First half 2008 consolidated sales: €2.7 billion (+16%)Very strong Group organic growth⁽¹⁾: + 9%

Very strong Group organic growth⁽¹⁾: + 9%


■  Wendel’s first half 2008 consolidated sales rose 16% to €2.7 billion.

■  This increase reflects the underlying results of Group companies which are bolstered by their diverse business lines and geographic positions. Once again, the group companies demonstrate their ability to adapt through the cycle while generating growth through targeted acquisitions in high potential regions and business sectors.

■  Average organic growth⁽¹⁾ of consolidated subsidiaries was extremely solid at 9%.

■  Wendel will consolidate for the first time Saint-Gobain under the equity method in its 2008 first half results. Those results will be released on August 28 after market close.

Consolidated sales:

Sales of companies consolidaded under equity method

Bureau Veritas: Strong organic growth coupled with targeted acquisitions

First half 2008 sales surged 24% to €1.2 billion vs. first half 2007. Organic and external growth amounted to 13% and 16%, respectively.

■  Organic growth was driven by all Group divisions. It was fuelled particularly by the Marine, Industry and Consumer Products divisions which growth rates exceeded 20%. The Marine division was boosted by strong demand for new vessels and market share gains. The Industry division was driven by strong demand from the energy sector (i.e. oil, natural gas and electricity) in all regions where the Group operates. The Consumer Products division took advantage of increased demand for tests on toys and other consumer products. The Construction division increased sales by over 10% thanks to the dynamism of infrastructure and a lesser downturn in the US market.

■  Bureau Veritas also pursued its external growth strategy and completed 12 acquisitions since the beginning of the year representing a total of nearly €160 million in annual sales. The acquisition of ECA gives to Bureau Veritas a market leader position in Spain, while, the acquisitions of Amdel and CCI Holdings in Australia open new opportunities for the company in the high-growth minerals sector.

In view of the strong level of activity since the beginning of the year, Bureau Veritas forecasts its full-year 2008 results will come in ahead of its initial forecast for 2008.

Materis: Steady growth and dynamism in emerging markets

First half 2008 sales amounted to €964 million, up 5% vs. first half 2007. Organic growth came in at 3.9% and external growth at 3.5%.

■  Admixtures, Aluminates and Mortars were boosted by strong growth in emerging market countries and dynamic European markets, largely offsetting the slowdown in the US and Spanish markets. The Paints sector was stable, in line with market growth in France and Southern Europe. Organic growth was also supported by the capacity of the company to pass on to its customers a portion of the increase in raw material, energy and freight costs.

■  The 3.5% external growth is primarily the result of acquisitions made in 2007.  Acquisitions made since late 2007- early 2008, represented €20 million in annual sales in Mortars (Cadina in Chile and Easipoint in the UK), Aluminates (Belitex in France) and Paints (4 distributors and 1 producer in France).

Materis also secured an additional €175 million credit facility in order to pursue its strategy of targeted acquisitions.

Deutsch: First acquisitions and strong organic growth

First half 2008 sales amounted to €235 million including strong organic growth of 10.6% resulting from the reorganization of Deutsch undertaken since Wendel’s acquisition in June 2006. Net external growth after the sale of the Relays division amounted to 3%. The fall in the dollar/euro exchange rate had an impact of -8.6%. Total sales growth in euros reached 5%.

■  The Aerospace division enjoyed high volumes boosted by sales of contacts, thereby improving its US distributor network. Industry division sales improved due to an upturn in the market for industrial and agricultural vehicles.

■  Buoyed by the oil and gas sector, the Offshore business, (now a stand-alone division), saw a stronger-than-expected growth which translated into sales nearly doubling over the period. The order backlog also sharply rose over the same time horizon.

■  The acquisition of a 60% equity stake in LADD, a US-based Industry division distributor, will enable Deutsch to improve its product potential on new business opportunities.

Oranje-Nassau: 18% increase in production

Sales surged 65% vs. first half 2007 to €191 million, boosted by higher oil prices and an 18% increase in gas and oil production (3.2 mboe).
The production increase was largely driven by the coming on stream of the Buzzard oil field in the North Sea during first half 2007 and the acquisition of Tchatamba field in Gabon in May 2008.

Stallergènes: Upgrade of annual sales forecast

First half sales rose to €87 million or 16% vs. first half 2007, which itself enjoyed strong growth of 17%

■  On June 24, 2008, Stallergènes was granted the final market license for ORALAIR® Grasses, enabling the commercial launch for adults in the coming weeks. In July, an application for clinical trials for (IND) ORALAIR® Grasses was filed in the United-States.

■ In view of the very strong first half 2008, the company has increased its 2008 full-year forecast for sales growth to at least 12% (up from at least 10% previously). This upgrade was fuelled by the growing success of the sublingual route in which Stallergènes continues to build on its market leadership.

Saint-Gobain: Robust first half
(Consolidated for by the equity method)

First half consolidated sales amounted to €22.1 billion, up 1.7% vs. first half 2007. Organic growth came in at +2.2% and at +4.9% at constant exchange rates. Saint-Gobain’s first half 2008 results, in particular compared with a strong first half 2007, demonstrates the company’s ability to resist well in a more difficult economic environment.

■  All the group’s divisions posted like-for-like sales increases during the first half. The second quarter alone posted organic growth of 3.4% (up from 0.9% in the first quarter). In particular, Saint-Gobain confirmed its ability to pass on most of the increase in raw material prices such that sales prices rose faster (+3.5%) in the second quarter compared to the first quarter (+2.6%). Residential construction continued to slow in the US throughout the first half of the year. Overall, the market held up well in Western Europe, despite the sharp downturn in the UK and Spanish markets during the second quarter. Volumes remained vigorous in Asia and emerging market countries, which resulted in organic growth of 11.7%.

■ In a more difficult economic environment, the Group stepped up the cost cutting program put in place for the US in the second half of 2006 and for certain European countries at the end of 2007. €300 million cost savings will be achieved in 2008, which represents in total cost savings of €435 million on a full year basis.

Legrand: Dynamism in emerging markets
(Consolidated for by the equity method)

First half consolidated sales amounted to €2.2 billion, up 3.4% from €2.1 billion in first half 2007. Organic growth came in at 3.1% and growth through acquisitions 3.5%. The movement in exchange rates had an impact of -3.1%.

■  The increase in sales based on constant consolidation and exchange rates was driven by growth in all regions except USA and Canada. Emerging market countries posted growth of 14% during first half 2008. Their share of total group sales continued to increase reaching 26%, up from 22% during first half 2007. Legrand is strengthening its ability to hold up well during market downturns by constantly expanding its presence on high growth markets where it can maximize margins.

■  Actively pursuing its strategy of growth through targeted acquisitions, the group completed four acquisitions in 2008 representing €100 million in total additional sales: HDL, undisputed no. 1 in audio and video intercom systems in Brazil, Turkish-based Estap, US-based PW Industries and UK-based Electrak.

■  From the beginning of this year, Legrand has also taken vigorous action to adapt its cost structure to business pace. The related cost-cutting plan enabled the Group to achieve margins equivalent to those recorded in the first half of 2007. Continuing implementation of this plan over the coming months is an opportunity for fresh progress in the optimization of its cost structure.

Stahl: Stepping up development and improvement initiatives
(Consolidated for by the equity method)

First half 2008 sales increased to €164 million thanks to development initiatives taken in 2007 and resulted in growth of 6.5% after negative exchange rate movements.
The growth was driven by the activities of all leather finishing products and high performance coatings (permuthane) as well as sales increases in Asia underpinned by expansion of the Suzhou plant in China and actions taken to improve the sales force.

Wendel reported consolidated net sales of 1.39 B€, in the first quarter of 2008, up 11.1% from the first quarter of 2007. Wendel’s average organic growth⁽¹⁾ was +6.2%, boosted by significant advances by Bureau Veritas, Deutsch and Stallergènes.
 

Consolidated net sales:

Net sales of companies accounted for by the equity method:

Bureau Veritas

In the first three months of the year, net sales totaled 552 M€, representing a major increase of 17.6%. Organic growth stood at +9.0%, owing to:

-  the dynamism of the Marine division (+17.7%), which reported strong growth in the classification of ships under construction, particularly in China, and the surveillance of ships in service;

- major advances by the Industry division (+23.6%), which benefited from the sustained increase in investments in the oil and energy sectors;

- the good performance of the Consumer Products division (+18.3%), particularly in the toy and textile segment in Europe, Asia and the United States.
 
External growth amounted to +13.1%; ECA in Spain and CCI Holdings in Australia, acquired in 2007, as well as Chemtox in Denmark, acquired in the first quarter of 2008, contributed to this growth. Foreign exchange fluctuations had a negative impact of 4.5%.
 
Materis

In the first quarter, net sales stood at 445 M€, an increase of 3.9% compared with the record level posted in the first quarter of 2007. Organic growth was +2.8%, in spite of the fact that there were fewer work days than in the first three months of 2007.
Admixtures, Aluminates and Mortars benefited from strong growth in emerging countries and the good performance of European markets, largely offsetting the slowdown in the American and Spanish markets. The Paints sector was stable, in line with market growth in France and southern Europe.
At +3.2%, external growth reflected the acquisitions made in 2007, mainly in Paints in Morocco and France and in Mortars in Brazil and Chile. Foreign exchange had a negative impact of 2.1%.
 
Editis

Net sales totaled 153.5 M€ in the first quarter of 2008, up +7.5%. Organic growth was +1.3% owing to publishing successes in Literature and Books for Young People, as well as the development of distribution agreements between external publishers and Interforum.
The acquisitions made in 2007 of the Belgian group De Boeck and of Paraschool in Education, as well as of Gründ in Literature, contributed to the rise in consolidated net sales for 6.2%.

 
Deutsch

First quarter net sales totaled 120.7 M€ in 2008, with sustained organic growth of +10.3%.
Despite a difficult environment and delays in certain civil aviation programs, the Aerospace division reported good business volume. This dynamism was boosted by the initial results of the company’s cross-selling strategy, especially in the United States. Sales rose at the Industry division in the United States, reflecting an upturn in the market for connectors used in industrial and farm vehicles, as well as by growth in business in Europe.
With the sale of Relays and the acquisition of 60% of the capital of LADD, which distributes Industry division products in the United States, external growth had a net impact of +3% on net sales. The depreciation of the U.S. dollar vis-à-vis the euro had a negative impact of 8%.
 
 

Oranje-Nassau

Oranje-Nassau reported net sales of 70.8 M€, excluding its real estate activities, which were sold in 2007. The significant growth of +30.7% compared with the first quarter of 2007 is linked to the rise in the average price of oil. The quarter’s production of 1.3 m boe was stable in comparison with the same period in 2007. For the year 2008, production should exceed the levels reported in 2007, with the increasing output from new oil fields – Buzzard in the North Sea and Kowe in Gabon (the latter acquisition is still subject to the approval of Gabon authorities). Lastly, in the first quarter, the company sold a non-strategic equity interest in the Janice field in the North Sea for 22 M€.
 
 
Stallergènes

Business in the first quarter experienced strong growth (+15.1%), boosted by the dynamism of the company’s sublingual treatment: +18%.
Authorization to market ORALAIR® Graminées anti-allergy tablets is expected soon. Requests for clinical trials in the United States should be submitted by the summer. Two clinical studies (adults and children) are planned for 2009.
 
 
Saint-Gobain (accounted for by the equity method)

Consolidated net sales stood at 10.3 B€, down 1.4% from the first quarter of 2007, but a rise of 0.9% like-for-like (on a constant structure and foreign exchange rate basis) and of 1.5% at constant exchange rates.
All of the Group’s business sectors reported a rise in like-for-like sales over the quarter, with the exception of Construction Products, which saw a 0.4% dip in net sales. Sales prices remained on an upward trend +2.6%, while volumes fell back slightly (-1.7%) as expected, due to fewer working days than in the first quarter of 2007.
Household consumption, industrial output and capital spending held up very well in both Europe and the United States. Emerging countries and Asia remained very dynamic and once again posted double-digit growth.
The impact of foreign exchange fluctuations was a negative 2.8%, as the U.S. dollar and the British pound continued to weaken vis-à-vis the euro.
 
 Legrand (accounted for by the equity method)


As reported, net sales totaled 1,049 M€, up 1.6% from the first quarter of 2007, while the rise at constant scope of consolidation and exchange rates was 1.4%. Consolidation of acquisitions contributed 2.9% to sales growth and variations in exchange rates had a negative impact of 2.6%.
 
Excluding the impact on comparisons of calendars effects and the launch of new wiring device ranges Céliane, Mosaic and Batibox in the first quarter of 2007 in France, net sales rose 4.1% at constant scope of consolidation and exchange rates and the increase in net sales before variations in exchange rates  was 7% in the first quarter.
 
 
Stahl (accounted for by the equity method)

The recovery observed in the second half of 2007 was confirmed in the first quarter of 2008. Organic growth was 8.7%, a figure that corresponds to growth of 6.5% in net sales after the negative impact of foreign exchange fluctuations. This growth was due to good performance levels in all the company’s activities, leather finishing products and high-performance coatings (permuthane). Emerging countries helped drive growth, with +37% in Brazil and +30% in China.

⁽¹⁾ Organic growth is calculated excluding Oranje-Nassau, at which changes in net sales are linked to the price of oil and to production levels.