annual report 2008 Pargesa Holding SA

Transcription

1 annual report 2008 Pargesa Holding SA

2 Pargesa Holding SA 11, Grand-Rue 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 15 Adjusted net asset value 18 Parent company income and proposed dividend 20 Proposals to the Annual General Meeting of 7 May Main shareholdings 21 GBL 23 Imerys 24 Total 26 GDF SUEZ 28 Suez Environnement 30 Lafarge 32 Pernod Ricard 34 Corporate Governance report 37 Consolidated financial statements 45 Parent company financial statements 95 Annual report Pargesa

4 Structure and key data Economic diagram at 31 December 2008* Pargesa 50.0% (2) GBL 27.4% 30.5% 4.0% 5.3% 7.1% 21.1% 8.2% Imerys Total GDF SUEZ Suez Env. Lafarge Pernod Ricard * shareholdings are expressed as a percentage of capital Main shareholdings key data at 31 December 2008 Company Currency Direct interest % Total interest % % of total voting rights % flowthrough interest (1) 2008 net profit (CHF million) 2008 shareholders' equity (CHF million) GBL EUR (1 092) Imerys EUR Total EUR GDF SUEZ EUR Suez Environnement EUR Lafarge EUR Pernod Ricard (2) EUR (1) flow-through interest assessed at the level of Pargesa (2) financial year ending on June 30 4 Annual report Pargesa

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 per-share data CHF million Consolidated shareholder's equity, Group's share 6' ' ' ' '434.8 Operating income Non-operating income ' (1'228.9) Consolidated net profit, Group's share ' (520.8) Gross dividend (1) Shares entitled to dividend 84'434'770 84'638'370 84'638'370 84'638'370 84'638'370 Market capitalisation at year-end '496 11'748 10'707 5'925 Adjusted net asset value at year-end 8'233 9'984 14'346 15'952 8'636 CHF per share Share price year-end high low average Consolidated shareholder's equity, Group's share Adjusted net asset value at year-end Operating income (2) Non-operating income (2) (14.52) Consolidated net profit, Group's share (6.15) Gross dividend (1) (Average) gross yield 2.8% 2.3% 2.0% 2.0% 2.5% (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 Flow-through adjusted net asset value CHF SPI relative CHF Annual report Pargesa

6 Board of Directors Chairman Paul DESMARAIS* Vice-Chairmen Baron FRÈRE* Paul DESMARAIS Jr. Gérald FRÈRE André de PFYFFER* Directors Marc-Henri CHAUDET* Victor DELLOYE André DESMARAIS* Ségolène GALLIENNE Robert GRATTON Aimery LANGLOIS-MEURINNE Maximilien de LIMBURG STIRUM* Gérard MESTRALLET Michael NOBREGA Michel PÉBEREAU* Michel PLESSIS-BÉLAIR* Baudouin PROT Gilles SAMYN Amaury de SEZE Chairman of the Executive Committee, Power Corporation of Canada Chairman of the Board of Directors, Frère-Bourgeois SA Chairman of the Board and Co-Chief Executive Officer, Power Corporation of Canada Executive Director, Frère-Bourgeois SA Attorney-at-Law Attorney-at-Law Director and General Secretary, Compagnie Nationale à Portefeuille (CNP) President and Co-Chief Executive Officer, Power Corporation of Canada Director, Compagnie Nationale à Portefeuille (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 Vice-Chairman of the Board, Power Corporation of Canada Chief Executive Officer, BNP Paribas Vice-Chairman and Executive Director, Compagnie Nationale à Portefeuille (CNP) Chairman of the Board, Carrefour * Election proposed to the Annual General Meeting of May 7, Annual report Pargesa

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 Marc-Henri CHAUDET Members André de PFYFFER Michel PLESSIS-BÉLAIR Gilles SAMYN Amaury de SEZE Compensation Committee Chairman André de PFYFFER Members Michel PLESSIS-BÉLAIR Gilles SAMYN Amaury de SEZE Auditors Deloitte SA Ernst & Young SA Senior Management Paul DESMARAIS Baron FRÈRE Paul DESMARAIS Jr. Aimery LANGLOIS-MEURINNE Pierre HAAS Jacques DRIJARD Andrew ALLENDER Mark KELLER Fabienne RUDAZ BOVARD Executive Director Executive Director Executive Director Managing Director Advisor to the Chairman Deputy Managing Director Financial Director and Secretary of the Board of Directors 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, In my message a year ago, I told you of my fears that the financial crisis would spread to the whole of the economy. That has been happening in fact since the second half of 2008, at exceptional speed and depth. We are faced with a more severe contraction of economic activity than in previous recessions, and at the same time with profound structural changes in widely different sectors such as financial services and the automotive industry. The growth of the global economy in the last few years had been boosted by excessive recourse to debt and characterised by the persistence of huge gaps between the developed and emerging countries. Today, it is difficult to forecast the depth or the length of the crisis, but the need for a massive and orderly deleverage means that there can be no optimism about the prospects in the short term. Under these circumstances, how is the portfolio of your Group reacting? Naturally, it has lost a good deal of market value, but that is not the core issue for a long-term investor. It is a matter of determining whether our companies are responding to the crisis, adjusting their financial structure and their cost structures, demonstrating their capacity to improve their competitive position, to come out stronger in the end. On that head, I can express a certain satisfaction, and I congratulate the management of the companies in which we are invested and with whom we work closely. I will make the following comments about the individual companies: GDF SUEZ and Total, our two biggest investments, have shown great resilience. They have improved their balance sheet in order to provide proper financing for their investment plans, which remain ambitious. Lafarge increased its debt a year ago in order to acquire Orascom. It has just announced a rights issue of EUR 1.5 billion with the support of our subsidiary, GBL. At the same time, it is pursuing an intensive programme of operational improvement. Many of the markets on which Imerys operates have been significantly impacted by the downturn but the company s leadership is such that it can be hopeful of protecting its margins whilst reducing fixed costs and making cash generation a priority. Finally, Pernod Ricard is integrating its latest acquisition, Absolut, and consolidating its financial structure while continuing to produce a solid operating performance. In financial terms, the structure of your Group is solid: the convertible debt of Pargesa does not mature until 2013/2014, whilst GBL has considerable net positive cash. That is why we are proposing a stable dividend of CHF 2.62, which represents a 10 % rise in euros, the currency of all our portfolio investments. My partner, Albert Frère, and I are prudent entrepreneurs. In 2009, in order to truly deserve your trust, we will be emphasising the prudence that is necessary in a less favourable, volatile environment with vastly lower visibility. Geneva, 3 March 2009 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 long-term 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 the management; - monitoring the course of business on a regular basis and participating in important decision-making; - participating in the definition of financial policy Applying these principles, the Group s portfolio at 31 December 2008 was concentrated in six major holdings: Imerys, Total, GDF SUEZ, Suez Environnement, Lafarge and Pernod Ricard. Details of their operations and results are provided in pages 23 to 36 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 51.8% of the voting power 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

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 During financial year 2008, Pargesa used CHF 290 million to purchase GBL shares on the stockmarket, increasing its stake from 48.6% to 50.0% of the capital and from 50.2% to 51.8% of the voting rights. At the beginning of 2008, Lafarge undertook a major external growth operation with the acquisition of Orascom. GBL used EUR 1.1 billion on strengthening its position in Lafarge, holding 21.1% of that company s capital at the end of This shareholding has been accounted for by the equity method since 1 January GBL also increased its interest in Pernod Ricard from 6.2% at the end of 2007 to 8.2% at 31 December 2008, investing almost EUR 300 million; it also raised its stake in Imerys from 26.8% to 30.5%, for an investment of around EUR 100 million. The General Meetings of Shareholders of Suez and Gaz de France, which took place on 16 July 2008, approved quasi unanimously the merger between the two groups and the creation of GDF SUEZ which is now the third largest capitalisation in France. As part of the merger, Suez distributed to its shareholders 65% of the capital of Suez Environnement, which was listed for trading on Euronext on 22 July. On that date, GBL s interests in GDF SUEZ and in Suez Environnement were 5.3% and 6.3% respectively. These transactions did not produce any capital gain in the Group accounts. GBL then raised its stake in Suez Environnement from 6.3% to 7.1% through stockmarket purchases. GBL also reduced its position in Iberdrola from 1.4% to 0.6% of the capital by the sale of shares worth EUR 436 million, producing a capital gain of EUR 47 million, or a Pargesa Group share of CHF 39 million. At the end of the financial year, the stock market decline caused the Group to record, in accordance with IFRS standards, an impairment on some of its shareholdings. These book entries have no effect either on the cash position or on the adjusted net asset value of the Group, the latter having always been based on market value in the case of its listed shareholdings. After the 2008 balance sheet date, Lafarge announced its intention of increasing its capital by EUR 1.5 billion through a rights issue and GBL confirmed its intention to subscribe in proportion to its shareholding. Annual report Pargesa

14 3. Group shareholdings In 2008, the operating performance of the Group s shareholdings was mixed. Imerys, a world leader in adding value to minerals, operated in 2008 in an environment marked by a gradual downturn in American and European economic conditions. This deterioration sharply worsened in the autumn, causing an unprecedented drop in sales volumes during the last two months of the year, in almost all its markets. External variable costs and exchange parities were also unfavourable. The group s current operating income fell by 15.7% to EUR 403 million. Group current net earnings also declined by 15.7% to EUR 267 million. Group net earnings stand at EUR million, compared with EUR million in 2007, after restructuring and asset depreciation costs. In view of the difficult economic situation at present, the Board of Directors will propose to the Annual General Meeting the payment of a lower dividend of EUR 1.00 per share, compared with EUR 1.90 for At 31 December 2008, Pargesa-GBL held 57.9% of the capital and 72.4% of the voting rights of Imerys. Total, a leading international integrated oil company, faced a 2008 oil industry environment of great contrast, with a rapid and continued rise in the Brent oil price during the first half of the year, followed by a strong decline linked to the sharp slowdown of the global economy in the second half of the year. Group net income reached EUR 10.6 billion compared with EUR 13.2 billion in 2007, a decrease of 20%. Group net income excluding non-recurring items stands at EUR 13.9 billion, an increase of 14%; adjusted net earnings per share grew 15% to EUR The dividend proposed at the Annual General Meeting will be EUR 2.28 per share, an increase of 10%. At 31 December 2008, GBL held 4.0% of the capital and 3.6% of the voting rights of Total. GDF SUEZ, a leading global energy company, recorded in 2008 a 16.6% increase in revenues, which reached EUR 83 billion. The proforma operating profit was EUR 8.6 billion in 2008 up 9.4%, and proforma net income, group share, increased 13% to EUR 6.5 billion. The dividend proposed at the Annual General Meeting will be EUR 1.40 per share, and it will also be proposed to distribute an additional exceptional dividend of EUR 0.80 per share, paid in cash or in shares. At 31 December 2008, GBL held 5.3% of the capital and 5.3% of the voting rights of GDF SUEZ. Suez Environnement, a world leader exclusively dedicated to environmental services, recorded in 2008 a 5.4% increase in revenues, which reached EUR 12.4 billion. Operating income increased 2.4% to EUR 1'059 million, and net income, group share, rose 8.4% to EUR 533 million. The company intends to pay a dividend of EUR 0.65 per share in 2009, representing a total distribution of EUR 318 million. At 31 December 2008, GBL held 7.1% of the capital and 7.1% of the voting rights of Suez Environnement. Lafarge, a world leader in building materials (Cement, Aggregates & Concrete, Gypsum), produced a good operating performance in 2008 despite the deterioration of its markets in the fourth quarter. Revenues rose by 8% and current operating income increased by 9% to EUR million. Group net income, excluding non-recurring items, grew 3% to EUR million. In the context of an unprecedented economic and financial environment, Lafarge s objective in 2009 is to reduce its level of debt quickly. An action plan was announced on 20 February 2009 comprising assertive operating measures and a rights issue aimed at consolidating its financial structure. A lower dividend of EUR 2.00 per share (compared with EUR 4.00 for 2007) will be proposed to the Annual General Meeting At 31 December 2008, GBL held 21.1% of the capital and 28.5% of the voting rights of Lafarge. 14 Annual report Pargesa

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 Pernod Ricard, a leading world operator in wines and spirits, recorded an increase in revenues and earnings for the 2007/2008 financial year, which ended on 30 June Current net income was EUR 897 million, a rise of 8%, or EUR 4.13 per share, a rise of 7%. Revenues for the first half of 2008/2009, which ended on 31 December 2008, reached EUR million, an increase of 13%. Current net income was EUR 685 million, a rise of 15%. At 31 December 2008, GBL owned 8.2% of the capital and 7.4% of the voting rights of Pernod Ricard consolidated results 4.1. Presentation of results in accordance with IFRS The simplified presentation of the income statement under IFRS is as follows : CHF million Operating income 5' '695.1 Operating expenses (5'171.6) (5'048.2) Other income and expenses (2'311.8) Operating profit (1'822.8) 1'009.1 Dividends and interest from long-term investments Other financial income (expenses) (191.9) (70.3) Taxes (139.6) (136.1) Income from associates Consolidated net profit (including minorities) (927.5) 1'578.3 attributable to minority interests (406.7) Attributable to Pargesa shareholders (Group share) (520.8) Average number of shares in circulation (thousands) 84'638 84'638 Basic earnings per share, Group share (CHF) (6.15) 8.53 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. In 2008, this item corresponds essentially to the impairment recorded by GBL on some of its shareholdings, principally Lafarge and Pernod Ricard. The dividends and interest from long-term investments item concerns net dividends received by the Group from its non-consolidated shareholdings, mainly Total, Suez, GDF SUEZ and Pernod Ricard. In 2008, this item no longer includes the dividend from Lafarge, eliminated on consolidation, this shareholding being accounted for by the equity method since 1 January The other financial income (expenses) and taxes items consolidate the figures for Pargesa, GBL and Imerys. The income from associates item concerns the share in the consolidated net profit contributed by shareholdings and accounted for in the Pargesa accounts using the equity method. In 2008, it mainly comprised the contribution from Lafarge, accounted for by the equity method for the first time, and a negative contribution from Ergon. 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. Annual report Pargesa

16 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 long-term 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, equity-accounting for Lafarge from 1 January 2008, and classification as financial instruments in the case of Total, GDF SUEZ, Suez Environnement and Pernod Ricard), 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 non-operating items in the results, the non-operating part being composed of capital gains in connection with disposals and any restructuring costs and impairment. According to this approach, the economic results for 2008 can be analysed as follows : CHF million Operating contribution of the main shareholdings Consolidated (Imerys) or equity-accounted (Lafarge) Imerys share of operating income Lafarge (since ) share of operating income Non-consolidated : Total net dividend GDF SUEZ (Suez until ) net dividend Lafarge (until ) net dividend Pernod Ricard net dividend Operating contribution of the main shareholdings per share (CHF) Operating contribution of other shareholdings (27.5) 17.9 Operating income contributed by holding companies (117.6) 20.6 Operating income per share (CHF) Non-operating income from consolidated or equity-accounted companies (92.9) (21.7) Non-operating income contributed by holding companies (1'136.0) Net income (520.8) per share (CHF) (6.15) 8.53 Average number of shares in circulation (thousands) 84'638 84'638 EUR/CHF average exchange rate Annual report Pargesa

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 Consolidated or equity-accounted holdings : Imerys recorded a net operating income in 2008 down -15.7% to EUR million. Pargesa s share of these results increased from 40.7% to 42.2%. Pargesa s share of Imerys operating income, expressed in Swiss francs, thus decreased by -15.7% to CHF million. The holding in Lafarge, 21.1% of whose capital is held by Pargesa Group, has been consolidated since 1 January 2008 by the equity method. From that date therefore, the contribution of this company represents Pargesa s share of net operating income for the period, whereas until 31 December 2007, the contribution represented the share of the dividend received by GBL during the period. Because of this change of accounting method, from 1 January 2008 the contribution of Lafarge is not directly comparable to that of prior periods. In 2008 Lafarge recorded a net income of EUR million, including net non-recurring items amounting to EUR -115 million. Pargesa s share of the operating income of Lafarge, expressed in Swiss francs, amounts to CHF million. Non-consolidated holdings : The contributions from Total, GDF SUEZ and Pernod Ricard correspond to Pargesa s share of the net dividends received by GBL from these companies. Total paid the balance of the 2007 dividend of EUR 1.07 per share in the second quarter of 2008, or a contribution to Pargesa of CHF 80.1 million. In accordance with its distribution policy, Total decided in September, and paid in November 2008, a 14% higher interim dividend of EUR 1.14 per share for 2008, Pargesa s share of which was CHF 75.6 million. Suez paid its 2007 annual dividend of EUR 1.36 per share in the second quarter of 2008 (a unit rise of 13%), or a contribution to Pargesa of CHF million. GDF SUEZ, its successor following the merger in July 2008, paid an interim dividend of EUR 0.80 per share in the fourth quarter, or a Pargesa share of CHF 77.8 million. Pernod Ricard, paid an interim dividend of EUR 0.63 per share in the second half of 2008, corresponding to a contribution to Pargesa of CHF 7.8 million. The balance of the dividend, EUR 0.69 per share, paid in the fourth quarter of 2008, corresponds to a contribution of CHF 9.9 million. Operating income of other shareholdings : CHF million of this income corresponds to the contribution from Ergon Capital Partners, a GBL investment, which made a net loss in 2008, principally as the result of the fair valuation of its shareholdings. The balance of this item is the Iberdrola interim 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 million, compared with CHF 20.6 million in In 2008, this item shows negative results for GBL trading operations, whereas in 2007 it benefited from the proceeds of disposals through private equity funds. Annual report Pargesa

18 Non-operating income : The non-operating income from consolidated or equity accounted companies essentially consists of Pargesa s share of the non-operating income of Imerys (CHF -71 million) and Lafarge (CHF -22 million). The net non-operating income contributed by holding companies of CHF million in 2008 essentially represents the impairment recorded by GBL on its investments in Lafarge and Pernod Ricard, i.e. a Pargesa share of CHF million. As regards Lafarge, an equity-accounted investment, the appraisal of its value in use led to the recording of an impairment of CH -897 million. As for Pernod Ricard, an investment classified as a financial asset, the impairment amounts to CHF -259 million, based on the company s market value at 31 December 2008, i.e. EUR 53 per share. 5. Adjusted net asset value Adjusted net asset value per share amounted to CHF at the end of 2008, 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; per-share 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 one-tenth of their number. Pargesa's flow-through adjusted net asset value Weighting as Weighting as Weighting as CHF million Amount % of total Amount % of total Amount % of total GDF SUEZ ' % Suez Environnement % Suez 3' % 4' % - - Total 3' % 4' % 2' % Lafarge 2' % 3' % 1' % Imerys 2' % 2' % 1' % Pernod Ricard % % % Major holdings 12' % 15' % 9' % Other holdings % % % Total portfolio 12' % 16' % 9' % Net cash (debt) (1) 1' % (108) (0.7%) (1'163) (13.5%) Adjusted net asset value 14' % 15' % 8' % per Pargesa share CHF Share price CHF EUR/CHF (closing) exchange rate (1) the market value of trading securities and net balance of current assets and liabilities are added to the net cash position 18 Annual report Pargesa

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 The adjusted net asset value per share decreased by 46% in 2008, linked to the fall in the stockmarket price of the companies in the portfolio. This decline was amplified by the almost 10% fall of the EUR against the CHF, the portfolio being composed of securities listed in EUR. 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 annual report. In particular, GDF SUEZ replaced Suez, following the completion of the merger of Gaz de France and Suez in July The merger also led to the spin off of Suez Environnement, which is now a portfolio company. At the end of 2008, GDF SUEZ and Suez Environnement together accounted for 39.4% of the Pargesa portfolio compared with the 28.6 % represented by the former Suez company at the end of At 31 December 2008, Other holdings includes in particular GBL s remaining 0.6% investment in Iberdrola and the group s private equity investments. The Group s increased investment in its shareholdings in 2008 was cash funded, mainly by GBL. The net debt item in net asset value at the end of 2008 represents the balance between available cash and debt, which is mainly constituted by convertible bonds issued by Pargesa and GBL and due to mature between 2012 and Pargesa s adjusted net asset value at 2 March 2009 stood at CHF 74 per share, down 28% on that date compared with the start of the year, and breaks down as follows: Pargesa's flow-through adjusted net asset value at 2 March 2009 CHF million % of capital % economic interest Share price in local currency Flow-through value Weighting as % of total Total 4.0% 2.0% EUR '449 39% GDF SUEZ 5.3% 2.7% EUR '011 32% Suez Environnement 7.1% 3.6% EUR % Lafarge 21.1% 10.6% EUR '000 16% Imerys 57.9% 42.7% EUR % Pernod Ricard 8.2% 4.1% EUR % Other holdings 272 4% Total portfolio 7' % Net cash (debt) (1'245) (20%) Adjuted net asset value 6' % per Pargesa share CHF EUR/CHF exchange rate The change in adjusted net asset value since the start of the year reflects the continued and general decline of the stockmarkets since the beginning of 2009, the portfolio being unchanged compared with the end of Annual report Pargesa

20 6. Parent company income and proposed dividend The parent company s income amounted to CHF million, or CHF 3.45 per share. The Board of Directors proposes that the Annual General Meeting should approve payment of a dividend of CHF 2.62 per bearer share and CHF per registered share. This would bring the total dividend distribution for 2008 to CHF million, unchanged from the dividend distributed the previous year. The sum of CHF million would be carried forward, allowing for the allocation of CHF 14.7 million to the general legal reserve. Parent company income and dividend Parent company income (CHF million) per share (CHF) Total dividend (CHF million) (1) per share (CHF) 2.62 (1) 2.62 (1) proposed to the Annual General Meeting 7. Proposals to the Annual General Meeting of 7 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 49.7 million, or a total amount available to distribution of CHF million, be allocated as follows : dividend CHF million general legal reserve CHF 14.7 million retained earnings to be carried forward CHF million 7.2. Appointments The Board of Directors will propose to the Annual General Meeting that Mr Maximilien de Limburg Stirum, a Belgian national, Officer in charge of Shareholdings of the Compagnie Nationale à Portefeuille SA (CNP), be elected to serve on the Board for a period of three years. The Board of Directors will propose that the Annual General Meeting renew the appointment of Ernst & Young SA and Deloitte SA as the Group s auditors for a term of one year. 20 Annual report Pargesa

21 Main shareholdings Annual report Pargesa

22 22 Annual report Pargesa

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 GDF SUEZ, Total, Lafarge, Pernod Ricard and Suez Environnement. GBL also has a stake in Imerys, which is jointly controlled by Pargesa and GBL Global data (EUR million) Shareholders equity at 31 December 15'682 18' Market capitalisation at 31 December 13'400 14' Consolidated net profit 2' (688) Total distribution Data per share (EUR) Consolidated net profit Dividend Issued shares (million) Pargesa's interest (%) GBL s consolidated financial statements show a net loss of EUR 688 million for 2008 compared to a net profit of EUR 779 million for Excluding disposals and the depreciation of non-current assets, in 2008 GBL posted a net profit of EUR 749 million compared with EUR 564 million in 2007, or growth of 33%. In compliance with IFRS, GBL recognised a EUR -1'494 million impairment on its investments in Lafarge, Pernod Ricard and Iberdrola, given the fall in their share price at the end of In 2008, GBL s results featured positive growth of cash earnings, i.e. results that give rise to a cash movement for GBL and its wholly-owned subsidiaries, amounting to EUR 721 million, compared with EUR 534 million in This 35% rise is due to a number of factors, notably: higher unit dividends from Suez, Lafarge, Total and Imerys, the first time recognition of an interim dividend from GDF SUEZ, and the strengthening of existing shareholdings, essentially Lafarge, Pernod Ricard and Imerys. The merger of Gaz de France (GDF) and Suez was finally completed in July 2008, producing GDF SUEZ, the third largest capitalisation in the CAC 40 index. GBL owns 5.3 % of the new group and is its leading private shareholder after the French State. The merger was also preceded by the spin-off of Suez Environnement, now itself a CAC 40 company. GBL, initially a 6.3% shareholder, increased its stake to 7.1% through stockmarket purchases. At the beginning of 2008, Lafarge undertook a major external growth operation with the acquisition of Orascom. GBL used EUR 1.1 billion to strengthen its position in the cement producer, holding 21.1% of the capital and 28.5% of the voting rights at the end of GBL increased its interest in Pernod Ricard, investing almost EUR 300 million to take its shareholding to 8.2%, compared with 6.2% a year earlier. The sum of EUR 100 million was invested to acquire 3.7% of the capital of Imerys, taking the GBL shareholding to 30.5%. The 1.4% interest in Iberdrola at the end of 2007 was partly disposed of in the first quarter of 2008 for EUR 436 million, GBL's remaining investment representing 0.6% of the capital of that company. At the end of 2008, GBL s net cash was EUR 0.8 billion compared with EUR 1.8 billion at the end of Shareholders equity is EUR 13.5 billion. The distribution of a gross dividend of EUR 2.30 per share, a rise of 10% compared with 2007 and corresponding to a total distribution of EUR 371 million, will be proposed to the Annual General Meeting on 14 April 2009 and distributed on 21 April Annual report Pargesa

24 Active in 47 countries and with more than 260 locations, Imerys is the world leader in adding value to minerals. Imerys follows a value-generating 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 food-grade liquids Global data (EUR million) Shareholders equity at 31 December 1'630 1'640 1'526 Market capitalisation at 31 December 4'269 3'550 2'040 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 Throughout 2008, Imerys operated in an environment marked by a gradual deterioration of the American and European economies. This deterioration suddenly accelerated in the autumn, leading to an unprecedented shrinking of sales volumes in the last months of the year. In this difficult economic context, turnover increased 1.4%, benefiting from the initial consolidation of the acquisitions of On the other hand, current operating income recorded a fall of 15.7%, mainly reflecting the impact of the lower volumes recorded at the end of the year on most of the group s markets. The Imerys action plans focused on programmes to improve industrial performance and integrate the companies acquired since 2007, the generation of free cash-flow by strict management of capital expenditure and working capital, and the adjustment of the production assets to the level of demand. Imerys total revenue reached EUR million, a rise of 1.4 % compared with This growth reflects a +3.9% net effect of changes in group structure and a -3.2% adverse exchange rate impact. Based on constant group structure and exchange rates, turnover grew 0.7% following improvements to the price/product mix component (+4.5%) and a decrease in sales volumes (-3.7%). When analysed by business activity, the results are as follows : 24 Annual report Pargesa

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 Turnover in Minerals for Ceramics, Refractories, Abrasives and Foundry amounted to EUR million, a rise of 10.3% compared with The growth reflects a +9.2% net effect of changes in group structure and a -3.6% exchange rate impact. Based on comparable group structure and exchange rates, sales increased 4.8%, essentially with the improvement in the price/product mix and in spite of the fall in volumes at the end of the year. Turnover in Performance Minerals and Filtration amounted to EUR million, a fall of 6.7% compared with The decrease is essentially due to the adverse exchange rate impact (-5.3%). Based on comparable group structure and exchange rates, the fall in sales was -2.6%, the price/product mix improvement not having completely offset the impact of the fall in volumes, mainly recorded in Performance Minerals. Pigments for Paper posted revenues of EUR million, -4.3% down compared with Based on comparable group structure and exchange rates, sales are little changed year on year (-0.5%) and reflect the twin impact of the positive price/product mix change offsetting the impact of the fall in sales volumes recorded in Europe and the USA. The Materials & Monolithics sector recorded revenues of EUR million, 1.5% higher compared with Based on comparable group structure and exchange rates, sales are stable year on year (-0.1%). The group s current operating income declined by -15.7% to EUR million (-13.5% based on comparable group structure and exchange rates). It takes account of a negative currency impact (EUR million) and a net positive change in group structure of EUR 8.1 million. The EUR million improvement in the price/product mix component offsets the negative variable cost impact of EUR million and the decline in sales volumes of EUR million. In addition, the positive impact of the restructuring plans on fixed costs was EUR 14.5 million. All in all, the group s operating margin declined to 11.7%, compared with 14.1% in Group share of current net income was EUR million (-15.7%). This decrease is after a higher financial profit, due in particular to the fall in interest rates, and to a rise in the effective rate of tax to 27.5% in 2008, compared with 26.0% in Group share of net profit is EUR million compared with EUR million in In 2008, net profit includes the sum of EUR million for other operating income and expenses net of tax, from the depreciation of industrial assets following the restructuring in 2008 and the impairment on a goodwill in Performance Minerals in the United States. After a record level of capital investment in 2007 (EUR 367 million), the 2008 programme again devoted a significant sum to the development of the group (EUR million), including EUR million to maintain the production assets at optimum level and EUR million for the targeted expansion of certain production capacities. External growth accounted for EUR 156 million. Current operating free cash flow is considerably higher at EUR million compared with EUR million in At 31 December 2008, net consolidated financial debt was EUR million, compared with EUR million at the end of 2007, or 101% of consolidated equity. The distribution of a net dividend, down 47.4% to EUR 1.00 per share, compared with EUR 1.90 per share for the previous year, i.e. a total distribution of EUR 63 million, will be proposed to the Annual General Meeting on 29 April The dividend will be distributed on 7 July Annual report Pargesa

26 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 to Downstream refining and distribution of refined products, as well as international trading in both crude and refined products. Total is also a major player in the Chemicals markets and, moreover, involved in the development of renewable energies Global data (EUR million) Shareholders equity at 31 December 40'321 44'858 48'992 Market capitalisation at 31 December 132' '138 92'287 Consolidated net profit 11'768 13'181 10'590 Total distribution 4'474 4' Data per share (EUR) Adjusted net income Dividend Shares issued (million) 2'426 2'396 2'372 Pargesa interest (%) In Total s Upstream sector, proven hydrocarbon reserves determined according to SEC rules give the company over 12 years of production at current rates. The group has a diversified asset portfolio, is particularly well placed to exploit the main growth segments of deep offshore, Liquefied Natural Gas and heavy oils, and of the majors, its technical costs are among the lowest. Downstream, Total is a leading group in Europe and Africa. It manages a refining capacity and markets refined products of 2.6 million and 3.7 million barrels per day respectively. It has interests in 25 refineries and operates a network of approximately 16'500 service stations, mainly under the Total, Elf and Elan brands, for the most part located in Europe and Africa. Total s Chemicals branch is a European or world leader on most of its markets. It has both petrochemical and major polymer operations that are characteristic of a major integrated company, and a specialty chemicals segment that focuses on rubber processing technologies and coating products. 26 Annual report Pargesa

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 In 2008 market conditions were very mixed for the oil industry. During the first half of the year, the Brent price continued to rise rapidly, reaching close on 150 dollars a barrel ($/b) in July. The second part of the year was marked by the sudden downturn of the global economy which took the Brent price down to a record annual low of 35 $/b in December. On average, the price was 97 $/b over the year. Downstream, European refining margins increased compared with 2007, carried by the sustained demand for diesel. Petrochemicals suffered in the first half from the rapidly rising price of crude; in the second half, margins were restored but demand was much weaker because of the downturn of the global economy. The dollar also demonstrated great volatility, losing an average 7 % of its value against the euro during the year but appreciating by 14 % during the fourth quarter of In this environment, Total recorded an historically high level of adjusted net profit for 2008, despite the decline in performance in the fourth quarter. In this situation, the average return on capital employed in the segments was 28% in 2008, on a par with the best in the industry. Consolidated turnover for 2008 stood at EUR 180 billion, a rise of 13% compared with Adjusted net operating income from the various business lines similarly increased in 2008 to EUR 14.0 billion compared with EUR 12.2 billion in 2007 (+14%). Expressed in dollars, it increased by 23%. Adjusted net operating income in detail: Upstream, it was EUR 10.7 billion compared with EUR 8.8 billion in 2007, i.e. an increase of 21% (+30% in USD). EUR 3.5 billion of this rise is due to the changes in oil and gas prices, partly offset by an exchange rate effect of EUR -0.6 billion and a EUR -1.0 billion impact caused by higher costs and the decline in production in Downstream, it was EUR 2.6 billion, a slight rise compared with 2007 (+9% in USD), in a generally satisfactory environment, benefiting from the effect of the productivity plans and favourable supply conditions, especially in the last quarter. in Chemicals, it was EUR 0.7 billion compared with EUR 0.8 billion in 2007, i.e. a fall of 21% (-15% in USD), reflecting the negative impact effect of the general economic conditions. Adjusted net profit rose 14% in 2008 to EUR 13.9 billion. Given the share buybacks by the group in 2008 (27.6 million shares for the sum of EUR 1.3 billion, or 1.2 % of the capital) adjusted net earnings per share for the year were EUR 6.20 and increased by 15%. Expressed in dollars, this was USD 9.11, an increase of 24% compared with The group share of net profit is EUR 10.6 billion, a fall of 20% compared with 2007 (-14% in USD). This is after nonrecurring items representing an overall negative amount of EUR 3.3 billion (a positive amount of EUR 1.0 billion was recorded in 2007). In 2008, the group s gross investments rose 16% to EUR 13.6 billion (EUR 11.7 billion in 2007). They were distributed on the basis of 74% Upstream, 18% Downstream and 8% Chemicals. Divestments calculated at their selling price accounted for EUR 2.6 billion. The distribution of a net dividend of EUR 2.28 per share for 2008, a rise of 10% compared with the previous year (EUR 2.07) will be proposed to the Annual General Meeting on 15 May Taking into account the payment of the interim dividend of EUR 1.14 per share on 19 November 2008, the balance of the dividend to be distributed on 22 May 2009 will be EUR 1.14 per share. 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 energy 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 new group has an active presence across the entire energy value chain, in electricity and natural gas, upstream to downstream. The group is based on a diversified portfolio of supply assets and a flexible generating fleet with a high degree of gas/electricity convergence. It holds leading international positions in liquefied natural gas, independent electricity production and energy services. Suez GDF SUEZ (proforma) Global data (EUR million) Shareholders equity at 31 December 19'504 22' Market capitalisation at 31 December 50'114 60' Consolidated net profit 3'606 3' Total distribution 1'533 1' Data per share (EUR) Net income Dividend Shares issued (million) 1'277 1' Pargesa interest (%) The merger of Suez and Gaz de France, in preparation since 2007, was approved by the respective General Meetings of Shareholders of the two groups and completed on 22 July 2008, backdated to 1 January 2008, by the prior distribution of 65% of Suez Environnement capital to Suez shareholders and the exchange of 22 Suez shares for 21 GDF shares. The integration of the two companies is now complete, in commercial and operational terms as well as at management level. As part of a net capital expenditure programme of EUR 30 billion for the period , the new group invested EUR 11.8 billion net in 2008 to increase and consolidate its positions especially in electricity generation (USA, Brazil, Singapore, Middle East, Germany, Italy...) and in upstream gas operations (acquisition of Nam assets in the Netherlands, Exploration and Production licences in Libya, Azerbaijan, Qatar...). 28 Annual report Pargesa

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 also concluded asset trading agreements with ENI and E.ON. These transactions mean that GDF SUEZ can balance and strengthen its industrial presence on two key markets - Italy and Germany - whilst complying with European Commission requirements. Moreover, the group reaffirmed its ambition to be part of the nuclear revival across the world. It will be associated with the second European pressurised reactor project (EPR) in France and has recently signed joint venture agreements with Iberdrola and Scottish and Southern Energy in connection with the land auctions organised by the Nuclear Decommissioning Authority in the United Kingdom, in order to build new nuclear power plants in that country. For 2009, GDF SUEZ has confirmed its strategy based on the development of its long-term operations. In view of the economic outlook, the group adopted a series of measures to ensure the robustness of the balance sheet, which included in particular accelerating the implementation of the EUR 1.8 billion performance plan by 2011, increasing its cash reserves and extending its debt repayment terms through the placement of bonds worth almost EUR 10 billion on various markets since November The group s pro forma turnover increased by 16.6% in 2008 to EUR 83.1 billion compared with 2007 (EUR 71.2 billion). Organic growth, excluding group structure and exchange rate effects, was 17.5%. The revenues generated in Europe and North America account for 92% of the total, and 86% of that is produced in Europe. Group pro forma EBITDA is EUR 13.9 billion, an increase of 10.7% compared with 2006 (+12.5% excluding group structure and exchange rate effects). Organic EBITDA growth benefited particularly from the 2008 energy prices in every sector. Pro forma current operating income was EUR 8.6 billion in 2008, an increase both in gross (+9.4%) and organic (+12.6%) terms. This growth is essentially the result of the operating factors mentioned earlier. It is attenuated by the increase in net additions to amortisation and the provisions relating to the commissioning of new plant. The group pro forma share of net profit at the end of 2008 was EUR 6.5 billion, a rise of 13.0% over 2007 (EUR 5.7 billion); this result includes in particular the capital gains from the disposals required by the European Commission as part of the merger. Pro forma operating cash flow before financial expenses and tax totalled EUR 13.3 billion at the end of 2008, a gross increase of 6.7% compared with Net investments in 2008 were EUR 11.8 billion. Maintenance expenses were EUR 2.7 billion, and financial and development expenses amounted to EUR 7.8 billion and EUR 4.9 billion respectively. During the same period, disposals amounted to almost EUR 3.6 billion and essentially comprised the proceeds of the disposals as part of the merger. Following the payment of EUR 5.1 billion in dividends and the EUR 1.7 billion for the share buyback programme, group net financial debt at the end of December 2008 was EUR 28.9 billion and represents 46% of equity. The distribution of an ordinary dividend of EUR 1.40 per share will be proposed to the Annual General Meeting on 4 May 2009, an interim dividend of EUR 0.80 per share having been paid on 27 November An exceptional (cash or stock) dividend of EUR 0.80 per share, to be distributed on 4 June 2009, will also be proposed. 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 exclusively dedicated to the environment, with a strong base in Europe, especially in France and Spain (Agbar), and operating in more than 30 countries. The group provides water and waste management services of all kinds through a variety of brands (Sita for waste, Lyonnaise des Eaux, Ondéo Industrial Solutions, Degrémont, United Water for water). In 2008, the group managed a total of over 1,700 production sites providing 76 million people with drinking water, supplied waste water management services to 44 million people, collected almost 23 million tonnes of waste and treated almost 40 million tonnes of that waste Global data (EUR million) Shareholders equity at 31 December 3' 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 energy-from-waste 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 pre-treatment 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

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, concurrently with the distribution by Suez to its shareholders of 65% of Suez Environnement shares. Throughout 2008, the group experienced a steady level of business activity in each of its divisions despite the deterioration of the general economic situation which adversely affected the Waste Europe segment during the fourth quarter. In the Water segment, the performance of Lyonnaise des Eaux and Agbar benefited in 2008 from the favourable impact of rising prices and the increase in the range of services, in a context of steady business activity in water and water treatment with the renewal and signing of important contracts. In the Waste segment, the growth in performance was based on strong business activity across the whole division; the group also continued to develop selectively by strengthening its position in the waste value chain through acquisitions in France, Belgium and Germany, and through strategic long-term partnerships with international industrial groups. In the International division, operating growth in 2008 came from the contribution of Degrémont which continues to win numerous contracts and also resulted from the price and volume rises of water in China, Morocco and North America and of waste in Australia and Central Europe. In 2008, the group also made several acquisitions, notably in the USA and China. Group revenues were EUR million in 2008 and grew by 5.4% compared with 2007 (excluding the disposal of Applus+). Organic growth was 5.6%, excluding an adverse exchange rate effect of -2.2% and a positive structural effect of +2.2% for the local industrial acquisitions. Revenues in Europe, North America and Australia accounted for 87% of the total, 80% of that from Europe alone. Group EBITDA was EUR million, an increase of 4.0% compared with 2007 (+5.0% at comparable group structure and exchange rates). This result breaks down into 44% contributed by the Waste Europe segment and 39% by the Water Europe segment. The group current operating income of EUR million represents a rise of 2.4% (excluding Applus+) compared with 2007 (and 3.0% organic growth). The group share of net profit at the end of 2008 grew 8.4% to EUR 533 million. It includes the recognition of an exceptional net deferred tax income of EUR 131 million corresponding to the transfer of the historic tax deficits generated by the French companies in the Environment division when they were part of the Suez group tax base. Net profit also includes costs associated with the listing of the company on the stock market and with the rebranding, amounting to a total of EUR 51 million. Group operating cash flow before financial expenses and tax stood at EUR million at the end of Investments in 2008 amounted to EUR million, including EUR 708 million for the takeover bid for the minority interests of Aguas de Barcelona (Agbar) and EUR 664 million for maintenance expenses; disposals amounted to EUR 166 million. Group net debt at the end of 2008 was EUR million, compared with EUR million at the end of 2007, and represents 143 % of equity (126% at the end of 2007). In 2009, the company intends to pay a dividend of EUR 0.65 per share, or a total distribution of 318 million. Annual report Pargesa

32 With a presence in 78 countries, Lafarge is a world leader in building materials: Cement, Aggregates & Concrete and Gypsum. Lafarge holds top-ranking positions in all its Businesses : it is joint world leader for Cement, second in the world for Aggregates, ranked third in the world as a producer of ready-mixed Concrete and third in the world for Gypsum Global data (EUR million) Shareholders equity at 31 December 10'403 10'998 12'910 Market capitalisation at 31 December 19'834 21'484 8'464 Consolidated net profit 1'372 1'909 1'598 Total distribution Data per share (EUR) Net income Dividend Shares issued (million) Pargesa interest (%) Despite the deterioration of the economic situation in the fourth quarter, Lafarge achieved a good operating performance in The objectives of the 2008 Excellence Plan launched in 2006 were exceeded, with EUR 420 million costs saved in 2008 compared with an initial target of EUR 340 million. The acquisition of Orascom Cement, announced at the end of 2007, enabled the group to grow its positions on the emerging markets and offset the turndown on the mature markets. The company generated over USD 1 billion of EBITDA in These measures, combined with a balanced geographical portfolio of business operations and good price performance in a context of constantly rising costs, led to a 9 % rise in current operating income. Faced with an unprecedented financial and economic situation at the start of 2009, Lafarge announced an assertive action plan on 20 February 2009, comprising operational measures to cut costs and capital investment, together with a rights issue of EUR 1.5 billion, GBL undertaking to subscribe in proportion to its shareholding. The Cement business operated in a context of slowing mature markets, largely offset by the strong growth of the emerging markets, the contribution of Orascom Cement, the improved pricing and the cost-cutting efforts. 32 Annual report Pargesa

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 Sales volumes increased from million tonnes in 2007 to million tonnes in 2008, thanks essentially to the Orascom Cement contribution. The emerging markets contributed 66.3% to current operating income compared with 52.7% in Cement revenues grew 14.0% to EUR 11.7 billion compared with EUR 10.3 billion in Based on comparable group structure and exchange rates, turnover would have increased by 6.5%. The increase reflects a mix of trends, the strong growth of the emerging markets and the price improvement broadly offsetting the slowdown on certain mature markets. Based on constant group structure, volumes were down by -2.1% (+2.7 % in 2007). In Aggregates & Concrete, the big drop in sales volumes in the USA, Spain and the UK throughout the year and the general deterioration in conditions in the last quarter could not be offset by the significant improvement in prices across all product lines. Turnover for this division stands at EUR 6.6 billion, little changed from Exchange rate variations had a heavy adverse impact of -5.3%. The changes in group structure had a +6.6% positive impact, due especially to the acquisition of Orascom Aggregates & Concrete and the proportional consolidation of the Middle East joint ventures from 1 January. Based on comparable group structure and exchange rates, turnover would have fallen by -1.6% compared with Revenue in the Gypsum business fell -2.2% to EUR 1.5 billion. The impact of the slowing of the housing market in the USA and Western Europe was counterbalanced by the improvement in turnover in the other regions. Based on constant group structure and exchange rates, turnover would have increased by 2.5%. The turnover of Lafarge stands at EUR million, a rise of +8.1% compared with The internal growth reflects the strength of the emerging markets during the first nine months of the year and the improvement in prices throughout the year, two factors that more than made up for the impact of the slowdown in the USA, Spain and the United Kingdom and a more general slowing of volume sales in the fourth quarter. There were negative exchange rate impacts of -5.1% and a net positive impact of 9.8% due to changes in group structure resulting from the Orascom business acquisition which was completed in January Based on constant group structure and exchange rates, revenue would have risen by 3.4%. Current operating income stands at EUR million, a rise of +9.3%, and little changed in terms of constant group structure and exchange rates (-0.2%). Group share of net profit fell % to EUR million compared with EUR million in 2007, but rose 3% to EUR million if non-recurring items are excluded. Consolidated net financial debt increased to EUR 16.9 billion at 31 December 2008, compared with EUR 8.7 billion at 31 December 2007, due in particular to the acquisition of Orascom Cement for EUR 8.3 billion. The distribution of a net dividend per share of EUR 2.00, a decrease of 50% compared to the dividend paid out in 2007, will be proposed to the Annual General meeting on 31 March Annual report Pargesa

34 Joint world leader for wines and spirits, Pernod Ricard occupies leading positions in every continent. Since it was established in 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 good 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 fifteen strategic brands, local brands that are leaders on their markets and a large number of regional brands. In spirits, the main group brands are: Chivas Regal, Ballantine s, Ricard, Martell, Malibu, Kahlua, Jameson, Beefeater, Absolut (as a result of the acquisition of Vin&Sprit and replacing Stolichnaya in the portfolio), Havana Club and The Glenlivet; in wines, the main brands are: Jacob s Creek, Montana and Mumm / Perrier Jouët (champagnes). 30 June June June 2008 Global data (EUR million) Shareholders equity 5'700 6'290 6'420 Market capitalisation 14'580 17'971 14'334 Consolidated net profit Total distribution Data per share (EUR) Net income Dividend Shares issued (million) Pargesa interest (%) (2) (1) retroactive adjustment taking into account the 2:1 stock split which occurred on January 15, On 16 January 2007, the share capital was increased by incorporation of reserves and the distribution of free shares in the proportion of 1 new share distributed for 5 shares previously held. Market data is presented at 30 June 2006 before distribution of free shares. (2) at year end For Pernod Ricard, was a year of confirmed strong growth in the emerging economies and more moderate development on the western markets in generally less buoyant economic conditions. Each region demonstrated strong growth both of the business and its operating profitability, thanks in particular to higher investment in advertising and promotion and to maintaining the focus on the fifteen strategic brands. But the main event of was the acquisition of the Vin&Sprit group (completed on 23 July 2008). Owner of 34 Annual report Pargesa