CHARGEURS : 2023 Interim financial report

Interim Financial Report 2023

Sommaire

1. Interim Activity Report
2. Statutory Auditors' Review and Condensed Interim Consolidated Financial Statements
3. Statement by the Person responsible for the Interim Financial Report

H1 2023 results:

Chargeurs limits the impact of an unfavorable business climate

Confirmed momentum of new growth drivers and Luxury division,

which now accounts for nearly 60% of Group revenue

After a transitional year in 2023, Chargeurs aims to achieve more than €800 million of revenue in 2024

• H1 2023 Group revenue at €352.8 million, down 11.5%: Q2 buoyant after a sharp decline in Q1
• The dynamic performance of new growth drivers and the Luxury division partly offset the temporary contraction of Chargeurs Advanced Materials, whose sales fell by 23.1% in the first half
• H1 2023 revenue growth of 16.4% of the Luxury division, driven by strong sales momentum at Chargeurs Museum Studio
• H1 2023 Group operating profit amounted to €14.1 million with an operating margin at 4.0%, down 2.4 points
• H1 2023 Attributable net profit was positive at €3.3 million
• Assuming a gradual recovery in CAM's business, Chargeurs aims to achieve in 2024 revenue of more than €800 million, an EBITDA margin between 9% and 10% and a debt/EBITDA multiple of less than 3x

	H1 2023	H1 2022	Change	Q2 2023	Q2 2022	Change
€m			reported	like-for-like			reported	like-for-like
Revenue	352.8	398.7	-11.5%	-12.0%	183.1	195.2	-6.2%	-5.7%
EBITDA	24.9	37.0	-32.7%
as a % of revenue	7.1%	9.3%
Recurring operating profit	14.1	25.4	-44.5%
as a % of revenue	4.0%	6.4%
Attributable net profit	3.3	10.2	-67.6%

Michaël Fribourg, Chief Executive Officer of Chargeurs group, stated: "2023 is a year of transition. Unsurprisingly, it is marked by a disrupted and unfavorable economic climate which has impacted our businesses in different ways: our new growth drivers are doing well, confirming their momentum and offsetting part of the temporary downturn in CAM's business, which remains profitable despite sluggish volumes. The Group's business portfolio combines assets that are both protective, as they remain profitable even in difficult times, and promising, as they are driven by structural growth in demand. Thus, Chargeurs benefits from its diversified business model, which enables the Group to progress through cycles and to pursue the transformation of its businesses, in order to create long-termvalue. Cautious and flexible, the Group is aiming for sales of over €800 million by 2024, with an EBITDA margin between 9 and 10%. Chargeurs consolidates its strategy of excellence in sustainable products and services.

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H1 2023 performances

At its meeting held on September 6, 2022, the Chargeurs' Board of Directors approved the consolidated financial statements for the six months ended June 30, 2023. A limited review of the first-half financial statements was conducted.

Consolidated Statement of Income as of June 30, 2023

€m	H1 2023
Revenue	352.8
Gross profit	88.9
as a % of revenue	25.2%
EBITDA	24.9
As a % of revenue	7.1%
Recurring operating profit	14.1
as a % of revenue	4.0%
Amort. Intangible assets linked to acq.	-3.1
Non-recurring	-1.8
Operating profit	9.2
Net financial expense	-12.4
Tax	6.5
Net profit	3.1
Attributable net profit	3.3
Earnings per share	0.14

H1 2022 Change

398.7 -11.5%

105.3 -15.6%

26.4%

-1.2 pt

37.0 -32.7%

9.3%

-2.2 pts

25.4 -44.5%

6.4%	-2.4 pts
-3.2
-0.9

21.3 -56.8%

-8.8-2.6

10.0 -69.0%

10.2 -67.6%

0.44 -68.2%

Revenue of €352.8 million

Revenue for the first half of 2023 is down 11.5% on a reported basis compared with the first half of 2022, and 12.0% on an like-for-like basis. The decline is mainly due to i) the contraction in sales volumes at Chargeurs Advanced Materials, linked to the unfavourable global macroeconomic context, ii) the absence of sales from the healthcare business during the half-year, because of the end of the pandemic.

Recurring operating profit of €14.1 million

The Group's gross margin amounts to 88.9 million euros in the first half of 2023, compared with 105.3 million euros in the first half of 2022. Gross margin as a percentage of revenue has reduced by 1.2 points to 25.2%, compared with 26.4% in first-half 2022. However, excluding Healthcare Solutions, gross margin has decreased by just 0.4 points to 25.0%, compared with 25.4% in first-half 2022 proforma. The negative impact of lower volumes at Chargeurs Advanced Materials on gross margin was largely offset by a stronger contribution from the Group's other business lines.

Group recurring operating profit, amounting to €14.1 million, is down 44.5% compared to the first half of 2022. This decline is mainly attributable to a lower contribution from CAM and the absence of revenue from Healthcare Solutions in the first half of 2023. Excluding Healthcare Solutions, the recurring operating income is down 36.0%.

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It is important to note that all the Group's businesses, including CAM, are profitable, despite the troubled context.

Attributable net profit of €3.3 million

Group attributable net profit for the first half came to 3.3 million euros, compared with 10.2 million euros in H1 2022. It includes a financial charge of 12.4 million euros, linked to higher financial expenses and hyperinflation in Argentina. The positive tax charge of 6.5 million euros is due to the activation of deferred tax credits, in anticipation of future profits for the French entities, which are mainly exporters.

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Revenue by operating segment

H1 2023 vs. H1 2022

	First half	Chg. 23 vs. 22	2nd Quarter	Chg. 23 vs. 22
€m	2023	2022	reported like-for-like	2023	2022	reported like-for-like
Technologies	247.2	308.0	-19.7%	-16.8%	125.2	151.4	-17.3%	-12.9%
Advanced Materials	146.7	190.7	-23.1%	-23.1%	76.0	94.8	-19.8%	-19.2%
PCC Fashion Technologies (incl. Healthcare Solutions)	100.5	117.3	-14.3%	-6.5%	49.2	56.6	-13.1%	-2.5%
PCC Fashion Technologies (excl. Healthcare Solutions)	100.5	111.1	-9.5%	-1.3%	49.2	56.5	-12.9%	-2.3%
Luxury	105.6	90.7	+16.4%	+4.3%	57.9	43.8	+32.2%	+19.0%
Museum Studio	61.2	36.3	+68.6%	+48.5%	37.2	20.4	+82.4%	+62.7%
Luxury Fibers	40.3	54.4	-25.9%	-25.2%	18.6	23.4	-20.5%	-18.8%
Personal Goods	4.1	-			2.1	-
TOTAL GROUP	352.8	398.7	-11.5%	-12.0%	183.1	195.2	-6.2%	-5.7%

First-half revenue 2023 is down 11.5% compared with the first half of 2022. The smaller decline in the second quarter, down by 5.7% on a like-for-like basis, reflects the growing contribution of new growth drivers and the gradual recovery in sales at Chargeurs Advanced Materials.

Total revenue for the Technologies division amounts to €247.2 million in the first half of 2023, down 19.7% on a reported basis and 16.8% on a like-for-like basis. The €60.8 million drop in sales compared with the first half of 2022 is mainly due to a lower contribution from Chargeurs Advanced Materials, whose sales fell by €44.0 million over the period.

Total revenue for the Luxury division totals €105.6 million in the first half of 2023, up 16.4% on a reported basis and 4.3% on a like-for-likebasis. Growth is driven by the ramp-upin revenue at Chargeurs Museum Studio, whose sales soared 68.6% vs. H1 2022 (+48.5% in like-for-likegrowth). It includes a scope effect linked to the acquisition (80% of the capital), in July 2022, of the Italian publishing house Skira Editore. Revenue of the Luxury Fibers business line have been impacted by lower sales volumes in the first half, following the cyclone that hit New Zealand in February. The Luxury division also has benefited from the consolidation of the two companies Altesse Studio and Cambridge Satchel, making up the new Personal Goods business segment and representing €4.1 million of revenue in the first half of 2023.

The Luxury division accounts for 30% of the Chargeurs group's total revenue vs. 23% in the first half of 2022.

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