Fimalac: 2003 Results.

Business Editors

PARIS--(BUSINESS WIRE)--March 17, 2004

Fimalac (Reuters: LBCP.PA; Bloomberg: FMLCF; Sicovam: 3794.PA; Isin: FR0000037947)

-- Operating income down 13,2% based on reported figures, but up

4% like-for-like

-- Recurring income before tax down 10.5% based on reported

figures, but up 15.8% like-for-like

-- Excellent performance by Fitch

-- Greater-than-expected EUR 317 million reduction in debt,

before proceeds from LBC divestment

-- Net loss of EUR 329.7 million, due mainly to the write-down of

Facom Tools goodwill

-- Divestment of LBC: irrevocable offer received from OEP LLC

valuing the business at EUR 243 million net of minority

interests

During its meeting of March 16, 2004, the Fimalac Board of Directors reviewed the 2003 financial statements. All of the decisions put to the vote at the meeting were adopted unanimously.

I) 2003 RESULTS

1) Operating income totaled EUR 137.9 million, up 4% like-for-like.

Fitch firmly established itself as the Group's leading business, in terms of both business and earnings growth. Revenues expanded 23.1% like-for-like. Operating income surged 40% like-for-like, reaching a higher-than-expected EUR 100 million.

By contrast, Facom Tools experienced a further dip in sales, down 4.7% like-for-like. Operating income fell 48.3% like-for-like, to EUR 17.3 million.

2) Greater-than-expected EUR 317 million reduction in debt.

All of the operating subsidiaries contributed to the Group's significant progress in paying down debt. Fitch led the way but Facom also played its part. Including operations carried out by the parent company, consolidated debt was scaled back EUR 317 million, representing a nearly one-third reduction.

            (in EUR  millions)             2002     2003

 Net debt                                   978      661     - 32.4 %
 Net debt/Ebitda                            4.2      2.8
 Goodwill                                   472      178     - 62.3 %
 Goodwill/total assets                     0.18     0.09

Unamortized goodwill carried in the 2003 balance sheet mainly concerns the Fitch and Cassina sub-groups.

3) Strong increase in recurring income before tax, up 15.8% like-for-like.

        (Like-for-like, in EUR m)          2002      2003

 Operating income                         159.4     165.8
 Net interest expense                     (57.0)    (47.2)    + 17.2%

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 Recurring income before tax              102.4     118.6     + 15.8%

4) Recurring income after tax weakened by heavy tax charge

        (Like-for-like, in EUR m)          2002      2003

 Recurring income before tax              102.4     118.6
 Tax on recurring income                  (38.2)    (56.7)    + 48.4%
 Minority interests                        (5.1)     (5.1)

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 Recurring income after tax and
  minority interests                       59.1      56.8      - 3.9%

5) Reported results adversely affected by the fall in the dollar

Fitch is now the largest contributor to consolidated revenues and income, and the fall in the dollar therefore had a considerable impact on reported results for 2003:

        (Reported, in EUR m)            2002        2003

 Sales                               1 302.7     1 259.6      - 3.3 %
 Ebitda                                230.7       240.1      + 4.1 %
 Operating income                      158.8       137.9     - 13.2 %
 Recurring income before tax           101.8        91.1     - 10.5 %
 Recurring income after tax and
  minority interests                    58.5        39.7     - 32.1 %

6) Net income severely weakened by Facom Tools impairment charges.

Facom's hand tools business was faced with the twin challenges of falling sales and heightened competition, with the entry in the European market of manufacturers from low-cost countries such as China. This change in the competitive landscape significantly affected Facom's position in the hand tools market, especially in France.

To take into account this new situation, which rapidly gained in magnitude during 2003, additional impairment charges were recorded in the accounts of Facom Tools and Fimalac decided to write down in full the unamortized balance of Facom Tools goodwill in the amount of EUR 248.7 million.

Asset impairment charges recorded in the accounts of Beissbarth were greater than expected, due to the closure or sale of loss-making subsidiaries and product line rationalizations, leading to net exceptional expense of EUR 31.1 million.

All of these items weighed heavily on Fimalac's bottom line and the Group ended the year with a EUR 329.7 million loss.

               (Reported, in EUR m)                  2002       2003

 Recurring income after tax and minority interests   58.5       39.7
 Exceptional items and income from companies
  accounted for by the equity method                (33.7)    (102.0)
 Amortization of goodwill                           (57.0)    (267.4)

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 Net loss                                           (32.2)    (329.7)

II) DIVIDEND KEPT AT EUR 0.95 PER SHARE (EXCLUDING THE TAX CREDIT)

The Group turned in a sound operating performance, despite the non-recurring losses due to Facom, and NAV per share at December 31, 2003 was significantly above the year-earlier figure. The Board of Directors is confident in the Group's outlook and will therefore be recommending at the June 8, 2004 Annual Shareholders' Meeting the payment of a dividend per share of EUR 0.95 (excluding the tax credit), unchanged from the previous year. Shareholders will be offered the choice between receiving the dividend in cash or in stock.

III) DIVESTMENT OF LBC

Fimalac has received an irrevocable purchase offer for LBC from One Equity Partners LLC (the Bank One Corporation private equity fund). The offer is based on an enterprise value net of minority interests of EUR 243 million, valuing the entire business at EUR 249.7 million. The deal is subject to the customary regulatory approvals.

IV) 2004 OUTLOOK

Management targets for 2004 are as follows:

-- Complete the divestment of LBC before June 30, 2004.

-- Improve Facom's underlying profitability by boosting sales

momentum and cutting costs across the entire organization.

-- Expand and develop Fitch's business, representing the main

growth driver in the Fimalac Group and the largest contributor

to earnings.

On the financial front, the aim is to continue creating value for shareholders. 2004 should see a return to growth in like-for-like recurring income after tax.

The positive fundamentals that were strengthened throughout 2003 have positioned Fimalac to confidently pursue renewed growth in the future.

Like-for-like: at constant exchange rates and based on a comparable structure.