2015 Annual report. Summary. 1 Management report Information on the Group. 2 Persons responsible for auditing the financial statements

Transcription

1 2015 Annual report Summary Press release dated March 10, 2016 Overview of Jacquet Metal Service group Financial report 20 Other informations Management report Information on the Group 20 1 Person responsible for the annual report and the annual financial report Management report Information on the parent company Jacquet Metal Service SA 36 2 Persons responsible for auditing the financial statements Consolidated financial position and earnings for Person responsible for the financial report information and investor relationships Statutory auditors' report on consolidated results Information on the share issuer proforma consolidated financial information Information on the share capital 6 Related party transactions Statutory auditors' report on the 2015 proforma consolidated financial information Information concerning the company, society and the environment Financial Statements Jacquet Metal Service SA 8 Statutory auditors' report on the parent company financial statements 9 Statutory auditors' special report on regulated agreements and commitments Independent verifier's report on consolidated social, environmental and societal information presented in the management report 9 Group infrastructures 10 Annual disclosure document Chairman's report concerning the preparation and organization of the Board of Directors work and internal control procedure 11 Statutory auditors' report on the report prepared by the Chairman of the Board of Directors Cross-reference table of the annual report Cross-reference table of the financial report

2 2015 Annual results Press release dated march 10, annual results > Sales 1,377 million (up 22.3% from 2014) > Adjusted EBITDA 38.0 million > Net income (Group share) 50.5 million On March 9, 2016 the Board of Directors, chaired by Éric Jacquet, approved the consolidated financial statements for the year ended December 31, m Q Q Sales , ,126.0 Gross margin % of sales 22.1% 26.5% 22.6% 25.2% Adjusted EBITDA % of sales 0.2% 4.3% 2.8% 5.2% Operating income / (loss) before non-recurring items 2 (2.7) % of sales -0.7% 3.9% 1.6% 4.0% Operating income / (loss) (2.5) % of sales -0.7% 3.9% 5.1% 4.0% Net income / (loss) (Group share) (9.1) Including the distribution business purchased from Schmolz+Bickenbach ("Schmolz+Bickenbach Distribution") from July 22, Adjusted for non-recurring items (non-ifrs financial indicators) 2015 sales and earnings 2015 Annual results Press release dated march 10, Headlines 2015 was marked by: > A 3.5% increase in volumes (at constant consolidation); > The July acquisition of Schmolz+Bickenbach Distribution, which operates in Germany, Austria, the Netherlands and Belgium and generates annual sales of around 600 million. Including this acquisition, 2015 proforma sales (12 months) should amounted to 1.7 billion, 42% of which was earned in Germany, the Group s principal market; > Market conditions, particularly challenging from the third quarter onwards related to an ongoing decline in raw material prices, bringing down both sale prices and gross margins.

3 Fourth quarter 2015 Fourth quarter sales amounted to 377 million, up 40% from the previous year and including: > Volume effect: +4.2% (at constant consolidation), with volume growth across all brands; > Change in consolidation: +45.8%; > Price effect: -10.2%. Adjusted EBITDA came to 0.7 million, compared to 11.6 million in the same period last year. This change is mainly due to the decline in the gross margin rate and the performance of Schmolz+Bickenbach Distribution in Germany. Full-year results The Group posted full-year sales of 1.38 billion, up 22.3% from 2014, with volumes up 3.5% (at constant consolidation), average prices down 3.3%, and a +22.1% change in consolidation following the acquisition of Schmolz+Bickenbach Distribution in July The 2015 gross margin amounted to million or 22.6% of sales (24% at constant consolidation) versus 25.2% in Operating expenses before non-recurring items were kept under control and increased by 0.4% at constant consolidation compared to the previous year. As a result, adjusted EBITDA came to 38.0 million (2.8% of sales), while operating income before non-recurring items amounted to 21.7 million (1.6% of sales). Operating income amounted to 70.8 million, which includes net non-recurring income of 48.1 million mainly related to the Schmolz+Bickenbach Distribution acquisition (including a 57 million badwill gain). Net income (Group share) came to 50.5 million (i.e per share), compared to from 25.2 million in At the beginning of 2016, the market was still marked by low raw material prices. In 2016, the Group will focus on improving the operating efficiency of each of its brands and, primarily, on turning around the business of Schmolz+Bickenbach Distribution. Financial position At December 31, 2015 operating working capital amounted to million, or 27% of sales, including inventories of million. In 2015, the Group generated operating cash flow of 43 million, compared to a 11.9 million outflow in Group capital expenditure for the year (excluding the acquisition price for Schmolz+Bickenbach Distribution) mainly related to new finishing capacity and amounted to 28.9 million, compared to 14.2 million in At December 31, 2015, Group net debt stood at million compared to shareholders' equity of million, resulting in a net debt to equity ratio of 72.3% Annual results Press release dated march 10, 2016

4 2015 operations and brand development JACQUET Abraservice STAPPERT IMS group Stainless steel and wear-resistant quarto plates Long stainless steel products Engineering steels m Q Q Q Sales Change vs % 14.2% -8.3% -2.9% 128.6% 59.2% Price effect -11.5% -2.7% -10.7% -1.8% -8.8% -5.0% Volume effect 9.5% 9.7% 2.5% -1.1% 2.0% 3.9% Change in consolidation 1.3% 7.2% 0.0% 0.0% 135.4% 60.3% Adjusted EBITDA (2.9) 7.7 % of sales 0.1% 2.3% 0.4% 3.1% -1.4% 1.3% Operating income before non-recurring 3 (1.8) (0.0) (0.5) 11.1 (3.1) 3.0 % of sales -2.4% 0.0% -0.5% 2.5% -1.5% 0.5% 1 Including the distribution business purchased from Schmolz+Bickenbach ("Schmolz+Bickenbach Distribution") from July 22, Non-division operations (including Jacquet Metal Service SA) contributed 3.2 million to Q adjusted EBITDA and 8.8 million to 2015 full-year adjusted EBITDA. 3 Adjusted for non-recurring items (non-ifrs financial indicators) 2015 Annual results Press release dated march 10, 2016 JACQUET Abraservice This division comprises the JACQUET and Abraservice brands, respectively specialized in the distribution of stainless steel and wear-resistant quarto plates. JACQUET and Abraservice have separate sales networks. Fourth quarter volumes were up 9.5% from fourth quarter The division s sales and earnings were nevertheless impacted by falling prices (down 11.5%) and by particularly challenging market conditions in the United States. Accordingly, the division posted adjusted EBITDA of 0.1 million, compared to 2.2 million in fourth quarter JACQUET Abraservice posted full-year sales of million, up 14.2% from 2014 (including 9.7% volume growth at constant consolidation, a -2.7% price effect and a +7.2% change in consolidation resulting from the acquisition of the Canadian Rolark group in 2014). The division posted adjusted EBITDA of 7.7 million (2.3% of sales), compared to 10.2 million in In 2016, the division will focus on improving operating efficiency in each of its regions. STAPPERT Fourth quarter volumes were up 2.5% from fourth quarter STAPPERT results, specialist of the distribution of long stainless steel products, were impacted by falling prices (down 10.7%). Accordingly, fourth quarter adjusted EBITDA came to 0.3 million, compared to 5.8 million in fourth quarter The division posted full-year sales of million, down 2.9% from 2014 (-1.1% volume effect; -1.8% price effect) adjusted EBITDA amounted to 13.8 million (3.1% of sales), compared to 26.5 million in This change is mainly due to falling prices in the second half of STAPPERT will focus 2016 capital expenditure on Europe. In the medium term, the brand may also set up operations in North America. IMS group IMS group specializes in the distribution of engineering steels, mainly in the form of long products. Schmolz+Bickenbach Distribution has been part of this division since July 22, The division s fourth quarter results were impacted by challenging market conditions and the performance of Schmolz+Bickenbach Distribution in Germany. The division posted full-year sales of million, up 59.2% versus 2014 (+3.9% volume effect at constant consolidation; -5.0% price effect; +60.3% change in consolidation) adjusted EBITDA amounted to 7.7 million (1.3% of sales). At constant consolidation (i.e. excluding Schmolz+Bickenbach Distribution), IMS group adjusted EBITDA came to 13.9 million, compared to 15.3 million in In 2016, the division will focus mainly on turning around the business of Schmolz+Bickenbach Distribution.

5 Headquarters in Lyon Saint-Priest 2015 Annual results Press release dated march 10, 2016

6 The group 1 A leading distributor of specialty steels > Sales billion > Employees 3,356 > Distribution centers 109 > Countries of operation 26 Breakdown of 2015 sales 1 Out of Europe 4% Other Europe 21% Germany 42% North America 5% Spain 7% Netherlands 7% Italy 7% France 8% Overview of the group Jacquet Metal Service is a European leader in the distribution of specialty steels, and is also active in Asia and North America Proforma data including Schmolz+Bickenbach Distribution

7 A global player World Europe Overview of the group 03

8 2 Brand management Jacquet Metal Service operates in high value-added niche markets and is a European leader in the distribution of specialty steels through its portfolio of four brands organized into three divisions, each of which targets specific customers and markets. Stainless steel and wear-resistant Quarto plates Long stainless steel products Engineering steels Each division is run by an operating manager, who is in charge of developing the relevant brand(s) in accordance with strategic options and objectives defined by the Group. Central functions, negotiation of purchasing conditions, financial and legal affairs, information technology, credit insurance and communication are managed by Jacquet Metal Service SA, in close collaboration with specialists from each division 3 Governance Overview of the group 3.1 The Board of Directors As of June 30, 2010 Jacquet Metal Service SA adopted a governance model based on a Board of Directors. The General Meeting of June 26, 2014 appointed the following individuals as directors for a two-year term of office expiring at the end of the General Meeting called to approve the financial statements for the financial year ended December 31, 2015: > Éric Jacquet, 57, a French national who has been the Chairman and Chief Executive Officer of Jacquet Metal Service since July 20, He was previously Chairman and Chief Executive Officer of Jacquet Metals (formerly Jacquet Industries) as from that company s foundation in Éric Jacquet also held the positions of Vice- Chairman of the Supervisory Board and member of the Strategy Committee of IMS International Metal Service from June 16, 2009 to February 3, Éric Jacquet has spent his entire career in the Jacquet Metal Service group, where he has held positions including Sales Manager ( ) and Marketing and Export Development Manager ( ). 04

9 Éric Jacquet is also a member of the Lyon Commercial Court Association of Judges and Former Judges. > He was first appointed to the Board of Directors on June 30, 2010 Jean Jacquet holds a law degree and is a graduate of the Paris Institute of Political Studies. > He was first appointed to the Board of Directors on June 30, > Françoise Papapietro, (who is considered as an independent director), a French national, 51, has spent most of her career in investment banking (Paribas and Barclays), where she gained expertise in financial transactions (M&A, equity capital transactions and tax engineering). She has also held positions as Head of Institutional and Financial Communications for Infogrames, Chief Executive Officer of Henri Germain and Chief Executive Officer of Loze Partners & Vostok. Françoise Papapietro is in charge of development at Barnes International Realty estate agents. > She was first appointed to the Board of Directors on June 29, 2012 > Gwendoline Arnaud, (who is considered as an independent director), a French national, 43, has been a lawyer since In 2003 she sets up a firm specializing in family and business law. Gwendoline Arnaud holds a Master's Degree in Private Law and a Certificate of Legal Proficiency (CAPA). > She was first appointed to the Board of Directors on June 26, > Jean Jacquet, (who is considered as an independent director), a French national, 83, held the positions of Chairman of Faïence et Cristal de France until 2012, Chairman and Chief Executive Officer of SOMERGIE (the Metz urban public-private waste management company) until 2011 and Chairman and Chief Executive Officer of TCRM (Metz area public transport system) until Jean Jacquet represented JSA as a member of the Supervisory Board and member of the Appointment and Compensation Committee of IMS International Metal Service from June 16, 2009 to February 3, Jean Jacquet began his career at the Renault Group, where he worked until He was then Chairman and Chief Executive Officer of Unimetal-Ascometal from 1984 to 1988, and Chairman of the Special Steel Dealers Union (UNAS) from 1988 to He has also held positions as Chairman of the Supervisory Board of Winwise, Director of the Metz National Engineering School, Chairman of the Inter-Ministerial Development Mission for the development of the Longwy European Hub, Chairman of the Board of Directors of the Metz power plant, Deputy Vice- Chairman of the French National Association of Electricity Concessions and Vice-Chairman of the Metz urban district (now the Metz metropolitan urban district grouping). We would remind you that Jean Jacquet is no relation to Éric Jacquet. > Henri-Jacques Nougein, (who is considered as an independent director), a French national, 68, is an arbitration expert, mediator, amicable liquidation expert and insurance broker (specializing in corporate risk and liability). He is also the Honorary President of the Lyon Commercial Court, former Chairman of the Inter-Professional Mediation and Arbitration Center and Joint Manager of the European Arbitration and Mediation Network. He is the founder and Joint Manager of the Franco-Argentinian Mediation and Arbitration Center, the Franco-Chinese Mediation Center (in partnership with the Shanghai government authorities), and the Franco-Indian Mediation and Arbitration Center (in partnership with the Indian Federation of Chambers of Commerce and Industry). Henri-Jacques Nougein is also a lecturer at Lyon III University (Economic Procedural Law) and is the author of a number of legal and technical research publications. He holds a degree in Private Law and is a graduate of the Lyon Legal Studies Institute, a graduate of the Advanced School of Private Law and a Government Doctor in Law (1976). > He was first appointed to the Board of Directors on June 30, 2010 > Xavier Gailly, (who is considered to be an independent director), a Belgian national, 68, spent almost his entire career at Fabrique de Fer de Charleroi, which subsequently became Industeel Belgium, a subsidiary of the Arcelor Mittal Group. He held a number of positions in a wide variety of fields (maintenance, capital expenditure, purchasing, production, human resources, etc.), before becoming the company's Chief Industrial Officer, Executive Director and finally Chief Executive Officer. He was then appointed as Sales Director for Industeel, Arcelor Mittal's specialty flat steels division. Xavier has been a director or the Chairman of several Arcelor Mittal subsidiaries in Belgium and abroad. He has also held the offices of Director of the Mons Polytechnic Faculty, Director of IGRETEC (interdistrict association for the management and performance of technical and economic research, which includes 68 towns and cities in the province of Hainaut in Belgium), Vice-Chairman of the Belgian Steel Industry Consortium and Chairman of its French-speaking division. Overview of the group 05

10 Gouvernance Overview of the group Xavier Gailly is the Chairman of GAMI, a member of the Outlook Committee for the city of Charleroi and a member of the Regional Advisory Committee for CERA (a cooperative financial grouping that includes 415,000 members). He is a civil electrical engineer and a graduate of the Mons Polytechnic Faculty (Belgium). > He was first appointed to the Board of Directors on June 30, 2010 > Jacques Leconte, (who is considered to be an independent director), a French national, 71, was the Director of the Crédit Agricole Sud Rhône-Alpes Business Center. He was specifically in charge of the financing activities for large companies, cooperatives and institutional investors for the Rhône-Alpes regional districts at the Crédit Agricole Regional Development Agency. He has been a director of Jacquet Metals since 2009 and is also a member of the Strategy Committee of Thermcross SA. Jacques Leconte studied geography at university and is a graduate of the Lyon Institute of Political Studies. > He was first appointed to the Board of Directors on June 30, > JSA, a limited company governed by Belgian Law, controlled by Éric Jacquet and represented by Philippe Goczol. Philippe Goczol, a Belgian national, 50, is also the Deputy Chief Executive Officer of Jacquet Metal Service. He holds several appointments as a legal representative within the JMS Group. Philippe Goczol was a member of IMS International Metal Service s Supervisory Board and Audit and Risk Committee from June 16, 2009 to February 3, 2010, the date on which he resigned. He was Chief Development Officer for Jacquet Metals from 2001 to 2004 and Chief Executive Officer from 2004 to Before joining Jacquet Metals, he was a member of the Executive Board and the CEO of Anysteel ( ), and held positions as Sales Director ( ), Proxy ( ) and Commercial Engineer ( ) at Industeel (formerly CLI-Fafer and Fafer). Philippe Goczol is a sales engineer and holds a degree from Mons University (Belgium). > He was first appointed to the Board of Directors on June 30, 2010 On May 5, 2015, the Board of Directors approved the appointment of Wolfgang Hartmann as a director of Jacquet Metal Service to replace resigning director Hiscan Patrimonio S.A.U. for its remaining term of office. The General Meeting of June 26, 2015 ratified this appointment until the end of the ordinary General Meeting called in 2016 to approve the financial statements for the financial year ended December 31, 2015: > Wolfgang Hartmann, a German national, 61, spent most of his career at STAPPERT Deutschland (formerly Stappert Spezial Stahl), a company specialized in the distribution of long stainless steel products. He joined Stappert Spezial Stahl's procurement department in 1977, Wolfgang Hartmann became a member of the Management Committee in 2004, CEO in 2005 and STAPPERT Group COO from 2010 to > He was first appointed to the Board of Directors on May 5, 2015 To the knowledge of Jacquet Metal Service SA, no member of the Board of Directors has been the subject of an official public sanction, has been sentenced for fraud during the past five years, has been involved in any receivership, has been sanctioned by any statutory or regulatory authorities, including designated professional bodies, or has been the subject of any measure preventing them from directing, managing, administering or controlling a company during the past five years. To the knowledge of Jacquet Metal Service SA, there is no potential conflict of interest between the private interests of the members of the Board of Directors and their duties to Jacquet Metal Service SA. There are no arrangements or agreements with the main shareholders, or with customers or suppliers, pursuant to which a member of the Board of Directors might have been appointed as a director of Jacquet Metal Service. There are no family ties between the members of the Board of Directors, including between Éric Jacquet and Jean Jacquet. A list of the offices and positions held by the corporate officers, as well as information on the number of shares they hold in Jacquet Metal Service is disclosed in paragraph 2.13 of the Management Report Information on the parent company. The remuneration paid to the corporate officers is set out in paragraph of the Management Report Information on the parent company. 06

11 3.2 Team management Jacquet Metal Service > Éric Jacquet : Chairman & Chief Executive Officer > Philippe Goczol : Deputy Chief Executive Officer > Thierry Philippe : Chief Financial Officer Brand operating divisions > David Farias : JACQUET Abraservice > Marc Steffen : STAPPERT > José Berthelier : IMS group > David Farias : Chief Executive Officer responsible for JACQUET Abraservice > Patrick Guien : IT Director > Jean Révérand : Group Procurement Director > Cédric Chaillol : Brand communications and corporate identity manager. 3.3 The Board of Directors committees Appointment and Compensation Committee The Appointment and Compensation Committee consists of the following directors appointed by the Board of Directors for the term of their office as director on June 26, 2014: > Henri-Jacques Nougein, Chairman; > Jacques Leconte; > Jean Jacquet. Audit and Risk Committee The Audit and Risk Committee consists of the following directors appointed by the Board of Directors for the term of their office as director on June 26, 2014: > Jean Jacquet, Chairman; > Françoise Papapietro; > Xavier Gailly. Overview of the group 07

12 4 Group organizational structure 4.1 Main Group companies JACQUET METAL SERVICE SA JACQUET Holding SARL FR Abraservice Holding SAS FR JACQUET Metallservice GmbH AT JACQUET Italtaglio Srl IT Abraservice Belgium SA BE JACQUET Benelux SA BE JACQUET Centro Servizi Srl IT Abraservice Nederland BV NL Rolark Toronto Inc. CA JACQUET Nova Srl IT Abraservice CZ Sro CZ Rolark Edmonton Inc. CA JACQUET Nederland BV NL Abraservice Deutschland GmbH DE JACQUET Montréal Inc. CA JACFRIESLAND BV NL Abraservice Ibérica INT, SAU ES JACQUET Osiro AG CH Intra Alloys FZE UAE Abraservice France SAS FR JACQUET Chengdu Co. Ltd. CN JACPOL Sp. z o.o. PL Abraservice Lyon SAS FR JACQUET Shanghai Co. Ltd. CN JACQUET Nordpol Sp. z o.o. PL Abraservice Italia SpA IT JACQUET Sro CZ JACQUET Polska Sp. z o.o. PL Abraservice Polska Sp. z o.o. PL JACQUET Berlin GmbH DE JACQUET Portugal LDA PT Abraservice Portugal LDA PT JACQUET Deutschland GmbH DE JACQUET Sverige AB SE Abraservice Özel Çelik Ltd Şi. TR JACQUET Danmark ApS DK Quarto Nordic AB SE Abraservice UK Ltd UK JACQUET Ibérica SA ES JMS Metals Asia Pte. Ltd. SG JACQUET Finland OY FI JMS Adriatic d.o.o. SI Détail Inox SAS FR Quarto Jesenice d.o.o. SI France Inox SAS FR JACQUET UK Ltd UK JACQUET Lyon SAS FR JACQUET Mid Atlantic Inc. US Overview of the group JACQUET Paris SAS JACQUET International SAS OSS SARL Quarto International SAS FR FR FR FR JACQUET Houston Inc. JACQUET Midwest Inc. JACQUET Central Inc. JACQUET West Inc. US US US US JACQUET Southeast Inc. US 08

13 STAPPERT Deutschland GmbH DE IMS group Holding SAS FR STAPPERT Fleischmann GmbH AT S+B Distributions GmbH DE STAPPERT Česká Republika Spol Sro CZ Günther + Schramm GmbH DE STAPPERT Magyarország Kft HU Dr. Wilhelm Mertens GmbH DE STAPPERT Intramet SA BE S+B Austria GmbH AT Trinox SA CH IMS S+B Nederland BV NL STAPPERT France SAS FR S+B Belgium SA BE UAB STAPPERT Lietuva LT Finkenholl Stahl Service Center GmbH DE Noxon Stainless BV NL Hoselmann Stahl GmbH DE STAPPERT Nederland BV NL Quarto Deutschland GmbH DE STAPPERT Polska Sp. z o.o. PL IMS Aceros INT, SAU ES STAPPERT Sverige AB SE IMS Portugal SA PT STAPPERT Slovensko AS SK Calibracier SAS FR STAPPERT UK Ltd UK IMS France SAS FR IMS SpA IT Finkenholl Benelux BV NL IMS Özel Çelik Ltd Şi. TR Overview of the group 09

14 Group organizational structure 4.2 History of the Group Jacquet Metals 1962 > Foundation of Etablissements JACQUET, a company specializing in custom metal cutting, by Michel Jacquet in Lyon > Éric Jacquet becomes the majority shareholder (51%) in JACQUET SA, the Group s parent company > Éric Jacquet founds JACQUET Industries, which controls 100% of the Group > JACQUET Industries is listed on the Paris Stock Exchange second market on October > The Group expands into Europe (Netherlands, Poland, UK, Italy and Finland) > JACQUET Industries becomes Jacquet Metals > The Group establishes its first operations in Asia (Shanghai, China) and the United States (Philadelphia, Houston, Chicago, Los Angeles and Charlotte) > Éric Jacquet and Jacquet Metals acquire a 33.19% stake in IMS. IMS 1977 > Foundation of "International Metal Service", which includes the Creusot-Loire steel manufacturer's "commercial companies" > Usinor acquires full control of IMS > IMS is listed on the Paris Stock Exchange second market on June 11, under the chairmanship of IMS founder Jacques-Didier Champalbert > The Group expands into Europe (IMS Stalserwis in Poland, IMS SpA in Italy, acquisition of Grupo Aceros Garay, which becomes Aceros IMS (Spain) and foundation of IMS France via the merger of three French companies) > Arcelor sells its shareholding and Chequers Capital Fund acquires control of IMS > Acquisitions in Central Europe (Hungary, the Czech Republic and Slovakia) > Acquisition of Hoselmann (engineering steels in Germany) > Chequers Capital sells its interest. Market placement of the IMS shares > Acquisition of the Cotubel Group > Sale of US subsidiary Astralloy. February 3, 2010 > Jacquet Metals launches a public exchange offer (PEO) for the IMS shares. June 30, 2010 July 20, 2010 > The absorption of Jacquet Metals by IMS on the basis of the issuance of 20 IMS shares for 7 existing Jacquet Metals shares is approved by the General Meetings of Jacquet Metals and IMS. > Merger between Jacquet Metals and IMS > Disposal of IMS France's aluminum and non-ferrous metals businesses and of Euralliage. > IMS International Metal Service becomes Jacquet Metal Service. > Disposal of Produr. Overview of the group 2012 > Disposal of Venturi (Italy) and Brescia Acciai (Italy) > Acquisition of Finkenholl (Germany) by IMS group > Acquisition of Rolark (Canada) by JACQUET > Acquisition of Schmolz+Bickenbach Distribution by IMS group. 10

15 5 Information on the group's business 5.1 The business The Jacquet Metal Service Group's main business is the purchase, storage and delivery of various categories of products to a primarily local customer base consisting of small and medium-sized industrial companies. The Group buys large quantities from specialty steel producers (20 suppliers account for over 50% of Group purchases, with lead times ranging between 1 and 12 months) and sells them to a fragmented customer base (60,000 active customers, average invoices of less than 3,000). Jacquet Metal Service provides the following valueadded between the producer and the end-customer: > A wide range of products in stock, which are delivered within short timeframes (order books rarely exceed a few weeks); > Security of supply and product traceability; > Managing requirements on a just-in-time basis (customized inventory, defined supply strategies); > Competitive sale prices; > Managing price fluctuation on the customer's behalf; > Cutting and finishing services. In addition to selling its standard product range, the Group is able to offer its customers the choice of various customized initial processing operations in order to meet the final users' specifications. These services, which are performed at the Group s warehouses, vary according to the products sold but usually involve light cutting, straightening and bending, folding or drilling operations. They provide an obvious commercial advantage, enabling the Group to increase customer loyalty by positioning itself as a single contact point, thereby avoiding the use of a sub-contractor. The sales teams account for around 40% of the staff. They consist of sedentary or traveling salespersons whose remit is to follow up and advise customers, while ensuring that the Group's offering meets their requirements on an ongoing basis. 5.2 Positioning The Group currently operates on four separate markets that form part of the distribution of specialty steels to industry, via four brands: > JACQUET: stainless steel quarto plates; > Abraservice: wear-resistant quarto plates; > STAPPERT: long stainless steel products; > IMS group: engineering steels. The Group's strategy is to be physically close to its customers on the markets targeted by each Group brand. To date, Jacquet Metal Service is primarily positioned in European markets with the STAPPERT, Abraservice and IMS group brands. The JACQUET brand is established in Europe, North America and China. Overview of the group 11

16 Information on the group s business 5.3 The market sources: Jacquet Metal Service The global steel market amounted to around billion tons in 2015, of which alloy steels (steels containing alloy components such as chrome, nickel, molybdenum and titanium) accounted for around 5% across all product ranges. In the steel alloy category, stainless steels accounted for around 37.7 million tons across all products, i.e. around 2.3% of the global steel market. As the specialty steels market covers a large number of product niches, geopolitical situations and types of distribution role, the Group has little quantified information of an official nature. JACQUET & STAPPERT > Stainless steels Stainless steels are characterized by their strong resistance to corrosion and their stability when treated with fluids or gas. The main sectors that consume stainless steels are industries operating in: > the chemicals sector (including pharmaceuticals and cosmetics); > the food-processing sector (hygiene restrictions and ease of maintenance); > the gas processing and storage sector (cryogenics, industrial gas); > the water treatment sector (waste water precipitation basins, desalination of sea water, transmission and supply); > the environmental and decontamination sector (emissions and waste treatment); > the energy sector (hydraulic, nuclear and thermal power plants, etc.). From 2013 to 2014, the consumption of stainless steel increased by 4% in Europe, 5% in North America and 6% in Asia. In 2015, the consumption of stainless steel decreased by 2.8% in Europe, 7% in North America, and the consumption in Asia increased by 0.2%. The stainless steel sector is characterized by the regular adjustment of the alloys to the increasingly high requirements of various industrial sectors. While there were two main varieties of stainless steel in 1960, JACQUET and STAPPERT currently stock several dozen, in addition to nickel alloy varieties, whose corrosion resistance is even higher than that of stainless steel. JACQUET > Stainless steel quarto plates STAPPERT > Long stainless steel products Overview of the group The annual global stainless steel quarto plate market represents just over 1.35 million tons, i.e. around 3.6% of the global stainless steel market. It is a typically niche market in this regard and accounts for the bulk of JACQUET s sales. This market is usually equally divided between projects (direct supply from the producer to the end-customer) and distribution. JACQUET is the leading global distributor of stainless steel quarto plates. The annual global long stainless steel product market represents around 5.5 million tons. The global stainless steel rod market represents around 3 million tons, while the European market represents around 800,000 tons. Distribution accounts for around 50% of the long stainless steel product market in Europe. STAPPERT is one of the leading operators on the distribution market. 12

17 Abraservice > Wear-resistant quarto plates Wear-resistant quarto plates are intended for industrial sectors that face issues related to wear, shock resistance, friction, temperature or tension that require the use of particularly hard materials, i.e. public works machinery, steel production, mines and quarries, cement plants, dredging, recycling, handling, agricultural machinery and the lifting and transportation of aggregates, etc. The wear-resistant quarto plates distributed by Abraservice meet particularly stringent quality and durability requirements. In addition to its offer, Abraservice also distributes plates with a high elasticity threshold designed for the heavy machinery, telescopic crane and civil engineering sectors. In fact, both categories of products share the same manufacturing methods ("hardened and tempered steels") and the same shaping processes (premanufacturing operations performed by Abraservice, including cutting, drilling, folding and rolling). The annual European wear-resistant steels market is usually estimated at around 350,000 tons, 70% of which is supplied via distribution channels while the remainder is sold directly to end-users by producers. The wear-resistant steel market has been struggling to recover since The European market for high-elasticity steels is usually estimated at around 500,000 tons, 30% of which is supplied via distribution channels. This market has also been struggling since Abraservice is one of the European market leaders for the distribution of wearresistant plates. IMS group > Engineering steels These steels are used to manufacture parts that are subject to stringent engineering specifications. Engineering steels are distributed by the IMS group brand, primarily in the form of seamless rods and tubes, and are produced in accordance with specific standards and specifications that guarantee their suitability for processing by the customer (forging, machining, folding, welding, heat treatment) so as to achieve specific engineering features following their treatment. They are used in many industrial sectors, including: general engineering, public works equipment, agricultural machinery, transportation (engines, automotive drives, heavy goods vehicles and the railway sector), lifting machinery, oil industry and energy (wind turbines, etc.), and machining plants. The engineering steels market includes many forms and categories of products. The annual European engineering alloy steel market is estimated at around 9.5 million tons, including 4.5 million tons of rods. The two largest geographical markets in Europe are Germany and Italy, which jointly account for 60% of the market, followed by France and Spain, which represent 20% of the European market. The distribution sector s share of the engineering steel rod market is estimated at 50%. IMS group s market share varies significantly depending on the country, with strong positions in Italy, France and Spain. IMS group still has significant room to expand in other European countries, especially in Germany (principal European market). Overview of the group 13

18 Information on the group s business 5.4 The competition JACQUET The main competitors in the cut plate market, which accounts for most of the volumes distributed by JACQUET, fall into two categories: > In-house departments of large European steel groups (e.g. Outokumpu) in several countries; > Family-owned companies, which operate in just one country. There are also two kinds of competitor in the trade segment (sale of unprocessed plates), a business where JACQUET implements an opportunistic policy depending on market conditions, i.e.: > Stainless steel producers who have their own inhouse distribution network (Acerinox, Outokumpu, Daekyung and Thyssen); > Companies that are independent from the producers, such as Nichelcrom in Italy and Salzgitter in Germany. Given that product availability, and therefore inventories, is a key factor in this business, there are few direct competitors in the trading segment. STAPPERT STAPPERT s competition breaks down between: > Operators who are established at the European level, including producers of long stainless steel products who distribute their products via their own distribution network (Schmolz + Bickenbach, Cogne, Valbruna) or distributors who are independent from the producers (Amari, Damstahl, ThyssenKrupp Materials); > Independent distributors, whose size may be significant at a regional or national level, but who do not operate on a European scale. Abraservice Wear-resistant products are often brand steels that are developed and distributed by steel producers. Abraservice s main competitor in Europe is Swedish steel producer SSAB, which only markets its own products. There are a few independent competitors, whose size can be significant, on the regional or national level. They often distribute entry-level products from remote or second-tier producers. IMS group The engineering steel distribution market includes a small number of major international operators at European level (Schmolz + Bickenbach, ThyssenKrupp Materials, Cogne). IMS group is the only operator that has no production activities. The rest of the market is divided between a large number of independent distributors, whose size may be significant at regional or national level but who do not operate on a European scale. Competition in the engineering steel distribution segment rarely stems from the producers themselves. A large number of those producers do not hold any inventories. The different varieties are often not produced on an ongoing basis and are sold through the order book as soon as they leave the plant. This means that the producers only target major end-users directly. Overview of the group 14

19 5.5 Customers Specialty steels are used for specific applications by a wide variety of industries. Larger end-users such as automotive manufacturers are supplied directly by producers. Conversely, Jacquet Metal Service's core target market consists of a local network of SMEs operating in a wide variety of industrial sectors. The Group supplies over 60,000 active customers operating in around 100 countries, while its commercial relationships are based on a large quantity of small orders (less than 3,000 on average). Accordingly, the Group is not dependent on any specific customer. Customers place their orders directly with the Group companies, with no call for tender process. Every customer order is invoiced once the products have been dispatched. A significant portion of the sales are insured by various credit insurance companies. JACQUET's and STAPPERT's customers primarily operate in the chemical, food-processing, energy and environmental sectors, as well as the water and gas storage and treatment sectors. Abraservice's customers are industrial companies that operate in the mining and quarries, public works machinery, handling, lifting and haulage sectors, as well as cement plants. IMS group offers products that display resistance to engineering constraints. Therefore, the brand primarily targets industrial companies in the transportation equipment (engines, drives, railways, etc.), energy (wind turbines, petrochemicals and refining, etc.) and more broadly in the general engineering and machining plant sectors. The commercial relationships are recurring and involve a large quantity of small orders, which account for most of the Group s sales. The order book represents around one month s sales. 5.6 Purchases The terms and conditions of purchase are negotiated between the main producers' management teams and the Jacquet Metal Service SA managers, working together with the operating manager of each division. By aggregating the volumes for each brand, Jacquet Metal Service provides producers with greater visibility on their business volumes and on the organization of their production schedule. The Group benefits from optimal purchasing terms and conditions in return. The "framework terms and conditions" obtained in this way are disclosed to the subsidiaries involved, which place their orders with the producers directly. The Group is not dependent on a specific supplier and only uses sub-contractors on an occasional basis. A given supplier is only in a position to provide a limited number of stock items. In the case of so-called specialty products distributed on niche markets, the number of suppliers is also limited. For certain niche products, the Group purchases its supplies primarily from producers with which it has a close relationship (VDM for nickel alloys, Arcelor Mittal Industeel for the CREUSABRO range, etc.). The Group also has exclusive agreements for some products and in certain countries. Overview of the group 15

20 6 Other information 6.1 IT system All companies belonging to the JACQUET Abraservice division use the Integrated Management Program (IMP), which was developed in-house. This program includes a business application and a localized accounting solution. These centralized tools are one of the keys to an effective and responsive management control process. This IMP is currently being installed for the STAPPERT brand. The dedicated IT tool provides optimal solutions aimed at simplifying the sales process. It is also an essential tool for implementing purchasing systems based on pooled negotiations. The user interface benefits from the user-friendliness of a full web mode. Every user can access all their brand's inventories in real-time. "Intra-group" sales are processed automatically. Marketing documents are published in the local language and comply with national presentation specifications. The business application for each brand is available in many languages, which simplifies the day-today work of all users throughout the world. For example, all user interface screens are available in Chinese; when a Chinese employee handles an order in Shanghai in their native tongue, this order can be viewed in French at the Group s head office. The business application has been developed using state-of-the-art technologies (full web mode on a LAOP Linux-Apache platform, Oracle database, PHP), while all Group websites are connected to the central website via an MPLS and VPN IPsec network. The high degree of scalability of the chosen solution enables the Group s developments over the coming years to be supported without problems, regardless of the number of users and / or volumes handled. The historical IMS group and STAPPERT brand companies primarily use the Stratix IMP and specific IMSX developments, which supplement the logistic functionalities of the Stratix product. Adapting the in-house developed IMP to the long product distribution businesses (STAPPERT and IMS group brands) required a significant number of changes and the development of additional modules. The main IMP modules have now been developed and the first STAPPERT Polska website has been rolled out. Local customization and the roll-out of the IMP developed in-house on STAPPERT brand companies will be continued in Schmolz+Bickenbach Distribution are using the SAP IMP and a number of peripheral systems. The final separation of the systems used by these companies from the seller's global system is currently in process, under the seller's responsibility, and will be completed by the end of first half The systems will operate in an identical manner before and after separation. 6.2 Brand development Overview of the group The Group is developing the use of its brands via a business model that is unusual in the metal distribution sector. Joint ventures (JVs) are set up with a local partner, who is usually the manager of the JV. This partner invests and receives an equity interest in the JV that ranges between 10 and 49%; the partner commits to recapitalizing the JV at least up to the amount initially invested in the event of losses. The JV benefits from the exclusive right to use the brand and can therefore market the full range of the brand s products in a specified area. The local partner benefits from a set of resources made available to them by the Group, such as terms and condi- tions of purchase, a product / market information system tailored to their business, staff training, access to an information network, etc. Every effort is made to enable the local partner to focus on their main goal, i.e. generating profitable sales. Local managers manage their inventories in accordance with the marketing policy that they have determined. Managers' compensation is largely based on the JV's results. The Group invoices the JV for services performed, primarily management fees and IT services. Where applicable, managers also receive dividends in proportion to the shares they hold. 16

21 6.3 Capital expenditure policy This information is provided in paragraph 1.4 " Consolidated financial position Capital expenditure " in the Management Report Information on the Group. 6.4 Risk factors This information is provided in paragraph 1.6 " Risk factors " in the Management Report Information on the Group. Overview of the group 17

22 7 Stock market information General features of shares and market capitalization sources: Jacquet Metal Service > Indices: CAC All Shares, CAC All- Tradable, CAC Basic Materials, CAC Mid & Small, CAC Small, Enternext PEA-PME 150, Next 150 > Market: Euronext Paris - Compartment B > Listed on: Euronext Paris > Code or ticker: JCQ > Code ISIN: FR > Reuters: JCQ.PA > Bloomberg: JCQ: FP Number of shares at end of period number of shares 24,028,438 24,028,438 24,028,438 24,028,438 24,028,438 Market capitalization at end of period , , , , ,507 High 20,24 17,80 13,25 12,17 19,30 Low 11,32 12,31 8,64 6,84 7,20 Price at end of period 14,30 15,55 13,03 8,78 7,97 Average daily trading volume number of shares 28,679 23,203 17,331 20,661 31,596 Average daily traded capital number of shares 465, , , , ,870 At December 31, 2015, the Jacquet Metal Service ("JCQ") share price was 14.30, down 8.0% from the December 31, 2014 closing price. On March 9, the share price was Jacquet Metal Service shares are monitored by Société Générale SGCIB, Oddo Securities and ID MidCaps JCQ (closing price) Share price Stoxx Europe TMI Industrial Metals (indexed on JCQ at Jan. 1, 2015) 0.0 Overview of the group 140, , ,000 80,000 60,000 40,000 20,000 0 Volume Number of shares at end of period number of shares 24,028,438 24,028,438 Market capitalization at end of period , ,642 High Low Price at end of period Average daily trading volume number of shares 28,679 23,203 source: Euronext

23 8 Shareholder structure Share capital 1 Voting rights 1 Other 52.08% Éric Jacquet / JSA 40.32% Other 41.98% Éric Jacquet / JSA 51.97% Treasury shares 1.60% R.W. Colburn Treasury shares 6.00% R.W. Colburn 1.28% 4.77% 1 At December 31, 2015 On December 16, 2015, Éric Jacquet declared that on December 12, 2015, directly and indirectly via JSA and Jeric, companies that he controls, he exceeded the 50% threshold of voting rights in the company and that he directly and indirectly held 40.32% of the share capital and 51.97% of the voting rights. The Group did not sell or buy any treasury stock (outside the scope of the liquidity contract) in Financial communication schedule > Q results: May 3, 2016 > General Meeting: June 30, 2016 > H results: September 7, 2016 Investors and shareholders may obtain complete financial information on the Company's website at: > Q results: November 9, 2016 > 2016 full-year results: March 2017 Investor relations > Jacquet Metal Service Thierry Philippe Chief Financial Officer comfi@jacquetmetals.com > NewCap Emmanuel Huynh / Julien Perez Tél : jacquetmetalservice@newcap.eu Overview of the group 19

24 > 2015 Financial report 1 Management report Information on the group 1.1 Group results for 2015 The results for the year ended December 31, 2015 are compared to the full-year results for 2014, which may be consulted in the 2014 Registration Document filed with the Autorité des Marchés Financiers (French market regulator or AMF) on March 17, 2015 (filing no. D ). 000 Q Q Sales 376, ,260 1,377,507 1,126,029 Gross margin 83,222 71, , ,487 % of sales 22.1% 26.5% 22.6% 25.2% Operating expenses (84,170) (59,634) (285,939) (225,427) Net depreciation and amortization (5,319) (3,461) (17,086) (13,675) Net provisions 3, , Gains/(losses) on disposals of non-current assets , Non-recurring income and expenses (346) 0 57,008 0 Operating income / (loss) (2,494) 10,529 70,771 45,177 % of sales -0.7% 3.9% 5.1% 4.0% Financial report 1 Management report Information on the group Net financial income / (expense) (2,081) (1,419) (9,673) (7,625) Income before tax (4,575) 9,110 61,098 37,552 Corporate income tax (3,747) (1,842) (9,353) (10,676) Consolidated net income / (loss) (8,322) 7,268 51,745 26,876 Net income / (loss) (Group share) (9,110) 7,061 50,473 25,154 Earnings per share in circulation ( ) (0.38) Adjusted EBITDA ,630 38,037 58,060 % of sales 0.2% 4.3% 2.8% 5.2% Operating income / (loss) before non-recurring items 2 (2,690) 10,491 21,687 44,944 % of sales -0.7% 3.9% 1.6% 4.0% 1 Including the distribution business purchased from Schmolz+Bickenbach ("Schmolz+Bickenbach Distribution") from July 22, Adjusted for non-recurring items (non-ifrs financial indicators) 20

25 1.2 Group sales and earnings 2015 was marked by: > A 3.5% increase in volumes (at constant consolidation); > The July acquisition of Schmolz+Bickenbach Distribution 1, which operates in Germany, Austria, the Netherlands and Belgium and generates annual sales of around 600 million. Including this acquisition, 2015 proforma sales (12 months) should amounted to 1.7 billion, 42% of which was earned in Germany, the Group's principal market; > Market conditions, particularly challenging from the third quarter onwards and characterized by an ongoing decline in raw material prices, bringing down both sale prices and gross margins. At the beginning of 2016, the market was still marked by low raw material prices. In 2016, the Group will focus on improving the operating efficiency of each of its brands and, primarily, on turning around the business of Schmolz+Bickenbach Distribution. 1 These activities consist of 6 companies: Schmolz + Bickenbach Distributions GmbH (Germany), Günther + Schramm GmbH (Germany), Dr.Wilhelm Mertens GmbH (Germany), Schmolz + Bickenbach Austria GmbH (Austria), IMS Schmolz + Bickenbach, IMS Nederland BV and Schmolz + Bickenbach Belgium SA"; the term used hereinafter "Schmolz + Bickenbach Distribution" refers to the scope and activity constituted by these six entities. Sales The Group posted 2015 full-year sales of 1.38 billion, up 22.3% from 2014, with volumes up 3.5% (at constant consolidation), average prices down 3.3% and a +22.1% change in consolidation following the acquisition of Schmolz+Bickenbach Distribution in July m Q Q Sales , ,126.0 Change vs % 22.3% Price effect -10.2% -3.3% Volume effect 4.2% 3.5% Change in consolidation 45.8% 22.1% Gross margin The 2015 gross margin amounted to million or 22.6% of sales (24.0% at constant consolidation) versus 25.2% in Excluding non-recurring items (mainly related to the first-time consolidation of Schmolz+Bickenbach Distribution), the 2015 gross margin amounted to million or 22.9% of sales. m Q Q Gross margin % of sales 22.1% 26.5% 22.6% 25.2% Financial report 1 Management report Information on the group 21

26 Information on the group Operating income / (loss) Operating expenses (including net depreciation, amortization and provision charges) amounted to million, up from million in The 60.6 million increase is mainly due to: > million due to changes in consolidation (mainly related to the acquisition of the Rolark group in 2014 and Schmolz+Bickenbach Distribution in 2015); > million in non-recurring expenses; Operating expenses before non-recurring items were kept under control and increased by 0.4% at constant consolidation compared to the previous year. As a result, adjusted EBITDA came to 38.0 million (2.8% of sales), while operating income before non-recurring items amounted to 21.7 million (1.6% of sales). Operating income amounted to 70.8 million, which includes net non-recurring income of 48.1 million mainly related to the Schmolz+Bickenbach Distribution acquisition. In particular operating income includes a provisional 57 million badwill gain (the valuation of which will be finalized by July 22, 2016). Net financial income / (expense) The 2015 net financial expense came to 9.7 million, compared to 7.6 million in the previous year. This includes 1.7 million in non-recurring bank fees and commissions incurred mainly in connection with the acquisition of Schmolz+Bickenbach Distribution. The average cost of gross debt in 2015 was 2.6%, compared to 2.8% in m Q Q Net cost of debt (1.8) (1.3) (7.9) (5.3) Other financial items (0.3) (0.2) (1.8) (2.3) Financial report 1 Management report Information on the group Net financial income / (expense) (2.1) (1.4) (9.7) (7.6) Net income Net income (Group share) came to 50.5 million, entailing earnings per share of This includes non-recurring items not subject to corporate income tax (including a provisional badwill gain of 57 million). m Q Q Income / (loss) before tax (4.6) Corporate income tax (3.7) (1.8) (9.4) (10.7) Consolidated net income / (loss) (8.3) Minority interests (0.8) (0.2) (1.3) (1.7) Net income (Group share) (9.1) % of sales -2.4% 2.6% 3.7% 2.2% 22

27 1.3 Sales and earnings by division JACQUET Abraservice Stainless steel and wear-resistant quarto plates This division comprises the JACQUET and Abraservice brands, respectively specialized in the distribution of stainless steel and wear-resistant quarto plates. JACQUET and Abraservice have separate sales networks. The division's sales and earnings were impacted by falling prices, especially during the second half of the year (Q3 down 11.4%, Q4 down 11.5%) and by particularly challenging market conditions in the United States. JACQUET Abraservice posted full-year sales of million, up 14.2% from 2014 and including: > volume growth of 9.7% compared to 2014 (at constant consolidation); > a +7.2% change in consolidation following the acquisition of the Canadian Rolark group in 2014; > prices down 2.7% compared to The division posted adjusted EBITDA of 7.7 million (2.3% of sales), compared to 10.2 million in In 2016, the division will focus on improving operating efficiency in each of its regions. m Q Q Sales Change vs % 14.2% Price effect -11.5% -2.7% Volume effect 9.5% 9.7% Change in consolidation 1.3% 7.2% Gross margin % of sales 29.8% 30.5% 28.2% 29.3% Adjusted EBITDA % of sales 0.1% 2.9% 2.3% 3.4% Operating income before non-recurring items % of sales -2.4% 0.8% 0.0% 1.4% 1 Adjusted for non-recurring items (non-ifrs financial indicators) Financial report 1 Management report Information on the group 23

28 Information on the group JACQUET brand m Q Q Sales Change vs % 24.5% Price effect -14.2% -3.9% Volume effect 17.5% 11.6% Change in consolidation 1.6% 9.1% Gross margin % of sales 26.9% 28.5% 25.6% 28.0% Adjusted EBITDA % of sales 0.5% 3.5% 2.5% 4.0% 1 Adjusted for non-recurring items (non-ifrs financial indicators) Financial report 1 Management report Information on the group Abraservice brand m Q Q Sales Change vs % -3.9% Price effect -0.3% 0.1% Volume effect -14.0% -4.0% Change in consolidation 0.0% 0.0% Gross margin % of sales 34.4% 33.0% 32.8% 32.1% Adjusted EBITDA % of sales -1.9% 0.4% 0.7% 1.1% 1 Adjusted for non-recurring items (non-ifrs financial indicators) 24

29 STAPPERT Long stainless steel products In 2015, STAPPERT results, specialist of the distribution of long stainless steel products, were impacted by falling prices in the second half of 2015 (Q3 down 6.9%, Q4 down 10.7%). STAPPERT posted full-year sales of million, down 2.9% from 2014 (-1.1% volume effect; -1.8% price effect) adjusted EBITDA amounted to 13.8 million (3.1% of sales), compared to 26.5 million in This change is mainly due to falling prices in the second half of STAPPERT will focus 2016 capital expenditure on Europe. In the medium term, the brand may also set up operations in North America. m Q Q Sales Change vs % -2.9% Price effect -10.7% -1.8% Volume effect 2.5% -1.1% Change in consolidation 0.0% 0.0% Gross margin % of sales 19.3% 23.4% 19.5% 22.0% Adjusted EBITDA % of sales 0.4% 5.7% 3.1% 5.9% Operating income before non-recurring items % of sales -0.5% 5.0% 2.5% 5.2% 1 Adjusted for non-recurring items (non-ifrs financial indicators) Financial report 1 Management report Information on the group 25

30 Information on the group IMS group Engineering steels Financial report 1 Management report Information on the group IMS group specializes in the distribution of engineering steels, mainly in the form of long products. Schmolz+Bickenbach Distribution has been part of this division since July 22, The division's results were impacted, particularly since the second half of the year, by challenging market conditions and the performance of Schmolz+Bickenbach Distribution in Germany. IMS group posted full-year sales of million, up 59.2% versus 2014 (+3.9% volume effect at constant consolidation; +60.3% price effect; -5.0% change in consolidation) adjusted EBITDA amounted to 7.7 million (1.3% of sales). At constant consolidation (i.e. excluding Schmolz+Bickenbach Distribution), IMS group adjusted EBITDA came to 13.9 million, compared to 15.3 million in In 2016, the division will focus mainly on turning around the business of Schmolz+Bickenbach Distribution. m Q Q Sales Change vs % 59.2% Price effect -8.8% -5.0% Volume effect 2.0% 3.9% Change in consolidation 135.4% 60.3% Gross margin % of sales 19.9% 25.3% 20.9% 24.4% Adjusted EBITDA % of sales -1.4% 2.3% 1.3% 4.1% Operating income before non-recurring items % of sales -1.5% 3.6% 0.5% 3.5% 26 1 Including the distribution business purchased from Schmolz+Bickenbach ("Schmolz+Bickenbach Distribution") from July 22, Adjusted for non-recurring items (non-ifrs financial indicators)

31 1.4 Consolidated financial position Simplified balance sheet The summary balance sheet below presents Jacquet Metal Service's consolidated financial position at December 31, 2015 and December 31, Goodwill 68,356 68,515 Net non-current assets 151,015 99,960 Net inventory 390, ,441 Net trade receivables 175, ,762 Other assets 83,887 51,945 Cash 90,588 63,151 Total assets 959, ,774 Shareholders' equity 295, ,930 Provisions for contingencies and charges and employee benefit obligations 106,029 52,766 Trade payables 192, ,716 Borrowings 306, ,462 Other liabilities 58,329 49,900 Total equity and liabilities 959, ,774 Working capital At December 31, 2015, net operating working capital amounted to 27% of sales ( 373 million), compared to 25% in Net inventory 390, ,441 Days inventory outstanding (rolling 12 months) Net trade receivables 175, ,762 Days inventory outstanding (rolling 12 months) Trade payables (192,932) (147,716) Days payable outstanding (rolling 12 months) Net operating working capital 372, ,487 % of sales % 25.0% Other receivables/payables excl. taxes and financial items (27,087) (21,809) Working capital excl. taxes and financial items 345, ,678 Changes in consolidation and other 104,365 Financial report 1 Management report Information on the group Working capital before taxes and financial items and adjusted for other changes 345, ,043 % of sales % 32.3% 1 On a proforma rolling 12-month basis including Schmolz+Bickenbach Distribution 27

32 Information on the group At December 31, 2015, inventory amounted to 390 million, representing 127 days of sales compared to 137 days at December 31, This decrease is the result of changes in the product mix, mainly due to the Schmolz+Bickenbach Distribution acquisition. Trade receivables at December 31, 2015 stood at million, up 30.4 million from December 31, The average trade receivable collection period was shortened to 49 days sales outstanding. This decrease is mainly due to the acquisition of Schmolz+Bickenbach Distribution, which mainly operates in Germany where payment terms are shorter than in southern Europe. Trade payables increased by 45.2 million and amounted to million at December 31, The average supplier payment timeframe was 62 days payable outstanding, 5 days less than in Again, this was due to the Schmolz+Bickenbach Distribution acquisition, given that the latter is subject to shorter supplier payment terms (46 days payable) than the rest of the Group. Provisions for contingencies and charges and employee benefits obligation On December 31, 2015, provisions for contingencies and charges and employee benefits obligation amounted to million compared to 52.8 million at December 31, This increase is mainly due to the integration of provisions for contingencies and charges and employee benefits obligation (retirement pensions ) of Schmolz+Bickenbach Distribution (change in consolidation). Net debt Financial report 1 Management report Information on the group At December 31, 2015, Group net debt stood at million compared to shareholders' equity of million, resulting in a debt to equity ratio of 72.3% Borrowings 306, ,462 Cash, cash equivalents and others 93,064 63,151 Net debt 213, ,311 Debt to equity ratio 72.3% 52.5% 28

33 Financing At December 31, 2015, the Group had million in lines of credit, 52% of which had been used as follows: m Authorized at Used at % used Jacquet Metal Service SA financing % Syndicated revolving loan % Schuldscheindarlehen (private placement of debt instruments under German law) % Credit lines % Subsidiary financing % Credit lines % Factoring % Asset financing (term loans and leasing) % Total % In addition to the financing shown in the preceding table, at December 31, 2015 the Group also had 61.2 million of non-recourse receivables credit lines, of which 21.5 million were drawn down. Financing covenants mainly apply to the syndicated revolving loan and the private placement of debt instruments under German law (Schuldscheindarlehen) contracted by Jacquet Metal Service SA in These covenants represent mainly commitments for the Group. The main terms of the new syndicated revolving loan are as follows: > Date of signature: July 16, 2015; > Maturity: July 16, 2018; > Amount: 125 million; > Guarantee: None; > Change of control clause: JSA must hold at least 40% of Jacquet Metal Service SA's share capital and voting rights; > Main covenants for 2015: > Net debt less than 325 million or leverage ratio less than 2.0, > Annual capital expenditure less than 40 million, > Debt to equity ratio less than 1; > Main covenants for 2016: > Net debt less than 300 million or leverage ratio less than 2.0, > Annual capital expenditure less than 30 million, > Debt to equity ratio less than 1. The main terms of the Schuldscheindarlehen are as follows: > Date of signature: October 30, 2015; > Maturity: October 30, 2020; > Amount: 88 million; > Guarantee: None; > Change of control clause: JSA must hold at least 40% of Jacquet Metal Service SA's share capital and voting rights; > Main covenant: > Debt to equity ratio less than 1. The financing covenants were in compliance at December 31, Financial report 1 Management report Information on the group 29

34 Information on the group Cash flow Operating cash flow before change in working capital 24,354 52,688 Change in working capital 18,597 (64,577) Cash flow from operating activities 42,951 (11,889) Capital expenditure (28,882) (14,249) Asset disposals 4, Impact of acquisitions (59,956) (9,212) Dividends paid to shareholders of Jacquet Metal Service SA (18,231) (13,978) Interest paid (10,296) (6,865) Other movements (6,667) (3,386) Change in net debt (76,219) (59,046) Net debt brought forward 137,311 78,265 Net debt carried forward 213, ,311 In 2015, the Group generated operating cash flow of 43 million, compared to a 11.9 million outflow in Group capital expenditure for the year was mainly related to new finishing capacity and amounted to 28.9 million, compared to 14.2 million in The preliminary purchase price (equity value) amounts to 56.6 million (max. amount). The final price will be determined after discussion between the Parties. To date, Jacquet Metal Service paid an amount of 48.6 million. Net debt stood at million, compared to million at the end of the previous year. Financial report 1 Management report Information on the group Development Brand development consists mainly in opening new service centers in order to cover new geographical regions. The average investment for a warehouse is around 3 million, two-thirds of which corresponds to inventories. Given the nature of its business, i.e. the distribution of specialty steels, capital expenditure primarily involves buildings and finishing capacity (cutting and folding machines, etc.). Post balance sheet events None. This development model requires relatively little capital outlay and is implemented at a rate adapted to the economic conditions encountered. It is also low-risk, given that inventories and machineries can quickly be used by other brand warehouses in the event that a service center has a low return on investment. Given the nature of its business, Jacquet Metal Service Group is not required to invest in research and development. 30

35 1.5 Staff information The Group's headcount at December 31, 2015 was 3,356 (full-time equivalent) employees compared with 2,413 at December 31, Full-time equivalent at closing date 3,356 2,413 Average headcount 2,815 2,398 France Other countries 2,278 1,879 The Group complies with local statutory working time requirements in accordance with the legislation of each country in which it operates. 1.6 Risk factors The Company's management has reviewed the risks that could have a material adverse impact on its business, financial position or income (or on its ability to meet its targets) and believes that there are no significant risks other than those set out below. Once a quarter, the Group's senior management meets the brand Chief Operating Officers. The primary purpose of these meetings is to review results, monitor targets, identify growth opportunities and survey risks. This survey is supplemented by a half-yearly report on the risks identified by the subsidiaries. The main risk areas identified relate to: > The economic environment: change in third parties' attitudes, changes in prices, especially the prices of raw materials, and market trends; Risks relating to the Group s operations IT system risk All the companies belonging to the JACQUET and Abraservice brands only use the Integrated Management Program (IMP) historically developed by Jacquet Metal Service. This program includes a business application and a localized accounting solution. These centralized tools > Operations: strategic monitoring, choice of acquisitions and their successful integration, business continuity in the event of a crisis and the effectiveness of control processes; > Human resources: motivation and loyalty of employees, reliance of the Group or its subsidiaries on specific senior executives and key personnel; > Support functions: performance and adjustments to the IT systems and tools for measuring financial performance. Risks other than those identified above may exist. Either they have not been identified to date, or their occurrence is not considered likely to have a material adverse impact on the Group. are one of the keys to effective and responsive financial control. The migration of the STAPPERT brand to this information system is currently underway, while that of IMS group is scheduled for a later date. Financial report 1 Management report Information on the group 31

36 Information on the group Jacquet Metal Service protects its IT architecture against risks of outage or disaster by using several IT rooms. Every item of equipment is installed in two separate inter-connected rooms, enabling ongoing real-time data duplication in both locations. The production rooms are hosted in data centers that provide a high level of service and access security, as well as broadband Internet access Procurement risk The nature of Jacquet Metal Service's business guarantees the Company's independence in terms of any specific supply contract. This strategy is reflected in a diversified procurement policy and a stringent supplier selection process specifically aimed at avoiding dependence on one or more suppliers Distribution risk Jacquet Metal Service primarily distributes its products via intermediaries and second-tier distributors, which makes it impossible to monitor the final destination of the products Risk of industrial accidents The Group considers that it complies with applicable safety rules and statutory provisions in each country. However, the measures adopted do not provide complete assurance that no industrial accident will occur Market risk Country risk Financial report 1 Management report Information on the group The Group generates over 90% of its sales in Europe and primarily operates in countries that are members of the European Union or are considered to be politically stable. The country risk is therefore considered to be low Purchase price elasticity risk Purchase prices of stainless steels (JACQUET and STAPPERT) usually consist of two separate components: > the base price, which is the outcome of negotiations at the time when the order is placed with each producer; and > a more variable portion, which depends on the trend in raw material prices. This includes, for example, the scrap surcharge for engineering steels or the alloy surcharge for stainless steels. The alloy surcharge is usually determined at the time of delivery, in accordance with a calculation formula specific to each producer, which factors in the cost of nickel, chromium, titanium, molybdenum and scrap metal, the euro-us dollar exchange rate, etc. Furthermore, delivery lead times are a major parameter for determining prices. In fact, they are usually not adhered to, and generally range between 1 and 12 months. Given the fluctuations in raw material prices that affect the value chain, purchase prices may be subject to adjustment clauses depending on compliance with delivery lead times. Some agreements may also provide for the final price to be adjusted depending on the actual delivery date, rather than on the theoretical date, while the base price may be revised retroactively by the producer, etc. Lastly, annual price reductions may be provided for in accordance with the volumes purchased and the producer s overall performance. The Group's gross margin as a percentage of sales varies in accordance with the following factors: > Changes in the business mix (relative contributions of brands to sales, in view of differences between individual brand margin rates); > The price levels in absolute value terms; > The impact of price changes on inventory rundown. 32

37 Accordingly, Group policy and industry practice tend to pass on any purchase price increases that occur directly to customers, with immediate effect if possible. Conversely, if prices decrease, the Group s competitive positioning requires it to pass on these price decreases within variable timeframes. The option whether to pass on price increases and decreases results in an inventory price effect and a gross margin effect. Changes in base steel prices and in the prices of certain metals used in alloys (nickel, molybdenum, chromium etc.) also impact the gross margin as a percentage of revenues Risk of changes in metal prices The Group does not use any financial instruments to hedge fluctuations in the price of the raw materials used as components in the steels that it markets. In the case of some of the metals used (especially molybdenum and chromium), this is due to the lack of a market allowing such a hedging process. In the case of nickel, the lack of hedging is a management decision, as the Group currently considers that such a policy would not necessarily be effective and could even be financially counter-productive, as the related costs may be higher than the profits likely to result. The advisability of implementing such a hedging policy is the subject of periodic reviews. To date, the policy has been to remain exposed to fluctuations in metal prices. The Group is not able to provide relevant and reliable quantified information regarding the elasticity and sensitivity of prices and margins, due to the large number of factors taken into account when setting raw material purchase prices and sale prices Currency risk The subsidiaries' raw material purchases are mainly carried out in euros, given the Group's geographical locations. Accordingly, the Group's exposure to currency risk primarily concerns purchases in euros made by subsidiaries based outside the euro zone, while other cash flows are expressed in the functional currency of each subsidiary Interest rate risk Cash investments primarily consist of term deposits, where the interest-rate risk is limited. Exposure to interest-rate risk primarily relates to the floating-rate debt, which is partly hedged via hedging instruments Liquidity risk Some loans are subject to compliance with covenants. As explained in Section 5.4 of the Notes to the 2015 consolidated financial statements, such clauses were not applicable at December 31, The Group has carried out a specific review of its liquidity risk and considers that it is able to meet its future liabilities as they fall due. Jacquet Metal Service SA is exposed to currency risk when it grants cash advances in local currencies to subsidiaries outside the euro zone. An assessment of currency risk is set out in Section of the Notes to the 2015 consolidated financial statements. An assessment of these risks is set out in Section of the Notes to the 2015 consolidated financial statements. An assessment of liquidity risk is set out in Section of the Notes to the 2015 consolidated financial statements. Financial report 1 Management report Information on the group 33

38 Information on the group Credit and counterparty risk The Group's exposure to credit and counterparty risk primarily relates to uninsured trade receivables. The Group is not in a position of commercial dependence on its customers. Moreover, the Group is not dependent on a specific supplier and only uses sub-contractors on an occasional basis. An assessment of these risks is set out in Section of the Notes to the 2015 consolidated financial statements Equity risk Jacquet Metal Service SA does not hold a share portfolio, except for its treasury shares. The Group held 385,406 treasury shares at December 31, 2015, which represented 1.6% of the share capital and a net value of 5.5 million. A 10% fall in the Jacquet Metal Service share price would result in a 0.6 million decrease in Jacquet Metal Service SA's net financial income. However, any change in Jacquet Metal Service's share price would have no impact on the Group's consolidated net income and consolidated shareholders' equity, as the treasury shares are eliminated from the consolidated shareholders' equity and any potential impact on net income is neutralized Legal risk There are no pending or imminent government, judicial or arbitration proceedings, including any proceedings of which the Company is aware, likely to have a material impact on the Company's and / or Group's financial position or profitability. Neither have any such proceedings had such an impact over the past 12 months. Financial report 1 Management report Information on the group Patents The Company does not depend on patents to carry out its business activities Sub-contracting There is no dependence on sub-contractors. 34

39 1.6.6 Insurance and risk coverage In the case of operational risks, each Jacquet Metal Service Group subsidiary has a risk coverage suited to its operations, through insurance policies taken out locally or by the Group and covering all potential risks, such as: > Property damage and consequential operating losses; > The liability of corporate officers and directors; > General third-party liability: the Group has taken out a master policy with AIG covering the consequences of the Company s and its subsidiaries liability for damage caused to third parties up to an amount of 25 million per claim for all types of damage combined, subject to the specific limits per type of risk provided for in the policy. The Company believes that its insurance cover complies with French and European professional third-party liability insurance standards and is sufficiently broad to cover the standard risks inherent to its operations. However, it cannot guarantee that these policies will cover all the claims that the Group may face. No material potential risk where the consequences were not already included in the 2015 financial statements had been identified at December 31, Environmental risk Given that its operations involve distribution and processing prior to delivery, Jacquet Metal Service does not incur any material environmental risk. In fact, Jacquet Metal Service does not use any particularly hazardous substances and its operations do not have a material impact on the environment. However, further tightening of environmental and safety requirements cannot be ruled out in the future. Furthermore, some of the facilities used by the Group companies have a long industrial history. Accordingly, the Group could be held liable for any pollution, including legacy pollution, identified at facilities currently or previously used by the Group. To date, Jacquet Metal Service has not been informed of any environmental constraints likely to affect the Group s use of its property, plant and equipment. Financial report 1 Management report Information on the group 35

40 2 Management report Information on the parent company Jacquet Metal Service SA Jacquet Metal Service SA, hereinafter the "Company", holds equity interests in the Group subsidiaries on a direct or indirect basis. Its main functions are as follows: > Defining the Group's strategy and coordinating its development; > Developing and maintaining the information systems; > Controlling, coordinating, and negotiating purchasing terms and conditions with the main producers; > Financial audits, financing management, financial communications, and investor relations; > Corporate communications. The Jacquet Metal Service SA financial statements for the year ended December 31, 2015 were prepared in accordance with French statutory requirements and in accordance with the same accounting principles and policies as those applied in the preparation of the financial statements for the previous financial year financial position and earnings Income statement Financial report 2 Management report Information on the parent company Sales 22,450 18,290 Operating income / (loss) (2,629) (295) Net financial income 17,662 10,306 Net non-recurring income Net income 15,066 10,541 Jacquet Metal Service SA's sales amounted to 22.5 million in These sales include services invoiced to the subsidiaries, primarily for management and IT services. The trend in sales is largely related to the Group s business volumes and development. The operating loss amounted to 2.6 million compared with 0.3 million in This change was primarily due to the increase in expenses relating to the Group's development, mainly the acquisition of Schmolz+Bickenbach Distribution), which were not reinvoiced to the subsidiaries. Net financial income amounted to 17.7 million compared with 10.3 million in This improvement was primarily due to the increase in dividends received from the subsidiaries. Under these conditions, the Company's net income amounted to 15.1 million compared with 10.5 million in

41 2.1.2 Statement of financial position Financial assets 258, ,705 Intangible assets and PP&E 2,221 2,431 Cash and cash equivalents 45,901 25,243 Other assets 122, ,643 Total assets 428, ,023 Shareholders' equity 208, ,862 Debt 193, ,033 Other liabilities 26,658 22,128 Total equity and liabilities 428, ,023 Financial assets Financial assets amounted to million at December 31, 2015, and broke down as follows: Equity investments 157, ,817 Receivables relating to equity investments 94,583 44,394 Other financial assets 5,804 5,494 Total net financial assets 258, ,705 Other financial assets primarily consist of treasury shares ( 5.3 million). Jacquet Metal Service SA did not dispose of or purchase any treasury shares during 2015, excluding transactions relating to the liquidity contract. The annualchange corresponds to variations relating to the liquidity contract. Cash and cash equivalents Net Cash amounted to 20.8 million as of, December 31, 2015, partially of which is invested in interest-bearing deposit accounts. Other assets Other assets, which amounted to million at the end of 2015, primarily consist of receivables from subsidiaries (cash pooling accounts Debt Debt amounted to million at December 31, 2015, and broke down as follows: > 167 million in loans and other borrowings from banks, including 88 million relating to the Schuldscheindarlehen, and bank overdrafts of 25.1 million; > Liabilities of 25.7 million (cash pooling accounts); > other financial liabilities amounting to 0.9 million. Other liabilities Financial report 2 Management report Information on the parent company Other liabilities amounted to 26.7 million at the end of 2015, including 21.8 million in operating liabilities, and 4.9 million in provisions for employee benefits valued by external actuaries. 37

42 Information on the parent company Payment schedule for trade receivables and trade payables 000 Balance sheet item Balance sheet total Balance of Of which receivables closing and payables entries 1 Balance not yet due < 30 days overdue Past due 30 to 60 days overdue 60 to 90 days overdue > 90 days overdue Trade receivables 15, ,122 9, Trade payables 8,332 1,439 6,893 5, Trade receivables 11, ,558 7, (7) Trade payables 7,409 2,339 5,070 4, Invoices to be issued and accrued invoices Amounts more than 90 days overdue mainly correspond to receivables and debts contracted with subsidiaries. 2.2 Share capital The share capital at December 31, 2015 was unchanged from the previous financial year. It consists of 24,028,438 shares, with a total value of 36,631, Progress and outlook Financial report 2 Management report Information on the parent company The Company will continue to drive Group strategy and manage its direct and indirect equity investments in the various subsidiaries. The Group's progress and outlook are set out in paragraph 1.2 of the "Management Report Information on the Group". 2.4 Share buyback program and treasury stock (disclosures in compliance with Article L of the French Commercial Code) In its tenth resolution, the General Meeting of June 26, 2015 authorized the Board to buy back the Company's shares in order to: > encourage transaction liquidity and regular listing of the Company's shares or avoid any share price discrepancies not justified by market trends, via a liquidity contract entered into with an investment service provider on an independent basis, under the conditions and in accordance with the procedures determined by regulations and recognized market practices, and in compliance with a code of conduct recognized by the French Financial Markets Authority; > grant shares to officers or employees of the Company and / or companies in its Group under the terms and conditions established by the applicable statutory and regulatory provisions, in relation to (i) sharing the benefits of the Company's expansion, (ii) the stock option system provided for by Articles L et seq. of the French Commercial Code, (iii) the bonus share system provided for by Articles L et seq. of the French Commercial Code, and (iv) a company savings plan, as well as to execute all hedging transactions related to these operations, under the conditions established by market regulators and at such times as the Board of Directors or the person acting as its representative so decides; 38

43 > deliver shares upon the exercise of rights attached to securities granting immediate or subsequent entitlement to the award of Company shares, via redemption, conversion, exchange, presentation of a warrant or any other means, as well as to perform any hedging transactions relating to the issuance of such securities, under the conditions established by the market regulatory authorities and at such times as the Board of Directors or the person acting on its authority so decides; > hold the shares and tender them at a later date in payment or exchange as part of potential acquisitions, mergers, demergers or contributions, in compliance with market practices approved by the French Financial Markets Authority; > cancel all or some of the shares by means of a capital reduction (primarily with a view to optimizing cash management, return on equity or earnings per share). The terms and conditions of the share buyback program are as follows: > The maximum price at which the Company may buy back its own shares is set at 50 per share, on the understanding that this price will be adjusted accordingly in the event of transactions affecting the share capital, in particular via capitalization of reserves, the award of bonus shares and / or stock splits or reverse stock splits; > The maximum number of shares that may be bought back is set at 10% of the total number of shares comprising the share capital (this percentage shall apply at all times to the share capital as adjusted in accordance with transactions affecting it following the General Meeting of June 26, 2015), with a maximum value of 120,142,190, subject to statutory restrictions. The number of shares purchased by the Company during the term of the share buyback program may not exceed 10% of the shares comprising the Company's share capital (this percentage shall apply at all times to the share capital as adjusted in accordance with transactions affecting it following the General Meeting of June 26, 2015), subject to compliance with the provisions of Article 5 paragraphs 2 and 3 of European Regulation No. 2273/2003/EC, on the understanding that (i) in the case of shares purchased under a liquidity contract, the number of shares taken into consideration for the calculation of the aforementioned cap of 10% of the share capital shall be equal to the number of shares purchased less the number of shares resold during the term of this authorization, and (ii) the number of shares purchased in order to be subsequently tendered as part of a merger, demerger or contribution may not exceed 5% of the Company's share capital at the time of purchase; > The term of the authorization was set at eighteen months as from June 26, As of December 31, 2015, the Group held 385,406 treasury shares representing 1.60% of the share capital and having a net value of 5.3 million. > 300,886 treasury shares were allocated as of December 31, 2015 for the purpose of being exchanged or used as payment in connection with potential acquisitions planned under the share buyback program authorized by the General Meeting of June 26, These were recognized under "Financial assets" at a net book value of 4.1 million; > 84,520 treasury shares were held under the liquidity contract and were recognized under "Financial assets" at a net book value of 1.2 million. The Company did not grant any stock options during the financial year. Financial report 2 Management report Information on the parent company 39

44 Information on the parent company 2.5 Bonus share allocation (disclosures in compliance with Article L of the French Commercial Code) The thirty-third resolution of the June 26, 2014 Combined Ordinary and Extraordinary General Meeting authorized the Board of Directors to allocate existing or future bonus shares to beneficiaries to be chosen from among the salaried employees and corporate executive officers of the Company or related entities within the meaning of Article L of the French Commercial Code, subject to a cap of 3% of the Company's share capital as of the date of the Board's decision to allocate the bonus shares. The term of the authorization was set at thirty-eight months as from June 26, The Board has not made use of this authorization to date. 2.6 Liquidity contract Financial report 2 Management report Information on the parent company Jacquet Metal Service SA entrusted the implementation of a liquidity contract compliant with the AMAFI Code of Conduct to Oddo Corporate Finance on March 17, This contract, which initially expired on December 31, 2008, is renewed on an annual basis. An initial amount of 2,600,000 was made available to the liquidity provider in order to implement this contract. The liquidity contract covered 84,520 shares in Jacquet Metal Service SA with a market value of 1.2 million at December 31, Identity of shareholders exceeding the statutory thresholds The Extraordinary General Meeting of June 30, 2010 granted double voting rights on registered shares held for more than two years. 6,178,020 Jacquet Metal Service shares enjoyed double voting rights at December 31, The voting right percentages are calculated in accordance with the provisions of Article of the AMF General Regulation (concerning all shares with voting rights, including treasury shares stripped of voting rights). Breakdown of share capital and voting rights over the past three years was as follows: No. of shares % capital % voting rights No. of shares % capital % voting rights No. of shares % capital % voting rights JSA / Éric Jacquet 9,688, % 51.97% 9,688, % 48.96% 9,688, % 47.96% Free float 13,954, % 46.75% 13,975, % 49.78% 13,986, % 50.84% Treasury shares 385, % 1.28% 364, % 1.26% 353, % 1.20% 40 Total 24,028, % 100.0% 24,028, % 100.0% 24,028, % 100.0%

45 Jacquet Metal Service SA is not aware of any shareholders who hold over 5% of its share capital or voting rights apart from those listed below: No. of shares % capital % voting rights No. of shares % capital % voting rights Hiscan Patrimonio SAU 1 1,236, % 4.999% R. W. Colburn concert 2 1,440, % 4.77% 1,440, % 4.988% Other float 12,513, % 41.98% 11,297, % 39.79% Total 13,954, % 46.75% 13,975, % 49.78% 1 Fundacion Caixa d Estalvis I Pensions de Barcelona disclosed that it had indirectly crossed the threshold of 5% in the downward direction of the share capital and voting rights on March 17, 2015, through the Spanish limited liability company Hiscan Patrimonio, which it controls, and now indirectly holds 4.98% of capital and 4.00% of voting right. 2 Information dated from March 12, The Group has no additional information since this date. Éric Jacquet and JSA (which is controlled by Éric Jacquet) held 40.32% of the share capital and 51.97% of the voting rights in Jacquet Metal Service SA as of,december 31, In accordance with the provisions of Article L II of the French Commercial Code, Éric Jacquet and JSA are considered to have effective control over Jacquet Metal Service SA insofar as they hold over 40% of the voting rights. Given the measures adopted within the governance structures, the Company considers that there is no risk of abusive control. Accordingly, the Chairman's report on internal control and the Registration Document both state that, in terms of governance: > The Board of Directors is consulted to give its prior consent to material investments and divestments; > A Deputy Chief Executive Officer may also represent the Company; > There are six independent members on the Board of Directors. All members of the Appointment and Compensation Committee and of the Audit and Risk Committee are considered to be independent; > The operation of the Board of Directors is governed by internal regulations that set down rules regarding disclosure in the event of a conflict of interest involving a director. At March 9, 2016, the Company was not aware of any other threshold crossings occurring since the 2015 balance sheet date. 2.8 Dividends paid in respect of the last three financial years Net dividend per share n.a Pay-out ratio n.a. 1 57% 69% 1 not available: decision of the General Meeting unknown at publication of this report. Financial report 2 Management report Information on the parent company 41

46 Information on the parent company 2.9 Share transactions by corporate officers In compliance with Article L of the French Monetary and Financial Code and Article of the AMF General Regulation, transactions involving the Company's financial instruments performed by each member of the Board of Directors and any "related parties" must be disclosed where the total amount of the transactions performed by each director exceeds 5,000 per calendar year. The Company was not informed of any transaction covered by Article L of the French Monetary and Financial Code during the period Transactions concerning stock options (new or existing shares) reserved for Company employees None. Financial report 2 Management report Information on the parent company 2.11 Compensation of corporate officers Compensation of corporate executive officers Summary of the compensation awarded As from July 20, 2010, the corporate executive officers are Mr. Éric Jacquet, Chairman of the Board of Directors and Chief Executive Officer, and Mr. Philippe Goczol, Deputy Chief Executive Officer. The compensation shown below is for the 2014 and 2015 financial years. Éric Jacquet, Chairman of the Board of Directors and Chief Executive Officer Gross amounts in Compensation due for the financial year Valuation of options granted during the financial year Valuation of performance shares granted during the financial year Total

47 Including: Gross amounts in 000 Amounts payable Amounts paid Amounts payable Amounts paid Fixed compensation Variable compensation 1 n.a Exceptional compensation Attendance fees Post-employment benefits In-kind benefits Total The Compensation Committee will meet after the General Meeting called to approve the 2015 financial statements. Philippe Goczol, Deputy Chief Executive Officer Gross amounts in Compensation due for the financial year Valuation of options granted during the financial year Valuation of performance shares granted during the financial year Total Including: Gross amounts in 000 Amounts payable Amounts paid Amounts payable Amounts paid Fixed compensation Variable compensation 1 n.a Exceptional compensation 15 Attendance fees Post-employment benefits In-kind benefits Total The variable portion of the compensation paid to corporate executive officers is based on quantitative criteria: it is a function of the Group's profitability, and the calculation is based on the ratio between net income Group share and consolidated sales. There are no set targets. Where applicable, the qualitative criteria are left to the discretion of the Compensation Committee, which submits the level of directors' annual compensation to the Board of Directors for approval. Variable compensation is payable annually, once the Group's results have been reported. Financial report 2 Management report Information on the parent company 43

48 Information on the parent company Contractual status of corporate officers Employment contract Supplementary pension scheme Indemnities or benefits 1 Indemnities relating to a non-competition clause Corporate executive officers Yes No Yes No Yes No Yes No Éric Jacquet, Chairman and Chief Executive Officer since Philippe Goczol, Deputy Chief Executive Officer since Indemnities or benefits due or potentially due to termination or change of function. The Company pays contributions for retirement benefits and supplementary pension contributions based on a formula common to Company employees, corporate officers and directors. The Company pays a contribution to Mr. Philippe Goczol in the form of a GSC-type directors' unemployment insurance policy, which provides for payment of an indemnity during a period of no more than 18 months as from the month following the occurrence of the event covered by the policy Stock options (new or existing shares) granted to corporate executive officers during the year None Stock options (new or existing shares) exercised by corporate executive officers during the year None. Financial report 2 Management report Information on the parent company Performance shares granted to corporate officers None Performance shares vested during the financial year for corporate officers None Bonus shares None Other information The following facilities, which are directly or indirectly owned by Éric Jacquet, are leased by Jacquet Metal Service SA as part of the Group's operations: Sites rent (excl. VAT) 2014 rent (excl. VAT) Saint-Priest France (69) Villepinte France (93) Lyon 6 ème France (69) Migennes France (89)

49 Indemnity for termination or non-renewal of Philippe Goczol's term of office On November 15, 2010 the Board of Directors decided to grant Philippe Goczol an indemnity for the termination or non-renewal of his duties as the Company's Deputy Chief Executive Officer. The conditions for the payment and amount of the indemnity are determined as follows: Conditions for granting the indemnity: Philippe Goczol shall be granted a termination indemnity under the following circumstances, subject to the Board of Directors acknowledging that any performance conditions have been met: > Decision by the Board of Directors to remove Mr. Philippe Goczol from the office of Deputy Chief Executive Officer; > Decision by the Board of Directors not to renew Philippe Goczol's term of office as Deputy Chief Executive Officer, unless he is offered other salaried or non-salaried duties at the Company and / or related companies within the meaning of Article L of the French Commercial Code, in return for annual compensation equal to 50% of the total gross compensation actually received by Philippe Goczol over the 24-months period prior to the month in which one of the aforementioned decisions is made. "Compensation received" includes fixed and variable compensation (PBMG Group manager profit bonus, attendance bonus and any other variable compensation that the Deputy Chief Executive Officer might receive during his term of office). Compensation does not include stock options and/or bonus share allocations. The gross salary as shown on Philippe Goczol's pay slip will be used to calculate the compensation received over the last 24 months. In addition, the Board of Directors decided that no termination indemnity shall be payable to the Deputy Chief Executive Officer if the termination or non-renewal of his term of office occurs after the date on which he becomes eligible for retirement or has retired. Calculation of the indemnity on the basis of performance requirements The amount of the indemnity is based on the change in the Company's theoretical enterprise value (TEV) between: > 2010, when Mr. Philippe Goczol took office; > and the average TEV for the benchmark period, including the year of departure and the two previous years. This indemnity shall amount to 6 months' salary, if the TEV has increased by an average of 3% to 6% per year compared with 2010, and to 12 months salary, if the average increase is higher than 6% per year. No indemnity will be paid if the average increase in the TEV is less than 3% per year. The following definitions shall apply for the calculation of the indemnities referred to above: > The benchmark salary used to calculate the indemnity equals the gross average fixed and variable compensation (PBMG, attendance bonus and any other variable compensation that the Deputy Chief Executive Officer may receive during his term of office) payable for the last three financial years and available as of the departure date ("Salary"). It is specified that compensation does not include stock options and / or the award of bonus shares in this case; > The TEV shall be assessed every year using the following formula: TEV = average market capitalization + average Group debt, where: > The average market capitalization is equal to the number of shares (recorded at the end of the benchmark period for the year of departure) multiplied by the average of the average daily volume-weighted share prices over the benchmark period; > The average debt is calculated on the basis of the average net debt at the end of the last two benchmark periods; > The benchmark period is determined on the basis of the departure date, as follows: > If the departure occurs before the date of the Board of Directors' meeting to review the half-year financial statements of the departure year (Year N), and no later than September 1 of Year N, the benchmark period for Financial report 2 Management report Information on the parent company 45

50 Information on the parent company the departure year shall be the most recent financial year ended (N-1). The two previous benchmark periods are therefore financial years N-2 and N-3; > If the departure occurs after the date of the Board of Directors' meeting called to review the half-year financial statements of the departure year (Year N) but before the date on which the Board of Directors reviews the annual financial statements of the current financial year (which must be prior to March 1), the benchmark period for the departure year corresponds to the 12 months preceding the half-year closing date (N). The two previous benchmark periods are determined in the same way for the 12 months preceding the closing dates of the two prior first half-years. At its meetings on June 29, 2012 and June 26, 2014, the Board of Directors renewed its approval of this indemnity in accordance with payment terms and conditions identical to those approved at its November 15, 2010 meeting Non-compete clause Financial report 2 Management report Information on the parent company The Board of Directors has authorized the signing of a non-compete clause with Philippe Goczol, Deputy Chief Executive Officer, for a period of no more than one year following the termination of his duties as Deputy Chief Executive Officer. During the contractual non-compete period, the Company shall pay the Deputy Chief Executive Officer a monthly financial compensation amount equal to: > The monthly compensation (hereinafter "MC") 0.5, in the event that the termination of his duties results from his resignation as Deputy Chief Executive Officer; > The monthly compensation (hereinafter "MC") 0.6 in all other cases. MC equals the total gross compensation actually received by Mr. Philippe Goczol over the 12 months preceding the month in which his duties are terminated, divided by 12. "Compensation received" includes fixed and variable compensation (PBMG Group manager profit bonus, attendance bonus and any other variable compensation that the Deputy Chief Executive Officer might receive during his term of office). Compensation does not include stock options and / bonus share allocations. The gross salary shown on Philippe Goczol's pay slip will be used to calculate the compensation received over the last 12 months. The Company shall reserve the right to waive the noncompete clause, and accordingly not to pay the financial compensation amount Remuneration of non-executive directors (Board members) With the exception of Wolfgang Hartmann, who was an employee of STAPPERT Deutschland until December 31, 2015, the directors of Jacquet Metal Service SA are not bound to the Group by an employment contract. The only compensation that they receive in respect of their office corresponds to attendance fees, which are paid on the basis of their effective attendance at the meetings of the Board and its various Committees. The compensation amounts set out below include the compensation paid to JSA as a Board member of the Company. 46

51 net amount in 000 Amounts payable Amounts paid Amounts payable Amounts paid Jean Jacquet Jean-François Clément Henri-Jacques Nougein Xavier Gailly Jacques Leconte Françoise Papapietro Gwendoline Arnaud JSA HISCAN PATRIMONIO CCAN 2007 ETVE SL. 7.1 Wolfgang Hartmann 4.3 Total Staff information The Jacquet Metal Service SA staff consisted of 15 executives at December 31, Financial report 2 Management report Information on the parent company 47

52 Information on the parent company 2.13 List of positions and functions held by corporate officers during the financial year Function Business address Appointment / renewal date End of term Number of shares held Other corporate offices excluding JMS subsidiaries Éric Jacquet Chairman of the Board of Directors Chief Executive Officer c / o Jacquet Metal Service 44 Quai Charles de Gaulle FR Lyon General Meeting 39,530 Managing Director of JSA Manager of SCI du Canal Manager of SCI La Fabrique Manager of SCI Rogna Boue Manager of SCI Quede Manager of SCI de Migennes Manager of Jeric SARL Manager of SCI de Bourgogne Manager of Jacquet Bâtiments EURL Manager of SCI des Brosses Manager of SCI de Mantenay Manager of SCI Cité 44 Manager of SCI Le Petit Sauzaye Jean Jacquet Vice-Chairman of the Board of Directors c / o Jacquet Metal Service 44 Quai Charles de Gaulle FR Lyon General Meeting 3,000 Françoise Papapietro Director c / o Jacquet Metal Service 44 Quai Charles de Gaulle FR Lyon General Meeting 500 Gwendoline Arnaud Director c / o Jacquet Metal Service 44 Quai Charles de Gaulle FR Lyon General Meeting 0 Manager of Cabinet Gwendoline Arnaud et Associés SELARL Manager of SCI PNRAS Manager of SCI LCSG Manager of SCM 2G Financial report 2 Management report Information on the parent company Xavier Gailly Director 4, rue Cleda BE 5521 Serville Wolfgang Hartmann Jacques Leconte Henri-Jacques Nougein JSA Philippe Goczol Director Am Spick 24 DE Meerbusch Director Director Company represented by Philippe Goczol Deputy Chief Executive Officer c / o Jacquet Metal Service 44 Quai Charles de Gaulle FR Lyon c / o Jacquet Metal Service 44 Quai Charles de Gaulle FR Lyon 85, rue de l Abbaye BE 4040 Hertsal c / o Jacquet Metal Service 44 Quai Charles de Gaulle FR Lyon General Meeting General Meeting General Meeting 2016 General Meeting 2016 General Meeting 2016 General Meeting 500 Chairman of GAMI 10, Member of the Thermocross SA Strategy Committee 10 9,648,941 2,431 Joint Manager of SCI des Acquits 48

53 2.14 Governance Board of Directors The Board of Directors' operating procedure is described in the internal regulations adopted by the Board on July 20, 2010 and amended by the Board on January 22, 2014 following the revision of the AFEP MEDEF Corporate Governance Code on June 16, The Board of Directors consists of nine members: > Éric Jacquet; > Jean Jacquet; > Françoise Papapietro; > Gwendoline Arnaud; > Xavier Gailly; > Wolfgang Hartmann; > Jacques Leconte; > Henri-Jacques Nougein; > JSA. The Board of Directors' meeting of May 5, 2015 established the following list of directors considered to be independent: Appointment and Compensation Committee The Appointment and Compensation Committee consists of the following directors, who were appointed by the Board of Directors' meeting of June 26, 2014 for the term of their office as director: Audit and Risk Committee The Audit and Risk Committee consists of the following directors, who were appointed by the Board of Directors' meeting of June 26, 2014 for the term of their office as director: > Jean Jacquet (not related to Éric Jacquet); > Françoise Papapietro; > Gwendoline Arnaud; > Xavier Gailly; > Jacques Leconte; > Henri-Jacques Nougein. The Board of Directors made the following appointments at its June 26, 2014 meeting: > As Chairman of the Board of Directors and Chief Executive Officer: Éric Jacquet, for the term of his office as director; > As Vice-Chairman: Jean Jacquet, for the term of his office as director; > As Deputy Chief Executive Officer: Philippe Goczol, for the period during which Éric Jacquet will perform his duties as Chief Executive Officer. > Henri-Jacques Nougein, Chairman > Jacques Leconte > Jean Jacquet > Jean Jacquet, Chairman > Françoise Papapietro > Xavier Gailly Financial report 2 Management report Information on the parent company 49

54 Information on the parent company 2.15 Appropriation of 2015 earnings The General Meeting's decision was not known at the time when this document was prepared 2.16 Non-deductible expenses referred to in Articles 39-4 and 223 of the French General Tax Code These expenses amounted to 6,991 for the 2015 financial year. The corresponding tax amounted to 2, Significant events occurring between the balance sheet date and the report drafting date Financial report 2 Management report Information on the parent company 50 None Current delegations of authority granted by the General Meeting The Jacquet Metal Service General Meeting on June 26, 2015 granted the following delegations of authority to the Board of Directors: Authority 1 /2 General Meeting Term 1. Authority to increase the Company's capital by capitalization of premiums, reserves, earnings or other. (Resolution No. 23) 2. Authority to increase the Company's share capital through issuance of shares and / or securities giving access to the Company's capital, with preferential subscription rights, and/or through issuance of securities conferring the right to debt securities. (Resolution No. 24) 3. Authority to increase the Company's capital through issuance of shares and / or securities giving access to the Company's capital, by way of public offering without preferential subscription rights, and/or through issuance of securities conferring the right to debt securities. (Resolution No. 25) Maximum authorized amount per transaction Overall maximum authorized amount ,000,000 8,000, Capital increase: 8,000,000 Issuance of debt securities: 90,000, Capital increase: 8,000,000 Issuance of debt securities: 90,000,000 Capital increase*: 12,000,000 Issuance of debt securities*: 120,000,000 * joint caps for Resolutions Nos. 24 to 28 Capital increase*: 12,000,000 Issuance of debt securities*: 120,000,000 * joint caps for Resolutions Nos. 24 to 28

55 Authority 2 /2 General Meeting Term Maximum authorized amount per transaction Overall maximum authorized amount 4. Authority to decide to increase the Company's capital through issuance of shares and / or securities giving access to the Company's capital, without a public offering and without preferential subscription rights. (Resolution No. 26) Capital increase: 8,000,000 Issuance of debt securities: 90,000,000 Capital increase*: 12,000,000 Issuance of debt securities*: 120,000, Authority, in the event of an increase in the Company's capital through issuance of shares and / or securities giving access to the Company's capital without preferential subscription rights, to set a price lower than the minimum issue price (Resolution No. 27) % of share capital per 12-month period * joint caps for Resolutions Nos. 24 to 28 Capital increase*: 12,000,000 Issuance of debt securities*: 120,000,000 * joint caps for Resolutions Nos. 24 to Authority to increase the number of securities to be issued in the case of a capital increase with or without preferential subscription rights (Resolution No. 28) % of the initial issue Capital increase*: 12,000,000 Issuance of debt securities*: 120,000,000 * joint caps for Resolutions Nos. 24 to Authority to issue shares or securities giving access to the Company's capital without preferential subscription rights in consideration for contributions in kind covering equity securities or securities giving access to the capital (Resolution No. 30) % of the share capital 10% of the share capital 8. Authority to issue shares and / or securities giving access to the Company's capital in the event of a public exchange offer launched by the Company (Resolution No. 31) 9. Authority to increase the Company's share capital through issuance of shares or securities giving access to the capital reserved for members of savings plans, without preferential subscription rights (Resolution No. 32) 10. Authority to grant bonus shares of the Company, whether existing or to be issued, to employees and officers of the Company and its affiliates (Resolution No. 33) 11. Authority to grant stock options covering new or existing shares of the Company to employees and/or officers of the Company and its affiliates (Resolution No. 34) 12. Authority to purchase or transfer Company shares (Resolution No. 10) 13. Authority to reduce the Company's capital through cancellation of treasury shares (Resolution No. 11) Capital increase: 8,000,000 Issuance of debt securities: 90,000, % of the number of shares comprising the share capital Capital increase: 8,000,000 Issuance of debt securities: 90,000,000 1% of the number of shares comprising the share capital % of the share capital 3% of the share capital % of the share capital 3% of the share capital % of the share capital 10% of the share capital % of the share capital amount per 24-month period 10% of the share capital amount per 24-month period Financial report 2 Management report Information on the parent company 51

56 Information on the parent company 2.19 Table showing key figures over the past five years Share capital at year-end Share capital 36,631 36,631 36,631 36,631 36,631 Number of ordinary shares outstanding 24,028,438 24,028,438 24,028,438 24,028,438 24,028,438 Operations and results for the year Sales excluding VAT 22,450 18,290 17,994 17,564 18,131 Profit before tax and calculated charges (amortization, depreciation and provisions) 18,228 11,443 24,961 21,692 18,788 Corporate income tax 311 (52) Employee profit-sharing Profit after tax and calculated charges (amortization, depreciation and provisions) 15,066 10,541 24,521 20,358 3,141 Earnings distributed (year of payment) 18,231 13,977 13,947 10,092 Earnings per share in Profit after tax and before calculated charges (amortization, depreciation and provisions) 0,75 0,48 1,02 0,87 0,75 Profit after tax and calculated charges (amortization, depreciation and provisions) 0,63 0,44 1,02 0,85 0,13 Dividend per share 0,76 0,58 0,58 0,42 Headcount Average number of employees during the year Total payroll for the year 3,204 2,061 2,130 1,931 2,672 Total employee benefits paid during the year (social security, corporate welfare, etc.) 1,572 1,159 1,155 1,146 1,948 Financial report 2 Management report Information on the parent company 2.20 Information on subsidiaries and equity investments Information on subsidiaries and equity investments is provided in Note 5.2 to the 2015 Jacquet Metal Service SA parent company financial statements ("Financial assets"). Éric Jacquet Chairman of the Board of Directors 52

57 Financial report 2 Management report Information on the parent company 53