Consolidated financial statements. as of December 31, 2018

Transcription

1 Consolidated fancial statements as December 31, 2018

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3 Consolidated fancial statements as December 31, Consolidated fancial statements as December 31, 2018 Consolidated come statement ( millions euros) Note Net revenue 2, ,841.1 Cost sales (2,183.7) (2,138.1) Gross prit Or operatg come (3) Sellg distribution expenses (330.1) (319.4) Research development (36.0) (36.4) General admistrative expenses (180.0) (187.5) Or operatg expenses (3) (12.9) (177.1) Result from operatg activities (3) Fancial come Fancial expenses (31.1) (24.7) Fancial come expense (7) (30.1) (23.4) Share prit equity accounted vestees (net come tax) (7.9) 3.0 Prit before come tax 68.6 (7.7) Total come tax (8) (18.5) (30.3) Prit from contug operations 50.1 (38.0) Prit (loss) from discontued operations (net come tax) - - Net prit for period 50.1 (38.0) Attributable : Owners Tarkett 49.3 (38.7) Non- controllg terests Net prit for period 50.1 (38.0) Earngs per share: Basic earngs per share ( euros) (9) 0.78 (0.61) Diluted earngs per share ( euros) (9) 0.77 (0.61) 2018 Registration Document < Tarkett 3

4 Consolidated fancial statements as December 31, 2018 Consolidated statement comprehensive come ( millions euros) Net prit for period 50.1 (38.0) Or comprehensive come (OCI) - - Foreign currency translation differences for foreign operations 12.0 (77.2) Changes fair value cash flow hedges 0.6 (0.8) Income tax (0.1) 0.2 First application IFRS 9 (0.3) - OCI be reclassified prit loss subsequent periods 12.2 (77.8) Defed benefit plan actuarial ga (losses) Income tax 0.7 (7.2) OCI not be reclassified prit loss subsequent periods Or comprehensive come for period, net come tax 15.2 (77.2) Net prit for period 65.3 (115.2) Attributable : Owners Tarkett 65.1 (115.5) Non- controllg terests Net prit for period 65.3 (115.2) 4 Tarkett > 2018 Registration Document

5 Consolidated fancial statements as December 31, 2018 Consolidated statement fancial position Assets ( millions euros) Note December 31, 2018 December 31, 2017 Goodwill (5) Intangible assets (5) Property, plant equipment (5) Or fancial assets (7) Deferred tax assets (8) Or non- current assets - - Total non- current assets 1, ,181.1 Invenries (3) Trade receivables (3) Or receivables (3) Cash cash equivalents (7) Current assets Total assets 2, ,133.1 Equity liabilities ( millions euros) Note December 31, 2018 December 31, 2017 Share capital (9) Share premium reserves Retaed earngs Net result for period 49.3 (38.7) Equity attributable equity holders parent Non- controllg terests Total equity Interest- bearg loans (7) Or fancial liabilities (7) Deferred tax liabilities (8) Employee benefits (4) Provisions or non- current liabilities (6) Non- current liabilities 1, Trade payables (3) Total or liabilities (3) Interest- bearg loans borrowgs (7) Or fancial liabilities (7) Provisions or current liabilities (6) Current liabilities Total equity liabilities 2, , Registration Document < Tarkett 5

6 Consolidated fancial statements as December 31, 2018 Consolidated statement cash flows ( millions euros) Note Cash flows from operatg activities Prit before come tax 68.6 (7.7) Adjustments for: Depreciation, amortization impairment (Ga) loss on sale fixed assets (0.5) (0.3) Net fance costs Change provisions or non- cash items (9.1) (6.6) Share prit equity accounted vestees (net tax) 7.9 (3.0) Operatg cash flow before workg capital changes (Increase)/Decrease trade receivables 16.9 (32.9) (Increase)/Decrease or receivables (1.4) (9.1) (Increase)/Decrease venries (13.1) (30.1) Increase/(Decrease) trade payables (15.6) 32.8 Increase/(Decrease) or payables Changes workg capital (12.3) (37.0) Net terest paid (17.2) (11.3) Net come taxes paid (25.3) (37.8) Or (0.7) (1.0) Net cash (used )/from operatg activities Cash flows from vestg activities Acquisition subsidiaries net cash acquired (2) (231.9) (0.4) Acquisitions tangible assets property, plant equipment (5) (128.2) (111.1) Proceeds from sale property, plant equipment (5) Effect changes scope consolidation 0 - Cash flows from vestg activities (358.6) (107.0) Net cash from/(used ) fancg activities Acquisition NCI without a change control - (8.3) Proceeds from loans borrowgs Repayment loans borrowgs (9.8) (224.3) Payment fance lease liabilities (0.4) (0.1) Acquisition treasury shares (5.3) - Dividends (37.9) (38.4) Net cash from (used ) fancg activities Net crease (decrease) cash cash equivalents (18.6) 24.9 Cash cash equivalents, begng period Effect exchange rate fluctuations on cash held (0.4) (3.3) Cash cash equivalents, end period Tarkett > 2018 Registration Document

7 Consolidated fancial statements as December 31, 2018 Consolidated statement changes equity ( millions euros) Share Share Translation Reserves Equity Non- controllg Total capital premium reserves attributable terests equity reserves equity holders parent As January 1, Net prit for period - - (38.7) (38.7) 0.7 (38.0) Or comprehensive come, net tax - - (76.8) - (76.8) (0.4) (77.2) Net prit for period - - (76.8) (38.7) (115.5) 0.3 (115.2) Dividends (38.0) (38.0) (0.4) (38.4) Own shares (acquired) sold (1.5) (1.5) - (1.5) Share- based payments Acquisition NCI without a change control (4.6) (4.6) - (4.6) Total transactions with shareholders (39.0) (39.0) (0.4) (39.4) As December 31, (55.4) As January 1, (55.4) Net prit for period Or comprehensive come, net tax (0.6) 15.5 First application IFRS (0.3) (0.3) - (0.3) Net prit for period Dividends (37.9) (37.9) - (37.9) Own shares (acquired) sold (5.3) (5.3) - (5.3) Share- based payments Acquisition NCI without a change control First application IFRS Or Total transactions with shareholders (38.9) (38.9) - (38.9) As December 31, (42.8) Registration Document < Tarkett 7

8 2. Note 1 Basis preparation General formation Significant accountg prciples Significant development 12 Note 2 Changes scope consolidation Consolidation methods Busess combations Foreign currency translation Changes scope consolidation Jot ventures 14 Note 3 Operatg Data Components come statement Segment formation Or operatg come expense Breakdown workg capital requirements Free cash flow 20 Note 4 Employee benefits Retirement benefits Personnel costs compensation senior management Share based payment transactions 25 Note 5 Tangible tangible assets Goodwill Tangible tangible assets Impairment assets Lease commitments 30 Note 6 Provisions Provisions Potential liabilities 32 Note 7 Fancg Fancial Instruments Accountg prciples Fancial come expense Net debt terest- bearg loans borrowgs Or fancial assets liabilities Fair value fancial assets liabilities Fancial risks Fancial Instruments Guarantees 42 Note 8 Income tax Income tax expense Deferred tax 44 Note 9 Shareholders equity earngs per share Share capital Earngs per share dividends 45 Note 10 Related parties Jot ventures Prcipal shareholders Members Management Board Supervisory Board 46 Note 11 Subsequent events 46 Note 12 Statury audir fees 47 Note 13 Prcipal consolidated entities 48 8 Tarkett > 2018 Registration Document

9 Note 1 > Basis preparation 1.1 General formation Tarkett s Consolidated Fancial Statements as for year ended December 31, 2018 comprise Company its subsidiaries (hereafter Group ) as well as its terests associates jot ventures. The Group is a leadg global floorg company, providg a large range floorg sports surface solutions busess residential end- users. The Group completed its itial public ferg on November 21, 2013, is listed on Compartment A Euronext Paris, ISIN code: FR Sck symbol: TKTT. The Group s registered fice is located at 1 Terrasse Belli Tour Initiale Paris- La Défense, France. The Group s Consolidated Fancial Statements as for year ended December 31, 2018 were falized by Management Board on February 6, 2019 reviewed by Supervisory Board on February 7, They will be submitted for shareholder approval on April 26, Significant accountg prciples Statement compliance applicable stard The Group s Consolidated Fancial Statements as for year ended December 31, 2018 have been prepared accordance with IFRS (International Fancial Reportg Stards) as adopted by European Union as such date, which are available at These stards have been applied consistently for fiscal years presented. a) Amendments, new stards, or revisions existg stards terpretations applied durg period The followg new published stards have been applied period by Group: > IFRS 15: Revenue from contracts with cusmers. On September 22, 2016, European Union adopted IFRS 15, Revenue from Contracts with Cusmers, application which was mary as from fiscal year begng January 1, Related amendments were adopted on Ocber 31, 2017 are applicable as same date as IFRS 15. IFRS 15, Revenue from Contracts with Cusmers, replaces IAS 18, Revenue, IAS 11, Construction Contracts, ir related terpretations. It entered effect on January 1, 2018, cludes new rules for recordg revenue segmentg contracts performance obligations. The stard cludes new prciples for revenue recognition, as well as new provisions on formation be cluded notes fancial statements. It establishes prciple that recognition revenue should take place when control a good or service is transferred cusmer, amount which seller expects be entitled when all contractual obligations have been satisfied. Tarkett develops, manufactures, sells floorg sports surfaces pressionals end- users residential commercial markets. The Group performed an exhaustive review applied it all its revenue sources order identify assess potential impacts stard on its revenue recognition. The Group divided its analysis its two busess secrs: floorg sports surfaces. For each its activities, Group applied analyzed revenue recognition usg five steps defed by stard. The objective was identify any differences between existg prciples for recordg Group s revenue new recordg methods set forth by IFRS 15. This process confirmed absence any significant impact on Group s Consolidated Fancial Statements light its current accountg rules. The floorg activity is Group s prcipal activity. The contracts that Group enters relate supply identifiable distct products constitutg prcipal performance obligation. No significant long- term contracts were identified. The Group acts its own name not as an termediary. The general terms conditions sale provide for payment under one year, Group does not fer variable fancg that would necessitate segmented recordg pursuant IFRS 15. Tarkett does not sell extended warranties on its products; refore, its warranty is not considered as a separate service is recorded accordance with IAS 37, Provisions, contgent liabilities contgent assets. For floorg activity, revenue from sale goods is recognized prit or loss when control herent service obligations has been transferred buyer, payment is likely, associated costs potential return merchise can be measured, revenue from merchise can be reliably assessed. Generally, revenue is recorded at time delivery performance obligation. Takg consideration nature products general terms conditions sale, sales are usually recorded on date on which products leave Group s warehouses, or upon delivery if Tarkett is responsible for transport. The sports surfaces activity is composed sales products directly distriburs sale stallation contracts (cludg provision sports surfaces). The direct sale products distriburs follows same Group rules for recordg revenue as those described for floorg activity. With respect stallation contracts, Group does not perform stallations without also providg sports surfaces; it refore considers supply products stallation be part same performance obligation. The general terms conditions sale do not fer variable fancg or specific components fancg. Tarkett does not sell extended warranties on its stallations; refore, its warranty is not considered a separate service is recorded accordance with IAS 37, Provisions, contgent liabilities contgent assets. For sports surfaces, revenue from services rendered or from construction contracts is recognized prit or loss proportion stage completion transaction at 2018 Registration Document < Tarkett 9

10 balance sheet date. Revenue is recorded as performance obligations are delivered. The stage completion is assessed by reference surveys work performed. The use percentage- - completion method requires satisfaction one three prior conditions provided for IFRS 15 paragraph (35) (C). Pursuant that paragraph stard, Group recognizes revenue over time, sce it complies with two three conditions: > asset created by Tarkett Group s performance does not have an alternative use that provided for contract; > Group has an enforceable right payment for performance completed date. In addition, at end period, majority performance obligations have been completed. As a result, Group believes that implementation IFRS 15 has not had a significant impact on its Consolidated Fancial Statements. > IFRS 9: Fancial Instruments. IFRS 9, Fancial Instruments, adopted by European Union on November 22, 2016, replaces IAS 39, Fancial Instruments, as from January 1, The new stard has been applied retrospectively effective as January 1, The comparative 2017 figures have not been restated as authorized by IFRS 9. IFRS 9 cludes three phases: > phase 1 Classification valuation Fancial Instruments ; > phase 2 Impairment testg assets ; > phase 3 Hedge transactions or than macro hedges. Phase 1 Classification measurement fancial assets The new categories fancial assets troduced by IFRS 9 have no impact on method accountg for fancial assets held by Tarkett as January 1, The table below sets forth classifications Group s fancial assets liabilities accordance with former IAS 39 new IFRS 9: As January 1, 2018 Initial classification New classification Book value as Book value as ( millions euros) accordance accordance January 1, 2018 January 1, 2018 with IAS 39 with IFRS 9 accordance accordance with IAS 39 with IFRS 9 Or fancial assets, current Loans receivables Amortized cost Non current fancial assets Assets designated at fair Fair value through prit loss valued at fair value value through prit loss Cash cash equivalents Assets designated at fair Fair value through prit loss value through prit loss Interest- bearg loans borrowgs Liabilities at amortized cost Amortized cost The changes that IFRS 9 makes accountg methods for debt restructurg have no impact on Group, sce as January 1, 2018, it had no debts that had been restructured a manner treated for accountg purposes as a modification debt (as opposed an extguishment debt). Therefore, application Phase 1 IFRS 9 has no impact on Group s shareholders equity as January 1, Phase 2 Impairment testg assets IFRS 9 troduced an impairment model for fancial assets that is based on expected losses, whereas IAS 39 had been based on a model objective evidence losses (with impairment beg recorded only followg occurrence a credit event, such as a payment delay or a significant deterioration credit quality). The application IFRS 9 results earlier recordg impairment on fancial assets valued on balance sheet at amortized cost. For non- current assets valued at amortized cost, impairment was assessed dividually, takg account risk prile counterparty warranties obtaed. At time itial recordg such non- current fancial assets, impairment is systematically recorded amount credit losses expected result from events that may occur next twelve months. In event a significant deterioration counterparty s credit quality, itial impairment is supplemented cover all expected losses over remag maturity receivable. For commercial receivables, Group conducted a review each its cusmer receivables dividually, takg account probability default by counterparty as well as extent which receivables were hedged, used simplified method provisiong expected losses over remag maturity receivables. On basis work performed light Group s credit risk management procedures, application expected loss model has no significant impact on Group s fancial statements as January 1, Tarkett > 2018 Registration Document

11 Therefore, impacts first application impairment phase IFRS 9 are not significant were not recorded Group s shareholders equity as January 1, Phase 3 Hedge transactions or than macro hedges The changes made by IFRS 9 hedge accountg are primarily tended harmonize rules companies use reflect risk management activities fancial statements. The impacts first application IFRS 9 on Group s fancial statements concern, particular, method accountg for time value currency terest rate options. Adjustments time value recorded durg life option are now recorded as a counterpart or comprehensive come. The itial option premium is eir (i) moved prit or loss when hedged transaction impacts prit or loss, where hedged item is related a transaction (commercial foreign exchange hedges); or (ii) amortized prit or loss over duration hedge, where hedged item is related a period time (terest rate hedges). The impacts first application stard were restated Group s openg shareholders equity as January 1, 2018, represent a net tal 0.3 million. > In addition, as January 1, 2018, Group has adopted terpretation IFRIC 22: Foreign currency transactions advance consideration, as well as IFRS 2, share- based Payment. Their impacts are not significant. b) Early adoption new stards or terpretations durg period No new stards or terpretations were adopted early by Group for period. c) New stards terpretations not adopted The followg published stards have not been applied by Group: > IFRS 16: Leases. On January 16, 2016, IASB published IFRS 16, Leases, which will replace IAS 17 related IFRIC SIC terpretations, will elimate distction formerly made between operatg leases fance leases. This stard, applicable as January 1, 2019 (or 2018, if adopted early) adopted by European Union, requires lessors record all leases with terms over one year manner currently required for fance leases under IAS 17, meang record an asset a liability for rights obligations created by a lease agreement. The first phase project, 2017, concerned identification Group s lease agreements as well as collection necessary data precisely measure impact on balance sheet. The identification agreements contued The greatest number lease agreements concern cars forklifts; however, measured by value, lease agreements primarily concern real property (fices, plants warehouses). In accordance with stard, agreements with a value less than 5,000 (or USD 5,000) or entered for an itial term less than 12 months will be excluded from stard s scope. Among key assumptions, Group decided use a different discount rate for each contract, determed based on its characteristics, term, country risk credit risk lessee entity, as well as terms Group s outside fancg. Off balance- sheet commitments as December 31, 2018 provide a good dication amount debt generated by this stard, it beg noted that amount that debt will be less than amount f balance- sheet commitments, due application a discount rate. The Group is currently falizg deployment a dedicated formation system generate accountg entries relatg this stard. The new stard will be applied on January 1, 2019 usg simplified retrospective method which does not allow restatement comparative fancial statements. In 2019 application IFRS 16 will have effect creasg fixed assets net debtedness, estimated at approximately million as date here. On come statement, result is a decrease lease payments recorded EBITDA an crease depreciation fixed assets fancial expenses. The improvement EBITDA over full 2019 year is estimated at about +28 million, correspondg an crease prit about +100 basis pots. The effect se changes on Net Debt EBITDA ratio is limited approximately +0.1x as compared with ratio as December 31, 2018, from 2.8x 2.9x prorma adjusted EBITDA. However, Group s fancg agreements provide that effects change accountg stards will be neutralized, n will be renegotiated. Thus, adoption IFRS 16 will have no consequences for Group s fancg. The impact on Group s net prit is not very significant Registration Document < Tarkett 11

12 1.2.2 Accountg estimates judgments The preparation Group s Consolidated Fancial Statements requires it make a number estimates assumptions that have an effect on amounts recorded on its balance sheet come statement. These judgments estimates relate prcipally : Note Measurement fair value consideration transferred, NCI assets acquired liabilities assumed 2 Impairment testg assets 5.3 Accountg treatment Fancial Instruments 7.6 Provisions for employee benefits 4.1 Valuation deferred tax assets 8.2 Determation or provisions (warranties disputes) 6 Management reviews se estimates assumptions on an ongog basis, by reference past experience formation deemed significant given current environment. Actual results may differ significantly from se estimates. The Group s Consolidated Fancial Statements have been prepared on basis hisrical cost with exception followg assets liabilities, which have been measured at fair value: derivatives, vestments held for tradg, available- for- sale fancial assets, pension plan assets or assets when required. The carryg amount assets liabilities subject fair value hedgg has been adjusted le with changes fair value attributable hedged risks. 1.3 Significant development In late March 2013, French Competition Authority started an vestigation several floorg manufacturers, cludg Tarkett, connection with possible anti- competitive practices on French resilient floorg market. In its decision no. 17- D- 20 dated Ocber 18, 2017, Competition Authority hed down a fancial penalty 165 million. As December 31, 2017, entire amount was recorded or operatg expenses. The payment full amount fe ok place December Note 2 > Changes scope consolidation 2.1 Consolidation methods Full consolidation Subsidiaries are entities controlled by Group. The Group controls an entity when it is exposed, or has right, variable returns from its volvement with entity has ability affect those returns through its power over entity. The fancial statements subsidiaries are cluded Consolidated Fancial Statements from date that control commences until date that control ceases. The accountg policies subsidiaries have been changed when necessary align m with policies adopted by Group. Losses applicable non- controllg terests a subsidiary are allocated non- controllg terests, even if dog so causes non- controllg terests have a deficit balance Equity method accountg for jot ventures associates A jot venture, for purposes IFRS 11, is an arrangement which Group has jot control, whereby Group has right net assets arrangement, rar than rights its assets obligations for its liabilities. The Group s terests equity- accounted jot ventures comprise prcipally jot venture Lamate Park GmbH & Co. They are recognized itially at cost, which cludes transaction costs. Subsequent itial recognition, Consolidated Fancial Statements clude Group s share prit or loss OCI equity accounted vestees, until date on which significant fluence or jot control ceases. The accountg policies described hereafter have been applied all periods presented Consolidated Fancial Statements have been uniformly applied by all Group entities acquired prior December 31, 2018 (see Note 2.4 Changes Scope Consolidation ). 2.2 Busess combations Busess combations are accounted for usg acquisition method on acquisition date i.e. when control is transferred Group. 12 Tarkett > 2018 Registration Document

13 The Group measures goodwill at acquisition date as: > fair value consideration transferred; plus > recognized amount any non- controllg terests acquiree; plus > if busess combation is achieved stages, fair value pre- existg equity terest acquiree; less > net recognized amount (generally at fair value) identifiable assets acquired liabilities assumed. When excess is negative, a barga purchase ga is recognized immediately prit or loss. Transactions costs, or than those associated with issue debt or equity securities, that Group curs connection with a busess combation are expensed as curred. Any contgent consideration payable is measured at fair value at acquisition date. If contgent consideration is classified as equity, n it is not remeasured settlement is accounted for with equity. However, subsequent changes fair value contgent consideration are recognized prit or loss. Acquisition NCI without a change control For each busess combation, Group elects measure any non- controllg terests acquiree eir: > at fair value; or > at ir proportionate share acquiree s identifiable net assets, which are generally at fair value. Changes Group s terest a subsidiary that do not result a loss control are accounted for as transactions with owners ir capacity as owners. Adjustments non- controllg terests are based on a proportionate amount net assets subsidiary. No adjustments are made goodwill no ga or loss is recognized prit or loss. Share put options granted by Group The Group may write a put option or enter a forward purchase agreement with non- controllg shareholders an existg subsidiary on ir equity terests that subsidiary. The Group consolidates entity as though non- controllg terests had already been acquired. This position leads recognizg a liability for present value price payable event that non- controllg terests exercise ir option. As December 31, 2018, all buyback options have been exercised. 2.3 Foreign currency translation The functional currency Tarkett its subsidiaries located euro zone is euro. Group entities operate on an aunomous basis refore functional currency entities operatg outside euro zone is generally ir local currency. The functional currency entities Commonwealth Independent States ( CIS ) is euro. After analyzg primary secondary dicars set forth IAS 21.9, Group has confirmed this choice for 2018 fancial statements. The Group presents its fancial statements euros. Foreign currency transactions Transactions foreign currencies are translated respective functional currencies Group entities at foreign exchange rate as date transaction. Foreign exchange rate differences arisg on se transactions are recognized eir operatg prit for operational transactions or fancial result for fancg transactions. Some items are covered by hedgg transactions; accountg treatment for those transactions is described Note 7.6. Non- monetary items are translated usg hisrical exchange rates, while monetary items are translated usg foreign exchange rates rulg at balance sheet date. Fancial statements foreign operations On balance sheet date, assets liabilities foreign operations are translated at closg rate, come expenses are translated at average exchange rate for period. Foreign currency differences are recognized or comprehensive come (OCI), presented translation reserve equity. Net vestments foreign operations When long- term loan foreign currency is granted a subsidiary, it may be deemed a net vestment a foreign company. Foreign exchange gas losses relatg se long- term loans are n recognized translation reserves or comprehensive come Registration Document < Tarkett 13

14 2.4 Changes scope consolidation The Tarkett Group s scope consolidation is as follows. (Note 13 provides a list consolidated entities.) Number companies December 31, 2017 Mergers Acquisitions Liquidations December 31, 2018 Fully consolidated companies 78 (2) 2-78 Equity-accounted consolidated companies Total 79 (2) Transactions completed 2018 The year s ma transactions are as follows: a) Acquisitions In late 2017, FieldTurf Tarkett SAS acquired 30% shares AllSports Constructions & Matenance, a Scottish company, which was consolidated through equity method On January 31, 2018, through its subsidiary FieldTurf Tarkett SAS, Tarkett acquired assets Grass Manufacturers Pty Limited (Grassman), a leadg Australian artificial turf manufacturer. As July 1, 2018, through its subsidiary FieldTurf Tarkett USA Holdgs Inc., Tarkett group acquired The Tennis Track Company, a U.S. company. In September 2018, Tarkett USA Inc. acquired Lexmark Carpet Mills, which manufactures high quality carpetg, prcipally for hotel dustry North America. In November 2018, through FieldTurf Inc., Tarkett acquired certa assets Thermagreen, a company specialized manufacture sale polyethylene foam products. b) Mergers In 2018, Nerls, FieldTurf Benelux BV was merged Tarkett Sports BV, Belgium, Tarkett Belux was merged Tarkett NV Transactions completed 2017 a) Mergers In 2017, Canada, Tus Centiva Limited acquired Nova Scotia Limited Tus Centiva GP. Moreover, Serbia, Tarkett DOO Backa Palancka ok over Stelon RS DOO Backa Palancka Stelon DOO Backa Palancka. In France, Desso SAS was merged Tarkett France. Fally, United States, Tarkett Fance Inc. absorbed Tarkett Enterprises Inc. Domco Products Texas Inc. acquired Texas Tile Manufacturg LLC. b) Call options In November 2017, commitment purchase mority terests (49%) FieldTurf Benelux B.V. was carried out. FieldTurf Benelux BV was already fully consolidated. In December 2017, commitment buy mority terests (49%) Morn Extrusionstechnik (M.E.T GmbH) was carried out. Morn Extrusionstechnik (M.E.T GmbH) was already fully consolidated. 2.5 Jot ventures Lamate Park GmbH & Co KG is jotly held with Sonae Group Germany. The jot venture produces lamate board for EMEA market. The Group also holds an terest Company AllSports Constructions & Matenance, a company established Scotl. Note 3 > Operatg Data 3.1 Components come statement Revenue recognition Revenue from sale goods is recognized prit or loss when control herent service obligations has been transferred buyer, payment is likely, associated costs potential return merchise can be reliably assessed, Group is no longer volved managg merchise, revenue from merchise can be reliably assessed. Revenue is recognized net returns, rebates, commercial discounts bulk discounts. 14 Tarkett > 2018 Registration Document Revenue from services rendered or from construction contracts is recognized prit or loss proportion stage completion transaction at balance sheet date. Revenue is recorded as performance obligations are delivered. Net sales comprise revenue from sale goods services net price reductions taxes, after elimation tragroup sales Operatg result a) Grants Grants relatg assets are deducted from carryg amount property, plant equipment. The grants are thus recognized as come over lives assets by way a reduced depreciation charge.

15 Grants are recognized when re is reasonable assurance that Group will comply with conditions attachg m that grants will be received. Or grants are recognized as come on a systematic basis over periods necessary match m with related costs which y are tended compensate. b) Expenses Cost sales Cost sales comprises cost manufactured products, acquisition cost purchased goods which have been sold, supply cha costs for logistic freight. Sellg distribution expenses Sellg distribution expenses comprise expenses marketg department sales force, as well as advertisg expenses, distribution expenses, sales commissions bad debts. Research development Research development costs are recognized as expenses when curred, unless criteria are met for m be capitalized, as per Note General admistrative expenses General admistrative expenses comprise remuneration overhead expenses associated with management admistrative personnel with exception amounts charged or cost centers. c) Or operatg come expenses This category cludes all operatg come expenses that cannot be directly attributed busess functions, cludg operatg expense related retirement commitments costs with respect certa disputes Adjusted EBITDA Adjusted EBITDA is a key dicar permittg Group measure its operatg recurrg performance. It is calculated by takg operatg come before depreciation amortization removg followg revenues expenses: > restructurg costs improve future pritability Group; > gas or losses on disposals significant assets; > impairment reversal impairment based on Group impairment testg only; > costs related busess combations legal reorganizations, cludg legal fees, transactions costs, advisory fees or adjustments; > expenses related share- based payments due ir non- cash nature; > or one- f expenses considered exceptional by ir nature. ( millions euros) Of which adjustments 2018 Restruc- Gas / losses Busess Share-based Or 2018 turg on asset combations payments adjusted sales / impairment Net revenue 2, ,836.1 Cost sales (2,183.7) (2,171.0) Gross prit Sellg distribution expenses (330.1) (0.2) (329.3) Research development (36.0) (35.6) General admistrative expenses (180.0) (170.0) Or operatg come expenses Result from operatg activities (EBIT) Depreciation amortization (0.7) (3.3) EBITDA Registration Document < Tarkett 15

16 ( millions euros) Of which adjustments 2017 Restruc- Gas / losses Busess Share-based Or (1) 2017 turg on asset combations payments adjusted sales / impairment Net revenue 2, ,841.1 Cost sales (2,138.1) (2,131.6) Gross prit Sellg distribution expenses (319.4) (1.2) (320.1) Research development (36.4) (35.7) General admistrative expenses (187.5) (174.8) Or operatg come expenses (147.0) (1.9) Result from operatg activities (EBIT) (1.3) Depreciation amortization (4.5) EBITDA (1.3) (1) Or: cludes adjustment 165 million recorded followg decision by French Competition Authority (see Note 1.3). 3.2 Segment formation In accordance with IFRS 8, Operatg Segments, Group s activities have been segmented based on organization its ternal management structure its products. The Group is organized four segments: > Europe, Middle East Africa ( EMEA ); > North America; > Commonwealth Independent States ( CIS ), Asia Pacific ( APAC ) Lat America; > Sports Surfaces. Certa expenses are not allocated, cludg expenses headquarters R&D Group. By operatg segment 2018 Floorg Sports Central Group ( millions euros) Surfaces EMEA North CIS, APAC America Lat America Net revenue ,836.1 Gross prit % net sales 26.9% 24.4% 19.2% 18.7% 23.0% Adjusted EBITDA (45.7) % net sales 10.7% 9.0% 12.8% 9.4% 8.8% Of which adjustments (5.8) (4.0) (1.7) (1.5) (7.6) (20.6) EBITDA (53.4) % net sales 10.1% 8.4% 12.5% 9.1% 8.0% Result from operatg activities (EBIT) (14.8) % net sales 5.4% 1.9% 4.6% 5.5% 3.8% Ongog capital expenditures Tarkett > 2018 Registration Document

17 2017 Floorg Sports Central Group ( millions euros) Surfaces EMEA North CIS, APAC America Lat America Net revenue ,841.1 Gross prit (1.1) % net sales 29.6% 27.8% 20.1% 17.0% 24.7% Adjusted EBITDA (46.7) % net sales 13.7% 12.1% 14.3% 10.0% 11.1% Of which adjustments (1) (168.5) (2.4) (1.8) (2.6) (4.8) (180.1) EBITDA (41.7) (51.5) % net sales (4.5)% 11.8% 14.0% 9.5% 4.8% Result from operatg activities (EBIT) (73.7) (11.6) 12.7 % net sales (8.0)% 3.2% 6.9% 5.9% 0.4% Ongog capital expenditures (1) EMEA: cludes adjustment 165 million recorded followg decision by French Competition Authority. Information on activity France or significant countries The Group s activity France represented less than 10% revenue Non- current assets France, excludg non- affected goodwill arisg out merger between Tarkett Sommer early 2000 s, also represent less than 10% Group s tal non- current assets Tarkett considers threshold for significance be 25% revenue. Only United States is above that threshold, with 41.0% Group s consolidated revenue 2018 (40.0% 2017). The United States represents 50.0% Group s tal non- current assets as December 31, 2018 (40.0% on December 31, 2017). None Tarkett s cusmers represents more than 10% its sales. In 2018, largest cusmer represented 3% Group s consolidated net revenues, as compared with 3% Or operatg come expense ( millions euros) Gas on disposal fixed assets Or operatg come Or operatg come Losses on disposal fixed assets - - Or operatg expenses (1) (12.9) (177.1) Or operatg expenses (12.9) (177.1) Total or operatg come expenses 0.3 (147.0) (1) In 2017, cludes 165 million penalty recorded followg decision by French Competition Authority. 3.4 Breakdown workg capital requirements Invenries Invenries are stated on a FIFO (first, first out) basis, at lower manufacturg/acquisition costs net realizable value. Manufacturg costs self- produced venries comprise all costs that are directly attributable a systematic allocation production overhead depreciation production facilities based on normal operatg capacity. Net realizable value is estimated sellg price ordary course busess, less estimated costs completion sellg expenses Registration Document < Tarkett 17

18 ( millions euros) December 31, 2018 December 31, 2017 Raw materials supplies Work progress Fished goods Samples Displays (2.3) - Consumables spare parts Total Gross Value Provision for venry depreciation (61.1) (57.1) Total net venry Detail provision for venry depreciation ( millions euros) Dec. 31, 2017 Allowance Decrease Foreign Or Dec. 31, 2018 exchange ga & loss Raw materials supplies (10.5) (2.4) 2.8 (0.2) (0.1) (10.4) Work progress (5.7) (2.7) 0.9 (0.1) (0.2) (7.8) Fished goods (33.8) (10.2) 8.3 (0.4) 0.0 (36.1) Samples (0.3) (0.1) 0.1 (0.0) - (0.3) Consumables spare parts (6.8) (0.7) (6.5) Total provision for venry depreciation (57.1) (16.1) 13.0 (0.6) (0.3) (61.1) The rate venry provisions is applied a similar way for different periods. Cost raw materials was 1,181.7 million 2018, as compared with 1,164.7 million Trade receivables Trade receivables are stated at ir voiced value converted at closg rate, less any allowance for doubtful accounts. The allowance for doubtful accounts is based on management s assessment recoverability specific cusmer accounts agg accounts receivable. Provision for doubtful receivables Where trade receivables are not covered by credit surance, provisions cover risk failg collect trade receivables eir full or part are recorded usg expected loss method. Doubtful receivables are identified provisioned this manner: > a statistical provision, based on age outstg receivables, is defed as follows: Receivables, trade overdue Impairment (as a percentage gross amount) From days 25% From days 50% From days 75% More than 360 days 100% > an additional provision on a case- by- case basis based on an application pressional judgment. 18 Tarkett > 2018 Registration Document

19 ( millions euros) December 31, 2018 December 31, 2017 Related party receivables Trade receivables Total Gross Value Provisions for doubtful receivables (17.7) (19.7) Total net receivables The variation provision for doubtful receivables amounts 2.00 million is maly explaed as follows: > million allowance; > 8.80 million reversals; > 0.20 million foreign exchange impact. Detail unimpaired overdue receivables ( millions euros) December 31, 2018 December 31, 2017 Receivables, trade overdue days Receivables, trade overdue days Receivables, trade overdue days Receivables, trade overdue > 360 days Receivables, bankruptcy procedure/legal cases Total unimpaired overdue Receivables Or receivables ( millions euros) December 31, 2018 December 31, 2017 Or receivables non- current - - Prepaid expenses current Income tax receivable current VAT or taxes Or accounts receivable or assets current Or receivables current Trade payables Payables due more than a year future are discounted net present value. Payables due more than a year future, cludg 5.9 million deferred come are discounted net present value. ( millions euros) December 31, 2018 December 31, 2017 Trade payables Trade notes payable Trade payables Registration Document < Tarkett 19

20 3.4.5 Or liabilities ( millions euros) December 31, 2018 December 31, 2017 Liabilities related employees Current tax VAT or taxes Sales rebates Or liabilities Or liabilities Free cash flow Free cash flow is defed as liquidity generated by operatg activities after deductg vestments or than acquisitions subsidiaries or changes scope consolidation. Free cash flow is calculated based on items presented consolidated cash flow statement, consists followg items: > operatg cash flow before workg capital changes; > changes workg capital requirement; > net terest paid; > net come taxes paid; > miscellaneous operational items paid; > acquisitions tangible assets property, plant equipment; > proceeds from sale property, plant equipment Operatg cash flow before workg capital changes Changes workg capital requirement (12.3) (37.0) Net terest paid (17.2) (11.3) Net come taxes paid (25.3) (37.8) Miscellaneous operational items paid (0.7) (1.0) Acquisitions tangible assets property, plant equipment (128.2) (111.1) Proceeds from sale property, plant equipment Free cash flow 36.4 (65.6) Note 4 > Employee benefits 4.1 Retirement benefits With Tarkett Group, various systems for providg for retirement benefits dependg on legal, economic tax environment each country exist. In accordance with laws uses applied each country, Group participates pension, welfare, health retirement benefit plans whose benefits are dependent on various facrs such as length service, salary contributions paid stitutions. Defed contribution plans Defed contribution plans are post- employment benefit plans under which Group pays fixed contributions will have no legal or constructive obligation pay furr contributions if fund does not hold sufficient assets pay all employee benefits relatg employee service current prior periods. These contributions, based on services rendered by employees, are recognized as an expense prit or loss as curred. Defed benefit plans Defed benefit plans are post- employment benefit plans under which Group assumes obligation providg employees with future benefits thus also assumes related actuarial vestment risks. The defed benefit liability is calculated usg projected unit credit method is discounted its present value from which amount past service cost for period may also be deduced. The detailed actuarial calculation requires use actuarial hyposes for demographic variables (mortality, employee turnover) economic variables (future creases salaries medical costs, discount rate). 20 Tarkett > 2018 Registration Document

21 When defed benefit plans are tally or partially funded by contributions paid a separate fund or surance company, those entities assets are measured at ir fair value. Their amount is n deducted from obligation defe net liability disclosed Group s balance sheet. The Group s obligation respect such arrangements is calculated by dependent actuaries, accordance with IAS 19, Employee Benefits. Description plans As December 31, 2018, Group s largest retirement plans were United States, Germany, Sweden, Canada United Kgdom. Those five countries represent more than 90% tal commitments under defed benefits plans. In United States United Kgdom, Group s retirement plans have been closed new participants accrual rights for several years. Most Group s plans Canada are now closed. These plans are prefanced accordance with local legislation. Additionally, Group operates medical life- surance benefit plans for certa employees United States. These plans are not covered by fancg assets are now closed. In Sweden, defed benefit retirement plans are mary for employees born prior 1979 under applicable collective bargag agreement. Employees born after that date participate mary defed contribution plan. In Germany, Group fers a pension plan, service awards early retirement. The Group also fers lump- sum retirement payments as provided for by applicable legislation or collective bargag agreements certa countries, cludg France Italy. The weighted average duration defed benefit obligation is 13 years. Special Events In 2018 Group decided freeze rights participants pension plan Canada. Active participants now contribute a multi- employer plan that does not generate benefit liabilities. Some employees also decided transfer ir vested rights new plan. No or special events occurred Assumptions Accountg for actuarial values is based on long- term terest rates, predicted future creases salaries flation rates. The ma assumptions are presented below: December 31, 2018 December 31, 2017 Pensions Post- Pensions Postemployment employment healthcare healthcare benefits benefits Weighted discount rate 3.10% 3.06% Includg: United States 4.25% 4.25% 3.75% 3.75% Germany 1.50% 1.50% Sweden 2.50% 2.75% United Kgdom 2.75% 2.40% Canada 3.75%/4.00% 3.75% Salary creases 2.60% 2.87% Inflation 2.16% 2.40% Discount rates are determed by reference yield on high- quality bonds. They are calculated on basis external dices commonly used as references: > United States: iboxx $ 15+ year AA; > Euro zone: iboxx Corporate AA 10+; > Sweden: bonds Swedish companies; > United Kgdom: iboxx 15+ year AA; > Canada: Canadian AA Mercer Yield Curve Canada bonds Registration Document < Tarkett 21

22 Amounts recognized December 31, 2018 December 31, 2017 statement fancial position Pensions Post- Total Pensions Post- ( millions euros) employment employment Total healthcare healthcare benefits benefits Defed Benefit Obligation Current service cost (92.6) - (92.6) (98.7) - (98.7) Net liability booked statement fancial position Pension obligations December 31, 2018 December 31, 2017 ( millions euros) Defed Fair value Net liabilities Defed Fair value Net liabilities benefit plan assets recorded on benefit plan assets recorded on obligations balance obligations balance sheet sheet As January (98.7) (100.6) Current service cost Past service cost (1.1) - (1.1) (0.1) - (0.1) (Ga)/loss on new retirement plans (0.4) - (0.4) Fancial cost (effect discount) 6.8 (3.2) (3.2) 4.0 Update or post- employment commitments Admistrative expenses taxes (expenses paid) (0.2) (0.2) Expense (come) for period 8.9 (1.4) (1.6) 9.5 Benefit payments from employer (5.2) - (5.2) (4.8) - (4.8) Benefit payments from plan (10.9) (7.7) Plan participants contributions 0.2 (0.2) (0.3) - Employer contributions - (5.1) (5.1) - (4.7) (4.7) Changes demographic assumptions (1.1) - (1.1) (1.7) - (1.7) Changes fancial assumptions (5.5) - (5.5) Effect experience adjustments (0.2) - (0.2) (0.9) - (0.9) (Return) on plan assets (excludg terest come) (8.4) (8.4) Total pension cost/(come) recognized OCI (6.8) 4.4 (2.4) 1.1 (8.4) (7.3) Changes scope Foreign exchange differences 2.3 (2.5) (0.2) (14.1) 9.2 (4.9) As December (92.6) (98.7) Tarkett > 2018 Registration Document

23 Or benefit obligations December 31, 2018 December 31, 2017 ( millions euros) Defed Fair value Net liabilities Defed Fair value Net liabilities benefit plan assets recorded on benefit plan assets recorded on obligations balance obligations balance sheet sheet As January Current service cost Past service cost (5.9) - (5.9) (Ga)/loss on new retirement plans Fancial cost (effect discount) (0.0) - (0.0) Update or post- employment commitments Admistrative expenses taxes (expenses paid) Expense (come) for period (5.6) - (5.6) Benefit payments from plan Benefit payments from employer (0.3) - (0.3) (0.1) - (0.1) Plan participants contributions Employer contributions Changes demographic assumptions (0.0) - (0.0) Changes fancial assumptions (0.1) - (0.1) Effect experience adjustments (0.0) - (0.0) (0.3) - (0.3) (Return) on plan assets (excludg terest come) Total pension cost/(come) recognized OCI (0.1) - (0.1) (0.3) - (0.3) Changes scope Foreign exchange differences (0.5) - (0.5) As December Allocation plan assets by type vestment December 31, 2018 December 31, 2017 Shares 36.7% 47.7% Bonds 39.2% 28.3% Insurance contracts 14.0% 12.7% Cash & cash equivalent 7.1% 8.5% Real Estate 3.0% 2.8% Sensitivity discount rate assumptions ( millions euros) December 31, 2018 December 31, 2017 Increase 50 basis pots Increase (Decrease) Defed Benefit Obligation Increase (decrease) 50 basis pots Increase/(Decrease) Defed Benefit Obligation (13.5) (14.5) Decrease 50 basis pots Increase (Decrease) Defed Benefit Obligation Increase (decrease) 50 basis pots Increase/(Decrease) Defed Benefit Obligation Registration Document < Tarkett 23