ANNUAL REPORT 2009 Pargesa

Transcription

1 ANNUAL REPORT 2009 Pargesa Holding SA

2 Pargesa Holding SA 11, GrandRue Telephone : +41 (0) Geneva Fax : +41 (0) Switzerland info@pargesa.ch

3 Contents Structure and key data 4 Board of Directors, Management and Auditors 6 Message from the Chairman 9 Business report 11 Introduction 12 Highlights 13 Group shareholdings consolidated results 14 Adjusted net asset value 17 Parent company income and proposed dividend 19 Proposals to the Annual General Meeting of 5 May Main shareholdings 21 GBL 23 Imerys 24 Lafarge 26 GDF SUEZ 28 Suez Environnement 30 Total 32 Pernod Ricard 34 Corporate Governance report 37 Consolidated financial statements 47 Parent company financial statements 103 Annual report Pargesa

4 Structure and key data Economic diagram at 31 December 2009* Pargesa 50.0% GBL 26.1% 30.7% 21.1% 5.2% 7.1% 4.0% 9.1% Imerys Lafarge GDF SUEZ Suez Env. Total Pernod Ricard * shareholdings are expressed as a percentage of capital Main shareholdings key data at 31 December 2009 Direct Total interest % interest % % of total voting rights % flowthrough 2009 net profit interest (1) () 2009 shareholders equity () Company Currency GBL EUR Imerys EUR Lafarge EUR GDF SUEZ EUR Suez Environnement EUR Total EUR Pernod Ricard (2) EUR (1) flowthrough interest assessed at the level of Pargesa (2) financial year ending on June 30 4 Annual report Pargesa 2009

5 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements Global and pershare data Consolidated shareholder s equity, Group s share Operating income Nonoperating income ( ) Consolidated net profit, Group s share (520.8) Gross dividend (1) Shares entitled to dividend Market capitalisation at yearend Adjusted net asset value at yearend CHF per share Share price yearend high low average Consolidated shareholder s equity, Group s share Adjusted net asset value at yearend Operating income (2) Nonoperating income (2) Consolidated net profit, Group s share Gross dividend (1) (Average) gross yield 2.8 % 2.3 % 2.0 % 2.0 % 3.6 % (1) proposed to the Annual General Meeting (2) calculated on the weighted average of the number of shares outstanding during the year Stock exchange data Market price CHF Flowthrough adjusted net asset value CHF SPI relative CHF Annual report Pargesa

6 Board of Directors Chairman Paul DESMARAIS Chairman of the Executive Committee, Power Corporation of Canada ViceChairmen Baron FRÈRE Paul DESMARAIS Jr.* Gérald FRÈRE* André de PFYFFER Chairman of the Board of Directors, FrèreBourgeois SA Chairman of the Board and CoChief Executive Officer, Power Corporation of Canada Executive Director, FrèreBourgeois SA AttorneyatLaw Directors MarcHenri CHAUDET Victor DELLOYE* André DESMARAIS Ségolène GALLIENNE* Robert GRATTON** Aimery LANGLOISMEURINNE** Maximilien de LIMBURG STIRUM Gérard MESTRALLET* Michael NOBREGA* Michel PÉBEREAU Michel PLESSISBÉLAIR Baudouin PROT* Gilles SAMYN* Amaury de SÈZE* Arnaud VIAL**** AttorneyatLaw Director and General Secretary, Compagnie Nationale à Portefeuille SA (CNP) President and CoChief Executive Officer, Power Corporation of Canada Director, Compagnie Nationale à Portefeuille SA (CNP) Executive Chairman of the Board of Directors, Power Financial Corporation Managing Director***, Pargesa Holding SA Officer in charge of Shareholdings, Compagnie Nationale à Portefeuille SA (CNP) Chairman and Chief Executive Officer, GDF SUEZ Chairman and CEO, Ontario Municipal Employees Retirement System (OMERS) Chairman of the Board of Directors, BNP Paribas ViceChairman of the Board, Power Corporation of Canada Chief Executive Officer, BNP Paribas ViceChairman and Executive Director, Compagnie Nationale à Portefeuille SA (CNP) Chairman of the Board, Carrefour Senior VicePresident, Power Corporation of Canada, Power Financial Corporation * Term of offi ce due to expire, renewal proposed to the Annual General Meeting of 5 May 2010 ** Term of offi ce due to expire, renewal not sought *** Managing Director until 31 January 2010 **** Election proposed to the Annual General Meeting of 5 May Annual report Pargesa 2009

7 Committees Auditors Senior Management Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements Audit Committee Chairman MarcHenri CHAUDET Members André de PFYFFER Michel PLESSISBÉLAIR Gilles SAMYN Amaury de SÈZE Compensation Committee Chairman André de PFYFFER Members Michel PLESSISBÉLAIR Gilles SAMYN Amaury de SÈZE Auditors Deloitte SA Ernst & Young SA Senior Management Paul DESMARAIS Baron FRÈRE Paul DESMARAIS Jr. Aimery LANGLOISMEURINNE Pierre HAAS Jacques DRIJARD Andrew ALLENDER Mark KELLER Fabienne RUDAZ BOVARD * until 31 January 2010 ** from 1 February 2010 Executive Director Executive Director Executive Director Managing Director* Advisor to the Chairman Deputy Managing Director* Managing Director** Financial Director and Secretary of the Board of Directors Deputy Managing Director** Chief Accountant Treasurer Annual report Pargesa

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9 Message from the Chairman Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements Ladies and Gentlemen, 2009 was a year of slow convalescence for the economies of the developed countries. The steps taken by governments and the central banks contained the financial crisis and enabled the worst to be avoided. However, profound imbalances still remain and they are a source of tension and of many uncertainties about the indebtedness of a number of countries and about the robustness of the banking system as well as the regulatory framework being prepared for it. For private companies, it was a convincing test : firms with a strong business model and competent and professional managers were able to demonstrate their responsiveness and resilience. They geared up for greater productivity and competitiveness. In many cases they have strengthened their finances and are preparing to take the lead again. I have great pleasure in being able to tell you that I rank in this category all the companies in which we have interests. And I take this opportunity to underline the quality of their management teams. Proof of our confidence is that in 2009 the Group actively participated in the rights issues of Lafarge, Pernod Ricard and Imerys. In addition, GBL increased its stake in PernodRicard to 9 %. Thanks to the quality of our portfolio, we are pleased to propose a 3.8 % increase in the dividend to CHF 2.72 per share, a rise of 6.8 % in euros, the currency of the entire portfolio looks to be a tough year and it is particularly difficult to form a clear forward view of the level of economic activity as this year begins. In this environment, the Pargesa Group will remain faithful to its longterm value creation model which is built around a small number of global companies of great quality. My partner, Albert Frère, and I are prudent entrepreneurs. In order to fully deserve your trust, the Group s operations will be conducted, as in the past, with prudence and discipline, and taking into account an economic environment that remains uncertain. Geneva, 2 March 2010 Paul Desmarais Annual report Pargesa

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11 Business report Annual Report Pargesa

12 1. Introduction Pargesa Holding SA, whose registered office is in Geneva, is the parent company of Pargesa Group, active in various industry and service sectors through its holdings in a number of operating companies. Pargesa Group s strategy is based on the following principles : concentrating the portfolio on a limited number of major holdings, with the aim of creating longterm value ; seeking to exercise control or major influence, over the companies in which the Group holds interests ; ongoing professional activity as a strategic shareholder in the companies in which Pargesa invests, particularly with regard to the following : selecting senior management ; discussing and approving development strategies proposed by senior management ; monitoring the course of business on a regular basis and participating in important decisionmaking ; participating in the definition of financial policy. Applying these principles, the Group s portfolio at 31 December 2009 was concentrated in six major shareholdings : Imerys, Lafarge, GDF SUEZ, Suez Environnement, Total and Pernod Ricard. Details of their operations and results are provided in pages 24 to 35 of this report. Five large operational shareholdings of the Pargesa Group are held through its subsidiary, Groupe Bruxelles Lambert (GBL), listed on EURONEXT in Brussels, of which Pargesa owned 50.0 % of the share capital and 52.0 % of the voting rights at the end of December The controlling shareholding in Imerys is held jointly by Pargesa and GBL. The composition and analysis of Pargesa s results are described in section 4 of this business report and the structure of the adjusted net asset value and its trend are to be found in section Annual report Pargesa 2009

13 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements 2. Highlights In 2009, in their role of longterm shareholders, Pargesa and GBL provided support for the strengthening of the financial structure of some of their shareholdings : GBL subscribed, in proportion to its shareholding, to a EUR 1.5 billion rights issue launched by Lafarge at the start of April For GBL this amounted to an investment of EUR 317 million. Also at the start of April, Pernod Ricard launched a EUR 1.0 billion rights issue. GBL subscribed by investing EUR 88 million. GBL also spent EUR 113 million on stockmarket purchases of Pernod Ricard shares, taking its holding in that company to 9.1 % of the capital, compared with 8.2 % at 31 December At the start of May 2009, Imerys launched a EUR 251 million rights issue. Pargesa and GBL subscribed by investing EUR 69 million and EUR 79 million respectively. From September 2009, Pargesa sold Imerys shares on the stockmarket, for a cumulative total of EUR 53 million (CHF 79 million) at the end of January 2010, with the aim of partially refinancing the subscription. The Pargesa shareholding in Imerys was thus reduced to 25.7 % of the capital compared with 26.1 % at the end of 2009 and 27.4 % at the end of 2008, without affecting the strategic nature of the investment. 3. Group shareholdings The Group s shareholdings posted mixed results from their operating performance in Imerys, a world leader in adding value to minerals, met the unprecedented economic crisis the world has been experiencing since the end of 2008, by taking rigorous steps to adjust its production assets to the collapse of its sales volumes. These measures produced better results than expected. Imerys thus demonstrated its responsiveness and the soundness of its business model, enabling it to forecast a return to a doubledigit operating margin and the comfort of a stronger balance sheet. The group s current operating income is 40.0 % down at EUR 249 million, with an operating margin of 9 % for the year as a whole. Group net operating income fell 55.3 % to EUR 119 million. Group net earnings stand at EUR 41.3 million, compared with EUR million in At the Annual General Meeting of shareholders, the Board of Directors will propose that the dividend be kept at EUR 1.00 per share. At 31 December 2009, PargesaGBL together held 56.8 % of the capital and 69.9 % of the voting rights of Imerys. Lafarge, a world leader in building materials (Cement, Aggregates & Concrete, Gypsum), recorded a 17 % fall in turnover and a current operating income down 30 % to EUR million. Group net income, excluding exceptional items, fell 52 % to EUR 829 million. In a difficult year, Lafarge successfully implemented the action plan announced in February 2009, intended to strengthen its financial structure. The group generated increased free cashflow and significantly reduced its costs, leading to the reduction of its debt and to stronger operating margins. The dividend proposed to the Annual General Meeting of shareholders will be kept at EUR 2.00 per share. At 31 December 2009, GBL held 21.1 % of the capital and 27.1 % of the voting rights of Lafarge. GDF SUEZ, a leading global energy company, recorded in 2009 a 3.8 % decrease in revenues, which totalled EUR 80 billion. Operating profit was practically unchanged in 2009 at EUR 8.3 billion and net income, group share, amounted to EUR 4.5 billion at the end of 2009, a stable result excluding the impact of disposals. The dividend proposed at the Annual General Meeting is EUR 1.47 per share, a rise of 5 %. At 31 December 2009, GBL held 5.2 % of the capital and voting rights of GDF SUEZ. Annual report Pargesa

14 Suez Environnement, a world leader exclusively dedicated to environmental services, recorded in 2009 almost stable revenues of EUR 12.3 billion. The current operating profit of the group declined 12.6 % to EUR 926 million, and consolidated net profit was EUR 403 million, a decline of 24.4 %. At the Annual General Meeting, the Board of Directors will propose that the dividend be kept at EUR 0.65 per share. At 31 December 2009, GBL held 7.1 % of the capital and voting rights of Suez Environnement. For Total, a leading international integrated oil company, 2009 was a year in which the oil industry s markets were characterised by a sharp decline in the demand for oil, gas and refined products. Crude oil prices continued to rise throughout the year however, whereas natural gas spot prices and refinery margins remained depressed, reflecting significant overcapacity. Group net income reached EUR 8.5 billion compared with EUR 10.6 billion in 2008, down 20 %. Group net income excluding nonrecurring items stands at EUR 7.8 billion, a decrease of 44 %, adjusted net earnings per share decreasing proportionately. The dividend proposed at the Annual General Meeting of shareholders will be EUR 2.28 per share, unchanged from At 31 December 2009, GBL held 4.0 % of the capital and 3.6 % of the voting rights of Total. Pernod Ricard, a leading world operator in wines and spirits, recorded an increase in revenues and earnings for the 2008/2009 financial year, which ended on 30 June Current net income was EUR million, a rise of 13 %. Revenues for the first half of 2009/2010, which ended on 31 December 2009, reached EUR million, a decrease of 3 %, current net income standing at EUR 648 million, a fall of 5 %, but a rise of +6 % at constant exchange rates consolidated results 4.1 Presentation of results in accordance with IFRS The simplified presentation of the income statement in accordance with IFRS is as follows : Operating income Operating expenses ( ) ( ) Other income and expenses ( ) Operating profit ( ) Dividends and interest from longterm investments Other financial income (expenses) (215.4) (191.9) Taxes (54.3) (139.6) Income from associates Consolidated net profit (including minorities) (927.5) Minority interests (406.7) Consolidated net profit (Group share) (520.8) Average number of shares in circulation (thousands) Basic earnings per share, Group share (CHF) 9.35 (6.15) 14 Annual report Pargesa 2009

15 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements Operating income and expenses are principally the turnover and operating expenses of Imerys, whose accounts are 100 % integrated into Pargesa. Other income and expenses are net capital gains and losses and impairment on Group shareholdings and operations. At the end of the fi rst quarter of 2009, this item was CHF 360 million negative, due to the charge resulting from the adjustment (mandatory under IAS 39) of the value of the Pernod Ricard and Iberdrola shares held by GBL to their market price at 31 March At the end of the 3rd quarter of 2009, part of the Lafarge impairment of CHF million recognised in 2008 was reversed, pursuant to IAS 36, whereas no reversal could be made in respect of the Pernod Ricard and Iberdrola shares despite the rise in their market price. This reversal, calculated on the basis of a Lafarge share value of EUR 61.2, amounted to CHF 981 million. At 31 December 2009, the other income and expenses item therefore stood at CHF 609 million, practically unchanged compared with 30 September The dividends and interest from longterm investments item concerns the net dividends received by the Group from its nonconsolidated shareholdings, mainly GDF SUEZ, Suez Environnement, Total and Pernod Ricard. The other financial income (expenses) and taxes items consolidate the fi gures for Pargesa, GBL and Imerys. The income from associates item represents the share in the consolidated net profi t contributed by shareholdings accounted for using the equity method in the Pargesa fi nancial statements. It mainly comprises the contribution of Lafarge. Minority interests essentially concern the share of income due to the minority shareholders of GBL and Imerys, these two companies being 100 % consolidated into the Pargesa Group s accounts. 4.2 Economic presentation of Pargesa results As a supplement to the accounts drawn up using the format recommended by IFRS, Pargesa is continuing to publish an economic presentation of its results in order to provide continuous information over the longterm about the contribution of each of its major shareholdings to its results. Because the IFRS require a different accounting treatment depending on the percentage of capital held by the Group in each of its companies (full integration for Imerys, equityaccounting for Lafarge and classifi cation as fi nancial instruments in the case of GDF SUEZ, Suez Environnement, Total, Pernod Ricard and Iberdrola), this continuous view would be interrupted without this additional information. The economic presentation shows, in terms of Group share, the operating contribution of the main shareholdings to the consolidated income of Pargesa together with the income from the operations of the holding companies (Pargesa and GBL). The analysis also draws a distinction between the operating and nonoperating items in the results, the nonoperating part being composed of capital gains in connection with disposals and any restructuring costs and impairment. Annual report Pargesa

16 According to this approach, the economic results for 2009 can be analysed as follows : Operating contribution of the main shareholdings Consolidated (Imerys) or equityaccounted (Lafarge) Imerys share of operating income Lafarge share of operating income Nonconsolidated : GDF SUEZ (Suez until ) net dividend Suez Environnement net dividend 17.8 Total net dividend Pernod Ricard net dividend Operating contribution of the main shareholdings per share (CHF) Operating contribution of other shareholdings 1.4 (27.5) Operating income contributed by holding companies (88.4) (117.6) Operating income per share (CHF) Nonoperating income from consolidated or equityaccounted companies (65.0) (92.9) Operating income contributed by holding companies ( ) Net income (520.8) per share (CHF) 9.35 (6.15) Average number of shares in circulation (thousands) EUR/CHF average exchange rate Consolidated or equityaccounted holdings : Imerys recorded a net operating income of EUR million in 2009, down 55.3 %. Pargesa s share of Imerys operating income, expressed in Swiss francs, decreased by 58 % to CHF 75.8 million. Lafarge recorded net earnings in 2009 of EUR 736 million, down 54 %, including nonrecurring net items of EUR 93 million. The Pargesa share of the operating contribution of Lafarge, expressed in Swiss francs, was CHF million, a decrease of 52 %. Nonconsolidated holdings : The contributions from Total, GDF SUEZ and Pernod Ricard represent the Pargesa share of the net dividends received by GBL from these companies. Total paid the balance of the 2008 dividend in the second quarter of 2009, representing a contribution to Pargesa of CHF 78 million. Under its distribution policy, Total decided in July 2009 to pay a 2009 interim dividend of EUR 1.14 per share, being a contribution to Pargesa of CHF 80 million, which was paid in November Annual report Pargesa 2009

17 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements GDF SUEZ paid its 2008 final dividend of EUR 0.60 per share in the second quarter of 2009, a contribution to Pargesa of CHF 55 million. GDF SUEZ also distributed, in the second quarter of 2009, an exceptional dividend of EUR 0.80 per share, representing a contribution to Pargesa of CHF 73 million. Finally, the payment of an interim dividend for 2009 of EUR 0.80 per share took place in the fourth quarter of 2009, representing a contribution to Pargesa of CHF 74 million, which was recognised in the third quarter of Pernod Ricard paid at the beginning of July 2009 an interim dividend of EUR 0.50 per share, or a contribution to Pargesa of CHF 8.9 million. The net operating contribution of other shareholdings includes the contribution from Ergon Capital Partners, a GBL investment, and the balance of the Iberdrola dividend received by GBL. Operating income contributed by holding companies, which is the net sum of financial income and expenses, overheads and taxes, stands at CHF 88.4 million, compared with CHF million in Nonoperating income : The nonoperating income from consolidated or equity accounted companies mainly concerns the Pargesa share of the nonoperating income of Imerys, amounting to CHF 49.6 million, and of Lafarge, amounting to CHF 15.5 million. The net nonoperating income contributed by holding companies of CHF million in 2009 includes CHF 184 million as the charge recognised in the first quarter which resulted from the adjustment of the value of the Pernod Ricard and Iberdrola shares held by GBL to their market price at 31 March 2009, i.e. EUR 42 (unadjusted) and EUR 5.3 per share respectively. At 31 December 2009, the price of these shares was EUR 60 and EUR 6.7 per share respectively ; this is a substantial rise, but IAS 39 does not allow a reversal of impairments previously recorded for this asset category. Conversely, for the equityaccounted shareholding in Lafarge, the significant appreciation of its market price led, during the first nine months of 2009 and pursuant to IAS 36, to a reversal at the end of the third quarter of 2009 of part of the impairment of CHF 897 million recognised in The reversal was calculated on the basis of EUR 61.2 per Lafarge share at 30 September It represents a Pargesa share of CHF 510 million. 5. Adjusted net asset value Adjusted net asset value per share amounted to CHF at the end of 2009, compared to CHF at the end of Adjusted net asset value is calculated according to the following principles : portfolio investments in listed companies are estimated at their market price and current exchange rates ; portfolio investments in unlisted companies are estimated on the basis of their shareholders equity and current exchange rates ; pershare values refer to one bearer share with a par value of CHF 20, registered shares with a par value of CHF 2 being retained at onetenth of their number. Annual report Pargesa

18 Pargesa s flowthrough adjusted net asset value Weighting as Weighting as Weighting as Amount % of total Amount % of total Amount % of total Total % % % GDF SUEZ % % Suez Environnement % % Suez % Lafarge % % % Imerys % % % Pernod Ricard % % % Major holdings % % % Other holdings % % % Total portfolio % % % Net debt (108) (0.7%) (1 163) (13.5 %) (1 371) (12.7 %) Adjusted net asset value % % % per Pargesa share CHF Share price CHF EUR/CHF (closing) exchange rate The adjusted net asset value per share grew 24 % in 2009, in an environment in which the EUR market price of most of the portfolio securities rose from the second quarter of 2009 onwards, the exchange rate impact being negligible given the stability of the EUR against the CHF between the reference dates of the period concerned. The changes during the past year to the components of the net asset and its total value also take account of the portfolio operations detailed in Section 2 Highlights of this business report. These operations included in particular, subscriptions to the rights issues of Lafarge, Imerys and Pernod Ricard, and also additional acquisitions of Pernod Ricard shares in the market, by GBL. At 31 December 2009, Other holdings includes in particular GBL s remaining 0.6 % investment in Iberdrola and the group s private equity investments. Investments by the Group in its shareholdings in 2009 were mainly funded by GBL s available cash. The net debt item in the net asset value at the end of 2009 represents the balance of available cash, held by GBL, and debt, mainly comprising convertible bonds issued by Pargesa and GBL, and due to mature between 2012 and Annual report Pargesa 2009

19 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements Pargesa s adjusted net asset value at 26 February 2010 stood at CHF per share, down 14 % on that date compared with the start of the year, and breaks down as follows : Pargesa flowthrough adjusted net asset value at 26 February 2010 % capital % economic interest Share price/ currency Flowthrough value Weighting as % of total Total 4.0 % 2.0 % EUR % GDF SUEZ 5.2 % 2.6 % EUR % Suez Environnement 7.1 % 3.6 % EUR % Lafarge 21.1 % 10.6 % EUR % Imerys 56.3 % 41.0 % EUR % Pernod Ricard 9.2 % 4.6 % EUR % Iberdrola 0.6 % 0.3 % EUR % Other shareholdings % Total portfolio % Net cash (debt) (1 379) (15%) Adjusted net asset value % per Pargesa share CHF EUR/CHF exchange rate Given that there is practically no change in the portfolio compared with the end of 2009, the change in adjusted net asset value since the start of the financial year, a decline of 14 %, reflects the change in the market price of the shareholdings at the start of 2010, and the 1.4 % weakening of the EUR against the CHF. 6. Parent company income and proposed dividend The parent company s income amounted to CHF million, or CHF 2.94 per share. The Board of Directors proposes that the Annual General Meeting should approve payment of a dividend of CHF 2.72 per bearer share and CHF per registered share, a rise of 3.8 % compared with the dividend paid for the preceding year, or a total distribution of CHF million, to be paid on 17 May The sum of CHF million would be carried forward, allowing for the allocation of CHF 12.5 million to the general legal reserve. Parent company income and dividend Parent company income () per share (CHF) Total dividend () (1) per share (CHF) 2.72 (1) 2.62 (1) proposed to the Annual General Meeting Annual report Pargesa

20 7. Proposals to the Annual General Meeting of 5 May Allocation of earnings The Board of Directors proposes to the Annual General Meeting that the net profit for the year of CHF million, in addition to the balance of CHF million, or a total amount available to distribution of CHF million, be allocated as follows : dividend CHF million general legal reserve CHF 12.5 million retained earnings to be carried forward CHF million 7.2. Nominations to the Board of Directors The term of office of Mrs Ségolène Gallienne, Messrs Paul Desmarais Jr., Gérald Frère, Victor Delloye, Robert Gratton, Aimery LangloisMeurinne, Gérard Mestrallet, Michael Nobrega, Baudouin Prot, Gilles Samyn and Amaury de Sèze will end at the Annual General Meeting of 5 May Mr Robert Gratton and Mr Aimery LangloisMeurinne have not sought to renew their term of office. The Board of Directors expresses its gratitude to Aimery LangloisMeurinne for the distinguished services he has rendered to the Company during the 20 years in which he was a member of the Board and Managing Director. The Board of Directors will propose to the annual General meeting that the other directors whose term of office has expired be reappointed for a period of three years and also that Mr Arnaud Vial, a French and Canadian national, Senior VicePresident of Power Corporation of Canada and of Power Financial Corporation be elected as a member of the Board of Directors for a period of three years. 7.3 Auditors Since 1997, the auditing of the Group s financial statements has been shared between two firms, Deloitte SA and Ernst & Young SA. In order to streamline the arrangements, and given that Swiss legislation does not require two external auditors, the Board of Directors will propose to the Annual General Meeting that the contract of Deloitte SA be renewed as sole external auditor. 7.4 Changes to the Articles of Association A motion will be put to the Annual General Meeting that the authorised capital of CHF 253 million maximum be renewed by the issuing of a maximum of bearer shares each with a par value of CHF 20 and by the issuing of a maximum of registered shares each with a par value of CHF 2. At the Annual General Meeting, there will also be a proposal to bring the Articles of Association into line with the present legal arrangements that have resulted in particular from the Swiss Law relating to securities held with an intermediary, which came into force on 1 January This law creates a legal framework for the evidencing of securities, the conservation and the transfer of securities lodged with financial intermediaries. It means that the Articles of Association must be updated in relation to the materialisation of the Company s bearer shares. The proposed amendments are essentially technical in nature, and do not cause significant changes to the arrangements that currently apply to the Company s shareholders. 20 Annual report Pargesa 2009

21 Main shareholdings Annual report Pargesa

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23 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements GBL directly owns the Pargesa Group holdings in Lafarge, GDF SUEZ, Suez Environnement, Total and Pernod Ricard. It also has a stake in Imerys, which is therefore jointly controlled by Pargesa and GBL Global data (EUR million) Shareholders equity at 31 December Market capitalisation at 31 December Consolidated net profit 779 (688) Total distribution Data per share (EUR) Consolidated net profit 5.23 (4.41) 6.80 Dividend Issued shares (million) Pargesa s interest (%) GBL s consolidated financial statements show a new profit of EUR million for 2009 compared with a net loss of EUR 688 million for In view of the rise in the Lafarge stock market price during the first nine months of 2009, the application of IAS 36 caused GBL to reverse in the income statement, on the balance sheet date at 30 September 2009, part of the EUR million impairment recognised in This reversal of EUR 650 million was determined according to the market price of EUR on that date. In an environment of falling financial markets, GBL conversely recognised a cumulative impairment of EUR 637 million on its shareholdings in Pernod Ricard and Iberdrola (EUR 402 million in 2008 and EUR 235 million in 2009). The impairment recorded in 2008 corresponded to the difference between the cost of acquisition and the market price at 31 December Following the fall in share prices in the first quarter of 2009, GBL recorded an additional charge in the income statement of EUR 235 million, which it was obliged to do pursuant to the application of the IFRS standards. Despite a rebound in market prices since 31 March 2009, no reversal through the income statement could be authorised under IAS 39. The value increase was recognised directly in shareholders equity. In 2009, cash earnings were EUR 602 million compared with EUR 721 million in Dividends are almost unchanged at EUR 652 million. Net cash earnings fell markedly from one year to the next, due to the combined effect of a decrease in average cash level and a significant reduction in interest rates. GBL subscribed, in proportion to its shareholding, to a EUR 1.5 billion Lafarge rights issue, launched at the start of April 2009 and representing a GBL investment of EUR 317 million. Again at the beginning of April, Pernod Ricard launched a capital rights issue of EUR 1.0 billion. GBL subscribed EUR 88 million. GBL also spent EUR 113 million on stock market purchases of Pernod Ricard shares, taking its stake to 9.1 % of the capital of that company, compared with 8.2 % at 31 December At the start of May 2009, Imerys launched a rights issue of EUR 251 million. GBL subscribed EUR 79 million. At the end of 2009, GBL net cash was EUR 600 million and shareholders equity stood at EUR 14.9 billion. The distribution of a gross dividend of EUR 2.42 per share, payable from 20 April 2010, a rise of 5 % compared with 2008 and corresponding to a total distribution of EUR 390 million, will be proposed to the Annual General Meeting on 13 April Annual report Pargesa

24 Active in 47 countries and with more than 240 locations, Imerys is the world leader in adding value to minerals. Imerys follows a valuegenerating growth strategy ; based on the minerals it mines and processes from its reserves of rare quality, the group develops solutions that improve the product performance and manufacturing efficiency of its industrial customers. The group s products have many applications in everyday life, including building, personal care products, paper, paint, plastics, ceramics, telecommunications and the filtration of foodgrade liquids Global data (EUR million) Shareholders equity at 31 December Market capitalisation at 31 December Consolidated net profit Total distribution Data per share (EUR) Net operating income Dividend Shares issued (million) Pargesa interest ( %) (1) (1) of which 27.4 % is owned by Pargesa and the rest by GBL 2009 was marked by an unprecedented downturn in Imerys end markets. An inventory reduction trend intensified the decrease in industrial output in the mature countries. The construction sector remained extremely slack in Europe and North America. Emerging countries, which now account for 24 % of the Group s outlets, were more robust. In 2008, Imerys undertook action plans to adapt to the collapse in demand and make free cash flow generation the priority. Efforts were stepped up in 2009, with results that exceeded the targets set by the Group. In this situation, turnover was lower because of a fall in sales volumes, but the substantial reduction in the cost base and the price incresase and product mix improvement enabled a current operating margin of 9.9 % to be reached in the second half of the year. Benefiting from the generation of current operating free cash flow and the 251 million euro rights issue of June 2009, the group reduced its debt burden by 600 million euros. Imerys therefore has all the financial flexibility it needs to return to growth and seize development opportunities. As a result of the poorer economic environment in 2009, total revenue for 2009 was EUR million, down 19 6 % compared with Based on constant group structure and exchange rates, turnover declined by 19.9 % after an improvement in the price/product mix component (+ 3.9 %) and the shrinking of sales volumes ( 23.8 %). 24 Annual report Pargesa 2009

25 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements When analysed by business activity, the results are as follows : Turnover in Minerals for Ceramics, Refractories, Abrasives and Foundry amounted to EUR million, a decrease of 31.5 % compared with This decline reflects the fall in demand for industrial equipment, automobiles and infrastructure, and also the reduction in inventories, particularly during the first half. Destocking gradually disappeared during the second half of 2009 and some restocking was even to be seen at the end of the year in the trade sectors that had been hardest hit. Turnover in Performance Minerals and Filtration amounted to EUR million, a fall of 12.4 % compared with In Europe, the reduced level of activity recorded in the second half of 2008 continued, and the US market was marked by a further decline in Demand for filtration products dipped temporarily at the end of 2008 and the start of 2009, reflecting the destocking undertaken by the group s customers and the distributors. Pigments for Paper posted revenues of EUR million, down 12.1 % compared with Since the low point recorded at the beginning of 2009, the production of printing and writing printing paper has rebounded slowly. It was 11 % lower for the year as a whole, the dynamic growth of the emerging countries not being able to compensate for the decline in the developed economies. The Materials & Monolithics sector recorded revenues of EUR million, 15.9 % lower than in In 2009, new singlefamily housing starts in France fell by about 20 % compared with In this situation, the clay roof tile segment held up better (11 %) because of the good performance of the building renovation market. In Monolithic Refractories, 2009 was marked by a significant decrease in demand in the steel sector, with numerous plant shutdowns. The group s current operating income was EUR million (40.0 %) after a volume decline (EUR million) amplified by the decrease in finished product and inprocess inventory, the reduction in fixed production costs and overheads (EUR million) and the improvement in prices and the price/product mix component (EUR million) in particular had been factored in. All in all, the group s operating margin was 9.0 %, compared with 11.7 % in Group share of current net income was EUR million in 2009, a decline of 55.3 %. It is the result of the lower level of activity and includes a downturn in financial profit due particularly to the adverse effect of changes in comparable group structure and a negative exchange rate impact. After other net operating income and expenses connected with the restructuring plans implemented in 2009 have been taken into account, group share of net profit is EUR 41.3 million compared with EUR million in Capital investment, which essentially concerned maintenance operations, was also down in 2009, by 50.2 % (EUR million compared with EUR million in 2008). Current operating free cash flow was EUR million compared with EUR million in 2008, due especially to the improvement in working capital and lower level of capital investment. The revenue from the EUR million capital rights issue received on 2 June was also allocated to debt reduction. All in all, net consolidated financial debt fell by EUR 600 million in 2009 : it stood at EUR million at 31 December 2009 (EUR million in 2008). A proposal will be made to the Annual General Meeting on 29 April 2010 to keep the dividend at EUR 1.00 per share, i.e. a total distribution of approximately EUR 75.4 million or 63.2 % of the group share of current net income. The dividend will be distributed from 11 May Annual report Pargesa

26 With a presence in 78 countries, Lafarge is a world leader in building materials : Cement, Aggregates & Concrete and Gypsum. Lafarge holds topranking positions in all its Businesses : it is world leader for Cement, second in the world for Aggregates, ranked third in the world as a producer of readymixed Concrete and third in the world for Gypsum Global data (EUR million) Shareholders equity at 31 December Market capitalisation at 31 December Consolidated net profit Total distribution Data per share (EUR) Net income Dividend Shares issued (million) Pargesa interest ( %) was marked by a considerable slowdown in economic activity which impacted volumes, essentially in North America and Europe. The development strategy with its emphasis on emerging countries enabled the effects of the crisis to be mitigated and margins to be kept above 30 % in Cement. In that situation, the group successfully completed an action plan designed to adapt to market conditions and reinforce its financial structure : implementation of measures to mitigate the impact of lower volumes on profits, such as cost cutting and plant closures, whilst keeping price levels unchanged ; strengthening of the financial structure through a EUR 1.5 billion rights issue, disposal of assets (over EUR 900 million), improvement of working capital, reduction of capital expenditure and refinancing of debt to longer loan maturities. The Cement business was strongly affected throughout the year by the 9 % decline in sales volumes from million tonnes in 2008 to million tonnes in 2009 (8 % based on constant group structure) associated with the slowing of the North American and European markets and partly offset by growth on the key markets of Africa and the Middle East, Latin America and Asia. Overall, prices remained firm. 26 Annual report Pargesa 2009

27 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements The effects of the disposal of assets during 2008 and 2009, essentially the sale of the stake in the joint venture with Titan in Egypt and of operations in Italy, Venezuela and Chile, were only partly offset by the positive impact of the consolidation of the Orascom businesses for the whole of 2009, compared with 11 months in In Aggregates & Concrete, the economic slowdown of 2008 continued during 2009, mainly in Europe and North America, with a negative impact on volumes. The price improvements across all product lines did not adequately compensate for the effects of the decline in volumes. Volume sales of pure aggregates declined by 21 % to million tonnes and by 22 % at constant group structure. Readymixed concrete sales volumes posted a fall of 15 % to 37.1 million cubic meters (23 % based on constant group structure). The changes in the scope of consolidation had a EUR 156 million negative impact on revenues following the disposal of assets in North America and of the operations in Chile, partly offset by businesses acquired in India. The Gypsum businesses were affected by the general economic slowdown of the housing market in Europe and North America. Sales volumes declined by 10 % to 667 million square meters (11 % based on constant group structure). However, the firmness of prices and the costcutting efforts in every region meant that the fall in sales volumes could be offset. Consolidated revenues were 17 % lower at EUR million compared with EUR million in Based on constant group structure and exchange rates, turnover fell by 14 %. This net decrease is the result of a mix of trends during the period : most of the emerging markets were strong whilst the mature markets and central and eastern Europe slowed very substantially. The changes in the scope of consolidation had a EUR 321 million negative net impact on turnover, i.e. 1 % : these concerned disposals of the joint venture with Titan in Egypt and of the operations in Italy, Chile and Venezuela, the effects of which were only partly offset by the consolidation of the Orascom businesses for the whole of the 2009 financial year (compared with 11 months in 2008). The Aggregates and Concrete division benefited from the consolidation of the businesses acquired in India, but were unfavourably affected by asset disposals, essentially in North America. There were also adverse exchange rate impacts of EUR 396 million. Current operating income fell 30 % to EUR million compared with EUR million in Based on constant group structure and exchange rates, current operating income was down 26 %, mainly reflecting the impact of the fall in volumes across all sectors, the effects of which were only partly offset by the substantial reductions achieved in costs and by an overall improvement in prices. Group share of net profit was 54 % lower at EUR 736 million in 2009 compared with EUR million in This decline takes account in particular of the reversal of a provision connected with the reduced fine charged to the group in Germany, the settlement of the litigation with USG, and the impairment of cement assets in western Europe in All in all, consolidated net financial debt was reduced by EUR 3.1 billion to EUR million, thanks in particular to the EUR 1.5 billion capital rights issue and to the cash flows generated by the group. A proposal will be made to the Annual General Meeting on 6 May 2010 to keep the dividend at EUR 2.0 per share, i.e. a total distribution of approximately EUR 570 million, or 64 % of the group share of net earnings. The dividend will be paid from 6 May Annual report Pargesa

28 Formed through the merger of Suez and Gaz de France, GDF SUEZ is a world energy leader, active across the entire value chain, in electricity and natural gas, upstream to downstream. On 22 July 2008, Suez and Gaz de France completed their merger, forming a world energy leader with a firm base in France and Belgium. As a result of this major industrial operation, the group has an active presence across the entire energy value chain, in electricity and natural gas, upstream to downstream. Its business activities thus cover the buying, producing and selling of natural gas and electricity ; they concern the transport, storage, distribution, development and management of natural gas infrastructures. And they also relate to the supply of energy and environmental management services (water and waste). Suez GDF SUEZ (proforma) Global data (EUR million) Shareholders equity at 31 December Market capitalisation at 31 December Consolidated net profit Total distribution Data per share (EUR) Net income Dividend Shares issued (million) Pargesa interest ( %) GDF SUEZ is based on a diversified portfolio of supply and flexible production assets with a high degree of gas/ electricity convergence. It holds leading international positions in liquefied natural gas (LNG), independent electricity production and energy services. GDF SUEZ has an integrated organisational structure built around six business lines, five in Energy and one for Environment : Energy Europe and International (EEI), Energy France (EF), Global Gas & LNG (3G), Infrastructures (I), Energy Services (ES) and Suez Environnement (SE). The GDF SUEZ strategy plans for development in several directions : strengthening its positions in Europe from its home base (France, Benelux), complementarity of dual gas/electricity offers (energy efficiency), selective international development and stronger industrial positions especially in upstream gas, liquefied natural gas, infrastructures and electricity generation (nuclear, renewables). The group also intends to reinforce its leadership positions in energy efficiency and the environment. 28 Annual report Pargesa 2009

29 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements In 2009, GDF SUEZ produced results comparable to those of 2008, despite the considerable downturn of the international gas business, impacted by the effects of the economic crisis and the price of commodities. In this unfavourable situation, the group continued to invest significantly close to EUR 20 billion over the last two years (in line with the target of EUR 30 billion in 3 years) mainly on organic growth projects. The major achievements of 2009 essentially concerned the expansion of the electricity generating fleet across the world by 19.5 GW, approximately 20 % of which is renewable energy, the commissioning of the CCGT power plant at Marafiq in Saudi Arabia with a capacity of 2.7 GW and the signing of Exploration & Production and LNG agreements, notably in Australia, Norway and Algeria. In addition, the group reached an agreement with the Belgian government on a 10year extension of the lifetime of 3 nuclear reactors in Belgium and signed a new public service contract in France, establishing the pricing framework for selling gas at regulated prices. The group s turnover of EUR 79.9 billion is 3.8 % lower than in 2008 (EUR 83.1 billion). The revenues generated in Europe and North America account for 92 % of the total, 86 % of which is produced in Europe alone. Group EBITDA is EUR 14.0 billion, little changed from 2008 (EUR 13.9 billion). Current operating income (EBIT) is EUR 8.3 billion, a slight decline (2.5 %) compared with 2008 (EUR 8.6 billion). Group share of net profit is EUR 4.5 billion. This is a net decline compared with the absolute level of 2008 (EUR 6.5 billion), which included EUR 2.1 billion for the impact of the contributions from the companies sold as part of the merger and the corresponding income. Excluding these impacts, group share of net profit has remained stable. Operating cash flow before financial expenses and tax totalled EUR 13.0 billion, practically unchanged compared with Cash flow before disposals and development investment grew 127 % compared with 2008 to EUR 9.6 billion, due in particular to the improvement in working capital. Net investments in 2009 amounted to EUR 8.8 billion. Maintenance expenses represented EUR 3.2 billion, financial and development expenses were EUR 6.5 billion and EUR 1.5 billion respectively. During the same period, disposals amounted to almost EUR 2.4 billion and essentially comprised the proceeds of the disposal of SPE and regulated Belgian assets. Group net financial debt at the end of 2009 was EUR 30.0 billion (EUR 28.9 billion at the end of 2008) and represents 46 % of equity. The distribution of a dividend of EUR 1.47 per share for 2009 will be proposed to the Annual General Meeting on 3 May 2010 (+5 % compared with the 2008 financial year) on which an interim dividend of EUR 0.80 per share was paid on 18 December Annual report Pargesa

30 Suez Environnement is a leading global player in water and waste, exclusively dedicated to the environment. Suez Environnement is a leading global player on the environment market, with a strong base in Europe, especially in France and Spain (Agbar), and operating in more than thirtyfive countries. The group provides water and waste management services of all kinds through a variety of brands such as Sita for waste, Lyonnaise des Eaux, Ondéo Industrial Solutions, Safège, Degrémont, United Water and Agbar for water. The group manages over production units providing 90 million people with drinking water, and operates over water treatment sites that meet the needs of 58 million people. In its waste business, the group collects almost 23 million tonnes of waste and treats almost 40 million tonnes of that waste Global data (EUR million) Shareholders equity at 31 December Market capitalisation at 31 December Consolidated net profit Total distribution Data per share (EUR) Net income Dividend Shares issued (million) Pargesa interest ( %) The group is structured around three main segments : Water Europe, Waste Europe and International. The Water business covers activities such as the collection, treatment and distribution of drinking water, maintenance of networks and operation of production facilities, customer management, the collection and treatment of domestic and industrial waste water and energyfromwaste operations using treatment sludges. The group s Waste services comprise the collection of waste of all kinds (except radioactive waste) and urban sanitation, the sorting and pretreatment of the waste, recycling, production of recoverable biological material and energy from the waste, disposal by incineration or landfill of the remaining waste and restoration of brownfield sites. The International division essentially comprises the Degrémont business of designing, building and operating drinking water production facilities, sea and salt water desalination plants, waste water treatment and recycling sites and sludge processing. The Group also has business operations in the USA, China, Central Europe, the Mediterranean and the Middle East. 30 Annual report Pargesa 2009

31 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements As part of the merger between Suez and Gaz de France, Suez Environnement became a listed company on 22 July 2008 ; the transaction was materialised by the distribution by Suez to its shareholders of 65 % of the company s shares. Despite a tough macroeconomic environment, Suez Environnement produced a generally stable operating performance in 2009, the group having benefited from the implementation of the cost optimisation plan and financial discipline with regard to capital expenditure and cash management. The unfavourable economic situation mainly impacted the Waste Europe segment, affecting both volumes and prices; the activity of the Water Europe and International segments on the other hand grew in comparison with the levels achieved in In 2009, the group experienced steady business activity and continued its development with major strategic movements, such as the signing of an agreement to take control of Aguas de Barcelona (Agbar) in mid2010, which will enable it to build the second European water pillar, increasing its stake in the SwireSita waste group (HongKong) to 100 % and obtaining the contract for the largest seawater desalination plant in Melbourne. In the Water segment, the performances of Lyonnaise des Eaux and Agbar benefited in 2009 from a slight rise in water volumes in Europe thanks to the weather conditions during the summer and to favourable price impacts due particularly to the application of tariff indexation formulas. However, the Works business was adversely affected by the economic slowdown. In the Waste segment, performance was particularly affected in 2009 by the fall in the prices of secondary raw materials (metals, paper and plastics) in the Sorting and Recovery business, which posted a decrease in turnover amounting to almost 40 % of the overall decline of this group of businesses. In the International division, growth was maintained by the new contract work begun by Degrémont (in Australia, Mexico and South America) and by the good performance of the businesses in Asia (Australia, China) and Central Europe. Revenues declined in 2009 by 0.5 % to EUR million. The Water Europe and International segments posted positive growth of 3.6 % and 7.3 % respectively, whilst the Waste Europe segment recorded a 7.1 % decline in revenue. Revenues in Europe, North America and Australia accounted for 87 % of the total, 78 % of that from Europe alone. The group current operating income (EBIT) of EUR 926 million is 12.6 % down, impacted especially by the rise in depreciation and renewal costs in connection with the increase in capital investment. The group share of net profit was EUR 403 million, down 24.4 % compared with 2008, which included exceptional tax savings of EUR 131 million. Group operating cash flow before financial expenses and tax (EUR millions) was stable compared with Free cash flow before disposals and development investment was EUR 891 million and grew 49.5 % compared with 2008 (20 % before exceptional items), mainly because maintenance capital expenditure and working capital were controlled. Group net debt at the end of 2009 was EUR million, compared with EUR million at the end of 2008, and represents 142 % of equity (143 % at the end of 2008). Overall, the return on capital employed (ROCE) was 7.3 % in 2009 compared with 9.8 % in 2008, given the increase in capital investment and the fall in operating profitability due to the economic crisis. Suez Environnement will propose to the Annual General Meeting of shareholders on 20 May 2010 that a dividend of EUR 0.65 per share be paid for 2009, unchanged from the previous year. Annual report Pargesa

32 Formed through successive mergers between the Total, PetroFina and Elf Aquitaine groups, Total is a worldwide integrated oil and gas group with substantial chemical activities. Total is a leading international oil and gas company. With operations in more than 130 countries, the group s activities span all aspects of the energy industry from Upstream oil and gas exploration, development and production, LNG to Downstream refining, distribution, transport and international trading of both crude and refined products. Total is also a major player in the Chemicals industry and, moreover, involved in the development of renewable energies Global data (EUR million) Shareholders equity at 31 December Market capitalisation at 31 December Consolidated net profit Total distribution Data per share (EUR) Adjusted net income Dividend Shares issued (million) Pargesa interest ( %) In the Upstream sector, the Group has exploration and production operations in over 40 countries. The Group s proven hydrocarbon reserves, determined according to SEC rules, give the company some 12 years of production at current rates (2.3 million equivalent barrels of oil per day). Total operates in the liquefied natural gas industry and its business activities also include operations in related market segments such as gas distribution and electricity generation. The Group is also preparing for future energies by supporting the growth of the new complementary forms of energy (solar, biomass, nuclear). Downstream, Total is a leading group in Western Europe and Africa ; it is also very active around the Mediterranean and is beginning to operate on the growth markets of SouthEast Asia. It manages a refining capacity and markets refined products amounting to 2.6 million and 3.6 million barrels per day respectively. The group has interests in 24 refineries and operates a network of approximately service stations, mainly under the Total, Elf, Elan and AS24 brands, which each have their own positioning. Total s Chemicals branch is a European or world leader on most of its markets. It comprises Base Chemicals, including petrochemicals and fertilisers, and a Specialty Chemicals segment that covers rubber applications, resins, adhesives and electroplating products destined mainly for industry. 32 Annual report Pargesa 2009

33 Structure and key data Board of Directors, Senior Management and Auditors Message from the Chairman Business report Main shareholdings Corporate Governance report Consolidated financial statements Parent company financial statements The 2009 oil and gas environment was marked by a sharp decline in the demand for oil, natural gas and refined products. Under these circumstances, crude oil prices declined by 37 % compared with their 2008 average. Natural gas spot prices remained depressed and refining margins fell to historically low levels, reflecting significant overcapacity. In Chemicals trading conditions suffered from a decrease in margins and a sharp drop in demand in OECD markets. The dollar rose 5 % against the euro. In this context, Total s adjusted net profit was EUR 7.8 billion, down 44 % compared with Expressed in dollars, adjusted net profit was 47 % down. In a generally unfavourable oil environment, consolidated turnover for 2009 was EUR 131 billion, a fall of 27 % compared with Adjusted net operating income from the various business lines declined by 46 % in 2009 to EUR 7.6 billion compared with EUR 14.0 billion in 2008 ; expressed in dollars, it decreased by 48 %. The detailed breakdown of contributions from the various businesses is : Upstream, adjusted net operating income was EUR 6.4 billion compared with EUR 10.7 billion in 2008, or a decrease of 40 % ( 44 % in USD). This decline is mainly explained by the impact of the lower average sales prices for liquid products, in line with the fall of the Brent price. This effect was reinforced by the 2.6 % decline in production from one year to the next. The costcutting plans launched at the end of 2008 enabled operating costs to be reduced by 8 % and to keep technical costs at the same level as in The Upstream return on average capital employed (ROACE) was 18 % in 2009, compared with 36 % in 2008 ; Downstream, adjusted net operating income was EUR 1.0 billion, down 63 % compared with 2008 ( 65 % in USD), reflecting a very much poorer environment in terms of refining margins ( 65 %) and refined volumes ( 9 %). The Downstream ROACE declined by 7 % in 2009, compared with 20 % in 2008 ; In Chemicals, adjusted net operating income was EUR 0.3 billion, compared with EUR 0.7 billion in This 59 % decline ( 61 % in USD) reflects the very much poorer market conditions for Base Chemicals and to a lesser extent a decline in sales and profits for Specialty Chemicals. The Chemicals ROACE for 2009 as a whole was 4 %, compared with 9 % in Adjusted net profit was EUR 7.8 billion in 2009, down 44 % compared with EUR 13.9 billion in The group share of net profit is EUR 8.4 billion, a fall of 20 % compared with 2008 ( 24 % in USD). This is after nonrecurring items representing an overall positive amount of EUR 0.7 billion (a negative amount of EUR 3.3 billion was recorded in 2008). In 2009, the group s gross investments remained stable at EUR 13.3 billion. They were distributed on the basis of 74 % Upstream, 21 % Downstream and 5 % Chemicals. Divestments calculated at their selling price amounted to EUR 3.1 billion and essentially concerned the sale of SanofiAventis shares. Group net cashflow was EUR 2.1 billion compared with EUR 7.6 billion in 2008, a decline due mainly to the increase in working capital. The distribution of a net dividend of EUR 2.28 per share for 2009, the same amount in euros as the previous year, will be proposed to the Annual General Meeting on 21 May Taking into account the payment of the interim dividend of EUR 1.14 per share on 18 November 2009, the balance of the dividend to be paid on 1 June 2010 will be EUR 1.14 per share. Annual report Pargesa

34 Joint world leader for wines and spirits, Pernod Ricard occupies leading positions in every continent. Since it was established its 1975, major internal growth and numerous acquisitions, especially Seagram in 2001, Allied Domecq in 2005 and Vin&Sprit in 2008, have enabled Pernod Ricard to become joint world leader for wines and spirits. With a strong presence on every continent and solid positioning in the emerging countries of Asia, Eastern Europe and South America, the group produces and distributes a range of wines and spirits spread across 15 strategic brands, local brands that are leaders on their markets and a large number of regional brands. In spirits, the main group brands are : Absolut, Ballantine s, Beefeater, Chivas Regal, Havana Club, Jameson, Kahlua, Malibu, Martell, Ricard and The Glenlivet ; in wines : Jacob s Creek, Montana and Mumm / Perrier Jouët (champagnes). 30 June June June 2009 Global data (EUR million) Shareholders equity Market capitalisation (1) Consolidated net profit Total distribution Data per share (EUR) (2) Net income Dividend (3) Shares issued (million) Pargesa interest ( %) (1) (1) at year end (2) retroactive adjustment taking into account the 2:1 stock split which occurred on 15 January (3) and a 1for50 free share distribution as part of a share capital increase by capitalisation of reserves to be carried out by the end of the 2009 calendar year. During 2008/2009, and despite a major slowdown of the global economy and a marked degree of destocking by distributors, Pernod Ricard was able to maintain turnover and profit growth. A major feature of the financial year was the integration of Vin&Sprit (V&S), owner of the premium vodka brand Absolut, acquired in July Annual report Pargesa 2009