Estimated 2003 Results

Compagnie de Saint-Gobain
04 February 2004

Press release


       ESTIMATED 2003 RESULTS:

O     At constant exchange rates,* growth in sales and operating income in line with objectives:

-     Sales down 2.3% to EUR 29,590 million (up 4.1% excluding currency effects and up 2.5% on a like-for-like
      basis)

-     Operating income down 5.4% to EUR 2,442 million (up 1.0% excluding currency effects and up 0.1% on a
      like-for-like basis)

-     Operating margin: 8.3%


O     Stable net income: down 0.1% to EUR 1,039 million

-     Net income excluding capital gains down 2.9%,
      to EUR 1,020 million


O     Strong free cash flow, at EUR 1.2 billion (excluding taxes on capital gains)


O     Significant 19% decrease in net debt, to EUR 5.7 billion


2004 TARGETS: to outperform 2003 growth in operating income at constant exchange rates, and to maintain strong free cash
flow levels.


        * based on average 2002 exchange rates

Analysis of the 2003 consolidated financial statements:


Based on the estimates presented at the Board of Directors Meeting of January
29, 2004, the Group's key consolidated data for 2003 are as follows:


                                                                2002           2003          %
                                                               in EUR      estimated in    change
                                                              millions         EUR
                                                                             millions

Net sales                                                      30,274         29,590       -2.3%

Operating income                                                2,582         2,442        -5.4%

Dividend income                                                  22             12         -45.5%

Interest and other financial charges, net                       (504)         (457)        -9.3%

Non-operating costs                                             (252)         (275)        +9.1%

Income before profit on sales of non-current assets and         1,848         1,722        -6.8%
taxes

Profit on sales of non-current assets, net                        3             86          n.m.

Provisions for income tax                                       (612)         (595)        -2.8%

Amortization of goodwill                                        (169)         (154)        -8.9%

Share in net results of equity investees                          4             6           +50%

Net income before minority interests                            1,074         1,065        -1.0%

Minority interests                                              (34)           (26)        -23.5%

Net income                                                      1,040         1,039        -0.1%

Earnings per share (in EUR )                                    3.05           2.99        -2.0%

Earnings per share excluding treasury                           3.10           3.09        -0.3%
stock (in EUR)

Net income excluding profit on sales of non-current assets      1,051         1,020        -2.9%

Earnings per share excluding profit on sales of                 3.08           2.93        -4.9%
non-current assets (in EUR )

Earnings per share excluding profit on sales of                 3.13           3.03        -3.2%
non-current assets and treasury stock (in EUR)

Cash flow from operations                                       2,673         2,471        -7.6%

Cash flow excluding capital gains tax                           2,688         2,540        -5.5%

Capital expenditure                                             1,431         1,351        -5.6%

Investments in securities                                        789           783         -0.8%

Net indebtedness                                                7,012         5,656        -19.3%


Saint-Gobain's 2003 performance, achieved against the backdrop of a sustained
challenging economic environment, once again testifies to the Group's solid
fundamentals and proves the quality of its business model.


Group sales dipped 2.3% in 2003 on an actual structure basis and 3.7% based on a
comparable structure. At constant exchange rates*, sales were up 4.1% on an
actual structure basis, and 2.5% based on a comparable structure. Currency
effects had a 6.1 point negative impact on sales for the year, particularly due
to the significant depreciation of the US dollar, pound sterling and Brazilian
real against the euro (down 16%, 9% and 20% respectively). Sales volumes climbed
1.7%, spurred by a recovery in the second half of the year. At the same time,
prices increased by 0.8%.

France accounted for 32.2% of total sales, with other European countries
contributing 42.0%, North America 18.6% and other countries 7.2%.



* based on average 2002 exchange rates.


Operating income contracted 5.4%. At constant exchange rates however, it rose
1.0% on an actual structure basis and 0.1% based on a comparable structure.
Operating margin was 8.3% compared with 8.5% in 2002. This change was
essentially due to a significant increase in the cost of energy and certain raw
materials such as natural gas, asphalt, iron and resins, at the start of 2003,
particularly in the United States. However, operating margins did pick up in the
second half of the year.


These cost increases also largely explain the contraction in profitability in
North America and most European countries, except for France and the United
Kingdom. Profitability remained high though in emerging countries.


Dividends received from non-consolidated companies fell significantly to EUR 12
million in 2003, compared with EUR 22 million a year earlier, reflecting the
absence of a 2002 dividend on Vivendi Universal shares.


Net interest and other financial charges decreased 9.3% to EUR 457 million from
EUR 504 million in 2002, thanks to the reduction in the Group's net debt and the
favorable impact of converting interest on dollar-denominated debt into euros.


Non-operating costs edged up to EUR 275 million, from EUR 252 million in 2002.
This slight increase was due to new restructuring programs implemented to boost
competitiveness at certain of the Group's manufacturing businesses. As in 2002,
the 2003 figure includes a EUR 100 million charge for the cost of
asbestos-related claims filed against CertainTeed.


Profit on sales of non-current assets totaled EUR 86 million in 2003. Capital
gains made during the year - including on the sales of Terreal and 7 million
Vivendi Universal shares - were partly offset by losses on other asset sales and
by asset write-downs.


Goodwill amortization amounted to EUR 154 million in 2003, compared with EUR 169
million a year earlier. This decline resulted from the currency impact on
converting into euros goodwill amortization for the Group's US subsidiaries.


Minority interests decreased from EUR 34 million in 2002 to EUR 26 million in
2003. This slight reduction stemmed from the unfavorable currency effect on
minority interests in the Brazilian subsidiaries.


Consolidated net income is estimated at EUR 1,039 million for 2003, virtually on
a par with 2002. Based on the 347,824,967 shares outstanding at December 31,
2003, earnings per share (EPS) came to EUR 2.99, a 2.0% contraction from EUR
3.05 in 2002. Based on the number of shares excluding treasury stock
(336,185,581 at December 31, 2003 compared with 335,850,864 at December 31,
2002) earnings per share amounted to EUR 3.09, on a par with the 2002 figure of
EUR 3.10.

The issue of 6,814,287 new shares in 2003 required for attribution under the
Group Savings Plan and further to the exercise of 314,880 stock options, were
offset by the buyback during the year of an almost equivalent number of shares
on the market. At December 31, 2003 treasury stock therefore represented
11,639,386 shares, compared with 5,159,816 shares at December 31, 2002. At its
meeting of January 29, 2004, the Board of Directors cancelled 6,799,832 treasury
shares, thus reducing the Group's capital stock to 341,025,135 shares at that
date, practically unchanged from the 341,010,680 shares outstanding at December
31, 2002.


Excluding profit on sales of non-current assets estimated net income came to EUR
1,020 million, 2.9% lower than in 2002. This reduction reflects the negative
impact of currency effects - including the fall in the US dollar, Brazilian real
and pound sterling - which hit the Group's main income statement captions. On a
constant exchange rate basis, net income excluding profit on sales of
non-current assets would have been slightly higher than in 2002.

Based on the 347,824,967 shares outstanding at December 31, 2003, earnings per
share excluding capital gains dipped 4.9% to EUR 2.93 compared with the 2002
figure of EUR 3.08. Based on the number of shares excluding treasury stock
(336,185,581 at December 31, 2003 compared with 335,850,864 at December 31,
2002) earnings per share excluding capital gains amounted to EUR 3.03, a 3.2%
decrease from the 2002 figure of EUR 3.13.


Cash flow from operations came in at EUR 2,471 million, down 7.6% on the
prior-year figure. Excluding the EUR 69 million in tax on profit on sales of
non-current assets, cash flow from operations contracted 5.5% to EUR 2,540
million from EUR 2,688 million in 2002. On a constant exchange rate basis, cash
flow from operations (excluding tax on capital gains) would have been slightly
up on 2002.


Capital expenditure on plant and equipment stood at EUR 1,351 million, compared
with EUR 1,431 million in 2002, and represented 4.6% of sales, versus 4.7% the
previous year.


Free cash flow (cash flow minus capital expenditure on plant and equipment)
totaled EUR 1,189 million excluding capital gains tax, compared with EUR 1,257
million in 2002.


Investments in securities amounted to EUR 783 million, including EUR 436 million
for bolt-on acquisitions in the Building Materials Division, and EUR 229 million
for share buybacks.


Net indebtedness was EUR 5.7 billion at December 31, 2003 after payment of the
2002 dividend, down EUR 1.3 billion on the prior-year figure. The gearing ratio
- based on consolidated shareholders' equity plus non-voting participating
securities - was 49.3%.


                         *             *                *

Performance of Group sectors and divisions


Although changes in exchange rates negatively impacted all Group divisions (see
appendix), all three sectors reported increased like-for-like sales (based on a
comparable Group structure and at constant exchange rates).


The Glass Sector achieved a 1.5% increase in like-for-like sales but operating
margin dipped slightly, to 10.5% from 11.2%. This was due to lower margins
across the board for the sector, with Containers and Insulation hit by soaring
energy costs in the United States and renewed pricing pressure for
Reinforcements. The Flat Glass Division reported sustained sales in emerging
markets as well as in the European automobile market but the picture was more
mixed in the European construction market. However, the strong price increases
seen in South America and Asia since the beginning of the year slowed down
towards the end of 2003.


The High Performance Materials Sector posted a 0.5% increase in like-for-like
sales and a solid improvement in operating margin, to 8.4% from 6.7% in 2002.
This was achieved primarily thanks to the cost cutting measures implemented
since 2001. Both manufacturing and capital expenditure began to recover towards
the end of the year, particularly in the United States.


The Housing Products Sector was the star performer in terms of organic growth.
The 3.9% rise in like-for-like sales was fueled by the 14.2% surge in Pipe
sales, spurred by major distant export contracts. However, the sector's
operating margin dipped slightly, to 6.4% from 6.6%, due to sharply higher raw
materials costs for the Pipe division (iron) and particularly the Building
Materials division (asphalt and resins). Improvements in Building Materials
operating margin were achieved though, as the year went on, thanks to measures
implemented to reshape the division's manufacturing and sales operations. The
Building Materials Distribution division continued to gain ground, through a
combination of organic and external growth and also posted a further improvement
in profitability with operating margin coming in at 5.0%, despite the
persistently dismal conditions in Germany and the Netherlands. On a constant
exchange rate basis, operating income for the division was up 8.5% on the 2002
figure.

                        *             *             *



Asbestos claims against CertainTeed in the United States:


During 2003, around 62,000 new asbestos claims were filed against CertainTeed,
including 29,000 in the state of Mississippi. The number of new claims filed in
the second half of the year was significantly lower than the first half,
representing a 71% decrease from 48,000 to 14,000. Excluding claims filed in
Mississippi, the period-on-period reduction was 35%, with 20,000 claims in the
first half and 13,000 in the second. These figures indicate that the exceptional
surge in new claims observed in Mississippi since Autumn 2002 appears to have
come to an end. They also confirm the downward trend in new claims observed in
the rest of the United States since June 2003, particularly as there have been
no significant surges in new claims in Texas, Ohio or Michigan, where the
introduction of tort reform measures may make those states less
plaintiff-friendly venues. Average monthly new claims totaled some 2,300 during
the second half of 2003, less than half as many as in 2002 and in the first six
months of the year 2003.


54,000 claims were resolved during the year, including 29,000 in the second
half, representing over double the number of new claims filed in the second
half.  7,000 claims were also placed on the inactive docket. At December 31,
2003 some 108,000 claims were outstanding, virtually unchanged from the December
31, 2002 figure of 107,000 and down on the 123,000 claims in progress at June
30, 2003.

The average cost of claims settled in 2003 was approximately US$ 2,100,
unchanged since the start of the year.


At December 31, 2003, the Group's total cover for asbestos-related claims
against CertainTeed amounted to US$ 431 million, practically identical to the
2002 figure. This amount comprises insurance policies and provisions, including
the EUR 100 million accrual booked in 2003.


In addition, on July 11, 2003 the US Senate Judiciary Committee approved
legislation to create a federal asbestos trust fund (as proposed by Senator
Hatch). The ultimate passage of this (or comparable) legislation is still
unknown, but such a solution would pave the way for all pending and future
asbestos-related claims to be dealt with at a national level.


                     *             *              *

2004 outlook and targets: in 2004, the Group will aim to outperform
2003 growth in operating income at constant exchange rates, and to maintain
strong free cash flow levels.


January 29, 2004.


Next results announcement:


- Final 2003 results: March 25, 2004, after the close of the Paris Stock Exchange.


                         Investor Relations Department


Ms. Florence TRIOU-TEIXEIRA                              Tel.: [phone]

Mr. Alexandre ETUY                                       Tel.: [phone]

                                                          Fax: [phone]


Appendix:

Results by Business Sector, Division and Geographic Area
(in millions of euros)



                                                               Estimated   Change on  Change on a    Change on
I. SALES                                              2002       2003      an actual   comparable   a comparable
                                                                           structure   structure   structure and
                                                                                         basis
                                                                             basis                 currency basis
1)By sector and division:
Glass (1)                                            11,818     11,266       -4.7%       -5.2%         +1.5%
Flat Glass                                           4,423       4,298       -2.8%       -3.3%         +1.9%
Insulation and Reinforcements                        3,329       3,110       -6.6%       -7.8%         -0.6%
Containers                                           4,076       3,869       -5.1%       -5.1%         +2.7%
High-Performance Materials (1)                       3,637       3,256      -10.5%       -10.5%        +0.5%
Ceramics and Plastics & Abrasives                    3,637       3,256      -10.5%       -10.5%        +0.5%
Housing Products (1)                                 15,102     15,362       +1.7%       -0.8%         +3.9%
Building Materials                                   3,074       2,824       -8.1%       -6.7%         +4.9%
Building Materials Distribution                      10,953     11,305       +3.2%       -0.5%         +2.5%
Pipe                                                 1,344       1,516      +12.8%       +11.0%        +14.2%
Internal sales                                       (283)       (294)

2)By geographic area:
France                                               9,439       9,926       +5.2%       +2.7%         +2.7%
Other European Countries                             13,068     12,948       -0.9%       -2.7%         +0.4%
North America                                        6,785       5,735      -15.5%       -13.9%        +2.8%
Rest of the world                                    2,195       2,227       +1.5%       -3.0%         +17.4%
Internal sales                                      (1,213)     (1,246)
GROUP TOTAL                                          30,274     29,590       -2.3%       -3.7%         +2.5%

(1) including inter-division eliminations


                                                               Estimated
II. OPERATING INCOME                                  2002       2003       Change

1)By sector and division:
Glass                                                1,325       1,178      -11.1%
Flat Glass                                            495         471        -4.8%
Insulation and Reinforcements                         351         265       -24.5%
Containers                                            479         442        -7.7%
High-Performance Materials                            244         273       +11.9%
Ceramics and Plastics & Abrasives                     244         273       +11.9%
Housing Products                                     1,004        976        -2.8%
Building Materials                                    335         265       -20.9%
Building Materials Distribution                       534         560        +4.9%
Pipe                                                  135         151       +11.9%

2)By geographical area:
France                                                841         884        +5.1%
Other European Countries                              923         869        -5.9%
North America                                         586         452       -22.9%
Rest of the world                                     232         237        +2.2%
GROUP TOTAL                                          2,582       2,442       -5.4%

                                                               Estimated
III. CASH FLOW                                        2002       2003       Change

1)By sector and division:
Glass                                                1,614       1,406      -12.9%
Flat Glass                                            622         548       -11.9%
Insulation and Reinforcements                         436         354       -18.8%
Containers                                            556         504        -9.4%
High-Performance Materials                            246         291       +18.3%
Ceramics and Plastics & Abrasives                     246         291       +18.3%
Housing Products                                      814         714       -12.3%
Building Materials                                    247*        172       -30.4%
Building Materials Distribution                       414         398        -3.9%
Pipe                                                  153         144        -5.9%

2)By geographic area:
France                                                794         832        +4.8%
Other European Countries                             1,050        921       -12.3%
North America                                         513*       450*       -12.3%
Rest of the world                                     316         268       -15.2%
GROUP TOTAL                                          2,673       2,471       -7.6%

* after the CertainTeed asbestos-related charge of EUR 67 m after tax

IV. CAPITAL EXPENDITURE                                        Estimated
ON PLANT AND EQUIPMENT                                2002       2003       Change

1)By sector and division:
Glass                                                 869         861        -0.9%
Flat Glass                                            377         364        -3.4%
Insulation and Reinforcements                         198         232       +17.2%
Containers                                            294         265        -9.9%
High-Performance Materials                            160         108       -32.5%
Ceramics and Plastics & Abrasives                     160         108       -32.5%
Housing Products                                      401         380        -5.2%
Building Materials                                    135         117       -13.3%
Building Materials Distribution                       227         213        -6.2%
Pipe                                                   39         50        +28.2%

2)By geographic area:
France                                                309         305        -1.3%
Other European Countries                              575         587        +2.1%
North America                                         316         233       -26.3%
Rest of the world                                     231         226        -2.2%
GROUP TOTAL                                          1,431       1,351       -5.6%

                      This information is provided by RNS
            The company news service from the London Stock Exchange