GUERBET GROUP INTERIM REPORT 30 JUNE 2004

GUERBET GROUP INTERIM REPORT FOR THE SIX MONTH PERIOD ENDING 30 JUNE 2004

GUERBET GROUP INTERIM REPORT 30 JUNE 2004 TABLE OF CONTENTS Chairman's message p. 3 Financial highlights p. 4 Consolidated balance sheet at 30 June 2004 p. 5 Consolidated income statement for the 2004 first half p. 6 Consolidated statement of cash flows p. 7 Statement of changes in shareholders' equity p. 8 Notes to the interim consolidated financial statements at 30 June 2004 p. 9 Statutory auditors' limited review report on the interim consolidated financial statements p. 14 1

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Chairman's message In the 2004 first half, Guerbet Group achieved strong growth in both sales and earnings in line with targets. First-half sales grew 10% to 122.63 million Operating profit advanced 21.7% with an operating margin of 12%. Dotarem and Xenetix, our two strategic value-added products, remained the main growth drivers. Dotarem registered total growth of 44%, boosted notably by its successful launch in Germany combined with strong growth in other markets of 25%. Xenetix, in the x-ray product line, gained nearly 10%. Strong performances by our subsidiaries have confirmed the effectiveness of Guerbet's growth strategy, focusing on Europe's most promising markets. Sales were up 31% in Germany (Europe's largest market), 17% in Spain, 16% in Italy, 14% in the Netherlands and 12% in France. As a result, Guerbet gained an additional point of market share in Europe. At the end of the first half, net profit had already attained the level of the prior full year, surging 70% in relation to the 2003 first half and pushing the net margin up sharply to 7.4%. At the same time, debt declined a further 20.5% in relation to 30 June 2003 to 45.8 million which represents approximately one and a half years of cash flow. Guerbet s stronger capital structure and improved operating performances have generated new resources to support investments and innovation for its customers. Launched in March 2004, the goal of Guerbet s 10-year strategic plan Cap 2013 is to become a major world provider of medical imaging products and services by pursuing profitable growth. Full year results are expected to increase significantly in relation to 2003, even if, because of the seasonality of expenses and sales, it will not be possible to sustain the high level of margins of the first six months in the second half. Philippe Decazes Chairman of the Executive Board 3

Financial highlights at 30 June 2004 In millions of Euros 2004 first half 2003 first half 04/03 2003 fiscal year mn % of sales mn % of sales % mn % of sales NET SALES 122.63 100.0 111.62 100.0 + 9.9 225.30 100.0 OPERATING PROFIT 14.89 12.1 12.24 11.0 + 21.7 22.50 10.0 ORDINARY INCOME BEFORE TAX 13.36 10.9 10.36 9.3 + 29.0 16.64 7.4 NET PROFIT 9.04 7.4 5.32 4.8 + 69.9 9.09 4.0 CASH FLOW 16.30 13,3 12.78 11.4 + 27.5 29.27 13.0 CAPITAL EXPENDITURES 5.74 4.7 5.52 5.0 + 4.0 12.15 5.4 RESEARCH EXPENDITURES 12.03 9.8 10.84 9.7 + 11.0 24.00 10.6 TOTAL NUMBER OF EMPLOYEES(1) 1,125 1,121 1,129 SHAREHOLDERS EQUITY (1) 108.62 97.91 + 10.9 101.00 TOTAL NET DEBT (2) 45.78 57.59-20.5 48.71 (1) YEAR-END (2) INCLUDING ASSIGNMENT OF RECEIVABLES Stock market performance High (in euros) High/Low (adjusted) Low (in euros) Trading volume in number of shares Trading volume in thousands of euros January 2003 February 2003 March 2003 April 2003 May 2003 June 2003 July 2003 August 2003 September 2003 October 2003 November 2003 December 2003 33.00 30.10 35.60 30.51 34.50 28.01 32.70 28.95 36.50 31.00 38.30 34.00 37.85 35.30 38.00 36.20 42.55 36.10 50.00 37.85 47.13 41.50 45.00 40.65 23,471 11,822 18,882 11,805 12,262 26,059 10,793 11,679 20,129 47,864 41,034 24,911 728.24 388.94 600.98 367.38 414.99 950.60 392.70 436.57 787.60 2,099.59 1,800.39 1,051.83 January 2004 February 2004 March 2004 April 2004 May 2004 June 2004 44.98 40.81 48.85 43.10 55.45 43.00 55.40 50.60 56.15 50.00 60.00 54.00 12,214 13,244 35,451 30,609 83,573 41,468 516.90 604.93 1,732.97 1,624.04 4,492.18 2,339.17 4

Consolidated balance sheet (in thousands of euros) Assets (Net amounts) Note 30.06.04 30.06.03 31.12.03 Intangible assets 22,339 24,090 22,126 Property, plant and equipment 59,228 60,446 60,247 Financial assets 3,000 2,733 2,876 Total fixed assets 84,567 87,269 85,249 Inventories 1 57,697 56,082 53,171 Trade receivables 2 73,456 63,586 68,048 Other current assets 11,501 15,592 13,479 Deferred income tax assets 7 3,846 4,652 2,360 Marketable securities, cash and cash equivalents 4,564 7,516 4,337 Total current assets 151,064 147,428 141,395 TOTAL ASSETS 235,631 234,697 226,644 Shareholders' equity and liabilities Note 30.06.04 30.06.03 31.12.03 Share capital 11,638 11,549 11,578 Additional paid-in capital 1,408 1,060 1,186 Reserves 86,536 79,977 79,169 Consolidated net income 9,035 5,323 9,085 Total shareholders' equity 108,617 97,909 101,018 Deferred income tax liabilities 7 4,919 3,681 5,044 Other provisions for contingencies and charges 3 8,766 8,734 9,071 Total provisions for contingencies and charges 13,685 12,415 14,115 Borrowings and financial debt 4 50,348 62,324 53,049 Trade payables 27,173 26,610 24,586 Other current liabilities 35,808 35,439 33,876 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 235,631 234,697 226,644 5

Consolidated income statement (in thousands of euros) Note 2004 2003 2003 first half first half fiscal year Operating revenue Net sales 122,633 111,620 225,304 Royalties 730 816 1,613 Other income 1,590 1,398 2,705 Operating expenses Supplies relating to sold production and other supplies (25,398) (25,132) (52,013) Non-stock supplies and other external charges (33,364) (30,896) (63,330) Taxes other than on income (5,392) (4,737) (9,334) Personnel expenses (including employee profit-sharing) (34,492) (32,319) (64,338) Allowances for depreciation and reserves (11,418) (8,513) (18,107) OPERATING PROFIT 14,889 12,237 22,500 Net financial expense 5 (1,527) (1,876) (5,862) ORDINARY INCOME BEFORE TAX 13,362 10,361 16,638 Exceptional profit (loss) 6 47 (27) (28) Income tax 7 (4,374) (5,011) (7,525) NET PROFIT 9,035 5,323 9,085 Earnings per share ( ) 3.11 1.84 3.15 Diluted earnings per share ( ) 2.98 1.77 3.02 6

Consolidated statement of cash flows (in millions of euros) 2004 first half 2003 first half 2003 fiscal year Gross cash flow 16.30 12.78 29.27 Change in inventories (4.52) (2.60) 0.31 Change in trade receivables and related accounts (5.41) (2.95) (7.41) Change in accounts payable and related accounts 2.59 (1.17) (3.19) Change in other assets and liabilities 1.27 4.35 3.,76 Cash flow from operating activities (A) 10.23 10.41 22.74 Capital expenditures (5.74) (5.52) (12.15) Proceeds on the disposal of fixed assets 0.29-0.23 Cash flow allocated to capital expenditures (B) (5.45) (5.52) (11.92) Dividends paid (2.12) (1.69) (1.69) Share capital increases 0.28 0.01 0.17 New long-term debt 4.76 9.00 27.53 Debt repayment (13.09) (5.56) (17.11) Cash flow from financing operations (C) (10.17) 1.76 8.90 Net change in cash (A) + (B) + (C) (5.39) 6.65 19.72 Cash at beginning of period (1.20) (20.92) (20.92) Cash at end of period (6.59) (14.27) (1.20) 7

Statement of changes in shareholders' equity (in thousands of euros) Foreign Share Additional Retained Income currency Total capital paid-in earnings translation capital adjustment At 31/12/2002 11,547 1,051 79,199 6,331 (3,697) 94,431 Distribution of dividends (1,685) (1,685) Consolidated income from 2002 6,331 (6,331) - Capital increase 31 135 166 Consolidated income - 2003 9,085 9,085 Translation adjustments (1,043) (1,043) Other changes 64 64 At 31/12/2003 11,578 1,186 83,909 9,085 (4,740) 101,018 Distribution of dividends (2,123) (2,123) Consolidated income from 2003 9,085 (9,085) - Capital increase 60 222 282 First-half consolidated income 9,035 9,035 Translation adjustments 398 398 Other changes 7 7 At 30/06/2004 11,638 1,408 90,878 9,035 (4,342) 108,617 Balance sheet reserves correspond to total retained earnings and the above foreign currency translation adjustment. 8

Notes to the consolidated financial statements at 30 June 2004 (In thousands of euros) I SIGNIFICANT ACCOUNTING POLICIES The 2004 first half consolidated financial statements have been prepared in accordance with the accounting policies established under the provisions of rule No. 99-02 and recommendation No. 99-01 concerning interim financial statements of the French accounting rules and regulation committee (CRC or Comité de Réglementation Comptable). The accounting and calculation methods applied in the interim financial statements are the same as those used to prepare the annual financial statements for the period ended 31 December 2003, except for special provisions provided for by the regulations governing interim financial statements. II SCOPE OF CONSOLIDATION There have been no changes in the consolidation scope since the 1st of January 2004. III SEGMENT INFORMATION Sales and Operating Profit by business In millions of euros Contrast agents Fine chemicals Total Group 06/2004 06/2003 06/2004 06/2003 06/2004 06/2003 Sales 120.11 109.03 2.52 2.59 122.63 111.62 Operating profit 14.48 12.16 0.41 0.08 14.89 12.24 Analysis of Group sales By geographic region 30/06/2004 30/06/2003 31/12/2003 France 30.8% 30.7% 30.2% Europe excluding France 49.8% 51.6% 51.9% Rest of the world 19.4% 17.7% 17.9% 100.0% 100.0% 100.0% By product line 30/06/2004 30/06/2003 31/12/2003 Uro-angio 66.7% 71.0% 70.8% MRI 21.6% 16.8% 17.4% Other 11.7% 12.2% 11.8% 100.0% 100.0% 100.0% 9

IV NOTES TO BALANCE STATEMENT AND INCOME STATEMENT ITEMS Note 1 - Inventories 30/06/2004 30/06/2003 31/12/2003 Raw materials and supplies - Gross amount 13,666 13,090 11,952 - Provision (228) (560) (564) - Net amount 13,438 12,530 11,388 In progress production, finished products and goods for resale - Gross amount 47,872 44,670 42,586 - Provision (3,613) (1,118) (803) - Net amount 44,259 43,552 41,783 Total gross 61,538 57,760 54,538 Total provisions (3,841) (1,678) (1,367) Total net 57,697 56,082 53,171 Note 2 Trade receivables 30/06/2004 30/06/2003 31/12/2003 Gross amount 75,812 66,193 70,502 Provisions (2,356) (2,607) (2,454) Net amount 73,456 63,586 68,048 10

Note 3 - Other provisions for contingencies and charges 31/12/03 Allowance Reversal (provision used) Reversal (provision unused) Translation adjustments &. reclass. 30/06/04 Accrued personnel benefits 6,996 298-25 16 7,285 Provisions for mandatory clinical paediatric trials 381-2 15 394 Provisions for planned redundancy schemes 404-404 Tax litigation contingencies 371-264 107 Allowances for uncollectibles Miscellaneous contingencies 240 240 919 23-171 -31 740 Total 9,071 321-196 -297-133 8,766 Virtually all allowances and provision write-backs have been recorded under operating profit. Note 4 Financial debt Breakdown by nature 30/06/2004 30/06/2003 31/12/2003 Bank borrowings 38,684 40,093 47,046 Special profit-sharing reserve 489 446 447 Current bank lines and credit balances 11,175 21,785 5,556 Total 50,348 62,324 53,049 Breakdown by maturity 30/06/2004 30/06/2003 31/12/2003 Maturing within one year 27,624 35,534 29,425 between one and five years 19,524 24,773 22,024 over five years 3,200 2,017 1,600 Total 50,348 62,324 53,049 of which debt on capital leases 6,491 4,563 6,982 11

Breakdown by type of interest rate 30/06/2004 30/06/2003 31/12/2003 Fixed-rate 26% 12% 26% Floating-rate 74% 88% 74% Total breakdown 100% 100% 100% At 30 June 2004, Group floating-rate debt was covered by various hedging instruments for a total of 25.7 million. Note 5 Net financial expense 2004 2003 2003 first half first half fiscal year Interest and similar dividend income (expense) (1,467) (1,438) (3,465) Foreign exchange gains (losses) (60) (438) (2 397) Net financial expense (1,527) (1,876) (5,862) Note 6 Exceptional profit (loss) 2004 2003 2003 first half first half fiscal year Proceeds from the disposal of fixed assets (22) (123) (261) Other exceptional items 69 96 233 Exceptional profit (loss) 47 (27) (28) Note 7 Income tax 1 Breakdown of the tax charge 2004 2003 2003 first half first half fiscal year Current tax charge (5,879) (5,151) (4,219) Deferred tax 1,505 140 (3,306) Income tax (4,374) (5,011) (7,525) Guerbet Group benefits from the provisions of parent company subsidiary tax consolidation whereby, subject to certain limitations and conditions, it is able to offset the tax earnings of its French subsidiary held, directly or indirectly, in excess of 95%. The relative decline in the tax charge reflects the improved financial situation of certain subsidiaries that now makes it possible to recognize tax losses or tax loss carryforwards. 12

2 Deferred income tax assets and liabilities 2.1. Analysis of deferred taxes by nature In preparing the balance sheet, deferred income tax assets and liabilities have been offset by tax entity. A comparison is provided in the following table for 2004 and 2003 figures. 30/06/2004 30/06/2003 31/12/2003 Deferred tax assets Deferred tax liabilities Deferred tax assets Deferred tax liabilities Deferred tax assets Deferred ta liabilities Loss carryforwards Timing differences Income tax assets (liabilities) offset by entity 3,433 3,785 (3,372) - 8,291 (3,372) 3,601 5,586 (4,535) - 8,216 (4,535) 2,791 378 (809) - 5,853 (809) Total 3,846 4,919 4,652 3,681 2,360 5,044 The French companies included in the tax group did not generate loss carryforwards. Deferred income tax assets whose recovery is considered unlikely are not recorded in the financial statements. V COMMITMENTS AT 30 JUNE 2004 REGARDING FINANCING OPERATIONS Interest rate derivatives: Foreign exchange derivatives: Bank loan covenants: 5 interest rate swaps for 25.7 million There are no currency futures in force. Certain loan agreements the Group has concluded are accompanied by covenants imposing compliance with certain ratios. At 30 June 2004 the Group met those requirements able to be calculated in a meaningful manner at the six-month closing and expects to comply with these ratios at 31 December 2004. 13

Statutory auditors' limited review report on the interim consolidated financial statements for the six-month period ending 30 June 2004 This is a free translation into English of the Statutory Auditors report issued in French and is provided solely for the convenience of English speaking readers. This statement should consequently be read in conjunction with, and construed in accordance with French law and professional auditing standards applicable in France. To the shareholders of Guerbet : In our capacity as Statutory Auditors, and in accordance with Article L 232-7 of the French commercial code, we carried out: a limited review of the attached consolidated interim financial statements of Guerbet, for the six-month period ended 30 June 2004, a verification of the information given in the interim management report. These interim financial statements are prepared under the responsibility of, and have been approved by, the Executive Board. It is our responsibility, on the basis of our review, to present our opinion on these statements. We conducted our review in accordance with French professional standards. These standards require that we perform limited procedures to obtain reasonable assurance, below the level resulting from a full audit, that the interim consolidated financial statements do not contain any material misstatements. These procedures, whose scope is thus less than that of an audit, involve principally conducting an analytical review and obtaining information from management and other persons we consider necessary. They in consequence provide a lower level of assurance than an audit. Based on our review, nothing has come to our attention that might suggest that the interim financial statements do not present fairly, in all material respects, the consolidated results of operations for the sixmonth period ended June 30, 2004 and the consolidated financial position and assets and liabilities of the companies comprising the Group at that date, in accordance with French generally accepted accounting principles. As required by professional standards generally accepted in France, we have also reviewed the information given in the interim report accompanying the consolidated financial statements that were the subject of our limited review. We have nothing to report with respect to the fairness of such information and its conformity with the financial statements. Paris and Neuilly, 13 September 2004 Statutory Auditors Constantin Associés Deloitte Touche Tohmatsu - Audit Marc de Prémare Christophe Perrau 14

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For further information concerning this report please contact: Philippe Barthelet, Chief Financial Officer, Tel. : +33 (0)1.45.91.50.11 - e-mail : philippe.barthelet@guerbet-group.com Postal address : BP 50400-95943 ROISSY CDG CEDEX FRANCE http://www.guerbet.com This is a free translation into English of the original French language version of the interim financial statements (rapport semestriel) and is provided solely for the convenience of English speaking readers. This report should consequently be read in conjunction with, and construed in accordance with French law and French generally accepted accounting principles. In the event of any ambiguity or conflict between corresponding statements in the two documents, the French language rapport semestriel shall prevail. Joint-stock company (Société Anonyme) with a capital of 11,577,692 308 491 521 RCS Bobigny Registered office: 15, rue des Vanesses 93420 Villepinte 16

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