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.