RISE IN NET SALES AND EARNINGS.

In 2007, Materis experienced robust and profi table growth, with net sales of €1,817 million, up 12% compared with 2006. Adjusted operating income totaled €227 million and the operating margin held steady at 12.6%. Innovation, price increases and productivity gains offset the increase in the cost of commodities and energy.

CONTINUED BALANCED GROWTH.

Materis continued to benefi t from a good balance between organic growth (7%) and acquisitions (6%).

The Admixtures business (Chryso) delivered excellent performance, with growth in sales especially in eastern Europe, Africa and the Middle East, owing in particular to the market for concrete. Net sales totaled €201 million, up 16.5% compared with 2006.

The Aluminates business (Kerneos) posted a very good 2007, with growth of 10.8% in net sales to €327 million. All geographic regions contributed to this very favorable performance.

The Mortars business (Parex Group) once again turned in an excellent year, with net sales of €552 million, up 13.2% over 2006. The regions driving growth were Asia-Pacifi c, Argentina and Europe, with France leading the way. They more than offset the contraction in individual construction in the United States.

The Paints business (Materis Paints) posted net sales of €748 million, up 10.5% compared with 2006, benefi ting from relatively upbeat market conditions in France and a favorable turnaround in the market in Spain and Portugal.

INNOVATION MOMENTUM.

Materis’ four divisions launched a large number of clean, easyto- use and high value-added products and services during the year.
Chryso launched a range of new-generation plasticizers to facilitate the use of ordinary concrete and also worked on a demolding agent designed exclusively with plant-based components and more than 60% biodegradable. Kerneos launched Secar XeniomTM, a product that improves refractory concretes by making them simpler, easier to use and more consistent.

After launching a dustless tile adhesive in France in 2006, the first of its kind anywhere in the world, Parex Group launched a dustless render in 2007 and expanded the technology in Argentina and the United States.

As part of its efforts to protect the environment, Materis Paints developed new generation paints that carry the European green Ecolabel. They offer maximum environmental value, as well as exceptional esthetic qualities, yield and applicability.

CONTINUED INTERNATIONAL GROWTH.

In 2007, Materis invested a total of €70 million in more than 10 acquisitions in its four businesses. Three acquisitions, in Brazil, Argentina and Chile, strengthened Materis’ existing positions in mortars in South America. Materis entered the Turkish market with the acquisition of Geser (mortars) and also acquired the fi fth-largest Moroccan decorative paints company, accelerating the group’s growth in emerging markets, where Materis derives 18% of its net sales.

Finally, Materis is consolidating its positions in mortars, admixtures and paints in North America, which will constitute a platform for development.

OUTLOOK

Materis’ markets are growing rapidly in emerging economies, while they are stable overall in Europe and contracting in the United States. Materis is confident it will be able to continue growing by pursuing its internal development projects and taking advantage of acquisition opportunities.