raising awareness among all the stakeholders concerned (villages, authorities, workers, retailers) on wildlife conservation. IMPROVING HEALTH STRUCTURES AT THE INDUSTRIAL AND FOREST SITES All of Rougier's industrial sites and living areas are equipped with health centers which must, as a minimum, ensure compliance with or even exceed the legal or regulatory requirements concerning the health and safety of employees and families. The aim with this collaboration is to provide ongoing technical assistance for the teams on-site for assessing and monitoring activities on the one hand, and on the other, for consultation and rolling out actions to improve quality. In its missions, technical assistance enables work to be carried out closely with the company's doctors and nurses, while ensuring that the recommendations and guidelines proposed to the management team are consensus-based. IN-DEPTH KNOWLEDGE OF WILDLIFE IN CAMEROONIAN CONCESSIONS WITH THE ZSL The Zoological Society of London (ZSL) has set up the Wildlife Wood Project (WWP) with a view to improving wildlife management in production forests in Western and Central Africa. The objectives mapped out for this project are as follows: (1) moving towards forest certification that takes the needs of wildlife into consideration more effectively by offering reliable bio-indicators, and (2) providing economic operators with support to develop and implement concrete wildlife management measures in their concessions. The areas for collaboration in Rougier's concessions in Cameroon are as follows: (1) monitoring of animal populations and concerted development of a biodiversity conservation program, and (2) strengthening of local capabilities and personnel through training on methods for monitoring wildlife and illegal activities in tropical forests. FIGHTING AGAINST AIDS AND BUILDING AWARENESS ON MALARIA AND TUBERCULOSIS WITH THE GIZ In conjunction with the GIZ (German international cooperation organization), this program which has been deployed in Cameroon is aimed more specifically at screening, raising awareness and educating communities living in or around timber sites about how diseases are transmitted, rolling out widespread prevention actions. In 2011, there are plans for the partnership to expand its range of activities with a view to reducing mortality linked to poor hygiene conditions, malaria and tuberculosis among workers, as well as communities living in or around the forest sites. 35

38 certific ertification R Rtific A Ation As seen by RougieR GOOD FOREST MANAGEMENT CERTIFICATE COC (Chains Of Control) FSC / PEFC / TLTV / OLB FSC CONTROLLED WOOD CERTIFICATE In-depth integration of social / wildlife ecosystem aspects CERTIFICATE OF LEGALITY AND TRACEABILITY In-depth process for verifying legality and traceability Export documents GOVERNMENT DOCUMENTS Production and traceability documents Transportation documents Transportation documents Forest harvesting documents No document ment ORIGIN UNKNOWN N N IO IO AT CT T R DU PO RO S P AN L RT TR RIAXPO ST E DU FO R ES T IN FSC : Forest Stewardship Council PEFC : program for the endorsement of Forest Certification 36 TLTV : timber legality & traceability Verification OLB : origin and legality of timber

39 Rougier 2010 financial statements 2o1o FINANCIAL STATEMENTS (IFRS Compliant) 38 / Consolidated income statement 39 / Consolidated statement of financial position 41 / Consolidated net cash flow statement 37

40 Consolidated income statement Consolidated income statement ' REVENUE 138, ,761 other operating income Purchases consumed (51,000) (50,063) Salaries and fringe benefits (27,100) (25,272) External Charges (45,734) (40,196) Taxes (6,920) (9,530) Depreciation and amortisation (6,935) (6,959) Provisions (598) (2,456) Change in inventories of work-in-progress and finished products 4,127 (2,398) other operating income and expenses (189) (281) INCOME FROM ORDINARY OPERATIONS 4,578 (12,140) Income on disposals of consolidated equity interests 0 0 other non-current operating income and expenses (1) 1,806 (3,934) EBIT 6,384 (16,074) Income from cash and cash equivalents Cost of gross financial debt (2,066) (2,333) Cost of net financial debt (2,042) (2,249) Other net financial income and expenses 220 (460) Income tax 781 3,222 Share of profits of associates (30) 0 NET INCOME 5,313 (15,561) o/w attributable to: - Owners of the parent - Non-controlling interests 5,343 (30) (15,524) (37) NET INCOME O/w attributable TO OwNErs Of ThE parent - Earning per share ( ) - fully diluted earning per share ( ) (11.75) (11.58) ' COMPREHENSIVE INCOME 5,509 (15,256) o/w attributable to: - Owners of the parent - Non-controlling interests 5,539 (30) (15,219) (37) 38 (1) Including the change in depreciation for the impairment of assets.

41 Rougier 2010 financial statements Consolidated statement of financial position Consolidated statement of financial position assets Dec Dec Intangible assets 10,829 10,320 Tangible assets 39,220 37,879 Investment properties 1,760 1,817 Investments in associates 45 0 Non-current financial assets 928 1,184 Deferred tax assets 1, other non-current assets 77 0 TOTAL NON-CURRENT ASSETS 54,153 51,330 Inventories 40,978 35,563 Trade receivables 25,817 25,422 Current tax receivables 2,822 3,224 other current assets 7,999 7,801 Derivative instruments assets Cash and cash equivalents 2,612 4,595 TOTAL CURRENT ASSETS 80,290 76,622 Non-current assets held for sale 0 0 TOTAL ASSETS 134, ,952 39

42 Consolidated statement of financial position liabilities Dec Dec Share capital 7,098 7,063 Share premium account 2,681 2,566 Treasury stock (1,436) (1,269) Revaluation of financial instruments 8 (117) Foreign currency translation reserve other reserves 1,828 1,828 Undistributed accumulated earnings 51,328 46,382 Equity attributable to owners of the parent 61,600 56,475 Non-controlling interests TOTAL EQUITY 62,383 57,280 Deferred tax liabilities 1,048 1,093 Provisions for liabilities and charges 2,150 1,525 Non-current borrowings and other non-current financial liabilities 15,864 13,170 other non-current liabilities TOTAL NON-CURRENT LIABILITIES 19,168 15,907 Provisions for liabilities and charges Bank overdrafts and other current financial liabilities 23,535 28,163 Trade payables 21,181 18,384 Current tax liabilities 56 0 other current liabilities 8,096 7,758 Derivative instruments liabilities 0 93 TOTAL CURRENT LIABILITIES 52,892 54,765 Liabilities directly associated with non-current assets held for sale 0 0 TOTAL LIABILITIES 134, ,952 4o

43 Rougier 2010 financial statements Consolidated net cash flow statement Consolidated net cash flow statement NET INCOME 5,313 (15,561) - Share of profit of associates Depreciation and amortisation 6,935 6,959 - Charge / (Writeback) for provisions (1) (1,682) 4,213 - Capital gains or losses on disposals and fair value adjustments (734) (436) - other non-cash (income) / expenses CASH FLOW FROM OPERATIONS 9,871 (4,266) after cost of net financial debt and tax - Cost of net financial debt 2,042 2,249 - Net income tax (781) (3,222) CASH FLOW FROM OPERATIONS 11,132 (5,239) before cost of net financial debt and tax Income tax paid (80) (523) Change in working capital linked to operations (3,204) 8,869 NET CASH FROM OPERATING ACTIVITIES 7,848 3,107 Purchases of tangible and intangible assets (6,314) (4,267) Purchases of financial assets (37) (2) Proceeds from disposals of tangible and intangible fixed assets 3 1,152 Proceeds from disposals of non-consolidated equities shares Change in other financial assets (21) (25) NET CASH FROM INVESTING ACTIVITIES (5,454) (3,142) Capital increase Dividends paid to Rougier S.A. shareholders (398) - Dividends paid to non-controlling interests - - New borrowings taken out (2) 6,027 3,025 Borrowings paid back (2) (7,229) (3,755) Net financial interest paid (2,043) (2,269) Decrease/(increase) in treasury stock (168) 143 NET CASH FROM FINANCING ACTIVITIES (3,661) (2,856) Impact of exchange rates variations 14 - TOTAL CHANGE IN CASH AND CASH EQUIVALENTS (1,253) (2,891) Cash and cash equivalents: - At beginning of period - At end of period (16,175) (17,428) (13,284) (16,175) (1) Excluding those relating to current assets. Including depreciation for the impairment of assets. (2) Including the change in other non-current financial liabilities (deposits and sureties received). 41

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45 Group addresses ROUGIER S.A. 155 avenue de la rochelle, Bp 8826, niort Cedex 09, France tel: +33 (0) Fax: +33 (0) avenue des Champs-elysées, paris, France tel: +33 (0) Fax: +33 (0) Forest harvesting and wood processing industries in Africa. International trade in wood and derivatives. ROUGIER GABON Bp 130, libreville, Gabon tel: (241) (241) Fax: (241) SFID Bp 1343, Douala, Cameroon tel: (237) (237) Fax: (237) MOKABI Bp 97, lola, Impfondo, republic of the Congo tel: (871) ROUGIER INTERNATIONAL 155 avenue de la rochelle, Bp 8826, niort Cedex 09, France tel: +33 (0) Fax: +33 (0) avenue des Champs-elysées, paris, France tel: +33 (0) Fax: +33 (0) Importing and distribution of wood and derivatives in France. ROUGIER SYLVACO 155 avenue de la rochelle, Bp 8826, niort Cedex 09, France tel: +33 (0) Fax: +33 (0) avenue des eaux Blanches, Sète, France tel: +33 (0) Fax: +33 (0) ROUGIER PANNEAUX 9 impasse des petits Marais, Gennevilliers, France tel: +33 (0) Fax: +33 (0)