Annual Report and Accounts
Compagnie de Saint-Gobain
25 January 2008
January 24, 2008
STRONG UPSWING IN 2007 ESTIMATED RESULTS OUTPERFORMING OBJECTIVES
• SALES: +4.4% (€43,421 million); +5.8% at constant exchange rates*;
+5.0% at constant structure and exchange rates*
• OPERATING INCOME: +10.6% (€4,108 million);
+11.4% at constant exchange rates*
• RECURRING NET INCOME**: +24.2% (€2,114 million)
* based on average exchange rates for 2006
* * excluding capital gains, asset write-downs, and the €694 million
provision for the Flat Glass fines (European Commission)
2008 OBJECTIVES
• MODEST GROWTH IN OPERATING INCOME (at constant exchange rates*) AND RECURRING NET INCOME**
* average exchange rates for 2007
** excluding capital gains, asset write-downs, and the €694 million
provision for the Flat Glass fines (European Commission)
Performance of Group sectors
The Saint-Gobain Group enjoyed upbeat trading activity in 2007, delivering 5%
organic growth (including a 3.7% price impact and a 1.3% volume effect) despite
the slowdown observed in the second half of the year, which compares to buoyant
business levels in the second half of 2006. The Group's five sectors all
contributed to this performance (see appendix 1), particularly activities linked
to construction markets in Europe (Flat Glass, Building Distribution, Interior
Solutions), which enjoyed vigorous demand bolstered by new regulations promoting
energy efficiency in buildings. This strong momentum more than offset the
downturn in US construction activities. Emerging countries and Asia, which
account for 15% of Group sales and 19% of its operating income, continued to
deliver robust growth (+16.6%) across all Group businesses. Lastly, industrial
output and capital expenditure held firm in all regions.
The Flat Glass sector turned in the Group's strongest performance, both in terms
of sales (+10.4% on a reported basis and +11.2% like-for-like) and operating
income (+49.4%). This reflects vibrant demand across all of its markets
(construction and automotive industries) in Europe as well as in emerging
countries, sales price increases implemented in the construction glass business,
and a rise in contributions from high value-added products. As a result, the
sector's operating margin jumped to 12.8%, from 9.4% in 2006.
Within the High-Performance Materials (HPM) sector, Ceramics, Plastics &
Abrasives reported 4.5% organic growth on the back of healthy capital
expenditure and industrial output worldwide. Organic growth for the sector as a
whole came in at 2.2% given the 4.2% downturn in the Reinforcements business, a
significant part of which was sold to Owens Corning on November 1, 2007. The
sector's operating margin improved significantly, up to 12.3% versus 10.1% in
2006.
Sales for the Construction Products (CP) sector edged up 2.5% like-for-like
(+2.2% on a reported basis), spurred by vigorous growth in demand across western
Europe and emerging countries (77% of total sales). This performance comfortably
offsets - in both Interior and Exterior Solutions divisions - the downturn in
the US housing market (23% of total sales). In this more difficult climate,
operating margin held up well, coming in at 11.8% (compared to 12.7% in 2006):
the operating margin for the Interior Solutions division stood at 14.8% (versus
16% in 2006), while Exterior Solutions reported an operating margin of 7.4%
(down from 7.8% in 2006).
Building Distribution delivered a 10.8% jump in sales on a reported basis,
boosted partly by acquisitions carried out in 2006 and 2007, coupled with solid
5.7% organic growth. Business held firm in most western European countries
except Germany. As in previous years, the best like-for-like sales performances
were achieved in Scandinavia, Spain, France and, to a lesser extent, the United
Kingdom. Emerging countries continued to enjoy robust trading conditions, with
sales in excess of the billion-euro mark, bolstered by organic growth of around
20% in both eastern Europe and Latin America. The Building Distribution business
also delivered double-digit growth in operating income (+10.1%), which
represents 5.7% of sales.
The Packaging sector posted a 5.5% rise in like-for-like sales, thanks chiefly
to an increase in sales prices on the back of strong demand in Europe and
emerging countries. Excluding the impact of the disposals of Calmar and
Desjonqueres, operating income for the sector surged 24% and operating margin
for the year edged up to 11.1% from 9.1%. Taking into account the impact of the
Calmar and Desjonqueres divestments, which were completed on July 1, 2006 and
March 31, 2007 respectively, operating income advanced 6.6% and operating margin
edged up to 11.3% in 2007 from 9.2% a year earlier.
Analysis of the estimated consolidated financial statements for 2007
Based on the estimates presented at the Board of Directors' meeting on January
24, 2008, unaudited key consolidated data for 2007 are set out below. The final
version of the 2007 consolidated financial statements will be authorized for
issue by the Board of Directors at their meeting of March 20, 2008.
2006 2007 %
€ millions € millions change
(1) (2) (2)/(1)
Sales and ancillary revenue 41,596 43,421 +4.4%
Operating income 3,714 4,108 +10.6%
Non-operating costs* (367) (290)* n.m.
Provision for Flat Glass fines 0 (694)
Capital gains and losses and exceptional asset
write-downs (27) 30 n.m.
Dividends received 2 2 n.m.
Business income 3,322 3,156 -5.0%
Net financial expense (748) (701) -6.3%
Income tax (899) (926) +3.0%
Share in net income of associates 7 14 n.m.
Income before minority interests 1,682 1,543 -8.3%
Minority interests (45) (56) +24.4%
Recurring net income** 1,702 2,114 +24.2%
Recurring** earnings per share (1) (in €) 4.62 5.65 +22.3%
Net income 1,637 1,487 -9.2%
Earnings per share (1) (in €) 4.44 3.97 -10.6%
Cash flow from operations* 3,347 3,762 +12.4%
Cash flow from operations excluding capital gains tax** 3,374 3,712 +10.0%
Depreciation and amortization 1,717 1,875 +9.2%
Capital expenditure 2,191 2,273 +3.7%
Free cash flow (excluding capital gains tax)** 1,183 1,439 21.6%
Investments in securities 584 965 +65.2%
Net debt 11,599 9,928 -14.4%
* excluding the provision for Flat Glass fines (European Commission).
** excluding capital gains and losses, asset write-downs and the provision
for Flat Glass fines (European Commission)
(1) calculated based on the number of shares outstanding at December 31
(374,216,152 shares in 2007 versus 368,419,723 in 2006). Based on the average
number of shares outstanding (367,124,675 shares in 2007 versus 341,048,210
shares in 2006), recurring earnings per share comes out at €5.76 (compared with
€4.99 in 2006), and earnings per share comes out at €4.05 (compared with €4.80
in 2006).
Group sales moved up 4.4%, or 5.8% at constant exchange rates. Changes in the
Group structure had a positive 0.7% impact, with contributions from acquisitions
carried out in 2006 and 2007 (essentially in the Building Distribution and CP
sectors) just exceeding contributions from companies sold (mainly Calmar on July
1st, 2006, Desjonqueres on March 31, 2007, and the Reinforcements & Composites
business on November 1, 2007). On a like-for-like basis*, Group sales advanced
5.0% or €2,059 million, including a 3.7% price impact and a 1.3% volume effect.
The breakdown of like-for-like sales by geographic area presents a sharply
contrasting picture, with North America (13% of Group sales), declining 7.1%,
but the rest of the world delivering sustained sales growth. Sales climbed 5.2%
in France (which accounts for 28% of sales for the Group as a whole) and 6.0% in
other western European countries (44% of Group sales). Emerging countries and
Asia (15% of Group sales) continued to outperform other regions, reporting
organic growth of 16.5%.
* Based on average exchange rates for 2006
Operating income jumped 10.6%, or 11.4% at constant exchange rates*. The Group's
operating margin, which notched up gains in each half of the year, advanced to
9.5% of sales (12.0% excluding Building Distribution), compared with 8.9% of
sales in 2006 (10.9% excluding Building Distribution). With the exception of
North America, profitability improved across all geographic areas.
Non-operating costs came in at €984 million (versus €367 million in 2006), and
include a €200 million charge in respect of industrial restructuring measures, a
€90 million charge for asbestos-related litigation involving CertainTeed in the
US (versus €272 million and €95 million, respectively, in 2006) and a €694
million provision in respect of the two proceedings conducted by the European
Commission into the Flat Glass sector (see the section entitled 'European
Commission proceedings' below).
The net total of capital gains and losses and exceptional asset write-downs came
in at €30 million, versus a negative €27 million in 2006. Capital gains of €394
million, arising mainly on the sale of Desjonqueres, were partly offset by €364
million in exceptional write-downs, including around €190 million in connection
with the sale of the Reinforcements & Composites business.
Business income shed 5% due to the factors mentioned above (non-operating costs,
capital gains and losses and exceptional asset write-downs).
Net financial expense was scaled back 6.3% to €701 million, compared with €748
million in 2006, reflecting chiefly the fall in average net debt over the year.
The interest cover ratio (operating income over interest expense) continued to
improve, at 5.9 versus 5 in 2006.
Recurring net income (excluding capital gains and losses, exceptional asset
write-downs and the provision for Flat Glass fines) surged 24.2% to €2,114
million, compared with €1,702 million in 2006. Based on the number of shares
outstanding at December 31, 2007 (374,216,152 shares compared with 368,419,723
shares at December 31, 2006), recurring earnings per share comes in at €5.65, up
22.3% on 2006 (€4.62).
Net income was 9.2% lower year-on-year at €1,487 million, hit by the provision
for the Flat Glass fines mentioned above. Based on the number of shares
outstanding at December 31, 2007 (374,216,152 shares compared with 368,419,723
shares at December 31, 2006), earnings per share comes in at €3.97, down 10.6%
on 2006 (€4.44).
Capital expenditure edged up 3.7% to €2,273 million in 2007 (€2,191 million in
2006), and represented 5.2% of sales (5.3% in 2006). The Group continues to
focus its investments on emerging countries (40% of growth investments) and on
markets linked to energy efficiency (in particular Flat Glass and CP sectors,
representing more than 50% of investment outlay).
Cash flow from operations (excluding provision for the Flat Glass fines) came in
12.4% higher year-on-year, at €3,762 million. Before the tax impact of capital
gains and losses and asset write-downs, cash flow from operations climbed 10%,
to €3,712 million, compared with €3,374 million in 2006.
Free cash flow (cash flow from operations less capital expenditure) surged 28.8%
to €1,489 million. Before the tax impact of capital gains and losses and asset
write-downs, free cash flow moved up 21.6% to €1,439 million.
Investments in securities amounted to €965 million in 2007. This figure does not
include the Maxit acquisition, which was announced in August and is pending
approval from the European competition authorities. Investments totaled €582
million for the Building Distribution sector (53 acquisitions representing
€1,304 million in full-year sales), and €226 million for the Construction
Products business.
Net debt before the acquisition of Maxit stands at €9,928 million at December
31, 2007, down 14.4% on end-2006 (€11,599 million) and 17.3% on June 30, 2007.
At end-December 2007, 88% of the Group's debt was at fixed rates, and had an
average maturity of five years. Net debt represents 65% of consolidated
shareholders' equity, compared with 80% at December 31, 2007.
* Based on average exchange rates for 2006
* * *
Update on asbestos claims in the United States
Some 6,000 claims were filed against CertainTeed in 2007, versus 7,000 in 2006.
Around 8,000 claims were settled over the period, bringing the number of
outstanding claims to 74,000 at December 31, 2007, compared with 76,000 at
end-2006. A total of USD 73 million indemnity payments were paid over the last
12 months, compared to USD 83 million over 2006.
In light of these trends, an additional provision of €90 million was recorded in
2007 (versus €95 million in 2006), increasing the total coverage for
CertainTeed's asbestos-related claims to USD 473 million at December 31, 2007,
compared to USD 451 million at end-2006.
* * *
European Commission proceedings (Flat Glass)
Further to its investigations in February and March 2005, the European
Commission sent Statements of Objections to Saint-Gobain Glass France (glass for
the construction industry) on March 12, 2007, and to Saint-Gobain Glass France,
Saint-Gobain Sekurit Deutschland and Saint-Gobain Sekurit France (automotive
glass) on April 19, 2007. The two Statements of Objections, which were also sent
to Compagnie de Saint-Gobain in its capacity as parent company of these
entities, concerned an alleged breach of Article 81 of the Treaty of Rome.
In summary, the Statements of Objections claim that the above-mentioned glass
subsidiaries contacted or met with one or more competitors to discuss pricing
strategies or market share stabilization, or to exchange illicit information.
Following a review of the case and the objections, Saint-Gobain Glass France did
not challenge the allegations made in respect of its construction glass
activity, while Saint-Gobain Glass France, Saint-Gobain Sekurit Deutschland and
Saint-Gobain Sekurit France acknowledged the claims against their automotive
glass businesses but challenge the scope given to certain such claims by the
Commission.
In their responses to the Commission, the companies concerned nevertheless set
forth a series of arguments based on the seriousness and duration of the alleged
infringements, the amount of sales generated by the activities to be taken into
account in the claim, and the impact of the repeat offence. Compagnie de
Saint-Gobain has formally denied any liability whatsoever for the allegations
made in the two cases.
In a decision of November 28, 2007 concerning its investigation into companies
manufacturing glass for the construction industry, the European Commission held
that Saint-Gobain Glass France had indeed violated Article 81 of the Treaty of
Rome. Accordingly, Saint-Gobain Glass France was fined, jointly and severally
with Compagnie de Saint-Gobain, an amount of €133.9 million. Compagnie de
Saint-Gobain and Saint-Gobain Glass France have decided not to appeal this
decision.
After adjusting the amount of the provision set aside in respect of this fine
for Construction Glass, and revising the provision for the automotive glass
investigation to incorporate a higher sales basis (2007 rather than 2006 sales),
the €650 million provision set aside in the first half of 2007 was increased to
€694 million at December 31, 2007.
Strategy
The Group's robust performance in 2007 highlights the efficiency of its business
model and the vigorous implementation of its construction-focused growth
strategy, offering innovative solutions to the fundamental challenges of our
time: growth, energy efficiency and the environment. Following the sale of
Calmar in July 2006 and Desjonqueres in March 2007, the Group sold its
Reinforcements & Composites business on November 1, 2007. In parallel, the Group
carried out 64 acquisitions in the construction market in 2007, representing
€1.6 billion in total full-year sales.
For 2008 and beyond, the Group intends to press ahead with the strategic focuses
unveiled in July 2007, including:
- stepping up expansion efforts through growth investments in
emerging countries, with the aim of generating 33% of Group sales (excluding
Building Distribution) in these regions by 2010,
- pursuing acquisition-led growth, in particular to deepen the
Group's footprint in emerging countries, enhance its potential for innovation
and reinforce Building Distribution,
- intensifying R&D initiatives and innovation, particularly in terms
of energy and the environment.
The Group therefore confirms its targets through 2010:
For 2007-2010:
- 5% average annual organic growth
- 10% average annual growth in recurring EPS (earnings per share)
For 2010:
- ROI of between 22% and 25%
- ROCE of between 13% and 14%
2008 outlook and objectives
In 2008, the Group will have to contend with a more difficult and far more
uncertain macro-economic climate than in 2007, with a possible recession for the
US economy and growth in housing starts across Europe losing momentum due
chiefly to stricter lending criteria. However, Saint-Gobain is well positioned
to face these challenging business conditions:
- a strong position on the European building renovation market,
- global leadership on markets related to energy efficiency in
buildings, which account for almost 30% of Group sales,
- significant contributions from Asia and emerging countries to Group
operating income (around 20%, i.e. double the North American contribution in
2007),
- the positive impact on the Group's results of further acquisitions,
- a solid financial structure and high levels of free cash flow.
In view of the above, for 2008 the Group is targeting:
- modest growth in operating income at constant exchange rates (average
exchange rates for 2007) and recurring net income*,
- a solid financial structure and continuing high levels of free cash
flow.
* excluding capital gains, asset write-downs and the €694 million provision
for Flat Glass fines (European Commission)
* * *
Forthcoming results announcements
- Final results for 2007: March 20, 2008 after close of trading on the Paris
Bourse.
- Sales for the first quarter of 2008: April 22, 2008, after close of trading on
the Paris Bourse.
* * *
Appendix 1 : Results by Business Sector and geographic area
Change Change on Change on
on a a
I. SALES 2006 2007e an actual comparable comparable
(in (in structure structure structure
EUR m) EUR m) basis basis and
basis currency
basis
By sector and
division:
Flat Glass 5,083 5,611 +10.4% +10.5% +11.2%
High Performance 4,938 4,752 -3.8% -1.6% +2.2%
Materials (1)
Ceramics & Plastics 3,589 3,584 -0.1% +0.4% +4.5%
and Abrasives
Reinforcements (2) 1,365 1,182 -13.4% -7.2% -4.2%
Construction 10,876 11,112 +2.2% +0.4% +2.5%
Products (1)
Interior 6,424 6,628 +3.2% +1.2% +2.9%
Solutions (*)
Exterior 4,476 4,516 +0.9% -0.7% +2.1%
Solutions (*)
Building 17,581 19,480 +10.8% +5.7% +5.7%
Distribution
Packaging (3) 4,080 3,546 -13.1% +2.5% +5.5%
Internal sales -962 -1,080 n.m. n.m. n.m.
and misc.
GROUP TOTAL 41,596 43,421 +4.4% +3.7% +5.0%
(1) including
intra-sector
eliminations
(2) of which Reinforcements and Composites businesses (sold on
November 1st, 2007): €671m in 2006 and €593m in 2007 before inter
businesses eliminations
(3) of which Desjonqueres (sold on March 31, 2007) and Calmar
(sold on July 1, 2006) : €760m in 2006 and €148m in 2007
(*) See Appendix 3 for details
By geographic
area :
France 12,528 12,931 +3.2% +5.2% +5.2%
Other Western 18,448 19,905 +7.9% +5.8% +6.0%
European countries
North America 6,790 5,793 -14.7% -14.6% -7.1%
Emerging countries 5,933 6,921 +16.6% +15.7% +16.5%
and Asia
Internal sales -2,103 -2,129 n.m. n.m. n.m.
GROUP TOTAL 41,596 43,421 +4.4% +3.7% +5.0%
Change on
II. OPERATING 2006 2007e an actual 2006 2007e
INCOME (in (in structure (in % of (in % of
EUR m) EUR m) basis sales) sales)
By sector and
division:
Flat Glass 480 717 +49.4% 9.4% 12.8%
High 500 585 +17.0% 10.1% 12,3%
Performance
Materials
Ceramics & Plastics 468 485 +3.6% 13.0% 13.5%
and Abrasives
Reinforcements (1) 32 100 n.m. 2.3% 8.5%
Construction 1,376 1,313 -4.6% 12.7% 11.8%
Products
Interior 1,028 980 -4.7% 16.0% 14.8%
Solutions (*)
Exterior 348 333 -4.3% 7.8% 7.4%
Solutions (*)
Building 1,001 1,102 +10.1% 5.7% 5.7%
Distribution
Packaging (2) 376 401 +6.6% 9.2% 11.3%
Miscellaneous -19 -10 n.m. n.m. n.m.
GROUP TOTAL 3,714 4,108 +10.6% 8.9% 9.5%
(1) of which Reinforcements and Composites businesses (sold on
November 1st, 2007): €11m in 2006 and €49m in 2007
(2) of which Desjonqueres (sold on March 31, 2007) and Calmar
(sold on July 1, 2006) : €72m in 2006 and €23m in 2007
(*) See
Appendix 3 for
details
By geographic
area :
France 970 1,096 +13.0% 7.7% 8.5%
Other Western 1,506 1,869 +24.1% 8.2% 9.4%
European countries
North America 701 344 -50.9% 10.3% 5.9%
Emerging countries 537 799 +48.8% 9.1% 11.5%
and Asia
GROUP TOTAL 3,714 4,108 +10.6% 8.9% 9.5%
Change on
III. BUSINESS 2006 2007e an actual 2006 2007e
INCOME (in (in structure (in % of (in % of
EUR m) EUR m) basis sales) sales)
By sector and
division:
Flat Glass 455 -49 n.m. 9.0% -0.9%
(a)
High 416 333 -20.0% 8.4% 7.0%
Performance
Materials
Ceramics & Plastics 411 482 +17.3% 11.5% 13.4%
and Abrasives
Reinforcements (1) 5 -149 n.m. 0.4% n.m.
(b)
Construction 1,229 1,243 +1.1% 11.3% 11.2%
Products
Interior 989 962 -2.7% 15.4% 14.5%
Solutions (*)
Exterior 240 281 +17.1% 5.4% 6.2%
Solutions (*)
Building 979 1,069 +9.2% 5.6% 5.5%
Distribution
Packaging (2) 379 688 n.m. 9.3% n.m.
(c)
Miscellaneous -136 -128 n.m. n.m. n.m.
(d)
GROUP TOTAL 3,322 3,156 -5.0% 8.0% 7.3%
(a) after a provision of €694m for the flat glass fines (European
Commission)
(b) after €190 m of asset write-downs related to the disposal of
the Reinforcements & Composites businesses
(c) after €283m of capital gains
following the disposal of
Desjonqueres
(d) after asbestos-related charge (before
tax) of € 90m in 2007 versus €95m in 2006
(*) See Appendix 3 for details
By geographic
area :
France 883 816(a) -7.6% 7.0% 6.3%
Other Western 1,457 1,536 +5,4% 7.9% 7.7%
European (a)
countries
North America 481 109(b) -77.3% 7.1% 1.9%
Emerging 501 695 +38.7% 8.4% 10.0%
countries and
Asia
GROUP TOTAL 3,322 3,156 -5.0% 8.0% 7.3%
(a) after a provision of €694m for the flat glass fines (European
Commission)
(b) after asbestos-related charge (before tax) of €
90m in 2007 versus €95m in 2006
Change on
IV. CASH FLOW 2006 2007e an actual 2006 2007e
(in (in structure (in % of (in % of
EUR m) EUR m) sales) sales)
basis
By sector and
division:
Flat Glass 529 677 +28.0% 10.4% 12.1%
High 432 487 +12.7% 8.7% 10.2%
Performance
Materials
Ceramics & Plastics 363 396 +9.1% 10.1% 11.0%
and Abrasives
Reinforcements 69 91 +31.9% 5.1% 7.7%
(1)
Construction 1,048 1,060 +1.1% 9.6% 9.5%
Products
Interior 726 739 +1.8% 11.3% 11.1%
Solutions (*)
Exterior 322 321 -0.3% 7.2% 7.1%
Solutions (*)
Building 817 825 +1.0% 4.6% 4.2%
Distribution
Packaging (2) 402 425 +5.7% 9.9% 12.0%
Miscellaneous 119 288 n.m. n.m. n.m.
GROUP TOTAL 3,347 3,762 +12.4% 8.0% 8.7%
(1) of which Reinforcements and Composites businesses (sold on
November 1st, 2007): €25m in 2006 and €25m in 2007
(2) of which Desjonqueres (sold on March 31, 2007) and Calmar
(sold on July 1, 2006) : €63m in 2006 and €14m in 2007
(*) See
Appendix 3 for
details
By geographic
area :
France 733 866 +18.1% 5.9% 6.7%
Other Western 1,446 1,731 +19.7% 7.8% 8.7%
European
countries
North America 573 401 -30.0% 8.4% 6.9%
(a)
Emerging 595 764 +28.4% 10.0% 11.0%
countries and
Asia
GROUP TOTAL 3,347 3,762 +12.4% 8.0% 8.7%
(a) after asbestos-related charge (after tax) of € 55m in 2007
versus €64m in 2006
Change on
V. CAPITAL 2006 2007e an actual 2006 2007e
EXPENDITURE (in (in structure (in % of (in % of
EUR m) EUR m) basis sales) sales)
By sector and
division:
Flat Glass 448 523 +16.7% 8.8% 9.3%
High 225 238 +5.8% 4.6% 5.0%
Performance
Materials
Ceramics & Plastics 161 192 +19.3% 4.5% 5.4%
and Abrasives
Reinforcements 64 46 -28.1% 4.7% 3.9%
(1)
Construction 844 830 -1.7% 7.8% 7.5%
Products
Interior 632 621 -1.7% 9.8% 9.4%
Solutions (*)
Exterior 212 209 -1.4% 4.7% 4.6%
Solutions (*)
Building 315 353 +12.1% 1.8% 1.8%
Distribution
Packaging (2) 335 309 -7.8% 8.2% 8.7%
Miscellaneous 24 20 n.m. n.m. n.m.
GROUP TOTAL 2,191 2,273 +3.7% 5.3% 5.2%
(1) of which Reinforcements and Composites businesses (sold on
November 1st, 2007): €40m in 2006 and €22m in 2007
(2) of which Desjonqueres (sold on March 31, 2007) and Calmar
(sold on July 1, 2006) : €53m in 2006 and €14m in 2007
(*) See
Appendix 3 for
details
By geographic
area :
France 485 536 +10.5% 3.9% 4.1%
Other Western 749 698 -6.8% 4.1% 3.5%
European
countries
North America 363 368 +1.4% 5.3% 6.4%
Emerging 594 671 +13.0% 10.0% 9.7%
countries and
Asia
GROUP TOTAL 2,191 2,273 +3.7% 5.3% 5.2%
Appendix 2: Consolidated Balance Sheet
in EUR millions Dec 31, 2007 Dec 31, 2006
Assets
Goodwill 9,240 9,327
Other intangible assets 3,125 3,202
Property, plant and equipment 12,753 12,769
Investments in associates 123 238
Deferred tax assets 328 348
Other non-current assets 472 390
Non-current assets 26,041 26,274
Inventories 5,833 5,629
Trade accounts receivable 6,211 6,301
Current tax receivable 173 66
Other accounts receivable 1,481 1,390
Assets held for sale 105 (*) 548
Cash and cash equivalents 1,294 1,468
Current assets 15,097 15,402
Total assets 41,138 41,676
Liabilities and Shareholders' equity
Capital stock 1,497 1,474
Additional paid-in capital and legal reserve 3,617 3,315
Retained earnings and net income for the year 10,625 9,562
Cumulative translation adjustments (564) 140
Fair value reserves 8 (20)
Treasury stock (206) (306)
Shareholders' equity 14,977 14,165
Minority interests 290 322
Total equity 15,267 14,487
Long-term debt 8,747 9,877
Provisions for pensions and other employee benefits 1,807 2,203
Deferred tax liabilities 1,277 1,222
Provisions for other liabilities and charges 923 936
Non-current liabilities 12,754 14,238
Current portion of long-term debt 971 993
Current portion of provisions for other liabilities and charges 1,107 467
Trade accounts payable 5,752 5,519
Current tax liabilities 317 190
Other accounts payable 3,425 3,336
Liabilities held for sale 41 (*) 249
Short-term debt and bank overdrafts 1,504 2,197
Current liabilities 13,117 12,951
Total equity and liabilities 41,138 41,676
(*) SG VTX America Plastic
Appendix 3 : Construction Products sector -
details
The activities of the Construction Products sector are henceforth
presented in two sub-groups: Interior Solutions, (Insulation and
Gypsum), and Exterior Solutions, (Building Materials and Pipe).
Change on Change on Change on a
a
I. SALES 2006 2007e an actual comparable comparables
(in (in structure structure structure
EURm) EURm) basis basis and
currency
basis
Interior Solutions 6,424 6,628 +3.2% +1.2% +2.9%
Insulation 2,542 2,785 +9.5% +1.9% +3.8%
Gypsum 3,895 3,864 -0.8% +0.9% +2.5%
internal sales -13 -21 n.m. n.m. n.m.
Exterior Solutions 4,476 4,516 +0.9% -0.7% +2.1%
Building Materials 2,694 2,603 -3.4% -5.2% -0.9%
Pipe 1,783 1,913 +7.3% +5.9% +6.4%
internal sales -1 - n.m. n.m. n.m.
Eliminations -24 -32 n.m. n.m. n.m.
Construction Products 10,876 11,112 +2.2% +0.4% +2.5%
sector
Change on
II. OPERATING INCOME 2006 2007e an actual 2006 2007e
(in (in structure (as % of (as % of
EURm) EURm) basis sales) sales)
Interior Solutions 1,028 980 -4.7% 16.0% 14.8%
Insulation 379 442 +16.6% 14.9% 15.9%
Gypsum 649 538 -17.1% 16.7% 13.9%
Exterior Solutions 348 333 -4.3% 7.8% 7.4%
Building Materials 208 167 -19.7% 7.7% 6.4%
Pipe 140 166 +18.6% 7.9% 8.7%
Construction Products 1,376 1,313 -4.6% 12.7% 11.8%
sector
Change on
III. BUSINESS INCOME 2006 2007e an actual 2006 2007e
(in (in structure (as % of (as % of
EURm) EURm) basis sales) sales)
Interior Solutions 989 962 -2.7% 15.4% 14.5%
Insulation 341 430 +26.1% 13.4% 15.4%
Gypsum 648 532 -17.9% 16.6% 13.8%
Exterior Solutions 240 281 +17.1% 5.4% 6.2%
Building Materials 170 129 -24.1% 6.3% 5.0%
Pipe 70 152 +117.1% 3.9% 7.9%
Construction Products 1,229 1,243 +1.1% 11.3% 11.2%
sector
Change on
IV. CASH FLOW 2006 2007e an actual 2006 2007e
(in (in structure (as % of (as % of
EURm) EURm) basis sales) sales)
Interior Solutions 726 739 +1.8% 11.3% 11.1%
Insulation 358 447 +24.9% 14.1% 16.1%
Gypsum 368 292 -20.7% 9.4% 7.6%
Exterior Solutions 322 321 -0.3% 7.2% 7.1%
Building Materials 204 175 -14.2% 7.6% 6.7%
Pipe 118 146 +23.7% 6.6% 7.6%
Construction Products 1,048 1,060 +1.1% 9.6% 9.5%
sector
Change on
V. CAPITAL EXPENDITURE 2006 2007e an actual 2006 2007e
(in (in structure (as % of (as % of
EURm) EURm) basis sales) sales)
Interior Solutions 632 621 -1.7% 9.8% 9.4%
Insulation 145 199 +37.2% 5.7% 7.1%
Gypsum 487 422 -13.3% 12.5% 10.9%
Exterior Solutions 212 209 -1.4% 4.7% 4.6%
Building Materials 142 133 -6.3% 5.3% 5.1%
Pipe 70 76 +8.6% 3.9% 4.0%
Construction Products 844 830 -1.7% 7.8% 7.5%
sector
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Fax.: +33 1 47 62 50 62
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