HEALTHY INCREASE IN REVENUE AND MARGIN

Saint-Gobain experienced healthy business conditions in 2007, with net sales rising 5.0% on a comparable basis (incl. price effects of 3.7%) to €43.4 billion. Operating income grew by 10.6% and by 11.4% at constant exchange rates. The group’s operating margin stood at 9.5% of sales, vs. 8.9% in 2006.

GOOD PERFORMANCE AT ALL FIVE BUSINESS SECTORS.

Flat Glass posted the group’s highest rate of growth in net sales (10.4% unadjusted; 11.2% on a comparable basis). This growth resulted from very robust demand, price increases in glass for the building industry and a larger contribution from higher value-added products.

In the High Performance Materials business sector, the Ceramics, Plastics and Abrasives units achieved organic growth of 4.5%, as investment and industrial production held up well worldwide.

Net sales in the Construction Products business sector fi rmed by 2.5% like-for-like, as demand in western Europe and emerging markets (77% of total sales) was high. This more than offset the contraction in the US construction market.

Net sales in Building Distribution advanced by 10.8% owing to acquisitions in 2006 and 2007 and solid organic growth of 5.7%. Business remained strong in most western European countries. Emerging markets remained very buoyant, and sales there passed the €1 billion mark in 2007.

Net sales in the Packaging business sector rose by 5.5% on a comparable basis, owing in particular to higher sales prices, against a background of vigorous demand in Europe and in developing countries.

GOOD INTERNAL CASH GENERATION

Cash flow from operations excluding provisions for Flat Glass fi nes totaled €3,762 million, up 12.4% from 2006. Industrial investments increased by 3.7% to €2,273 million and represented 5.2% of sales. The group’s capital expenditures are concentrated in emerging markets, which absorb 40% of growth capital expenditures, and in markets related to energy effi ciency, in particular Flat Glass and Construction Products, which represent more than 50% of capital expenditures). Free cash fl ow (cash fl ow from operations – capital expenditures) surged 28.8% to €1,489 million. Excluding the acquisition of Maxit, net debt was €9,928 million at December 31, 2007, down 14.4% compared with the previous year-end.

ROBUST BUSINESS GROWTH IN EMERGING MARKETS

Businesses related to residential housing in Europe (in particular Flat Glass, Distribution, Interior Building Solutions) benefi ted from strong demand, amplifi ed by new energy-saving regulations in the building industry. This growth more than offset the sharp decline in construction in the United States. In Asian markets, where Saint- Gobain derived 15% of its net sales and 19% of its operating income, all of the group’s businesses continued to see very robust growth (16.6%).

By geographic region, there were sharp contrasts, on a like-for-like basis, between North America (13% of the group’s net sales), where sales declined 7.1%, and the rest of the world, which saw robust growth. Sales advanced by 5.2% in France for example (28% of net sales) and by 6% in the rest of Europe (44% of sales). Emerging markets and Asia (15% of net sales) posted the fastest growth: 16.5% organically. With the exception of North America, profi tability improved in each geographical area.

OUTLOOK

Against a more difficult and more uncertain economic backdrop, the group has significant built-in resilience. It is present in building renovation in Europe. It is a world leader in residential energy efficiency. It intends to carry out additional acquisitions. Finally, its financial structure is sound and its cash flow generation high.

For 2008 and future years, the group intends to pursue the strategic avenues presented in July 2007:

• step up geographic expansion via growth investments in emerging economies, with the objective of deriving 33% of the group’s net sales (excl. Distribution) from them by 2010;

• continue to grow through acquisitions, in particular to extend the group’s footprint in emerging market countries, increase the potential for innovation, and strengthen Building Distribution;

• innovate and devote more effort to R&D, in particular in energy and the environment.