Annual report - Sequana

Annual report2009

CONTENTS01 Profile02 Interview with the Chairmanand the Chief Executive Officer04 Board of Directors06 2009 key figures08 Stock market10 STRATEGYCreator of value12 A Group that creates value14 Stepping up our operational deployment16 BUSINESSESInnovating in the interests of our customers18 Antalis28 Arjowiggins36 RESPONSIBILITYCommitments that matter38 Environment40 Safety42 Sponsorship and partnerships44 Indicators“A Curious Story” marketing campaign.€ 4.1 2.3billion in sales in 2009 million tonnes of paperdistributed each year by Antalis1.3million tonnes of paper manufacturedeach year by ArjowigginsThis document is printed on Cocoon Silk paper: the cover uses Cocoon Silk 350g, the inside Cocoon Silk 150g. It is FSC and Eco-label certified,100% recycled extra-white, demi-matte coated paper. Cocoon Silk is both a product and a brand of Arjowiggins Graphic and it is distributed by Antalis.

A ntalisNo.1 IN EUROPE AND No.4 WORLDWIDEin B2B distribution of paper and packaging materials€2.8 billionin sales6,900Overemployees in 51 countries140 distribution centresBREAKDOWN OF SALESBY SEGMENT3%VisualCommunication9%OtherFour business segmentsPrintCoated and non-coated paper, creative paper, envelopes,specialty paper (carbonless, self-adhesive paper, etc.).OfficeReams, envelopes, consumables.PackagingStandard products for packaging and protecting goods (kraft paper,bubble wrap, cardboard boxes, strapping machines, packaging, etc.),tailored technical solutions (anti-corrosion protection, etc.).Visual communicationBoard, plastics and paper for point-of-sale materials,signage, window and car window displays and banners, etc.Leading positionsNo.1 in Baltic States, Belgium, Finland, France, Ireland,Norway, Poland, Slovakia, South Africa, Sweden, Switzerland, etc.No.2 in Austria, Czech Republic, Denmark, Hungary, Netherlands,Romania, Spain, Turkey, UK, etc.5%Packaging22%Office61%PrintBroad range of clientsMore than 230,000 customers around the world:– printers, publishers– companies and government agencies– professionals specialised in signage systems– industrial firms

A rjowigginsNo.1 PRODUCERof creative and technical paper worldwide€1.5 billionin sales6,300Aroundemployees27production sitesBREAKDOWN BY DIVISION19%Security34%GraphicFive autonomous divisionsGraphic–Standard or recycled coated and non-coated paper for the publishing,advertising and printing markets, specialty paper and 100% recycledpremium pulp.–Brands: Chromomat, Cyclus, Eural, Maine gloss, Maine gloss green,Reprint, Satimat, Satimat green, Cocoon, Utopia, Playper, etc.US coated–Coated papers for the print and publishing industries.–Brands: Utopia, Altima.Creative Papers–Paper for use in corporate communication and promotion, bookbindingand luxury packaging, fine arts, and paper for specialty applications.–Brands: Conqueror, Curious Collection, Gateway, Keaykolour, Opale,Pop’Set, Rives, Arches, Guaflex, Priplak, Iris, etc.Industrial Solutions–Papers for use in industry (decor paper, abrasive paper) and the healthsector (medical packaging, sterile packaging and sterilisation wraps),thin and opaque papers for pharmaceutical leaflets, etc.–Brands: Arjofoil, ArjoTop, ArjoPrint, Arjosave, ArjoFinish, ArjoMulti,ArjoBasic, Arjopeel, Sterisheet, Elementa, etc.Security–Paper for banknotes and secure documents, e-documents, brand protectionand synthetic paper.–Brands: Diamone, Polyart.15%IndustrialSolutions16%CreativePapers16%Coated US

PROFILESequana is a major player in the paperindustry, boasting leading positionsin each of its businessesNo.1 in Europe and No.4 worldwide in B2Bdistribution of paper and packaging materials viaAntalis; No.1 producer of creative and technicalpaper worldwide via Arjowiggins.Sequana’s strategy is to maximise value creationfor all of its shareholders. To strengthen its leadingpositions on its markets and further improveprofitability, Sequana focuses its production anddistribution capabilities on high value addedproducts and services.With 13,000 employees in more than 50 countries,Sequana serves corporate clients and printersworldwide. A global paper group committed tosustainable development, Sequana delivered salesof €4.1 billion in 2009.Sequana 1 2009 Annual report

INTERVIEW WITH THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICERRESULTS BUOYEDBY THE GROUP’SSWIFT RESPONSEIn spite of the fraught business environment throughoutthe year, the benefits of the strategic plan deployedin late 2007 have begun to filter through in the formof enhanced operating performances.How would you assess thispast year?TRBA: The results are satisfactoryand encouraging from a Groupperspective and bear out the capacityof our businesses to weather the severedownturn. They also highlight the factthat the benefits of the strategic plandeployed in late 2007 have begun tofilter through.PL: The paper industry worldwide hasbeen severely affected by the globalcrisis and there has been a sharp dropin end demand across all of the businesses.And yet our results haveimproved despite the difficulties outthere in the market. Our recurringoperating income for the year jumped7.5% to €137 million, despite a 15.6%drop in sales, and our operating marginwas up 3.4%. We also generatedhealthy cash flow and managed tomake deep inroads into the Group’snet debt.What has been the impactof cost reduction programmeson your results?PL: The Group’s swift response anddecisiveness have helped mitigate theimpact of the sharp drop in demandon our results. Back in June 2008, weanticipated the fall in demand bydeploying a cost cutting plan but thedeteriorating economic situation at thebeginning of 2009 necessitated additionalmeasures. Antalis stepped up itscost cutting programme throughout itsEuropean businesses and Arjowigginsclosed loss-making plants and broughtproduction capacity into line withlower market demand. Production wascut by up to 20% in some divisionssuch as Creative Papers.TRBA: We cut operating expenses by€93 million in 2009, or by €161 millionover two years (if discontinuedoperations are factored back in,the reduction was €180 million).This productivity drive, coupled witha significant drop in raw materialprices enabled us to enhance ouroperating margins.Arjowiggins is notan integrated papermanufacturer. To whatextent is it able to absorbfluctuations in paper pulpprices?TRBA: In Europe, the coated papersector, which is most sensitive tofluctuations in paper pulp prices, hasexcess capacity. For a number of yearsnow, our strategy has been to “green”traditional coated paper – which onlyrepresents 13% (25% if we includethe US coated paper business) ofArjowiggins’ total sales – by transformingit into recycled premiumcoated paper. This underpins the entiredevelopment strategy of ArjowigginsGraphic, the European market leaderin this segment.Sequana 2 2009 Annual report

Pascal Lebardand TibertoRuy Brandolinid’AddaPL: Thanks to strong growth in“green” paper, which now accountsfor nearly 50% of its sales, the Graphicdivision turned in a considerablyenhanced performance in 2009, eventhough demand for coated paper as awhole dropped by 18%. ArjowigginsGraphic manufactures its green paperfrom premium FSC-certified recycledpulp at its Greenfield plant out of usedoffice paper, so it is not dependent onpaper pulp prices. This is a majorcompetitive advantage.What are Antalis’ keygrowth vectors?TRBA: Antalis has demonstrated agenuine capacity to weather the downturnin 2009 by keeping its operatingmargin stable at 2.7%, in spite of a14.6% drop in its sales. Map’s integrationprocess is now almost completewhich has helped to optimise thelogistics chain and the IT systems, theareas where the greatest savings aswell as the most significant operatingsynergies are to be found.PL: Antalis launched the RACE 2012programme in early 2010 which isdesigned to boost its leadership in thedistribution of paper and packagingmaterials in Europe. This shouldhelp Antalis to consolidate its positionin specialised distribution in eachgeographic area in which it has operationsnotably by systematicallyadopting best operating practices soas to pass on even more value addedto its customers.How do you feel lookingahead into 2010?PL: Demand has remained sluggishinto the early part of 2010 in thedistribution business. On the productionside, the upturn in demand,mainly a technical rebound, acrossall Argowiggins’ specialty segmentstook hold. But we have complete faithin the ability of all of our teams tocontinue to grow our operating marginsand Sequana will deliver an improvedoperating performance in 2010.TRBA: Our strategy is also to keepreducing costs and the Group’s debt.Thanks to the action taken in 2009,Sequana moved back into profitand the Board of Directors will beproposing the payment of a dividendof €0.35 per share at the upcomingShareholders’ Meeting.Sequana 3 2009 Annual report

BOARD OF DIRECTORSTRANSPARENT ACCOUNTABLEGOVERNANCESequana constantly strives to follow a corporate governance policythat complies with the recommendations of the French stock marketauthorities and with best market practices.A balanced divisionof dutiesIn light of Sequana’s new organisation,separating the duties of Chairman from thoseof Chief Executive Officer, as decided by theBoard in 2007, has proved to be the best basisof corporate governance. Indeed, the balanceddivision of these two corporate offices aroundthe complementary skills and experience ofTiberto Ruy Brandolini d’Adda and PascalLebard, provides Sequana with optimumvisibility over its operational activities whilesafeguarding the quality of the Board’s work.Accountable directorsSequana’s Board of Directors is chairedby Tiberto Ruy Brandolini d’Adda and has11 members. The shareholder agreementbetween Exor SA (formerly IfilInvestissements SA) and DLMD governsthe allocation of responsibilities among directorsand each company’s role on the Boardand its committees. Five directors on theBoard meet the independence criteria set outin the recommendations in force. The Boardmet on six occasions in 2009, with an attendancerate of 86%. At meetings, directors bringtheir commitment, diversity and complementaryprofessional experience into play,participating actively in debates andexpressing their opinions freely. Theyendeavour to be available whenever needed.Proactive committeesThe Board’s committees act strictly withintheir remit as defined by the Board. Theyprepare the Board’s work and make recommendationsbut have no decision-makingpower. The committees regularly report tothe Board, which takes decisions that are thenrelayed to shareholders by the Chairman.– Audit Committee, chairedby Alessandro PotestàThe purpose of this committee is to reviewthe financial position of the Group and anyrisks to which it may be exposed, its internalcontrol procedures and the accountingprinciples and policies it applies.–Nominations and CompensationCommittee, chaired by Luc ArgandThe purpose of this committee is to makerecommendations on compensation to bepaid to corporate officers and key executives,and to review share purchase orsubscription plans and proposals for bonusshare awards. It is also responsible forreviewing all matters relating to the compositionof the Board and its committees, howthey are organised and how their businessis conducted.– Strategy Committee, chairedby Tiberto Ruy Brandolini d’AddaThe purpose of this committee is to makerecommendations on the Group’s keystrategies and examine the best investmentopportunities.Compositionof the Board of Directorsat 31 December 2009The Shareholders’ Meeting of 21 May 2008renewed the terms of office of all of the directorsfor a three-year period through 2011.It also appointed a new independent directorto increase the proportion of independentdirectors on the Board.Sequana 4 2009 Annual report

Tiberto RuyBrandolini d’Adda,62 years old, Italian citizen,Chairman of the Boardof Directors of SequanaPascal Lebard,47 years old, Chief ExecutiveOfficer of Sequana, Chief ExecutiveOfficer of Antalis and of ArjowigginsTiberto Ruy Brandolini d’AddaPascal LebardLuc Argand,62 years old, Swiss citizen,Partner at the law firm of Pfyffer& Associés (Switzerland)Jean-Pascal Beaufret,59 years old, Chief FinancialOfficer, National BroadbandNetworks (Australia)Pierre Martinet,60 years old, Managing Directorof Old Town (Luxembourg)Laurent Mignon,46 years old, Chief ExecutiveOfficer of NatixisLuc ArgandJean-Pascal BeaufretPierre MartinetAlessandro Potestà,42 years old, Italian citizen,Managing Director of Exor SpAMichel Taittinger,65 years oldPierluigi Riches,Permanent representativeof Allianz France, 57 years old,Chief Operating Officerresponsible for investmentsand Member of the ExecutiveCommittee of Allianz FranceLaurent MignonAlessandro PotestàMichel TaittingerNicolas Lebard,Permanent representativeof DLMD, 43 years old,Managing Director of ED&FMan Malaysia SDN BHDCarlo Sant’Albano,Permanent representativeof Exor SA, 45 years old,Italian citizen,Chief Executive Officerof Exor SpAPierluigi RichesNicolas LebardCarlo Sant’AlbanoEleven members, includingfive independent members.Three different nationalitiesrepresented and an averageage of 53.Sequana 5 2009 Annual report

2009 KEY FIGURESSatisfactory resultsA genuine resilienceDespite very difficult market conditions in 2009 Sequana improvedits operating performance and met the objectives of its strategic plan,i.e. an increase in operating margin, reduction in overheads, furtherdecrease in net debt and completion of the non-strategic loss-makingasset divestment programme.BREAKDOWN OF SALES32%Arjowiggins+0.3%EBITDAedged up 0.3% year-on-year tostand at 5.2% of sales, versus 4.4%in 2008 (on a like-for-like basis).+14.5%Recurring net incomeon a like-for-like basis grewby €9 million.68%AntalisDistribution accounts fortwo-thirds of Sequana’s sales,and production for one-third.SHAREHOLDERS’ EQUITY(€ millions)NET DEBT(€ millions)BREAKDOWN OF 2009 SALESBY GEOGRAPHIC AREA7%US13%Rest ofthe world16%UKThe increase in shareholders’equity chiefly reflects the returnto profit in 2009.Net debt was slashed by€140 million despite thedisbursement of non-recurringitems for €126 million related todisposals and restructuring costs.50%Europe (excludingFrance and UK)86% of Sequana’s salesare recorded outside France.14%FranceSequana 6 2009 Annual report

CONDENSED ANALYTICAL INCOME STATEMENT€ millions, except per share amounts * These unaudited results have been adjusted to reflect the sale of Antalis Promotional Products and Antonin Rodet in 2009. Percentagechanges and changes in value are based on sales and rounded out to one decimal place.** EBITDA: recurring operating income before depreciation and amortisation and changes in provisions.*** Recurring net income: recurring operating income after net financial income (expense) and income tax on recurring operating income.KEY FIGURES - ANTALIS€ millions (*) Proforma 2008 figures have been adjusted to reflect the sale of Antalis Promotional Products in 2009.KEY FIGURES - ARJOWIGGINS€ millions 2009 HIGHLIGHTSFurther cost cutting measuresIn early 2009, severely depressedmarkets offered no visibilityas to the rest of the year. Sequana’s swift,vigorous reaction was to implementfurther cost cutting measures.– Antalis: the integration of Mapcontinued apace and cost cuttingmeasures were stepped up in Europe.– Arjowiggins: closure of loss-makingplants and cuts in capacity of upto 20% in certain divisions to bringproduction into line with demand.Completion of the nonstrategicasset divestmentprogram– Sequana: sale in May 2009 ofAWA Ltd, the entity liable for theFox River environmental claim; salein September 2009 of Antonin Rodet,owner and merchant of Burgundywines, to the Boisset group foran enterprise value of €23 million.– Antalis : sale in March 2009 ofthe Promotional Products businessto the BIC group based on anenterprise value of €34 million.– Arjowiggins : sale in June 2009of the Decor paper Asia businessto international investors; salein October 2009 of the Carbonlesspaper business to a former seniorexecutive and a team of experiencedlocal managers with the supportof the Walloon region.The decision of the SequanaBoard at the end of Septemberto hold onto the Security divisionmarked the end of the non-strategicasset divestment programme.Sequana 7 2009 Annual report

STOCK MARKETSEQUANA ON THESTOCK MARKETOWNERSHIP STRUCTURE(at 31 December 2009)A regular dialogue with investors0.71%Treasury shares50.83%Free float (incl. Allianz[formerly AGF] 11.83%)21.81%DLMD26.65%Exor SAIn July 2007, Exor SA and DLMDsigned a shareholder agreementto act in concert for an initialperiod of three years, with the aimof ensuring shareholder stability.Sequana provides the market withquarterly sales updates and publishesfull financial statements twice a year.All of this information can be consultedon its website in French and English.A financial notice is published in theFrench media summarising the Group’sinterim and full-year results.In 2009 for the first time, the Groupgave notice of its full-year 2008 andthird-quarter 2009 results on the radio,thus helping to create a link with itswebsite by encouraging listeners togo online to find out more. An emailalert service keeps all interested parties informed of thelatest press releases.Reaching out to shareholdersSequana maintains a privileged dialogue with financialanalysts, private shareholders and institutional investors. Inaddition to information meetings that coincide with thepublication of annual and interim results, senior managementis committed to meeting regularly with investors in Europe.In 2009, Sequana participated in a number of conferencesorganised for small- and mid-caps in Paris and the rest ofFrance and met with large numbers of investors at roadshowsheld in Paris.Sequana 8 2009 Annual report

SHARE PERFORMANCE AND DIVIDEND DATA FOR THE PAST THREE YEARS * Subject to shareholder approval at the Shareholders’ Meeting of 19 May 2010.PERFORMANCE OF THE SEQUANA SHARE AND THE SFB 250 INDEXbetween 1 January 2009 and 31 March 2010Source: NYSE EuronextKey dates in 201019 May:Annual Shareholders’ Meeting28 July:H1 2010 results27 October:Q3 2010 salesSequana on the stock marketListed on Eurolist of NYSE Euronext(Segment B)Indices: CAC MID100 and SBF 250Eligible for the deferred settlementservice (SRD)Ticker symbol: VORISIN code: FR0000063364Par value per share: €1.50Contact usSequana19 avenue Montaigne75008 Paris, FranceTel: +33 1 56 88 78 00contact@sequana.comShare accounts are administeredby BNP Paribas Securities Services9, rue du Débarcadère93500 Pantin, FranceTel: +33 826 109 119Sequana 9 2009 Annual report

STRATEGY

CREATOROF VALUEA worldwide player in the paper sector, Sequana is currently refocusingon specialised distribution and pursuing a long-term value creation strategy.This strategy is designed to:- boost Antalis’ operational efficiency and consolidate its leadershipin the paper and packaging distribution market;- enhance Arjowiggins’ specialty businesses with a high valueadded component and leverage Arjowiggins’ positionas a pioneer in eco-friendly graphic paper.Sequana 11 2009 Annual report

STRATEGY12A Group that creates valueFocusing on responsiveness and efficiencyRECURRING OPERATINGINCOME(€ millions)On a like-for-like basis, recurringoperating income climbed 7.5%and represented 3.4% of sales,versus 2.6% in 2008.In 2009, Sequana continued to refocuson specialised distribution and profitablegrowth. To protect its margins,the Group continued to deploy itsstrategy in three key areas: disposingof non-strategic assets, reducing overheadsand decreasing net debt.As part of the programme to sell offnon-strategic loss-making assets,Arjowiggins sold its Carbonless paperand Decor paper Asia businesses.Antalis sold off its PromotionalProducts business to BIC groupand refocused on its core business:distribution of paper and packagingmaterials.Sequana sold Antonin Rodet, ownerand merchant of premium Burgundywines and its last remaining investmentin the non-paper sector, to the Boissetgroup. The Group also disposed ofAWA Ltd – the entity liable for theFox River environmental claim – whichallowed it to exit from a significantcontingent liability. All of these divestmentstook place as initially planned. The decision of theSequana Board at the end of September to hold onto theSecurity division marked the end of the divestmentprogramme. This business is a high-quality asset thatcontributes considerably to Group cash flow.Generating profitable growthSequana’s improved results and financial structure in 2009in a particularly tough period are a testimony to its abilityto grow profitably.The collapse in volumes in the last quarter of 2008 did notlet up in the early part of the New Year and Sequana actedswiftly to mitigate the effects of the crisis on its results.New measures were taken immediately to bring productionback into line with demand and to cut fixed costs.Arjowiggins upped the pace of the restructuring planlaunched in 2008. It closed its loss-making plants andproduction was cut in most divisions, and the numberof shifts was reduced from five to four. Production wascut by as much as 20% in certain divisions, particularlyCreative Papers. These combined measures gave a considerableboost to Arjowiggins’ operating performance ina period of falling demand. EBITDA climbed 13.2%to €128 million, while recurring operating income surged30% to €74 million, or 4.8% of sales, representing aSequana 12 2009 Annual report

1Premium 100% recycledpulp before drying.234Showrooms focusingon creation and innovation.Recycled pulp in production.An offering that passesadded value onto printersand large companies.341.7 point year-on-year increase. Antalis continuedthe process of integrating Map (acquired in late 2007) –particularly into its logistics chain – in order to optimisethe performance of its distribution networks. Overheadreduction plans were stepped up at head office and regionallevels. This helped Antalis to hold its operating marginsteady despite a 14.6% drop in sales. These variousplans generated total savings of €93 million in 2009, or€161 million between 2007 and 2009. The figure comesto €180 million if discontinued operations are included.Sequana was also careful to protect margins and hold pricessteady during the period and, in spite of the dip in sales,recurring operating income grew 7.5% to €137 millionand operating margin climbed by 0.8 points from 2.6% to3.4%. Careful management of working capital in bothbusinesses and healthy cash flows combined to knocka considerable chunk off the Group’s consolidated debtwhich dropped from €791 million at end-2008, to standat €651 million at 31 December 2009.Boosting efficiencyCustomer satisfaction is key and this is why Sequana isunceasing in its commitment to innovation in Arjowigginsand Antalis.In September 2009, Antalis launched a strategic review ofits businesses under the banner of RACE 2012 (ResultsAcceleration through Customer Excellence) with the aimof moving its business model towards creating more valueadded for its customers. This will help Antalis to developan even closer fit between customer needs and its salesstrategy, to determine growth opportunities – in particularby leveraging best practices – and to boost profitability.RACE 2012 is Antalis’ roadmapand should help consolidate thecompany’s leadership in the distributionof paper and packaging materialsin Europe.Sequana is also striving to unlocksynergies between its two businesses,especially in the area of eco-friendlyproducts. So, for example, Antalislaunched the Arjowiggins Graphicbrand of recycled coated and noncoatedpremium paper in Europe underits exclusive brand name Cocoon.The Group is constantly looking forinnovative ways of integrating itsproduction and distribution activitiesinto the value chain and passing oneven more value added to its customersthrough its products and services.NET INCOMEATTRIBUTABLE TO OWNERS(€ millions)Net income attributable to ownersreflected a return to profitabilityin spite of the drain of restructuringcharges and discontinued operations.Sequana 13 2009 Annual report

STRATEGY571 2 4Stepping upour operational deploymentAn Executive Committee actingin the interests of the Group as a wholeSince the move to give the divisionsgreater autonomy in June 2008, theGroup has been radically overhauledand transformed from a holdingcompany into an operational group.The creation of an Executive Committeein April 2009 marked a new milestonein the deployment of this strategy.It comprises executives from Sequana, Antalis and Arjowigginsand helps to coordinate overall Group strategy more effectivelyand to boost the operating performance of Antalis andArjowiggins.New organisational structureThe new strategy has also involved integrating Arjowigginsand Antalis operational teams more closely in the spheresSequana 14 2009 Annual report

EXECUTIVE COMMITTEESSequana1 Pascal Lebard, 47 years old,Chief Executive Officerof Sequana, Chief Executive Officerof Antalis and of Arjowiggins2 Hervé Poncin, 46 years old,Chief Operating Officer of Antalis63Guy Léonard, 57 years old,Chief Operating Officerof Arjowiggins and ManagingDirector of Arjowiggins’ CreativePapers division4 Xavier Roy-Contancin,51 years old, Group ChiefFinancial Officer5Isabelle Boccon-Gibod,42 years old, ExecutiveVice-President, Special Projects6 Antoine Courteault,53 years old, Company Secretary7 Gilles Raynaud, 54 years old,Group Human Resources Directorof finance, IT, internal audit, legal affairs, human resourcesand communications. Centralising certain functions at Grouplevel is designed to help the teams at Antalis and Arjowigginsin their day-to-day work and to unlock as many synergies aspossible throughout the Group.Moreover, Pascal Lebard, who was already Chairman ofArjowiggins, has taken up the same position with Antalis,thus consolidating Sequana’s operational brief.Rallying employeesSequana’s Board of Directors wanted its three-year businessplan to give the Group’s managers and executives as big astake as possible in its future earnings.In February 2010, Sequana set up a performance share planfor certain key managers that play a vital role in the Group.The plan is subject to the performance-contingent vestingcriteria set out in the Group’s three year-business plan.3The Group aims to foster loyalty amongits employees and to give them a stakein its future earnings by rallyingeveryone around a common project.AntalisAntalis’ Executive Committeecomprises eleven people of five differentnationalities and meets once a month.Its modus operandi was reviewedin early 2010 with the launch of RACE2012. This programme aims to boostoperational efficiency as well as productand service innovation and to leverageknow-how. It focuses particularlyon Europe.Managers from South America,South Africa and Asia as well ascertain functional heads (legal affairs,communication) now participatein Executive Committee meetings everyquarter or more frequently if necessary.This has helped streamline decisionmakingand boost the deploymentof RACE 2012.ArjowigginsSince the move to restructurethe divisions and give them greaterautonomy, Pascal Lebard has beenappointed Chief Executive Officerof Arjowiggins. He is assisted byan Executive Committee made upof five heads of divisions and theheads of the corporate functions.Sequana 15 2009 Annual report

BUSINESSES

INNOVATINGIN THE INTERESTSOF OUR CUSTOMERSIn both its distribution and production businesses, Sequana strivesto create value added for its customers.So innovation lies at the very heart of the Antalis and Arjowiggins commercialstrategies, driving an ever-richer and distinctive product offering.Sequana 17 2009 Annual report

BUSINESSESA ntalisBREAKDOWN OF 2009 SALESBY GEOGRAPHIC AREA9%Rest of the world20%UKNo. 1 in Europe and No. 4 worldwide in B2B distribution of paper and packagingmaterials, Antalis is present in Europe, South America, South Africa and Asia andaccounts for two-thirds of consolidated group sales. Antalis’ customers benefit fromits strong local presence as well as the advantages of being part of an internationalgroup and market leader.Antalis strives to consolidate its leadership by creating added value for its customers,printers and large companies and this is the philosophy that underpins the RACEprogramme, launched in early 2010 with the aim of boosting operational efficiencyas well as product and service innovation and leveraging know-how.13%Eastern Europe45%Western Europe(excluding Franceand UK)13%FranceAntalis is mainly present in four markets: print, office, packaging and visualcommunication. The distribution of paper and communications support materialsbore the brunt of the downturn in 2009 and volumes dipped sharply. The situationwas particularly acute in the graphic paper segment due to cuts in advertisingand publishing budgets and increased use of the internet but Antalis proved highlyresilient and managed to hold onto its margins.€2.8billion in sales6,900employees230,000customers51countries, including27 in Europe2.3million tonnes of paperdistributed each year20,000deliveries a day in EuropeSequana 18 2009 Annual report

Antalis combines balanced geographic coverage in Europe with strongpositions in Asia, South America and South Africa.The partnership with xpedx helps it to serve its North American customers.EuropeAustriaBelgiumBulgariaCzech RepublicDenmarkEstoniaFinlandFranceGermanyHungaryIrelandLatviaLithuaniaLuxembourgNetherlandsNorwayPolandPortugalRomaniaRussiaSlovakiaSloveniaSpainSwedenSwitzerlandTurkeyUnited KingdomAsia/PacificAustraliaBangladeshChinaHong KongIndiaIndonesiaJapanKoreaMalaysiaNew Zealand andthe Pacific IslandsPakistanSingaporeSri LankaTaiwanThailandThe PhilippinesSouthAmericaArgentinaBoliviaBrazilChilePeruAFRICABotswanaMauritiusSouth AfricaSequana 19 2009 Annual report

BUSINESSESAntalisFour business segmentsA broad array of innovative productsSALES BY BUSINESSSEGMENT3%VisualCommunication5%Packaging22%Office9%Other61%PrintAntalis is market leader in the printsegment and widely-recognised asdistributing the broadest range ofproducts on the market. Printers,graphic designers, publishers andadvertising agencies can choose froma vast array of premium coated andnon-coated paper, creative paper andmatching envelopes, as well asspecialty paper (carbonless, selfadhesivepaper, etc.).PrintAntalis is the undisputed market leaderand it continued to enhance its offeringin 2009 by forging partnerships withstrategic suppliers, and notably withArjowiggins. In Creative paper, distributionof the Curious Collection andConqueror brands was rolled outacross Europe and other brands suchas Rives, Pop’Set and Keaykolourwere launched in the UK, Polandand Germany. As an innovativeway of promoting these high valueadded paper products, Antalis and Arjowiggins combinedto organise the “Printed samples & me” competition thatawarded prizes for the most imaginative corporate designs.The high participation rate was proof of how much papermedia continue to matter in spite of tough market conditions.Antalis broadened its offering with Digital, whichis HP Indigo certified.It also worked hard on its eco-friendly range of paper bylaunching Maine gloss green and Satimat green recycledpaper and premium Cocoon recycled paper in Europe.Antalis offers its customers a comprehensive range ofeco-friendly products and envelopes (FSC/PEFC-certifiedor recycled). A major marketing campaign was organisedto inform and help all customers in “greening” theirbusiness.Effective backsellingof premium printing materials.Sequana 20 2009 Annual report

“Ask”David McCormickMD of John McCormick & CoOfficeAntalis distributes a complete rangeof reams (for photocopiers andprinters), envelopes adapted to thelatest print technology (ink-jet, laser,digital) and consumables to largecorporations, government organisationsand resellers (central purchasingbodies and procurement centres, officesupply dealers, retailers). Three envelopeplants in Belgium, Spain andPortugal give it a major competitiveedge in the market for fine paper andstationery envelopes and Antalisprovides an extensive range of envelopesincluding stock and indent,standard and bespoke, blank andcustomized. It can adapt its productioncapacity and has a total manufacturingcapability of two billion envelopes.Following the acquisition of the Mapgroup in late 2007, Antalis beganstreamlining its brand portfoliowith a view to providing customerswith a coherent pan-European productoffering. The process was completedin 2009 by refocusing on key brands,especially the new Image range,launched in the second quarter inGermany and Belgium. This hasbecome Antalis’ flagship brand andwill be available throughout Europeand Asia from 2010.Located in Scotland, the printerJohn McCormick & Co servesthe general commercial print marketas well as the office supplies market. Thecompany employs 32 staff and recordeda €2.6 million turnover in 2009.What products do you buy?We produce everything from full colourand small offset litho to digital printing,from business cards to transpromotionalwork, including image variation. We movedinto web to print last year and this supportsand enhances each aspect of the business:digital print, litho print, forms managementand office supplies. Over the years we havepurchased coated and uncoated papers,carbonless, envelopes and different itemsfrom the complete Antalis portfolio,covering all of our needs.What do you expect from your merchant?A broad range of products that are readilyavailable at competitive prices, but notonly this: Antalis is able to respondto our requirements with a high-qualityservice in every area. This good workingrelationship is essential as we also expecthelp and advice in many areas, from thecorrect use of a product to seeking newbusiness. We need to work together.That is why we consider Antalis not just asa supplier but as a real partner. As a result,hopefully both of us will be successful!Sequana 21 2009 Annual report

BUSINESSESAntalisAir cushioning systems integratedin a packaging department.PackagingPackaging distribution is a growing,high value added segment, albeita fragmented one. With its strongEuropean presence, Antalis is themarket leader.The client base comprises majorindustrial groups in sectors such asthe car industry and electronics, aswell as SMEs and printers. Antalisprovides tailored solutions in consumables,machines and additional servicesfor packaging and protectinggoods in transit and in storage.Its product offering includes standardpackaging products like kraft paper,bubble wrap, cardboard boxes,strapping machines and packaging,etc., or bespoke technical solutions,especially for the export market orprotection against corrosion. Antalishas its own development centre whereengineers work on finding solutionsto specific problems using state-ofthe-artComputer Aided Design (CAD)software.Visual CommunicationVisual communication targets graphicart specialists conducting promotional,advertising or informationcampaigns and Antalis supplies themwith board, plastics and paper forpoint-of-sale materials, signage, storeand car window displays and banners.The products have been adapted todifferent printing techniques includingscreen, UV offset or digital printing. Both the media andthe technology are constantly evolving and Antalis has tokeep abreast of these developments and integrate theminto its product offering. It has broadened its range overthe past few years to provide customers with everythingthey need to print Very Large Format.Masterline – high performanceadhesive tapeThe Masterline range includes different packagingmaterials such as stretch film or loose fill. In 2009,Antalis launched adhesive tape in Europe underits own brand and a two-month marketing campaignwas organised targeting both customers and the salesforce. The objectives were achieved and results revealedsignificant growth in sales in the field.Sequana 22 2009 Annual report

A wide range of high value addedinnovative products and services1241Visual Communication:Large Format Printing.2 Print.334Packaging: loose filland bubble wrap.Office: Image range.

BUSINESSESAntalisDelivering excellenceto our customersBalanced European coverage“Image is everything”Image was launched in the secondhalfof 2009 as Antalis’ new flagshipoffice brand. It will be launchedin 25 European countries and soldin a number of Asian marketsincluding Singapore, Malaysia,Thailand, Hong Kong and Chinato cover all office copying andprinting requirements:– Image Volume for high volumeprinting,– Image Business for day-to-dayuse,– Image Impact for quality colourprinting,– Image Impact Plus for superiorquality colour printing.Antalis has gone forstraightforward packagingand design so that customers caneasily understand and distinguishbetween each product.This environmentally-friendlybrand bolsters Antalis’ positionas leader in the office market.There has been a major shakeout inthe European paper distribution marketover the past ten years. Of the estimated30 million tonnes – half ofwhich passes through the hands ofthe distributors – 80% is handled bythe top five players.Antalis consolidated its position asEuropean market leader by acquiringMap (fourth largest paper distributor)in late 2007. It is present in 27 countries– market No.1 in twelve of them– and has reached critical mass inmost of its markets which enhancesits ability to spread risk as it demonstrated in 2009.The drop in volumes across all business segments ascustomers ran down inventories let up somewhat insecond-half 2009 in the Nordic countries, Germany andPoland, but demand remained sluggish in France, theUK and Spain.Antalis’ extensive geographic coverage can also be leveragedto forge partnerships with strategic suppliers and tooffer major international customers the same level of qualityin all countries.As part of Antalis’ strategy of developing an internationalproduct offering, the streamlining of the office brandportfolio in 2008 in the wake of the acquisition of Mapculminated in 2009 with the launch of the Image range.Showroom in Stockholm (Sweden).Sequana 24 2009 Annual report

High-performancesupply chainAntalis’ strength combines a high-performance supplychain with major storage capacity. In most major cities,it can deliver to customers within 24 hours or even offersame-day service.Streamlining its distribution and delivery networks hasbecome a strategic priority, especially in the wake of theacquisition of Map.In 2009, several new distribution centres were opened and anumber of warehouses were closed in the Netherlands, CzechRepublic, Poland and Romania.Streamlining the supply chain helps Antalis provide a betterquality service to customers by unlocking synergies at regionallevel. It also constitutes a major vector for boosting theGroup’s profitability.Antalis draws on its efficiency and expertise to offer customersa comprehensive, end-to-end service using just-in-timemanagement to optimise their supply chain, storing customers’goods and delivering direct to their customers.An environmentally-friendlydistribution centreThe new distribution centre that was inaugurated inthe Netherlands in September is used by Antalis’ paperand Visual Communication businesses and by DekkerPackaging. Built in just six months, the facility hasa surface area of 27,000m² and is the first Antalis warehouseto be powered solely by green energy from a wind farm.Aside from its green credentials, it allows Antalis tooptimise inventory management and goods output andoffer its customers superior service quality and a broaderarray of products. Further, bringing together all of ourteams under one roof is a major source of efficiency.Strong local presenceIn spite of its international profile with a firm foothold in Europe,Asia Pacific, South America and South Africa, Antalis remainsa group with a strong local presence. This is essential in meetingcustomer needs and developing strong business ties.Antalis’ sales organisation benefits from an on-the-groundapproach aimed at adapting to each customer’s specificitiesand profile, bringing tailored solutions and efficient customerrelationship management.Call centre staff use cutting-edge software such as AutomaticCall Distributors (ACD) and Computer Telephony Integration(CTI) to handle incoming calls and keep customer waitingtimes to a minimum.CTI identifies customers by displaying their key informationon the computer screen, thus offering a more pro-active service.The same top-quality service approach is employed for thefield sales force, which deploys automation software to quicklyreact to customer requests and ensure effective follow-up.A dedicated team has been set up to work with major internationalaccounts that wish to centralise purchases at Europeanand international level. The team helps design solutions thatprovide the customer with a consistent and coherent offeringof paper and packaging materials and services throughout Europe.Antalis’ newdistribution centrein Almere(Netherlands).

BUSINESSESAntalisKeeping our customers one step aheadServices with a high value added componentAs market leader in paper and packagingdistribution, Antalis is bound tooffer excellence to its customers andthis is why innovation has been placedat the very heart of its marketing andsales policy: providing customers witha wide array of products to facilitatetheir business and help them win newmarkets.From initial sales contact to after-salesservices, delivery solutions to technicaladvice and e-procurement solutions,Antalis offers a comprehensiverange of services tailored to eachcustomer’s needs. Its offering is adapted to take accountof local market features and includes:–Advice and expertiseCustomers are able to order samples or see the productsfor themselves in the showrooms and seek advice or eventraining on changing printing techniques in order to guidethem in the choice of paper that best meets their needs.Antalis organises seminars around the different types ofpaper and their value added in terms of use, eco-certificationand choice of a suitable medium, etc.–DeliveriesAn efficient logistics network offers considerable flexibilityin terms of service: same-day delivery in major EuropeanSequana 26 2009 Annual report

Eye witnessPeter Barbe, Publi TonyDeveloping e-servicesAntalis is constantly developing new e-servicesfor its customers and Belgium is the first countryto test a new online service for visual communicationsolutions. It allows customers to perform virtualcuts and calculations for keeping waste to a minimumand has been an instant hit, as Peter Barbeof Publi Tony explains.A new phase in e-commerce policyAntalis deploys e-business solutions for both itscustomers and suppliers in order to enhance servicequality and boost profitability. In 2009, Antalink,the Antalis transactional webtool went live in Norway(May) and in Denmark (November). The new-lookwebsite was launched in September in France.Designed above all as an online store, www.antalis.froffers customers new functions and features suchas multi-criteria searches, cross-selling solutionsand extensive product information. This latest versionwill go live throughout Europe in 2010.cities and 24-hour delivery to all other destinations; a taxiservice for express deliveries; 2-man deliveries (fromhandling to multi-point dispatch); and freighting of largeformat products for visual communication media.–ConversionAntalis offers tailored solutions based around sheetingfrom reels, tailoring reels or cutting board to the requiredsize.Peter Barbe’s company is specialised in the letteringof vehicles or buildings and signing and employsten people.“Publi Tony has been an Antalis customer for years.A couple of months ago we were chosen to test theViscom cutting tool. Most of the sheets we orderhave to be cut to size, so this turned out to be a majorasset. Previously, we had to calculate the cuts ourselvesor we asked Antalis to do it for us, but the onlinecalculation module proved to be perfectly reliable.If we have a specific question about a cut, we cansend it by e-mail and we always get a quick answerfrom the internal sales division. And Antalis won’tdeliver until they’ve answered our question.Antalink is an easy solution: it gives an immediateoverview of any product’s availability price. No needfor phone calls or faxes anymore. This means we’resaving lots of precious time. With Antalink, we cansend our order much later and still be deliveredthe next day which is a big plus. We are now usingAntalink on a daily basis.”–Ordering online via AntalinkAntalis has developed dedicated Electronic ApplicationInterfaces (EAI) that make it possible to link its own ITsystems directly to the customers’.

BUSINESSESA rjowigginsBREAKDOWN OF 2009 SALESBY GEOGRAPHIC AREA11%Asia10%Rest of the world22%North AmericaArjowiggins is the world’s leading producer of creative and technical paper with fiveautonomous divisions. It generates one third of Sequana’s sales.Arjowiggins has operations in Europe, North America, Latin America and Asia andsells products and solutions with a high value added component – incorporatingleading-edge, eco-friendly solutions – to all market players.It deploys a niche market strategy and is either No.1 or has a very strong position ineach of its business segments thanks to a proactive innovation policy and the excellenceof its services.With the exception of the Security division, there was a steep decline in volumes anddemand over the first-half of the year. In the final six months, Arjowiggins benefitedfrom a technical rebound in specialty segments like Decor paper. But Arjowigginsstill managed to improve its operating performance in spite of the slump in sales.32%Europe(excl. Franceand UK)9%UK16%France€1.5billion in sales6,300employees1.3million tonnes ofpaper manufacturedeach year27production sitesSequana 28 2009 Annual report

EuropeAmericasAsiaCzech RepublicBrnoArgentinaWitcelChinaQuzhouDenmarkOdenseMaglemølleFranceAnnonayArchesBessé-sur-BrayeRives/CharavinesChâteau-ThierryCrèvecœurLe BourrayNeuilly-en-ThellePalaldaWizernesGermanyAchernDettingenItalyArzanoNetherlandsApeldoornSpainGelidaUnited KingdomCharthamClactonIvybridgeStoneywoodBrazilSaltoUnited StatesCharlestonCharlotteCombined LocksSequana 29 2009 Annual report

BUSINESSESArjowigginsGraphicConsolidating its leadershipin eco-friendly solutions2009: a passionatelycommitted marketleaderAt the French employers’association (Medef ) summerconference, Arjowiggins Graphicraised companies’ awareness ofrecycling solutions with its “zeropaper waste” campaign, aimed atcollecting, sorting, conditioningand recycling 80% of recyclablepaper used at the event.Arjowiggins Graphic alsopartnered the United NationsCopenhagen summit in December,launching a communicationinitiative on CyclusOffset 100%recycled paper and printed withvegetable ink around the theme“Copenhagen CO 2mmitment -No CO 2mpromise”. Lastly,together with WWF Franceit committed to reducing itslong-term environmentalfootprint by using its R&Dengineers to work on innovativetechnological solutions.The Graphic division delivered 34%of Arjowiggins’ sales in 2009. TheEuropean market for coated paperdeclined by 20% but ArjowigginsGraphic managed to limit the drop inits sales to 13% thanks to strongdemand for recycled graphic paper.This market has phenomenal growthpotential. Only 10% of needs arecurrently being met and Arjowigginsis the market leader.Its complete range of eco-friendlyproducts provides 100% recycled andFSC-certified papers, as well as mixedpapers combining a recycled/virgin fibre content – alsocertified FSC – to the publishing market, advertising andprinting industries.Arjowiggins Graphic’s Greenfield plant is a major assetin promoting its green offering as the European leader inthe production of premium FSC-certified, recycled extrawhitepulp.Thanks to its constant innovation, Arjowiggins Graphicoccupies strong positions in certain niche marketsfor specialty papers such as playing cards for casinosin Shanghai, Macao and Las Vegas, flexible labels andpackaging, transfer, posters, displays and tissue. It is alsomarket leader in coloured tissue producing a range of160 colours.Maine 1 face greenThe world’s first one-side coatedrecycled paper – Maine 1 facegreen – was launched in 2009to respond to distributors’and customers’ expectations interms of eco-friendly packaging,particularly food packaging.European marketingcampaign around “greening”the product offering.Sequana 30 2009 Annual report

Coated US“Greening” the businessAppleton Coated US is the market leader in premium coated papers with itsflagship brand Utopia. It was the first paper manufacturer to develop an ecofriendlyproduct offering and this helped boost its market share in 2009. In spiteof the sharp dip in its sales, the Coated US segment – which contributed 16%of Arjowiggins’ consolidated sales – significantly enhanced its operating performanceover the year.Coated US has used its excellent service and high-end offering to carve outstrong positions in the educational textbook market partnering with publisherssuch as Pearson and Houghton Mifflin Harcourt, as well as in commercialprinting for major groups like Ann Taylor and Pfizer.Appleton Coated US is also well known for its pioneering work in developingeco-friendly practices. It was the first coated producer to be certified FSC andto develop a range of papers produced from FSC-certified virgin or recycledpulp using renewable energy. It was also the very first to allow customerswishing to boost their green credentials the possibility of buying paper manufacturedusing “green power”.Utopia Green Zone, an online resource designedaround green printing practicesIn September 2009, Arjowiggins launched a website to help professionals designmore eco-friendly printed materials. The website is organised into four areas(Being Green, UtopiaGreen, Printing Greenand Sharing Green) thatprovide information andtools allowing professionalsto calculate theirgreen impact. It also offerstips on eco-friendly paperand chain-of-custody(CoC), and provides aforum for printers wishingto pool their experienceand offer advice.Production of premium 100% recycled pulpat the Greenfield plant.

BUSINESSESArjowigginsCurious Collection –a world of creativityAs part of its campaign tolaunch new shades of CuriousMetallics and Translucents,Arjowiggins Creative Paperscreated headlines with itson- and off-line marketingcampaign “A Curious Story”in which paper is both subjectand actor. It was unanimouslypraised by designers andadvertising agencies alikeand received the Grand Prixdu Luxe awarded by the Frenchmagazine “Stratégies” in March2010 as well as the Phénix deBronze from the UDA (Frenchassociation of advertisers).“A Curious Story”marketing campaignEco-friendlypremium papers2009 also saw ArjowigginsCreative Papers launch itsnew Conqueror 100% recycledbrand in Europe. ConquerorCarbon Neutral went on salein Benelux, Switzerland,Austria, the Nordic countriesand Iceland, as well as inGermany and the UK where ithas been available since 2008.The Conqueror range has nowbecome “the” market referencein corporate communicationsand business stationeryin over 120 countries offeringconsumers a premium,eco-friendly product whilemaintaining its excellentprintability properties.Creative PapersBolstering its leadership withthe most innovative and eco-friendlypremium offering on the marketArjowiggins Creative Papers wasbadly hit by falling demand forpremium paper in 2009 coupled withdestocking by customers. It used thetough conditions to step up its technicalinnovation and eco-friendlystrategy and consolidate its positionas European market leader.Creative paper brings in 16% ofArjowiggins’ sales.Its premium, widely recognised brandscover a large range of applications thatinclude business stationery, corporatecommunications, advertising andpromotion, bookbinding and luxurypackaging, fine arts, and paper forspecialty applications (tracing paperfor technical drawing and transferrelease paper for the fashion, leather and car industries).Innovation is the key to differentiation in these marketsand this is why Arjowiggins Creative Papers is constantlydeveloping and adding to its range. It has to be ahead ofthe game and to anticipate trends in terms of materials,texture, feel, tints and finish so as to provide companieswith “differentiable” media to boost the impact of theircommunication strategy.And it did not disappoint in 2009 with the launch of theCurious Cosmic creative paper range, the ArjowigginsDigital range designed for digital printing developed aspart of an exclusive partnerships with Antalis, and thePriplak Karat and Izilight ranges.Lastly, Arjowiggins Creative Papers continues to “green”its offering by introducing new solutions to its alreadyFSC-certified ranges, and proving that premium paper canbe eco-friendly and still meet customer expectations interms of quality.Sequana 32 2009 Annual report

Industrial solutionsLeveraging technical know-howArjowiggins generates 15% of its sales from IndustrialSolutions which cover technical paper for use in industryand the health sector. The division managed to improveits operating performance in 2009 in spite of the falloff indemand.The Industry business covers three segments. Decor papercomprises print bases, decor paper with plain colours orprinted patterns for use in chipboard or the manufactureof furniture, doors, partitions, work surfaces, parquets,cladding and street furniture. Customers include decorprinters, impregnators, laminators, polishers and manufacturersof panelling. Arjowiggins is renowned for itsexpertise in terms of colour and the creation of patternsreflecting the latest styles.Abrasive papers are used in the auto and building industries.Finally, thin and opaque papers are used in pharmaceuticalleaflets.Arjowiggins’ Medical division supplies sterile packagingand sterilisation wraps for the protection of disposablemedical instruments (needles,compresses, gowns, etc.) as well assterilised sealing and wrapping solutionsto protect reusable medicalinstruments for use in operatingtheatres (scalpels, forceps, etc.). TheProppel, Ethypel, Arjopeel andSterisheet brands offer a wide rangeof sterilised packaging and wrappingsolutions certified to the highestmedical standards and replete withhigh bacterial barriers, controlledpermeability, suitable strength andfluid-repellent properties.Arjowiggins occupies strong positionsin all of its market segments thanksto its non-stop innovation, technicalknow-how and the quality of itsservice.A standard “clean &green” solution for decorprintersArjoFoil S is the first standard rangeof pre-impregnated paper to havebeen certified FSC Mixed Sources andis designed to facilitate the choice ofdecor printers with a targeted rangeof colours that have included chestnut,beige, grey and white since 2009.ArjoFoil S is manufactured withoutformaldehydes and represents excellentvalue in plain or printed paper forlaminates in economy-medium-rangefurniture: drawers, shelves and othervertical supports.Market positions worldwide– No.1 in abrasive base papersand sterile packaging– No.3 in synthetic papers andsterile wraps– No.4 in decor paperCollection Color Gallery:plain and printed decor papers.Sequana 33 2009 Annual report

BUSINESSESArjowigginsSecurityLeveraging innovation to consolidateleadershipHighly technicalproductsArjowiggins Security wonthe contract to manufacturethe 200 pesos banknote fromthe Bank of Mexico to celebratethe bicentenary of nationalindependence. It went intocirculation on 23 September 2009and is the first banknote tofeature the Pixel Watermark,developed by Arjowiggins SecurityR&D department and nowrecommended by Interpol.Arjowiggins Security is the world’sleading producer of banknote paper,security paper and security solutions.It turned in a good performance in2009 in an increasingly competitiveinternational market that sufferedfrom the ongoing crisis. The divisionbrought in 19% of Arjowiggins’ sales.Arjowiggins Security derives itsexpertise from its core business –the production of banknote paper –and it has extended its know-howinto secure solutions for officialID-type documents (passports, vehicleregistration documents, birth certificates,university diplomas, etc.) andparafiscal documents (display discsauthorising the sale of alcohol,tobacco, etc).The division has also become a leadingplayer in brand protection bydesigning solutions to combat brandinfringement, counterfeiting or theft.Arjowiggins Security has a business line devoted toother means of payment apart from banknotes, includingluncheon vouchers, event ticketing and chequebooks.One of the subsidiaries, Arjobex, is dedicated to the productionof synthetic fibres that provide innovative and complementarysolutions in many different domains.The increasing importance of secure e-documents (e-passportsand biometric passports, e-ID cards, etc.) has led tothe creation of Integral Solutions, a subsidiary with itsown specific R&D programme. It is based in France andin Hong Kong and proposes comprehensive solutionscombining physical and e-security, ranging from straightforwarde-protection to systems to detect and personalisesensitive official documents.These highly technical media are mainly sold to governmentdepartments, central banks, national printers and universitiesas well as to the private sector, notably in 2009.The whole business is based on dynamic innovation andR&D activity, based in France, which files about 20 patentsannually and means that Arjowiggins Security is subjectto particularly close scrutiny by national, European andinternational bodies.Sequana 34 2009 Annual report

Innovating to come upwith high value added,eco-friendly productsand solutions1 24123Marketing campaign for Cyclus,a range of natural white, recycled,coated and non-coated products.“A Curious Story” creativepapers marketing campaign.Decor paper for use in parquetsand furniture.34 Utopia, the flagship brandof Appleton Coated US.

RESPONSIBILITY

CTHATOMMITMENTSMATTERSequana has been committed to sustainable development now for a numberof years, both on the production and the distribution sides of its business.The Group is constantly striving to reduce its environmental footprint and to boostits range of innovative, eco-friendly products.Sequana 37 2009 Annual report

COMMITMENTS THAT MATTEREnvironment1234Bale of recycled paper forthe production of premium100% recycled pulp.Distribution c entre,Antalis France.Comprehensive range of 100%recycled, extra-white, coatedand non-coated paper.Quality control priorto coating.1 2Preserving the environmentA unique“green” offeringArjowiggins has been a trailblazer ineco-friendly paper thanks to itsGreenfield (France) plant, which isEurope’s leading producer of premiumFSC-certified recycled pulp from usedbusiness stationery. This extra-whitepulp is manufactured using a chlorinefreeprocess that, when combined withArjowiggins’ innovative know-how,gives a leading-edge, eco-friendlyproduct in terms of both whiteness andprintability. Arjowiggins leverages itsdynamic R&D function to constantlyexpand its eco-friendly product offering.In the graphic paper segment, theportion of products using recycledfibres is still much too low (10%versus 70% in packaging) butArjowiggins Graphic is trying tochange this situation and to boost theportion of recycled fibres in premiumpaper. In 2009, the new Cocoon Silkand Cocoon Gloss ranges of 100%recycled extra-white coated paper werelaunched in Europe and ArjowigginsGraphic’s green offering also comprisesFSC-certified mixed papers usingrecycled fibres such as Satimat greenand the FSC-certified Maine glossrange.Customers for creative paper arealso starting to look for eco-friendlysolutions and Arjowiggins CreativePapers has anticipated this trend byobtaining FSC certification for itsentire product range. A milestone wasreached in 2009 with the launch ofthe Conqueror 100% recycled brandin Europe and the distribution ofConqueror Carbon Neutral in a largenumber of European countries.By forging partnerships with strategicsuppliers, Antalis provides customerswith the eco-friendly solutions theycrave through a complete range ofenvironmentally-friendly products andenvelopes (FSC/PEFC-certified orrecycled).Reducing theenvironmental footprintArjowiggins is committed to reducingits carbon footprint as a way ofpreserving the environment as well asour natural resources. The Group hascommissioned an independent body,The Carbon Neutral Company, tomeasure greenhouse gas emissions atits production sites.The Group has also deployed actionplans designed to:– reduce water consumption, optimisetreatment of liquid effluent and setup recycling processes – such asenzymatic recycling – to scale backits consumption of raw materials andenergy;Sequana 38 2009 Annual report

3 4–increase energy efficiency at itsplants;–preserve air quality by using an airquality control system to recoverand condense waste gases at anumber of plants in order to reduceemissions into the atmosphere andconsumption of fossil fuels;–contribute to effective waste managementby using material that can berecycled or burnt to produce energy.Antalis has also made a priority ofreducing its carbon footprint and ithas launched a carbon pilot to assessthe best methodology to be deployedin a number of countries by 2010.Moreover the initiatives deployed in2008 around five broad themes –procurement, energy, travel, logisticsand waste management – continuedapace in 2009. Within the scope ofoptimising its distribution network,the inauguration of the new distribu-tion centre in the Netherlands inSeptember 2009 allowed Antalis tobring its administrative, commercialand logistics activities under the same– eco-friendly – roof. It was built in2009 and is powered solely by greenenergy from a wind farm.Helping customers that wish to pursuea sustainable development strategy isa priority for both Arjowiggins andAntalis. Thence the wide range ofpledges and services that it offers tothem:–FSC and ISO 14001 certification forArjowiggins’ plants (excludingChina and Greenfield);–Antalis provides CoC certificationin 37 countries that guaranteesend-to-end sustainability in boththe production and distributionprocess;–“environmental pledges” for eachof its product ranges; and–seminars organised around the environmentand certification.Responsibleprocurement practicesResponsible procurement is one ofthe Group’s watchwords and it iscommitted to choosing its raw materialssuppliers with care: Arjowigginsonly uses pulp from sustainable forestmanagement programmes.Antalis also gives priority to supplierswho have put the environment tothe fore. It encourages them to boostefficiency and make improvementsall the way down the production lineand out through the logistics chain,as well to deploy ISO 14001 certifiedEnvironmental Management Systemsor Eco-Management and Audit Schemes(EMAS).Sequana 39 2009 Annual report

COMMITMENTS THAT MATTERSafety12Eye witnessJoseph Hemmerlé,Manager of the Witcel(Argentina) plant“While safety concerns everyone,the involvement of, and example setby management is crucial.The strong signals coming frommanagement help bolster ourconvictions and underpin ouractions. While we are extremelyproud that we have not had anyaccidents with stoppages in the pasttwo years, you cannot afford to reston your laurels where safety isconcerned and we have launched aninnovative, hands-on campaign toanalyse and eliminate risks andhazards throughout the factory.Everything began spontaneouslyafter one of the operators drew apicture and then everybody elsebegan chipping in with ideas.”SafetyFirst, and All the TimeEmployee safetyThe safety of employees in bothproduction and distribution activitieshas always been a Group priority. It isone of the guiding principles of itssustainable development strategy anda key performance indicator.Group Safety management is taskedwith coordinating information andtraining programmes, regulatorycompliance, risk analysis and audits,action plans, communication of bestpractices and reporting across bothbusinesses. It is supported at divisionallevel by a network of safety coordinatorsand by safety leaders at site orcountry level.On the production side, a five-year programme waslaunched in June 2009 around two broad themes:–the primacy of employee physical welfare over thecontinuity of production;–the necessity to focus on behaviour and the protectionof facilities in tandem.“Making paper safely”The aim of this programme is to validate and deploy thebest technical standards for paper machines such as protectivegrids, closure and controlling access by interlockedguards, operating in step-by-step mode, etc. It also aimsto develop organisational safety procedures aroundconsigning equipment or the nature and use of specifictools. Following an audit of all European sites, an initialaction plan was rolled out in each division to provide allmachines with a level of protection sufficient to containthe main risks by the end of June 2010, when a supplementaryaction plan is to be submitted. This will aim todeploy an optimal level of protection on each machine byend-2012 at the latest.Sequana 40 2009 Annual report

123Manual handling assistancein a warehouse.Programme to assess practicesin Antalis distribution centres.Interlocked guards on a papermachine.3“Behaviour in front of hazards”Fostering awareness among employees of the importanceof safety is a Group priority and in 2010 Arjowiggins willstart gradually mapping different danger situations andcorresponding behaviour patterns. As well as analysingrisks, this will help develop awareness programmes toenhance risk control.On the distribution side, a programme was rolled out inMarch to assess performance and practices, especially indistribution centres. Other tools have been developed andwill be deployed in 2010: consolidated accident andperformance data and safety audits to map comparative“maturity” in safety practices across different sites.Beginning in 2009, a safety module was included in traininggiven at country level on the protection of goods.Protecting goodsIn production and distribution alike, protecting goodsagainst the risk of fire, explosion, extreme weatherand other natural phenomena, as well as against handlingerrors or perishability is closely bound up with the protectionof employees. An annual audit programme togetherwith closely monitored action plans for each site isorganised jointly by the insurance company and Safetymanagement.Eye witnessJohn Gaunt,Creative Papers IndustrialDirector“Safety in Arjowiggins(Sequana) is regarded as ourfirst priority in all of our activities.The essential activities tosupport this are… Firstlyinfluencing the behaviour ofour employees and encouragingthem to adopt safemethods of working byinvolving and engaging themin a continuous dialogue onsafety issues and encouragingreporting of hazards and nearmisses; and secondlyprotecting our employees fromhigh-risk activities by guardinghazards and controlling activitiessuch as maintenance andcleaning of automated equipment.To progress on hazardprotection we have recentlyembarked upon a project toprogressively install the highestlevel of guarding on our papermachinery. This will beachieved over the next threeyears through the installationof guards to the in runningnips and trapping hazards onour machines and the improvementof the design of themachines to eliminate as far aspossible the need for manualintervention in areas wherethere are potential trappinghazards. This project willimplement more robust solutionsto achieve the higheststandards of protection practicedwithin our industry.This will be applied to all ourmachines whatever their agethrough a centrally coordinatedproject.”Sequana 41 2009 Annual report

COMMITMENTS THAT MATTERSponsorship and partnerships13421234Catalogues for the exhibition,“Titian, Tintoretto, Veronese– Rivals in Renaissance Venice”,from 17 September 2009 to4 January 2010 at the Louvre.Catalogue for the exhibition “HolyRussia” to be held from 5 Marchto 24 May 2010 at the Louvre.Launch of new shades in theCurious Metallics rangeat the “The Gates of Heaven.Visions of the World in AncientEgypt” exhibition.Catalogue for the ParisInternational ContemporaryArt Fair (FIAC).Sponsorship and partnershipsAs a Group committed to corporateresponsibility, Sequana pursues a corporatephilanthropy programme focusedon making art as widely accessible aspossible. The Group also supports localinitiatives to promote solidarity in mostcountries in which it is present.Cultural philanthropyAs a natural benefactor of the artworld, Sequana has been supportingthe Louvre Museum for the pastfive years by supplying the cataloguepaper for its temporary exhibitions.These are an exceptional image vectoras they are printed on leading-edge,premium Arjowiggins paper thatmeets the Museum’s criteria, especiallyin terms of respect for theenvironment.The Group supplied the paper for15 catalogues as part of this partnershipin 2009, and notably for “TheLouvre during the War”, “The BreguetMechanisms” and “The VenetianRenaissance”. Sequana will also beinvolved in the major 2010 exhibition“Holy Russia” to be held from 5 Marchto 24 May 2010.Also within the scope of this partnership,Arjowiggins and Antalis wereable to organise an evening for theirclients at the flagship 2009 Exhibition,“The Gates of Heaven. Visions of theWorld in Ancient Egypt”.Flushed with the success of theirinvolvement in the previous year,Sequana renewed its sponsorship ofthe prestigious Paris InternationalContemporary Art Fair (FIAC).The 36 th Fair welcomed over 80,000visitors to the Grand Palais, the Louvreand the Tuileries Gardens between22 and 25 October 2009.The exhibition catalogue as well as anumber of other brochures (“ParcoursPrivé”, “Out & About”) were printedon Arjowiggins paper.A Group that believesin solidarityAntalis is involved in the communityin most of the countries in whichit is present and most initiativesrevolve around helping children andeducation.Ireland benefited greatly in 2009 anda major competition was organised inSequana 42 2009 Annual report

575The winning school in the“What I like about summer”competition in Ireland.6 A centre opened by the PlayrightChildren’s Play association.67Programme for the Gala AmnestyInternational evening held onof 6 May 2009.300 schools involving 2,000 childrenaround the theme “What I like aboutsummer”. The first prizes consistedof IT and sports equipment for thewinning schools.Sizable donations of paper were alsomade in Dublin to schools as well asto an association that works withunderprivileged families.In the past few years, the Group hasbeen increasingly involved in localinitiatives in Hong Kong and the teamshave been working with various associationsincluding “Playright Children’sPlay Association”, which strives toenrich children’s lives through games.In May 2009, the association openeda centre that provides children withbooks, toys and all sorts of activitiesand, as many of these require paper,Hong Kong decided to donate damagedor imperfect paper that the childrencan use for their own needs. Thisinitiative is perfectly in line with thecentre’s aim of promoting the use of“available” materials or papers forartwork or craftwork.Antalis has also been providingsupport to the sick and disabled,particularly in Spain. In the UK, teamshave been involved in the fight againstbreast cancer for a number of yearsnow (collecting money, donations,participation in “Wear it pink day”).Projects to support sick children havealso been endowed in the Netherlands,Hungary and Latvia, such as the“Grown up to small kids” project toraise funds for providing education inhospitals. Design schools have beenendowed in a number of countriesincluding the Netherlands, Hungary,Thailand and Turkey.Arjowiggins has continued itsprogrammes in favour of associationssuch as Enfance Majuscule, AmnestyInternational, Aide à l’enfant réfugiéand the Anti-Cancer League, byproviding them with the paper theyuse for the invitations to their fundraisinggalas.Sequana 43 2009 Annual report

COMMITMENTS THAT MATTERIndicatorsIndicatorsSafetyINCIDENT R ATEEnvironmentArjowiggins– 30% reduction in water consumption over the past fi v eyears thanks to the use of bio-technologies, particularlyin the treatment of water.– The amount of electricity and combustible fossil fuels(natural gas, steam, fuel, coal) used to produce one tonneof paper have been cut by 20% and 12%, respectively,over the past five years. These results have been drivenby continued investments in renewable energy such asbio-fuels.30%fall in water consumptionover the past five yearsat ArjowigginsArjowiggins Incident Rate: 36%improvement in the last six years(no. of Lost Time Accident/no. FullTime Equivalent x 1,000).KEY ENVIRONMENTAL PERFORMANCE INDICATORS (ARJOWIGGINS)2009 2008 2007Water consumption (m 3 /paper tonne) 26.3 26.2 28.6Energy consumptionFossil fuels (kWh/paper tonne) 1,642 2,299 2,390Electricity (kWh/paper tonne) 859 885 876Liquid effluents after treatmentVolume of effluents (m 3 /paper tonne) 23.5 23.6 25.4Total suspended solids (TSS) (kg/paper tonne) 0.39 0.71 0.48Chemical oxygen demand (DCO) (kg/paper tonne) 2.32 2.9 2.5Biochemical oxygen demand (DBO5) (kg/paper tonne) 0.35 0.51 0.49Gas effluentsCO 2 emissions (kg/paper tonne) 378 414 473NB: These data correspond to average values for the whole group. Significant differences may exist between different plants due to the typeof products manufactured.Antalis– CoC certification in 37 countries.– Over 80% of volumes sold by Antalis have been purchasedfrom suppliers that have obtained ISO 9001, ISO 14001,FSC and PEFC certification.70%of the countries in whichAntalis is present haveCoC certification.Sequana 44 2009 Annual report

Designed by:Photo credits:Antalis and Arjowiggins photo libraries,“A Curious Story by Grégoire Alexandre -Arjowiggins Creative Papers,Musée du Louvre/Angèle Dequier,Jean-Lionel Dias, Carole Epinette,Cécile Fourcade, Olivier Placet,Gilles Rolle/Réa, CorbisPrinter:Artecom, IMPRIM’VERT ® ,FSC and PEFC certifiedPrinted in France in June 2010© Sequana ® All rights reserved

19, avenue Montaigne75008 Paris - FranceTel: +33 1 56 88 78 00E-mail: contact@sequana.comwww.sequana.comAntalis122, rue Édouard Vaillant92300 Levallois-Perret - Francewww.antalis.comArjowiggins20, rue Rouget de Lisle92130 Issy-les-Moulineaux - Francewww.arjowiggins.com

Annual report - Sequana

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