Hal Trust : Report on the first half year 2018

HAL Trust

Report on the first half year 2018

Table of Contents

Interim report of the Executive Board of HAL Holding N.V. 5

Condensed Interim Consolidated Financial Statements HAL Trust 7

Interim Consolidated Statement of Financial Position 8

Interim Consolidated Statement of Income 9

Interim Consolidated Statement of Comprehensive Income 10

Interim Consolidated Statement of Changes in Equity 11

Interim Consolidated Statement of Cash Flows 12

Basis of preparation 13

Notes to the Condensed Interim Consolidated Financial Statements 18

List of Principal subsidiaries and minority interests 25

Supplemental information 26

Statement by the Executive Board 33

Interim report of the Executive Board of HAL Holding N.V.

First half year net income of € 48 million (2017: € 229 million). Net asset value decreases by € 320 million.

Net income of HAL Holding N.V. for the first six months of 2018 amounted to € 48 million (€ 0.60 per share) compared to € 229 million (€ 2.86 per share) for the same period last year, representing a decrease of € 181 million (€ 2.26 per share). This decrease is mainly due to lower earnings from Boskalis, primarily due to an impairment charge of € 380 million (effect for HAL € 137 million).

The net asset value based on the market value of the ownership interests in quoted companies and the liquid portfolio and on the book value of the unquoted companies, decreased by € 320 million during the first six months of 2018. This decrease is primarily due to the lower stock market value of GrandVision and Boskalis partly offset by a higher stock market value of Vopak. After taking into account the cash portion of the 2017 dividend (€ 248 million) and the sale of treasury shares (€ 2 million), the net asset value amounted to € 11,556 million (€ 141.46 per share) on June 30, 2018, compared with € 12,122 million (€ 151.45 per share) on December 31, 2017.

During the period from June 30, 2018, through August 24, 2018, the value of the ownership interests in quoted companies and the liquid portfolio increased by approximately € 500 million (€ 6.12 per share).

The information in this report has not been audited nor reviewed by an external auditor.

Quoted minority interests

At the end of June, the stock market value of HAL's interests in quoted minority interests (Koninklijke Vopak N.V., Koninklijke Boskalis Westminster N.V., Safilo Group S.p.A. and SBM Offshore N.V.) amounted to € 4.3 billion compared with € 4.4 billion at the end of 2017. The ownership interest in Boskalis increased from 35.71% at the end of 2017 to 37.77% at the end of June 2018 due to stock dividend and the purchase of additional shares. The income from quoted minority interests amounted to a loss of € 67 million (2017: profit of € 99 million). This decrease is primarily the result of lower earnings from Boskalis primarily due to an impairment charge of € 380 million (effect for HAL € 137 million).

Optical retail

Revenues for the first half year amounted to € 1,874 million (2017: € 1,721 million) representing an increase of 8.9%. Excluding the effect of acquisitions and changes in currency exchange rates, revenues increased by 3.9%. The same-store sales, based on constant exchange rates, increased by 2.8% during the first half year compared with the same period last year (2017: 2.4%). The operating income (earnings before interest, exceptional and non-recurring items, taxes and amortization ofintangible assets but including amortization of software) for the first half year amounted to € 220 million (2017: € 211 million).

As of June 30, 2018, the stock market value of HAL's 76.72% ownership interest in GrandVision amounted to € 3.8 billion (December 31, 2017: € 4.2 billion).

Unquoted companies

Revenues from the unquoted subsidiaries for the first half year amounted to € 1,139 million (2017: € 1,052 million). Excluding the effect of acquisitions and changes in currency exchange rates, revenues from the unquoted companies increased by 7.1%. The operating income of the unquoted companies (income before interest, exceptional and non-recurring items, taxes and amortization of intangible assets but including amortization of software) for the first half year amounted to € 84 million (2017: € 66 million). This increase is primarily a result of higher earnings from Ahrend and Timber and Building Supplies Holland.

Liquid portfolio and net debt

The corporate liquid portfolio, including derivatives, at the end of June, 2018, amounted to € 2,132 million (December 31, 2017: € 2,303 million), a decrease of € 171 million. This decrease is primarily due to the cash portion of the 2017 dividend (€ 248 million). As of June 30, 2018, the corporate liquid portfolio consisted for 77% of cash balances and fixed income instruments amounting to € 1,638 million (December 31, 2017: € 1,774 million) and for 23% of equities for an amount of € 494 million (December 31, 2017: € 529 million). The corporate liquid portfolio provided a total return of 0.4% during the first half of 2018 compared to 1.4% for the same period last year.

The consolidated net cash (excluding the net debt of Koninklijke Vopak N.V. and Safilo Group S.p.A.) as of June 30, 2018, as per the pro forma interim consolidated balance sheet in the supplemental information (defined as cash and cash equivalents and marketable securities less current and non-current bank debt) amounted to € 900 million (December 31, 2017: € 1,000 million).

Acquisitions and divestitures unquoted companies

On May 23, 2018 Broadview Holding B.V. ("Broadview", 97.4% HAL) agreed to acquire 75.5% of the voting rights of WESTAG & GETALIT AG ("Westag") from the Gethalia Foundation. Westag is a leading manufacturer of high-quality wood-based products for interior finishing and building construction. Its product offering includes doors and frames, kitchen worktops and window sills, as well as solid surface material and coated plywood panels. Founded in 1901, Westag is based in North-Western Germany and employs circa 1,300 people. The company reported 2017 revenues of € 234.4 million.