2003 ANNUAL REPORT CONTENTS 1 Investing and entrepreneurial spirit 42 HEALTHCARE 2 Message from the Chairman 42 Stallergènes 3 History of the Group 44 bioMérieux 6 Interview with the Chief Executive Officer 46 Silliker 8 Stages in development 10 Board of Directors 47 CORPORATE ORGANIZATION 12 Corporate governance 48 RECENT DEVELOPMENTS 15 Internal control 18 Sustainable development FINANCIAL STATEMENTS 2003 22 Shareholders' review 49 Consolidated financial statements 24 Financial highlights 93 Parent company financial statements 26 Business sectors as of December 31, 2003 ANNUAL SHAREHOLDERS’ 28 INDUSTRY MEETING 28 Legrand 120 Independent auditors’ reports 30 Wheelabrator Allevard 127 Explanation of resolutions 32 Oranje-Nassau 130 Resolutions 34 Valeo 141 SUPPLEMENTAL INFORMATION 35 SERVICES 35 Capgemini 36 Bureau Veritas 38 Trader Classified Media 40 Neuf Telecom 41 Other corporate holdings 2003 Annual Report • WENDEL Investissement 1 INVESTING AND ENTREPRENEURIAL SPIRIT WENDEL Investissement was created to invest in companies active in the industrial and service sectors, and to help them become international leaders by fostering their development. WENDEL Investissement is a full-fledged industrial and financial partner – it supports entrepreneurial teams by monitoring operations on a regular basis, helps define ambitious strategies, and provides the financing needed to ensure the success of the companies in which it has invested. WENDEL Investissement invests in a relatively limited number of significant equity holdings in industry (products and systems for electrical installations, automotive components and systems, industrial abrasives, oil exploration and real estate), services (conformity assessment and certification, classified advertising and multimedia services, IT services and consulting, telecommunications), and healthcare (medical diagnostics, food quality testing, allergy laboratory). 2 2003 Annual Report • WENDEL Investissement MESSAGE FROM THE CHAIRMAN industrial and service sectors. With a new team, an updated structure and renewed impetus, the Group was about to write a new chapter in its history without losing the creative inspiration of the entrepreneurs who had founded the company. In 1977, CGIP was floated on the stock market with an estimated value of FRF 300 million.Twenty years later, the company’s worth had multiplied 40 times over. By readopting the name of Wendel, the bearer of the family tradition and a code of ethics since 1704,the ninth generation has met the challenge of historical industrial success with the same determination – to ensure the development of leading companies and increase the value of the assets that To the Shareholders, shareholders have entrusted to management. With a younger, skilled, flexible and responsive team, This year, the WENDEL Group celebrates its three WENDEL Investissement makes its expertise hundredth anniversary. Our company still operates available to subsidiaries in the role of an active, in the spirit of an enterprise created in 1704. Backed demanding partner. The objective of WENDEL by family shareholders, supported by a large number Investissement is to support entrepreneurial of French and international investors, it continues teams, define winning strategies, and provide to be motivated by the same determination to invest, ambitious financing to achieve top-tier success. develop business sectors and increase the value of From our venerable industrial roots to the most the assets entrusted to the company. modern business activities that prefigure the economy The history of our Group is an example of family of tomorrow, we capitalize on the experience we unity and an entrepreneurial tradition, marked for have acquired.The Group now focuses on investing three centuries by constant adaptation to the in new sectors of production and in technological economic, technological and social environment, services by diversifying assets in a balanced manner, and by an unerring sense of innovation. so as to make the long term our constant priority. The story began even before the Industrial We have created value for our shareholders with Revolution, in 1704, when Jean-Martin Wendel average annual growth of more than 15% over the acquired the Hayange forges in Lorraine. Handed last 20 years. Our ambition is to maintain this down from generation to generation, this production performance and perhaps to surpass these results site was to become the heart of the steel industry by fully participating in the entrepreneurial project in France. An entrepreneurial spirit and a keen of the twenty-first century. sense of innovation ensured the company’s development even beyond the Group’s historical borders. Far from putting an end to the family adventure, the nationalization of the steel industry in 1978 introduced a new phase of transformation with the full support of the family shareholders. A new group was created, CGIP, which significantly Ernest-Antoine Seillière restructured its activities and invested in new Chairman and Chief Executive Officer 2003 Annual Report • WENDEL Investissement 3 300 YEARS OF HISTORY 1704 1782 1797 Marguerite d’Hayange, Charles’ energetic 1737 widow, who ran the family business after her husband died in 1784, François-Ignace, continued to develop the prodigal son, the steel plants fascinated by new until she was ideas and a friend Jean-Martin Wendel brutally confronted of the encyclopédistes, acquired the Hayange by the French demonstrated forges. Revolution and saw his expertise From 1704 to 1870, her property by helping to create the Group accelerated confiscated and sold1797 Le Creusot, the development at auction. 4 Charles de Wendel the benchmark of its steel business 1782 succeeded his father of the steel industry by building on and expanded the in France. the great inventions family business well of the age, such as 0 beyond the Fensch coke smelting, the valley where it introduction of blast began. New facilities furnaces and rolling in the direction mills, and the of La Sarre doubled development of rail industrial capacity, transport. 17 enabling the firm to meet the growing demand for metallurgical products. 1737 4 2003 Annual Report • WENDEL Investissement 300 YEARS OF HISTORY 1880 1815 1871 By then a widow and alone at the helm 1857 With François de of the company, 88 Wendel, the family -year-old Madame regained François de Wendel had possession of its to deal with Germany’s industrial property annexation of Alsace and acquired the and Lorraine, and she Moyeuvre facilities. created the limited That year, the 1815 partnership The Wendel family’s Wendel clan also Les Petits-Fils de acquisition of the entered politics, François de Wendel Thomas Process 1871 as François was et Cie. allowed the two elected to a deputy Driven by an family companies in the French outstanding (Les Petits-Fils de legislature. entrepreneurial spirit, François de Wendel in ten years Charles & Cie, created 1871 de Wendel adapted in , the family company and Wendel & Cie, 1880 to modern industrial founded in ) techniques, to produce steel particularly linked using local ore and to the development to rank among of railroads. Europe’s leading steel makers. 1880 1857 2003 Annual Report • WENDEL Investissement 5 2002 1924 1974 The brutal surge in oil prices sparked a general economic 1948 crisis. The French steel sector entered a major depression as a freeze on steel prices and modernization measures triggered financial paralysis. As of 1978, the Group The period between The French was off to a fresh start, the two world wars government decided concentrating on was marked by to nationalize the steel industrial companies the forceful figure industry. The Group in which it exercises 1924 of François de Wendel, had to restructure, effective control. who was a deputy and all its non-steel At the same time, In the twentieth century, and senator for almost assets were put in a it diversified into new though severely affected 30 years, Vice-President new entity, Compagnie technological sectors. by the two world wars of the Fédération Générale d’Industrie In 2002, that devastated the Républicaine, et de Participations Marine-Wendel plants in Lorraine, President of the (CGIP). and CGIP merged the Group rose from Comité des Forges to form WENDEL its ashes and pursued and a Régent of the Investissement. its development. Banque de France. The creation of the Sollac (1948) and Solmer (1969) production cooperatives enabled 1974 the Group to satisfy the growing needs for heavy plate and steel. The company was at the height of its power 1948 between 1950 and 1973. 2002 In 1975, its plants accounted for 72% of French production of unfinished steel. 6 Rapport2003 Annual annuel Report 2003 • •WENDEL WENDEL Investissement Investissement INTERVIEW WITH THE CHIEF EXECUTIVE OFFICER What is your opinion of the past year? for the first time in 2003 made a major contribu- The year 2003 represented real progress for WENDEL tion of 48 million euros to the Group’s net income. Investissement. Consolidated net income totaled In my opinion, our support for the development of 253 million euros, primarily owing to the strong this fine company provides positive assistance. In a growth in income reported by the Group’s business sluggish economic environment, Legrand reduced sectors (+56% compared with 2002), which stood its debt significantly and more rapidly than at 157 million euros. planned (from 2.7 billion euros to 2.3 billion euros These results are a good illustration of the quality between the