Value Investors Club / Saint-Gobain (SGO FP)

Description

Saint-Gobain – Historic Restructuring With New Entry of Capable / Aligned Shareholder to Spur Re-rating

In light of recent significant shareholder and board changes, long-term self-inflicted share price erosion coupled with dramatic short term underperformance, we believe Saint-Gobain, the French-based global building constructions product company, presents a compelling opportunity at current levels to invest in a medium-term restructuring of large scale which we are confident will lead to a material rebasing of earnings power coupled with a significant long-overdue re-rating of the shares to, at a minimum, reflect peer valuations of lesser market positions and quality. We see SGO trading on a 24.5% FCF yield upon completion of a successful restructuring, yielding a realistic €10-12 of FCF per share in 2010 upon implementation of (1) a more aggressive restructuring than announced targeting €1000 in cost rationalizations spearheaded by Wendel; (2) implementation of market leading pricing policy in dominant market positions leading to a sustainable re-basing of revenue 7% higher than current levels (3) improved required return on expansion capex and R+D dollars and tighter WCR ratios, contributing to €2,000 incremental free cash flow in 2010 and (4) intiation of an aggressive share repurchase program. We believe all the aforementioned are very likely to materialize over the coming 24-36 months with the presence of a strong private-equity minded control shareholder with significant relevant industry experience, an impeccable track-record of attaining and surpassing aggressive operational targets, and a modest return of capital of 33% of operational free cash flow via share repurchases. All of these actions are consistent with our evaluation of the potential of the underlying businesses under a strict cost-containment program with disciplined cash allocation policy, even considering cyclical pressures and dollar exposure (which we view as over-estimated by the investment community due to structural complexity of the group and poor historical return profile). Notably, in the scenario we outlined, Saint-Gobain’s FCF/EBITDA conversion profile is still last in its peer group, but significantly above historical trends, suggesting our figures are a first step. this report intends to lay forth the restructuring case and leaves to the interested reader to learn about the various business units within saint-gobain.

Share Price	€ 51.0
Shares Outstanding	361.7
Market Capitalization	€ 18,446.7

Net Debt	€ 9,928.0
Asbestos Liability	€ 1,446.8
Minority Interest	€ 290.0
Enterprise Value	€ 30,111.5

	2005	2006	2007	2008	2009	2010
Free Cash Flow	1,323	1,950	2,506	2,050	3,201	4,042
Net Income	1,264	1,703	2,115	2,106	2,768	3,422
EBITDA	4,199	5,235	5,658	5,844	6,763	7,781

S/O				362	343	324

FCF per Share				€ 5.7	€ 9.3	€ 12.5
Earnings Per Share				€ 5.8	€ 8.1	€ 10.6

EV/EBITDA	7.2x	5.8x	5.3x	5.2x	4.5x	3.9x
P/FCF	13.9x	9.5x	7.4x	9.0x	5.5x	4.1x
FCF Yield	7.2%	10.6%	13.6%	11.1%	18.3%	24.5%
P/E	14.6x	10.8x	8.7x	8.8x	6.3x	4.8x

Saint-Gobain is a global vertically-integrated producer, processor and distributor of construction materials. Saint-Gobain operates in more than 50 countries worldwide, is one of the world’s hundred leading industrial corporations. Importantly, Saint-Gobain has strong exposure founded on business lines related to home renovation, as opposed to new building construction, which is sheltered by strong commercial and standard-related barriers.

Saint-Gobain is amongst world leaders in each of its business lines. The group is organized around five main divisions: (1) Distribution: Number #1 worldwide in tiles distribution, (2) Construction products: #1 Worldwide building materials, plasterboard, mortar, insulation and pipes, (3) High performance materials (ceramics/abrasives, plastics and reinforcement), (4) Flat glass (#1 in Europe and #3 in the world), (5) Packaging (#1 in Europe and # 2 in the world).

No Value Reflected in For Acquisition Spree Over Past 10 Years

Our own calculations suggest Saint-Gobain has destroyed approximately € 19 billion of shareholder value in the past 10 years in acquisitions, low-return capital spending programs and failure to exploit the market-leader pricing and cost rationalization opportunities afforded to it as market leader in its areas of operation (see footnote 1 and appendix 1). Fortunately, investors have the opportunity to make a clean assessment of the group, with the entrance of a key shareholder who will dramatically redirect the group’s focus in the future, paying a discount to capital employed at current levels. Optimization of these assets and/or sale will crystallize value leakage

Announced Date	Target	Value
1998 Enterprise Value		€ 17,680.0
Aug-03-2005	BPB plc	€ 5,585.0
Aug-07-2007	Maxit Group AB	€ 2,088.8
Mar-05-2004	Dahl International AB	€ 608.9
Apr-27-2006	Saint-Gobain Calmar, Inc. (nka:MeadWestvaco Calmar)	€ 507.1
Jul-26-2007	Saint-Gobain Vetrotex International, Reinforcements And Composites Activities	€ 457.1
Jul-17-2007	Norandex Distribution, Inc.	€ 265.0
Feb-07-2002	Groupe Lapeyre	€ 183.5
Oct-31-2003	Pum Plastiques SA	€ 150.4
Apr-02-2001	Saint Gobain Cristaleria SA	€ 145.8
Sep-06-2006	Izocam Ticaret ve Sanayi A.S. (IBSE:IZOCM)	€ 128.1
Dec-20-2007	Dlh Tra & Byg A/s	€ 113.3
Jun-13-1997	Unicorn International	€ 100.0
May-01-2003	Air Vent, Inc.	€ 82.1
Jul-11-2003	Dubois Materiaux	€ 80.7
Jun-09-1999	RentX Industries, Inc. (nka:HSS RentX)	€ 69.7
Oct-26-2005	Xuzhou General Iron and Steel Works (nka:Saint-Gobain Xuzhou Cast Pipe Co.)	€ 61.8
Apr-01-1998	Montague L. Meyer Ltd.	€ 59.8
Mar-03-2005	Le Monde SA	€ 54.9
Apr-22-1998	Oliver Ashworth Group Plc	€ 40.8
Dec-22-1998	ABT Building Products, Fiber Cement Business	€ 34.3
Apr-20-2000	Brunswick Technologies	€ 27.5
Jun-05-2002	Saint-Gobain Crystals & Detectors	€ 21.4
May-15-2000	ServiceMagic, Inc.	€ 20.7
Mar-04-2008	Rencol Tolerance Rings	€ 17.7
Oct-04-2007	Entreprise de Platre et Derives Spa	€ 6.1
Mar-30-2001	Saint-Gobain Pipe Systems Oy	€ 2.1
Jan-04-1999	Poliet S.A.	€ 0.3
May-24-2004	Ovalbrick	-€ 0.5
Dec-27-2005	Futronic GmbH	-€ 5.1
Aug-08-2007	Saint-Gobain Ceramic Materials K.K.	-€ 23.9
Jun-12-2001	RentX Industries, Inc. (nka:HSS RentX)	-€ 36.9
Jul-31-2000	Carborundum Insulation Technology	-€ 41.8
May-26-2005	Saint-Gobain Stradal SAS (nka:Stradal SAS)	-€ 107.4
Sep-01-2003	Terreal Group	-€ 313.6
Mar-29-2007	Saint-Gobain Desjonquères	-€ 638.1
Additional Undisclosed Estimated M&A Spend
Total M&A Spend		€ 17,746.3

Adjusted Capital Employed (1998 Valuation + Acquisitions To Date - Divestitures To Date + Expansion Capex)		€ 45,426.3
Current Enterprise Value (Market Capitalization + Net Debt + Minority Interest)	€ 26,489.2
10-Year Value Destruction Estimate	€ 18,937.1

A relevant tangent: VIC members may recall an earlier write-up of Italian conglomerate Fiat SpA in January 2005 making the case that a conglomerate of leading market-share assets with leading market shares, significant revenue bases, and material scope for profitability and working capital improvements under revitalized management would create significant value for shareholders. Central to the perspective was the dramatic devaluation relative to the enterprise value of the assets acquired over the previous 10 years. In the absence of material write-downs, it was reasonable to conclude that the vast majority of the value-destruction was temporary, and could be reversed by a sound blocking and tackling strategy, careful regard for future capital allocation, and unemotional approach to cost-base right-sizing and portfolio review. The stock as much as quintupled from its depressed base, driven by a “changing of the guard”. As noted at the time of the Fiat writeup, opportunities to buy market-leading franchises that have been materially de-valued due to undermanagement of the assets present themselves infrequently. SGO is an important asset-rich conglomerates of scale and market position and as such offers huge potential if restructured correctly.

Calculation based upon Adjusted 2008 Capital Employed (1998 Valuation + Acquisitions To Date - Divestitures To Date + Expansion Capex) Less Current Enterprise Value.

Cash Flow Optimization

We believe Wendel sees cash flow optimization as a huge potential source of value creation. We expect to see see material improvements coming off of a low base of efficiency. Below shows the generation of cash post payment of financial and tax charges, post change in working capital requirement, and post payment of maintenance capital expenditure but before the payment of expansion capital expenditure for SGO and its competitors. Saint-Gobain’s performance is 33% versus an average 50% for the sector. Saint-Gobain has the lowest conversion, which is largely explained by poor WCR management, and very high / inefficient spend on maintenance capex. SGO’s ratio of maintenance capex to depreciation of around 100%, despite the fact that it is currently in an investment phase (expansion capex represents around EUR550m, or 2% of fixed assets). Players in investment phases usually have capex/depreciation ratios below 1.0x due to the lower maintenance needs of new assets.Comparing the company’s maintenance capex spending (100% of depreciation) with peers, only Wolseley (a distributor) has such a high ratio. Other industrial peers report or target an average 70% ratio. See below

100%	SGO
100%	Wolesley
85%	Lafarge
70%	Holcom
65%	Imerys
60%	Wiernerberger

Incredibly, despite its scale, SGO has the lowest cash conversion figures in its industry (33% Free Cash Flow / EBITDA) for reasons touched upon above. See chart below

Cash Conversion

Cemex ADR	69%
Titan Cement	67%
Lafarge	65%
Dyckerhoff Pref	58%
Imerys	58%
Buzzi Unicem	51%
Holcim R	49%
Ciments Français	48%
Italcementi	42%
CRH Plc	42%
CRH Plc	40%
Heidelberg Cement	39%
CIMPOR Cimentos Portugal	36%
Hanson	35%
Saint-Gobain	33%

A similar consideration is ROCE. ROCE ex goodwill is usually favourable for groups having actively acquired other companies, as this ratio factors in the EBIT line the positive contribution from synergies, while not taking into consideration the goodwill paid. Saint-Gobain again ranks lowest in its peer group, producing returns exactly in line with WACC, helping to explain the incredibly poor historical share price performance of the group.

ROCE comparison

Saint-Gobain Hanson	7.5 7.9
Wienerberger	9.2
Holcim	9.4
Imerys	9.4
Cementir	9.6
Italcementi	9.6
Dyckerhoff Pref	10.6
CRH Plc	10.8
Lafarge	10.9
Buzzi Unicem	11.8
Wolseley	12.4
Heidelberg	11.8

Cash Flow 2005-2010

CASH FLOW STATEMENT	2005	2006	2007	2008e	2009e	2010e

Net income	1,264	1,703	2,115	2,106	2,768	3,422
Minority interests	30	45	56	59	77	96
Excess of income of equity investees over dividends	-5	-5	-5	-5	-5	-5
Depreciation and amortization	1420	1521	1549	1570	1669	1759
(Profit)/loss on sales of non-current assets & other	26	76	0	-150	0	0
Cash flows from operations	2,735	3,340	3,715	3,580	4,509	5,272
		-7	-47	267	679	1,065
Change in inventories	-77
Change in accounts receivable	-46
Change in accounts payable	383
Changes in income taxes payable and deferred taxes	-30
Other WCR change	-197
Net change in working capital	33	131	137	-130	110	177
Cash flows from operating activities	2,768	3,471	3,852	3,450	4,620	5,449
	109
Purchases of property, plant and equipment (capex) + intangibles	-1,865	-2,191	-2,273	-2,366	-2,400	-2,024
Capex/sales	5.3%	5.3%	5.2%	5.2%	5.0%	4.0%
ow expansion capex	-311	-670	-927	-966	-981	-759
expansion capex / sales	0.9%	1.6%	2.1%	2.1%	1.6%	1.5%
ow intangibles acquisitions	-109
ow maintenance capex	-1445	-1521	-1346	-1400	-1419	-1407
maintenance capex / depreciation	108%	100%	87%	89%	85%	80%
maintenance capex / sales		3.7%	3.1%	3.1%	3.1%	3.1%
FCF	1,012	1,280	1,579	1,084	2,219	3,283
% of sales	2.9%	3.1%	3.6%	2.4%	4.6%	6.5%
FCF pre expansion capex	1,323	1,950	2,506	2,050	3,201	4,042
				36.2%	54.8%	59.8%
% of sales	3.8%	4.7%	5.8%	4.5%	6.7%	8.0%
FCF/EBITDA				35.08%	47.33%	51.95%

Net Debt and WCR
Net Debt	13,243	11,848	9,969	11,729	10,319	7,947
ow bonds
ow convertible bonds	920	920	0	0	0	0
Average net debt/EBITDA	2.3	2.4	1.9	1.9	1.6	1.2
Interest cover	4.5	4.4	4.5	5.3	6.4	8.1
WCR	4,472	4,341	4,204	4,334	4,224	4,047
% of sales	12.7%	10.4%	9.7%	9.6%	8.8%	8.0%
days	46.5	38.1	35.3	35.0	32.1	29.2

ROCE on Exane's restated EBIT	5.6%	7.3%	8.0%	8.2%	10.1%	12.0%
ROCE on business income	5.5%	7.3%	6.7%	8.2%	10.1%	12.0%

Pending exercise of voting rights

Saint-Gobain possesses some very high quality businesses that have woefully under-earned their potential historically, through a combination of obscene and unbridled acquisition spend, lack of cost integration/rationalization,

and failure to exploit market leadership positions and price correctly can now be purchased for less than capital employed capital, reflecting the expectation that SGO will never produce legitimate returns on its assets, will never cease its value destructive acquisition activity, and will continue to allocate “growth capex” to areas of low or no tangible return for shareholders.

Our own calculations suggest Saint-Gobain has destroyed approximately € 19 billion of shareholder value in the past 10 years in bad, scantly disclosed acquisitions, low-return capital spending programs and failure to exploit the market-leader pricing and cost rationalization opportunities afforded to it as market leader in its areas of operation (see footnote 1 and appendix 1). Fortunately, investors have the opportunity to make a clean assessment of the group, with the entrance of a key shareholder who will dramatically redirect the group’s focus in the future, paying a discount to capital employed at current levels.

Why has value creation been limited?

1) The return on most large acquisitions has been disappointing (due to price paid and timing of deals). [insert detail on BPB, Maxit]. Whereas ROCE ex-goodwill was 12.7% in 2007, ROCE including goodwill reduced returns by an astounding 500 basis points to 7.5% (in-line with WACC – clearly unacceptable). The group has exceptional goodwill: it now represents EUR10.5bn out of total capital employed of EUR29bn.

2) Margins are consistently below those of peers despite leading market positions announced intra-group synergies. SG&A is very high reflecting poor extraction of synergies.

3) EBITDA conversion into cash is the lowest in the sector (33% versus 65-70% for the sector average), highlighting the bloated low return spend on working capital requirement and capex. Maintenance capex to depreciation ratio (100%) has been extremely high compared to sector standards (70%).

We believe Wendel will quickly address these issues over the coming months as the group begins to integrate them as a key decision maker. Should the existing management not prove responsive, we believe Wendel coudact to replace management.

Background:

VIC members may recall an earlier write-up of Italian conglomerate Fiat SpA in January 2005 making the case that a conglomerate of leading market-share assets with leading market shares, significant revenue bases, and material scope for profitability and working capital improvements under revitalized management would create significant value for shareholders. Central to the perspective was the dramatic devaluation relative to the enterprise value of the assets acquired over the previous 10 years. In the absence of material write-downs, it was reasonable to conclude that the vast majority of the value-destruction was temporary, and could be reversed by a sound blocking and tackling strategy, careful regard for future capital allocation, and unemotional approach to cost-base right-sizing and portfolio review. The stock as much as quintupled from its depressed base, driven by a “changing of the guard”. As noted at the time of the Fiat writeup, these opportunities are few and far between, as important asset-rich conglomerates of scale and market position have materially all implemented their restructuring efforts and extracted significant returns for shareholders.

Today SGO’s valuation at a historic moment with Wendel Group entering the share capital at 20.6%, having 1.6X the voting capacity in the next 18 months (up to 35% of votes) and importantly, seats on strategic M&A committee determining the future shape of the business. Lastly, just as the “old guard” of Fiat turned over in late 2004/2005, with the passing of the cultural icon Gianni Agnelli, Jean-Louis Beffa’s transition from CEO to Chairman, coupled with the entry of Wendel into the group as its largest shareholder, sets the stage for a similarly historic restructuring and repositioning of a group that should flexing its entrenched market shares by acting as price leader, leverage its large structure by centralizing its cost base, use its scale to exact best-in-class working capital terms, and show the market is will no-longer engage in value-destructive m&a, but will maximize the value of market-leading businesses, and divest at good prices of those that detract from group valuation. Saint Gobain is trading at split adjusted roughly the same levels as it was 10 years ago in 1998, versus an 80% appreciation in the CAC40 Paris Large Capitalization Index.

BUSINESS DESCRIPTION

Insulation/Gypsum

Europe (55%) and North America (30%) represent more than 85% of 2006e sales of the Gypsum and Insulation divisions. Both regions are making significant changes in energy saving regulations that should boost insulation and plasterboard consumption:

The Energy Building Performance Directive (EBPD) in Europe. The goal of the EBPD is to save 22% of the present energy consumption in buildings by 2010. New standards should lead builders to use more insulation products than in the past, either due to the requirement of more efficient products (higher thickness or specialty products) or to the usage of those products on a higher surface within buildings. ñ The Energy Saving Directive (ESD) and energy savings certificates in Europe. The Energy Saving Directive will take effect this year and will require member states to draw up national action plans to achieve 1% yearly energy savings in the retail, supply and distribution of electricity, natural gas, urban heating, and other energy products, including transport fuels. Then, over nine years starting in January 2008, end-use energy efficiency in each member state should increase by a minimum of 9%. Many countries have developed fiscal incentives to renovate the insulation of buildings.

The division’s margins and ROCE are relatively high (ex goodwill paid on BPB) and the two businesses enjoy healthy growth rates in mature countries (increasing penetration, benefits of stricter energy saving regulations, increased cost of labour benefiting rapidly-installed products like plasterboard, etc.) as well as in emerging countries. While the US slowdown creates a risk for volumes and selling prices, gypsum & insulation margins should benefit from the integration of BPB (acquired in late 2005). Cost synergies have been valued at EUR100m in 2007 and commercial synergies at EUR50m by 2008. As we will see, we think these figures are conservative.

SWOT analysis of the Gypsum/Insulation division

Strengths - Local businesses - Strong positions in Europe and the USA - Very profitable insulation business - Higher growth than construction market	Weaknesses - Limited exposure to emerging markets
Opportunities - Cost synergies with BPB - New entrants in very profitable market - Cross-selling insulation/plasterboard - Innovation and R&D - Growing penentration	Threats Price war in US plasterboard

Focus on the composites reinforcementsí JV with Owens Corning

Structure of the deal

In July 2006, Owens Corning and Saint-Gobain announced their intent to merge their reinforcements businesses (the deal has not yet closed pending the antitrust regulators green light). The transaction will be structured as a joint venture, with Owens Corning owning a 60% equity interest and Saint-Gobain owning the remaining 40%. After a minimum of four years, the joint-venture provisions give Saint-Gobain the option of selling its 40% stake to Owens Corning, while Owens Corning has the option to buy it.

Jean-Louis Beffa has indicated that Saint-Gobain would be likely to exercise its option. We understand that the potential exit value could be around 1 times sales. Saint- Gobain should bring around EUR850m of sales to the structure. On a pro forma basis, the new company would have approximately USD1.8bn (EUR1.4bn) in annual revenues. The reinforcements business is most impacted by Chinese competition and has continually decreased selling prices: margins have declined regularly towards 3.8% for Saint-Gobain and 8% for Owens Corning in 2005.

With the proposed JV, we feel that Saint-Gobain will achieve the following three objectives:

1) it will keep 100% control over Construction Textiles, which is less penalised by Chinese competition and oriented towards Saint-Gobainís traditional end-market (construction);

2) it will benefit from the restructuring of the Composites business with Owens-Corning;

3) it will have a put option for the 40% stake it will have in the new JV, which could be exercised after four years. At that time, it will probably be in a position to sell the business at a much better price than if it had sold it today. We expect that the transaction multiple could be around 1x sales, or close to EUR800m.We believe the deal would be a significant trigger for margin enhancements of the composite business. Indeed, the press release states that the Owens Corning-Saint- Gobain joint venture would present significant opportunities for synergies. These are expected to come primarily from scale benefits in purchasing and procurement; operational and technological plant improvements; improved distribution costs; reduced administrative costs; and asset management optimization.

Packaging: likely a division for sale

We believe that over time the rationale for keeping the packaging division within the group has become less convincing.

- Synergies between Packaging and the rest of the group are now limited. In our view, this has been illustrated by the group itself when it stopped reporting the Packaging division within the Glass sector. The Packaging division is not contributing to the group effort to increase top-line growth (2.7% average organic sales growth over 2001/2005 versus an average 3.1% for the group). It has no exposure whatsoever to the construction sector, now the group's main focus.

Its profitability is inferior to that of peers, especially in the US, where we believe Saint-Gobainís margins are around 6.5%, below that of its main competitor, Owens-Illinois.

What valuation for the Packaging division? If they were sold separately, it would be important to differentiate the valuations of European and US assets, as margins in Europe are higher than in the US for structural reasons. US plants tend to be less strategically located than peers, leading to extra freight costs and thus lower margins.

Comparable transactions include the acquisition of:

- BSN by Owens-Illinois in 2004 for an equity amount of EUR1,2bn. The low-margin

BSN (<4%) was then valued at 0.9x sales and 23x EBIT.

- Gerresheimer by Blackstone for EUR123m, representing 0.9x sales and 24x EBIT.

We believe such high multiples are not applicable to Saint-Gobain Packaging (margins are not comparable). Listed peers have average 2007 EV/Sales of 1.1x, EV/EBIT of 9.2x, and P/Es of 14.2x. Applying a 9.2x EBIT multiple would value the division at EUR3.5bn. Applying a 1.1x sales multiple would value it at EUR4.5bn.

transformation post packaging disposal

We estimate that post disposals, the groupís exposure to non construction markets would be below 10% (part of the flat glass is sold to the automotive industry plus some of the HPM businesses). The group would look very much like CRH (distribution + building materials) which trades at a limited discount to its fair value (10% discount on DCF). This new Saint- Gobain profile could lead to a rerating.

SG+A

What are the responsibilities of the delegations? It seems to vary from one delegation to another Our understanding is that the delegations represent the holding everywhere that the group is present. We have also understood that the role of delegations varies: their size, organisations and responsibilities depend on the local situations and people. The main focus in emerging markets is allegedly to develop sales (capex and M&A), which is less the case for mature assets.

Can the delegations be more leveraged?

Until now, Saint-Gobain has been a diversified structure. Our view is that it is likely to become an integrated group post disposals like Packaging. In that context, we wonder if the roles of the delegations could be leveraged further: could support services be centralised at the holding level in all delegations? Could Saint-Gobain develop shared services like peers have done? If such centralisation were possible, it would certainlyrepresent a significant cost saving.

The Terreal business case (interesting!)

Terreal was formerly a Saint-Gobain clay products subsidiary. It was sold to Carlyle in 2003 for EUR515m. Carlyle then sold the company to other funds in August 2005 for EUR860m, i.e. 67% more than the price it paid in 2003. While the expansion of multiples explains part of the increased price, margins at Terreal have also expanded between 2003 and 2005 following the restructuring of the company.

Could this be an indication that a restructuring would have a significant impact on some of Saint-Gobainís divisions?

Potential for more synergies within the Construction products sector?

We wonder if all of the synergies within the Construction Products sector have already been extracted, i.e. if the sector is already managed as one integrated division. Notably, we wonder if there could be costs savings stemming from an increased integration of support services within the sector.

Appendix I - Comparable Company Analysis

Company Name	Market Cap	TEV	TEV/Trailing 12m Revenue	TEV/LTM EBITDA	TEV/LTM EBIT
Cemex S.A.B. de C.V. (NYSE:CX)	19,358.1	39,663.1	1.8x	8.9x	12.3x
Ciments Francais SA (ENXTPA:CMA)	6,810.1	10,252.7	1.4x	5.3x	7.4x
Colas SA (ENXTPA:RE)	11,871.0	11,377.9	0.6x	6.7x	10.9x
CRH plc (ISE:CRG)	19,857.8	28,143.8	0.8x	6.1x	8.2x
HeidelbergCement AG (DB:HEI)	21,414.5	45,461.7	2.6x	12.3x	16.3x
Holcim Ltd. (VIRTX:HOLN)	27,061.5	43,057.3	1.6x	6.0x	8.2x
Italcementi SpA (CM:IT)	6,099.3	11,923.1	1.2x	5.3x	7.8x
Lafarge SA (ENXTPA:LG)	29,613.4	44,802.7	1.6x	6.8x	8.8x
Wolseley plc (LSE:WOS)	6,794.9	13,049.2	0.4x	6.1x	10.2x

High			2.6x	12.3x	16.3x
Low			0.4x	5.3x	7.4x
Mean			1.3x	7.1x	10.0x
Median			1.4x	6.1x	8.8x

Saint Gobain (ENXTPA:SGO)	29,311.7	45,460.2	0.7x	5.0x	7.0x

Company Name	LTM Gross Margin	LTM EBITDA Margin	LTM EBIT Margin
Cemex S.A.B. de C.V. (NYSE:CX)	33.37	19.05	13.61
Ciments Francais SA (ENXTPA:CMA)	42.70	25.56	18.35
Colas SA (ENXTPA:RE)	52.87	8.37	4.85
CRH plc (ISE:CRG)	29.90	13.70	10.01
HeidelbergCement AG (DB:HEI)	12.58	17.98	12.58
Holcim Ltd. (VIRTX:HOLN)	61.59	19.95	14.68
Italcementi SpA (CM:IT)	47.98	25.62	18.57
Lafarge SA (ENXTPA:LG)	25.35	22.92	15.64
Wolseley plc (LSE:WOS)	10.00	5.55	4.76

	27.83	6.64	3.97
High
Low	61.59	25.62	18.57
Mean	10.00	5.55	3.97
Median	34.42	16.53	11.70
	31.64	18.51	13.09

Saint Gobain (ENXTPA:SGO)	100.00	13.15	9.46

Appendix 2 - Main points of Wendel’s ownership and Board Representation

• Wendel is to have three board members, two of which as of the next AGM on

June 5. Wendel has accepted that the board is to now have 16 members

instead of 15 in order to maintain a sufficiently high level of independent board

members.

• Wendel would only have one board member if its stake fell to below 10% of the

capital.

• Wendel has pledged to not raise its stake to beyond 21.5%.

• In order to limit the extent of double votes, Wendel is to limit their usage in

order to not exceed 34% of the votes during AGMs, up to 2011 inclusive.

Note: These two last points are no longer valid if a third party acquires alone or

in concert, more than 11% of Saint Gobain’s capital, or in the event of a

takeover bid for the group.

• Saint-Gobain has the right of first refusal in the event of a sale of more than

5% of Wendel’s stake (excluding a public placement).

• Wendel will not propose resolutions at the AGMs in 2008 and 2009 and will

vote on June 5 in favour of the resolution enabling the issue of warrants during

hostile takeover bids.

• Wendel will not take part in a takeover bid not recommended by the board, but

reserves the right to accept it.

• A strategic committee is to be created at the end of the AGO on June 5,

chaired by an independent board member, including the CEO of Saint Gobain

Calculation based upon Adjusted 2008 Capital Employed (1998 Valuation + Acquisitions To Date - Divestitures To Date + Expansion Capex) Less Current Enterprise Value.

Appendix III - profitability and drivers by division

Reinforcements
Sales	1,306	1,365	1,182	582	602	624
Sales growth	2.8%	4.5%	-13.4%	-50.8%	3.5%	3.5%
Sales growth LFL		3.0%	-4.2%	1.0%	3.5%	3.5%
Operating income	49	32	100	44	45	47
% of sales	3.8%	2.4%	8.5%	7.5%	7.5%	7.5%

Flat glass	2005	2006	2007e	2008e	2009	2010
Sales	4,680	5,083	5,611	5,866	6,061	6,360
Sales growth	5.7%	8.6%	10.4%	4.6%	3.3%	4.9%
Sales growth LFL		7.8%	11.2%	3.9%	3.3%	4.9%
Operating income	453	480	717	675	697	731
% of sales	9.7%	9.4%	12.8%	11.5%	11.5%	11.5%

Packaging
Sales	4,008	4,080	3,546	3,515	3,603	3,694
Sales growth	3.3%	1.8%	-13.1%	-0.9%	2.5%	2.5%
Sales growth LFL		3.6%	5.5%	6.0%	2.5%	2.5%
operating income	385	376	401	468	480	492
operating income margin	9.6%	9.2%	11.3%	13.3%	13.3%	13.3%

Construction products
Sales	6,694	10,876	11,112	12,132	13,434	14,504
Sales growth	11.2%	62.5%	2.2%	9.2%	10.7%	8.0%
Sales growth LFL		6.5%	2.6%	1.0%	7.7%	7.9%
Operating income	614	1,376	1,314	1,379	1,656	1,883
% of sales	9.2%	12.6%	11.8%	11.4%	12.3%	13.0%

Building Materials
Sales	2,733	2,694	2,603	3,437	4,111	4,498
Sales growth	4.3%	-1.4%	-3.4%	32.0%	19.6%	9.4%
Sales growth LFL		2.3%	-0.9%	-6.4%	8.8%	9.4%
Operating income	223	208	167	248	377	474
% of sales	8.2%	7.7%	6.4%	7.2%	9.2%	10.5%

Insulation
Sales	2,244	2,542	2,785	2,859	3,082	3,346
Sales growth	10.5%	13.3%	9.5%	2.7%	7.8%	8.5%
Sales growth LFL		10.4%	3.7%	3.6%	7.8%	8.5%
Operating income	292	379	443	428	447	485
% of sales	13.0%	14.9%	15.9%	15.0%	14.5%	14.5%

Gypsum
Sales	263	3,895	3,865	3,880	4,229	4,591
Sales growth		1381.0%	-0.8%	0.4%	9.0%	8.5%
Sales growth LFL		6.5%	2.5%	1.9%	9.0%	8.5%
Operating income	-8	649	538	529	652	738
% of sales	-3.0%	16.7%	13.9%	13.6%	15.4%	16.1%

Pipes
Sales	1,474	1,783	1,913	2,017	2,077	2,140
Sales growth	6.2%	21.0%	7.3%	5.4%	3.0%	3.0%
Sales growth LFL		9.6%	6.4%	5.5%	3.0%	3.0%
Operating income	107	140	166	175	181	186
% of sales	7.3%	7.9%	8.7%	8.7%	8.7%	8.7%

Eliminations
Sales	-603	-962	-1,080	-1,133	-1,190	-1,250
Sales growth	11%	60%	12%	5%	5%	5%
Operating income	9	-19	-10	-10	-10	-10
% of sales	-1.5%	2.0%	0.9%	0.9%	0.8%	0.8%

Group
Sales	35,110	41,596	43,421	45,098	47,785	50,360
Sales growth	9.1%	18.5%	4.4%	3.9%	6.0%	5.4%
Sales growth LFL		0.0%	5.2%	2.9%	5.1%
Operating income	2,860	3,714	4,109	4,024	4,570	4,996
% of sales	8.1%	8.9%	9.5%	8.9%	9.6%	9.9%

Detailed Summary

BUILDING DISTRIBUTION	2005	2006	2007e	2008e	2009	2010
France volumes ex new outlets		2.1%	1.0%	1.3%
Share of France		46%	44%	44%
UK volumes ex new outlets		0.5%	0.0%	-5.7%
Share of UK		21%	19%	19%
Germany volumes ex new outlets		3.0%	-15.0%	-2.0%
Share of Germany		14%	10%	10%
Netherlands volumes ex new outlets		2.0%	0.0%	-4.0%
Share of Netherlands		4%	4%	4%
Nordics volumes ex new outlets		2.0%	1.5%	-0.7%
Share of Nordics		10%	15%	15%
Eastern Europe volumes ex new outlets		2.0%	5.0%	10.0%
Share of Eastern Europe		3%	3%	4%
Other volumes ex new outlets		1.0%	1.0%	5.0%
Share of other		2%	5%	4%
Weighted average volume growth ex new outlets		1.9%	-0.6%	-0.4%	1.5%	1.5%

Contribution from new outlets		1.0%	1.0%	1.5%	1.5%	1.5%
					53
				0
Sales	15,451	17,581	19,480	20,618	21,612	22,599
% change	13.2%	13.8%	10.8%	5.8%	4.8%	4.6%
Total l-f-l (%)	2.7%	7.0%	5.7%	3.6%	4.5%	4.6%
price (%)	1.8%	2.4%	4.6%	2.5%	1.5%	1.5%
volume (%), incl new outlets	0.9%	4.6%	1.1%	1.1%	3.0%	3.0%
currency (%)		0.2%	0.0%	-1.9%	0.0%	0.0%
scope (%)	10.5%	6.6%	5.1%	4.1%	0.3%	0.0%
Total l-f-l (m)		1,074	1,002	705	932	977
price (m)		371	809	487	309	324
volume (m), incl new outlets		703	193	218	623	653
currency (m)		25	0	-362	0	0
scope (EURm)	0	1,012	897	795	61	0
Operating income	888	1,001	1,102	1,080	1,297	1,469
Operating margin	5.75%	5.70%	5.66%	5.24%	6.00%	6.50%
Restructuring / impairment	-14	-21	-33	-15	-15	-15
Business income (post restruct.)	874	980	1,069	1,065	1,282	1,454

Cost of goods sold	11,883	13,684
Gross profit	3,568	3,897
Gross margin	23.1%	22.2%
Cash flow	667	817	825	787	989	1,148
Cash flow/sales	4.3%	4.6%	4.2%	3.8%	4.6%	5.1%
Capex	327	315	353	351	367	384
Capex/sales	2.1%	1.8%	1.8%	1.7%	1.7%	1.7%
FCF	340	502	472	436	622	763
Depreciation	222	268	297	314	329	344
Depreciation/sales	1.4%	1.5%	1.5%	1.5%	1.5%	1.5%
Ebitda	1,110	1,269	1,399	1,394	1,626	1,813
Net profit (aprox)	445	549	528	472	660	803
Total assets	11,316	12,819	12,875	12,911	12,949	12,989
Sales/assets	1.4x	1.4x	1.5x	1.6x	1.7x	1.7x
Operating Income after 35% tax / assets	5.1%	5.1%	5.6%	5.4%	6.5%	7.4%

HIGH PERFORMANCE MATERIALS	2005	2006	2007e	2008e	2009	2010

Intra sector sales eliminations	-17	-15	-14	-14	-15	-15

Sales	4,880	4,938	4,752	4,101	4,265	4,453
% change		1.2%	-3.8%	-13.7%	4.0%	4.4%
Total l-f-l (%)		3.2%	2.1%	#VALUE!	#VALUE!	4.5%
price (%)		0.6%	1.2%	#VALUE!	#VALUE!	1.0%
volume (%)		2.6%	0.9%	#VALUE!	#VALUE!	3.5%
currency (%)		0.2%	-3.8%	#VALUE!	#VALUE!	0.0%
scope (%)		-2.3%	-2.1%	#VALUE!	#VALUE!	0.0%
Total l-f-l (m)		158	104	6	162	187
price (m)		31	61	48	59	43
volume (m)		127	43	-41	103	144
currency (m)		12	-189	-129	0	0
scope (EURm)		-114	-103	-529	4	0
Operating income	511	500	585	432	450	431
Operating margin	10.5%	10.1%	12.3%	10.5%	10.5%	9.7%
Restructuring / impairment	-100	-84	-252	-35	-35	-35
Business income (post restruct.)	411	416	333	397	415	396

Cash flow	446	432	487	340	354	331
Cash flow/sales	9.1%	8.7%	10.2%	8.3%	8.3%	7.4%
Capex	271	225	238	215	224	234
Capex/sales	5.6%	4.6%	5.0%	5.3%	5.3%	5.3%
FCF	175	207	249	125	130	97
Depreciation	307	248	234	187	194	202
Depreciation/sales	6.3%	5.0%	4.9%	4.6%	4.5%	4.5%
Ebitda	818	748	819	619	644	634
Net profit (aprox)	139	184	253	154	160	129
Total assets	5,659	5,636	5,640	5,669	5,699	5,730
Sales/assets	0.9x	0.9x	0.8x	0.7x	0.7x	0.8x
Operating Income after 35% tax / assets	5.9%	5.8%	6.7%	5.0%	5.1%	4.9%

CERAMICS, PLASTICS & ABRASIVES	2005	2006	2007	2008	2009	2010

Europe - coporate investment/ind . Pduction				2%
weight of Europe				55%
US - coporate investment/ind . Pduction				-5%
weight of US				45%
Em. markets - coporate investment/ind . Pduction				7%
weight of emerging markets				0%
Weighet average undelying markets growth				-1.2%

Sales	3,591	3,589	3,584	3,533	3,678	3,845
% change	3.1%	-0.1%	-0.1%	-1.4%	4.1%	4.5%
Total l-f-l (%)	2.5%	3.3%	4.5%	-0.2%	4.0%	4.5%
price (%)	3.9%	1.6%	1.7%	1.0%	1.5%	1.0%
volume (%)	-1.3%	1.7%	2.8%	-1.2%	2.5%	3.5%
currency (%)	0.5%	0.1%	-4.1%	-2.7%	0.0%	0.0%
scope (%)	0.0%	-3.5%	-0.5%	1.4%	0.1%	0.0%
Total l-f-l (m)		119	161	-5	141	166
price (m)		57	61	36	53	37
volume (m)		61	100	-41	88	129
currency (m)		4	-148	-97	0	0
scope (EURm)	0	-126	-18	51	4	0
Operating income	462	468	485	389	405	384
Operating margin	12.9%	13.0%	13.5%	11.0%	11.0%	10.0%
Restructuring / impairment	-84	-57	-3	-25	-25	-25
Business income (post restruct.)	378	411	482	364	380	359

Cash flow	342	363	396	301	314	289
Cash flow/sales	9.5%	10.1%	11.0%	8.5%	8.5%	7.5%
Capex	187	161	192	189	197	206
Capex/sales	5.2%	4.5%	5.4%	5.4%	5.4%	5.4%
FCF	155	202	204	112	117	83
Depreciation	199	145	145	143	149	155
Depreciation/sales	5.5%	4.0%	4.0%	4.0%	4.0%	4.0%
Ebitda	661	613	629	531	553	540
Net profit (aprox)	143	218	251	159	165	134
Total assets	3,905	3,609	3,656	3,703	3,751	3,802
Sales/assets	0.9x	1.0x	1.0x	1.0x	1.0x	1.0x
Operating Income after 35% tax / assets	7.7%	8.4%	8.6%	6.8%	7.0%	6.6%

REINFORCEMENTS	2005	2006	2007	2008	2009	2010

Sales	1,306	1,365	1,182	582	602	624
% change	2.8%	4.5%	-13.4%	-50.8%	3.5%	3.5%
Total l-f-l (%)	-2.2%	3.0%	-4.2%	1.0%	3.5%	3.5%
price (%)	-1.3%	-2.0%	0.0%	1.0%	1.0%	1.0%
volume (%)	-0.9%	5.0%	-4.2%	0.0%	2.5%	2.5%
currency (%)	5.0%	0.6%	-3.0%	-2.7%	0.0%	0.0%
scope (%)	0.0%	0.9%	-6.2%	-49.1%	0.0%	0.0%
Total l-f-l (m)		40	-57	12	20	21
price (m)		-26	0	12	6	6
volume (m)		66	-57	0	15	15
currency (m)		8	-41	-32	0	0
scope (EURm)	0	12	-85	-580	0	0
Operating income	49	32	100	44	45	47
Operating margin	3.8%	2.4%	8.5%	7.5%	7.5%	7.5%
Restructuring / impairment	-16	-27	-249	-10	-10	-10
Business income (post restruct.)	33	5	-149	34	35	37

Cash flow	104	69	91	39	40	42
Cash flow/sales	8.0%	5.1%	7.7%	6.7%	6.7%	6.7%
Capex	84	64	46	26	27	28
Capex/sales	6.4%	4.7%	3.9%	4.5%	4.5%	4.5%
FCF	20	5	45	13	13	14
Depreciation	108	103	89	44	45	47
Depreciation/sales	8.3%	7.5%	7.5%	7.5%	7.5%	7.5%
Ebitda	157	135	190	88	91	94
Net profit (aprox)	-4	-34	2	-5	-5	-5
Total assets	1,754	1,575	1,532	1,514	1,496	1,477
Sales/assets	0.7x	0.9x	0.8x	0.4x	0.4x	0.4x
Operating Income after 35% tax / assets	1.8%	1.3%	4.3%	1.9%	2.0%	2.1%

FLAT GLASS	2005	2006	2007e	2008e	2009	2010

Western Europe volumes				-3%	1%
Share of Western Europe				0%	0%
Eastern Europe volumes				5%	5%
Share of Eastern Europe				0%	0%
Emerging markets volumes				6%	6%
Share of Emerging markets				0%	0%
Weighted average volume growth				0.0%	0.0%


Sales	4,680	5,083	5,611	5,866	6,061	6,360
% change	5.7%	8.6%	10.4%	4.6%	3.3%	4.9%
Total l-f-l	0.4%	7.8%	11.2%	3.9%	3.3%	4.9%
price / mix (%)	-0.7%	4.0%	6.2%	1.0%	1.0%	1.0%
volume (%)	1.1%	3.7%	5.0%	2.9%	2.3%	3.9%
currency (%)	5.3%	1.2%	-0.7%	-0.2%	0.0%	0.0%
scope (%)	0.0%	-0.4%	-0.1%	0.9%	0.0%	0.0%
Total l-f-l (m)		358	569	217	195	296
price (m)		187	315	56	59	61
volume (m)		171	254	160	136	235
currency (m)		54	-38	-11	0	0
scope (EURm)	0	-21	-3	50	0	0
Operating income	453	480	717	675	697	731
Operating margin	9.7%	9.4%	12.8%	11.5%	11.5%	11.5%
Restructuring / impairment	-10	-25	-766	-30	-30	-30
Business income (post restruct.)	443	455	-49	645	667	701
						7.9%
Cash flow	528	529	677	633	654	686
Cash flow/sales	11.3%	10.4%	12.1%	10.8%	10.8%	10.8%
Capex	485	448	523	645	667	541
Capex/sales	10.4%	8.8%	9.3%	11.0%	11.0%	8.5%
FCF	43	81	154	-12	-13	145
Depreciation	335	322	355	372	384	403
Depreciation/sales	7.2%	6.3%	6.3%	6.3%	6.3%	6.3%
Ebitda	788	802	1,072	1,046	1,081	1,134
Net profit (aprox)	193	207	322	261	270	283
Total assets	4,982	4,905	5,073	5,346	5,629	5,767
Sales/assets	0.9x	1.0x	1.1x	1.1x	1.1x	1.1x
Operating Income after 35% tax / assets	5.9%	6.4%	9.2%	8.2%	8.0%	8.2%
				149	316	167
PACKAGING	2005	2006	2007e	2008e	2009	2010

Sales	4,008	4,080	3,546	3,515	3,603	3,694
% change	3.3%	1.8%	-13.1%	-0.9%	2.5%	2.5%
Total l-f-l	1.9%	3.6%	5.5%	6.0%	2.5%	2.5%
price (%)	1.3%	5.2%	4.0%	4.0%	1.5%	1.5%
volume (%)	0.6%	-1.5%	1.5%	2.0%	1.0%	1.0%
currency (%)	1.4%	0.4%	-3.0%	-2.7%	0.0%	0.0%
scope (%)	0.0%	-2.2%	-15.6%	-4.2%	0.0%	0.0%
Total l-f-l (m)		148	224	213	88	90
price (m)		208	163	142	53	54
volume (m)		-60	61	71	35	36
currency (m)		16	-122	-96	0	0
scope (EURm)	0	-90	-636	-148	0	0
Operating income	385	376	401	468	480	492
Operating margin	9.6%	9.22%	11.3%	13.3%	13.3%	13.3%
Restructuring / impairment and capital gains	-10	3	287	0	0	0
Business income (post restruct.)	375	379	688	468	480	492
			35	177
Cash flow	432	402	425	492	504	517
Cash flow/sales	10.8%	9.9%	12.0%	14.0%	14.0%	14.0%
Capex	305	335	309	281	288	296
Capex/sales	7.6%	8.2%	8.7%	8.0%	8.0%	8.0%
FCF	127	67	116	210	216	221
Depreciation	252	239	208	206	211	216
Depreciation/sales	6.3%	5.9%	5.9%	5.9%	5.9%	5.9%
Ebitda	637	615	609	674	691	708
Net profit (aprox)	180	163	217	286	293	300
Total assets	3,832	3,367	3,468	3,544	3,621	3,700
Sales/assets	1.0x	1.2x	1.0x	1.0x	1.0x	1.0x
Operating income after 35% tax / assets	6.5%	7.3%	7.5%	8.6%	8.6%	8.6%

CONSTRUCTION PRODUCTS	2005	2006	2007e	2008e	2009	2010

Intra sector sales eliminations	-20	-38	-54	-60	-66	-71
			-825	-106	-81
Sales	6,694	10,876	11,112	12,132	13,434	14,504
% change	11.2%	62.5%	2.2%	9.2%	10.7%	8.0%
Total l-f-l		6.5%	2.6%	1.0%	7.7%	7.9%
price (%)		3.4%	1.5%	0.3%	2.3%	2.3%
volume (%)		3.1%	1.1%	0.7%	5.4%	5.6%
currency (%)		0.1%	-2.1%	-2.0%	0.0%	0.0%
scope (%)		55.9%	1.8%	10.2%	3.1%	0.0%
Total l-f-l (m)		434	283	114	937	1,064
price (m)		229	158	33	279	312
volume (m)		205	125	81	658	753
currency (m)		5	-233	-225	0	0
scope (EURm)		3,743	201	1,137	371	0
Operating income	614	1,376	1,314	1,379	1,656	1,883
Operating margin	9.2%	12.6%	11.8%	11.4%	12.3%	13.0%
Restructuring / impairment	-55	-147	-70	-95	-50	-50
Business income (post restruct.)	559	1,229	1,244	1,284	1,606	1,833

Cash flow	559	1,048	1,060	1,126	1,382	1,587
Cash flow/sales	8.4%	9.6%	9.5%	9.3%	10.3%	10.9%
Capex	355	844	830	469	524	567
Capex/sales	5.3%	7.8%	7.5%	3.9%	3.9%	3.9%
FCF	204	204	230	656	858	1,020
Depreciation	282	432	443	477	526	568
Depreciation/sales	4.2%	35621.5%	4.0%	3.9%	3.9%	3.9%
Ebitda	896	1,807	1,757	1,856	2,182	2,451
Net profit (aprox)	245	617	617	649	857	1,019
Total assets	12,342	12,754	13,141	13,134	13,132	13,131
Sales/assets	0.5x	0.9x	0.8x	0.9x	1.0x	1.1x
Operating income after 35% tax / assets	3.2%	7.0%	6.5%	6.8%	8.2%	9.3%

BUILDING MATERIALS	2005	2006	2007	2008	2009	2010

Volumes Weber + Maxit		2.0%	9.2%	3.5%	10%	10%
ow underlying market growth				0.2%	3.0%	3.0%
-in mature countries (70%)				-4.0%	0.0%	0.0%
-in developing countries (30%)				10.0%	10.0%	10.0%
ow commercial synergies				3.3%	6.7%	6.7%
Volumes Certain Teed		-5.0%	-11.0%	-10.0%	2.0%	2.0%

Prices Maxit/Weber				2.0%	2.0%	2.0%
Prices Certain Teed				-5.0%	2.0%	2.0%

Maxit sales		1,237	1,235	978	1,458	1,631
% change LFL			-0.2%	5.5%	12%	12%
Maxit EBIT		125	163	119	193	233
Maxit Margin		10.1%	13.2%	12.2%	13.2%	14.3%

Weber sales		1,000	1,092	1,152	1,289	1,442
% change			9.2%	5.5%	12%	12%
Weber EBIT		106	122	128	144	161
Weber Margin		10.6%	11.1%	11.1%	11.1%	11.1%

Certain Teed sales		1,694	1,511	1,343	1,343	1,342
% change			-10.8%	-20.0%	4%	4%
Certain Teed EBIT		102	45	0	40	81
Certain Teed Margin		6.0%	3.0%	0.0%	3.0%	6.0%

Total sales			2,603	3,473	4,090	4,415
Total EBIT			167	248	377	474


Sales	2,733	2,694	2,603	3,437	4,111	4,498
% change	4.3%	-1.4%	-3.4%	32.0%	19.6%	9.4%
Total l-f-l	5.1%	2.3%	-0.9%	-6.4%	8.8%	9.4%
price (%)	6.8%	5.0%	3.0%	-2.1%	2.0%	2.0%
volume (%)	-1.6%	-2.6%	-3.9%	-4.3%	6.8%	7.3%
currency (%)	-0.9%	0.2%	-4.3%	-4.3%	0.0%	0.0%
scope (%)	0.0%	-3.9%	1.8%	42.7%	10.8%	0.0%
Total l-f-l (m)		66	-25	-166	303	382
price (m)		136	81	-54	69	82
volume (m)		-70	-106	-112	235	299
currency (m)		5	-114	-112	0	0
scope (EURm)	0	-107	49	1,112	371	0
Operating income	223	208	167	248	377	474
Operating margin	8.2%	7.7%	6.4%	7.2%	9.2%	10.5%
Restructuring / impairment	24	-38	-38	-20	-15	-15
Business income (post restruct.)	247	170	129	228	362	459
		-24.1%	163.6%	-40.0%	-24.1%
Cash flow	212	204	175	258	389	488
Cash flow/sales	7.8%	7.6%	6.7%	7.5%	9.5%	10.8%
Capex	102	142	133	189	226	247
Capex/sales	3.7%	5.3%	5.1%	5.5%	5.5%	5.5%
FCF	110	62	42	69	163	240
Depreciation	91	85	82	108	130	142
Depreciation/sales	3.3%	3.2%	3.2%	3.2%	3.2%	3.2%
Ebitda	314	293	249	356	506	616
Net profit (aprox)	121	119	93	150	260	346
Total assets	1,741	1,846	1,897	1,977	2,074	2,179
Sales/assets	1.6x	1.5x	1.4x	1.7x	2.0x	2.1x
Operating income after 35% tax / assets	8.3%	7.3%	5.7%	8.1%	11.8%	14.1%

INSULATION	2005	2006	2007	2008	2009	2010
France / Belgium volumes		10.0%	6.0%	5.0%	5.0%	5.0%
Share of France		13%	21%	22%	22%	22%
Spain/Portugal/Italy volumes		10.0%	4.0%	2.0%	2.0%	2.0%
Share of Spain/Portugal/Italy		8%	9%	10%	10%	10%
Germany/Austria volumes		5.0%	4.3%	2.0%	5.0%	5.0%
Share of Germany/Austria		25%	17%	19%	19%	19%
Northern Europe volumes		10.0%	6.0%	5.0%	5.0%	5.0%
Share of Northern Europe		22%	18%	19%	19%	19%
Eastern Europe volumes		20.0%	15.0%	15.0%	15.0%	15.0%
Share of Eastern Europe		4%	10%	11%	11%	11%
North America volumes		4.0%	-13.0%	-8.3%	2.0%	5.0%
Share of North America		28%	25%	19%	19%	19%
Weighted average volume growth		7.5%	1.7%	2.7%	5.2%	5.8%
				100%	100%	100%
Prices North America			-7.0%	-5.0%	3.0%	3.0%
Prices Rest of the world			5.1%	2.5%	2.5%	2.5%

Sales North America		712	528	426	447	484
% change			-25.8%	-19.4%	5.1%	8.2%
EBIT North America		157	61	26	27	73
Margin North America		22.0%	11.6%	6.0%	6.0%	15.0%

Sales Rest of the world		1,830	2,244	2,437	2,647	2,876
% change			22.6%	8.6%	8.6%	8.6%
EBIT Rest of the world		222	381	402	437	474
Margin rest of the wold		12.1%	17.0%	16.5%	16.5%	16.5%

Sales Total		2,542	2,772	2,863	3,094	3,360
% change			9.1%	3.3%	8.1%	8.6%
EBIT Total		379	443	428	464	547
Margin Total		14.9%	16.0%	14.9%	15.0%	16.3%

Sales	2,244	2,542	2,785	2,859	3,082	3,346
% change	10.5%	13.3%	9.5%	2.7%	7.8%	8.5%
Total l-f-l	7.2%	10.4%	3.7%	3.6%	7.8%	8.5%
price (%)	2.4%	3.2%	2.1%	0.9%	2.6%	2.6%
volume (%)	4.7%	7.0%	1.7%	2.7%	5.2%	5.8%
currency (%)	3.4%	0.3%	-1.9%	-1.5%	0.0%	0.0%
scope (%)	0.0%	2.6%	7.6%	0.5%	0.0%	0.0%
Total l-f-l (m)		229	95	101	224	259
price (m)		72	52	26	74	80
volume (m)		157	43	75	149	179
currency (m)		6	-47	-42	0	0
scope (EURm)	0	58	194	15	0	0
Operating income	292	379	443	428	447	485
Operating margin	13.0%	14.9%	15.9%	15.0%	14.5%	14.5%
Restructuring / impairment	-14	-38	-12	-30	-15	-15
Business income (post restruct.)	278	341	431	398	432	470
			16.3%	13.4%
Cash flow	287	358	447	432	452	490
Cash flow/sales	12.8%	14.1%	16.1%	15.1%	14.7%	14.7%
Capex	145	145	199	200	216	234
Capex/sales	6.5%	5.7%	7.1%	7.0%	7.0%	7.0%
FCF	142	213	248	232	236	256
Depreciation	112	121	133	136	147	159
Depreciation/sales	5.0%	4.8%	4.8%	4.8%	4.8%	4.8%
Ebitda	404	500	575	564	594	644
Net profit (aprox)	175	237	314	296	305	331
Total assets	1,498	1,585	1,651	1,716	1,785	1,860
Sales/assets	1.5x	1.6x	1.7x	1.7x	1.7x	1.8x
Operating Income after 35% tax / assets	12.7%	15.5%	17.4%	16.2%	16.3%	17.0%

GYPSUM	2005	2006	2007	2008	2009	2010
		160
		0.68
North America		0.055
Sales	868	987	576	425	491	559
% change		14%	-42%	-26%	16%	14%
% change lfl		16%	-40%	-22%	15%
price (%)		21%	-29%	-12%	10%	10%
selling price in USD - ref: US Gypsum	145	175	125	110	121	133
volume (%)		-5.0%	-11.5%	-9.5%	5.0%	3.5%
o.w. Sales Growth synergies (EURm)		5	10	15
currency (%)		-1.3%	-7.6%	-7.4%
Cost synergies for the current year		5	15
Cumulated cost synergies		5	20
Op income	123	204	-14	-43	25	50
margin	14.1%	20.6%	-2.4%	-10.0%	5.0%	9.0%
			-107%
Europe
Sales NW Europe - (2/3 = UK)	845	879	947	907	962	1,021
% change		4%	8%	-4%	6%	6%
% change lfl		4%	15%	0%	6%
price (%)		2%	9%	3%	2.0%	2.0%
volume (%)		2.0%	6%	-2%	4%	4%
currency (%)		-0.6%	0%	-4%
Sales Growth synergies (EURm)		5	10	15
scope (m)			-67
Cost synergies for the current year		40	35
Cumulated cost synergies		40	75
Op income NW Europe	150	218	270	249	264	280
margin	17.7%	24.8%	28.5%	27.5%	27.5%	27.5%

Sales Sth Europe (1/2=France)	1,190	1,219	1,408	1,484	1,589	1,686
% change		2%	15%	5%	7%	6%
% change lfl		2%	15%	5%	7%
price (%)		0%	8%	3%	2.0%	2.0%
volume (%)		2.0%	7.4%	2.9%	5%	4%
Sales Growth synergies (EURm)		5	10	15
Cost synergies for the current year		0	10
Cumulated cost synergies		0	10
Op income Sth Europe	120	130	160	176	196	217
margin	10.1%	10.6%	11.3%	11.8%	12.3%	12.8%

Sales Ctral/Eastern Europe (1/3 = GMN)	539	550	653	729	803	885
% change		2%	19%	12%	10%	10%
% change lfl		2%	17%	9%	10%
price (%)		0%	9%	3%	2%	2%
volume (%)		2.0%	8.0%	6.8%	8.0%	8.0%
currency (%)		-1%	1%	2%
Sales Growth synergies (EURm)		5	10	15
Cost synergies for the current year		0	0
Cumulated cost synergies		0	0
Op income Ctral/Eastern Europe	40	52	55	65	76	88
margin	7.4%	9.4%	8.4%	8.9%	9.4%	9.9%

Total Europe Sales	2,575	2,648	3,008	3,121	3,355	3,592
% change		3%	14%	4%	8%	7%
Total Europe Op income	310	399	484	490	536	585
margin	12.0%	15.1%	16.1%	15.7%	16.0%	16.3%

Emerging markets
Sales	214	260	365	438	494	557
% change		22%	40%	20%	13%	13%
% change lfl		10%	35%	17%	13%
price (%)		2%	10%	2%	2.5%	2.5%
volume (%)		8.0%	25.0%	15.0%	10.0%	10.0%
currency (%)		4%	2%
scope (m)				10
Sales Growth synergies (EURm)		15	30	60
Cost synergies for the current year		5	5
Cumulated cost synergies		5	10
Op income	27	46	68	81	91	103
margin	12.7%	17.6%	18.5%	18.5%	18.5%	18.5%

Synergies implied -100% incl in gypsum - 0% in insulation
Sum of cumulated growth synergies (sales)		35	105	225
Sum of cumulated growth synergies (EBIT)		6	17	36
Margin on growth synergies		16%	16%	16%

Cost synergies for the current year		50	55
Cumulated cost synergies		50	115	0
		3,895	3,950	3,984	4,340	4,708
			85	104	111	117
Sales	263	3,895	3,865	3,880	4,229	4,591
% change		6.5%	-0.8%	0.4%	9.0%	8.5%
Total l-f-l		6.5%	2.5%	1.9%	9.0%	8.5%
price (%)			-0.9%	0.3%	3.0%	3.0%
volume (%)			3.5%	1.6%	6.0%	5.5%
currency (%)			-1.6%	-1.8%	0.0%	0.0%
scope (%)			-1.7%	0.3%	0.0%	0.0%
Total l-f-l (m)			99	74	350	361
price (m)			-36	13	116	129
volume (m)			135	61	234	233
currency (m)		-13	-62	-69	0	0
scope (EURm)	263	3,632	-67	10	0	0
Operating income	-8	649	538	529	652	738
Operating margin	-3.0%	16.7%	13.9%	13.6%	15.4%	16.1%
Restructuring / impairment	-49	-1	-6	-15	-15	-15
Business income (post restruct.)	-57	648	532	514	637	723
			12.9%

Cash flow	-31	368	292	282	383	446
Cash flow/sales	-11.8%	9.4%	7.6%	7.3%	9.1%	9.7%
Capex	52	487	422	0	0	0
Capex/sales	19.8%	12.5%	10.9%	0.0%	7.0%	6.0%
FCF	-83	-119	-130	282	383	446
Depreciation	14	163	162	162	177	192
Depreciation/sales		4.2%	4.2%	4.2%	4.2%	4.2%
Ebitda	6	812	700	691	829	930
Net profit (aprox)	-77	205	130	119	206	254
Total assets	7,594	8,219	8,479	8,317	8,140	7,948
Sales/assets	0.0x	0.5x	0.5x	0.5x	0.5x	0.6x
Operating income after 35% tax / assets	-0.1%	5.1%	4.1%	4.1%	5.2%	6.0%

PIPES	2005	2006	2007	2008	2009	2010

Sales	1,474	1,783	1,913	2,017	2,077	2,140
% change	6.2%	21.0%	7.3%	5.4%	3.0%	3.0%
Total l-f-l	5.4%	9.6%	6.4%	5.5%	3.0%	3.0%
price (%)	7.8%	1.5%	3.4%	2.5%	1.0%	1.0%
volume (%)	-2.2%	8.0%	3.0%	3.0%	2.0%	2.0%
currency (%)	0.6%	0.5%	-0.5%	-0.1%	0.0%	0.0%
scope (%)	0.0%	10.9%	1.4%	0.0%	0.0%	0.0%
Total l-f-l (m)		139	114	105	60	62
price (m)		21	61	48	20	21
volume (m)		118	53	57	40	42
currency (m)		7	-9	-2	0	0
scope (EURm)	0	160	25	0	0	0
Operating income	107	140	166	175	181	186
Operating margin	7.3%	7.9%	8.7%	8.7%	8.7%	8.7%
Restructuring / impairment	-16	-70	-14	-30	-5	-5
Business income (post restruct.)	91	70	152	145	176	181

Cash flow	91	118	146	154	159	163
Cash flow/sales	6.2%	6.6%	7.6%	7.6%	7.6%	7.6%
Capex	56	70	76	80	83	85
Capex/sales	3.8%	3.9%	4.0%	4.0%	4.0%	4.0%
FCF	35	48	70	74	76	78
Depreciation	65	62	67	70	72	74
Depreciation/sales	4.4%	3.5%	3.5%	3.5%	3.5%	3.5%
Ebitda	172	202	233	246	253	261
Net profit (aprox)	26	56	79	84	86	89
Total assets	1,509	1,618	1,627	1,637	1,648	1,658
Sales/assets	1.0x	1.1x	1.2x	1.2x	1.3x	1.3x
Operating income after 35% tax / assets	4.6%	5.6%	6.6%	7.0%	7.1%	7.3%

INTERNAL SALES AND MISCELLANEOUS	2005	2006	2007e	2008e	2009	2010
Internal sales	-603	-962	-1,080	-1,133	-1,190	-1,250
Operating income	9	-19	-10	-10	-10	-10
Restructuring / impairment & provisions	-117	-117	-118	-109	-109	-109
Business income (post restruct. & provisions)	-108	-136	-128	-119	-119	-119

Cash flow	103	119	288
Capex	13	24	20	0	0	0
FCF	90	95	268
Depreciation	12	12	12	12	12	12
EBITDA	21	-7	2	2	2	2
Total assets	257	269	277	265	253	241
Sales/assets	-2.3x	-3.6x	-3.9x	-4.3x	-4.7x	-5.2x
Operating income after 35% tax / assets	2%	-5%	-2%	-2%	-3%	-3%

Catalyst

Wendel-driven restructuring/ Integration of core assets / demonstration of defensiveness of assets / sale/spin of distribution, glass, packaging

show sort by

			2008	2009
Price:	51.00	EPS
Shares Out. (in M):	0	P/E
Market Cap (in $M):	18,400	P/FCF
Net Debt (in $M):	0	EBIT	0	0
TEV (in $M):	0	TEV/EBIT