July 28, 2011
Saint-Gobain: First-half 2011: Robust Organic Growth; Strong Growth in Earnings
PARIS, July 28, 2011 /PRNewswire/ --
Publication of first half 2011 results.
KEY FIGURES (EURm) H1-2010 H1-2011 Change Sales 19,529 20,875 +6.9% Operating income 1,445 1,720 +19.0% Recurring(1) net income 580 902 +55.5% Net income 501 768 +53.3%
Highlights of first-half 2011:
- Organic growth: up 6.7% over the first half. - Sales prices: up 2.4% over the first half (up 2.0% in the first quarter; up 2.8% in the second quarter). - Double-digit growth in operating income (at constant exchange rates*): up 18.6%. - Free cash flowsquared: up 7.0% to EUR1.1bn, against a target of EUR1.3bn for the full year. - Continued strong balance sheet: net debt/EBITDA ratio cut to 1.8 from 2.1 at end-June 2010. - Relaunch of capital spending (up 48.4% to EUR641m) and acquisitions (up from EUR36m to EUR182m).
Pierre-Andre de Chalendar, Chairman and Chief Executive Officer of
"Saint-Gobain's strong sales growth in the first half of the year
confirmed the recovery in sales volumes observed in 2010 and our successful
focus on sales prices. Based on significantly lower costs, this performance
helped drive a double-digit rise in our earnings and curb the impact of
soaring raw material and energy costs.
We expect the underlying trends observed since the beginning of the year
to continue in the six months to December 31. Leveraging our strong balance
sheet, we will continue to adopt a resolute, tempered development strategy.
Capital expenditure and acquisitions will be stepped up and focused
primarily on our three priorities: Asia and emerging countries, high
value-added solutions for the Habitat market, and bolt-on and consolidating
acquisitions in Building Distribution and Construction Products, following
the example of the Build Center and Brossette acquisitions unveiled early
Overall for the year as a whole,we are confident about our ability to
achieve our 2011 targets of robust organic growth and a double-digit rise in
operating income (at constant exchange rates**). We also confirm ourfree
cash flow target of EUR1.3 billion, after a EUR500 million increase in our
1. Excluding capital gains and losses on disposals, asset write-downs
and material non-recurring provisions.
2. Excluding the tax effect of capital gains and losses on disposals,
asset write-downs and material non-recurring provisions.
* Exchange rates for first-half 2010.
** Exchange rates for 2010.
The second quarter of 2011 confirmed the underlying trends seen in the
three months to March 31 (excluding the very positive impact of mild winter
weather and the number of working days which boosted volumes in the first
quarter). Organic growth for the Group came in at 4.4%, with contributions
from all of the Group's business sectors and main geographic regions. This
performance continued to be powered by vigorous momentum in emerging
countries and brisk trading in industrial markets,and confirms the gradual
improvement in businesses linked to the residential construction sector in
Europe. High value-added solutions and especially businesses related to
energy efficiency in the Habitat market (Insulation, Reinforced Thermal
Insulation Glass, Industrial Mortars, etc.) continued to spearhead the
Group's organic growth on residential construction markets in Europe, buoyed
by new energy performance standards and particularly Thermal Regulation "RT
2012" in France. The growth push in these sectors continues to be driven by
the Group's largest national markets (France, Germany and Scandinavia), with
the exception of the UK where sales volumes slowed during the second
Businesses related to household consumption (Packaging sector: Verallia)
continued to perform well.
Barring the renovation segment (Exterior Products), which saw growth
pick up pace over the last few months due to severe storms, construction
markets in North Americaremained in the doldrums.
With market conditions for the Group improving on the whole and raw
material and energy costs soaring, sales prices remaineda key focus for the
Group throughout the first half, climbing 2.4% over the period, including
2.8% in the second quarter alone (after 2.0% in the three months to March
Overall in the first six months of 2011, the Group posted 6.7% organic
growth (positive volume and price impacts of 4.3% and 2.4%, respectively).
However, trading levels were still well below their pre-crisis levels of
first-half 2008 (12.6% lower in volume terms).
Bolstered by the cost savings achieved over the last few years, the
Group's operating margin rose sharply,up to 8.2% from 7.4% in first-half
2010. Each key geographical area contributed to margin growth except North
America, where profitability in the comparative first-half 2010 period had
been boosted by stockpiling by building materials distributors who are Group
1degree(s)) Performance of Group Business Sectors
All business sectors reported robust organic growth in the first half of
2011. Profitability improved in Innovative Materials and Building
Distribution, but dipped slightly in Construction Products and Packaging
(Verallia), squeezed by the hike in raw material and energy costs. For these
two sectors, the acceleration in sales price increases throughout the first
half failed to compensate fully for cost inflation.
Innovative Materials continuedto enjoy the bullish trading observed in
2010 and once again delivered the Group's best organic growth performance,
both in the first half (up 8.5%) and in the three months to June 30 (up
5.5%). The contribution from the sector's different divisions was roughly
equal. Markets related to industrial output and capital spending remained
upbeat across all regions, and particularly Asia and emerging countries.
Innovative Materials also benefited from an upturn in residential
construction markets across Europe during the first half. Combined with a
significantly leaner cost base thanks to the cost savings achieved in the
past few years, this drove further advances in the business sector's
operating margin, which rose to 12.5% from10.4% in first-half 2010.
- Flat Glass reported 8.2% organic growth over the period, including 5.8% in the second quarter, spurred chiefly by volume advances in Asia and emerging countries as well as Western Europe (France in particular). Volume growth in Western Europe reflects the gradual recovery in residential construction markets across the region. In an attempt to curb the impact of rising raw material and energy costs, sales prices continued to rise over the first half, with increases picking up pace between the first and second quarters. The operating margin climbed sharply, up to 9.5% of sales from 7.8% of sales in the same year-ago period.
- High-Performance Materials (HPM) delivered a further 9.3% rise in like-for-like sales (up 5.5% in the second quarter). Industrial output and capital spending remained upbeat across all regions, and particularly Western Europe. To keep up with spiraling raw material and energy costs, sales prices were up significantly over the period, with price increases across the sector also picking up pace between the first and second quarters. Although HPM volumes are not as yet back to their pre-crisis levels of first-half 2008, very strong operating leverage sent the operating margin well above its record first-half 2008 showing (13.9%), at 16.4% of sales versus 13.5% of sales in first-half 2010.
Construction Products (CP)like-for-like sales climbed 4.9% over the
first half (3.7% in the second quarter), buoyed by the rebound in sales
volumes across all divisions except Pipe and Interior Solutions in the US.
The business sector'soperating margin edged down to 9.7% from 10.1% in
first-half 2010. This reflects narrower margins in Exterior Solutions, due
chiefly to the hike in raw material and energy costs. The upward momentum in
sales prices over the six months to June 30 (up 2.8% for the business sector
as a whole and 2.7% for Exterior Solutions) failed to fully offset this cost
- After an excellent first quarter, Interior Solutions posted robust 6.0% organic growth over the first half and more moderate 3.9% growth in the three months to June 30. The sharp recovery in sales volumes over both periods in most Western European countries (particularly in Insulation), along with ongoing vibrant trading in Asia and emerging countries, more than offset the continuing slowdown in North America. Sales price increases (up 3.0% over the first half and 3.2% in the second quarter) - especially in the Insulation business, helped offset the spike in energy and raw material costs. Volume growth led to further advances in the operating margin, up to 7.9% versus 6.8% in first-half 2010.
- Like-for-like Exterior Solutions sales climbed 4.1% over the first half and 3.9% in the second quarter. This improvement reflects a very mixed performance from its different divisions. Industrial Mortars delivered double-digit organic growth in the six months to June 30, powered by bullish conditions in Asia and emerging countries, but Pipe volumes were down sharply, hit by austerity measures in most European countries and a decline in export sales. Exterior Products benefited from a sharp upturn in the US renovation market in the second quarter, on the back of severe storms over the past few months. Despite an acceleration in sales price increases in the three months to June 30 (up 3.4% after a 1.8% rise in the first quarter), the operating margin narrowed to 11.1% from 13.0% in first-half 2010, squeezed mainly by the sharp downturn in the Pipe business sector and soaring raw material and energy costs.
Building Distribution rebounded strongly over the first half, posting
7.3%organic growth(of which 4.5% in the second quarter), spurred by a strong
rise in sales volumes in France, Germany, the Netherlands and Scandinavia
during the first six months of the year. In contrast, trading was more
uneven in the UK and Eastern Europe, and remains very tough in southern
Europe. The overall trading upturn, combined with sharp cost reductions over
the past few years, led to a strong rise in the operating margin, up to 3.6%
Packaging (Verallia) reported 4.2% organic growthover the first half,
driven by improved conditions in Western Europe and buoyant trading in Latin
America. Despite the negative currency impact due mainly to the fall in the
US dollar against the euro, EBITDA climbed to EUR347 million from EUR344
million in the same period in 2010, in line with Verallia's target for the
full year. This performance reflects Verallia's ability to pass on most of
the steep rise in its costs (mainly energy and raw materials) to prices,
which gained 2.6%. The EBITDA margin dipped to 19.1% from 19.5% one year
earlier, reflecting the time lag before the full impact of the sales price
rises kicks in.
Taking the opportunity of the release of Saint-Gobain's first-half
results, Verallia's registration document (document de base) was updated
with the French financial markets authority (AMF) on July 28, 2011.
2degree(s)) Analysis by geographic area
As in the first quarter, all of the Group's regions delivered strong
organic growth over the six months to June 30, 2011. Profitability improved
sharply in Western Europe, Asia and emerging countries, but edged down
slightly in North America.
- In France and other Western European countries, organic growth for the first half came in at 6.2% and 6.3%, respectively (3.9% and 3.2%, respectively, in the second quarter). During the second quarter, the rebound observed in businesses related to residential construction over the three months to March 31 continued apace, particularly in Building Distribution and Interior Solutions, despite a slowdown in the UK and persistent difficulties in southern Europe. Businesses related to industrial markets remained buoyant. As a result, the operating margin climbed sharply in both France and other Western European countries, to 7.2% and 6.2%, respectively (6.2% and 5.1%, respectively, in first-half 2010).
- North Americareported 3.9% organic growth over both the first half and the second quarter. This was essentially driven by fresh advances in High-Performance Materials and rising volumes in Exterior Products. The operating margin continued to perform very well,despite narrowing to 11.2% (compared to 12.0% in first-half 2010, which had benefited from stockpiling by building materials distributors).
- Asia and emerging countries once againdelivered the Group's strongest organic growth performance, both in the first half and over the second quarter (up 12.4% and 9.7%, respectively). This strong momentum was seen across all regions, and particularly Eastern Europe. The operating margin continued on an upward trend, at 10.1% of sales versus 9.1% one year earlier.
Analysis of the interim consolidated financial statements for first-half
The interim consolidated financial statements set out below were
authorized for issue by the Board of Directors on July 28, 2011:
H1 2010 H1 2011 % change EURm EURm Sales and ancillary revenue 19,529 20,875 +6.9% Operating income 1,445 1,720 +19.0% EBITDA (op. inc. + operating depreciation/amortization) 2,220 2,479 +11.7% Non-operating costs (193) (150) -22.3% Capital gains and losses on disposals, asset write-downs, corporate acquisition fees and earn-out payments (51) (114) +123.5% Business income 1,201 1,456 +21.2% Net financial expense (387) (298) -23.0% Income tax (279) (352) +26.2% Share in net income of associates 3 4 +33.3% Income before minority interests 538 810 +50.6% Minority interests (37) (42) +13.5% Recurring net income 580 902 +55.5% Recurring earnings per share (in EUR) 1.09 1.68 +54.1% Net income 501 768 +53.3% Earnings per share (in EUR) 0.94 1.43 +52.1% Operating depreciation and amortization 775 759 -2.1% Cash flow from operations 1,431 1,721 +20.3% Cash flow from operations excluding capital gains tax 1,419 1,697 +19.6% Capital expenditure 432 641 +48.4% Free cash flow (excluding capital gains tax) 987 1,056 +7.0% Investments in securities 36 182 +405.6% Net debt 9,081 9,055 -0.3%
1 Excluding capital gains and losses on disposals, asset write-downs and
material non-recurring provisions.
2 Calculated based on the number of shares outstanding at June 30
(535,334,213 shares in 2011 versus 530,786,373 shares in 2010). Based on the
weighted average number of shares outstanding (526,306,335 shares in
first-half 2011 versus 509,735,208 shares in first-half 2010), recurring
earnings per share comes out at EUR1.71 (versus EUR1.14 in first-half 2010),
and earnings per share comes out at EUR1.46 (versus EUR0.98 in first-half
3 Excluding material non-recurring provisions.
4 Excluding the tax effect of capital gains and losses on disposals,
asset write-downs and material non-recurring provisions.
Sales advanced 6.9%. Exchange rate fluctuations had a minimal 0.2%
positive impact, with gains in Scandinavian currencies and most currencies
of the Group's main emerging countries against the euro almost fully offset
by the decline in the US dollar. The impact of changes in Group structure
was neutral over the period, with the sale of Advanced Ceramics at December
31, 2010 fully offsetting sales contributions from acquisitions over the
past 12 months.
Sales therefore climbed 6.7% on both a constant exchange rate basis* and
like-for-like (constant exchange rates and Group structure). Volumes were up
4.3%, while sales prices gained 2.4%.
Thanks to sweeping cost cuts over the last three years, operating income
benefited fully from the growth in sales, surging 19.0%, or 18.6% at
constant exchange rates*. The operating margin thereforeimproved
significantly, up to 8.2% of sales (11.3%excluding Building Distribution),
versus 7.4% of sales (10.7% excluding Building Distribution) in first-half
EBITDA (operating income + operating depreciation and amortization
)advanced 11.7%. The consolidated EBITDA margin came in at 11.9% of sales
(16.4% excluding Building Distribution), up from 11.4% (16.2% excluding
Building Distribution) in the six months to June 30, 2010.
Non-operating costs declined 22.3% from EUR193 million in first-half
2010 to EUR150 million in first-half 2011 on the back of lower restructuring
costs. This amount includes a EUR48.5 million accrual to the provision for
asbestos litigation involving CertainTeed in the US (half of the 2010
The net balance of capital gains and losses, asset write-downs and
corporate acquisition feeswas a negative EUR114 million. This amount
comprises EUR21 million in net gains on asset disposals and EUR128 million
in asset write-downs. Most write-downs relate to restructuring plans and
plant closures in progress and chiefly concern certain Building Distribution
businesses in Europe (mostly southern Europe) and Construction Products
businesses in the US (write-down of property, plant and equipment at
mothballed sites where production is no longer considered likely to resume
in the short term).
Business incomejumped 21.2% to EUR1,456 million after taking into
account the items mentioned above (non-operating costs, capital gains/losses
on disposals and asset write-downs).
Net financial expense fell EUR89 million, or 23.0%, to EUR298 million
from EUR387 million in the same year-ago period, powered chiefly by the fall
in average net debt over the period and the decrease in net interest costs
on pensions (higher returns on plan assets). The average cost of net debt in
first-half 2011 came out at 5.6%, as for full-year 2010.
Income tax was up 26.2%, from EUR279 million to EUR352 million,
reflecting the rise in pre-tax income. The income tax rate on recurring net
income came out at 28% versus 32% in the six months to June 30, 2010.
Recurring net income (excluding capital gains and losses, exceptional
asset write-downs and material non-recurring provisions) amounted to EUR902
million, soaring 55.5% year-on-year. Based on the number of shares
outstanding at June 30, 2011 (535,334,213 shares versus 530,786,373 shares
at June 30, 2010), recurring earnings per share came out at EUR1.68, a rise
of 54.1% on first-half 2010 (EUR1.09).
Net incomecame in at EUR768 million, up 53.3% on first-half 2010. Based
on the number of shares outstanding at June 30, 2011 (535,334,213 shares
versus 530,786,373 shares at June 30, 2010), earnings per share came out at
EUR1.43, up 52.1% on first half 2010 (EUR0.94).
Following the relaunch of the investment strategy announced at the start
of 2011,capital expenditure jumped 48.4% toEUR641 million (EUR432 million in
first-half 2010), and accounted for 3.1% of sales (2.2% in first-half 2010).
Half of these investments relate to growth capex, focused chiefly on
selective growth projects in Asia and emerging countries and activities
related to energy efficiency (Flat Glass - including solar power - and
Cash flow from operations rose 20.3% year-on-year to EUR1,721 million.
Before the tax impact of capital gains and losses on disposals and asset
write-downs, free cash flow rose 19.6% to EUR1,697 million, from EUR1,419
million in the six months to June 30, 2010.
* Based on average exchange rates for first-half 2010.
Despite the sharp rise in capital expenditure:
- free cash flow (cash flow from operations less capital expenditure
)rose 8.0% to EUR1,079 million. Before the tax impact of capital gains and
losses and asset write-downs, free cash flow moved up 7.0% to EUR1,056
million, at 5.1% of sales (as in first-half 2010). More than 80% of the
Group's full-year EUR1.3 billion free cash flow target has therefore already
been met in the first half.
- the difference between EBITDA and capital expenditure was up 2.8%, to
EUR1,838 million in first-half 2011 (from EUR1,788 million in first-half
2010), representing 8.8% of sales (9.2% in the same year-ago period).
After eight years of continuous improvements, operating working capital
requirementsinched up 1.1 day to 46.6 days' sales at June 30, 2011, to stand
in between operating WCR at June 30, 2010 (45.5 days) and at June 30, 2009
(47.2 days). This trend chiefly reflects the upturn in trading and increase
in raw material inventories amid spiraling raw material costs over the first
half of 2011.
Consistent with the relaunch of the Group's acquisitions strategy
announced at the start of 2011, and in parallel with the rise in capital
spending, investments in securitieswere up sharply at EUR182 million,a
five-fold increase on first-half 2010(EUR36 million). In all, 85% of these
investments (EUR154 million) related to acquisitions in Asia and emerging
Net debt remained stable year-on-year, at EUR9.1 billion, with all of
the cash flow generated over the past 12 months (net of changes in operating
WCR) used to relaunch capital spending and acquisitions projects and to pay
dividends (2009 dividend paid in July 2010 on top of the 2010 dividend paid
in June 2011 for a total of EUR746 million) and share buy-backs. Net debt
came out at 50% of shareholders' equity, versus 51% at June 30, 2010. The
net debt to EBITDA ratio came out at 1.8 versus 2.1 at end-June 2010.
Update on asbestos claims in the US
Some 2,000 claims were filed against CertainTeed in the first six months
of 2011, on a par with first-half 2010. A total of 4,000 claims were settled
during the period (2,000 in first-half 2010), bringing the total number of
outstanding claims to 54,000 at June 30, 2011, compared with 56,000 at
December 31, 2010.
A total of US$ 96 million in indemnity payments were paid in the US over
the year to June 30, 2011, compared with US$ 103 million in the year to
December 31, 2010.
Outlook and objectives for full-year 2011
After a very encouraging first half, the Group expects the conditions
observed on its various markets since the beginning of the year to continue
- growth should remain vigorous in Asia and emerging countries;
- industrial markets should remain upbeat in North America, while construction markets are likely to remain fairly sluggish;
- industrial markets should continue to perform well in Western Europe, while the residential sector (new-builds and renovations) is expected to continue on an upward trend. Trading is expected to remain upbeat in France, Scandinavia and Germany;
- household consumption markets should hold firm across all regions.
Against this backdrop, all of the Group's business sectors should
continue to benefit from a positive growth momentum, despite a higher basis
for comparison in the second half.
To drive growth in its different businesses, Saint-Gobain will therefore
- pursueits resolute and tempered development strategy,underpinned by
strict financial discipline. It will step up capital spending and
acquisitions, focusing on the Group's main growth drivers (emerging
countries, energy efficiency and solar power - which should account for more
than 80% of growth capex in 2011 as a whole - as well as consolidation in
Building Distribution and Construction Products business sectors). Along
these lines, early this week the Group announced its acquisition of
Brossette and of the Build Center network in the UK;
- leverage its price-focused policy and endeavor to pass on the rise in
raw material and energy costs through sales price increases, particularly
amid rising inflation;
- maintain a tight rein on costs;
- keep a close watch on cash management and on maintaining a strong
- maintain R&D efforts.
Consequently, Saint-Gobain is confident about its ability to achieve its
full-year 2011 targets:
- robust organic growth;
- double-digit growth in operating income (at constant exchange rates*),
despite the rise in raw material and energy costs;
- EUR1.3 billion in free cash flow, after a EUR500 million increase in
- a persistently strong balance sheet.
* average exchange rates for 2010.
Forthcoming results announcement
- Sales for the first nine months of 2011: October 25, 2011, after close
of trading on the Paris Bourse.
* * *
Appendix 1: Results by business sector and geographic area Change on Change on Change on H1 a a I. SALES H1 2010 2011 an actual comparable comparable (in EUR (in structure structure structure m) EUR m) basis basis and currency basis By sector and division: Innovative Materials (1) 4,535 4,827 +6.4% +8.4% +8.5% Flat Glass 2,537 2,764 +9.0% +8.9% +8.2% High-Performance Materials 2,010 2,082 +3.6% +8.0% +9.3% Construction Products (1) 5,422 5,713 +5.4% +4.5% +4.9% Interior Solutions 2,535 2,721 +7.3% +6.3% +6.0% Exterior Solutions 2,903 3,017 +3.9% +3.3% +4.1% Building Distribution 8,322 9,043 +8.7% +8.4% +7.3% Packaging (Verallia) 1,760 1,818 +3.3% +2.4% +4.2% Internal sales and misc. -510 -526 n.m. n.m. n.m. Group Total 19,529 20,875 +6.9% +6.9% +6.7% (1) including intra-sector eliminations By geographic area: France 5,786 6,138 +6.1% +6.2% +6.2% Other Western European countries 8,161 8,828 +8.2% +8.0% +6.3% North America 2,846 2,772 -2.6% -1.3% +3.9% Emerging countries and Asia 3,631 4,149 +14.2% +13.7% +12.4% Internal sales -895 -1,012 n.m. n.m. n.m. Group Total 19,529 20,875 +6.9% +6.9% +6.7% H1 H1 2010 2011 H1 2010 H1 2011 (in EUR (in (in % of (in % of m) EUR m) Change on sales) sales) II. OPERATING INCOME an actual structure basis By sector and division: Innovative Materials 471 602 +27.8% 10.4% 12.5% Flat Glass 199 261 +31.2% 7.8% 9.5% High-Performance Materials 272 341 +25.4% 13.5% 16.4% Construction Products 549 552 +0.5% 10.1% 9.7% Interior Solutions 173 216 +24.9% 6.8% 7.9% Exterior Solutions 376 336 -10.6% 13.0% 11.1% Building Distribution 197 327 +66.0% 2.4% 3.6% Packaging (Verallia) 227 226 -0.4% 12.9% 12.4% Miscellaneous 1 13 n.m. n.m. n.m. Group Total 1,445 1,720 +19.0% 7.4% 8.2% By geographic area: France 358 442 +23.5% 6.2% 7.2% Other Western European countries 415 551 +32.8% 5.1% 6.2% North America 342 310 -9.4% 12.0% 11.2% Emerging countries and Asia 330 417 +26.4% 9.1% 10.1% Group Total 1,445 1,720 +19.0% 7.4% 8.2% H1 H1 2010 2011 H1 2010 H1 2011 (in EUR (in (in % of (in % of m) EUR m) Change on sales) sales) III. BUSINESS INCOME an actual structure basis By sector and division: Innovative Materials 382 475 +24.3% 8.4% 9.8% Flat Glass 153 189 +23.5% 6.0% 6.8% High-Performance Materials 229 286 +24.9% 11.4% 13.7% Construction Products 483 504 +4.3% 8.9% 8.8% Interior Solutions 122 195 +59.8% 4.8% 7.2% Exterior Solutions 361 309 -14.4% 12.4% 10.2% Building Distribution 160 267 +66.9% 1.9% 3.0% Packaging (Verallia) 217 220 +1.4% 12.3% 12.1% Miscellaneous -41(a) -10(a) n.m. n.m. n.m. Group Total 1,201 1,456 +21.2% 6.1% 7.0% By geographic area: France 310 418 +34.8% 5.4% 6.8% Other Western European countries 336 432 +28.6% 4.1% 4.9% North America 257(a) 208(a) -19.1% 9.0% 7.5% Emerging countries and Asia 298 398 +33.6% 8.2% 9.6% Group Total 1,201 1,456 +21.2% 6.1% 7.0% (a) after asbestos-related charge (before tax) of EUR37.5m in H1 2010 and EUR48.5m in H1 2011 H1 H1 2010 2011 H1 2010 H1 2011 (in EUR (in (in % of (in % of m) EUR m) Change on sales) sales) IV. CASH FLOW an actual structure basis By sector and division: Innovative Materials 463 600 +29.6% 10.2% 12.4% Flat Glass 235 285 +21.3% 9.3% 10.3% High-Performance Materials 228 315 +38.2% 11.3% 15.1% Construction Products 403 424 +5.2% 7.4% 7.4% Building Distribution 149 252 +69.1% 1.8% 2.8% Packaging (Verallia) 250 261 +4.4% 14.2% 14.4% Miscellaneous 166(a) 184(a) n.m. n.m. n.m. Group Total 1,431 1,721 +20.3% 7.3% 8.2% By geographic area: France 229 333 +45.4% 4.0% 5.4% Other Western European countries 500 645 +29.0% 6.1% 7.3% North America 290(a) 291(a) +0.3% 10.2% 10.5% Emerging countries and Asia 412 452 +9.7% 11.3% 10.9% Group Total 1,431 1,721 +20.3% 7.3% 8.2% (a) after asbestos-related charge (after tax) of EUR23m in H1 2010 and EUR30m in H1 2011 H1 H1 2010 2011 H1 2010 H1 2011 (in EUR (in (in % of (in % of m) EUR m) Change on sales) sales) V. CAPITAL EXPENDITURE an actual structure basis By sector and division: Innovative Materials 151 323 +113.9% 3.3% 6.7% Flat Glass 116 251 +116.4% 4.6% 9.1% High-Performance Materials 35 72 +105.7% 1.7% 3.5% Construction Products 97 147 +51.5% 1.8% 2.6% Interior Solutions 43 88 +104.7% 1.7% 3.2% Exterior Solutions 54 59 +9.3% 1.9% 2.0% Building Distribution 63 69 +9.5% 0.8% 0.8% Packaging (Verallia) 114 92 -19.3% 6.5% 5.1% Miscellaneous 7 10 n.m. n.m. n.m. Group Total 432 641 +48.4% 2.2% 3.1% By geographic area: France 77 78 +1.3% 1.3% 1.3% Other Western European countries 133 191 +43.6% 1.6% 2.2% North America 66 113 +71.2% 2.3% 4.1% Emerging countries and Asia 156 259 +66.0% 4.3% 6.2% Group Total 432 641 +48.4% 2.2% 3.1% H1 H1 2010 2011 H1 2010 H1 2011 (in EUR (in (in % of (in % of m) EUR m) Change on sales) sales) VI. EBITDA an actual structure basis By sector and division: Innovative Materials 715 842 +17.8% 15.8% 17.4% Flat Glass 352 421 +19.6% 13.9% 15.2% High-Performance Materials 363 421 +16.0% 18.1% 20.2% Construction Products 811 803 -1.0% 15.0% 14.1% Interior Solutions 341 374 +9.7% 13.5% 13.7% Exterior Solutions 470 429 -8.7% 16.2% 14.2% Building Distribution 336 462 +37.5% 4.0% 5.1% Packaging (Verallia) 344 347 +0.9% 19.5% 19.1% Miscellaneous 14 25 n.m. n.m. n.m. Group Total 2,220 2,479 +11.7% 11.4% 11.9% By geographic area: France 547 622 +13.7% 9.5% 10.1% Other Western European countries 687 819 +19.2% 8.4% 9.3% North America 466 425 -8.8% 16.4% 15.3% Emerging countries and Asia 520 613 +17.9% 14.3% 14.8% Group Total 2,220 2,479 +11.7% 11.4% 11.9%
Appendix 2: Sales by business sector and geographic area - Second Quarter Change on Change on Change on Q2 a a SALES Q2 2010 2011 an actual comparable comparable (in EUR (in structure structure structure m) EUR m) basis basis and currency basis By sector and division: Innovative Materials (1) 2,429 2,441 +0.5% +2.6% +5.5% Flat Glass 1,344 1,406 +4.6% +4.6% +5.8% High-Performance Materials 1,089 1,042 -4.3% +0.4% +5.5% Construction Products (1) 3,009 3,055 +1.5% +1.0% +3.7% Interior Solutions 1,344 1,375 +2.3% +2.3% +3.9% Exterior Solutions 1,674 1,694 +1.2% +0.3% +3.9% Building Distribution 4,659 4,892 +5.0% +4.7% +4.5% Packaging (Verallia) 973 966 -0.7% -1.7% +2.2% Internal sales and misc. -278 -278 n.m. n.m. n.m. Group Total 10,792 11,076 +2.6% +2.7% +4.4% (1) including intra-sector eliminations By geographic area: France 3,108 3,228 +3.9% +3.9% +3.9% Other Western European countries 4,539 4,732 +4.3% +4.0% +3.2% North America 1,597 1,471 -7.9% -6.7% +3.9% Emerging countries and Asia 2,022 2,170 +7.3% +7.2% +9.7% Internal sales -474 -525 n.m. n.m. n.m. Group Total 10,792 11,076 +2.6% +2.7% +4.4%
Appendix 3: Consolidated balance sheet June 30, (in EUR million) 2011 Dec 31, 2010 ASSETS Goodwill 10,887 11,030 Other intangible assets 3,024 3,067 Property, plant and equipment 13,389 13,727 Investments in associates 132 137 Deferred tax assets 677 700 Other non-current assets 307 272 Non-current assets 28,416 28,933 Inventories 6,425 5,841 Trade accounts receivable 6,369 5,038 Current tax receivable 86 175 Other accounts receivable 1,412 1,248 Cash and cash equivalents 1,275 2,762 Current assets 15,567 15,064 Total assets 43,983 43,997 Liabilities and Shareholders' equity Capital stock 2,141 2,123 Additional paid-in capital and legal reserve 5,913 5,781 Retained earnings and net income for the year 10,817 10,614 Cumulative translation adjustments (743) (383) Fair value reserves (17) (43) Treasury stock (345) (224) Shareholders' equity 17,766 17,868 Minority interests 378 364 Total equity 18,144 18,232 Long-term debt 6,581 7,822 Provisions for pensions and other employee benefits 2,732 2,930 Deferred tax liabilities 913 909 Provisions for other liabilities and charges 2,126 2,228 Non-current liabilities 12,352 13,889 Current portion of long-term debt 1,595 1,094 Current portion of provisions for other liabilities and charges 523 527 Trade accounts payable 5,840 5,690 Current tax liabilities 117 156 Other accounts payable 3,258 3,395 Short-term debt and bank overdrafts 2,154 1,014 Current liabilities 13,487 11,876 Total equity and liabilities 43,983 43,997
Appendix 4: Consolidated cash flow statement (in EUR million) H1 2011 H1 2010 Net income attributable to equity holders of the parent 768 501 Minority interests in net income 42 37 Share in net income of associates, net of dividents received (1) (1) Depreciation, amortization and impairment of assets 886 830 Gains and losses on disposals of assets (21) (9) Unrealized gains and losses arising from changes in fair value and share-based payments 4 32 Changes in inventories (692) (416) Changes in trade accounts receivable and payable, and other accounts receivable and payable (1,267) (1,011) Changes in tax receivable and payable 49 211 Changes in deferred taxes and provisions for other liabilities and charges (127) (106) Net cash from operating activities (359) 68 Purchases of property, plant and equipment [ H1-2011: (641), H1-2010: (432) ] and intangible assets (676) (451) Acquisitions of property, plant and equipment in finance leases (4) (3) Increase (decrease) in amounts due to suppliers of fixed assets (173) (152) Acquisitions of shares in consolidated companies [ H1-2011: (172), H1-2010: (33) ], net of debt acquired (183) (70) Acquisitions of other investments (10) (3) Increase in investment-related liabilities 2 21 Decrease in investment-related liabilities (6) (2) Investments (1,050) (660) Disposals of property, plant and equipment and intangible assets 74 45 Disposals of shares in consolidated companies, net of net debt divested (2) 13 Disposals of other investments and other divestments (6) 9 Divestments 66 67 Increase in loans and deposits (19) (27) Decrease in loans and deposits 19 20 Net cash used in investing activities / divestments (984) (600) Issues of capital stock 150 509 Minority interests' share in capital increases of subsidiaries 1 2 Increase (decrease) in investment-related liabilities (put on minority interests) (12) (11) (Increase) decrease in treasury stock (122) (4) Dividends paid (603) (509) Dividends paid to minority shareholders of consolidated subsidiaries and increase (decrease) in dividends payable (14) 100 Net Cash from (used in) financing activities (600) 87 Increase (decrease) in net debt (1,943) (445) Net effect of exchange rate changes on net debt 37 (87) Net effect from changes in fair value on net debt 19 5 Net debt at beginning of period (7,168) (8,554) Net debt at end of period (9,055) (9,081)
Analyst/Investor relations Florence Triou-Teixeira +33-1-47-62-45-19 Etienne Humbert +33-1-47-62-30-49 Vivien Dardel +33-1-47-62-44-29
Press relations Sophie Chevallon +33-1-47-62-30-48