Wendel : 2021 Half-Year financial report

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Half-Year financial

report

Investing for the long term

HALF YEAR FINANCIAL REPORT………………………………………………………………1

1. Business overview
2. Other information

NAV OF €189.1 PER SHARE AS OF JUNE 30, 2021…………………………………......... 13

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1ST HALF 2021………………14

1. Balance sheet - Statement of consolidated financial position
2. Consolidated income statement
3. Statement of comprehensive income
4. Statement of changes in shareholders' equity
5. Consolidated cash-flow statement
6. General principles
7. Notes
8. Notes on the balance sheet
9. Notes on the income statement
10. Notes on changes in cash position
11. Other notes

STATUTORY AUDITORS' REVIEW REPORT ON THE 2021 INTERIM
FINANCIAL INFORMATION	57

CERTIFICATION BY THE CHAIRMAN OF THE EXECUTIVE BOARD……………………. 59

Half year financial report

Business overview

Business overview

H1 2021 consolidated results

H1 2021 Consolidated sales

in millions of euros		H1 2021		H1 2020	Change	Organic
		change
Bureau Veritas		2 418.4		2 200.5	9.9%	14.3%
Constantia Flexibles		752.1		761.4	-1.2%	0.7%
Cromology		370.7		290.2	27.7%	27.8%
Stahl		419.8		316.8	32.5%	36.4%
CPI (1)		36.5		23.7	53.6%	59.0%
CONSOLIDATED NET SALES (2)		3 997.4		3 592.6	11.30%	14.70%

1. H1 2020 Sales included a PPA restatement impact of -$1,5M, included in perimeter effect.

H1 2021 sales of equity-consolidated companies

		H1 2021		H1 2020	Change	Organic
in millions of euros			change
IHS		633.4		603.0	5.0%	19.5%

H1 2021 consolidated results

in millions of euros	H1 2021	H1 2020	Change	%
Consolidated subsidiaries	401.5	141.2	260.3	184.3%
Financing, operating expenses and taxes	-54.5	-57.9	3.4	-5.9%

Net income from operations (1)

Net income from operations, Group share (1) Non-recurring net income

Impairment and impact of goodwill allocation

	347.0		83.4	263.6	316.1%
	152.9		5.6	147.3	2630.4%
	3.1		-142.7	145.8	102.2%
	-49.0		-220.0	171.0	-77.7%

Total net income	301.0		-279.3	580.3	207.8%
Net income (loss), Group share	131.1		-203.7	334.8	164.4%

(1) Net income before goodwill allocation entries and non-recurring items.

Half year financial report

Business overview

H1 2021 net income from operations

in millions of euros		H1 2021	H1 2020	Change
Bureau Veritas		231.5	93.0	149.0%
Stahl		71.9	35.3	103.8%
Constantia Flexibles		35.3	27.3	29.5%
Cromology		37.9	4.5	752.6%
Tsebo		n/a	-7.6	n/a
CPI		1.1	-7.6	114.9%
IHS (equity method)		23.8	-3.4	793.1%
Total contribution from subsidiaries		401.5	141.3	184.0%
Total contribution from subsidiaries Group share		207.4	63.5	226.6%
Total operating expenses		-34.0	-30.8	10.4%
Total financial expenses		-20.5	-27.0	-24.0%
Net income from operations		347.0	83.5	315.5%
Net income from operations, Group share		152.9	5.6	2630.4%

The Supervisory Board met on September 6, 2021, under the chairmanship of Nicolas ver Hulst, to review Wendel's condensed consolidated financial statements, as approved by the Executive Board on September 2, 2021. The interim financial statements were subject to a limited review by the Statutory Auditors prior to publication.

Wendel Group's consolidated sales totaled €3,997.4 million, up +11.3% overall and up +14.7% organically.

The overall contribution of Group companies to net income from operations amounted to €401.5 million, strongly up +184 % from the first half of 2020. This increase largely resulted from the impact of COVID19 related lockdowns in H1 2020 and resulting effects on portfolio companies.

Financial expenses, operating expenses and taxes incurred by Wendel totaled €54.5 million, down 5.8% from the €57.9 million reported in H1 2020. This decrease results from a decrease in financial expense line item, down 24.0% since Wendel unwound its euro/dollar cross currency swaps in March 2021, allowing c. €25 million future interest costs savings mainly as a result of the reduction in gross debt during the year.

Non-recurring net result was a profit of 3.1 million in H1 2021 vs. a loss of €142.7 million in H1 2020. This gain is mainly due to the positive impact of the positive change in the fair value of Wendel Lab's financial assets for €51.9 million related to the IPO of an asset held by a subscribed fund.

Wendel's net income, was a profit of €301.0 million in H1 2021, compared with a €279.3 m illion loss in H1 2020. Net income, Group share was a profit of €131.1 million, vs. a loss of €203.7 million in H1 2020.

Portfolio companies H1 2021 activity and Net asset value as of June 30, 2021 have already been published on July 29, 2021 as part of Wendel's trading update, available on the website, in the Finance section.

2021 half-year consolidated financial statements are available on Wendel's website, in the Finance section.

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Half year financial report

Business overview

Group companies' results

Figures are after IFRS 16, unless otherwise specified

Bureau Veritas: Excellent H1 2021 operating and financial performance; 2021 Full Year outlook upgraded

(full consolidation)

Revenue in the first half of 2021 amounted to €2,418.4 million, a 14.3% organic growth, of which 22.5% in the second quarter, benefiting from improving end markets across most businesses and the return to a more normal operating environment compared to H1 2020.

More than half of the portfolio (including Certification, Consumer Products and Buildings & Infrastructure) strongly recovered, up +23.2% organically on average. Certification was the best performing activity, up +38.6% in H1 (including a +58.5% growth in Q2) benefiting from both catch-up of audits and strong momentum on CSR-related services. Consumer Products strongly returned to growth (up +23.4% in H1, with a +27.3% increase in Q2) fueled by Asia, the resumption of product launches, and helped by favorable comparables. B&I outperformed Bureau Veritas average with an increase of +19.5% in the first half of the year as it benefited from strong momentum across its three platforms (Americas, Asia and Europe). A fifth of the portfolio (Industry) deliver ed +9.5% organic revenue growth in the first half (including a +20.8% rebound in the second quarter) with strong business activity for the Power & Utilities segment in particular, including renewables, and stabilizing trends for Oil & Gas markets. Less than a third of the portfolio (Agri-Food & Commodities and Marine & Offshore) grew at +4.4% organically on average.

The scope effect was a negative -0.1%, reflecting the impact from prior-year disposals offset by the four bolt-on acquisitions realized in the first half of 2021. Currency fluctuations had a negative impact of -4.3% (of which -3.6% in Q2), mainly due to the depreciation of some emerging countries' currencies, and the USD and pegged currencies against the euro.

Consolidated adjusted operating profit increased by +75.3% to EUR 378.2 million; the half-year 2021 adjusted operating margin rose 583 basis points to 15.6%, including a 23 -basis-point negative impact from foreign exchange and a 5-basis point positive impact from the scope. On an organic basis, it jumped by 601 basis points to 15.8%.

All business activities experienced higher organic margins due to operational leverage in a context of revenue recovery. This was supported by strong cost containment measures the prior year, and favorable business mix. The businesses that saw the best margin improvement were Consumer Products, Certification and Buildings & Infrastructure, that rebounded the most following the lockdown measures in the prior year. Together, they represented the bulk of the organic increase in Bureau Veritas' margin in the first half of 2021.

Bureau Veritas continued to see a rising demand towards quality, safety, traceability and environmental stewardship which perfectly positions the company for a new step forward in its development. Through BV Green Line of services and solutions dedicated to sustainability, Bureau Veritas is uniquely positioned to help its clients across multiple sectors to implement, measure and monitor their ESG commitments in a more transparent, credible, and data driven way than self- declaration. Bureau Veritas also has the expertise to support them with their energy transition encouraged notably by the large-scale government investment programs around the world. Bureau Veritas now expects strong growth for 2021 and upgraded its full-year outlook accordingly.

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