Interim Results

Compagnie de Saint-Gobain
24 July 2003


press release



•  FIRST-HALF 2003 RESULTS

     •  GROUP RESULTS SEVERELY IMPACTED BY UNFAVORABLE EXCHANGE RATES

          -  Sales: EUR 14,650 million, down 4.6% including a 7.7-point negative 
             currency effect
          -  Operating income: EUR 1,187 million, down 8.1% including a 
             9.1-point negative currency effect
          -  Net income: EUR 470 million,  down 5.6%
          -  Net income before profits and losses on sales of non-current 
             assets: EUR 471 million, down 8.5%

     •  MODERATE GROWTH IN SALES  AND  OPERATING INCOME, ON A 'LIKE-FOR-LIKE' 
        BASIS

          -  Sales up 2.0%
          -  Operating income up 0.6%


     •  2003 TARGET: MODEST INCREASE IN OPERATING INCOME ON A CONSTANT RATE 
        BASIS




•  Net income

Saint-Gobain Group consolidated net income for the first half of 2003 amounted
to EUR 470 million, a decrease of 5.6% on the same period of 2002. Net income
before profits and losses on sales of non-current assets came to EUR 471
million, down 8.5% on the year-earlier period. The decline was attributable to
unfavorable exchange rates (US Dollar: -19%; Brazilian Real: -39%;, British
Pound: -9%) which significantly impacted the Group's main income statement
captions. At constant exchange rates*, net income was on a par with first-half
2002.

* conversion based on average exchange rates for first-half 2002


•  Performance of Group sectors and divisions: moderate like-for-like
   growth in sales (2.0%) and operating income (0.6%)

Like-for-like consolidated sales - based on a comparable Group structure and at
constant exchange rates - rose 2.0% compared with first-half 2002. Changes in
exchange rates negatively impacted all Group divisions (see appendix 1).
However, all three sectors reported increased like-for-like sales, spurred
mainly by higher sales prices.

The Glass Sector achieved moderate organic growth, with like-for-like sales up
1.6%. However, operating margin dipped slightly, to 10.2% from 10.6%. This was
due to lower margins in the Containers division, caused by soaring energy costs
in the United States, as well as in the Insulation and Reinforcements divisions
as a result of renewed pricing pressure. The Flat Glass division, for its part,
turned in the best operating income performance within the Group on a
like-for-like basis. These good results were primarily attributable to strong
sales in emerging markets as well as in the European automobile market,
offsetting the ongoing erosion of demand from the European construction
industry.

The High Performance Materials Sector posted a solid improvement in operating
margin, to 9% from 7.2%, on the back of a modest 1.1% increase in like-for-like
sales. This was achieved primarily thanks to the cost-cutting measures
implemented in 2001 and 2002. Sales growth was held back by the persistently
depressed conditions in manufacturing industry on both sides of the Atlantic,
which have prevented any real recovery in corporate capital spending.

The Housing Products Sector was the star performer in terms of organic growth.
The 2.7% rise in like-for-like sales was attributable to the 12.9% surge in Pipe
sales, spurred by major distant export contracts. However, the sector's
operating margin dipped slightly, to 6.0% from 6.7%, due to sharply higher raw
materials costs for the Building Materials division in the United States. The
Building Materials Distribution division continued to gain ground in its main
markets, through a combination of organic and external growth, and also posted a
further improvement in profitability despite the persistently dismal conditions
in Germany.


                            *          *          *


•  Detailed review of interim results:

Key figures from the interim consolidated financial statements reviewed by the
Board of Directors on July 24, 2003 are as follows:

                                                                    H1 2002       H1 2003       Change
                                                                       EURm          EURm            %

                                                                        (1)           (2)      (2)/(1)

Net sales                                                            15,350        14,650        -4.6%
Operating income                                                      1,292        1,1,87        -8.1%
Dividend income                                                          17             4       -76.5%
Interest and other financial charges, net                              (274)         (242)      -11.7%
Non-operating costs                                                     (99)         (124)      +25.3%
Income before profit on sales of non-current assets and taxes           936           825       -11.9%
Profit (loss) on sales of non-current assets, net                       (24)            2         n.m.
Provisions for income tax                                              (321)         (271)      -15.6%
Amortization of goodwill                                                (78)          (74)       -5.1%
Share in net results of equity investees                                  1             2        +100%
Net income before minority interests                                    514           484        -5.8%
Minority interests                                                      (16)          (14)      -12.5%
Net income                                                              498           470        -5.6%
Earnings per share (in EUR)                                            1.44          1.38        -4.2%
Net income excluding profits and losses on sales of non-current         515           471        -8.5%
assets
Earnings per share excluding profits and losses on sales of                          
non-current assets (in EUR)                                            1.49          1.38        -7.4%
Cash flow from operations                                             1,357         1,243        -8.4%
Cash flow excluding capital gains tax                                 1,350         1,247        -7.6%
Capital expenditure                                                     575           501       -12.9%
Investments in securities                                               480           251       -47.7%
Net indebtedness                                                      8,009         7,099       -11.4%



Consolidated sales contracted by 4.6% or 5.9% based on a comparable structure.
The decline was entirely attributable to unfavourable exchange rates - mainly
the sharp weakening of the US dollar, sterling and the Brazilian real against
the euro - which had a 7.7% negative impact on sales for the period.  Excluding
the currency effect, sales climbed 3.4% (2.0% based on a comparable structure).
Volumes expanded by 0.8% while average sales prices rose by a further 1.2%.

The breakdown by geographic area is as follows: France 32.9%, other European
countries 41.3%, North America 19.0% and rest of the world 6.8%.

Operating income declined by 8.1%. However, excluding the currency effect,
operating income rose 1.0% (0.6% based on a comparable structure). Operating
margin eased back to 8.1% of sales, from 8.4% in first-half 2002. The decline
stemmed from lower margins in the Insulation and Reinforcements Division, and
also in the Building Materials Division due to soaring raw materials prices in
the United States.

Profitability improved in France and emerging markets, but retreated in the
other countries of Europe and in North America.

Dividend income from non-consolidated companies fell to EUR 4 million from EUR
17 million in first-half 2002, reflecting the absence of a 2002 dividend on
Vivendi Universal shares.

Interest and other financial charges, net amounted to EUR 242 million versus EUR
274 million in first-half 2002. The 11.7% improvement was attributable to a
reduction in Group indebtedness and the favourable impact of converting interest
on dollar-denominated debt into euros.

Non-operating costs for the period amounted to EUR 124 million, equivalent to
half of total non-operating costs for 2002. The figures for first-half 2003 and
first-half 2002 both include a EUR 50 million charge for the cost of asbestos
claims filed against CertainTeed.

Net profit on sales of non-current assets amounted to EUR 2 million. Profits on
asset sales were almost entirely offset by permanent write-downs of assets.

Amortization of goodwill stood at EUR 74 million versus EUR 78 million in
first-half 2002.

Minority interests dipped to EUR 14 million from EUR 16 million in first-half
2002, due to the unfavourable currency effect on minority interests in the
Brazilian subsidiaries.

Net income came in at EUR 470 million, down 5.6% on first-half 2002. Based on
the 341,010,680 shares outstanding at June 30, 2003, earnings per share stood at
EUR 1.38 versus EUR 1.44 for first-half 2002. Net income at constant exchange
rates was virtually on a par with that for the year-earlier period.

Excluding profits and losses on sales of non-current assets, net income amounted
to EUR 471 million versus EUR 515 million in first-half 2002, a decline of 8.5%.
Earnings per share before profits and losses on sales of n on-current assets
stood at EUR 1.38, compared with EUR 1.49 for the year-earlier period, based on
the 341,010,680 shares outstanding at June 30, 2003. Net income before profits
and losses on sales of non-current assets and at constant exchange rates was
virtually unchanged compared with first-half 2002.

Cash flow from operations contracted by 8.4% to EUR 1,243 million. Excluding
taxation of profits on sales of non-current assets (EUR 4 million), cash flow
from operations was EUR 1,247 million, versus EUR 1,350 million in first-half
2002, a decrease of 7.6%. Excluding the currency effect, cash flow from
operations was stable compared with the year-earlier period.

Capital expenditure amounted to EUR 501 million compared with EUR 575 million in
first-half 2002, representing 3.4% of sales versus 3.7%.

Investments in securities totalled EUR 251 million, including EUR 159 million
for acquisitions of local Building Materials distributors.

Net indebtedness (excluding financial instruments) came to EUR 7.1 billion at
June 30, 2003, after payment of the 2002 dividend. This was significantly below
the year-earlier figure of EUR 8.0 billion. The gearing ratio - based on
consolidated shareholders' equity plus non-voting participating securities - was
61% compared with 67% at June 30, 2002.


                            *          *          *


Asbestos claims in the United States: During the first half of 2003, around
48,000 new asbestos claims were filed against CertainTeed, including 28,000 in
the state of Mississippi. As announced at the beginning of the year, there was
an exceptional surge in asbestos claims filed in Mississippi at the end of 2002
due to the adoption of a new law, applicable from January 1, 2003, which makes
this state a less friendly venue for these claims. Most of the claims recorded
in Mississippi in the first half of 2003 were filed before the new law came into
effect on January 1 but were not disclosed to the company until after that date.
The flow of claims in Mississippi declined significantly in June, indicating
that the surge is probably over.

Some 20,000 claims were filed during the period in other states, compared with
21,400 in the second half of 2002. Apart from the temporary rise in claims in
Mississippi, average monthly new claims in the first half of 2003 were on a par
with the second half of 2002, at less than 4,000.

During first-half 2003, 25,000 claims were settled versus 24,000 in second-half
2002, and 7,000 claims were placed on the inactive docket. At June 30, 2003,
some 123,000 claims were in progress.

The average cost of claims settled in first-half 2003 was USD 2,100, unchanged
since September 2002.

In the coming months, the number of new claims recorded in Mississippi is
expected to remain very low. However, there may be a rush to the courthouse in
Texas, as the state legislature is seriously considering a new legislation
making the state a less friendly venue.

The proposal to set up a federal Asbestos Trust Fund contained in a Bill
introduced by Senator    Hatch might pave the way for all current and future
claims to be dealt with at national level.



                        *             *            *


Outlook and targets: In light of the sharp rise in the euro against most other
currencies observed since the beginning of the year, operating income and net
income for the full year will be down on 2002. At constant exchange rates (i.e.
based on average 2002 exchange rates), the Group is aiming for a modest increase
in operating income.


July 24, 2003





Next results announcement:



- sales for the first nine months of 2003: October 28, 2003 after market closure







                         Investor Relations Department



Florence TRIOU-TEIXEIRA     Tel. : [phone] - mailto : [e-mail]
Alexandre ETUY              Tel. : [phone] - mailto : [e-mail]
                            Fax : [phone]



Appendix 1

Result by Business Sector, Division and Geographic
Area
(in EUR millions)
                                            H1            H1        change on      change on a       change on
                                           2002          2003       an actual       comparable      a comparable
I. SALES                                                            structure       structure      structure and
                                                                      basis           basis        currency basis

by sector and division:
Glass (1)                                 6 018         5 642         -6,2%           -7,0%            +1,6%
Flat Glass                                2 244         2 159         -3,8%           -4,3%            +3,2%
Insulation and Reinforcements             1 678         1 534         -8,6%           -10,4%           -1,9%
Containers                                2 101         1 955         -6,9%           -6,9%            +2,7%
High-Performance Materials (1)            1 913         1 640         -14,3%          -12,6%           +1,1%
Ceramics & Plastics and Abrasives         1 913         1 640         -14,3%          -12,6%           +1,1%
Housing Products (1)                      7 565         7 515         -0,7%           -3,2%            +2,7%
Building Materials                        1 644         1 436         -12,7%          -13,0%           +1,0%
Building Materials Distribution           5 371         5 477         +2,0%           -1,4%            +2,0%
Pipe                                       690           750          +8,7%           +8,1%            +12,9%

internal sales                             -146          147           n.s.
Group                                     15 350        14 650        -4,6%           -5,9%            +2,0%

by geographic area:
France                                    4 793         5 022         +4,8%           +2,2%            +2,2%
Other European Countries                  6 420         6 321         -1,5%           -3,2%            -0,1%
North America                             3 614         2 894         -19,9%          -18,4%           +0,2%
Rest of the world                         1 127         1 031         -8,5%           -12,1%           +23,2%
internal sales                             -604          -618          n.s.
Group                                     15 350        14 650        -4,6%           -5,9%            +2,0%


(1) including inter-division
eliminations





                                                       H1               H1            change on
II. OPERATING INCOME                                  2002             2003           an actual
                                                                                      structure
                                                                                        basis
by sector and division:
Glass                                                  641              574             -10,5%
Flat Glass                                             227              227             +0,0%
Insulation and Reinforcements                          176              134             -23,9%
Containers                                             238              213             -10,5%
High-Performance Materials                             137              147             +7,3%
Ceramics & Plastics and Abrasives                      137              147             +7,3%
Housing Products                                       511              453             -11,4%
Building Materials                                     199              125             -37,2%
Building Materials Distribution                        244              250             +2,5%
Pipe                                                   68               78              +14,7%
misc.                                                   3               13               n.s.
Group                                                 1 292            1 187            -8,1%

by geographic area:
France                                                 445              470             +5,6%
Other European Countries                               417              384             -7,9%
North America                                          328              223             -32,0%
Rest of the world                                      102              110             +7,8%
Group                                                 1 292            1 187            -8,1%




                                                   H1               H1            change on
III. CASH FLOW                                    2002             2003           an actual
                                                                                  structure
                                                                                    basis
by sector and division:
Glass                                             770              696              -9,6%
Flat Glass                                        292              266              -8,9%
Insulation and Reinforcements                     205              179              -12,7%
Containers                                        273              251              -8,1%
High-Performance Materials                        131              153              +16,8%
Ceramics & Plastics and Abrasives                 131              153              +16,8%
Housing Products                                  387              336              -13,2%
Building Materials                               149**              90              -39,6%
Building Materials Distribution                   166              172              +3,6%
Pipe                                               72               74              +2,8%
Misc.                                              69              58**             -15,9%
Group                                            1 357            1 243             -8,4%

by geographic area:
France                                            445              487              +9,4%
Other European Countries                          472              416              -11,9%
North America                                    295**            212**             -28,1%
Rest of the world                                 145              128              -11,7%
Group                                            1 357            1 243             -8,4%

** after asbestos-related litigation charge of EUR 34 m
after taxes



IV. CAPITAL EXPENDITURE                                H1               H1            change on
      ON PLANT AND EQUIPMENT                          2002             2003           an actual
                                                                                      structure
                                                                                        basis
by sector and division:
Glass                                                  345              286             -17,1%
Flat Glass                                             158              102             -35,4%
Insulation and Reinforcements                          78               86              +10,3%
Containers                                             109              98              -10,1%
High-Performance Materials                             58               42              -27,6%
Ceramics & Plastics and Abrasives                      58               42              -27,6%
Housing Products                                       171              172             +0,6%
Building Materials                                     52               57              +9,6%
Building Materials Distribution                        105              95              -9,5%
Pipe                                                   14               20              +42,9%
misc.                                                   1                1              +0,0%
Group                                                  575              501             -12,9%

by geographic area:
France                                                 104              126             +21,2%
Other European Countries                               242              214             -11,6%
North America                                          114              87              -23,7%
Rest of the world                                      115              74              -35,7%
Group                                                  575              501             -12,9%



Appendix 2: CONSOLIDATED BALANCE SHEET
In EUR millions

                                  ASSETS                                         June 30, 2003       Dec. 31, 2002

Goodwill                                                                                 5 205               5 521
Other intangible assets, net                                                             1 863               1 914
                                                                                         7 068               7 435
Property, plant and equipment                                                           21 806              22 069
Less: depreciation                                                                    (12 864)            (12 687)
                                                                                         8 942               9 382
Investments in equity investees                                                            104                 114
Investments, at cost                                                                       139                 144
Non-current marketable securities                                                          147                 175
Other non-current assets                                                                 1 514               1 590
                                                                                         1 904               2 023
Non-current assets                                                                      17 914              18 840

Inventories                                                                              4 873               4 664
Trade accounts receivable                                                                4 986               4 264
Other receivables                                                                        1 236               1 010
Short-term loans                                                                           140                 162
Marketable securities                                                                      760                 469
Cash and cash equivalents                                                                  955                 739

Current assets                                                                          12 950              11 308

Total assets                                                                            30 864              30 148



                   LIABILITIES AND SHAREHOLDERS' EQUITY

Capital stock                                                                            1 364               1 364
(at 06/30/2003 and 12/31/2002, composed of 341 010 680 shares with a par value of EUR 4)
Additional paid-in capital and legal reserve                                             2 264               2 264
Retained earnings and net income for the period                                          9 295               9 204
Translation adjustments                                                                (1 808)             (1 438)
Treasury stock                                                                            (87)                (79)

Shareholders' equity                                                                    11 028              11 315

Minority interests                                                                         216                 227

Net equity of consolidated entities                                                     11 244              11 542

Non-voting participating securities                                                        391                 391
Pensions and other post-retirement benefits                                              2 290               2 353
Deferred tax liability                                                                     554                 696
Other liabilities                                                                        1 059               1 084
Long-term debt                                                                           6 759               6 238

Shareholders' equity and non-current liabilities                                        22 297              22 304

Trade accounts payable                                                                   3 740               3 352
Other payables                                                                           2 632               2 348
Current portion of long-term debt                                                          651                 487
Short-term debt and bank overdrafts                                                      1 544               1 657

Current liabilities                                                                      8 567               7 844

Total liabilities and shareholders' equity                                              30 864              30 148





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