GROUPE MÉCANIQUE DÉCOUPAGE S.A.

Transcription

1 Information Memorandum dated 10 November 2015 GROUPE MÉCANIQUE DÉCOUPAGE S.A. (a société anonyme incorporated in France) 65,000, per cent. Notes due 29 April 2022 Issue Price: 100 per cent. The 65,000, per cent. Notes (the Notes ) of Groupe Mécanique Découpage S.A. (the Issuer ) will mature on 29 April 2022 (the Maturity Date ). Interest on the Notes will accrue at the rate of 4.50 per cent. per annum from 13 November 2015 (the Issue Date ) and will be payable in Euro annually in arrears on 29 April, in each year from and including 29 April 2016 to and including the Maturity Date. There will be a first short coupon in respect of the period, from and including, the Issue Date to, but excluding 29 April 2016 (See Terms and Conditions of the Notes Interest ). Payments of principal and interest on the Notes will be made without deduction for or on account of taxes of the Republic of France (See Terms and Conditions of the Notes Taxation ). Unless previously redeemed or purchased and cancelled in accordance with the terms and conditions of the Notes, the Notes will be redeemed at their principal amount on the Maturity Date. The Notes may, and in certain circumstances shall, be redeemed, prior to the Maturity Date, in whole or in part, and in accordance with the provisions set out in Terms and Conditions of the Notes (See Redemption and Purchase Redemption at the option of the Issuer ; Redemption at the option of Noteholders following a Change of Control ; Redemption at the option of Noteholders following a breach of a Financial Covenant ; Redemption at the option of Noteholders following a substantial disposal of the Issuer s business ; Redemption at the option of Noteholders following a dividend payment by the Issuer ; Redemption at the option of Noteholders following an annual acquisition event by the Issuer and Redemption at the option of Noteholders following a pluriannual acquisition event by the Issuer ) and in whole but not in part, and in accordance with the provisions set out in Terms and Conditions of the Notes (See Redemption and Purchase Redemption for Taxation Reasons and Residual maturity Call Option ). Application will be made to Alternext, a market of Euronext in Paris ( Alternext ) for the Notes to be listed and admitted to trading on Alternext. Alternext is multilateral trading facility and is not a regulated market within the meaning of the Markets in Financial Instruments Directive 2004/39/EC, as amended. The Notes will, as from their Issue Date, be inscribed (inscription en compte) in the books of Euroclear France which shall credit the accounts of the Account Holders (as defined in Terms and Conditions of the Notes Form, Denomination and Title ) including Euroclear Bank S.A./N.V. (Euroclear) and the depositary bank for Clearstream Banking, société anonyme ( Clearstream, Luxembourg ). The Notes will be in dematerialised bearer form in the denomination of 100,000 each. The Notes will at all times be represented in book-entry form (dématérialisé) in the books of the Account Holders in compliance with Articles L and R of the French Code monétaire et financier. No physical document of title (including certificats représentatifs pursuant to Article R of the French Code monétaire et financier) will be issued in respect of the Notes. Neither the Notes nor the long-term debt of the Issuer are rated. IMPORTANT NOTICE This information memorandum (the Information Memorandum ) does not constitute a prospectus within the meaning of article 5.3 of and for the purpose of Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003, as amended from time to time. No such prospectus will be approved by the Autorité des marchés financiers for the purpose of the listing and admission to trading of the Notes on Alternext. The Notes will not be offered to the public in any jurisdiction (including France) and are offered by way of a private placement made exclusively to qualified investors (investisseurs qualifiés), acting for their own account and/or persons providing investment services relating to portfolio management for the account of third parties (personnes fournissant le service d investissement de gestion de portefeuille pour compte de tiers), as defined in, and in accordance with, articles L.411-1, L and D of the French Code monétaire et financier. Copies of this Information Memorandum will be available on the website of the Issuer ( and on the website of Alternext ( Prospective investors should have regard to the factors described in the section headed Risk Factors in this Information Memorandum. Sole Bookrunner Natixis

2 This Information Memorandum has been prepared for the purpose of giving information with regard to the Issuer, the Issuer and its consolidated subsidiaries taken as a whole (the Group ) and the Notes, which is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer and of the rights attached to the Notes. This Information Memorandum is to be read in conjunction with all documents that are incorporated herein by reference. This Information Memorandum does not constitute an offer of, or an invitation by or on behalf of the Issuer or the Sole Bookrunner (as defined in Subscription and Sale below) to subscribe or purchase, any of the Notes. The distribution of this Information Memorandum and the offering of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Information Memorandum comes are required by the Issuer and the Sole Bookrunner to inform themselves about and to observe any such restrictions. The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act ). Subject to certain exceptions, the Notes may not be offered or sold within the United States. For a description of certain restrictions on offers and sales of Notes and on distribution of this Information Memorandum, see Subscription and Sale. No person is authorised to give any information or to make any representation not contained in this Information Memorandum and any information or representation not so contained must not be relied upon as having been authorised by or on behalf of the Issuer or the Sole Bookrunner. Neither the delivery of this Information Memorandum nor any sale made in connection herewith shall, under any circumstances, create any implication that there has been no change in the affairs or in the financial position of the Issuer or the Group since the date hereof or the date upon which this Information Memorandum has been most recently amended or supplemented or that the information contained or incorporated by reference in it or any other information supplied in connection with the Notes is correct as of any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same. The Sole Bookrunner accepts no responsibility whatsoever for the content of this Information Memorandum or for any other statement in connection with the Issuer or the Group. The Sole Bookrunner has not separately verified the information contained or incorporated by reference in this Information Memorandum. The Sole Bookrunner makes no representation, express or implied, or accepts no responsibility, with respect to the accuracy or completeness of any of the information contained or incorporated by reference in this Information Memorandum. Neither this Information Memorandum nor any other financial statements are intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by any of the Issuer and the Sole Bookrunner that any recipient of this Information Memorandum or any other financial statements should purchase the Notes. Each potential purchaser of Notes should determine for itself the relevance of the information contained in this Information Memorandum and its purchase of Notes should be based upon such investigation as it deems necessary. Each potential purchaser of Notes should consult its own advisers as to legal, tax, financial, credit and related aspects of an investment in the Notes. The Sole Bookrunner does not undertake to review the financial condition or affairs of the Issuer or the Group during the life of the arrangements contemplated by this Information Memorandum nor to advise any investor or potential investor in the Notes of any information coming to its attention. See Risk Factors below for certain information relevant to an investment in the Notes. In this Information Memorandum, unless otherwise specified, references to a Member State are references to a Member State of the European Economic Area, references to EUR or euro or are to the single currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty establishing the European Community, as amended. 2

3 FORWARD-LOOKING STATEMENTS This Information Memorandum contains certain statements that are forward-looking, including statements with respect to the Issuer s and the Group s business strategies, expansion and growth of operations, trends in the business, competitive advantage, and technological and regulatory changes, information on exchange rate risk, and generally includes all statements preceded by, followed by or that include the words believe, expect, project, anticipate, seek, estimate or similar expressions. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Potential investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. 3

4 TABLE OF CONTENTS DOCUMENTS INCORPORATED BY REFERENCE... 5 RISK FACTORS... 6 TERMS AND CONDITIONS...18 USE OF PROCEEDS...36 DESCRIPTION OF THE ISSUER...37 RECENT DEVELOPMENTS...52 TAXATION...53 SUBSCRIPTION AND SALE...56 GENERAL INFORMATION...58 PERSONS RESPONSIBLE FOR THE INFORMATION GIVEN IN THE INFORMATION MEMORANDUM...60 Page 4

5 DOCUMENTS INCORPORATED BY REFERENCE This Information Memorandum shall be read and construed in conjunction with the following documents which are incorporated in, and shall be deemed to form part of, this Information Memorandum: (1) the audited consolidated financial statements of the Issuer for the year ended 31 December 2013 in the French language and the report of the statutory auditors on such accounts (the 2013 Financial Statements ); and (2) the audited consolidated financial statements of the Issuer for the year ended 31 December 2014 in the French language and the report of the statutory auditors on such accounts (the 2014 Financial Statements ). Such documents shall be deemed to be incorporated in, and form part of this Information Memorandum, save that any statement contained in this Information Memorandum or in a document which is incorporated by reference herein shall be deemed to be modified or superseded for the purpose of this Information Memorandum to the extent that a statement contained in any document which is subsequently incorporated by reference herein by way of a supplement. The documents incorporated by reference in this Information Memorandum will be published on the website of the Issuer ( The cross-reference list below set out the relevant page references for the information incorporated herein by reference Financial Statements 2014 Financial Statements Report of the statutory auditors Pages 3 and 4 Pages 3 and 4 Balance sheet Pages 6 and 7 Pages 6 and 7 Income statement Pages 8 and 9 Pages 8 and 9 Annexes and Explanatory Notes Pages 10 to 34 Pages 10 to 33 5

6 RISK FACTORS The Issuer believes that the following risk factors are important for any decision to invest in the Notes and/or may affect its ability to fulfil its obligations under the Notes. These risks are uncertain, and the Issuer is not able to comment on any occurrence of these risks. The Issuer believes that the factors described below represent the key risks relating to the Group and to the Notes, without being exhaustive. The risks described below are not the only risks to which an investor in the Notes may be exposed. Other risks and uncertainties, that are currently unknown to the Issuer or that it thinks are not decisive at the date of this Information Memorandum, can have a significant impact for investments in the Notes. Potential investors must also read the detailed information which appears in this Information Memorandum and form their own opinion before taking any investment decision. In particular, investors must conduct their own examination of the risks linked to the Notes before investing in the Notes and must consult their own financial or legal advisers in relation to the risks linked to the investment in specific series of Notes and the appropriateness of such an investment considering their own situation. Investors are informed that they can, in some circumstances, lose some or all of the value of their investment. The Issuer believes that Notes should only be purchased by investors who are capable of understanding the particular risks that an investment in the Notes involves. The order of presentation of the risks below is not an indication of the probability of their occurrence. Any reference below to a Condition is a reference to the correspondingly numbered condition in the "Terms and Conditions". 1 Risk factors relating to the Group 1.1 Risks relating to the Issuer being a holding company The Issuer is a holding company that derives the substantial majority of its operating income and cash flows from its subsidiaries. The business, results of operations and financial condition of the Issuer is therefore dependent on the trading performance of the other members of the Group. Their ability to service its debt will depend upon the level of distributions, if any, received from its operating subsidiaries and interests, any amounts received on intra-group loans, capital raisings and asset disposals and the level of cash balances. Certain of the Group's operating subsidiaries and associated companies may, from time to time, be subject to restrictions on their ability to make distributions, foreign exchange limitations, tax and company law constraints and other regulatory restrictions in cases where it is not the only shareholder of these subsidiaries, in the case of joint ventures, agreements with the other shareholders of such subsidiaries or associated companies, or royalty or similar arrangements. Any such restrictions may have a material adverse effect on the Group's business, results of operations or financial condition and on the ability of the Issuer to fulfil its obligations under the Notes as the case may be. 1.2 Risks related to the activities of the Group Risks relating to it activity of components manufacturer As a components manufacturer for the automotive industry, and given the high volumes that its customers order, the Group constantly has to adapt its business activity to its customers demands in terms of their supply chain, productions operations, services and R&D. Should the Group, or one of its suppliers or service providers, default at any stage of the manufacturing process, the Group could be held liable for failure to fulfil 6

7 its contractual obligations or for technical problems. The Group could also be required to make certain investments which may not be offset by customer order volumes. Risks related to raw materials Volatility in the prices of raw materials, as well as limitations on or disruptions in the supply of raw materials could adversely affect the Group s profitability. Indeed, The availability and prices of raw materials may be negatively affected by, among other factors, new laws or regulations; suppliers allocations to other purchasers; business continuity of suppliers; interruptions in production by suppliers; accidents or other similar events at suppliers premises or along the supply chain; wars, natural disasters and other similar events; changes in exchange rates; consolidation in steel and plastic-related industries; the bargaining power of raw material suppliers; worldwide price fluctuations; and the availability of transportation. The raw materials industry is highly concentrated and producers possessed substantial pricing power during the recent periods of high demand. Risks related to the price of energy GMD activities require substantial amounts of energy, including electricity and natural gas. Energy costs, including the cost of electricity and natural gas, make up a substantial portion of the cost of products sold by the Group. The price of energy has varied significantly in the past several years and may vary significantly in the future largely as a result of market conditions and other factors including significant increases in oil prices. In the event of significant and sustained increases in the prices of energy, the Group may experience higher production costs which could potentially affect it profitability. Moreover, energy shortage could lead to production interruption and result in heavy economic losses. Risks related to the economic downturn in the regions in which the Group operates The Group s sales are dependent on the overall economic climate in its principal geographic markets, in particular, in Europe, which represented 92% of net consolidated sales for the year ended In recent periods, the global economy and capital and credit markets have been experiencing exceptional turmoil and upheaval, in particularly in Europe. The adverse economic conditions could affect the Group s activities and its results of operations. Risks of multi-national operations The Group operates in 9 countries and its products are sold in many countries worldwide. Thus, it is exposed to the risks inherent to international operations, including the possibility of political, social or economic instability within some of the countries or regions where the Group is present, burdensome requirements and potential inconsistencies between legal regimes, commercial practices, regulations and business models in different countries and unexpected or adverse changes in laws or regulatory requirements, including the imposition of restrictions on foreign trade and investment. Risks related to international development The Group intends to further develop internationally and could encounter difficulties in managing its risks related to international development and to its growth in new international markets, as a result, in particular, of the following: fluctuations in exchange rates and monetary devaluations (see further details in Exchange rate risks, below); potentially unfavourable tax events; quantitative and tariff restrictions on import-export transactions, and protectionist regulations; 7

8 practices favouring local businesses in certain countries; a potential lengthening of payment periods for sales conducted in certain foreign countries; more restrictive legislation and regulations applicable to the Group s products; political instability in certain countries in which the Group conducts business; and difficulties related to its international growth and development could have a material adverse effect on the Group s activity, results, or financial condition or on its ability to achieve its objectives. Targets The Issuer has provided information on the main targets of the Group. These financial targets have been formulated based on the Group's 2015 budget and a three-year plan. These targets have also been formulated based on market conditions as at beginning 2015, namely existing competitive dynamics between equipment suppliers and the economic conditions of the countries in which the Group operates. There is no guarantee that these targets will be met, in particular if there is change in market conditions or competitive dynamics. 1.3 Risks related to competitors The markets in which the Group operates are mature and characterized by the presence of a large number of competitors. The high competition on the markets in which the Group operates could have a negative impact on the activities, the financial results, the financial position and the prospects of the Group. 1.4 Risks linked to the Group counterparties The Group is exposed to the risk of reliance on its partners (suppliers, subcontractors or joint-contractors) which are French or international companies. As at 31 December 2014, the top ten clients of the Group accounted for more than 75% of its revenues and its first client accounted for about 50% of its consolidated revenues. The default or insolvency of a partner or the non-renewal of the contractual relationship between the Group and such partner could make more difficult or significantly delay the implementation of projects by the Group, as the Group may not be in a position to substitute in a timely manner another partner to fulfil the technical specifications needed. To limit this risk, the Group pays particular attention to the selection and spread of partners with whom it signs contracts, both at the operational and financial levels. In addition, the diversity of activities and geographical locations of the Group contributes to reduce this risk. However, the risk of default of a partner of the Group cannot be excluded and, should it materialise, additional costs and delays (such as delivery delays) could be generated, which could have a significant impact on the reputation, the activities, the financial results and the prospects of the Group. In addition, the renewal of contracts between the Group and its partners may have to be made on different conditions, including on tariffs. If one or more of the Group s main suppliers were to go bankrupt, or experience an unforeseen stock-out, quality problems, a strike or any other incident disrupting its supplies for which it were liable, this could impact the Group s production output or lead to additional costs that would affect the Group s sales, results and overall financial position. 8

9 The occurrence of such risks could materially impact the activities, the financial position and results of the Group. 1.5 Risks related to the Group s ability to manage and maintain its external growth As part of its strategy for growth, the Group has made some acquisitions. The Group's ability to effectively manage its external growth requires it to implement, improve and use all of its resources efficiently. Specifically, the Group must continue to develop its operational, financial and accounting procedures and other internal control systems. The continuation of this external growth strategy could be limited notably by excessive valuations, the absence of appropriate targets, competition for acquisition targets and, punctually, by the application of competition law. The Group may encounter, for various reasons, difficulties in integrating future acquisitions in its organization, which could lead to results and cash flows being lower than expected, up to the writing off of goodwill. To limit these risks and harmonise its internal management rules with those of the newly acquired entity, the Group usually opts for taking a majority stake. If the Group is unable to effectively manage growth and implement appropriate procedures or if the implementation of this strategy runs into serious difficulties making it more expensive (higher level of debt and burden of interest charges for the Group) or less profitable than expected, it could materially adversely affect its image, its business, its financial results and its financial position. 1.6 Risks associated with human resources Risks associated with social conflicts The business of the Group is one of services. In the daily management of men and women, the Group cannot exclude the possibility that conflicts may occur. These social conflicts may in particular result in work stoppages, demonstrations and more generally in the disruption of normal activities of the Group. The emergence of social conflicts may have material adverse effects on the activities, the profitability, the financial results, the financial position and the prospects of the Group. Health risks at work During all the industrial process of the main activities of the Group, certain employees of the Group may be exposed to various nuisances (noise, vibration, dust, toxic or CMR (carcinogenic, mutagenic, reprotoxic)) that could lead to work stoppages. Employees may also engage litigation to obtain the recognition of their exposure to these nuisances as occupational disease. The occurrence of these risks could affect the reputation, the results, the financial situation and the prospects of the Group. Risk of losing key personnel To reduce the risk of losing key personnel, the Group has put in place retention incentives such as employee profit sharing. 9

10 1.7 Environmental and industrial risks The Group's activities can affect the environment (pollution or contamination of soil and watercourses) and biodiversity (accidental disruption or destruction of a habitat or species) due to the presence of chemicals on construction sites and/or the operation of fixed or mobile facilities. These risks, the importance of which varies according to the size and nature of activities of the site, are significant for most industrial sites because of their size. These sites are under regular surveillance by the Group, with a particular focus on sites which are greater in size or more sensitive in the nature of their activity. In addition, there is a risk that French and European environmental standards could become stricter, in which case the potential impact, in particular on its activity and its financial results, is difficult to quantify. The occurrence of these risks and the cost of complying with applicable regulations may have an adverse effect on the reputation, the results (increase in operating, maintenance or restoration expenses) and the prospects of the Group. 1.8 Risks related to the Group s shareholders The Group s family-held shareholding ownership structure, which is detailed in the section Main Shareholders of the Description of the Issuer, exposes the Group and potential investors to risk. The Martineau family maintain full ownership in the Group, which in turn holds an ownership stake of 64.83% in the share capital. The Martineau family reserves the power to veto, block or otherwise frustrate major strategic decisions that may be proposed, including decisions that could impact, significantly or otherwise, on a range of an issue relevant to the Group s operations, including but not limited to : current or future profit margins, international expansion plans (either by way of acquisition, entry into new markets, or otherwise), products and/or product ranges offered, investment in and/or divestiture of assets and risk management policy and direction. The interest of the shareholders may be different from those of the Noteholders which may cause the Issuer to take actions that are not in the best interests of the Noteholders 1.9 Risks related to the availability of information about the Group The Issuer s shares are not listed on any exchange. The Issuer is also unrated and it is not required to undertake the financial reporting on ongoing disclosure obligations which investors may used to be seeing undertake by others companies in which they invest. A lack of readily available public information may make it more difficult for an investor to assess the performance and current prospects of the Issuer or the Group at any time. If investors experience a delay in important information coming to their attention of in information is not accurately or fully brought to their attention, then it may make it more difficult for them to make informed investment decisions with respect to the Notes Legal risks Litigation risk In the course of its ordinary business activities, the Group and its members may become subject to government, legal or arbitration proceedings that could have a significant effect on the financial position or profitability of the Group. 10

11 Risks related to intellectual and industrial property rights The Group believes that it either owns or holds valid usage rights to all of the intellectual and industrial property that it uses in the context of its commercial activities, and that it has taken all reasonable measures to protect its intellectual and industrial property rights. However, the Group has a limited exposure to risks related to intellectual and industrial property rights Financial Risks Interest Rate risks The Group is exposed to interest rate risk on its financial liabilities and cash equivalents. Its interest-bearing debt exposes it to interest rate fluctuations that impact its financial expenses. Exchange rate risks Although the Group reports its results in euro, it conducts business in countries that use currencies other than the euro, and it is therefore subject to risks in currency fluctuations. The Group s results of operations may be affected by both the transaction effects and the translation effects of foreign currency fluctuations. The Issuer is exposed to transaction effects when one of its subsidiaries incurs costs or earns revenue in a currency different from its functional currency. The Group is exposed to currency fluctuation when it converts currencies received from operations into currencies required to pay debt, or into currencies in which it makes purchases, meets fixed costs or pays for services, which could result in a gain or a loss depending on fluctuations in exchange rates. Currency exchange rates have been especially volatile in the recent past. If the value of the euro declines against currencies in which the Group s obligations are denominated or increases against currencies in which the Group s revenues are denominated, its results of operations and financial condition could be materially affected. Liquidity Risk The Group believes that its cash flow will enable it to service its potential debt, given the current level of that debt. Group debt is subject to compliance with covenants. Failure to comply with these covenants may lead to early repayment of debt. However, this ability will depend on the Group s future performance, which is partly related to the economic cycle, which the Group cannot control. No guarantee can therefore be given regarding the Group s ability to cover its future financial needs. The Notes may not be a suitable investment for all investors The Notes may not be a suitable investment for all investors. Each potential investor in the Notes must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should: (i) (ii) (iii) have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the Notes and the information contained or incorporated by reference in this Information Memorandum or any applicable supplement; have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Notes and the impact the Notes will have on its overall investment portfolio; have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including where the currency for principal or interest payments is different from the potential 11

12 investor s currency or where the currency for principal or interest payments is different from the currency in which such potential investor s financial activities are principally denominated; (iv) (v) understand thoroughly the terms of the Notes and be familiar with the behaviour of any relevant financial markets; and be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks. Legal investment considerations Legal investment considerations may restrict certain investments. The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult their legal counsel in order to determine whether and to what extent (i) Notes are legal investments for it, (ii) Notes can be used as collateral for various types of borrowing and (iii) other restrictions apply to its purchase or pledge of any Notes. Financial institutions should consult their legal counsel or the appropriate regulators to determine the appropriate treatment of the Notes under any applicable risk-based capital or similar rules. Independent Review and Advice Each prospective investor in the Notes must determine, based on its own independent review and such professional advice as it deems appropriate under the circumstances, that its acquisition of the Notes is fully consistent with its financial needs, objectives and condition, complies and is fully consistent with all investment policies, guidelines and restrictions applicable to it and is a fit, proper and suitable investment for it, notwithstanding the clear and substantial risks inherent in investing in or holding the Notes. A prospective investor may not rely on the Issuer or the Sole Bookrunner or any of their respective affiliates in connection with its determination as to the legality of its acquisition of the Notes or as to the other matters referred to above. Legality of Purchase Neither the Issuer, the Sole Bookrunner nor any of their respective affiliates has or assumes responsibility for the lawfulness of the subscription or acquisition of the Notes by a prospective investor in the Notes, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates (if different), or for compliance by that prospective investor with any law, regulation or regulatory policy applicable to it. A Noteholder s actual yield on the Notes may be reduced from the stated yield by transaction costs When Notes are purchased or sold, several types of incidental costs (including transaction fees and commissions) are incurred in addition to the current price of the security. These incidental costs may significantly reduce or even exclude the profit potential of the Notes. For instance, credit institutions as a rule charge their clients for own commissions which are either fixed minimum commissions or pro rata commissions depending on the order value. To the extent that additional domestic or foreign parties are involved in the execution of an order, including but not limited to domestic dealers or brokers in foreign markets, Noteholders must take into account that they may also be charged for the brokerage fees, commissions and other fees and expenses of such parties (third party costs). In addition to such costs directly related to the purchase of securities (direct costs), Noteholders must also take into account any follow-up costs (such as custody fees). Investors should inform themselves about any additional costs incurred in connection with the purchase, custody or sale of the Notes before investing in the Notes. 12

13 Risks related to the market generally No active secondary market for the Notes The Notes may have no established trading market when issued, and one may never develop. A request will be made with a view to admitting these Notes to trading on Alternext but nothing guarantees the development of an active market enabling the trading of these Notes. If a market does develop, it may not be very liquid. Therefore, investors may not be able to sell their Notes in the secondary market, in which case the market or trading price and liquidity may be adversely affected or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. An investment in the Notes should be considered primarily with a view to holding them until Maturity Date (i.e. 29 April 2022). Market value of the Notes The market value of the Notes will be affected by the credit worthiness of the Issuer and a number of additional factors, including, but not limited to, market interest and yield rates and the time remaining to the maturity date. The value of the Notes depends on a number of interrelated factors, including economic, financial and political events in France or elsewhere, including factors affecting capital markets generally and the stock exchanges on which the Notes are traded. The price at which a holder of Notes will be able to sell the Notes prior to maturity may be at a discount, which could be substantial, from the issue price or the purchase price paid by such purchaser. The trading market for debt securities may be volatile and may be adversely impacted by many events The market for debt securities issued by the Issuer is influenced by economic and market conditions and, to varying degrees, market conditions, interest rates, currency exchange rates and inflation rates in other European and other industrialised countries. There can be no assurance that events in France, Europe or elsewhere will not cause market volatility or that such volatility will not adversely affect the price of Notes or that economic and market conditions will not have any other adverse effect. Exchange rate risks and exchange controls The Issuer will pay principal and interest on the Notes in Euro. This presents certain risks relating to currency conversions if an investor s financial activities are denominated principally in a currency or currency unit (the Investor s Currency ) other than Euro. These include the risk that exchange rates may change significantly (including changes due to devaluation of Euro or revaluation of the Investor s Currency) and the risk that authorities with jurisdiction over the Investor s Currency may impose or modify exchange controls. An appreciation in the value of the Investor s Currency relative to the Euro would decrease (i) the Investor s Currency-equivalent yield on the Notes, (ii) the Investor s Currency-equivalent value of the principal payable on the Notes and (iii) the Investor s Currency-equivalent market value of the Notes. Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal. Interest rate risks The Notes bearing interest at a fixed rate, investment in the Notes involves the risk that subsequent changes in market interest rates may adversely affect the value of the Notes. Credit risk The value of the Notes will also depend on the credit worthiness of the Issuer. If the credit worthiness of the Issuer deteriorates, the value of the Notes may decrease and investors may lose all or part of their investment. 13

14 The Notes may be redeemed prior to maturity In the event that the Issuer would be obliged to pay additional amounts in respect of any Notes due to any withholding as provided in Condition 6(b), the Issuer may redeem all outstanding Notes in accordance with such Terms and Conditions. In addition, the Issuer has the option to redeem (i) the Notes (in whole or in part) at any time prior to the Maturity Date as provided in Condition 6(c) or (ii) all the Notes as provided in Condition 6(j) as from 31 January Accordingly, the market value of the Notes generally will not rise substantially above the price at which they can be redeemed. This also may be true prior to any redemption period. In the event the Issuer redeems the Notes as provided in Condition 6, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Notes being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in light of other investments available at that time. Put Option in the event of a Change of Control or in the event of a breach of a Financial Covenant In the event of a Change of Control of the Issuer (as more fully described in Condition 6(d)) or in the event of a breach of a Financial Covenant (as more fully described in Condition 6(e)), each Noteholder will have the right to request the Issuer to redeem or, at the Issuer s option, procure the purchase of all or part of its Notes at their principal amount together with any accrued interest. In such case, any trading market in respect of those Notes in respect of which such redemption right is not exercised may become illiquid. In addition, Noteholders having exercised their put option may not be able to reinvest the moneys they receive upon such early redemption in securities with the same yield as the redeemed Notes. The Notes may not be protected by restrictive covenants and do not prevent the Issuer from incurring additional indebtedness The Terms and Conditions of the Notes only contain financial covenants (as set out in Condition 4). The Terms and Conditions of the Notes contain a negative pledge undertaking that prohibits the Issuer and its Material Subsidiaries (as defined in Condition 3) from creating security (sureté réelle) over its assets and revenues without securing equally and rateably the Notes, in certain circumstances and subject to certain exceptions. Subject to these covenants and negative pledge, the Issuer and its subsidiaries may incur significant additional debt that could be considered before or rank equally with the Notes. Accordingly, if the Issuer incurs significant additional debt ranking equally with the Notes, it will increase the number of claims that would be entitled to share rateably with Noteholders in any proceeds distributed in connection with an insolvency, bankruptcy or similar proceeding. No direct access to subsidiaries cash flows or assets The Issuer is a holding company. Noteholders will not have any direct claims on the cash flows or the assets of the Issuer s subsidiaries, and such subsidiaries have no obligation, contingent or otherwise, to pay amounts due under the Notes or to make funds available to the Issuer for these payments. Absence of Rating of the Notes and of the Issuer Credit rating may not reflect all risks Neither the Notes nor the long-term debt of the Issuer are rated. One or more independent credit rating agencies may assign credit ratings to the Notes on an unsolicited basis. The ratings of the Notes or of the long term debt of the Issuer may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Notes. A rating or the absence of a rating is not a recommendation to buy, sell or hold securities. 14

15 Change of law The Terms and Conditions of the Notes are based on the laws of France in effect as at the date of this Information Memorandum. No assurance can be given as to the impact of any possible judicial decision or change to the laws of France or administrative practice or the official application or interpretation of French law after the date of this Information Memorandum. Furthermore, the Issuer operates in a heavily regulated environment and has to comply with extensive regulations in France and elsewhere. No assurance can be given as to the impact of any possible judicial decision or change to laws or administrative practices after the date of this Information Memorandum. Modification and waiver The conditions of the Notes contain provisions for calling meetings of Noteholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Noteholders, including Noteholders who did not attend and vote at the relevant meeting, and Noteholders who voted in a manner contrary to the majority. French insolvency law Under French insolvency law, holders of debt securities are automatically grouped into a single assembly of holders (the Assembly ) in order to defend their common interests if a safeguard proceeding (procédure de sauvegarde), an accelerated safeguard proceeding (procédure de sauvegarde accélérée), an accelerated financial safeguard proceeding (procédure de sauvegarde financière accélérée) or a judicial reorganisation procedure (procédure de redressement judiciaire) is opened in France with respect to the Issuer. The Assembly comprises holders of all debt securities issued by the Issuer (including the Notes) regardless of their governing law. The Assembly deliberates on the draft safeguard plan (projet de plan de sauvegarde), draft accelerated safeguard plan (projet de plan de sauvegarde accélérée), draft accelerated financial safeguard plan (projet de plan de sauvegarde financière accélérée) or judicial reorganisation plan (projet de plan de redressement) applicable to the Issuer and may further agree to: increase the liabilities (charges) of holders of debt securities (including the Noteholders) by rescheduling due payments and/or partially or totally writing off receivables in form of debt securities; establish an unequal treatment between holders of debt securities (including the Noteholders) as appropriate under the circumstances; and/or decide to convert debt securities (including the Notes) into securities that give or may give right to share capital. Decisions of the Assembly will be taken by a two-thirds (⅔) majority (calculated as a proportion of the debt securities held by the holders expressing a vote). No quorum is required to convoke the Assembly. The procedures, as described above or as they will or may be amended, could have an adverse impact on holders of the Notes seeking repayment in the event that the Issuer or its subsidiaries were to become insolvent. For the avoidance of doubt, the provisions relating to the Representation of the Noteholders described in this Information Memorandum in Condition 10 (will not be applicable in these circumstances. Taxation Potential purchasers and sellers of the Notes should be aware that they may be required to pay taxes or documentary charges or duties in accordance with the laws and practices of the jurisdiction where the Notes 15

16 are transferred or other jurisdictions. In some jurisdictions, no official statements of the tax authorities or court decisions may be available for innovative financial instruments such as the Notes. Further, a Noteholder s effective yield on the Notes may be diminished by the tax impact on that Noteholder of its investment in the Notes. Potential investors are advised not to rely upon the tax summary contained in this Information Memorandum but to ask for their own tax adviser s advice on their individual taxation with respect to the subscription, acquisition, holding, disposal and redemption of the Notes. Only these advisers are in a position to duly consider the specific situation of each potential investor. EU Savings Directive Under Council Directive 2003/48/EC on the taxation of savings income in the form of interest payments (the Savings Directive ), EU Member States are required to provide to the tax authorities of other EU Member States details of certain payments of interest or similar income paid or secured by a person established in an EU Member State to or for the benefit of an individual resident in another EU Member State or certain limited types of entities established in another EU Member State. For a transitional period, Austria is instead required (unless during that period it elects otherwise) to operate a withholding system in relation to such payments (subject to a procedure whereby, on meeting certain conditions, the beneficial owner of the interest or other income may request that no tax be withheld). The end of the transitional period is dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries. A number of non-eu countries and territories including Switzerland have adopted similar measures (a withholding system in the case of Switzerland). On 24 March 2014, the Council of the European Union adopted a Council Directive (the Amending Directive ) amending and broadening the scope of the requirements described above. The Amending Directive requires EU Member States to apply these new requirements from 1 January 2017 and if they were to take effect the changes would expand the range of payments covered by the Savings Directive, in particular to include additional types of income payable on securities. They would also expand the circumstances in which payments must be reported or subject to withholding. This approach would apply to payments made to, or secured for, persons, entities or legal arrangements (including trusts) where certain conditions are satisfied, and may in some cases apply where the person, entity or arrangement is established or effectively managed outside of the European Union. However, the European Commission has proposed the repeal of the Savings Directive from 1 January 2017 in the case of Austria and from 1 January 2016 in the case of all other EU Member States (subject to on-going requirements to fulfil administrative obligations such as the reporting and exchange of information relating to, and accounting for withholding taxes on, payments made before those dates). This is to prevent overlap between the Savings Directive and a new automatic exchange of information regime to be implemented under Council Directive 2011/16/EU on Administrative Cooperation in the field of Taxation (as amended by Council Directive 2014/107/EU). The new regime under Council Directive 2011/16/EU (as amended) is in accordance with the Global Standard released by the Organisation for Economic Co-operation and Development in July Council Directive 2011/16/EU (as amended) is generally broader in scope than the Savings Directive, although it does not impose withholding taxes. The proposal also provides that, if it proceeds, EU Member States will not be required to apply the new requirements of the Amending Directive. If a payment were to be made or collected through an EU Member State which has opted for a withholding system and an amount of, or in respect of, tax were to be withheld from that payment, neither the Issuer nor any Paying Agent (as defined in the Conditions of the Notes) nor any other person would be obliged to pay additional amounts with respect to any Note as a result of the imposition of such withholding tax. The Issuer 16

17 is required to maintain a Paying Agent in an EU Member State that is not obliged to withhold or deduct tax pursuant to the Savings Directive. Financial transaction tax ( FTT ) On 14 February 2013, the European Commission published a proposal (the Commission s Proposal ) for a Directive for a common FTT in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the Participating Member States ). The Commission s Proposal has very broad scope and could, if introduced, apply to certain dealings in the Notes (including secondary market transactions) in certain circumstances. Under the Commission s Proposal the FTT could apply in certain circumstances to persons both within and outside of the participating Member States. Generally, it would apply to certain dealings in Notes where at least one party is a financial institution, and at least one party is established in a participating Member State. A financial institution may be, or be deemed to be, established in a Participating Member State in a broad range of circumstances, including (a) by transacting with a person established in a participating Member State or (b) where the financial instrument which is subject to the dealings is issued in a participating Member State. Joint statements issued by Participating Member States indicate an intention to implement the FTT by 1 January However, the FTT proposal remains subject to negotiation between the Participating Member States and the scope of any such tax is uncertain. Additional EU Member States may decide to participate. Prospective holders of Notes are advised to seek their own professional advice in relation to the FTT. Potential Conflicts of Interest The Sole Bookrunner and its affiliates have engaged, and may in the future engage in investment banking and/or commercial banking transactions with, and may perform services for, the Issuer and its affiliates in the ordinary course of business. In addition, in the ordinary course of their business activities, the Sole Bookrunner and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuer or Issuer s affiliates. The Sole Bookrunner and its affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. 17

18 TERMS AND CONDITIONS The terms and conditions of the Notes will be as follows: The issue of 65,000, per cent. Notes due 29 April 2022 (the Notes ) of Groupe Mécanique Découpage S.A. (the Issuer ) has been decided pursuant to the resolution of the Board of Directors (Conseil d administration) of the Issuer dated 29 October The Issuer will enter into a fiscal agency agreement (the Fiscal Agency Agreement ) dated 13 November 2015 with BNP Paribas Securities Services as fiscal agent, principal paying agent, calculation agent and put agent. The fiscal agent, paying agent, calculation agent and put agent for the time being are referred to in these Conditions as the Fiscal Agent, the Paying Agent, the Calculation Agent and the Put Agent, each of which expression shall include the successors from time to time of the relevant persons, in such capacities, under the Fiscal Agency Agreement, and are collectively referred to as the Agents. References to Conditions are, unless the context otherwise requires, to the numbered paragraphs below. In these Conditions, references to day or days are to calendar days unless the context otherwise specifies. 1 Form, Denomination and Title The Notes will be issued on 13 November 2015 (the Issue Date ) in dematerialised bearer form in the denomination of 100,000. Title to the Notes will be evidenced in accordance with Articles L and R of the French Code monétaire et financier by book-entries (inscription en compte). No physical document of title (including certificats représentatifs pursuant to Article R of the French Code monétaire et financier) will be issued in respect of the Notes. The Notes will, upon issue, be inscribed in the books of Euroclear France, which shall credit the accounts of the Account Holders. For the purpose of these Conditions, Account Holders shall mean any intermediary institution entitled to hold accounts, directly or indirectly, with Euroclear France, and includes Euroclear Bank S.A./N.V. ( Euroclear ) and the depositary bank for Clearstream Banking, société anonyme ( Clearstream, Luxembourg ). Title to the Notes shall be evidenced by entries in the books of Account Holders and will pass upon, and transfer of Notes may only be effected through, registration of the transfer in such books. 2 Status The obligations of the Issuer in respect of the Notes constitute direct, unconditional, unsubordinated and (subject to Condition 3) unsecured obligations and rank and will rank pari passu and without any preference among themselves and (subject to such exceptions as are from time to time mandatory under French law) equally and rateably with all other present or future unsecured and unsubordinated obligations of the Issuer. 3 Negative Pledge So long as any of the Notes remains outstanding (as defined below), the Issuer undertakes that it will not and will ensure that none of its Material Subsidiaries (as defined below) will create or permit to subsist any Security Interest (as defined below) upon the whole or any part of the Issuer s or any Material Subsidiary s present or future assets, business, property or revenues to secure any Relevant Debt (as defined below) unless at the same time or prior thereto the Notes are equally and rateably secured therewith, except: (i) any Security Interest in existence as at the Issue Date; 18

19 (ii) (iii) (iv) (v) (vi) (vii) any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances; any lien arising by operation of law and in the ordinary course of business; any Security Interest or lien arising in respect of taxes or imposed by law or state authorities, which are being contested in good faith by appropriate proceedings; any Security Interest over or affecting any asset acquired by a member of the Group after the Issue Date, if (i) the Security Interest is created in order to secure the financing of the acquisition of that asset by a member of the Group and (ii) the Security Interest has been released within one hundred and twenty (120) days from the date of such acquisition; any Security Interest over or affecting any asset of any entity which becomes a member of the Group after the Issue Date if (i) the Security Interest is created prior to the date on which that entity becomes a member of the Group and (ii) the Security Interest has been released within one hundred and eighty (180) days from the date such entity becomes a member of the Group; any Security Interest in relation to the Factoring Programme (as defined below); (viii) any Security Interest in relation to a trade receivables securitisation programme; (ix) (x) any Security Interest arising under a financial lease, to the extent such financial lease is deemed to create a Security Interest under the applicable law; any Security Interest, other than those permitted under paragraphs (i) to (ix) above, securing Relevant Debt of the Issuer or any of its Material Subsidiaries the principal amount of which, when aggregated to the principal amount of any other Relevant Debt secured by any other Security Interest (other than those permitted under paragraphs (i) to (ix) above) granted by the Issuer or any of its Material Subsidiary does not exceed, at any time, 2.5 per cent. of the Consolidated Assets. For the purposes of these Conditions: Consolidated Assets means the net value of total assets (actif total) as referred to in the most recent audited annual consolidated financial statements of the Issuer. EBE (excédent brut d exploitation) means on a consolidated basis, in respect of the Relevant Period, the operating incomes (produits d exploitation) less the sum of: (i) (ii) the purchases of goods (achat de marchandises); the inventory changes (variation de stock marchandises); (iii) purchase of raw materials and other supplies (achats matières premières et autres approvisionnements); (iv) (v) (vi) (vii) inventory changes in raw materials and supplies (variation de stock matières premières et approvisionnement); other purchases and external expenses (autres achats et charges extérieures); taxes, duties and similar payments (impôts, taxes et versements assimilés); wages and salaries (salaires et traitements); and (viii) social security charges (charges sociales). 19

20 Factoring Programmes means any programme for the assignment of receivables (cession de créances) by the Issuer or any of its Subsidiaries for a maximum amount representing three (3) months of the latest annual consolidated turnover (the Threshold ) at any time, it being specified that the amounts collected under any factoring programme by the Subsidiaries consolidated by the proportionate consolidation method will only be taken into account, for the Threshold determination, up to the consolidation rate of the relevant consolidated Subsidiaries. Group means the Issuer and its fully consolidated Subsidiaries taken as a whole. Material Subsidiary means any Subsidiary of the Issuer which at any time accounts for: (i) 5 per cent. or more of the consolidated turnover of the Issuer; (ii) 5 per cent. or more of the consolidated total assets; or (iii) 5 per cent. or more of EBE, as calculated by reference to the Issuer s latest audited consolidated annual financial statements and the relevant Subsidiary s latest annual audited consolidated or unconsolidated (if consolidated accounts are not prepared in relation to such subsidiary) annual audited financial statements. outstanding means, in relation to the Notes, all the Notes issued other than: (a) those which have been redeemed in accordance with the Conditions, (b) those in respect of which the date for redemption in accordance with the Conditions has occurred and the redemption moneys (including all interest accrued on such Note to the date for such redemption and any interest payable under Condition 5 after such date) have been duly paid to the Paying Agent and (c) those which have been purchased and cancelled as provided in Condition 6. Relevant Debt means any present or future indebtedness for borrowed money which is in the form of, or represented by: (i) (ii) (iii) (iv) (v) (vi) (vii) bond issues (emprunts obligataires); convertible bond issues (emprunts obligataires convertibles); borrowings and debt with credit institutions (emprunts et dettes auprès d établissements de crédit); bank overdraft (concours bancaires courants); other loans, borrowings and leasing agreements (autres emprunts et dettes financières divers et contrats de location ou de credit-bail qualifiés de location financière par les principes comptables appliqués par le groupe GMD (les investissements inférieurs à euros n étant pas retraités)); recourse and non-recourse factoring programmes (affacturage avec ou sans recours); trade receivables securitisation programme. Relevant Period means each twelve months period ending on 31 December in each year or on 30 June in each year. Security Interest means mortgage, lien, charge, pledge or other form of security interest (sûreté réelle) including, without limitation, anything analogous to any of the foregoing under the laws of any jurisdiction. Subsidiary means in relation to any person or entity at any time, any other person or entity (whether or not now existing) controlled directly or indirectly by such person or entity within the meaning of Article L of the French Code de commerce. 20

21 4 Financial Covenants, Information Undertakings and Adjustment of Interest Rate 4.1 Financial Covenants So long as any of the Notes is outstanding, the Issuer shall procure that: (i) the Leverage Ratio shall be lower than 2.5 as at 31 December in each year 1 and lower than 3.0 as at 30 June in each year; and (ii) the Gearing Ratio shall be lower than 1.2 as at 31 December in each year 2 and lower than 1.5 as at 30 June in each year. The Leverage Ratio and the Gearing Ratio are, together, the Financial Covenants. If the Leverage Ratio is equal to or above 2.5 as at 31 December in each year or if the Gearing Ratio is equal to or above to 1.2 as at 31 December in each year, the rate of interest will be adjusted as provided in Condition 4.3 below. If the Leverage Ratio is equal to or above 3.0 as at 30 June and/or 31 December or if the Gearing Ratio is equal to or above 1.5 as at 30 June and/or 31 December, there will be an early redemption at the option of the Noteholders as described in Condition 6(e) below. For the avoidance of doubt and for the purposes of this Condition, the terms used below and in the EBE definition in French language refer to the corresponding terms as used in the annual audited consolidated financial statements of the Issuer as they appear in the audited consolidated accounts as at 31 December The Financial Covenants will be calculated pursuant to the accounting standards applicable as at the Issue Date and by reference to the latest annual audited consolidated financial statements of the Issuer and to the latest unaudited interim consolidated financial statements on a twelve (12) months rolling basis. In the event of a change in such accounting standards, the consolidated financial statement of the Issuer will be adjusted to calculate such Financial Covenants on the basis of the accounting standards applicable at the Issue Date. For the purposes of this Condition: Leverage Ratio means the ratio of Net Financial Debt to EBE (as defined in Condition 3). Gearing Ratio means the ratio of Net Financial Debt to Group s Equity. Group s Equity means, in respect of the Relevant Period, the Group s equity (capitaux propres groupe), referred to in the annual consolidated accounts of the Issuer. Group means the Issuer and its consolidated Subsidiaries taken as a whole. Net Financial Debt means, in respect of the Relevant Period, the sum of: (i) (ii) (iii) (iv) bond issues (emprunts obligataires); convertible bond issues (emprunts obligataires convertibles); borrowings and debt with credit institutions (emprunts et dettes auprès d établissements de crédit); bank overdraft (concours bancaires courants); 1 2 For information purposes only, the Leverage Ratio was equal to as at 31 December 2014 and to as at 31 December For information purposes only, the Gearing Ratio was equal to as at 31 December 2014 and to as at 31 December

22 (v) (vi) other loans, borrowings and leasing agreements (autres emprunts et dettes financières divers et contrats de location ou de credit-bail qualifiés de location financière par les principes comptables appliqués par le groupe GMD (les investissements inférieurs à euros n étant pas retraités); recourse factoring programs (affacturage avec recours). less the sum of: (i) marketable securities (valeurs mobillières de placement); and (ii) cash items (disponibilités). 4.2 Information Undertakings So long as any of the Notes is outstanding, the Issuer shall deliver to the Fiscal Agent which will in turn promptly notify the Noteholders in accordance with Condition 11 at the date of publication of its latest annual consolidated financial statements, and no later than one hundred and eighty (180) days after the end of each financial year, a certificate signed by an authorised representative of the Issuer and by the statutory auditors of the Issuer stating that the Financial Covenants are complied with or not (the Annual Certificate ). So long as any of the Notes is outstanding, the Issuer shall deliver to the Fiscal Agent which will in turn promptly notify the Noteholders in accordance with Condition 11 no later than one hundred and twenty (120) days after the end of each financial semester, a certificate signed by an authorised representative of the Issuer stating that the Financial Covenants are complied with or not (the Semestrial Certificate ). So long as any of the Notes is outstanding, the Issuer shall supply to the Fiscal Agent and publish within one hundred and eighty (180) days after the end of each of its financial year, the audited consolidated financial statements for that financial year and of the audit reports thereon. Furthermore, so long as any of the Notes is outstanding, the Issuer shall provide to the Noteholders: (i) within one hundred and twenty (120) days after the end of each semester, the interim consolidated financial statement (not being the subject of any review from the statutory auditors of the Issuer); (ii) within forty-five (45) days after the end of each quarter (the first quarter commencing on 1 January 2016 and ending on March 2016), a quarterly reporting (including sales, gross margin, EBITDA (as defined in section Description of the Issuer General above), the position of gross debt, cash and amount in relation to the factoring programmes, budget and the same figures for the corresponding quarter of the preceding year); and (iii) within one hundred and eighty (180) days after the end of each financial year, a list of all existing Security Interests (as defined in Condition 3) as at 31 December and a list of all new Security Interests created during such financial year (these lists having been reviewed by the statutory auditors of the Issuer). So long as any of the Notes is outstanding, the Issuer shall deliver to the Representative before the completion of an External Growth Transaction, an executive summary describing such contemplated External Growth Transaction, including, but not limited to, a description of the Target, its prospects, its business plan and the financing plan of such acquisition by the Issuer, together with (a) a copy of the consolidated and/or nonconsolidated accounts (if any) of the Target or pro-forma statements of the Target (where the Target is a business) and (b) a copy of the audit reports prepared (if any) for the contemplated External Growth Transaction. So long as any of the Notes is outstanding, the Issuer undertakes, upon request of any Noteholder, to organise once a year a Noteholders meeting in order to inform the Noteholders of the financial condition, the annual 22

23 budget and the business of the Issuer. For the avoidance of doubt, such annual meeting will not constitute a general assembly of Noteholders as described in Condition 10. For the purposes of this Condition: External Growth Transaction shall mean an acquisition of a Target for an enterprise value (valeur d entreprise) of at least 15,000,000. Target shall mean the company, entity or the business that the Issuer intends to acquire. 4.3 Adjustment of Interest Rate The Rate of Interest (as defined in Condition 5) payable on the Notes is subject to adjustment in accordance with the Interest Ratchet in the event of a Step Up Event or a Step Down Event (each such adjustment a Rate Adjustment ). Any Rate Adjustment shall apply for the Interest Period (as defined in Condition 5) in which the relevant Step Up Event or the relevant Step Down Event occurs. The Issuer shall forthwith give notice to the Fiscal Agent of such Interest Ratchet and shall notify the Noteholders thereof as soon as practicable in accordance with Condition 11. Where: A Step Up Event shall have occurred when (i) the Leverage Ratio is equal to or higher than 2.5 as at 31 December or (ii) the Gearing Ratio is equal to or higher than 1.2 as at 31 December as at the date of publication of the Annual Certificate. Step Down Event means, where the Rate of Interest has previously been subject to an increase following a Step Up Event, the compliance by the Issuer with all its Financial Covenants as at the date of publication of the Annual Certificate. Initial Rate of Interest means 4.50 per cent. per annum. Interest Ratchet means: (a) (b) upon the occurrence of a Step Up Event: the Initial Rate of Interest plus 1.25 per cent. per annum; and upon the occurrence of a Step Down Event following the previous occurrence of a Step Up Event as referred to in (a) above: the Initial Rate of Interest. 5 Interest The Notes bear interest at the rate of 4.50 per cent. per annum (the Rate of Interest ) from and including the Issue Date payable annually in arrears on 29 April in each year (each, an Interest Payment Date ), commencing on 29 April There will be a first short coupon in respect of the period, from and including, the Issue Date to, but excluding, 29 April The period commencing on, and including, the Issue Date and ending on, but excluding, the first Interest Payment Date and each successive period commencing on, and including, an Interest Payment Date and ending on, but excluding, the next succeeding Interest Payment Date is called an Interest Period. Notes will cease to bear interest from the date provided for their redemption, unless the Issuer defaults in making due provision for their redemption on said date. In such event, the Notes will continue to bear interest in accordance with this Condition (as well after as before judgment) on the principal amount of such Notes until whichever is the earlier of (i) the day on which all sums due in respect of such Notes up to that day are received by or on behalf of the relevant holder and (ii) the day after the Fiscal Agent has notified the holders 23

24 of the Notes (the Noteholders ) in accordance with Condition 11 of receipt of all sums due in respect of all the Notes up to that day. Interest will be calculated on an Actual/Actual (ICMA) basis. Where interest is to be calculated in respect of a period of less than one year, it shall be calculated on the basis of the number of days elapsed in the relevant period, from and including the date from which interest begins to accrue to but excluding the date on which it falls due, divided by the number of days in such period in which the relevant period falls (including the first but excluding the last day of such period). Where interest is to be calculated in respect of a period which is more than one year, such interest shall be the aggregate of the interest payable in respect of a full year plus the interest payable in respect of the remaining period calculated in the manner as aforesaid. 6 Redemption and Purchase The Notes may not be redeemed otherwise than in accordance with this Condition 6 and Condition 9. (a) Final Redemption Unless previously redeemed or purchased and cancelled as provided below, the Notes will be redeemed by the Issuer in full at their principal amount on 29 April 2022 (the Maturity Date ). (b) Redemption for Taxation Reasons (i) (ii) If, by reason of a change in French law or regulation, or any change in the official application or interpretation of such law, becoming effective after the Issue Date, the Issuer would on the occasion of the next payment due in respect of the Notes, not be able to make such payment without having to pay Additional Amounts as specified in Condition 8 below, and provided that such obligation cannot be avoided by the Issuer taking reasonable measures available to it, the Issuer may on any Interest Payment Date, subject to having given not more than sixty (60) nor less than thirty (30) days prior notice to the Noteholders (which notice shall be irrevocable), in accordance with Condition 11, redeem all, but not some only, of the outstanding Notes at their principal amount plus any interest accrued to the date fixed for redemption provided that the due date for redemption of which notice hereunder may be given shall be no earlier than the latest practicable Interest Payment Date on which the Issuer could make payment of principal and interest without withholding or deduction for French taxes. If the Issuer would on the occasion of the next payment in respect of the Notes be prevented by French law from making payment to the Noteholders of the full amount then due and payable, notwithstanding the undertaking to pay Additional Amounts contained in Condition 8, and provided that this cannot be avoided by the Issuer taking reasonable measures available to it, then the Issuer shall forthwith give notice of such fact to the Fiscal Agent and the Issuer shall upon giving not less than seven (7) days prior notice to the Noteholders in accordance with Condition 11 redeem all, but not some only, of the Notes then outstanding at their principal amount plus any accrued interest on the latest practicable date on which the Issuer could make payment of the full amount payable in respect of the Notes without withholding or deduction for French taxes, or, if such date is past, as soon as practicable thereafter. (c) Redemption at the option of the Issuer The Issuer may, subject to compliance with all relevant laws, regulations and directives and to having given not more than sixty (60) nor less than thirty (30) days irrevocable notice to the Noteholders in accordance with Condition 11, redeem the Notes (in whole or in part) at any time prior to their 24

25 Maturity Date (the Make-whole Redemption Date ) at an amount per Note calculated by the Calculation Agent and equal to the greater of: (i) (ii) 100 per cent. of the principal amount of the Note; or the sum of the then current values of the remaining scheduled payments of principal and interest (not including any interest accrued on the Note to, but excluding, the Make-whole Redemption Date) discounted to the Make-whole Redemption Date on an annual basis (based on the actual number of days elapsed divided by 365 or (in the case of a leap year) by 366) at the Reference Rate (as defined below) plus 0.64 per cent., plus, in each case (a) or (b) above, any interest accrued on the Note to, but excluding, the Make-whole Redemption Date. The Reference Rate will be published by the Issuer in accordance with Condition 11. The Reference Rate is the average of the four quotations given by the Relevant Dealers of the midmarket annual yield of the Reference OAT on the fourth business day (as defined in Condition 7(b) in Paris preceding the Make-whole Redemption Date at a.m. (Central European Time ( CET )). If the Reference OAT is no longer outstanding, a Similar Security will be chosen by the Calculation Agent at a.m. (CET) on the third business day in Paris preceding the Make-whole Redemption Date, quoted in writing by the Calculation Agent in accordance with Condition 11. Where: Reference Dealers means each of the four banks (that may include the Sole Bookrunner) selected by the Calculation Agent which are primary European government security dealers, and their respective successors, or market makers in pricing corporate bond issues. Reference OAT means the French government bond (obligations assimilables du Trésor, OAT) due 25 April 2022, with ISIN FR Similar Security means a reference bond or reference bonds issued by the French government having an actual or interpolated maturity comparable with the remaining term of the Notes that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. The Issuer will procure that, so long as any Note is outstanding, there shall at all times be a Calculation Agent for the purposes of the Notes. If the Calculation Agent is unable or unwilling to continue to act as the Calculation Agent or if the Calculation Agent fails duly to establish the amount due in relation to this Condition 6(c), the Issuer shall appoint some other leading bank engaged in the Euro interbank market (acting through its principal Euro-zone office) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been so appointed. All notifications, opinions, determinations, certifications, calculations, quotations and decisions given, expressed, made or obtained for the purposes of this Condition 6(c) by the Calculation Agent shall (in the absence manifest error) be binding on the Issuer and the Noteholders and (in the absence as aforesaid) no liability to the Issuer or the Noteholders shall attach to the Calculation Agent in connection with the exercise or non-exercise of its powers, duties and discretions. In the case of a partial redemption, the redemption may be effected, at the option of the Issuer, either (i) by reducing the nominal amount of all such Notes in proportion to the aggregate nominal amount redeemed or (ii) by redeeming in full only part of such Notes and, in such latter case, the choice 25

26 between those Notes that will be fully redeemed and those Notes that will not be redeemed shall be made in accordance with Article R of the French Code monétaire et financier, subject, in each case, to compliance with any applicable laws and stock exchange requirements. (d) Redemption at the option of Noteholders following a Change of Control If at any time while any Note remains outstanding, there occurs a Change of Control (as defined below) (a Put Event ), the Noteholder will have the option (the Put Option ) (unless, prior to the giving of the Put Event Notice (as defined below), the Issuer gives notice to redeem the Notes under Condition 6(b), 6(c) or 6(h)) to require the Issuer to redeem or, at the Issuer s option, to procure the purchase of, all or part of its Notes, on the Optional Redemption Date (as defined below) at the principal amount outstanding of such Notes together with (or where purchased, together with an amount equal to) interest accrued to, but excluding, the Optional Redemption Date. A Change of Control shall be deemed to have occurred each time that (i) any person or persons acting in concert (other than a Permitted Holder) come(s) to legally or beneficially own or acquire(s) directly or indirectly such number of shares in the capital of the Issuer carrying more than 50 per cent. of the voting rights exercisable at a general meeting of the Issuer or (ii) the Permitted Holders, considered together, no longer own, directly or indirectly, 51 per cent. or more of the shares and voting rights exercisable at a general meeting of the Issuer. For the purpose of this definition, acting in concert has the meaning given in article L of the French Code de commerce. Permitted Holder means Mr Alain Martineau and/or any of its heirs, successors and/or beneficiaries. Promptly upon the Issuer becoming aware that a Put Event has occurred, the Issuer shall give notice (a Put Event Notice ) to the Noteholders in accordance with Condition 11 specifying the nature of the Put Event and the circumstances giving rise to it and the procedure for exercising the Put Option contained in this Condition 6(d). To exercise the Put Option to require redemption, or, as the case may be, purchase of the Notes under this Condition 6(d), a Noteholder must transfer or cause to be transferred its Notes to be so redeemed to the account of the Put Agent specified in the Put Option Notice (as defined below) for the account of the Issuer within the period (the Put Period ) of forty-five (45) days after a Put Event Notice is given together with a duly signed and completed notice of exercise in the then current form obtainable from the Put Agent (a Put Option Notice ) and in which the Noteholder may specify a bank account to which payment is to be made under this Condition 6(d). A Put Option Notice once given shall be irrevocable. The Issuer shall redeem or, at the option of the Issuer procure the purchase of, the Notes in respect of which the Put Option has been validly exercised as provided above, and subject to the transfer of such Notes to the account of the Put Agent for the account of the Issuer as described above on the date which is the fifth Business Day following the end of the Put Period (the Optional Redemption Date ). Payment in respect of such Notes will be made on the Optional Redemption Date by transfer to the bank account specified in the Put Option Notice and otherwise subject to the provisions of Condition 7. For the avoidance of doubt, the Issuer shall have no responsibility for any cost or loss of whatever kind (including breakage costs) which the Noteholder may incur as a result of or in connection with such Noteholder s exercise or purported exercise of, or otherwise in connection with, any Put Option (whether as a result of any purchase or redemption arising therefrom or otherwise). 26

27 (e) Redemption at the option of Noteholders following a breach of a Financial Covenant If at any time while any Note remains outstanding, (i) the Leverage Ratio is equal to or above 3.0 or (ii) the Gearing Ratio is equal to or above 1.5, each Noteholder will have the option (the Financial Covenants Put Option ), (unless, prior to the giving of the Financial Covenants Put Option Notice, the Issuer gives notice to redeem the Notes under Condition 6(b), 6(c) or 6(j)) to require the Issuer to redeem or, at the Issuer s option, to procure the purchase of, all or part of its Notes, on the Financial Covenants Optional Redemption Date (as defined below) at the principal amount outstanding of such Notes together with (or where purchased, together with an amount equal to) interest accrued, to but excluding, the Financial Covenants Optional Redemption Date. To exercise the Financial Covenants Put Option, a Noteholder must transfer or cause to be transferred its Notes to be so redeemed to the account of the Put Agent specified in the Financial Covenants Put Option Notice (as defined below) for the account of the Issuer within the period (the Financial Covenants Put Period ) of forty-five (45) days after the notification to the Noteholders of the Annual Certificate or the Semestrial Certificate in accordance with Conditions 4.1 and 11 stating that the Issuer does not comply with any of the Financial Covenants together with a duly signed and completed notice of exercise in the then current form obtainable from the Put Agent (a Financial Covenants Put Option Notice ) and in which the Noteholder may specify a bank account to which payment is to be made under this Condition 6(e). A Financial Covenants Put Option Notice once given shall be irrevocable. The Issuer shall redeem or, at the option of the Issuer procure the purchase of, the Notes in respect of which the Financial Covenants Put Option has been validly exercised as provided above, and subject to the transfer of such Notes to the account of the Put Agent for the account of the Issuer as described above on the date which is the fifth Business Day following the end of the Financial Covenants Put Period (the Financial Covenants Optional Redemption Date ). Payment in respect of such Notes will be made on the Financial Covenants Optional Redemption Date by transfer to the bank account specified in the Financial Covenants Put Option Notice and otherwise subject to the provisions of Condition 7. For the avoidance of doubt, the Issuer shall have no responsibility for any cost or loss of whatever kind (including breakage costs) which the Noteholder may incur as a result of or in connection with such Noteholder s exercise or purported exercise of, or otherwise in connection with, any Financial Covenants Put Option (whether as a result of any purchase or redemption arising therefrom or otherwise). (f) Redemption at the option of Noteholders following a substantial disposal of the Issuer s business If at any time while any Note remains outstanding, the Issuer or any Material Subsidiary ceases to carry on substantially all of its business or disposes of substantially all of its business except (i) in connection with any form of reorganisation pursuant to which the surviving entity shall be the transferee of or successor to substantially all of the business of the Issuer or any Material Subsidiary and assumes all of the obligations of the Issuer with respect to the Notes or (ii) on such other terms approved by a resolution of the General Meeting of Noteholders, (the Substantial Disposal Put Event ), any Noteholder will have the option (the Substantial Disposal Put Option ) (unless, prior to the giving of the Substantial Disposal Put Event Notice (as defined below), the Issuer gives notice to redeem the Notes under Condition 6(b), 6(c) or 6(j)) to require the Issuer to redeem or, at the Issuer s option, to procure the purchase of, all or part of its Notes, on the Substantial Disposal Optional Redemption Date (as defined below) at the principal amount outstanding of such Notes together with (or where purchased, together with an amount equal to) interest accrued to, but excluding, the Substantial Disposal Optional Redemption Date. 27

28 Promptly upon the Issuer becoming aware that a Substantial Disposal Put Event has occurred, the Issuer shall give notice (a Substantial Disposal Put Event Notice ) to the Noteholders in accordance with Condition 11 specifying the nature of the Substantial Disposal Put Event and the circumstances giving rise to it and the procedure for exercising the Substantial Disposal Put Option contained in this Condition 6(f). To exercise the Substantial Disposal Put Option to require redemption, or, as the case may be, purchase of the Notes under this Condition 6(f), a Noteholder must transfer or cause to be transferred its Notes to be so redeemed to the account of the Put Agent specified in the Substantial Disposal Put Option Notice (as defined below) for the account of the Issuer within the period (the Substantial Disposal Put Period ) of forty-five (45) days after a Substantial Disposal Put Event Notice is given together with a duly signed and completed notice of exercise in the then current form obtainable from the Put Agent (a Substantial Disposal Put Option Notice ) and in which the Noteholder may specify a bank account to which payment is to be made under this Condition 6(f). A Substantial Disposal Put Option Notice once given shall be irrevocable. The Issuer shall redeem or, at the option of the Issuer procure the purchase of, the Notes in respect of which the Substantial Disposal Put Option has been validly exercised as provided above, and subject to the transfer of such Notes to the account of the Put Agent for the account of the Issuer as described above on the date which is the fifth Business Day following the end of the Substantial Disposal Put Period (the Substantial Disposal Optional Redemption Date ). Payment in respect of such Notes will be made on the Substantial Disposal Optional Redemption Date by transfer to the bank account specified in the Substantial Disposal Put Option Notice and otherwise subject to the provisions of Condition 7. For the avoidance of doubt, the Issuer shall have no responsibility for any cost or loss of whatever kind (including breakage costs) which the Noteholder may incur as a result of or in connection with such Noteholder s exercise or purported exercise of, or otherwise in connection with, any Substantial Disposal Put Option (whether as a result of any purchase or redemption arising therefrom or otherwise). For the purpose of this Condition 6(f), substantially all of its business shall mean a cessation or a disposal of a business representing at least (i) 5 per cent. of the latest EBE (as defined in Condition 3) and (ii) 20 per cent. of the EBE aggregated since the Issue Date. (g) Redemption at the option of Noteholders following a dividend payment by the Issuer Any Noteholder will have the benefit of an early redemption option, if at any time while any Note remains outstanding, the Issuer pays dividends to any of its shareholders unless: (a) (b) the Leverage Ratio (as defined in Condition 4) is lower than 2.0 when calculated as at (x) the last 31 December preceding the dividend payment and (y) the day after the payment of such amount of dividends (i.e.: calculated as at the last 31 December but taking into account the amount of dividends paid) and the total amount of dividends paid does not exceed: (i) (ii) if the dividend payment occurs at any time before 1 January 2017, 30 per cent. of the annual consolidated net result for the financial year ending 31 December 2015, if the dividend payment occurs at any time between 1 January 2017 (included) and 1 January 2018 (excluded), 30 per cent. of the aggregated consolidated net results for the financial years ending 31 December 2015 and 31 December 2016, or 28

29 (iii) if the dividend payment occurs at any time on or after 1 January 2018, 30 per cent. of the aggregated consolidated net results for the last three (3) financial years preceding the dividend payment (the Dividend Payment Put Event ). In such event, any Noteholder will have the option (the Dividend Payment Put Option ) (unless, prior to the giving of the Put Event Notice (as defined below), the Issuer gives notice to redeem the Notes under Condition 6(b), 6(c) or 6(j)) to require the Issuer to redeem or, at the Issuer s option, to procure the purchase of, all or part of its Notes, on the Dividend Payment Optional Redemption Date (as defined below) at the principal amount outstanding of such Notes together with (or where purchased, together with an amount equal to) interest accrued to, but excluding, the Dividend Payment Optional Redemption Date. Promptly upon the Issuer becoming aware that a Dividend Payment Put Event has occurred, the Issuer shall give notice (a Dividend Payment Put Event Notice ) to the Noteholders in accordance with Condition 11 specifying the nature of the Dividend Payment Put Event and the circumstances giving rise to it and the procedure for exercising the Dividend Payment Put Option contained in this Condition 6(g). To exercise the Dividend Payment Put Option to require redemption, or, as the case may be, purchase of the Notes under this Condition 6(g), a Noteholder must transfer or cause to be transferred its Notes to be so redeemed to the account of the Put Agent specified in the Dividend Payment Put Option Notice (as defined below) for the account of the Issuer within the period (the Dividend Payment Put Period ) of forty-five (45) days after a Dividend Payment Put Event Notice is given together with a duly signed and completed notice of exercise in the then current form obtainable from the Dividend Payment Put Agent (a Dividend Payment Put Option Notice ) and in which the Noteholder may specify a bank account to which payment is to be made under this Condition 6(g). A Dividend Payment Put Option Notice once given shall be irrevocable. The Issuer shall redeem or, at the option of the Issuer procure the purchase of, the Notes in respect of which the Dividend Payment Put Option has been validly exercised as provided above, and subject to the transfer of such Notes to the account of the Put Agent for the account of the Issuer as described above on the date which is the fifth Business Day following the end of the Dividend Payment Put Period (the Dividend Payment Optional Redemption Date ). Payment in respect of such Notes will be made on the Dividend Payment Optional Redemption Date by transfer to the bank account specified in the Dividend Payment Put Option Notice and otherwise subject to the provisions of Condition 7. For the avoidance of doubt, the Issuer shall have no responsibility for any cost or loss of whatever kind (including breakage costs) which the Noteholder may incur as a result of or in connection with such Noteholder s exercise or purported exercise of, or otherwise in connection with, any Dividend Payment Put Option (whether as a result of any purchase or redemption arising therefrom or otherwise). (h) Redemption at the option of Noteholders following an annual acquisition event by the Issuer If at any time while any Note remains outstanding, the Issuer acquires one or several companies or businesses for an aggregate enterprise value (valeur d entreprise) of at least 50,000,000 during a financial year (the Annual Acquisition Put Event ), any Noteholder will have the option (the Annual Acquisition Put Option ) (unless, prior to the giving of the Annual Acquisition Put Event Notice (as defined below), the Issuer gives notice to redeem the Notes under Condition 6(b), 6(c) or 6(j)) to require the Issuer to redeem or, at the Issuer s option, to procure the purchase of, all or part of 29

30 its Notes, on the Annual Acquisition Optional Redemption Date (as defined below) at the principal amount outstanding of such Notes together with (or where purchased, together with an amount equal to) interest accrued to, but excluding, the Annual Acquisition Optional Redemption Date. Promptly upon the Issuer becoming aware that an Annual Acquisition Put Event has occurred, the Issuer shall give notice (a Annual Acquisition Put Event Notice ) to the Noteholders in accordance with Condition 11 specifying the nature of the Annual Acquisition Put Event and the circumstances giving rise to it and the procedure for exercising the Annual Acquisition Put Option contained in this Condition 6(h). To exercise the Annual Acquisition Put Option to require redemption, or, as the case may be, purchase of the Notes under this Condition 6(h), a Noteholder must transfer or cause to be transferred its Notes to be so redeemed to the account of the Put Agent specified in the Annual Acquisition Put Option Notice (as defined below) for the account of the Issuer within the period (the Annual Acquisition Put Period ) of forty-five (45) days after an Annual Acquisition Put Event Notice is given together with a duly signed and completed notice of exercise in the then current form obtainable from the Annual Acquisition Put Agent (an Annual Acquisition Put Option Notice ) and in which the Noteholder may specify a bank account to which payment is to be made under this Condition 6(h). An Annual Acquisition Put Option Notice once given shall be irrevocable. The Issuer shall redeem or, at the option of the Issuer procure the purchase of, the Notes in respect of which the Annual Acquisition Put Option has been validly exercised as provided above, and subject to the transfer of such Notes to the account of the Put Agent for the account of the Issuer as described above on the date which is the fifth Business Day following the end of the Annual Acquisition Put Period (the Annual Acquisition Optional Redemption Date ). Payment in respect of such Notes will be made on the Annual Acquisition Optional Redemption Date by transfer to the bank account specified in the Annual Acquisition Put Option Notice and otherwise subject to the provisions of Condition 7. For the avoidance of doubt, the Issuer shall have no responsibility for any cost or loss of whatever kind (including breakage costs) which the Noteholder may incur as a result of or in connection with such Noteholder s exercise or purported exercise of, or otherwise in connection with, any Annual Acquisition Put Option (whether as a result of any purchase or redemption arising therefrom or otherwise). (i) Redemption at the option of Noteholders following a pluriannual acquisition event by the Issuer If at any time while any Note remains outstanding, the Issuer acquires one or several companies or businesses for an aggregate enterprise value (valeur d entreprise) of at least 150,000,000 since the Issue Date, (the Pluriannual Acquisition Put Event ), any Noteholder will have the option (the Pluriannual Acquisition Put Option ) (unless, prior to the giving of the Pluriannual Acquisition Put Event Notice (as defined below), the Issuer gives notice to redeem the Notes under Condition 6(b), 6(c) or 6(j)) to require the Issuer to redeem or, at the Issuer s option, to procure the purchase of, all or part of its Notes, on the Pluriannual Acquisition Optional Redemption Date (as defined below) at the principal amount outstanding of such Notes together with (or where purchased, together with an amount equal to) interest accrued to, but excluding, the Pluriannual Acquisition Optional Redemption Date. Promptly upon the Issuer becoming aware that a Pluriannual Acquisition Put Event has occurred, the Issuer shall give notice (a Pluriannual Acquisition Put Event Notice ) to the Noteholders in accordance with Condition 11 specifying the nature of the Pluriannual Acquisition Put Event and the 30

31 circumstances giving rise to it and the procedure for exercising the Pluriannual Acquisition Put Option contained in this Condition 6(h). To exercise the Pluriannual Acquisition Put Option to require redemption, or, as the case may be, purchase of the Notes under this Condition 6(h), a Noteholder must transfer or cause to be transferred its Notes to be so redeemed to the account of the Put Agent specified in the Pluriannual Acquisition Put Option Notice (as defined below) for the account of the Issuer within the period (the Pluriannual Acquisition Put Period ) of forty-five (45) days after a Pluriannual Acquisition Put Event Notice is given together with a duly signed and completed notice of exercise in the then current form obtainable from the Pluriannual Acquisition Put Agent (a Pluriannual Acquisition Put Option Notice ) and in which the Noteholder may specify a bank account to which payment is to be made under this Condition 6(h). A Pluriannual Acquisition Put Option Notice once given shall be irrevocable. The Issuer shall redeem or, at the option of the Issuer procure the purchase of, the Notes in respect of which the Pluriannual Acquisition Put Option has been validly exercised as provided above, and subject to the transfer of such Notes to the account of the Put Agent for the account of the Issuer as described above on the date which is the fifth Business Day following the end of the Pluriannual Acquisition Put Period (the Pluriannual Acquisition Optional Redemption Date ). Payment in respect of such Notes will be made on the Pluriannual Acquisition Optional Redemption Date by transfer to the bank account specified in the Pluriannual Acquisition Put Option Notice and otherwise subject to the provisions of Condition 7. For the avoidance of doubt, the Issuer shall have no responsibility for any cost or loss of whatever kind (including breakage costs) which the Noteholder may incur as a result of or in connection with such Noteholder s exercise or purported exercise of, or otherwise in connection with, any Pluriannual Acquisition Put Option (whether as a result of any purchase or redemption arising therefrom or otherwise). (j) Residual Maturity Call Option The Issuer may, on giving not less than thirty (30) nor more than sixty (60) days irrevocable notice to the Noteholders in accordance with Condition 11 redeem, at any time or from time to time, as from 31 January 2022, until the Maturity Date, the Notes, all but not some only, at par together with interest accrued to, but excluding, the date fixed for redemption. All Notes in respect of which any such notice is given shall be redeemed on the date specified in such notice in accordance with this Condition. (k) Purchases The Issuer may at any time purchase Notes together with rights to interest relating thereto in the open market or otherwise at any price in accordance with applicable laws and regulations. Notes so purchased by the Issuer may be held and resold in accordance with Articles L A and D A of the French Code monétaire et financier for the purpose of enhancing the liquidity of the Notes. (l) Cancellation All Notes which are redeemed pursuant to Conditions 6 or purchased for cancellation will forthwith be cancelled and accordingly may not be reissued or sold. 31

32 7 Payments (a) Method of Payment Payments of principal and interest in respect of the Notes will be made in Euro by credit or transfer to a Euro-denominated account (or any other account to which Euro may be credited or transferred) specified by the payee in a city in which banks have access to the TARGET System. TARGET System means the Trans European Automated Real Time Gross Settlement Express Transfer (known as TARGET2) System or any successor thereto. Such payments shall be made for the benefit of the Noteholders to the Account Holders and all payments validly made to such Account Holders in favour of the Noteholders will be an effective discharge of the Issuer and the Paying Agents, as the case may be, in respect of such payments. Payments of principal and interest on the Notes will, in all cases, be subject to any fiscal or other laws and regulations applicable thereto in the place of payment, but without prejudice to the provisions of Condition 8. (b) Payments on Business Days If any due date for payment of principal or interest in respect of any Note is not a Business Day (as defined below), then the Noteholder thereof shall not be entitled to payment of the amount due until the next following day which is a Business Day and the Noteholder shall not be entitled to any interest or other sums in respect of such postponed payment. In this Condition, Business Day means any day, not being a Saturday or a Sunday, on which the TARGET System is operating and on which Euroclear France is open for general business. No commission or expenses shall be charged to the Noteholders in respect of such payments. (c) Fiscal Agent, Paying Agent, Calculation Agent and Put Agent The name and specified office of the initial Fiscal Agent, initial Paying Agent, initial Calculation Agent and initial Put Agent are set out below: BNP Paribas Securities Services (affiliated with Euroclear France under number 29106) Les Grands Moulins de Pantin 9, rue du Débarcadère Pantin France The Issuer reserves the right at any time to vary or terminate the appointment of the Fiscal Agent or Paying Agent or Calculation Agent or Put Agent and/or appoint another Fiscal Agent or Paying Agent or Calculation Agent or Put Agent additional Paying Agents or approve any change in the office through which any such Agent acts, subject to having given not more than forty-five (45) nor less than thirty (30) days prior notice to the Noteholders in accordance with Condition 11, provided that there will at all times be (i) a Fiscal Agent, a Paying Agent, a Calculation Agent and a Put Agent having a specified office in a European city and (ii) so long as the Notes are admitted to trading on Alternext, and if the rules applicable to such stock exchange so require, a Paying Agent ensuring the financial service of the Notes in France. 32

33 8 Taxation (a) Withholding Tax All payments of principal and interest by or on behalf of the Issuer in respect of the Notes shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of any jurisdiction or any political subdivision or any authority thereof having power to tax, unless such withholding or deduction is required by law. (b) Additional Amounts If, pursuant to French laws or regulations, payments of principal or interest in respect of any Note become subject to withholding or deduction in respect of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed by or on behalf of the Republic of France or any authority therein or thereof having power to tax, the Issuer shall, to the fullest extent then permitted by law, pay such additional amounts (the Additional Amounts ) as may be necessary in order that the holder of each Note, after such withholding or deduction, will receive the full amount then due and payable thereon in the absence of such withholding or deduction; provided, however, that the Issuer shall not be liable to pay any such Additional Amounts in respect of any Note: (i) (ii) to, or to a third party on behalf of, a Noteholder who is liable to such taxes, duties, assessments or governmental charges in respect of such Note by reason of his having some connection with France other than the mere holding of such Note; where such withholding or deduction is required to be made pursuant to the Council Directive 2003/48/EC (as amended) or any other European Union Directive implementing the conclusions of the ECOFIN Council meeting of November 2000 on the taxation of savings or any law implementing or complying with, or introduced in order to conform to, such Directive. Any references in these Conditions to principal and interest shall be deemed also to refer to any Additional Amounts which may be payable under the provisions of this Condition 8. 9 Events of Default If any of the following events (each, an Event of Default ) shall have occurred: (i) (ii) (iii) default by the Issuer in any payment when due of principal, interest (including the payment of any Additional Amounts pursuant to the provisions of Condition 8) on any of the Notes, if such default shall not have been remedied within fifteen (15) days thereafter; default by the Issuer in the performance of, or compliance with, any other obligation under the Notes, other than as referred to in Condition 9(i) above, if such default shall not have been remedied within thirty (30) days after receipt by the Fiscal Agent of written notice of such default given by a Noteholder; any other present or future indebtedness of the Issuer or any of the Material Subsidiaries for borrowed moneys in excess of 2,500,000 (or its equivalent in any other currency), whether individually or in the aggregate, becomes, following, where applicable, the expiry of any originally applicable grace period, due and payable (exigible) prior to its stated maturity as a result of a default thereunder, or any such indebtedness shall not be paid when due or, as the case may be, within any originally applicable grace period therefor or any steps shall be taken to enforce any security in respect of any such 33

34 indebtedness or any guarantee or indemnity given by the Issuer or any of the Material Subsidiaries, as the case may be, for, or in respect of, any such indebtedness of others shall not be honoured when due and called upon unless the Issuer or any of the Material Subsidiaries, as the case may be, has disputed in good faith that such borrowed money is due or such guarantee or indemnity is callable, and such dispute has been submitted to a competent court in which case such event shall not constitute an event of default hereunder so long as the dispute has not been finally adjudicated; (iv) (v) (vi) a judgement is issued for the judicial liquidation (liquidation judiciaire) or for a transfer of the whole of the business (cession totale de l entreprise) or substantially the whole of the business of the Issuer or any Material Subsidiary; or, to the extent permitted by law, the Issuer or any Material Subsidiary is subject to any other insolvency or bankruptcy proceedings under any applicable laws or the Issuer or any Material Subsidiary makes any conveyance, assignment or other arrangement for the benefit of its creditors or enters into a composition with its creditors; or if the Issuer or any Material Subsidiary is wound up or dissolved or ceases to carry on all of its business or disposes of all of its business except (i) in connection with a merger, consolidation, amalgamation or other form of reorganisation pursuant to which the surviving entity shall be the transferee of or successor to all of the business of the Issuer or any Material Subsidiary and assumes all of the obligations of the Issuer with respect to the Notes or (ii) on such other terms approved by a resolution of the General Meeting of Noteholders; enforcement of any Security Interest of the Issuer or any of the Material Subsidiaries securing an amount in excess of 2,500,000 (or its equivalent in any other currency); then any Noteholder may give written notice to the Issuer at its registered office with a copy to the Fiscal Agent that all the Notes (but not some only) held by such Noteholders are immediately due and payable as of the date on which such notice is received by the Issuer, at their principal amount together with any accrued interest (if any) to the date of payment, without further formality, unless such event shall have been remedied prior to the receipt of such notice by the Fiscal Agent. 10 Representation of the Noteholders The Noteholders will be grouped automatically for the defence of their respective common interests in a masse (hereinafter referred to as the Masse ). The Masse will be governed by the provisions of the Code de commerce applicable to the Masse. The representative of the Masse (the Representative ) shall be AETHER FINANCIAL SERVICES 22 rue d Artois Paris France Tel : hpjeancard@aetherfs.com Web : The Representative will receive a remuneration of 500 per year (VAT excluded) for its services. All interested Noteholders will at all times have the right to obtain the names and the addresses of the Representative at the head office of the Issuer and at the offices of any of the Paying Agents. 34

35 In accordance with Article R of the French Code de commerce, the right of each Noteholder to participate in general assemblies will be evidenced by the entries in the books of the relevant Account Holder of the name of such Noteholder as of 0:00, Paris time, on the second business day in Paris preceding the date set for the meeting of the relevant general assembly. 11 Notices Any notice to the Noteholders will be valid if delivered to the Noteholders through Euroclear France, Euroclear or Clearstream, Luxembourg, for so long as the Notes are cleared through such clearing systems and published on the website of the Issuer ( and so long as the Notes are admitted to trading on Alternext and the rules of Alternext so require, on the website of Alternext ( Any such notice shall be deemed to have been given on the date of such delivery or, if delivered more than once or on different dates, on the first date on which such delivery is made. 12 Prescription Claims against the Issuer for the payment of principal and interest in respect of the Notes shall become prescribed ten (10) years (in the case of principal) and five (5) years (in the case of interest) from the due date for payment thereof. 13 Further Issues The Issuer may, from time to time without the consent of the Noteholders, issue further notes to be assimilated (assimilables) with the Notes as regards their financial service, provided that such further notes and the Notes shall carry rights identical in all respects (or in all respects except for the issue price and the first payment of interest thereon) and that the terms of such further notes shall provide for such assimilation. In the event of such assimilation, the Noteholders and the holders of any assimilated notes will, for the defence of their common interests, be grouped in a single Masse having legal personality. 14 Governing Law and Jurisdiction The Notes are governed by, and shall be construed in accordance with, the laws of France. Any claim against the Issuer in connection with any Notes may be brought before any competent court of the jurisdiction of the Cour d appel of Versailles. 35

36 USE OF PROCEEDS The net proceeds from the issue of the Notes will be used by the Issuer for general corporate purposes. 36

37 DESCRIPTION OF THE ISSUER 1 General Legal name, form and registered office The legal name of the Issuer is Groupe Mécanique Découpage (GMD or the Issuer). The Issuer is a société anonyme (a form of limited liability company) with a Board of Directors established under French law and is registered at the Registre du commerce et des sociétés of Nanterre under reference number Its registered and principal office is currently at 22, rue Edouard Nieuport, Suresnes, France. The Issuer s website is Date of incorporation and length The Issuer was incorporated in its current form on 13 January 1999, with the term running until 15 June 2091, subject to early dissolution or extension. General presentation The Issuer is the holding company of the GMD Group comprised of the Issuer and its consolidated subsidiaries (together the Group). Pursuant to Article 2 of its bylaws, the corporate purpose of the Issuer both in France and abroad, consists in: directly or indirectly purchasing shares and interests in any and all existing and future companies in the industrial sector and, more specifically, in the engineering and manufacturing, stamping, high pressure die casting, systems plastics, sealing and manufacturing of any products; purchasing, acquiring, managing or selling any processes and patents covering these activities; funding, in any form, of any transactions satisfying the requirements of its industrial subsidiaries or contributing to their business development; the Company's direct or indirect involvement in any financial, real estate or other operations, commercial or industrial businesses relating to the corporate purpose or to any similar or related purpose or contributing to its realisation. The Group is present in France, Eastern Europe, North Africa and Asia through 29 sites as shown on the map below: 37

38 As of 31 December 2014, to meet the needs of 500 active customers, the Group had a total workforce of 4,300 employees (including 400 technicians and engineers design and development), of whom 3,100 were based in France and 1,200 were based overseas. The consolidated revenues of the Group amounted to 645 million as at 31 December In 2014, the Group began to focus its strategy on automotive market and sold its plastic injection activities for industrial applications, the other non-strategic activities have been sold. As at 31 December 2014, the revenues of the Group are divided into four main activities, as follows: The European market represents about 92 % of the revenues of the Group in The level of activity of the Group is linked to two key factors: (i) (ii) the size of its book order is known three months in advance due to the fact that the activity depends on sales of new vehicles; the allocation of new markets by OEMs (original equipment manufacturer) which depends on the vehicles renewal cycle (i.e. two or three years before their launch on the market). The Group knows and follows its renewal and allocation rate for the new vehicles and the new technical platforms common to several brands and vehicles. One of the main factors which is difficult to foresee is the sales volume on the automotive market. The success of GMD is the result of an organisation focused on: the diversity of geographical locations, knowledge, technics and machineries; the good reactivity thanks to the size and autonomy of the business units; low cost structures; the capacity for innovation, change and flexibility; and expertise in acquisition and development of companies with financial difficulties. The business is based on several advantages: 38

39 the constant growth of the Group; the complementarity between the various industries of automotive business; the securing of the automotive subcontracting of the Group; the presence of specialised business sites near to the customers; a technical expertise; and a reliable and high quality approach. Strategy of the Group The Group ambitions are to become a major European actor in its four areas of expertise, focusing on the following strategic axes: strong focus to international expansion; investment in best of technologies; innovation to propose the right products in the right process; recognised industrial excellence; and vertical integration of the value chain. Main targets of the Group The financial guidelines set out below constitute the targets of the Group and not estimates nor forecasts. Evolution of consolidated revenues (M ) Evolution of consolidated EBITDA (M ) Evolution of consolidated Net Equity (M ) EBITDA means EBE less the sum of: (i) (ii) (iii) the reversal of provision/amortization (reprises amortissements et provisions)*; other cost (autres charges); and the profit sharing (participation des salariés). * Included in the operating incomes (inclut dans les produits d'exploitation) 2 History The Group was founded in 1986 by Mr. Alain Martineau, current CEO and principal shareholder, with the takeover of VERON Company which was specialised in cutting and stamping activities. From 1987 to 1996, GMD continued to grow through internal and external acquisitions, in particular of companies specialised in cutting and stamping activities and to develop the office automation. During this period, the consolidated revenues have been increased by a factor 5. 39

40 From 1999 to 2002, the Group initiated a reconversion by working with the most important French car makers, in particular with Renault and Peugeot. The year 2003 confirmed the strong activity of the Group with Renault, PSA and the automotive sector; on this year, the group made targeted acquisitions in two new areas of activities: the sheet metal working (tôlerie) and the manufacturing of thermoformed parts (fabrication de pièces thermo-formées). From 2004 to 2005, the Group continued to develop its activities by (i) acquisition of company specialised in automotive cutting, (ii) the acquisition of companies in order to develop its specialised sheet metal working activity (tôlerie) and (iii) the development of its cutting/stamping activity with French car makers. The year 2006 was marked by the development of a new activity with the acquisitions of several companies specialised in the plastic industry and the creation of a sub-holding, GMD PLAST, for the organisation of this plastic activity. In 2007, the Group had continued its external growth by several acquisitions of companies specialised in the manufacturing of rearview mirrors, the manufacturing of Bouclier and in sheet metal working (tôlerie). In 2009, despite the market contraction, the Group continued to make strategic acquisitions such as the acquisition of EUROSTYLE in April 2009 (composed of three plastic production locations in France, a technical centre, 600 employees and revenues amounted to 100 million) and RENCAST Group in July 2009 (composed of five Die Casting production locations, 562 employees and revenues amounted to 70 million). The years 2010 and 2011 were marked by the acquisitions of companies specialised in the Die Casting, in the plastic injection and in sheet metal working (tôlerie) and by the start of the construction of the Cutting / plastic injection (injections plastique) production location in Tanger (Morroco). In 2013, the Group began to focus exclusively on automotive market. In that process, GMD sold its plastic injection activities for industrial applications in 2013 (composed of 9 companies with 800 employees and revenues of 80 million) and the other non-strategic activities in In the same time, the Group acquired Sealynx Group ( 100 million sales per year, 1,000 employees and 3 production sites in France, Morocco and Romania). This major acquisition strengthens the Group position in automotive markets. The restructuring of the Group ends in 2015 with the sale of the gravity cast aluminium activity. 3 Overview of the Issuer s business With regular and controlled growth since 1986, the Group is now a key market player, mastering the flat metal processing by cutting and stamping, the production of plastic parts injection and thermo forming, the stamping of aluminium and the manufacturing of seals static and dynamic sealing. The Issuer estimates that it is the first industrial subcontracting group in France in the following four areas of expertise, exclusively with automotive customers and primarily manufacturers: Cutting / Stamping (Découpage/Emboutissage) (14 % of the consolidated revenues for the financial year 2014) Plastic (Plasturgie) (30 % of the consolidated revenues for the financial year 2014) Die Casting (Fonderie d aluminium) (38 % of the consolidated revenues for the financial year 2014) Sealing (Etanchéité) (18 % of the consolidated revenues for the financial year 2014). As at 31 December 2014, the Group is composed of 32 companies, with consolidated revenues of EUR 645 million. 40

41 3.1 Stamping Business Unit (Emboutissage) As at 31 December 2014, with 628 employees (including 90 technicians and engineers design and development, the revenues for the stamping business unit were of EUR 78 million allocated as follows: car makers (constructeurs) (71%); components manufacturers (équipementiers) (21%) and the industry (industrie) (8%). In 2014, the stamping business unit represented 14% of the consolidated revenues of the Group. GMD is specialised in the design and production of cut-off and stamped metal parts (pièces métaliques découpées) for the automotive industry and more particularly structural components of vehicles as well as props, fasteners and various components related to the vehicle engine, gearbox and suspension. With more than 50 machines combined with finishing equipment (équipements de parachevement) such as welding machine (robots de soudure), assembly line (ligne d assemblage), GMD develops complete subsystems directly fitted for car makers assembly-lines. The Stamping business unit is composed of five production units (three of which are located in France). GMD Tanger Metal GMD Tanger Metal produces 12 million components per year with 244 employees. This industrial production unit includes: 3 progressive presses (presse d emboutissage) from 400 to 800 tons; 9 stamping presses (presses de reprise) from 200 to 750 tons; 12 welding presses (presse à souder) and 6 welding robots (robots de soudures). MOTOKOM Slovakia MOTOKOM Slovakia produces 9 million components per year with 47 employees. This industrial production unit includes: 3 progressive presses (presse d emboutissage) from 40 to 250 tons; 4 stamping presses (presses de reprise) from 160 to 800 tons; 7 welding presses (presse à souder). MOTTAZ Industrie MOTOKOM Industrie produces approximately 12 million components per year with 117 employees. This industrial production unit includes: 5 progressive presses(presse d emboutissage) from 160 to 1000 tons; 5 stamping presses (presses de reprise) from 32 to 600 tons; 20 welding presses (presse à souder) and 3 assembling machine casing. VERON International VERON International produces approximately 12 million components per year with 151 employees. This industrial production unit includes: 8 automatic presses (presses automatique) from 80 to 630 tons; 3 welding robots (robots de soudures); 41

42 22 ARO welders. LUCHARD LUCHARD produces approximately 17 million components per year with 143 employees. This industrial production unit includes: 14 progressive presses from 32 to 800 tons; 10 semi-automatic welders (soudeuses semi-auto) and 3 robotic welders (soudeuses robotisées); Degreasing and deburring (Dégraissage et ébavurage). Products The activity of the business unit is organised around development centre in which each product is designed with the support of clients. Also, each entity of the business unit has means of control adapted to its activity. Example of products built by the Stamping business unit: Mounting Bracket Lift Tab Sensor Bracket Clients of this business unit include car makers such as: Renault, Ford, Nissan, PSA Peugeot Citröen. Main targets of the business unit The financial guidelines set out below constitute the targets of the Group and not estimates nor forecasts. 3.2 Plastic System Business Unit (Plasturgie) As at 31 December 2014, with 1,322 employees, the consolidated revenues for the Plastic System business unit was of EUR 184 million allocated as follows: car makers (constructeurs) (90%) and components manufacturers (équipementiers) (10%). In 2014, the plastic system business unit represented 30% of the consolidated revenues of the Group. 42

43 The Plastic System business unit is dedicated to the production of plastic systems for car makers and components manufacturers and the supply of automotive plastic parts (interior, exterior, engine and modules). This business unit is composed of three entities that meet the growing needs of plastic parts in the automotive sector: Eurostyle Systems which is specialised in the development and the production of modules and plastic parts concerning interior and exterior of vehicles. Eurostyle Systems actively participate in various projects for major car makers. MBPI (located in Molinges) which is specialised in the development and production of opening impulse generators, exterior rear mirrors, fuel doors and painted parts (interior and exterior). PFI (located in Lognes) which is specialised in the development and the production of thermoplastic components, electric components and vehicle gearbox. In terms of subsidiaries, this business unit is composed of 9 production sites, 5 technical centres and 3 commercial offices. Plastic production locations Technical centers Commercial offices France : Eurostyle Systems Chateauroux Eurostyle Systems Sens Eurostyle Valenciennes MBP Industrie PFI Abroad : GTA Plastic (Morocco) Systems Eurostyle Systems Slovakia Eurostyle Systems Espana Eurostyle Systems Klin Russia France : Eurostyle Systems Chateauroux (36) MBP Industrie (39) PFI (77) Abroad : Eurostyle Systems Romania Eurostyle Systems Kosice France : Eurostyle Systems (91) Abroad : Eurostyle Systems Deutschland Eurostyle Systems Shanghai 43

44 Products The following chart shows the breakdown of the consolidated revenues of this business unit by products for the year ended 31 December 2014: Example of products built by the Plastic System business unit: Painted Systems Mirrors Painted Parts Modules Interior Systems 44

45 Door Panels IP Components Body Side, Trunk & Roof The activity of this business unit is supported by a technical center, a production unit and a quality control unit. The activity is primarily based on centers of activity that combine all the necessary business lines and more than 130 experienced employees (in France and Romania) for the development of products. These performing research capabilities include in particular a plastic injection center (centre d injection plastique), mechanical adjustments and maintenance procedures for the tooling workshop and a high quality laboratory. The production is based on more than 150 machines (presses) which produces plastic parts by injection moulding (low-pressure injection (IMD), fast polyamide injection, 2-material (hard-soft), overmolding and gas). In addition, high-performance equipment such as manual or robotic assembly-lines, exterior / interior painting lines (lignes peinture extérieur/intérieur) and laser cutting machines, permit the production of plastic modules that meet the needs of customers. Finally, the business unit provides control of products through testing laboratories in order to ensure compliance with customer specifications. Clients of this business unit include car makers such as Renault Nissan, PSA Peugeot Citroën, Volkswagen, Bentley, McLaren and components manufacturers like Faurecia, Delphi and Leoni. Main targets of the business unit The financial guidelines set out below constitute the targets of the Group and not estimates nor forecasts. 3.3 Die Casting Business Unit (Fonderie d aluminium) As at 31 December 2014, with 985 employees, the consolidated revenues for the Die Casting business unit were of EUR 230 million. In 2014, the business unit represented 38% of the consolidated revenues of the Group. The Die Casting business unit is the major activity of the Group and one of the leaders of the aluminium die casting market in Europe. In this regard, the Group is member of the European Die-Casting Association (EDCA) which gathers the major actors of this industry in Europe. The business unit is composed of eight Die Casting production sites (six of which are actually located in France). 45

46 Die Casting production locations France : EUROCAST Brive EUROCAST Chateauroux EUROCAST Delle Abroad : MDS Abele (Germany) Angao (China) EUROCAST Portugal (ongoing project) EUROCAST Reyrieux EUROCAST Thonon FP Alu Products The business unit is specialised in the design and development of high value-added complex and technical parts for the automotive industry: foundry moulds, robotized assembly and machining lines. With their expertise, the employees are able to meet to the most advanced applications. With presses from 300 to 3000 tonnes, the Die Casting Business unit is a tier 1 (delivery to car makers) and a tier 2 (delivery to components manufacturers) suppliers in the aluminium high pressure die casting for automotive market. The activity of this business unit is organised around the designing and the production of different automotive components. The graphic below shows the breakdown of the activity by revenues as at 31 December 2014: 46

47 Example of products built by the Die Casting business unit: Gearbox components Hydraulic Distributor Mechanism Housing Clutch Housing Motor Components Camshaft Bearing Cap Cover Cylinder Head Cover Oil Separator Clients of this business unit include car makers such as Renault Nissan, PSA Peugeot Citröen, Volkswagen, Bentley and McLaren. Main targets of the business unit The financial guidelines set out below constitute the targets of the Group and not estimates nor forecasts. 47

48 3.4 Sealing Business Unit (Etanchéité) As at 31 December 2014, with 882 employees, the consolidated revenues for the sealing business unit was of EUR 116 million. In 2014, the Sealing business unit represented 18% of the consolidated revenues of the Group. SEALYNX International, which has integrated the Group in 2013, has become a major participant of the car bodywork sealing market. The Sealing business unit has a recognised experience in the development of products and their environment, in collaboration with design offices, and in the design and manufacturing of sealing system for coupés et cabriolets. The business unit is composed of 3 production locations (one of which is in France). Sealing production locations France : Sealynx International World : Sealynx Automotive Maroco Sealynx Automotive Romania 48

49 Products The Sealing business unit is supported by a development centre, a production unit and a quality control unit. The activity is primarily based on a development centre and an efficient research and development activity through testing laboratories (for achieving all test car specifications) and analytical laboratories (micrographic analysis, cleanliness analysis, static test, specific test bench) but also highly advanced technologies such as 3D design on CATIA system, 2D and 3D simulation (compressibility attempts, deformations, effort in implementing) and 3D scanner (to scan any physical object). The means of production include: 3 EPDM rubber mixing lines (lignes de mélangeage de caoutchouc EPDM) (with a capacity of 85 tons per day), 20 extruding lines by vulcanization through salt bath and hot air hardening (lignes d extrusion à vulcanisation par bain de sel par air chaud), 3000 EPDM or TPE vertical injection moulding machines (presses verticales d injection EPDM ou TPE), robotic tests assembly-lines and varnish spray robots (robots de pulvérisation de vernis). Finally, the business unit ensures the quality of its production through various controls (geometric control, and other specific controls), conducted by specialised laboratories (laboratory for the checking of blends, finalised products control laboratory). Clients of this business unit include car makers such as Renault Nissan, PSA Peugeot Citroën, General Motors, Mercedes and Volkswagen. Main targets of the business unit The financial guidelines set out below constitute the targets of the Group and not estimates nor forecasts. 49

50 4 Organisation of the Group The diagram set forth below shows a summary of the structure of the Group as at 31 December 2014: The Group s current management structure is as follows: 50

51 5 Corporate Governance The Company is managed by a Board of Directors, currently consisting of three members: Alain André Marcel Martineau, Chairman (and founder); Jean Jacques Fournel, Board member; and M.I.I. MARS INDUSTRIES ET INVESTISSEMENT (Société par actions simplifiée), Board member. 6 Main shareholders 7 Insurance coverage As part of its business, the Issuer has entered into insurance policies which are essential requirements to develop its activities with major car makers. These insurance policies cover defective products which can lead to a general vehicle recall and represent a non-negligible risk in the automotive industry. 51