6-K 1 sixk.txt 6-K -------------------------------------------------------------------------------- FORM 6K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington DC 20549 REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE THREE MONTHS ENDED MARCH 31, 2003 CLONDALKIN INDUSTRIES PLC (Translation of Registrant's Name Into English) Monastery Road, Clondalkin Dublin 22 Ireland (Address of Principal Executive Offices) (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F) Form 20-F X Form 40-F --- --- (Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934) Yes No X --- --- (If "Yes" is marked indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ) CLONDALKIN INDUSTRIES PLC QUARTERLY REPORT TABLE OF CONTENTS

Page ~~----~~PART ~~Introduction~~I ~~2 Comparison of Results for the years ended December 31, 2002 and December 31, 2001 3~~ - 6FINANCIAL ~~Management's~~INFORMATION ~~Discussion~~Introduction ~~and~~2 ~~Analysis of~~ Financial ~~Condition~~Statements ~~and~~Consolidated ~~Results~~Profit ~~of Operations 7 - 11 Liquidity~~ and ~~Capital~~Loss ~~Resources~~Accounts 12(Unaudited) -for 13the ~~Legal~~three ~~Proceedings~~months 14ended ~~Changes~~March in31, ~~Securities~~2003 and ~~Use~~March of31, ~~Proceeds~~2002 14respectively ~~Defaults~~3 ~~upon Senior Securities 14 Appointment of Deutsche Bank to advise the Company's Shareholders 14 Financial Review and Prospects 14~~ Consolidated ~~Profit~~Balance ~~and~~Sheets ~~Loss~~(Unaudited) ~~Accounts~~at ~~for~~March ~~the years ended December~~ 31, ~~2002,~~2003 ~~December 31, 2001~~ and December 31, ~~2000.~~2002 15respectively 4 Consolidated ~~Statement~~Cash ofFlow ~~Total~~Statements ~~Recognized~~(Unaudited) ~~Gains and Losses~~ for the ~~years~~three months ended ~~December~~March 31, ~~2002,~~2003 ~~December 31, 2001~~ and ~~December~~March 31, ~~2000.~~2002 16respectively ~~Consolidated~~5 ~~Balance~~Statement ~~Sheets~~of asChanges atin ~~December~~Shareholders' ~~31,~~Equity ~~2002~~(Unaudited) ~~and~~6 ~~December~~Notes ~~31,~~to ~~2001.~~the 17 Consolidated ~~Cash~~Financial ~~Flow~~ Statements ~~for~~(Unaudited) ~~the~~7 ~~years~~Operating ~~ended~~and ~~December~~Financial ~~31,~~Review ~~2002,~~8 ~~December~~Quantitative ~~31,~~and ~~2001~~Qualitative ~~and~~Disclosures ~~December~~of ~~31,~~Market ~~2000.~~Risk 1813 ~~Notes~~PART toII ~~the~~- ~~Consolidated~~OTHER ~~Financial~~INFORMATION ~~Statements~~Legal ~~Note~~Proceedings 1:13 ~~Basis~~Changes ofin ~~Preparation~~Securities and ~~Accounting~~Use ~~Policies~~of 19Proceeds -13 22Defaults ~~Note~~upon 2:Senior ~~Segmental~~Securities ~~Analysis~~13 22Appointment ~~Note~~of 3:Deutsche ~~Borrowings~~Bank ~~and~~to ~~Cash~~advise ~~Balances~~the 23Shareholders ~~Note 4: Cash Inflow from Operating Activities 23~~13

1 CLONDALKIN INDUSTRIES PLC INTRODUCTION Quarterly Report for the three months ended March 31, 2003 The accompanying condensed consolidated financial statements have been prepared to show the results of Clondalkin Industries PLC ("the Company") and its subsidiaries (collectively referred to as "the Group") for the three months ended March 31, 2003 compared to the three months ended March 31, 2002 and to show the financial condition of the Group as at March 31, 2003 compared to December 31, 2002. The Company was incorporated on July 22, 1999 and its wholly owned subsidiary, Edgemead Limited, acquired Clondalkin Group Limited (previously Clondalkin Group PLC) on November 9, 1999. Forward-Looking Statements The Company and its affiliates and representatives may from time to time make written or verbal statements which, to the extent that they are not historical fact, constitute "forward -looking statements". By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Any statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. 2 CLONDALKIN INDUSTRIES PLC PART I - FINANCIAL INFORMATION CONSOLIDATED PROFIT AND LOSS ACCOUNTS (UNAUDITED)

~~Unaudited~~Three ~~Audited~~months ~~----------------~~ended ~~-----------------~~Three ~~Year~~months ended ~~Year~~March ~~ended December~~ 31, ~~December~~2003 March 31, 2002 ~~2001 % of Sales Restated % of Sales~~ --------------------------------------------~~------------------~~ ~~Amounts in accordance with Irish GAAP~~ ((euro) thousands) Sales ~~710~~171,~~458~~615 ~~100.0 710~~179,~~816~~239 ~~100.0~~ Cost of sales (~~565~~137,~~317~~194) (~~79.6) (579~~142,~~349~~861) ~~(81.5)~~ --------------------------------------------~~------------------~~ Gross profit ~~145~~34,~~141~~421 ~~20.4 131~~36,~~467~~378 ~~18.5~~ Net operating costs (7518,~~041~~537) (~~10.6) (74~~19,~~342~~653) ~~(10.5)~~ --------------------------------------------~~------------------~~ Operating profit 7015,~~100~~884 ~~9.8 57~~16,~~125~~725 ~~8.0~~ Goodwill amortization (142,~~108~~815) (~~2.0) (13~~3,~~681~~588) ~~(1.9)~~ --------------------------------------------~~------------------~~ Profit before interest 5513,~~992~~069 ~~7.9 43~~13,~~444~~137 ~~6.1~~ Net interest ~~payable~~expense (4610,~~127~~180) (~~6.5) (49~~12,~~594~~022) ~~(7.0) Taxation (8,018) (1.1) (2,002) (0.3)~~ -------------------------------------------- Profit before taxation 2,889 1,115 Taxation charge (1,991) (1,699) -------------------------------------------- ~~Profit~~Net profit (loss) ~~after~~for ~~taxation~~the ~~1,847~~period ~~0.3~~898 (~~8,152~~584) ~~(1.1)~~ ============================================~~==================~~

The accompanying notes are an integral part of this statement. 3 CLONDALKIN INDUSTRIES PLC CONSOLIDATED BALANCE SHEETS (UNAUDITED)

~~Year~~As ~~ending~~at ~~Year~~March ~~ending December~~ 31, As at December 31, 2003 2002 ~~2001~~---------------------------------------------- ~~Increase~~(euro) ~~Increase~~thousands Fixed assets Intangible assets 224,910 229,999 Tangible assets 189,451 195,310 Financial assets 1,888 1,888 ---------------------------------------------- 416,249 427,197 ---------------------------------------------- ~~((euro)thousands~~Current )assets %Stocks ~~Flexible~~73,967 ~~packaging~~ 70,~~622~~240 60Debtors 106,~~353~~174 1098,~~269~~508 ~~17.0%~~Bank ~~Specialist~~and ~~packaging~~cash 26balances 18,~~423~~052 2442,~~390~~567 2---------------------------------------------- 198,~~033~~193 ~~8.3%~~211,315 ~~Group~~---------------------------------------------- ~~costs~~Current ~~(3,245)~~liabilities ~~(3,033)~~Creditors (~~212~~amounts falling due within one year) ~~7.0%~~149,197 161,033 ---------------------------------------------- Net current assets 48,996 50,282 ---------------------------------------------- ~~93,800~~Total 81assets less current liabilities 465,~~710~~245 12477,~~090~~479 ~~14.8%~~ ============================================== Creditors (amounts falling due after more than one year) 470,199 481,698 Provision for liabilities and charges - deferred taxation 12,275 12,733 ---------------------------------------------- 482,474 494,431 ---------------------------------------------- Capital and reserves Called up share capital 38 38 Other reserves - currency translation reserves (1,106) 69 Profit and loss account (16,161) (17,059) ---------------------------------------------- Shareholders' funds (17,229) (16,952) ---------------------------------------------- 465,245 477,479 ==============================================

The accompanying notes are an integral part of this statement. 4 CLONDALKIN INDUSTRIES PLC CONSOLIDATED CASH FLOW STATEMENTS (UNAUDITED)

~~EBiTDA~~Three ~~Quarterly~~months ~~Performance~~ended ~~over~~Three ~~the~~months ~~last~~ended |March ~~Increase~~31, ~~Increase~~2003 ~~three~~March ~~years~~31, ~~| (Decrease) (Decrease)~~ 2002 ~~2001 2000 | 2002 2001~~ ----------------------------------------------~~----------------~~ ((euro) thousands )Cash ~~Quarters~~flow ~~ended~~from |operating ~~March~~activities 31Operating ~~22,900~~profit 1715,~~600~~884 1716,~~100~~725 |Depreciation 5,~~300~~865 ~~500~~6,131 ~~June~~Profit 30on ~~24,600~~disposal ~~20,200~~of ~~17,200~~tangible |fixed ~~4,400~~assets ~~3,000~~(184) ~~September~~(138) 30Increase ~~24,500~~in 21working capital (19,~~200~~553) (17,~~600~~395) |---------------------------------------------- 32,~~300~~012 35,~~600~~323 ~~December~~---------------------------------------------- 31Returns ~~21,800~~on ~~22,000~~investment ~~18,500~~and |servicing ~~(200)~~of ~~3,500~~finance ---------------------------------------------- Net interest paid (9,230) (11,560) ---------------------------------------------- ~~EBiTDA~~Taxation ~~93,800~~paid 81(2,~~000~~683) 70(3,~~400~~442) |---------------------------------------------- ~~12,800~~Net ~~10,600~~cash ~~Translation~~outflow ~~difference~~from -capital toexpenditure ~~adjust~~and tofinancial ~~fiscal~~investment |Purchase ~~year~~of ~~rates~~tangible ~~from~~fixed ~~quarterly~~assets ~~exchange rates~~ (~~900~~4,738) (~~100~~4,542) ~~300~~Sale |of ~~(800)~~tangible ~~(400)~~fixed assets 255 138 Payment of deferred acquisition consideration and expenses - - ---------------------------------------------- (4,483) (4,404) ---------------------------------------------- ~~EBiTDA~~Cash outflow before ~~profit~~financing on(14,384) ~~disposal~~(14,083) |---------------------------------------------- ofNet ~~tangible~~cash ~~fixed~~outflow ~~assets~~from ~~92,900~~financing ~~80,900~~Increase ~~70,700~~in |loans ~~12,000~~due ~~10,200~~within |one ~~Profit~~year on545 ~~disposal~~1,195 ofDecrease ~~tangible~~in ~~fixed~~loans ~~assets~~due ~~900~~after ~~800~~more ~~2,100~~than |one ~~100~~year 1(15,~~300~~614) (16,217) ---------------------------------------------- (15,069) (15,022) ---------------------------------------------- ~~EBiTDA~~Decrease ~~93,800~~in ~~81,700~~cash 72(29,~~800~~453) ~~| 12~~(29,~~100~~105) ~~8,900~~ ==============================================~~================~~

The accompanying notes are an integral part of this statement. 5 CLONDALKIN INDUSTRIES PLC STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)

~~December~~Called ~~31,~~up %Foreign ofCurrency ~~December~~Profit ~~31,~~Total %Share ofTranslation ~~2002~~And ~~sales~~Shareholders' ~~2001~~Capital ~~sales~~Reserve Loss Funds Account -------------------------------------------------------------------------------- ((euro)~~thousands)~~ ~~((euro)~~thousands) ~~Distribution~~At ~~costs~~December 3431,~~879~~ ~~4.9%~~2002 ~~36,414~~38 ~~5.1%~~69 ~~Administrative~~(17,059) ~~expenses 41~~(16,~~084~~952) ~~5.8%~~Profit ~~38,741~~for ~~5.5%~~period ~~Profit~~- on- ~~disposal~~898 of898 ~~tangible~~Currency ~~fixed~~translation ~~assets~~- (~~922) (0.~~1%,175) ~~(813)~~- (0.1%,175) --------------------------------------------------------- ~~Operating costs before goodwill amortization 75,041 10.6% 74,342 10.5% Goodwill amortization 14,108 2.0% 13,681 1.9%~~ -----------------------~~----------------------------------~~ ~~Net~~At ~~operating~~March ~~costs 89~~31,~~149~~ ~~12.6%~~2003 8838 (1,~~023~~106) ~~12.4%~~(16,161) (17,229) ================================================================================

The accompanying notes are an integral part of this statement. 6 CLONDALKIN INDUSTRIES PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of preparation The accompanying unaudited consolidated financial statements have been prepared in accordance with Irish GAAP and, in the opinion of management, include all adjustments necessary for the fair presentation of results for the interim periods. The unaudited consolidated profit and loss accounts and unaudited consolidated cash flow statements for the three months ended March 31, 2003 and March 31, 2002 show the results of Clondalkin Industries PLC and its subsidiaries for the periods ended on these dates. The unaudited balance sheets and statement of changes in shareholders' equity show the financial position at March 31, 2003 compared to the financial position at December 31, 2002 of Clondalkin Industries PLC and its subsidiaries. 2. Borrowings

~~2002~~As ~~2001~~at March 31, As at December 31, 2003 2002 ------------------------------------------- ((euro) thousands) ~~Bank~~Short ~~and~~term ~~other~~borrowings Bank loans ~~net~~due ~~interest~~within 16one year 22,~~344~~265 21,~~663~~720 ~~Senior~~=========================================== ~~notes~~Long term borrowings Bank and other loans 168,359 184,333 10.625% ~~coupon~~senior ~~and~~notes ~~mezzanine~~125,000 ~~finance~~125,000 13Shareholders' loans 134,~~281~~323 13134,~~281~~333 Interest due on shareholders' loans added to principal 46,727 42,413 ------------------------------------------- ~~Cash interest payable 29~~474,~~625~~409 34486,~~944~~079 ~~Subordinated~~Deferred ~~shareholders'~~issue ~~loans~~costs ~~10% coupon 15~~(4,~~907~~210) 13(4,~~981~~381) ~~Debt issue cost amortization 595 669~~ ------------------------------------------- ~~Net interest payable 46~~470,~~127~~199 49481,~~594~~698 ===========================================

3. Segmental analysis

~~Total~~Three ~~2002~~months ~~2001~~Three ~~2000~~months ~~1999~~ended ~~------------------------------------------------------------------------~~ended ~~(euro)'000~~March ~~(euro) thousands Cash flow from operating activities 279~~31,~~465~~ ~~92,098~~2003 ~~82,395~~March 7931,~~645~~ ~~25,327~~2002 ~~Sale of assets held for disposal 24,569 6,475~~ - ~~18,094~~ - ~~Sale of tangible fixed assets 6,057 1,722 1,469 2,866~~ - ~~Distribution received on financial assets 3,426~~ - - ~~3,426~~ - ~~Proceeds from share issued 10~~ - - - ~~10 Loan from parent company 134,333~~ - ~~20,000 2,133 112,200~~ ---------------------------------~~-------------------------------------~~ ~~Total cash inflow 447,860 100,295 103,864 106,164 137,537 ---------------------------------------------------------------------- Interest paid net of interest receipts~~ (~~97,521~~euro) ~~(29,928)~~thousands ~~(35,857)~~Analysis ~~(29,235) (2,501) Taxation paid (16,837) (3,983) (3,136) (7,606) (2,112) Purchase~~ of ~~tangible~~sales ~~fixed~~by ~~assets~~activity ~~(51,404)~~Flexible ~~(17,555)~~packaging ~~(19~~118,~~977)~~557 ~~(11~~116,~~054)~~098 ~~(2,818)~~Specialist ~~Subsidiaries~~packaging acquired (51,942) (2,054) (49,888) - - Clondalkin Group acquired (499,281) - - (12,117) (487,164) Deferred acquisition consideration paid (9,081) (330) (608) (8,143) - Business termination costs (2,085) - - (2,085) - ---------------------------------------------------------------------- Total cash outflow (728,151) (53,~~850)~~058 ~~(109~~63,~~466)~~141 ~~(70,240) (494,595)~~ -------------------------------------------~~---------------------------~~ ~~(Increase) decrease in debt net of cash (280~~171,~~291)~~615 46179,~~445~~239 ~~(5,602) 35,924 (357,058)~~ ===========================================~~===========================~~ ~~(Funded)~~Analysis ~~Applied as follows Mezzanine finance repaid (drawn) - - - 120,000 (120,000) Issue~~ of ~~senior~~operating ~~notes~~profit ~~(125,000)~~by -activity -Flexible ~~(125,000)~~packaging ~~- Finance costs paid including legal costs 5~~12,~~000~~268 ~~- 900 4~~12,~~100~~744 -Specialist ~~Bank~~packaging ~~debt repaid - term and revolver 111~~3,~~673~~616 473,~~569~~981 ~~27,794 36,310~~ - ~~Bank debt drawn (315,540)~~ - ~~(30,000)~~ - ~~(285,540) Increase (decrease) in cash and bank deposits 43,576 (1,124) (4,296) 514 48,482~~ ----------------------------------------~~------------------------------~~ ~~(Increase) decrease in debt net of cash (280~~15,~~291)~~884 4616,~~445~~725 ~~(5,602) 35,924 (357,058)~~ ===========================================~~===========================~~

7 CLONDALKIN INDUSTRIES PLC OPERATING AND FINANCIAL REVIEW The following discussion relates to the financial condition and results of operations of Clondalkin Industries PLC and its subsidiaries for the three months ended March 31, 2003 compared to the results for the three months ended March 31, 2002. In this commentary, the operating review is analysed as between flexible packaging and specialist packaging activities. Our flexible packaging businesses include our plastic / polymer based businesses and our foils and laminate businesses. Our specialist packaging businesses include folding cartons, labels and paper packaging and printing businesses. Results of Operations Foreign currency translation We report our financial results in euros. A significant proportion of the Group's activities are denominated in other currencies. In the three months ended March 31, 2003, sales recorded by our U.S. dollar, sterling and our Swiss franc denominated operations accounted for 21.6%, 15.5% and 5.3% respectively of our total sales. The U.S. dollar, sterling and Swiss franc exchange rates used to translate the trading results of the non euro denominated businesses in the three months ended March 31, 2003 were US1.0831, GBP0.6765 and CHF1.4691 respectively. The exchange rates used in the three months ended March 31, 2002 were US0.8724, GBP0.6130 and CHF1.4670 respectively. The weaker translation rates, particularly the U.S. dollar and sterling, used in the three months ended March 31, 2003, compared to the prior year corresponding quarter, caused our reported sales, operating profit and our EBiTDA to decrease by (euro)11.7 million, (euro)0.8 million and (euro)1.1 million respectively. Our borrowings are denominated in U.S. dollars, sterling, Swiss franc and euros to align our profits and cash flow generation with our debt service requirements and also to protect the Group financing arrangements from exchange rate volatility. The weaker translation rates caused our reported net interest charge to decrease by (euro)0.5 million and caused our reported net debt to decrease by (euro)5.6 million. Sales Flexible Packaging Flexible packaging sales increased by (euro)2.5 million, from (euro)116.1 million in the three months ended March 31, 2002 compared to sales of (euro)118.6 million in the three months ended March 31, 2003, equivalent to an increase of 2.1%. The increase is primarily attributable to: o Increased selling prices caused by significantly higher raw material costs, especially plastics and polymers, which were up to 35% higher in some of the polymer grades we convert in the three months ended March 31, 2003 compared to corresponding three months ended March 31, 2002, caused sales to increase. o Volumes also increased in our polymer converting businesses whereas volumes in our coatings & laminates packaging businesses remained stable. o These price and volume effects caused sales to increase by (euro)8.8 million. o The weaker U.S. dollar, sterling and Swiss franc translation rates against the euro for the period ended March 31, 2003 compared to the corresponding exchange rates at March 31, 2002 caused reported sales to decrease by (euro)6.3 million. 8 CLONDALKIN INDUSTRIES PLC OPERATING AND FINANCIAL REVIEW Sales - Flexible Packaging continued Operating profit reported by our flexible packaging businesses decreased by (euro)0.4 million or by 3.7%, from (euro)12.7 million in the three months ended March 31, 2002 to (euro)12.3 million in the three months ended March 31, 2003. The main operating profit advances were achieved in our foils and laminating business and these gains were offset by reduced operating profits in our polymer converting businesses which faced difficult raw material cost conditions. Between January 2003 and March 2003, resin costs increased by between 21% and 24%. Specialist Packaging Specialist packaging sales decreased by (euro)10.0 million or 15.9% from (euro)63.1 million in the three months ended March 31, 2002 to (euro)53.1 million in the three months ended March 31, 2003. The decrease is primarily attributable to: o The weaker U.S. dollar, sterling and Swiss franc translation rates against the euro for the period ended March 31, 2003 compared to the corresponding exchange rates at March 31, 2002 caused reported sales to decrease by (euro)5.4 million. o Our print operations also experienced weaker demand conditions compared to the prior year comparative period. Operating profit reported by the specialist packaging businesses decreased by 9.2%, from (euro)4.0 million in the three months ended March 31, 2002 to (euro)3.6 million in the three months ended March 31, 2003, equivalent to a decrease of (euro)0.4 million. Most of this operating profit decrease occurred in our printing operations. Our cartons and labels and paper packaging businesses all made operating profit advances at volume activity levels which were in line or moderately down on the prior year corresponding period. The operating profit advances which are predominantly U.S. dollar and sterling denominated were partly negated by weaker foreign currency translation rates compared to the prior year corresponding period. Cost of Sales Our cost of sales includes the cost of raw materials we use in our production processes, the cost of goods we purchase for resale, labor costs associated with production, depreciation and other production costs, such as energy costs. Cost of sales does not include the costs we incur in distributing our products. Our cost of sales decreased by (euro)5.7 million or 4.0% to (euro)137.2 million representing 80.0% of sales for the first quarter of 2003 compared to 79.7% of sales in the first quarter of 2002. The decrease is primarily attributable to: o The weaker U.S. dollar, sterling and Swiss franc translation rates against the euro for the period ended March 31, 2003 compared to the corresponding exchange rates at March 31, 2002 caused reported cost of sales to decrease by (euro)9.3 million o This decrease was offset mainly by significantly higher polymer resin costs, in the first quarter of 2003 compared to the prior year corresponding period. Flexible Packaging Our flexible packaging cost of sales increased from (euro)92.6 million, equivalent to 79.7% of sales in 2002, to (euro)95.6 million, or 80.6% of sales in the first quarter of 2003. Gross profit decreased in the quarter ended March 31, 2003 by approximately (euro)0.5 million or 2.1%, to (euro)23.0 million compared to (euro)23.5 million for the 9 CLONDALKIN INDUSTRIES PLC OPERATING AND FINANCIAL REVIEW Cost of Sales - Flexible Packaging continued quarter ended March 31, 2002. The weaker foreign currency translation rates applied to our non euro denominated activities caused reported gross profit to decrease by (euro)1.1 million, whereas expressed in constant currency terms, the gross profit of our flexible packaging operations increased by (euro)0.6 million. Specialist Packaging Our specialist packaging cost of sales decreased from (euro)50.3 million, equivalent to 79.7% of sales in 2002, to (euro)41.6 million, or 78.3% of sales in the first quarter of 2003. Gross profit decreased in the quarter ended March 31, 2003 by (euro)1.3 million or 10.2%, to (euro)11.5 million, compared to (euro)12.8 million for the quarter ended March 31, 2002. The weaker foreign currency translation rates applied to our non euro denominated activities accounted for all of the (euro)1.3 million decrease. Net Operating Costs The following table provides a breakdown of our net operating costs in the three months ended March 31, 2003 compared to the three months ended March 31, 2002.

~~Unaudited~~Three ~~Audited~~months ~~Audited Year~~ ended ~~Year~~Three ~~ended~~months ~~Year~~ ended ~~December~~March 31, ~~2002~~2003 ~~December~~March 31, ~~2001~~2002 ~~December 31, 2000 Restated Restated~~ -------------------------------------------------------~~------~~ ((euro) thousands) ~~Sales~~% ~~710,458~~of ~~710,816~~(euro) ~~639,400~~thousands ~~Cost~~% of sales ~~(565,317)~~sales ~~(579,349) (522,471)~~ ---------------------------------------------------- ~~Gross profit 145,141 131,467 116,929 Net operating costs (75,041) (74,342) (66,419)~~ ---~~-------------------------------------------------~~ ~~Operating~~Distribution ~~profit~~costs ~~before goodwill amortization 70~~8,~~100~~428 ~~57,125~~4.9 509,~~510~~298 ~~Goodwill amortization (14,108) (13,681) (12,440) Exceptional income (costs) Income from financial assets - - 3,426 Business termination and rationalization costs - - (~~5.2~~,085)~~ ~~----------------------------------------------------~~Administrative ~~Profit~~expenses ~~before interest 55~~10,~~992~~293 ~~43,444~~6.0 3910,~~411~~490 ~~Net~~5.9 ~~interest payable (46,127) (49,594) (47,550) ----------------------------------------------------~~ Profit ~~(loss)~~ on ~~ordinary~~disposal ~~activities~~of ~~before~~assets ~~taxation 9,865~~ (~~6,150~~184) (~~8,139~~0.1) ~~Taxation on profit on ordinary activities~~ (~~8,018~~135) (~~2,002~~0.1) ~~(458)~~ ------------------------------------------------------- ~~Profit~~Net ~~(loss)~~operating ~~retained~~costs ~~for period 1~~18,~~847~~537 (10.8~~,152)~~ (819,~~597)~~653 11.0 =======================================================

Net operating costs decreased by (euro)1.1 million from 11.0% of sales in 2002 to 10.8% in 2003. The decrease is primarily attributable to: o The weaker U.S. dollar, sterling and Swiss franc translation rates against the euro for the period ended March 31, 2003 compared to the corresponding exchange rates at March 31, 2002 caused reported net operating costs to decrease by (euro)1.5 million. o This decrease was offset by (euro)0.4 million of cost increases reflecting inflationary cost increases in administrative expenses. Operating profit and Earnings before interest, tax, depreciation and amortization (EBiTDA) The net effect of the above revenue and cost developments caused operating profits to decrease by (euro)0.8 million, or by 5.0%, to (euro)15.9 million in the three months ended March 31, 2003 compared to (euro)16.7 million in the three months ended March 31, 2002. The weaker U.S. dollar, sterling and Swiss franc translation rates against the euro for the period ended March 31, 2003 compared to the corresponding exchange rates used for the period ended March 31, 2002 caused reported operating profit to decrease by (euro)0.8 million. EBiTDA in the quarter ended March 31, 2003 was (euro)21.7 million, a decrease of (euro)1.1 million or 4.8% on the prior year corresponding period EBiTDA of (euro)22.9 million. The weaker U.S. dollar, sterling and Swiss franc translation rates against the euro for the period ended March 31, 2003 compared to the corresponding exchange rates at March 31, 2002 caused reported EBiTDA to decrease by (euro)1.1 million. 10 CLONDALKIN INDUSTRIES PLC OPERATING AND FINANCIAL REVIEW Goodwill Amortization Clondalkin Industries PLC recorded goodwill of (euro)254.4 million on the acquisition of Clondalkin Group Limited in November 1999, (euro)31.2 million on the acquisition of the EPH companies in April 2001 and (euro)2.5 million negative goodwill or discount on the acquisition of Spiralkote in December 2002. Subject to impairment reviews, goodwill is amortized over 20 years and the discount on acquisition of Spiralkote will be released in 2003. The charge in the three months ended March 31, 2003 was (euro)2.8 million compared to (euro)3.6 million in the three months ended March 31, 2002. The decrease in the goodwill charge is mainly due to the release of (euro)0.6 million in the period relating to the discount on the acquisition of Spiralkote. The remaining (euro)0.2 million reduction in goodwill amortization relates to the translation effect. Net Interest Expense Our net interest expense decreased from (euro)12.0 million for the quarter ended March 31, 2002 to (euro)10.2 million for the quarter ended March 31, 2003. The following table shows the composition of our net interest expense in the quarter ended March 31, 2003 compared to prior year corresponding quarter:

o The net cash interest payable, decreased by (euro)2.3 million to (euro)5.7 million for the quarter ended March 31, 2003 compared to (euro)7.9 million for the prior year corresponding period. This decrease, all on senior debt bank interest costs is due to debt repayment benefits and lower interest rates which together account for (euro)1.8 million of the interest charge reduction and translation effects which account for (euro)0.5 million of the reduction. o The interest on the Senior notes did not change as between the quarter ended March 31, 2002 and March 31, 2003 as the loan amount of (euro)125 million and interest coupon of 10.625% are both fixed for the borrowing period to maturity in January 2010. o Our EBiTDA times' interest cover increased to 3.31 times for the 12 months ended March 31, 2003 compared to 2.50 times for the 12 months ended March 31, 2002. o The roll-up effects of adding annual interest accruals from 1999 to December 31, 2002 caused the non cash interest payable accrued on shareholders' loans to increase by (euro)0.4 million in the first quarter of 2003 compared to the first quarter of 2002. Taxation Our provision for corporation taxes in the three months ended March 31, 2003 of (euro)2.0 million approximates an effective tax rate of 35% after excluding the effect of goodwill amortization and other charges which are not tax deductible. In the three months ended March 31, 2002 we reported a taxation charge of (euro)1.7 million which approximated an effective tax rate of 35%. 11 CLONDALKIN INDUSTRIES PLC Liquidity and Capital Resources Principal and interest payments under the senior credit bank facility and on the senior notes represent significant liquidity requirements for the Group. In the three months ended March 31, 2003, we paid interest on bank loans of (euro)2.6 million and interest on the senior notes of (euro)6.6 million. The interest on the senior notes is payable in two annual instalments in January and July each year. We also repaid (euro)9.7 million of term bank loans in the period. Our main source of liquidity is operating cash flow. Operating profit plus depreciation decreased from (euro)22.9 million in the three months ended March 31, 2002 to (euro)21.8 million for the three months ended March 31, 2003, a decrease of (euro)1.1 million or 4.8%. The main cash outflows in the period were as follows: o The additional working capital requirements in the three months ended March 31, 2003 were (euro)19.6 million. This increase reflects the higher seasonality requirements at March 31, 2003 compared to December 2002. o On a last twelve months (LTM) basis, from March 2002 to March 2003, working capital increased by (euro)2.9 million. The LTM increase reflects the effects of higher raw material costs experienced at the end of the LTM period compared to the beginning of the LTM period. o Interest costs paid in the first three months of 2003 were (euro)9.2 million compared to (euro)11.6 million in the same period in 2002. The lower interest payments reflects the lower interest charge in the three months ended March 31, 2003 compared to the quarter ended March 31, 2002. o In the first three months of 2003, we paid (euro)2.7 million in corporation taxes due under preliminary taxation assessments compared to (euro)3.4 million taxes paid in the first three months of 2002. o We invested (euro)4.7 million in our existing operations in the three months ended March 31, 2003, being (euro)3.4 million in our flexible packaging operations and (euro)1.3 million in our specialist packaging operations. These investments increase our production capacity and add additional customer service capabilities. The 2003 expenditure compares with (euro)4.5 million expended in the corresponding prior year period, being (euro)2.1million in our flexible packaging operations and (euro)2.4 million in our specialist packaging operations. All of our operations are well invested and our capital expenditures are mainly discretionary and not related to technology replacement. Gross indebtedness under the senior credit bank facilities and other loans decreased from (euro)206.1 million at December 31, 2002 to (euro)190.6 million at March 31, 2003. The decrease of (euro)15.5 million comprises debt repayments of (euro)9.7 million and currency translation effects which caused the reported gross debt to decrease by (euro)5.8 million. Our senior credit bank facility debt is denominated in U.S. dollars, sterling, Swiss francs and euro to align the debt servicing requirements with underlying cash flows in these currencies. Cash balances decreased from (euro)42.6 million at December 31, 2002 to (euro)18.1 million at March 31, 2003, a decrease of (euro)24.5 million, as cash balances were used to fund the reduction in senior facilities and pay the excess of cash outflows compared to inflows. The movement on cash balances also includes a currency translation effect, which caused reported cash balances to decrease by (euro)0.2 million. 12 CLONDALKIN INDUSTRIES PLC QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK There has been no material change in the Group's exposure to market risk since we issued the Annual Report for the year ended December 31, 2002. PART II - OTHER INFORMATION LEGAL PROCEEDINGS We are, from time to time, involved in contractual disputes, administrative and legal proceedings and investigations of various types arising in the normal course of business. While any litigation, proceeding or investigation has an element of uncertainty, we believe that the outcome of any proceeding, lawsuit or claim that is pending or threatened, or all of them combined, will not have a material adverse effect on our consolidated financial position or results of operations. CHANGES IN SECURITIES AND USE OF PROCEEDS None. DEFAULTS UPON SENIOR SECURITIES None. APPOINTMENT OF DEUTSCHE BANK TO ADVISE THE COMPANY'S SHAREHOLDERS As advised in March, our parent company and its shareholders appointed Deutsche Bank to advise them on the alternatives available to them in respect of their share holdings in Clondalkin Group Holdings Limited which owns all of the issued share capital in Clondalkin Industries PLC. The review is ongoing and it is not possible at this time, to anticipate the likely outcome of this review, which may or may not lead to a change to the existing share ownership position. 13

Unaudited Audited ------------------------------------------ December 31, December 31, 2002 2001 Restated ------------------------------------------ ((euro) thousands) Fixed assets Intangible assets 229,999 255,722 Tangible assets 195,310 203,154 Financial assets 1,888 1,888 -------- -------- 427,197 460,764 -------- -------- Current assets Assets held for disposal - 6,350 Stocks 70,240 72,553 Debtors 98,508 104,633 Bank and cash balances 42,635 46,486 -------- -------- 211,383 230,022 Current liabilities Creditors (amounts falling due within one year) 161,101 160,577 -------- -------- Net current assets 50,282 69,445 -------- -------- Total assets less current liabilities 477,479 530,209 ======== ======== Creditors (amounts falling due after more than one year) 481,698 534,831 Provisions for liabilities and charges - deferred taxation 12,733 13,845 -------- -------- 494,431 548,676 -------- -------- Capital and reserves Called up share capital 38 38 Currency translation reserve 69 401 Profit and loss account (17,059) (18,906) -------- -------- Shareholders' funds (16,952) (18,467) -------- -------- 477,479 530,209 ======== ========

Unaudited Audited Audited Year ended Year ended Year ended December 31, 2002 December 31, 2001 December 31, 2000 ------------------------------------------------------- ((euro)thousands ) Cash inflow from operating activities 92,098 82,395 79,645 -------------------------------------------- Returns on investment and servicing of finance Interest received 599 637 934 Interest paid (30,527) (36,494) (30,169) Income from financial assets - - 3,426 -------------------------------------------- (29,928) (35,857) (25,809) -------------------------------------------- Taxation paid (3,983) (3,136) (7,606) -------------------------------------------- Net cash outflow for capital expenditure and Financial investment Purchase of tangible fixed assets (17,555) (19,977) (11,054) Sale of assets held for disposal 6,475 - 18,094 Sale of tangible fixed assets 1,722 1,469 2,866 Subsidiaries acquired (2,054) (49,888) (12,117) Payment of deferred acquisition consideration (330) (608) (8,143) Business termination and rationalization costs - - (2,085) -------------------------------------------- (11,742) (69,004) (12,439) -------------------------------------------- Cash inflow (outflow) before liquid resources and financing 46,445 (25,602) 33,791 -------------------------------------------- Net cash (outflow) inflow from financing Increase (decrease) in loans due within one year 125 3,883 (7,636) (Decrease) in loans due after more than one year (47,694) (1,677) (28,674) Increase in senior notes - - 125,000 Payment of fees related to issue of senior notes - (900) (4,100) Decrease in mezzanine finance - - (120,000) Loans from parent company - 20,000 2,133 -------------------------------------------- (47,569) 21,306 (33,277) -------------------------------------------- (Decrease) increase in cash and bank deposits (1,124) (4,296) 514 ============================================

Unaudited Audited -------------------------------------- Year ended Year ended December 31, December 31, 2002 2001 -------------------------------------- ((euro) thousands) Analysis of sales by activity Flexible packaging 474,002 463,893 Specialist packaging 236,456 246,923 -------- -------- 710,458 710,816 ======== ======== Analysis of operating profit by activity Flexible packaging 54,635 44,176 Specialist packaging 17,233 14,609 Unallocated central costs (2,690) (2,473) Profit on disposal of tangible fixed assets 922 813 -------- -------- 70,100 57,125 ======== ========

3. Borrowings and cash balances Unaudited Audited ------------- ------------ December 31, December 31, 2002 2001 ------------- ------------ ((euro) thousands) Bank and other loans due within one year 21,720 22,980 ======== ======== Long term debt ((euro)thousands) Bank and other loans due after more than one year 184,333 253,970 10.625% senior notes due January 2010 125,000 125,000 -------- -------- 309,333 378,970 Deferred issue costs (4,381) (4,978) -------- -------- 304,952 373,992 ======== ======== Total gross indebtedness 326,672 396,972 ======== ======== Bank and cash balances 42,635 46,486 ======== ======== Net indebtedness 284,037 350,486 ======== ======== ((euro) thousands) Shareholders' loans due 2010 134,333 134,333 Interest due on shareholders' loans payable at maturity 42,413 26,506 -------- -------- 176,746 160,839 ======== ======== The bank and other loans due after more than one year mature as follows Between one and two years 25,628 26,314 Between two and three years 27,796 31,058 Between three and four years 28,675 33,711 Between four and five years 61,539 34,711 After five years 40,695 128,176 -------- -------- 184,333 253,970 ======== ======== 4. Cash inflow from operating activities Unaudited Audited ------------- ------------ December 31, December 31, 2002 2001 ------------- ------------ ((euro) thousands) Operating profit before goodwill amortization 70,100 57,125 Depreciation 23,531 24,416 Pension amortization 169 169 Profit on disposal of tangible assets (922) (813) Decrease in stock 1,067 2,414 Decrease in debtors 2,388 2,450 Decrease in creditors (4,235) (3,366) -------- -------- 92,098 82,395 ======== ========

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