25.05.2005 07:00:00 CET

TOUAX : Transition to IFRS

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Paris, May 24, 2005

- Decrease of 26.8% in 2004 shareholders' equity (-E12.8 million)

- No change in 2004 consolidated net income (E3.2 million)

- Estimated rise in earnings from 2005 of +E0.5 million

The TOUAX Group has completed its valuation work in accordance with IFRS international standards. The adjusted 2004 IFRS accounts (excluding IAS 32, 39 and IFRS 4, which will only be applied from 2005) have been reviewed by the auditors and approved by the Board of Directors.

Although the transition to IFRS standards adopted by the European Union has no impact on the financial reality of the Group, it nevertheless constitutes a complex technical change which has been carried out with great care.

From the options available under the IFRS standards, TOUAX has chosen those which afford the best protection for the future and are consistent with the Group's management methods. The elements which have remained unchanged are the following:

- Tangible assets have not been revalued on the date of transition to IFRS, in order to avoid any negative impact on future results due to additional depreciation,

- The historical cost principle has been retained,

- Securitized assets are not considered controlled entities within the meaning of SIC 12 (Consolidation - special purpose entities) and consequently are not consolidated under IFRS,

- The principles of revenue recognition IAS 18 (Revenue), reinforced by EITF interpretation 99-19 (US GAAP), result in the TOUAX Group being considered to be the principal operator and not an agent. All of the revenue and expense flows are accordingly recorded in the income statement,

- The stock subscription and purchase option schemes have not been valued in accordance with IFRS 2 (share-based payment), as their impact is negligible,

- Business acquisitions and combinations completed prior to 1 January 2004 have not been adjusted in accordance with the provisions of IFRS 3 (Business combinations),

The elements which have been modified following the adoption of IFRS standards are the following:

- According to IAS 18 (Revenue), start-up commissions associated with the formation of trusts are recognized only once the TOUAX Group is able to recover the deposits provided to guarantee the securitization transactions. These commissions, up to the amounts of the guarantee deposits (E8.2 million), have been deferred until the closing date of the trusts. This adjustment has an impact of -17.6% on shareholders' equity.

- Charges to be spread over several periods, which did not correspond to asset accounting criteria (E3.2 million), particularly trust formation expenses and certain expenses for repairs of equipment, have been reversed. This adjustment has an impact of -6.8% on shareholders' equity, but increases future annual earnings by approximately E250,000.

- The component approach (IAS 16 Property, plant and equipment) has resulted in a faster writedown of the individual elements of the main fixed assets and has led to certain repair and maintenance expenses being considered ineligible. This adjustment has an impact of -4% (-1.9 million) on shareholders' equity.

- Goodwill is no longer amortized and is stated at its net value as at January 1, 2004. This adjustment increases future annual earnings by approximately E250,000.

- The balance sheet have been reclassified into current items and non-current items,

- The accumulated translation reserves as at January 1, 2004 are stated in the consolidation reserves,

- The employee benefits have been valued in accordance with IAS 19 (Employee benefits),

- The deferred taxes associated with IFRS adjustments have been capitalized and have replaced the deferred taxes previously stated in connection with tax losses. It has therefore been possible to recapitalize tax losses under IFRS standards for the 2004 financial year, giving rise to a favorable impact of E1.2 million on shareholders' equity.

In implementing these accounting choices from among the options available, the TOUAX Group has ensured that its earnings capacity is reinforced. The Group confirms its strategic directions for the years ahead: priority for growth and profitability in its four operational leasing businesses, management for its own account and for third parties, diversification of risks and a recurring dividend policy.

The 2004 balance sheet and income statement under IFRS are as follows:

TOUAX : CONVERSION TABLE FOR THE BALANCE SHEET AS AT 31/12/2004

          IFRS 
     consolidated 
  French GAAP with Other IFRS balance sheet 
In thousands of euros (E 000) French GAAP IFRS presentation reclassifications adjustments as at 31/12/04 
ASSETS      
Goodwill 2,41 2,41  233 2,643 
Other net intangible assets 277 277  -226 51 
Net tangible assets 76,072 76,072 -144 -1,882 74,046 
Financial fixed assets 10,557    0 
Long-term financial assets  11,462 -225 -109 11,128 
Other non-current assets  1,116   1,116 
Deferred tax assets  2,085  1,163 3,248 
Total fixed assets Reg n° 99-02/ 89,316 93,422 -369 -82 0 92,233 
Total non-current assets IFRS      
Inventories and work in progress 13,033 13,033   13,033 
Trade debtors 28,094 28,094   28,094 
Other receivables 21,594    0 
Other current assets  17,488 -9 -3,387 14,092 
Cash and short-term investments 32,185 32,185  -31 32,154 
Total current assets Reg n° 99-02/      
Total current assets IFRS 94,906 90,8 -9 -3,418 87,373 
Assets held for sale & discontinued operations      
TOTAL ASSETS 184,222 184,222 -378 -4,238 179,606 
      
LIABILITIES      
Share capital 22,705 22,705   22,705 
Consolidated reserves 20,375 20,375  -12,388 7,987 
Attributable income 3,217 3,217  -40 3,177 
Attributable shareholders' equity 46,297 46,297 0 -12,429 33,868 
Minority interests 186 186  -40 146 
Total shareholders' equity 46,483 46,483 0 -12,469 34,014 
Borrowings and financial debts 72,662 42,391   42,391 
Deferred tax liabilities  729   729 
Retirement benefits and similar items  77  76 153 
Other long-term liabilities  369 -369 8,155 8,155 
Total non-current liabilities N/A 43,566 -369 8,231 51,428 
Provisions for liabilities and charges 722 276 -9  267 
Borrowings and current bank facilities  30,271   30,271 
Suppliers & other payables 35,776 35,776   35,776 
Other liabilities 28,579 27,85   27,85 
Total current liabilities N/A 94,173 -9 0 94,164 
Liabilities held for sale & discontinued operations      
Total liabilities 184,222 184,222 -378 -4,238 179,606 

TOUAX : CONVERSION TABLE FOR THE INCOME STATEMENT AS AT 31/12/2004

In thousands of euros          IFRS 
     consolidated 
     Income 
   IFRS Total statement as 
 French GAAP Reclassifications adjustments Adjustments at 31/12/04 
Lease revenues 108,396 1,871 0 1,871 110,267 
Sales of equipment 70,227 0 0 0 70,227 
Commissions 89 0 0 0 89 
Managed equipment program distributions 1,871 -1,871 0 -1,871 0 
Total revenues 180,583 0 0 0 180,583 
Capital gains on disposals  4,547 0 4,547 4,547 
Revenues from business activities N/A 4,547 0 4,547 185,13 
Cost of sales -65,135 0 0 0 -65,135 
Operating expenses -55,132 0 -1,987 -1,987 -57,119 
Selling, general and administrative expenses -10,314 0 0 0 -10,314 
Capital gains on disposals 4,547 -4,547  -4,547 0 
Overheads -3,06 0 0 0 -3,06 
Ebitda 51,489 0 -1,987 -1,987 49,502 
Depreciation and amortization -6,237  442 442 -5,795 
Operating result 45,252 0 -1,545 -1,545 43,707 
Net revenues due to investors -36,862 0 0 0 -36,862 
Operating income after distribution to investors 8,39 0 -1,545 -1,545 6,845 
Financial income 1,246 0 -18 -18 1,228 
Financial expenses -4,958 0 13 13 -4,945 
Financial result -3,712 0 -5 -5 -3,717 
Underlying pretax earnings 4,678 0 -1,55 -1,55 3,128 
Corporation tax -1,611 0 1,274 1,274 -337 
Net income from consolidated companies 3,067 0 -276 -276 2,791 
Amortization of goodwill -236 0 236 236 0 
Result of discontinued activities 0 0 0 0 0 
Total consolidated net income 2,831 0 -40 -40 2,791 
Minority interests 386 0 0 0 386 
Consolidated net attributable income 3,217 0 -40 -40 3,177 
Earnings per share 1.13    1.12 

Net bank debt as at 31/12/2004 - IFRS : E40.5 million

Consolidated shareholders' equity as at 31/12/2004 - IFRS : E34 million

EBITDA after distribution to investors on 31/12/2004 - IFRS : E12.6 million

The reconciliation table for shareholders' equity as at 1 January 2004 and 31 December 2004 is as follows:

TOUAX : RECONCILIATION TABLE FOR SHAREHOLDERS' EQUITY AS AT 1/1/2004 AND 31/12/2004

                TOTAL 
       MINORITY CONSOLIDA 
  ATTRIBUTABLE SHAREHOLDERS' EQUITY   INTERESTS TED GROUP 
 01/01/2004 Result for Distribution of Translation Other 31/12/2004   
In thousands of euros  the year dividends differential items    
Shareholders' equity under French         
acccounting standards 46 034 3 217 -1 710 -947 -297 46 297 186 46 483 
Tangible fixed assets - Application of         
the component approach and         
modification of depreciation schedules -1 407 -510 0 41 0 -1 876 0 -1 876 
of certain fixed assets, impairment         
charge         
Intangible fixed assets - Cancellation         
of charges to be spread over several         
 -2 256 -1 022 0 108 0 -3 170 0 -3 170 
periods and certain intangible fixed         
assets         
         
Revenue - Reversal of revenue         
recognized under French standards -8 527 -18 0 390 0 -8 155 0 -8 155 
(start-up commissions not meeting all         
IFRS revenue recognition criteria)         
Retirement benefits -62 -14 0 0 0 -76 0 -76 
         
Own shares - Reclassified as -36 0 0  5 -31 0 -31 
deduction from shareholders' equity         
Other items -534 13 0 4 0 -517 -40 -557 
         
Total IAS/IFRS adjustments before tax -12 822 -1 551 0 543 5 -13 825 -40 -13 865 
Effect of deferred tax on IFRS         
adjustments 0 1 274 0 -111 0 1 163 0 1 163 
Goodwill - Cancellation of         
amortization 0 237 0 -4 0 233 0 233 
Shareholders' equity under IFRS 33 212 3 177 -1 710 -519 -292 33 868 146 34 014 

A detailed memorandum on the transition to IFRS standards will be available in the TOUAX reference document.

TOUAX is listed in Paris on EURONEXT - Eurolist Compartment C (Code ISIN FR0000033003) and is part of the Next Prime quality segment of EURONEXT.

Contacts: TOUAX

Fabrice WALEWSKI/Raphaël WALEWSKI

Co-Chairmen

touax@touax.com

Tel : 01 46 96 18 00

ACTUS FINANCE Nicole ROFFÉ - Analyst/Investor Relations nroffe@actus.fr

Sébastien BERRET - Press Relations sberret@actus.fr Tel : 01 53 67 35 77