Saint-Gobain - First-half 2013: The Group Confirms its Target of a Recovery in Operating Income in the Second Half

Saint-Gobain - First-half 2013: The Group Confirms its Target of a Recovery in
                     Operating Income in the Second Half

PR Newswire

PARIS, July 24, 2013

PARIS, July 24, 2013 /PRNewswire/ --

Publication of first-half 2013 results.

    KEY FIGURES

    (EURm)                       H1-2012*     H1-2013       Change*

    Sales                         21,590       20,771        -3.8%

    EBITDA                         2,266        1,983       -12.5%

    Operating income               1,494        1,260       -15.7%

    Recurring[1] net income          608          422       -30.6%

    Net income                       463          332       -28.3%

First-half 2013highlights:

  oSales prices hold firm: up 1.0%.
  oFirst-half sales volumes hard hit by fewer working days (1.8 days less, or
    a negative impact of around 1.4%) and by poor weather: down 4.2%.
  oAsiaand emerging countries deliver 3.9% like-for-like growth.
  oCost cutting program: an additional €300m in cost savings compared to
    first-half 2012.
  oFree cash flow^[^2]: up 3.0% to €646m.
  o2013 targets confirmed.

Pierre-André de Chalendar, Chairman and Chief Executive Officer of
Saint-Gobain, commented:

"The continued upturn in US construction markets and a return to growth for
our businesses in emerging countries failed to offset the general slowdown in
the European economic environment, exacerbated by a negative calendar impact
and very poor weather. In this tough market climate, we pressed ahead with our
cost cutting efforts while successfully pursuing our price-focused policy.

As announced previously,we expect trading to gradually improve in the second
half, based on the trends already observed in the three months to June 30, and
can therefore confirm our target of a recovery in operating income in the
second half."

* Items restated to reflect the impacts of the amendment to IAS 19.

1.Excluding capital gains and losses on disposals, asset write-downs, and
    material non-recurring provisions.

Excluding the tax impact of capital gains and losses on disposals, asset
write-downs and material non-recurring provisions.

Operating performance

Overall, after a particularly tough first quarter hit by both fewer working
days than in the year-earlier period and by very poor weather, the second
quarter saw underlying trends stabilize on the Group's main markets in Western
Europe and market conditions continue to rally in other regions. However,
like-for-like, the second quarter was down a slight 1.2% on the same period in
2012, with volumes off 2.2% and prices up 1.0%. With the exception of Flat
Glass - buoyed by a pick-up in growth in Asia and emerging countries - and
Interior Solutions - lifted by the gradual improvement in the US construction
market - all of the Group's Business Sectors and Divisions continued to suffer
from sluggish European economies, albeit far less than in the first quarter.

In this persistently tough economic climate and despite the smaller rise in
raw material and energy costs, sales prices remained a key priority for the
Group throughout the first half, and gained 1.0%.

Overall, due to the ground lost in the first quarter, like-for-like
consolidated sales were down 3.2% in the first six months of the year, with
volumes losing 4.2% and prices gaining 1.0%.

Despite profitability gains in North America and in Asia and emerging
countries, the Group's operating margin narrowed, to 6.1% in first-half 2013
compared to 7.0% for the same period in 2012 and 6.3% for second-half 2012.

1°) Performance of Group Business Sectors

The deteriorating economic environment in Western Europe led to negative
organic growth for all of the Group's Business Sectors in the six months to
June 30, 2013.

Along the lines of the first quarter, Innovative Materials sales fell 2.9% on
a like-for-like basis in the first half, hurt by a downturn in sales volumes,
especially in Western Europe. The operating margin for the Business Sector
narrowed, to 6.7% from 8.4% in first-half 2012 and 6.9% in second-half 2012.

  oLike-for-like, Flat Glass sales lost 1.3% over the first half, but were up
    2.4% in the second quarter. In the three months to June 30, the quicker
    pace of recovery in Asia and emerging countries (double-digit growth) more
    than offset the downturn in volumes and sales prices on Western European
    construction markets. Automotive Flat Glass sales stabilized over the
    second quarter in Western Europe, after a very tough first three months.
    Over the first half as a whole, the price of commodity products (float
    glass) in Europe remained lower on average than in first-half 2012,
    despite the price increases implemented in the second quarter. As a
    result, and despite the large-scale restructuring measures rolled out, the
    operating margin for the Division slipped further, down to 1.5% of sales
    versus 2.1% of sales in first-half 2012.

  oHigh-Performance Materials (HPM) sales shed 5.1% on a like-for-like basis,
    reflecting the decline in businesses related to capital spending
    (Ceramics). HPM's other businesses (Abrasives, Plastics, Textile
    Solutions) proved resilient, especially in the US and in Asia and emerging
    countries. The operating margin, up against a very tough basis for
    comparison (15.6% in first-half 2012) came in at 13.0%, an improvement on
    the six months to December 31, 2012 (12.7%).

Construction Products (CP) sales retreated 1.7% on a like-for-like basis, hit
by the slowdown in sales in Western Europe, not wholly offset by growth in
Asia and emerging countries. The operating margin narrowed slightly, to 8.5%
from 8.8% in first-half 2012.

  oInterior Solutions reported timid 1.0% organic growth over the first half
    on the back of continued strong momentum in its second-quarter sales in
    the US. After a very difficult start to the year, the business in Western
    Europe leveled off at the end of the first half, while trading in Asia and
    emerging countries remained upbeat. Although sales prices moved up across
    the Division, the operating margin dropped to 7.6% from 8.7% in first-half
    2012 and 7.9% in second-half 2012, squeezed by the volume downturn in
    Western Europe.

  oExterior Solutions sales contracted 4.1% on a like-for-like basis, hit by
    the fall in Exterior Products sales in the US. Unlike the bullish first
    quarter, the three months to June 30, 2013 took an exceptional hit
    resulting from the large-scale destocking by our distributors. This
    destocking in no way reflects the underlying momentum of the US market.
    Pipe continued to feel the pinch of austerity measures in Europe, which
    the fledgling recovery in export sales has not yet been able to fully
    offset (the first deliveries under the USD 200 million contract with
    Kuwait began at the very end of the second quarter). Industrial Mortars
    enjoyed further vigorous growth in Asia and emerging countries, but were
    hit in Western Europe by the impact of the economic slowdown and poor
    weather conditions early in the year. Sales prices for the Division as a
    whole remained upbeat over the first half. As a result, the operating
    margin widened, to 9.3% of sales from 8.9% of sales in first-half 2012 and
    7.7% of sales in the six months to December 31, 2012.

Building Distribution sales dropped 4.6% on a like-for-like basis over the
first half, hard hit by fewer working days than in the year-earlier period
(1.8 days less, representing a negative impact of 1.4% on Business Sector
volumes) and by very harsh weather early in the year. However, the Sector's
performance improved sharply in the second quarter, driven chiefly by a strong
rebound in the UK, accelerated growth in Brazil, and stabilizing sales in
Scandinavia. In France, trading continued to prove fairly resilient in a tough
economic environment, with further gains in market share. Overall, sales
prices remained upbeat across the Business Sector. The operating margin came
out at 2.4% versus 3.9% in first-half 2012, owing chiefly to the sharp
downturn in volumes in the first quarter.

Packaging (Verallia) sales slipped 2.9% on a like-for-like basis over the six
months to June 30, despite a 2.1% rise in sales prices. Volumes retreated in
the US and in Western Europe, and remained stable in Russia and Latin America.
Operating income increased by €36 million, or 17.4%, as a result of applying
IFRS 5 (assets and liabilities held for sale) to Verallia North America(VNA)
as of January 1, 2013, according to which depreciation of VNA's fixed assets
(€36 million in the first half) is no longer charged to operating income.
Excluding this one-off item, Verallia's operating income would be stable, at
€207 million, and its operating margin - buoyed by a positive price/cost
spread - would be 11.4%, versus 10.8% in first-half 2012. Regarding the
planned divestment of VNA, Ardagh and Saint-Gobain are disappointed by the
complaint filed by the FTC (Federal Trade Commission) on July 2, 2013, and
intend to vigorously defend the transaction in litigation, whilst at the same
time working with the FTC to seek to resolve its concerns.

2°) Analysis by geographic area

  In line with the economic scenario presented by the Group in February and
consistent with the first quarter's underlying trends, trading by geographic
area in the first six months of 2013 reveals a sharp contrast between Western
Europe - which slowed despite some improvement towards the end of the period -
and Asia and emerging countries which, on the whole, returned to growth. North
America continued to enjoy strong trading momentum, fueled by the upturn in
the construction market, although Exterior Products suffered the fall-out in
the second quarter of its very strong start to the year.

Consequently, profitability improved in Asia and emerging countries and in
North America, but declined in both France and in other Western European
countries.

  oFranceand other Western European countries saw like-for-like sales
    decline 6.3% and 4.8%, respectively. This downtrend reflects the very
    tough market conditions in the first quarter and, to a lesser extent, the
    general slowdown in European economies over the six months to June 30,
    2013. These factors impacted all of the Group's Business Sectors and
    Divisions (particularly Innovative Materials), which all reported volume
    declines over the period. In contrast, sales prices held up well. In the
    second quarter, while Southern Europe, Benelux and to a lesser extent
    France continued to slow (albeit far less than in the first quarter),
    trading stabilized in Germany and Scandinavia and picked up in the UK,
    spurred by the rebound in the construction market at the end of the
    period. The operating margin narrowed, both in France and in other Western
    European countries, to 4.9% and 3.1%, respectively (5.7% and 6.0%,
    respectively, in first-half 2012).

  oNorth America posted a 2.0% drop in like-for-like sales, with trading down
    6.6% in the second quarter after growing 3.1% in the first. The reversal
    in the trend is wholly due to Exterior Products which, after a very strong
    start to the year, suffered in the second quarter from exceptionally high
    destocking by building materials distributors. This destocking in no way
    reflects the underlying momentum of the US market. Sales prices were up
    sharply over the first half, buoyed by further rises implemented since the
    beginning of the year in Construction Products. The operating margin
    continued to recover, up to 13.2% from 11.6% in first-half 2012.

  oAfter a fledgling recovery in the first quarter (up 1.5%), Asia and
    emerging countries saw trading pick up pace in the three months to June 30
    (up 6.1%), and reported 3.9% like-for-like sales growth over the first
    half. This increase, which outpaced growth in the Group's underlying
    markets in the region, chiefly reflects the investments made in these
    countries over the past few years and continues to be led primarily by
    Latin America, with steep gains in Flat Glass and Interior Solutions. In
    contrast, Asia continued to decrease in the six-month period, despite
    advancing 2.7% in the second quarter, while Eastern Europe stabilized as
    vigorous momentum in Russia and the Baltics offset difficulties in Poland
    and the Czech Republic. The operating margin recovered, up to 7.1% of
    sales versus 6.1% of sales one year earlier.

Analysis of the interim consolidated financial statements for first-half 2013

The interim consolidated financial statements set out below were approved and
adopted by the Board of Directors on July 24, 2013. The comparative
consolidated P&L presented in the financial statements for first-half 2012 has
been restated to reflect the amendment to IAS 19 regarding employee benefits.

If the amended standard had been applied at January 1, 2012, it would have had
the following impacts on the financial statements for the six months ended
June 30, 2012 and for the year ended December 31, 2012, respectively:

  oan increase of €44 million in financial expenses (€31 million after tax)
    for the six months ended June 30, 2012 and of €88 million for the year
    ended December 31, 2012 (€62 million after tax), as a result of applying a
    rate of return on plan assets equal to the discount rate used for employee
    benefit obligations, instead of the expected rate of return;

  oan increase of €18 million in operating expenses (€12million after tax)
    for the six months ended June 30, 2012 and the year ended December 31,
    2012, due to the impacts of employee benefit plan amendments;

  oa decrease of €14 million in equity (€9 million after tax) at January 1,
    2012, due mainly to the immediate recognition of past service cost (€8
    million impact). The combined impact of all these adjustments on closing
    equity at December 31, 2012 would have been a negative €32 million (€21
    million after tax).


                                            H1 2012* H1 2013 % change  H1 2012
                                              EURm     EURm             EURm
                                               (A)      (B)   (B)/(A)    (C)

    Sales and ancillary revenue               21,590  20,771    -3.8%   21,590
    Operating income                           1,494   1,260   -15.7%    1,512
    EBITDA (op. inc. + operating
    depr./amort.)                              2,266   1,983   -12.5%    2,284
    Non-operating costs                        (224)   (260)   +16.1%    (224)
    Capital gains and losses on disposals,
    asset write-downs, corporate
    acquisition fees and earn-out payments
                                               (135)    (26)   -80.7%    (135)
    Business income                            1,135     974   -14.2%    1,153

    Net financial expense                      (400)   (403)    -0.8%    (356)
    Income tax                                 (266)   (231)   -13.2%    (285)
    Share in net income of associates              4       7   +75.0%        4
    Income before minority interests             473     347   -26.6%      516
    Minority interests                          (10)    (15)   +50.0%     (10)

    Recurring[1] net income                      608     422   -30.6%      651
    Recurring[1] earnings per share[2] (in
    EUR)                                        1.14    0.76   -33.3%     1.23
    Net income                                   463     332   -28.3%      506
    Earnings per share[2] (in EUR)              0.87    0.60   -31.0%     0.95

    Operating depreciation and amortization      772     723    -6.3%      772
    Cash flow from operations[3]               1,419   1,146   -19.2%    1,462
    Cash flow from oper. excl. cap. gains
    tax[4]                                     1,381   1,165   -15.6%    1,424
    Capital expenditure                          754     519   -31.2%      754
    Free cash flow

    (excluding capital gains tax)[4]             627     646    +3.0%      670

    Investments in securities                    277      41   -85.2%      277
    Net debt                                   9,828   9,497    -3.4%    9,828

*Accounts restated to reflect the impacts of the amendment to IAS 19.

1.Excluding capital gains and losses on disposals, asset write-downs and
material non-recurring provisions.

2.Calculated based on the number of shares outstanding at June 30
(552,755,774 shares in 2013, including the capital increase following the
payment of a share dividend on July 5, 2013, versus 531,052,614 shares in
2012). Based on the weighted average number of shares outstanding (527,978,739
shares in first-half 2013 versus 526,833,258 shares in first-half 2012),
recurring earnings per share comes out at €0.80 (versus €1.15 in first-half
2012), and earnings per share comes out at €0.63 (versus €0.88 in first-half
2012).

3. Excluding material non-recurring provisions.

4. Excluding the tax effect of capital gains and losses on disposals, asset
write-downs and material non-recurring provisions.

The comments belowrefer to the restated interim financial statements for
first-half 2012.

Consolidated sales fell 3.8% to €20,771 million, from €21,590 million in
first-half 2012. Exchange rate fluctuations had a negative 1.3% impact,
chiefly resulting from the depreciation against the euro of the currencies of
the main emerging markets where the Group operates (particularly Latin
America) and, to a lesser extent, the US dollar and British pound. In
contrast, changes in Group structure had a positive 0.7% impact over the first
half (but a negative impact in the second quarter), mainly reflecting the
consolidation of Brossette as of April 1, 2012.

Like-for-like (constant exchange rates and Group structure), sales therefore
declined 3.2%, with the 1.0% rise in sales prices failing to offset the 4.2%
downturn in volumes.

Operating incomeshed 15.7%, hit by slowing sales volumes. Consequently, the
operating margin narrowed, to 6.1% of sales (8.6% excluding Building
Distribution), versus 6.9% of sales (8.9% excluding Building Distribution) in
first-half 2012 and 6.3% in second-half 2012 (8.0% excluding Building
Distribution).

EBITDA(operating income + operating depreciation and
amortization)retreated 12.5%. The consolidated EBITDA margin came in at 9.5%
of sales (13.5% excluding Building Distribution), versus 10.5% of sales (14.0%
excluding Building Distribution) in first-half 2012.

Non-operating costs rose 16.1% to €260 million (€224 million in first-half
2012), driven by an increase in restructuring costs (particularly in Flat
Glass). Non-operating costs for first-half 2013 include a €45 million accrual
to the provision for asbestos-related litigation at CertainTeed in the US,
unchanged compared to the first-half 2012 accrual.

Thenet balance of capital gains and losses on disposals, asset write-downs
and corporate acquisition fees was a negative €26 million compared with a
negative €135 million in the year-earlier period. This item includes €85
million in gains on disposals of assets relating mainly to the sale of the PVC
Pipe & Foundations business, and €109 million in asset write-downs. The bulk
of these write-downs are inherent to the restructuring plans and site closures
implemented over the period, especially in Flat Glass (€87 million) and, to a
lesser extent, in certain Construction Products businesses in Spain.

Business incomefell 14.2% to €974 million after taking into account the
items mentioned above (non-operating costs, capital gains and losses on
disposals and asset write-downs).

Net financial expense was practically unchanged, up 0.8% to €403 million from
€400 million in first-half 2012, as the cost of gross debt stabilized over the
period. Thanks to the Group's recent bond issues, the average cost of gross
debt over the first half fell to 4.7% from 4.9% in first-half 2012.

In line with pre-tax income trends, income tax was down 13.2%, from €266
million to €231million. The tax rate applicable to recurring net income was
32.7%, as in first-half 2012.

Recurring net income (excluding capital gains and losses, exceptional asset
write-downs and material non-recurring provisions) fell 30.6% on first-half
2012 to €422 million. Based on the number of shares outstanding at June 30,
2013 (552,755,774 shares including the capital increase following the payment
of a share dividend on July 5, 2013, versus 531,052,614 shares at June 30,
2012), recurring earnings per share came out at €0.76, 33.3% lower than in
first-half 2012 (€1.14).

Net income was down 28.3% year-on-year at €332 million. Based on the number of
shares outstanding at June 30, 2013 (552,755,774 shares including the capital
increase following the payment of a share dividend on July 5, 2013, versus
531,052,614 shares at June 30, 2012), earnings per share came out at €0.60,
down 31.0% on the year-earlier period (€0.87).

Capital expenditure was down 31.2% to €519 million (€754 million in first-half
2012), representing 2.5% of sales (3.5% in first-half 2012). The bulk of these
investments consisted of growth capex focused on Asia and emerging countries
and on markets related to energy efficiency in Western Europe and in the US.

Cash flow from operations came in at €1,146 million, down 19.2% on the
year-earlier period (€1,419 million). Before the tax impact of capital gains
and losses on disposals and asset write-downs, cash flow from operations
contracted 15.6%, to €1,165 million from €1,381 million in first-half 2012.

Given the decrease in capital spending:

-free cash flow(cash flow from operations less capital expenditure)fell
5.7% to €627million. Before the tax impact of capital gains and losses on
disposals and asset write-downs, free cash flow advanced 3.0% to €646 million,
representing 3.1% of sales (2.9% in first-half 2012);

-the difference between EBITDA and capital expenditure was €1,464 million,
3.2% less than in first-half 2012 (€1,512 million), and represented 7.0% of
sales, as in the previous year.

Operating working capital requirements continued to improve in value terms
(down €44 million to €4,982 million) and remained largely unchanged in terms
of days' sales compared to first-half 2012, at 42.4 days versus 41.5 days in
the year-earlier period.

Investments in securities were down sharply, to just €41 million compared to
€277 million in first-half 2012. They primarily concerned selective bolt-on
acquisitions consistent with the Group's strategic goals, namely development
in Asia and emerging countries and energy efficiency markets and consolidation
in Building Distribution.

Net debt was down 3.4% year-on-year to €9.5 billion, spurred by the sharp
reduction in capital expenditure and financial investments over the past 12
months. Net debt represented 52% of consolidated equity versus 54% at June 30,
2012. The net debt to EBITDA ratio came out at 2.3, compared to 2.1 at
end-June 2012.

Update on asbestos claims in the US              

Some 2,000 claims were filed against CertainTeed in the first half of 2013 (as
in first-half 2012). At the same time, 2,000 claims were settled (versus 7,000
in first-half 2012), bringing the total number of outstanding claims to 43,000
at June 30, 2013, unchanged from December 31, 2012.

A total of USD 87 million in indemnity payments were made in the US in the 12
months to June 30, 2013, versus USD 67 million in the year to December 31,
2012.

Action plan to address the deteriorating economic environment        
 

To address the deteriorating economic environment observed in Western Europe
in first-half 2013, Saint-Gobain:

  ocontinued to give priority to sales prices, which rose 1.0% over the first
    half;

  orolled out new cost cutting measures, with additional cost savings of
    around €300 million in first-half 2013 compared to first-half 2012,
    chiefly in Western Europe (and Flat Glass in particular). These measures
    will be continued and stepped up in the second half, leading to total
    annual cost savings of €580 million in 2013, and of €1,100 million
    compared to the 2011 cost base;

  ostabilized its operating working capital requirements (WCR) at 42 days'
    sales;

  oslashed its capital spending and financial investments by €471 million
    year-on-year, driving net debt lower by 3.4%.

This action plan will be continued and intensified in the six months to
December 31, 2013.

Outlook and objectives for full-year 2013

The first six months of 2013 remained tough, hit by a significantly negative
calendar impact and by very poor weather early in the year, particularly in
Europe. In the next few quarters, the Group expects trading to gradually
improve, especially in North America and in Asia and emerging countries
(regions which together represented 44% of consolidated operating income and
46% of the Group's fixed assets in 2012):

  oin North America, the residential new-build and renovation markets should
    continue on a steady upward trend, while industrial output should remain
    at a good level;

  oin Asia and emerging countries, trading should continue to improve, but
    stark contrasts will persist from one country to the next, with robust
    growth in Latin America, moderate growth in India and China, and stability
    in Eastern Europe;

  oin Western Europe, industrial markets (particularly automotive) should
    stabilize, while construction market trends should remain challenging on
    the whole, albeit with sharply contrasting patterns from one country to
    the next. Regulatory measures promoting energy efficiency in new and
    existing homes should shore up demand, however, and allow the Group to
    outperform its underlying markets;

  olastly, household consumption markets should remain upbeat overall.

Against this backdrop, over the next few quarters the Group will press ahead
with its action plan, focusing particularly on:

  oincreasing its sales prices, in a context of a slower rise in raw material
    and energy costs;

  opursuing its cost cutting program, in order to achieve additional cost
    savings of €160 million in the second half compared to the first six
    months of 2013 (or €280 million compared to second-half 2012). This will
    represent €580 million in cost savings in 2013 as a whole and €1,100
    million in cumulative cost savings calculated on the 2011 cost base;

  okeeping a close watch on cash management and financial strength.

Saint-Gobain will also continue to pursue its strategic goals (development in
Asia and emerging countries, energy efficiency and energy markets, and
consolidation in Building Distribution and Construction Products).
Profitability will remain a constant focus, underpinned by strict financial
discipline.

The Group is therefore confirming its targets for full-year 2013:

- a recovery in operating income in the second half, after having bottomed
out in first-half 2013;

- a high level of free cash flow, thanks mainly to a €200million reduction
in capital expenditure;

- a robust balance sheet, further strengthened by the disposal of Verallia
North America.

Forthcoming results announcement

- Sales for the first nine months of 2013: October 24, 2013, after close of
trading on the Paris
Bourse.

    Appendix 1 : Results by business sector and geographic area
    H1-2012: Items restated to reflect the impacts of the amendment to IAS 19

                                   H1         H1     Change on  Change on     Change on
    I. SALES                      2012       2013    an actual a comparable  a comparable
                               (in EUR m) (in EUR m) structure  structure   structure and
                                                       basis      basis     currency basis
    By sector and division:
    Innovative Materials (1)     4,853      4,623      -4.7%      -4.8%         -2.9%
    Flat Glass                   2,597      2,519      -3.0%      -2.9%         -1.3%
    High-Performance Materials   2,272      2,111      -7.1%      -7.5%         -5.1%
    Construction Products (1)    5,903      5,724      -3.0%      -3.7%         -1.7%
    Interior Solutions           2,846      2,870      +0.8%      -0.9%         +1.0%
    Exterior Solutions           3,084      2,882      -6.5%      -6.2%         -4.1%
    Building Distribution        9,456      9,099      -3.8%      -5.2%         -4.6%
    Packaging (Verallia)         1,908      1,813      -5.0%      -4.2%         -2.9%
    Internal sales and misc.      -530       -488       n.m.       n.m.          n.m.
    Group Total                 21,590     20,771      -3.8%      -4.5%         -3.2%
    (1) including intra-sector
        eliminations

    By geographic area:
    France                       6,148      5,919      -3.7%      -6.3%         -6.3%
    Other Western European
    countries                    8,901      8,477      -4.8%      -5.1%         -4.8%
    North America                3,192      3,078      -3.6%      -3.3%         -2.0%
    Emerging countries and Asia  4,263      4,182      -1.9%      -1.3%         +3.9%
    Internal sales                -914       -885       n.m.       n.m.          n.m.
    Group Total                 21,590     20,771      -3.8%      -4.5%         -3.2%

                                   H1         H1        Change on
    II. OPERATING INCOME          2012       2013       an actual
                               (in EUR m) (in EUR m) structure basis
    By sector and division:
    Innovative Materials          408        312         -23.5%
    Flat Glass                     54         38         -29.6%
    High-Performance Materials    354        274         -22.6%
    Construction Products         518        485          -6.4%
    Interior Solutions            247        218         -11.7%
    Exterior Solutions            271        267          -1.5%
    Building Distribution         371        215         -42.0%
    Packaging (Verallia)          207        243         +17.4%
    Misc.                         -10         5           n.m.
    Group Total                  1,494      1,260        -15.7%

                                         H1         H1        Change on
    II. OPERATING INCOME                2012       2013       an actual
                                     (in EUR m) (in EUR m) structure basis
    By sector and division:
    Innovative Materials                408        312         -23.5%
    Flat Glass                           54         38         -29.6%
    High-Performance Materials          354        274         -22.6%
    Construction Products               518        485          -6.4%
    Interior Solutions                  247        218         -11.7%
    Exterior Solutions                  271        267          -1.5%
    Building Distribution               371        215         -42.0%
    Packaging (Verallia)                207        243         +17.4%
    Misc.                               -10         5           n.m.
    Group Total                        1,494      1,260        -15.7%

    By geographic area:
    France                              335        292         -12.8%
    Other Western European countries    535        264         -50.7%
    North America                       368        405         +10.1%
    Emerging countries and Asia         256        299         +16.8%
    Group Total                        1,494      1,260        -15.7%

                                           H1              H1            H1 2012
    II. OPERATING INCOME                  2012            2013       Published IAS 19
                                     (in % of sales) (in % of sales)           impact
    By sector and division:
    Innovative Materials                  8.4%            6.7%          408
    Flat Glass                            2.1%            1.5%           54
    High-Performance Materials           15.6%           13.0%          354
    Construction Products                 8.8%            8.5%          520      -2
    Interior Solutions                    8.7%            7.6%          247
    Exterior Solutions                    8.8%            9.3%          273      -2
    Building Distribution                 3.9%            2.4%          370       1
    Packaging (Verallia)                 10.8%           13.4%          207
    Misc.                                 n.m.            n.m.            7     -17
    Group Total                           6.9%            6.1%         1,512    -18

    By geographic area:
    France                                5.4%            4.9%          349     -14
    Other Western European countries      6.0%            3.1%          534       1
    North America                         11.5%           13.2%         370      -2
    Emerging countries and Asia           6.0%            7.1%          259      -3
    Group Total                           6.9%            6.1%         1,512    -18

                                          H1         H1        Change on
    III. BUSINESS INCOME                 2012       2013       an actual
                                      (in EUR m) (in EUR m) structure basis
    By sector and division:
    Innovative Materials                 265         98         -63.0%
    Flat Glass                           -76       -162        -113.2%
    High-Performance Materials           341        260         -23.8%
    Construction Products                450        513         +14.0%
    Interior Solutions                   205        193          -5.9%
    Exterior Solutions                   245        320         +30.6%
    Building Distribution                276        173         -37.3%
    Packaging (Verallia)                 201        221         +10.0%
    Misc.                               -57(a)     -31(a)        n.m.
    Group Total                         1,135       974         -14.2%

    By geographic area:
    France                               315        204         -35.2%
    Other Western European countries     321        105         -67.3%
    North America                       306(a)     416(a)       +35.9%
    Emerging countries and Asia          193        249         +29.0%
    Group Total                         1,135       974         -14.2%


                                                H1              H1           H1 2012
    III. BUSINESS INCOME                       2012            2013      Published  IAS 19
                                         (in % of sales)  (in % of sales)           impact
    By sector and division:
    Innovative Materials                        5.5%            2.1%         265
    Flat Glass                                 -2.9%           -6.4%         -76
    High-Performance Materials                 15.0%           12.3%         341
    Construction Products                       7.6%            9.0%         452     -2
    Interior Solutions                          7.2%            6.7%         205
    Exterior Solutions                          7.9%           11.1%         247     -2
    Building Distribution                       2.9%            1.9%         275      1
    Packaging (Verallia)                       10.5%           12.2%         201
    Misc.                                       n.m.            n.m.         -40(a) -17(a)
    Group Total                                 5.3%            4.7%       1,153    -18

    By geographic area:
    France                                      5.1%            3.4%         329    -14
    Other Western European countries            3.6%            1.2%         320      1
    North America                               9.6%           13.5%         308(a)  -2(a)
    Emerging countries and Asia                 4.5%            6.0%         196     -3
    Group Total                                 5.3%            4.7%       1,153    -18

    (a) after asbestos-related charge (before tax) of EUR45m in H1 2012 and EUR45m in H1
    2013


                                         H1                   H1             Change on
    IV. CASH FLOW                       2012                 2013            an actual
                                     (in EUR m)           (in EUR m)      structure basis
    By sector and division:
    Innovative Materials                 392                  261              -33.4%
    Flat Glass                           102                   31              -69.6%
    High-Performance Materials           290                  230              -20.7%
    Construction Products                375                  304              -18.9%
    Building Distribution                255                  123              -51.8%
    Packaging (Verallia)                 239                  215              -10.0%
    Misc.                                158(a)               243(a)             n.m.
    Group Total                        1,419                1,146              -19.2%

    By geographic area:
    France                               209                  180              -13.9%
    Other Western European countries     634                  358              -43.5%
    North America                        290(a)               256(a)           -11.7%
    Emerging countries and Asia          286                  352              +23.1%
    Group Total                        1,419                1,146              -19.2%

    (a) after asbestos-related charge (after tax) of EUR27m in H1 2012 and EUR27m in
        H1 2013

                                                 H1            H1              H1 2012
    IV. CASH FLOW                               2012          2013        Published IAS 19
                                          (in % of sales) (in % of sales)           impact
    By sector and division:
    Innovative Materials                        8.1%          5.6%           392
    Flat Glass                                  3.9%          1.2%           102
    High-Performance Materials                 12.8%         10.9%           290
    Construction Products                       6.4%          5.3%           377     -2
    Building Distribution                       2.7%          1.4%           255
    Packaging (Verallia)                       12.5%         11.9%           248     -9
    Misc.                                       n.m.          n.m.           190(a) -32(a)
    Group Total                                 6.6%          5.5%         1,462    -43

    By geographic area:
    France                                      3.4%          3.0%           219    -10
    Other Western European countries            7.1%          4.2%           634
    North America                               9.1%          8.3%           321(a) -31(a)
    Emerging countries and Asia                 6.7%          8.4%           288     -2
    Group Total                                 6.6%          5.5%         1,462    -43
    (a) after asbestos-related charge (after tax) of EUR27m in H1 2012 and EUR27m in H1
    2013


                               H1         H1        Change on          H1              H1
    V. CAPITAL EXPENDITURE    2012       2013       an actual         2012            2013
                           (in EUR m) (in EUR m) structure basis (% of sales) (% of sales)
    By sector and division:
    Innovative Materials       325        193         -40.6%           6.7%           4.2%
    Flat Glass                 245        113         -53.9%           9.4%           4.5%
    High-Performance Materials  80         80          +0.0%           3.5%           3.8%
    Construction Products      203        132         -35.0%           3.4%           2.3%
    Interior Solutions         121         81         -33.1%           4.3%           2.8%
    Exterior Solutions          82         51         -37.8%           2.7%           1.8%
    Building Distribution       97         68         -29.9%           1.0%           0.7%
    Packaging (Verallia)       116        110          -5.2%           6.1%           6.1%
    Misc.                       13         16          n.m.            n.m.           n.m.
    Group Total                754        519         -31.2%           3.5%           2.5%

    By geographic area:
    France                     119         71         -40.3%           1.9%           1.2%
    Other Western European
     countries                 174        127         -27.0%           2.0%           1.5%
    North America              133        113         -15.0%           4.2%           3.7%
    Emerging countries
     and Asia                  328        208         -36.6%           7.7%           5.0%
    Group Total                754        519         -31.2%           3.5%           2.5%

    VI. EBITDA                           H1         H1        Change on
                                        2012       2013       an actual
                                     (in EUR m) (in EUR m) structure basis
    By sector and division:
    Innovative Materials                651        552         -15.2%
    Flat Glass                          214        202          -5.6%
    High-Performance Materials          437        350         -19.9%
    Construction Products               773        732          -5.3%
    Interior Solutions                  407        376          -7.6%
    Exterior Solutions                  366        356          -2.7%
    Building Distribution               506        347         -31.4%
    Packaging (Verallia)                333        331          -0.6%
    Misc.                                3          21          n.m.
    Group Total                        2,266      1,983        -12.5%

    By geographic area:
    France                              516        473          -8.3%
    Other Western European countries    806        515         -36.1%
    North America                       483        483          +0.0%
    Emerging countries and Asia         461        512         +11.1%
    Group Total                        2,266      1,983        -12.5%

    VI. EBITDA                             H1              H1            H1 2012
                                          2012            2013       Published IAS 19
                                     (in % of sales) (in % of sales)           impact
    By sector and division:
    Innovative Materials                  13.4%           11.9%         651
    Flat Glass                             8.2%            8.0%         214
    High-Performance Materials            19.2%           16.6%         437
    Construction Products                 13.1%           12.8%         775      -2
    Interior Solutions                    14.3%           13.1%         407
    Exterior Solutions                    11.9%           12.4%         368      -2
    Building Distribution                  5.4%            3.8%         505       1
    Packaging (Verallia)                  17.5%           18.3%         333
    Misc.                                  n.m.            n.m.          20     -17
    Group Total                           10.5%            9.5%       2,284     -18

    By geographic area:
    France                                 8.4%            8.0%         530     -14
    Other Western European countries       9.1%            6.1%         805       1
    North America                         15.1%           15.7%         485      -2
    Emerging countries and Asia           10.8%           12.2%         464      -3
    Group Total                           10.5%            9.5%       2,284     -18

Appendix 2: Sales by business sector and geographic area - Second Quarter

                                                Change on       Change on      Change on
    SALES               Q2 2012    Q2 2013      an actual     a comparable    a comparable
                        (EUR m)    (EUR m)  structure basis structure basis structure and
                                                                            currency basis
    By sector and
    division:
    Innovative
    Materials (1)        2,472      2,412         -2.4%           -2.5%          -0.6%
    Flat Glass           1,307      1,319         +0.9%           +1.0%          +2.4%
    High-Performance
    Materials            1,168      1,097         -6.1%           -6.4%          -3.9%
    Construction
    Products (1)         3,086      2,970         -3.8%           -3.7%          -1.5%
    Interior Solutions   1,438      1,503         +4.5%           +3.9%          +6.3%
    Exterior Solutions   1,664      1,483        -10.9%          -10.1%          -8.2%
    Building
    Distribution         5,113      4,989         -2.4%           -1.9%          -1.1%
    Packaging
    (Verallia)           1,028        978         -4.9%           -4.6%          -3.1%
    Internal sales
    and misc.             -271       -252          n.m.            n.m.           n.m.
    Group Total         11,428     11,097         -2.9%           -2.6%          -1.2%
    (1) including
        intra-sector
        eliminations

    By geographic area:
    France               3,252      3,116         -4.2%           -4.0%          -4.0%
    Other Western
    European countries   4,721      4,673         -1.0%           -1.3%          -0.5%
    North America        1,673      1,522         -9.0%           -8.4%          -6.6%
    Emerging countries
    and Asia             2,235      2,239         +0.2%           +1.4%          +6.1%
    Internal sales        -453       -453          n.m.            n.m.           n.m.
    Group Total         11,428     11,097         -2.9%           -2.6%          -1.2%

    Appendix 3: Consolidated balance sheet

    (in EUR million)                                             June 30, 2013 Dec 31, 2012

                                ASSETS
    Goodwill                                                            10,775       10,936
    Other intangible assets                                              3,107        3,196
    Property, plant and equipment                                       13,111       13,696
    Investments in associates                                              205          206
    Deferred tax assets                                                  1,198        1,236
    Other non-current assets                                               372          359

    Non-current assets                                                  28,768       29,629

    Inventories                                                          6,376        6,133
    Trade accounts receivable                                            6,160        5,017
    Current tax receivable                                                 221          204
    Other accounts receivable                                            1,359        1,425
    Assets held for sale - Discontinued operations                       1,007          936
    Cash and cash equivalents                                            3,085        4,179

    Current assets                                                      18,208       17,894

    Total assets                                                        46,976       47,523

                 Liabilities and Shareholders' equity
    Capital stock                                                        2,211        2,125
    Additional paid-in capital and legal reserve                         6,195        5,699
    Retained earnings and net income for the year                       10,475       10,334
    Cumulative translation adjustments                                   (981)        (523)
    Fair value reserves                                                   (44)         (15)
    Treasury stock                                                       (160)        (181)

    Shareholders' equity                                                17,696       17,439

    Minority interests                                                     361          412

    Total equity                                                        18,057       17,851

    Long-term debt                                                       9,452        9,588
    Provisions for pensions and other employee benefits                  2,829        3,465
    Deferred tax liabilities                                               769          792
    Provisions for other liabilities and charges                         2,239        2,171

    Non-current liabilities                                             15,289       16,016

    Current portion of long-term debt                                    1,517        1,732
    Current portion of provisions for other liabilities and charges        489          457
    Trade accounts payable                                               6,069        6,143
    Current tax liabilities                                                118           70
    Other accounts payable                                               3,366        3,408
    Liabilities held for sale - Discontinued operations                    458          497
    Short-term debt and bank overdrafts                                  1,613        1,349

    Current liabilities                                                 13,630       13,656

    Total equity and liabilities                                        46,976       47,523

    Appendix 4: Consolidated cash flow statement

    (in EUR million)                                           H1 2012 H1 2013

    Net income attributable to equity holders of the parent        506     332

    Minority interests in net income                                10      15
    Share in net income of associates, net of dividents
    received                                                       (2)     (2)
    Depreciation, amortization and impairment of assets            964     832
    Gains and losses on disposals of assets                       (66)    (85)
    Unrealized gains and losses arising from changes in fair
    value and share-based payments                                 (1)      10
    Changes in inventories                                       (117)   (387)
    Changes in trade accounts receivable and payable, and
    other accounts receivable and payable                        (679) (1,198)
    Changes in tax receivable and payable                           38      17
    Changes in deferred taxes and provisions for other
    liabilities and charges                                      (448)    (25)

    Net cash from operating activities                             205   (491)

    Purchases of property, plant and equipment [ H1-2012:
    (754), H1-2013: (519) ] and intangible assets                (792)   (555)
    Acquisitions of property, plant and equipment in finance
    leases                                                         (7)     (9)
    Increase (decrease) in amounts due to suppliers of fixed
    assets                                                       (193)   (177)
    Acquisitions of shares in consolidated companies [
    H1-2012: (276), H1-2013: (25) ], net of debt acquired        (291)    (24)
    Acquisitions of other investments                              (1)    (16)
    Increase in investment-related liabilities                      46      10
    Decrease in investment-related liabilities                     (4)     (2)
                           Investments                         (1,242)   (773)
    Disposals of property, plant and equipment and intangible
    assets                                                          51      39
    Disposals of shares in consolidated companies, net of net
    debt divested                                                   67     141
    Disposals of other investments and other divestments             1       0
                           Divestments                             119     180
    Increase in loans and deposits                                (56)    (39)
    Decrease in loans and deposits                                  45      17

    Net cash used in investing activities / divestments        (1,134)   (615)

    Issues of capital stock                                        125     582
    Minority interests' share in capital increases of
    subsidiaries                                                     7       3
    Increase (decrease) in investment-related liabilities (put
    on minority interests)                                        (27)       0
    Disposals of minority interests without loss of control          0      12
    (Increase) decrease in treasury stock                        (183)      11
    Dividends paid                                               (646)   (654)
    Dividends paid to minority shareholders of consolidated
    subsidiaries and increase (decrease) in dividends payable     (51)     124

    Net Cash from (used in) financing activities                 (775)      78

    Increase (decrease) in net debt                            (1,704) (1,028)

    Net effect of exchange rate changes on net debt               (39)      46
    Net effect from changes in fair value on net debt               10    (25)

    Net debt at beginning of period                            (8,095) (8,490)
    Net debt at end of period                                  (9,828) (9,497)

Analyst/Investor relations
Gaetano Terrasini +33-1-47-62-32-52
Vivien Dardel +33-1-47-62-44-29
Alexandra Baubigeat +33-1-47-62-30-93

Press relations
Sophie Chevallon Susanne Trabitzsch, +33-1-47-62-30-48 / +33-1-47-62-43-25

SOURCE Saint-Gobain