Interim Results
Compagnie de Saint-Gobain
26 January 2007
January 25, 2007
press
release
STRONG GROWTH IN ESTIMATED RESULTS FOR 2006, OUTPERFORMING TARGETS
• SALES: UP 18.5% to €41,596 million; up 18.2% at constant exchange rates* and
up 6.7% like-for-like.
• OPERATING INCOME: UP 29.9% to €3,714 million; up 29.8% at constant exchange
rates*.
• NET INCOME (EXCLUDING CAPITAL GAINS AND LOSSES ON SALES OF NON-CURRENT
ASSETS): UP 32.6% to €1,702 million.
* average exchange rates for 2005
2007 TARGETS: ANOTHER YEAR OF GROWTH
• Robust increase in operating income at constant exchange rates**.
• Double-digit growth in net income (excluding capital gains and losses on
sales of non-current assets).
** average exchange rates for 2006
Performance of Group sectors
The Saint-Gobain Group enjoyed very buoyant business levels in 2006 and
registered its best organic growth performance of the last 10 years, at 6.7%,
including a 3.2% volume impact and a 3.5% price effect. The Group's five sectors
contributed to this growth, delivering a robust increase in sales on a
like-for-like basis (see Appendix 1). The trading environment observed in the
first half of the year held firm throughout the six months to end-December 2006,
with certain business sectors (Flat Glass, Building Distribution) reporting
increased momentum in the last few months of the year.
Businesses related to construction markets (in particular Construction Products
and Building Distribution) proved buoyant and drove the Group's growth. In
Europe, vigorous construction markets, bolstered by the impact of new European
regulations promoting energy efficiency in the construction industry, and in the
second half of the year by the recovery of the German market, more than offset
the impact of a slowdown in US housing starts. Businesses exposed to household
consumption and industrial production markets remained on a growth track.
The Group reported ongoing expansion in Asia and emerging countries, delivering
like-for-like growth of 12.7% (14.5% in the second half).
The Flat Glass sector notched up a significant 7.8% rise in sales over the year
based on comparable Group structure and exchange rates (11.5% over the six
months to December 31, 2006), thanks to the strong second-half recovery of
volumes and sales prices on the European construction market, and particularly
in Germany. Profitability for the sector improved, to 9.8% in the second half of
2006 (versus 9.4% in second-half 2005), but was slightly down over the full
year, due to the first-half impact of the rise in energy and raw materials
costs.
High-Performance Materials continued to report sustained like-for-like growth of
3.3% for the full year (2.8% for the second half), reflecting healthy industrial
markets, particularly in the energy, environment and housing segments. Ceramics
& Plastics and Abrasives scored further gains in profitability, which climbed to
13.0% (versus 12.9% in 2005). However, the operating margin of the
Reinforcements business narrowed, hit by another retreat in sales prices, which
explains the dip in profitability of the sector as a whole (10.1% of sales
compared with 10.5% of sales in 2005).
The Construction Products sector (CP) delivered the Group's highest organic
growth, at 8.7% over the full year (5.8% over the second half), including a 5.8%
price impact and a 2.9% volume effect. All of the sector's businesses
contributed to this performance, despite the slowdown in US housing starts in
the six months to December 31, 2006. The interior building solutions businesses
- Gypsum and Insulation - reported double-digit organic growth for the year
(12.1% and 10.4%, respectively), with significant price rises thanks to strong
demand on most markets, boosted by a raft of new measures to promote energy
efficiency, particularly in Europe. The Pipe division posted 9.6% organic
growth, reflecting a strong advance in distant exports and healthy business
levels in Europe, mainly France and Spain. Despite the strong organic growth in
Industrial Mortars in Europe and emerging countries, the Building Materials
division was hit by the impact of a slowdown in US housing starts in the second
half of the year, and delivered organic growth of 2.3%. Powered by profitability
gains in each of its businesses (except Building Materials in the US), the
Construction Products sector reported a sharp increase in profitability to
12.7%, compared with 9.2% in 2005 (or 11.1% proforma including BPB for full-year
2005).
The Building Distribution sector posted a strong increase in like-for-like
sales, up 7.0% over the full-year (8.4% over the second half), on the back of a
robust trading performance by the sector's main banners, particularly in France,
Scandinavia, eastern Europe, and, for the first time this year, Germany. The
sector's UK banners delivered moderate growth. The Building Distribution
business continued with its policy of bolt-on acquisitions in major European
countries where it has an operational base. During the year, it acquired 54
companies representing total annual sales of €630 million. Including the
contribution to 2006 sales from companies acquired in 2005, the Building
Distribution sector posted 6.6% external growth in 2006. Operating income for
the sector surged past the symbolic billion-euros mark. Operating margin
remained stable at 5.7%, due primarily to the increase in 2006 of development
and start-up costs relating to innovative concepts.
Like-for-like sales for the Packaging sector rose 3.6% (over both the full year
and over the six months to December 31, 2006), with rising energy and raw
materials costs successfully passed on through sales prices in the Bottles &
Jars business in the US and in Europe. The sector's operating margin improved
significantly in the second half of the year, to 8.8% versus 8.1% in the second
half of 2005, powered chiefly by price rises and improved manufacturing
performance.
Analysis of the 2006 consolidated financial statements
Based on the estimates presented at the Board of Directors' meeting of January
25, 2007, unaudited key consolidated data for 2006 are set out below. The final
version of the 2006 consolidated financial statements will be authorized for
issue by the Board of Directors at their meeting of March 22, 2007.
2005 2006 % change
In € millions In € millions
(1) (2) (2)/(1)
Sales* 35,110* 41,596* +18.5%
Operating income 2,860 3,714 +29.9%
Non-operating costs (288) (367) +27.4%
Capital gains and losses and exceptional asset
write-downs (21) (27) -28.6%
Dividend income 3 2 -50.0%
Business income 2,554 3,322 +30.1%
Net financial expense (569) (748) +31.5%
Income tax (701) (899) +28.2%
Share in net income of equity investees 10 7 -30.0%
Income before minority interests 1,294 1,682 +30.0%
Minority interests (30) (45) +50.0%
Net income 1,264 1,637 +29.5%
Earnings per share based on the number of shares at
December 31 (in €) 3.66 4.44 +21.3%
Net income excluding capital gains 1,284 1,702 +32.6%
Earnings per share excluding capital gains based on the
number of shares at December 31 (in €) 3.72 4.62 +24.2%
Cash flow from operations 2,735 3,347 +22.4%
Cash flow from operations excluding capital gains tax 2,730 3,374 +23.6%
Depreciation and amortization 1,420 1,717** +20.9%
Capital expenditure 1,756 2,191 +24.8%
Investments in securities*** 6, 991 584 n.m.
Net debt 12,850 11,599 -9.7%
* including ancillary revenue of €273 million in 2006, versus €250 million
in 2005.
** including additional amortization of €17 million in 2006 resulting from the
allocation of BPB's acquisition cost to certain items of property, plant and
equipment (gypsum quarries and industrial plants) and intangible assets such as
patents.
*** excluding buy-backs and/or sales of own shares.
Group sales jumped 18.5% on an actual structure basis, and 18.2% at constant
exchange rates*. The contribution from acquisitions, net of disposals,
represented 11.4% growth. At constant Group structure and exchange rates*, Group
sales climbed to €2,519 million, representing like-for-like growth of 6.7%
including Gypsum organic growth (12.1%), and of 6.3% excluding Gypsum.
The breakdown of like-for-like sales by geographic area reveals robust trading
in France (up 5.7%%) and other western European countries, with the recovery in
Germany gathering momentum in the second half of the year (up 11.8%). North
America posted moderate growth over the year (up 3.1%), reflecting a dip in
housing starts in the six months to December 31, 2006 after a very good first
half. Business in emerging countries and Asia remained vigorous, delivering
organic growth of 12.7%.
By geographic area, France accounted for 28.3% of sales, with other western
European countries contributing 42.5%, North America 16%, and emerging countries
and Asia/Pacific 13.2%.
Operating income jumped 29.9%, or 29.8% at constant exchange rates*. The Group's
operating margin increased significantly, to 8.9% (10.9% excluding Building
Distribution) of sales, versus respectively 8.2% (and 10.0%) in 2005 (excluding
BPB), thanks, in particular, to the contribution from the Gypsum business, which
reported operating income of €649 million in 2006 (including €50 million in cost
synergies), and represented 16.7% of sales. Profitability improved across all
geographic areas.
Business income advanced 30.1% due mainly to the increase in operating income.
Non-operating costs rose to €367 million versus €288 million in 2005, on the
back of further restructuring measures designed to maintain the Group's
productivity and competitiveness at optimum levels. Non-operating costs also
include a €95 million charge in respect of asbestos-related litigation
concerning CertainTeed (€100 million in 2005). Capital gains and losses and
exceptional asset write-downs came in at a negative €27 million, versus a
negative €21 million in 2005: capital gains on sales of non-current assets in
2006 (€175 million, including €146 million generated on the sale of Calmar) were
more than offset by exceptional asset write-downs (€202 million).
Net financial expense advanced 31.5% to €748 million compared with €569 million
in 2005, attributable to higher borrowing costs due to the increase in debt
following the BPB acquisition.
Net income came in at €1,637 million, up 29.5% on 2005. Based on the number of
shares making up the capital stock at December 31, 2006 (368,419,723 shares
after the creation of 5,399,291 shares for the purposes of the Group Savings
Plan, 342,550 shares on the exercise of share subscription options, and
17,421,612 shares further to the conversion of Oceane bonds**), earnings per
share jumped 21.3% to €4.44, versus €3.66 in 2005 (based on 345,256,270 shares).
Based on the average number of shares (341,048,210 shares in 2006 versus
336,330,568 shares in 2005), earnings per share came in at €4.80 up 27.7% on
2005 (€3.76).
Excluding capital gains and losses, net income surged 32.6% to €1,702 million,
compared with €1,284 million in 2005. Based on the number of shares making up
the capital stock at December 31, 2006 (368,419,723 shares), earnings per share
amounted to €4.62 compared with €3.72 in 2005, a rise of 24.2%. Based on the
average number of shares, earnings per share came in at €4.99, up 30.6% on 2005
(€3.82).
Cash flow from operations stands at €3,347 million, up 22.4% year-on-year.
Excluding the tax impact of capital gains and losses, cash flow from operations
increased 23.6% to €3,374 million, versus €2,730 million in 2005.
Capital expenditure advanced 24.8% to €2,191 million (5.3% of sales, or 4.5%
excluding BPB), against €1,756 million in 2005 (5.0% of sales). This rise was
mainly fuelled by the integration of BPB - where higher year-on-year capital
expenditure (proforma) represented 12.5% of sales. Saint-Gobain continues to
invest heavily in emerging countries and Asia, which accounted for 27.1% of the
Group's total capital expenditure.
Investments in securities amounted to €584 million, including €355 million
relating to Building Distribution and €142 million relating to Construction
Products.
Net debt after the dividend payout, collection of the proceeds from the Calmar
sale (€568 million) and conversion of the Oceane bonds** (€915 million), stood
at €11,599 million at December 31, 2006, down 9.7% on the year-earlier figure
(€12,850 million). Net debt also includes an exceptional payment of €672 million
to fund pension schemes, of which €518 million in Germany. Net debt represents
80% of consolidated shareholders' equity, versus 104.4% at December 31, 2005.
* based on average exchange rates for 2005
** bonds convertible and/or exchangeable into new or existing shares
* * *
Update on asbestos claims in the United States
Some 7,000 claims were filed against CertainTeed in 2006, down 59% on 2005
(17,000 claims). At the same time, around 12,000 claims were resolved (compared
with 20,000 in 2005), and 19,000 claims were transferred to 'inactive dockets'
further to a number of court rulings in the States of Ohio and Texas. The number
of outstanding claims therefore continued on a downward trend, falling to around
76,000 at end-December 2006 versus 100,000 at December 31, 2005. Total damages
paid in 2006 amounted to USD 83 million (compared with USD 88 million in 2005).
The average cost per claim settled in the past 12 months or in the process of
settlement at December 31, 2006 was around USD 3,000 per claim, up slightly on
the year-earlier figure (around USD 2,800 per claim), due to the lower
proportion of mass actions settled over the last 12 months as a proportion of
total claims settled.
In light of these trends, an additional provision of €95 million was recorded in
2006 (versus €100 million in 2005), increasing the total coverage for
CertainTeed's asbestos-related claims to approximately USD 451 million at
December 31, 2006, compared with USD 422 million at end-December 2005.
On the legislative front, the likelihood of a vote on federal reform in the
short or medium term now appears to be almost nil. However, numerous States
continue to consider tort reform measures in order to adopt medical criteria
requirements and reduce abuses of the system.
* * *
Strategy
The Group's strong results in 2006 highlight the efficiency of its business
model and the high-quality acquisition of BPB, which posted better-than-expected
operating results, was integrated successfully within the Group, and unlocked
cost synergies ahead of term. The BPB acquisition is strongly accretive (impact
of 15% on net income excluding capital gains and losses).
The Group intends to focus its strategy on:
- prioritizing development of construction, housing, and energy-related
businesses, in particular through bolt-on acquisitions in Building Distribution
and Construction Products sectors;
- pushing ahead with R&D and innovation initiatives, particularly in
Flat Glass and High-Performance Materials sectors;
- stepping up expansion efforts in emerging countries.
Accordingly, after the 2006 sales of Calmar and Synflex, the Group began a
strategic review of the Reinforcements & Composites business (with a plan to
create a joint venture with Owens Corning) and of Saint-Gobain Desjonqueres, for
which it is currently looking to find partners. Positive developments suggest
that a deal could be reached in the next few weeks, based on an enterprise value
of around €690 million. Part of this amount will be used by Saint-Gobain to take
a 20% stake in the capital of the new company. The transaction is subject to
discussions with the corresponding employee representative bodies.
In 2007, the Group will consider further measures aimed at reorganizing its
businesses in line with its business model, and growth and profitability
potential.
* * *
2007 outlook and targets
The Group expects the economic climate to remain favorable in most markets (with
the exception of new residential construction in the US), and for 2007 is
targeting:
- robust growth in operating income at constant exchange rates (based on average
exchange rates for 2006);
- double-digit growth in net income, excluding capital gains and losses on sales
of non-current assets.
These objectives are based on the assumption that both Saint-Gobain Desjonqueres
and the Reinforcements & Composites business will be deconsolidated in
first-half 2007, but do not reflect any other major scope adjustments that may
occur in 2007.
* * *
Forthcoming results announcement
- final results for 2006: March 22, 2007, after close of trading on the Paris
Bourse
- sales for the first quarter of 2007: April 26, 2007, after close of trading on
the Paris Bourse.
* * *
Appendix 1 : (Estimated) Results by Business Sector, Division and Geographic
Area
Change on Change on a Change on a
an actual comparable comparable
I. SALES 2005 2006E structure structure structure and
(in EUR (in EUR basis basis currency
m) m)
basis
By sector and division :
Flat Glass 4,680 5,083 +8.6% +9.0% +7.8%
High-Performance Materials (1) 4,880 4,938 +1.2% +3.5% +3.3%
Ceramics & Plastics and Abrasives 3,591 3,589 -0.1% +3.4% +3.3%
Reinforcements 1,306 1,365 +4.5% +3.6% +3.0%
Construction Products (1) 6,694 10,876 +62.5% +8.9% +8.7%
Building Materials 2,733 2,694 -1.4% +2.5% +2.3%
Insulation 2,244 2,542 +13.3% +10.7% +10.4%
Gypsum 263 3,895 n.m. +12.2% +12.1%
Pipe 1,474 1,783 +21.0% +10.1% +9.6%
Building Distribution 15,451 17,581 +13.8% +7.2% +7.0%
Packaging (2) 4,008 4,080 +1.8% +4.0% +3.6%
Internal sales and misc. -603 -962 n.m. n.m. n.m.
GROUP TOTAL 35,110 41,596 +18.5% +7.1% +6.7%
2005 BPB pro forma*
Construction Products (1) 9,986 10,876 +8.9% +8.9% +8.7%
Insulation 2,280 2,542 +11.5% +10.7% +10.4%
Gypsum 3,521 3,895 +10.6% +12.2% +12.1%
Building Distribution 15,593 17,581 +12.7% +7.2% +7.0%
Internal sales and misc. -979 -962 n.m. n.m. n.m.
Group total based on 2005 BPB pro 38,168 41,596 +9.0% +7.1% +6.7%
forma
By geographic area :
France 11,438 12,528 +9.5% +5.7% +5.7%
Other western European countries 15,193 18,448 +21.4% +7.1% +7.1%
North America 5,956 6,790 +14.0% +2.6% +3.1%
Emerging countries and Asia 4,443 5,933 +33.5% +16.4% +12.7%
Internal sales -1,920 -2,103 n.m. n.m. n.m.
GROUP TOTAL 35,110 41,596 +18.5% +7.1% +6.7%
2005 BPB pro forma*
France 11,892 12,528 +5.3% +5.7% +5.7%
Other western European countries 16,576 18,448 +11.3% +7.1% +7.1%
North America 6,836 6,790 -0.7% +2.6% +3.1%
Emerging countries and Asia 4,842 5,933 +22.5% +16.4% +12.7%
Internal sales -1,978 -2,103 n.m. n.m. n.m.
Group total based on 2005 BPB pro 38,168 41,596 +9.0% +7.1% +6.7%
forma
(1) including intra-sector eliminations
(2) o/w Calmar (sold in july 2006) : 313 M€ in 2005 ; 183 M€ in
2006
*BPB pro forma information is disclosed solely for those business sectors affected by the
BPB acquisition. Figures for BPB's building merchants' business are included
within the Building Distribution
sector.
Change on
II. OPERATING INCOME 2005 2006E an actual 2005 2006E
(in EUR (in EUR structure (in % of (in % of
m) m) sales) sales)
basis
By sector and division :
Flat Glass 453 480 +6.0% 9.7% 9.4%
High-Performance Materials 511 500 -2.2% 10.5% 10.1%
Ceramics & Plastics and Abrasives 462 468 +1.3% 12.9% 13.0%
Reinforcements 49 32 -34.7% 3.8% 2.3%
Construction Products 614 1,376 +124.1% 9.2% 12.7%
Building Materials 223 208 -6.7% 8.2% 7.7%
Insulation 292 379 +29.8% 13.0% 14.9%
Gypsum -8 649 n.m. n.m. 16.7%
Pipe 107 140 +30.8% 7.3% 7.9%
Building Distribution 888 1,001 +12.7% 5.7% 5.7%
Packaging (2) 385 376 -2.3% 9.6% 9.2%
Miscellaneous 9 -19 n.m. n.m. n.m.
GROUP TOTAL 2,860 3,714 +29.9% 8.1% 8.9%
2005 BPB pro forma*
Construction Products (1) 1,113 1,376 +23.6% 11.1% 12.7%
Insulation 296 379 +28.0% 13.0% 14.9%
Gypsum 487 649 +33.3% 13.8% 16.7%
Building Distribution 893 1,001 +12.1% 5.7% 5.7%
Group total based on 2005 BPB pro 3,364 3,714 +10.4% 8.8% 8.9%
forma
By geographic area :
France 889 970 +9.1% 7.8% 7.7%
Other western European countries 1,090 1,506 +38.2% 7.2% 8.2%
North America 487 701 +43.9% 8.2% 10.3%
Emerging countries and Asia 394 537 +36.3% 8.9% 9.1%
GROUP TOTAL 2,860 3,714 +29.9% 8.1% 8.9%
2005 BPB pro forma*
France 965 970 +0.5% 8.1% 7.7%
Other western European countries 1,335 1,506 +12.8% 8.1% 8.2%
North America 627 701 +11.8% 9.2% 10.3%
Emerging countries and Asia 437 537 +22.9% 9.0% 9.1%
Group total based on 2005 BPB pro 3,364 3,714 +10.4% 8.8% 8.9%
forma
* BPB pro forma information is disclosed solely for those business sectors affected by the
BPB acquisition. Figures for BPB's building merchants' business are included
within the Building Distribution sector.
(2) o/w Calmar : 35 M€ in 2005; 28 M€ in
2006
Change on
III. BUSINESS INCOME 2005 2006E an actual 2005 2006E
(in EUR (in EUR structure (in % of (in % of
m) m) sales) sales)
basis
By sector and division :
Flat Glass 443 455 +2.7% 9.5% 9.0%
High-Performance Materials 411 416 +1.2% 8.4% 8.4%
Ceramics & Plastics and Abrasives 378 411 +8.7% 10.5% 11.5%
Reinforcements 33 5 -84.8% 2.5% 0.4%
Construction Products 559 1,229 +119.9% 8.4% 11.3%
Building Materials 247 170 -31.2% 9.0% 6.3%
Insulation 278 341 +22.7% 12.4% 13.4%
Gypsum -57 648 n.m. n.m. 16.6%
Pipe 91 70 -23.1% 6.2% 3.9%
Building Distribution 874 979 +12.0% 5.7% 5.6%
Packaging (2) 375 379 +1.1% 9.4% 9.3%
Miscellaneous** -108 -136 n.m. n.m. n.m.
GROUP TOTAL 2,554 3,322 +30.1% 7.3% 8.0%
2005 BPB pro forma*
Construction Products (1) 1,079 1,229 +13.9% 10.8% 11.3%
Insulation 282 341 +20.9% 12.4% 13.4%
Gypsum 459 648 +41.2% 13.0% 16.6%
Building Distribution 879 979 +11.4% 5.6% 5.6%
Group total based on 2005 BPB pro 3,079 3,322 +7.9% 8.1% 8.0%
forma
By geographic area :
France 856 883 +3.2% 7.5% 7.0%
Other western European countries 1,012 1,457 +44.0% 6.7% 7.9%
North America ** 302 481 +59.3% 5.1% 7.1%
Emerging countries and Asia 384 501 +30.5% 8.6% 8.4%
GROUP TOTAL 2,554 3,322 +30.1% 7.3% 8.0%
2005 BPB pro forma*
France 924 883 -4.4% 7.8% 7.0%
Other western European countries 1,287 1,457 +13.2% 7.8% 7.9%
North America 441 481 +9.1% 6.5% 7.1%
Emerging countries and Asia 427 501 +17.3% 8.8% 8.4%
Group total based on 2005 BPB pro 3,079 3,322 +7.9% 8.1% 8.0%
forma
* BPB pro forma information is disclosed solely for those business sectors affected by the
BPB acquisition. Figures for BPB's building merchants' business are included
within the Building Distribution sector.
** after asbestos-related charge (before tax) of € 95 million in 2006, versus € 100 million
in 2005.
(2) o/w Calmar : 34 M€ in 2005; 31 M€ in
2006
Change on
IV. CASH FLOW 2005 2006E an actual 2005 2006E
(in EUR (in EUR structure (in % of (in % of
m) m) sales) sales)
basis
By sector and division :
Flat Glass 528 529 +0.2% 11.3% 10.4%
High-Performance Materials 446 432 -3.1% 9.1% 8.7%
Ceramics & Plastics and Abrasives 342 363 +6.1% 9.5% 10.1%
Reinforcements 104 69 -33.7% 8.0% 5.1%
Construction Products 559 1,048 +87.5% 8.4% 9.6%
Building Materials 212 204 -3.8% 7.8% 7.6%
Insulation 287 358 +24.7% 12.8% 14.1%
Gypsum -31 368 n.m. n.m. 9.4%
Pipe 91 118 +29.7% 6.2% 6.6%
Building Distribution 667 817 +22.5% 4.3% 4.6%
Packaging (2) 432 402 -6.9% 10.8% 9.9%
Miscellaneous** 103 119 n.m.
GROUP TOTAL 2,735 3,347 +22.4% 7.8% 8.0%
2005 BPB pro forma*
Construction Products 908 1,048 +15.4% 9.1% 9.6%
Insulation 282 358 +27.0% 12.4% 14.1%
Gypsum 323 368 +13.9% 9.2% 9.4%
Building Distribution 672 817 +21.6% 4.3% 4.6%
Miscellaneous 109 119 n.m. n.m. n.m.
Group total based on 2005 BPB pro 3,095 3,347 +8.1% 8.1% 8.0%
forma
By geographic area :
France 903 733 -18.8% 7.9% 5.9%
Other western European countries 969 1,446 +49.2% 6.4% 7.8%
North America** 410 573 +39.8% 6.9% 8.4%
Emerging countries and Asia 453 595 +31.3% 10.2% 10.0%
GROUP TOTAL 2,735 3,347 +22.4% 7.8% 8.0%
2005 BPB pro forma*
France 830 733 -11.7% 7.0% 5.9%
Other western European countries 1,252 1,446 +15.5% 7.6% 7.8%
North America 513 573 +11.7% 7.5% 8.4%
Emerging countries and Asia 500 595 +19.0% 10.3% 10.0%
Group total based on 2005 BPB pro 3,095 3,347 +8.1% 8.1% 8.0%
forma
* BPB pro forma information is disclosed solely for those business sectors affected by the
BPB acquisition. Figures for BPB's building merchants' business are included
within the Building Distribution sector.
** after asbestos-related charge (before tax) of € 64 million in 2006, versus € 68 million
in 2005.
(2) o/w Calmar : 36 M€ in 2005; 19 M€ in
2006
Change on
V. CAPITAL EXPENDITURE 2005 2006E an actual 2005 2006E
(in EUR (in EUR structure (in % of (in % of
m) m) sales) sales)
basis
By sector and division :
Flat Glass 485 448 -7.6% 10.4% 8.8%
High-Performance Materials 271 225 -17.0% 5.6% 4.6%
Ceramics & Plastics and Abrasives 187 161 -13.9% 5.2% 4.5%
Reinforcements 84 64 -23.8% 6.4% 4.7%
Construction Products 355 844 +137.7% 5.3% 7.8%
Building Materials 102 142 +39.2% 3.7% 5.3%
Insulation 145 145 +0.0% 6.5% 5.7%
Gypsum 52 487 n.m. n.m. 12.5%
Pipe 56 70 +25.0% 3.8% 3.9%
Building Distribution 327 315 -3.7% 2.1% 1.8%
Packaging (2) 305 335 +9.8% 7.6% 8.2%
Miscellaneous 13 24 n.m. n.m. n.m.
GROUP TOTAL 1,756 2,191 +24.8% 5.0% 5.3%
2005 BPB pro forma*
Construction Products 667 844 +26.5% 6.7% 7.8%
Gypsum 364 487 +33.8% 10.3% 12.5%
Building Distribution 328 315 -4.0% 2.1% 1.8%
Group total based on 2005 BPB pro 2,069 2,191 +5.9% 5.4% 5.3%
forma
By geographic area :
France 391 485 +24.0% 3.4% 3.9%
Other western European countries 574 749 +30.5% 3.8% 4.1%
North America 256 363 +41.8% 4.3% 5.3%
Emerging countries and Asia 535 594 +11.0% 12.0% 10.0%
GROUP TOTAL 1,756 2,191 +24.8% 5.0% 5.3%
2005 BPB pro forma*
France 432 485 +12.3% 3.6% 3.9%
Other western European countries 697 749 +7.5% 4.2% 4.1%
North America 298 363 +21.8% 4.4% 5.3%
Emerging countries and Asia 642 594 -7.5% 13.3% 10.0%
Group total based on 2005 BPB pro 2,069 2,191 +5.9% 5.4% 5.3%
forma
* BPB pro forma information is disclosed solely for those business sectors affected by the
BPB acquisition. Figures for BPB's building merchants' business are included
within the Building Distribution sector.
(2) o/w Calmar : 26 M€ in 2005; 9 M€ in
2006
Appendix 2: (Estimated) Consolidated
Balance Sheet at December 31 , 2006
in EUR millions Dec 31, Dec 31,
2006E 2005
restated
(*)
Assets
Goodwill 9,327 9,718
Other intangible Assets 3,202 3,196
Property, plant and equipment 12,769 12,832
Investments in associates 238 139
Deferred tax assets 348 447
Other non-current assets 390 431
Non-current assets 26,274 26,763
Inventories 5,629 5,535
Trade accounts receivable 6,301 5,813
Current tax receivable 66 82
Other accounts receivable 1,390 939
Assets held for sale 548 0
Cash and cash equivalents 1,468 2,080
Currents assets 15,402 14,449
Total assets 41,676 41,212
Liabilities and Shareholders' equity
Shareholders' equity 14,165 11,991
Minority interests 322 327
Total equity 14,487 12,318
Long-term debt 9,877 11,315
Provisions for pensions and other employee 2,203 3,430
benefits
Deferred tax liabilities 1,222 1,149
Provisions for other liabilities and 936 875
charges
Non-current liabilities 14,238 16,769
Current portion of long-term debt 993 922
Current portion of provisions for other 467 680
liabilities and charges
Trade accounts payable 5,519 4,779
Current tax liabilities 190 216
Other accounts payable 3,336 2,835
Liabilities held for sale 249 0
Short-term debt and bank overdrafts 2,197 2,693
Current liabilities 12,951 12,125
Total equity and liabilities 41,676 41,212
(*) In accordance with IAS 8, at january1,
2006 shareholders' equity was restated by €
274 million. Of this amount, €208 million
relates to the restatement at December
31,2005 of actuarial gains and losses of
the deferred tax effect. These actuarial
differences relate to pension obligations
and are recognized against equity with
effect from January 1, 2006, in accordance
with the option available under the revised
IAS 19.
Investor Relations department
Florence Triou-Teixeira Tel.: +33 1 47 62 45 19
Alexandre Etuy Tel.: +33 1 47 62 37 15
Fax: +33 1 47 62 50 62
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