Pargesa : 1st half of 2016 consolidated results (unaudited)

PRESS RELEASE NO. 8/2016

Geneva, 29 July 2016

H1 2016 financial results:

• Economic operating income stood at CHF 228.3 million, compared with CHF 207.2 million in H1 2015. The H1 2016 figure mainly reflects:

  • the smaller contribution from Total following the disposals made by GBL in late 2015 and in H1 2016;

  • the lack of a contribution from Lafarge (deconsolidated in 2015), which was more than offset by the LafargeHolcim dividend, recorded for the first time in 2016;

  • the non-cash impact of the derivative financial instruments embedded in the exchangeable and convertible bonds issued by GBL being marked to market, for a net amount of CHF +31.5 million (CHF +42.5 million in H1 2015). Excluding this non-cash impact, economic operating income was CHF 196.8 million, compared with CHF 164.7 million in H1 2015.

• Non-operating income/loss: CHF −589.5 million, as against CHF 191.4 million in H1 2015. In H1 2016, Pargesa's non-operating loss primarily resulted from the impairments recorded by GBL on its holdings in LafargeHolcim (for an amount of CHF −959.5 million) and ENGIE (for an amount of CHF −24.7 million) in accordance with IFRS. These impairments were partially offset by a gain at the level of Pargesa of CHF 401.0 million resulting from the sale by GBL of 1.1% of Total's share capital in H1 2016. In H1 2015, non-operating income included Pargesa's CHF 221.1 million share of the partial reversal of the impairment previously recorded by GBL on its holding in Lafarge, and Pargesa's CHF 34.3 million net share of the capital gain generated from GBL's sale of 0.1% of Total's share capital.

• As a result of the above, H1 2016 net loss came in at CHF −361.2 million, compared with net income of CHF 398.6 million in H1 2015.

1. Highlights of H1 2016 and early H2

   • In Q1 2016, GBL sold an additional 27.5 million Total shares, representing 1.1% of the company's capital, both in the market and through a private placement by way of an accelerated bookbuilding process for institutional investors. These transactions represented a total amount of EUR 1.1 billion and generated a capital gain of EUR 428 million for GBL. As a result of these transactions, GBL held 1.3% of Total's capital at 30 June 2016, down from 2.4% at 31 December 2015. Furthermore, in Q2 2016, GBL sold an additional

     11.1 million Total shares, representing 0.4% of that company's capital, through forward contracts that will mature in December 2016. The proceeds from this sale amounts to EUR 460 million and will generate a capital gain of EUR 209 million1 for GBL, which will be recorded in Q4. Given the high dividend yield on this holding, these recent and ongoing sales will have a significant impact on the contribution of Total to

     Pargesa's economic operating income. However, the proceeds from the sales will be used to make investments that will gradually contribute to income depending on when the proceeds are reinvested and the level of the return on the new investments.

     1 Pargesa's share of this gain will in addition include the reversal of an historical exchange-rate adjustment.

     Pargesa Holding SA - 11, Grand-Rue - CH-1204 Geneva Tel: +41 22 817 77 77 - Fax: +41 22 817 77 70

     info@pargesa.ch - www.pargesa.ch

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   • In H1 2016, GBL repurchased in the market EUR 210.0 million in principal amount of bonds exchangeable for ENGIE shares. In H1 2016 also, GBL launched a competitive tender offer for the bonds exchangeable for ENGIE shares; at offer closing, EUR 458.3 million in principal amount had been repurchased. The bonds repurchased by GBL were cancelled. Taking into account the early redemption requests representing EUR 2.8 million in principal amount, around 33% of the initial EUR 1 billion issue is still outstanding.

   • In Q2 2016, GBL sold 32.1 million ENGIE1 shares, representing 1.3% of that company's capital, through forward contracts that will mature in October 2016, for an amount of EUR 437 million. These forward sales will generate a book loss of EUR 1 million for GBL, which will be recorded in Q4.

   • GBL continued to increase its stake in adidas; at 30 June 2016, it held 7.2% of adidas' capital (4.7% at 31 December 2015), representing a market value of EUR 1.9 billion. GBL now has a representative on adidas' Supervisory Board. As previously announced, this holding, which was until now included in GBL's portfolio of "incubator" investments, is now considered a strategic shareholding.

   • To expand its "incubator" investments, GBL continued to increase its stakes in Umicore and Ontex.

     • Umicore: At 30 June 2016, GBL held 17.0% of Umicore's capital (16.6% at 31 December 2015), representing a market value of EUR 881 million. At the Annual General Meeting on 26 April 2016, shareholders approved the appointment of a second director representing GBL;

     • Ontex: At 30 June 2016, GBL held 15.0% of Ontex' capital (7.6% at 31 December 2015), representing a market value of EUR 318 million.

   • Sienna Capital (GBL's "Financial Pillar"):

     • in Q1 2016, Ergon Capital Partners III (ECP III) acquired an indirect majority stake in Financière Looping S.A.S., a European theme-park operator. In Q2 2016, ECP III signed agreements to sell its interests in De Boeck Education, De Boeck Digital SA and Larcier Holding SA. The profit resulting to these transactions amounted to CHF 29.2 million at the level of Pargesa. On 19 July 2016, Ergon Capital Partners completed a funding round for EUR 150 million, bringing the size of ECP III to EUR 500 million. Funds were committed by Sienna Capital and by European institutional investors active in private equity. The increase will enable ECP III to continue investing in leading mid-market companies in its core Western European regions;

     • on 25 March 2016, a group of investors led by Sagard announced that they had signed an agreement with the founder and majority shareholder of Prosol to acquire a minority stake in that company, which is the parent company of Grand Frais, a chain of French supermarkets that specialises in fresh food;

     • at 30 June 2016, debt fund Kartesia had invested EUR 427 million (approximately 84% of the fund's commitments) in primary and secondary financing transactions;

     • in March 2016, a group of investors, including BDT Capital Partners, a private equity fund to which Sienna Capital committed EUR 113 million in 2015, finalised the acquisition of Keurig Green Mountain, Inc., a group specialised in personal beverage systems;

     • on 16 June 2016, Sagard II and Equistone announced that they had signed an agreement to sell their interests in Flakt Woods, a leading provider of critical Air Functions for HVAC systems. The transaction is subject to regulatory approval in the relevant jurisdictions.

       At 30 June 2016, GBL's commitments under its Financial Pillar amounted to EUR 301 million (EUR 413 million at 31 December 2015).

       1 ENGIE is also a high dividend yield shareholding.

2. Consolidated H1 2016 financial results (unaudited)

Pargesa Holding SA's Board of Directors met today and reviewed the unaudited H1 2016 consolidated financial results.

In addition to the accounts drawn up in accordance with IFRS, Pargesa continues to publish an economic presentation of its results, in order to provide continuous information over the long term about the contribution of each of its major shareholdings to its results. IFRS require different accounting treatments depending on the Group's percentage holding in each of its investments (full integration for Imerys, equity method for Lafarge up to 30 June 2015, with other major Group holdings being booked as financial investments), so this continuous view would be interrupted without this additional economic presentation of the Group's results.

The economic presentation shows, in terms of the Group's share of results, the contribution of the main shareholdings to Pargesa's consolidated income, together with the income from the operations of the holding companies (Pargesa and GBL), which highlight in particular the income from private equity activities and other investment funds (combined under Sienna Capital at GBL) and the impact of net financial income. The analysis also draws a distinction between the operating and non-operating items in income, the non-operating part being composed of net capital gains and losses in connection with disposals, restructuring costs and impairments or reversals of previous impairments.

According to this approach, the economic results for H1 2016 were as follows:

1 This item represents Pargesa's share of the dividends from GBL's incubator-type portfolio. The investment in adidas, which was previously included in GBL's portfolio of "incubator" investments, is now considered a strategic shareholding. The H1 2015 figure for "Other operating income from holding company activities" has been adjusted accordingly.