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Financial Reportand Registration Document 2008

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ents

Group profi le and key fi gures 2008 .......................................................................................... 1

GROUPE SEB IN 2008

CORPORATE GOVERNANCE

CONSOLIDATED FINANCIAL STATEMENTS

COMPANY FINANCIAL STATEMENTS

ANNUAL GENERAL MEETING

ADDITIONAL INFORMATION

Milestones in the history of the Group ..................................................................................... 4

Business sectors ................................................................................................................. 6

Group strategy and industrial policy ........................................................................................ 8

Management report on 2008 ................................................................................................ 10

Outlook for 2009 ................................................................................................................ 19

Risk management .............................................................................................................. 20

Social performance indicators .............................................................................................. 27

Environment performance indicators ..................................................................................... 33

Board of Directors .............................................................................................................. 36

Organization and functioning of the Board of Directors ............................................................. 43

Group management bodies ................................................................................................. 46

Report of the Chairman and CEO on i nternal c ontrol ................................................................ 52

Auditors’ report on internal control ........................................................................................ 57

Statutory a uditors .............................................................................................................. 58

10-year fi nancial summary ................................................................................................... 60

Consolidated ratios ............................................................................................................ 61

Financial statements .......................................................................................................... 62

Notes to the consolidated fi nancial statements ....................................................................... 67

Statutory auditors’ report on the consolidated fi nancial statements .......................................... 124

Balance sheet of SEB S.A. – at 31 December ........................................................................ 128

Income statement – years ended 31 December ..................................................................... 130

Report of the Board of Directors ......................................................................................... 131

Notes to the Company fi nancial statements .......................................................................... 132

Auditors’ report on the Company fi nancial statements ............................................................ 143

Report of the Board of Directors on the resolutions proposed to the Annual General Meeting of May 13, 2009............................................................................................................... 146

Auditors’ special report on related party agreements and commitments .................................... 150

Proposed resolutions ........................................................................................................ 152

General information on SEB S.A. ........................................................................................ 160

Share c apital b reakdown and c hanges ................................................................................ 163

Financial authorizations .................................................................................................... 167

Employee shareholding ..................................................................................................... 168

Stockmarket information ................................................................................................... 171

Consultation of legal documents ........................................................................................ 172

1 GROUPE SEB FINANCIAL REPORT AND REGISTRATION DOCUMENT 2008

Market leader with famous brands:

World brands: All-Clad, Krups, Lagostina, Moulinex, Rowenta and Tefal; •

Regional brands: Calor and Seb (France and Belgium); T-Fal, Mirro • , WearEver, AirBake, Regal (North America); Arno, Panex, Rochedo, Penedo, Clock, Samurai (South America); and Supor (China).

GROUP PROFILE AND KEY FIGURES 2008Groupe SEB, in touch with changing timesPresent in French homes for more than fi fty years, we have gradually extended the scope of our operations around the world, selling our products through multiple retail formats in more than 120 countries.

Groupe SEB, with its rich portfolio of powerful brands and the market’s most extensive product offer, is world leader today in small household equipment.

This success is rooted in the Group’s ability to innovate and invent for your day-to-day life in tomorrow’s world.

A MULTI-SPECIALIST GROUP

COOKWARE:frying pans, saucepans, casseroles, bakeware, oven dishes, pressure cookers, low-pressure steam pots, kitchen utensils…

ELECTRIC COOKING:deep fryers, table-top ovens, rice cookers, induction hobs, electric pressure cookers, barbecues, informal meal appliances, waffl e makers, meat grills, toasters, steam cookers…

FOOD AND BEVERAGE PREPARATION:food processors, beaters, mixers, blenders, centrifugal juice extractors, small food-preparation equipment, coffee makers (pod, fi lter and espresso), electric kettles, hot-water dispensers, home beer-tapping machines…

PERSONAL CARE:haircare equipment, depilators, bathroom scales, foot massage appliances, babycare (bottles, bottle-heaters, sterilizers, nightlights…)…

LINEN CARE:steam irons and steam systems, semi-automatic washing machines, garment steam brushes…

HOME CARE:vacuum cleaners (upright or canister, with and without dust bag, compact and cordless), fans, heaters and air-conditioners…

WORLD RANKING

No. 1

€ 3,230 million

+12.5%SALES

€ 342 million

+13.6%OPERATING MARGIN

€ 152 million

+4.9%NET INCOME

€ 649 million

+€ 64 millionFINANCIAL DEBT

€ 116 million

+26%CAPITAL EXPENDITURE

18,879 worldwide

at 31/12/2008EMPLOYEES

No. 2No. 3

Cookware – pressure cookers – irons and steam systems – electric kettles – steam cookers – food-preparation equipment – toasters – deep fryers – breadmakers – informal meal appliances

Table-top ovens – electric barbecues – waffl e makers and sandwich makers

Filter and espresso coffee makers

This Registration Document was fi led with the French Financial Markets Authority (Autorité des marchés financiers or AMF) on 7 April 2009, in accordance with Article 212-13 of AMF general regulations. It may be used as a basis for fi nancial transactions if it is accompanied by an AMF information memorandum. This document was drawn up by and is the responsibility of the issuer and the Chairman and CEO.

This Registration Document is available on the Groupe SEB website, www.groupeseb .com.

FINANCIAL REPORT AND REGISTRATION DOCUMENT 2008 GROUPE SEB2

GROUPE SEB IN 2008

GROUP PROFILE AND KEY FIGURES 2008 . . . . . . . . . . . . . . 1

MILESTONES IN THE HISTORY OF THE GROUP .. . . 4

A dynamic acquisition strategy 4

Organic growth: innovation and international expansion 5

BUSINESS SECTORS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

A constantly evolving industry 6

Different economic models 7

Multiple forms of competition 7

GROUP STRATEGY AND INDUSTRIAL POLICY . . . . . . 8

A long-term strategy 8

Industrial strategy 8

Research and Development 9

MANAGEMENT REPORT ON 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

2008 highlights 10

Comments on 2008 sales 13

Comments on the 2008 results 16

OUTLOOK FOR 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

RISK MANAGEMENT .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Risks relating to operations 20

Dependency risks 23

Legal risks 24

Financial market risks 24

Sensitivity analysis 25

Insurance 25

Exceptional events and litigation 26

SOCIAL PERFORMANCE INDICATORS .. . . . . . . . . . . . . . . . . . 27

Remuneration and social charges 27

Breakdown of employees by geographic zone 27

Breakdown of employees by category 28

Breakdown of changes in staffi ng 28

Breakdown of employees by type of contract 28

Disabled employees 29

Statutory weekly working hours for full-time employees 29

Breakdown of employees by gender and category 29

External staff 30

Paid overtime 30

Work safety: frequency and severity of accidents 30

Training (staff and training hours) 31

Training budget 31

Groupe SEB Academy training 31

Bonus and profi t-sharing 32

ENVIRONMENT PERFORMANCE INDICATORS .. . 33

Energy consumption 33

Emissions 33

Waste 34

ISO Certifi cation 34

GROUPE SEB FINANCIAL REPORT AND REGISTRATION DOCUMENT 2008 3

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Milestones in the history of the Group

MILESTONES IN THE HISTORY OF THE GROUP

Groupe SEB dates from 1857 with the creation of the company Antoine Lescure, in Burgundy, France. Beginning as a tinware company specialized in making buckets and watering cans, it gradually expanded its activities to include kitchen utensils, zinc tubs and other a rticles. It began to mechanize production when it bought its fi rst press at the beginning of the 20th century. At that time, the company’s business was confi ned to its local region.

It took a major stride forward in 1953 when it launched the pressure cooker. This gave the company, thereafter called Société d’Emboutissage de Bourgogne, a new national dimension.

The subsequent history of the Group would take shape through successive phases of acquisition and organic growth.

A DYNAMIC ACQUISITION STRATEGY

A series of acquisitions over the last 40 years have earned Groupe SEB its status as a world leading multi-specialist today.

CREATION OF THE GROUP

In 1968, SEB acquired Tefal, a company specialized in nonstick cookware; in 1972, it took over the Lyon company, Calor, a maker of irons, hair dryers, small washing machines and portable radiators. This established SEB as a leading operator in small household equipment in France. In 1973, it decided to form a group structure under a lead holding company, SEB S.A., which would be listed on the Paris Stock Exchange in 1975.

WORLDWIDE STATUS

The 1988 acquisition of Rowenta, whose German and French factories made irons, electric coffee makers, toasters and vacuum cleaners, was a crucial step in the international expansion of the Group. In 1997-1998, the takeover of Arno, Brazil’s market leader in small electrical appliances, established the Group in South America. Arno was a specialist in the manufacture and sale of food-preparation appliances (mixers/blenders), non-automatic washing machines and fans. At the same time, the Group acquired Volmo, leader in small electrical appliances in Colombia and Venezuela, with its own offer in food-preparation appliances (mixers/blenders), fans and irons.

September 2001 saw Moulinex, the Group’s main rival in France, fi le for bankruptcy. The Group’s offer of a partial takeover of the assets of Moulinex and its subsidiary Krups was accepted by the Nanterre Commercial Court in October 2001. The integration of Moulinex-Krups began at that point, giving birth to a bigger and stronger Groupe SEB worldwide. After much legal debate at the European Commission and in France, the fi nal authorizations for the takeover were obtained in 2005.

REINFORCEMENT OF COOKWARE OPERATIONS

Meanwhile, in the summer of 2004 the Group took the opportunity to strengthen its base in the United States with the acquisition of All-Clad, a premium-range cookware specialist whose product offer was an ideal complement to the T-Fal brand in the US market. In May and June 2005, the Group once again enhanced its cookware offer with two more takeovers: Lagostina in Italy and Panex in Brazil. Lagostina, Italy’s leader in top-range stainless steel cookware (saucepans, frying pans and pressure cookers) has a prestige brand image that gives the Group access to new markets and new specialist retail channels. Panex, with its brands extending over several segments, helped us to penetrate the cookware market in Brazil and instantly occupy a front-rank position.

In August 2006, the Group embarked on a new phase of consolidation in cookware when it bought selected assets of the American company Mirro WearEver. This made Groupe SEB North American leader in cookware, adding to its mid-range T-Fal offer and All-Clad premium-range offer.

In the same year, the Group initiated a process to buy a majority stake in Supor, China’s domestic market leader in cookware and number 2 in small electric cooking appliances. As Supor is listed on the Shenzhen Stock Exchange and as this kind of transaction was without a precedent in China, the deal required various authorizations from China’s Trade Ministry (MOFCOM) and the country’s securities regulator (CSRC).

Having acquired an initial 30% stake in Supor’s capital on 31 August 2007, the Group raised this to a 52.74% controlling stake in Supor on 21 December 2007 following a successful public share offer.


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Milestones in the history of the Group

ORGANIC GROWTH: INNOVATION AND INTERNATIONAL EXPANSION

New product development and the conquest of new markets are two key pillars of our strategy. Innovation gives the Group the leading edge needed to establish solid market positions. Parallel with this, international expansion opens up new opportunities: a better geographic spread of sales and high growth potential in emerging markets.

A STRONG INNOVATION DYNAMIC

Both SEB and Moulinex, ever since they were founded, have set out to offer innovative products that contribute to the day-to-day wellbeing of consumers. Emblematic products such as the Seb pressure cooker and the Moulinex puree hand-press paved the way for the fi rst electrical appliances in the 50s and 60s: irons, coffee grinders, odourless fryers, and the famous Charlotte and Marie multipurpose appliances. The 70’s and 80’s would see the advent of more sophisticated functions, with electronic components in many products such as bathroom scales and programmable coffee makers. This era also saw the emergence of new lifestyles, refl ected in the launch of convivial meal products such as the raclette grill and espresso coffee maker for the home. In the decade up to 2000, both Groupe SEB and Moulinex brought new simplicity to the world of small household equipment: a pressure cooker with fi nger-touch lid closing, a compact vacuum cleaner with a triangular head, a coffee maker incorporating a grinder-doser, a frying pan with a visual heat indicator, and a food processor designed for easy storage. Then, in 2006 the Group adopted a new approach to promoting its product offer: its fi rst partnerships with leading food-industry operators which gave it access to new product categories such as pod coffee makers and draught beer-tapping machines. The following year saw the Group launch new concepts to meet new consumer needs. These led to major commercial successes with, for example, the Quick & Hot instant hot-water dispenser, the Actifry minimal-oil electric fryer, the quiet, yet powerful Silence Force vacuum cleaner, and breadmaking machines. In 2008, other completely new functional features were introduced in linen care, such as a self-cleaning iron soleplate and an anti-scaling system for steam generators.

HEADING FOR NEW MARKETS

From the 1970s, Groupe SEB turned its attention to international growth. Building on its culinary expertise, it began by penetrating the Japanese and American markets. In 1992 and 1993, it took advantage of the opening of Eastern Europe, creating marketing operations to make inroads into these countries and gain greater access to the Russian market. From 1994 to 2000, it focused on building up its commercial operations worldwide and, where appropriate, its industrial presence by setting up factories in South America, China and elsewhere. In this way, over the years, the Group expanded on all the world’s continents and built its international manufacturing base. It continued expanding in Asia with marketing subsidiaries created in Thailand and Taiwan in 2003, and in Singapore and Malaysia in 2004. It then reinforced its presence in South America by opening a subsidiary in Peru. In 2005, the Group created a subsidiary in Switzerland to directly manage its operations in that country. Meanwhile, to accompany emerging markets in Northern, Central and Eastern Europe, the Group strengthened its presence in these zones by setting up subsidiaries in Romania in 2005, Ukraine and Slovenia in 2006 and Latvia in 2007. This drive continued in Bulgaria in 2008, while, in Southeast Asia, Supor opened a new factory in Vietnam.

The strength of Groupe SEB lies in its ability to blend innovation – a key factor of success – with international operations which bring it closer to its retail clients and customers. These are the two pillars upon which the Group continues to build its future.


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Business sectors

BUSINESS SECTORS

Global leader in small household equipment , Groupe SEB deploys its strategy via a portfolio of diversifi ed and complementary brands focused on worldwide or local markets. It stands out from its main rivals by being present in both the small electrical appliance sector (which accounts for 71% of its sales and is estimated to be worth €26 billion), and cookware (a sector worth around €6.5 billion).

The combined small household equipment market is seeing modest growth, spurred by an accelerating innovation dynamic, a new demand for higher-status products, the economic emergence of certain markets and by a shortening of product replacement cycles.

While the development of global markets enables a standardization of offers, multiplicity of local usage makes it vital to adapt and respond to needs.

BREAKDOWN OF THE SMALL DOMESTIC EQUIPMENT †MARKET, BY PRODUCT FAMILY

A CONSTANTLY EVOLVING INDUSTRY

The small domestic equipment sector has seen profound changes in the last ten years, in both industrial and commercial terms:

the proportion of manufacturing relocated to low-cost countries continues •

to grow. The preponderance of assembly – and thus of labour – in small electrical appliance production is an incitement to relocation. In addition, ease of handling permits geographic distance between factory location and end-user market. For Western operators, Asia continues to be a prime relocation target for manufacturing their most basic products;

strong growth in emerging markets, notably in Asia, driven by the rise of an •

urban middle class, by growing demand from fi rst-time buyers and by an increasingly structured retail industry. It is notable that these consumers go directly for advanced-technology products such as induction cooking hobs;

more complex relations with major retailers as they concentrate and •

globalize, particularly marked by pressure on prices. Meanwhile, specialist high-end distributors are expanding, especially in the United States. We are also seeing the spread of new sales channels such as the Internet, telesales, own-brand stores, and direct-from-factory outlets;

the entry-level offer continues to be abundant, with no-brand or retail- •

banner products sold through supermarkets or discount stores;

a still very active mid-range sector combined with an upgrading of ranges •

by retailer brands which offer with a more structured and attractive choice;

the development of prestigious premium range • s associated with high status in economically advanced countries, but also increasingly in emerging markets;

growing use of partnerships between leading mass-market consumer •

brands – notably in the food industry – and makers of small electrical appliances which offer tangible consumer benefits and additional services.

In this context and in the face of a very competitive environment, particularly in mature markets, industry operators adapt by sector consolidation and by making their manufacturing more competitive, measures increasingly used in diffi cult times:

Concentration of the small electrical appliances sector in quest of •

critical size. Continuing takeovers allow groups to generate economies of scale particularly in the areas of R&D, production and distribution. This concentration also helps small electrical appliance operators to penetrate new markets or product families. Small-scale local operators are thus a prime target.


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Business sectors

The industry’s ten biggest operators account for between €0.8 billion and €3 billion in sales, and represent over 40% of the global market for small electrical appliances.

Concentration of the industry is more advanced in Europe than elsewhere: the fi ve main European groups – Groupe SEB, Philips, Braun, Bosch Siemens and DeLonghi – account for more than half of Europe’s small electrical appliance market.

Rationalization of production • to cope with labour-cost differences and the volatility of raw materials prices. Relocation of production and outsourcing to low-cost countries (mainly in Asia) is becoming general in entry-level and low mid-range products. Leading groups thus increasingly focus on appliance design and assembly and are stepping up their outsourcing of component and sub-assembly manufacturing.

DIFFERENT ECONOMIC MODELS

Three juxtaposed economic models are in use in the market:

concentration on basic, low-priced products comprised almost entirely of •

fi nished a rticles procured in countries with low-cost production factors; in the latter case R&D efforts are abandoned while marketing and sales budgets are cut to a minimum;

the development of good-quality middle ranges: this demands innovation •

to feed product renewal and dynamize the point-of-sale offer; it also calls for a clear marketing strategy, advertising support, regular product launches and good client service;

concentration on added-value products, based on real innovation and •

differentiation; these very carefully conceived top-range products are sold by dedicated sales teams working in liaison with selective retail networks.

The mid-range and top-range segments use innovation and expertise to re-dynamize markets with products that stand out from cheaply mass-produced and increasingly commonplace a rticles. These ranges offer genuine product benefi ts: breakthrough innovation, ease of use, high-tech performance, timesaving, ergonomics, elegant design, handy storage and many other ’plus’ features that are tangible for the consumer. Innovation thus raises the general standards of the market, and helps manufacturers to have a better product mix. This is clearly the stance adopted by Groupe SEB which, as leader in its sector, strives not only to enhance the quality of the present offer, but also to develop the potential of the small household equipment market.

MULTIPLE FORMS OF COMPETITION

Few of the Group’s competitors cover the whole of this sector. Other world groups operating in part or exclusively in small household equipment include:

major multi-activity groups such as Philips, Procter & Gamble (Braun), •

Electrolux and Bosch-Siemens, or Japan’s Panasonic (ex-Matsushita) which operates mostly in Asia and North America;

globally expanding American specialists in small electrical appliances, such •

as Salton/Applica and Conair, or European operators such as DeLonghi, Glen Dimplex and Saeco;

American groups focused almost solely on the American continent, such •

as Jarden Corp (Sunbeam, Mister Coffee...), Hamilton Beach-Proctor Silex, Newell Rubbermaid (Calphalon) and World Kitchen in the cookware segment;

Asian groups such as Midea, Joyoung and Airmate which, in addition to •

acting as sub-contractors for other industry operators, tend increasingly to make and sell on their own behalf, mainly in China;

top-range specialists focused on just one or two product families (Magimix, •

Dyson, Vorwerk, Jura, Laurastar, Breville and others).

In addition to these known rivals who use a variety of strategies, there is the competition from no-brand or retail-banner products made mostly in China. In recent years, this type of competition has grown strongly in markets such as the United States and Europe, in the wake of relocation of production by many Western operators and pressure from mass retailers.

Also noteworthy is recent diversifi cation by some mass retailers involving incursions into the small electrical appliances sector.


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Group strategy and industrial policy

GROUP STRATEGY AND INDUSTRIAL POLICY

A LONG-TERM STRATEGY

The Group pursues a long-term strategy based on four key priorities:

product leadership • : Groupe SEB is world leader in ten product families (cookware, pressure cookers, irons and steam systems, electric fryers, toasters, electric kettles, food-preparation appliances, breadmakers, informal meal equipment and steam cookers); it is second in electric barbecues, table-top ovens and sandwich makers, and ranks third worldwide in fi lter and espresso coffee makers;

geographic leadership • : thanks to its worldwide presence, steadily and patiently built up, and its strong regional market-leader positions based on powerful well-known brands;

client service • : this has become a key factor today; faced with a well-organized and globally merging retail trade – which is thus more powerful and demanding – we must offer impeccable service in product quality, on-time delivery, logistics and stock-replenishment facilities such as the Group’s Joint Supply Management system;

competitive performance • : the Group’s future depends on its ability to constantly adapt its industrial, logistics, administrative and other structures, so that it can ensure the highest standards of excellence and remain competitive in the future.

INDUSTRIAL STRATEGY

In 2008, Groupe SEB made 65% of the products it brought to market. Following the industrial restructuring plan carried out in France in 2006 and 2007, our worldwide production base now comprises 27 factories at 21 sites. Europe accounted for 42% of the Group’s manufacturing and the United States for 2%, while 21% was done in low-cost countries such as Brazil, Colombia, China and Russia. The remaining 35% was outsourced, mainly to China (30%).

The Group’s industrial policy aims to permanently improve competitive performance and quality over the long term. It uses a three-pronged approach:

European-based manufacturing when economies of scale are feasible •

and where the Group is a market leader and protects its own product-conception technologies (enabling a better product mix and justifying higher prices), or where the Group’s manufacturing process generates cost savings;

use of its own plants outside Europe for economic mass-production where •

the Group wants to retain control of its specifi c technologies in products and processes – these same factories also making products destined for local markets;

sourcing of certain basic everyday products or • a rticles in which the Group cannot exploit economies of scale.

In this context, our European factories serve increasingly as hubs of expertise specialized in a product family, while they steer R&D in their respective product domains. Our international plants function as multi-product centres because they must supply the Group’s local marketing subsidiaries. Outsourced manufacturing of fi nished products forms an integral part of the company’s drive to be more competitive, and has been extensively developed in recent years for certain basic everyday products in which the Group can no longer generate technological or industrial added value.


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Group strategy and industrial policy

RESEARCH AND DEVELOPMENT

The Group fully exploits its capacity for innovation which is a powerful means of differentiating products and gaining new market share. For this reason it pursues an active Research and Development(1) policy that focuses resources on industrial processes and products. In 2008, tangible results were seen in the form of 110 new patents and 404 preliminary patent notifi cations. Ranked France’s 20th-largest patent fi ler, and holder of over 1,000 current patents, the Group launched 190 new models and products in 2008. Our portfolio of new products (those launched in the last 18 months) features several major conceptual breakthroughs with high potential, such as the Actifry minimal-oil electric fryer, the Quick & Hot instant hot-water dispenser and the powerful Silence Force vacuum cleaner. The Group is also sharpening its high-tech and marketing stance via partnerships with leading food-industry brands, well-known top chefs, or prestigious labels such as the Elite model agency. These partnerships, which are important relays for future growth, accounted for about 10% of the Group’s consolidated revenue in 2008, including sales of Nespresso and Dolce Gusto coffee machines, the BeerTender, the Elite hairstyling set, Jamie Oliver cookware and Emeril products.

At the same time, Groupe SEB pursues a rigorous purchasing policy with greater use of global sourcing, standardization and relocation to optimize costs. It draws on a panel of 312 approved suppliers, carefully selected and tested by the Purchasing department, which then recommends them to its production sites. The Group’s performance reviews of its main suppliers got well under way in 2007 and was further strengthened in 2008. These reviews involve detailed analysis of all the key criteria in purchasing: prompt delivery, performance, the inherent quality of materials and products (components and sub-assemblies) and prices – along with an undertaking from suppliers to continue improving their performance in every area. These areas include productivity, added value and other solutions proposed by suppliers. In this way, the Group seeks to foster long-term collaborative efforts with its suppliers by involving them in product development and services, and goals for effi ciency and competitive performance that go well beyond the mere supply function.

(1) Specific data on research and development are given in Note 15 of the Consolidated Financial Statements.


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Management report on 2008

MANAGEMENT REPORT ON 2008Information on risk management, social performance and the environment is presented in the following sections.

2008 HIGHLIGHTS

TRADING ENVIRONMENT

After a fairly lively fi rst half, the economic climate showed signs of weakening in the third quarter before going into steep decline toward the end of the year. The severe crisis in banking which struck during the summer quickly spread to fi nancial and stock markets before impacting the real economy and business activity. The effect of this economic downturn on the small domestic equipment sector was not immediate, and Groupe SEB resisted for some time before eventually feeling the brunt of the general slump in demand as from November. The profound crisis in investor confi dence, highlighted by the media and stoked by increasingly pessimistic reports, spread around the world, drawing retailers and consumers into a negative spiral driven by the idea of a credit crunch. Both mature and emerging markets seem to have been equally affected by this unprecedented major economic crisis.

In these circumstances, the small domestic equipment sector was less disrupted than others, and with delayed effect. With an average purchase price of around €55, this sector is concerned more with spontaneous or replacement buying than with any heavy investment in the home. Moreover, despite these events, consumers confi rmed their interest in innovative technologies and products that offer high added value and status – and this, even in the more tense fi nal weeks of the year, which were also helped by festive-season demand. Brand products held onto, and even improved, their market share in 2008. This was notably the case with Groupe SEB which strengthened its positions in several countries in, for example, Western Europe.

The fall in world stockmarkets led to valuations of companies totally unrelated to their performance, fi nancial health and business potential. Affected later than others, the SEB share lost 50% of its value in 2008 (French indexes being down by about 40%), due to the combined effect of being a consumer-market investment with strong exposure in emerging economies, and to its dependence on the retail industry. The Group nonetheless continues to maintain its objectives and pursue its strategic priorities for growth, even in times of economic turbulence. There is no doubt that the extent of the current crisis will have an impact on our business, but the company’s fi nancial structure remains intact; the current stockmarket valuation of under €1 billion, absolutely does not refl ect the assets, the fi nancial solidity and potential of the Group.

CURRENCIES

After a 2007 trading year already marked by a strongly negative foreign exchange impact, notably at the end of the year, 2008 took up this trend with an €18 million currency loss in the fi rst quarter, worsening to a €23 million loss in the second quarter; the discrepancy then narrowed slightly to €18 million in the third quarter before slowing to a shortfall of €10 million in the fi nal quarter. This €10 million loss refl ected sudden and opposing shifts (a rise of the yen and revival of the US dollar, but sharp depreciation of, for example, the Brazilian real, the rouble and the Mexican peso). The foreign exchange impact on sales for the whole year was negative to the tune of €69 million (against a loss of €39 million in 2007).

The currency impact echoed the depreciation of the Group’s main functional currencies in 2008, as detailed below.

The dollar, which has the greatest impact on the Group, lost an average of 6.9% against the euro in 2008, despite a notable 9.9% recovery in the fourth quarter.

The steady slide of the pound sterling steepened each quarter to end up at an average of 14% down on the euro (-23% at year-end rates). Similarly, the Mexican peso lost 8.3% against the euro in 2008.

The Korean won, the rouble and the Turkish pound all weakened as the year went on, while the Brazilian real which rose for nine months, fell back by 14% in the fourth quarter to end the year 0.8% down on the euro.

After a steep decline in 2007, the yen steadied over the fi rst three quarters of 2008, to recover strongly in the fourth quarter, ending the year with an average of 5.9% up on the euro.

The two other currencies which gained strength against the euro were the Polish zloty and the Chinese yuan.

The virtually generalized weakening of currencies against the euro is a major factor affecting the competitive performance and profi tability of our local subsidiaries. Likewise, while a further strengthening of the dollar would have a benefi cial effect on sales, it would penalize purchases made in this currency. On the other hand, a more moderately valued euro against the dollar should make our European factories more competitive.


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RAW MATERIALS

The Group’s business exposes it to fl uctuations in the price of certain raw materials such as aluminium, nickel (used in stainless steel) copper, oil, plastics and paper pulp. After three years of almost continuously rising metal prices, with record peaks in 2007 and early 2008, the third quarter of last year saw a sharp turnaround of this trend. This easing of prices concerned mainly quoted metals such as aluminium and nickel, rather than unquoted metals such as steel which remained high.

The average price of aluminium for the year was USD 2,570 a tonne (USD 2,640 in 2007), nickel USD 21,027 a tonne (USD 37,180 in 2007, though with peaks of over USD 50,000 a tonne), and copper USD 6,950 a tonne (USD 7,126 in 2007). The downward trend in these metals has accelerated since, so that rates in January 2009 were generally about half of average prices in 2008. However, as these markets are highly volatile, with wide fl uctuations over sometimes short periods, they must be regarded with prudence. Such volatility does not have a direct and immediate impact on the Group, as it pursues a multi-annual hedging policy to reduce its exposure in raw materials by spreading the impact of sometimes unpredictable swings, particularly in metal prices.

At the same time, erratic shifts in prices per barrel of oil affected the cost of plastics and freight, both of which rose steeply in 2008. The year-end fall in crude oil prices should lead to substantial savings in 2009, notably in maritime freight costs.

INTEGRATION OF SUPOR

On 21 December 2007, a partial public share offer fi nalized the process of taking a majority stake in the Chinese listed company, Supor – a process begun in August 2006 with the signing of an agreement between Groupe SEB and Supor’s Su founding family. By the end of 2007, Groupe SEB controlled 52.74% of Supor, of which it already held 30% of the capital since 31 August. Integrated by the equity method for 30% over four months in 2007, Supor has been fully consolidated since 1 January 2008.

As part of its integration into Groupe SEB, the Supor Board of Directors was recomposed and comprises a majority of Groupe SEB members since January 2008. Meanwhile, the company’s integration process is under way and is overseen by two operational committees:

the strategy committee, comprising members of the Groupe SEB Executive •

Committee and the main members of Supor’s general management, defi nes and oversees Supor strategic orientation and decides on priorities for the integration process;

the integration committee, comprising members of Supor’s general •

management, implements the decisions of the strategy committee and the practical steps for integration.

The strategy committee has identifi ed ten strategic projects, of which six are defi ned as priority areas:

development of Supor exports; •

its expansion in Southeast Asia; •

two projects for mutual transfer of products and technologies between •

Supor and the Group, in the areas of cookware and small electrical appliances;

adaptation of Supor’s outsourcing policy; •

industrial strategy. •

The process also involves six integration projects covering factory productivity, R&D procedures, optimization of purchasing, and harmonization of fi nancial, human resources and IT systems.

The 2008 trading year was focused on integrating Supor and bringing it into line with Groupe SEB. Harmonization of a number of key processes and the active and fruitful collaboration of Supor central and local working teams led to signifi cant progress in several priority areas for integration:

the manufacture of certain cookware • a rticles previously outsourced by Groupe SEB was transferred to Supor’s Yuhuan factory, helping to offset the expected reduction in Supor’s sub-contract work for third parties;

following a test phase, a fi rst major technology transfer in cookware is •

under way at the Yuhuan factory, with startup of work on the Thermospot (the visual heat-indicator pan) which will enrich the Supor offer in the Chinese market;

signifi cant improvements to Supor’s factory organization and productivity: •

a 30% gain in the productivity of factory workers with the installation of fl exible assembly lines at the Hangzhou and Dongguan plants; production capacity for anodized cookware was doubled in the Hangzhou plant for one-tenth of the originally expected outlay; savings on capital expenditure at the new sites in Vietnam and Shaoxin thanks to rationalization of the plans for these factories;

cooperation between Groupe SEB and Supor purchasing teams has helped •

to identify ways of cutting costs and has led to an action plan which will generate substantial savings for all parties;

development of the Supor brand within the Groupe SEB Southeast Asia •

sales network with a product launch plan designed for Thailand, Malaysia, Singapore, Hong Kong and Taiwan;

harmonization of priority procedures, in particular IT systems linking Supor •

with Groupe SEB, comprehensive fi nancial reporting aligned with the other subsidiaries, and coherence of the Supor budgeting process with that of the Group;

a new • SUPOR brand platform adapted to Groupe SEB strategy and a new logo have been in use since March 2009.

All these action plans will continue throughout 2009, with plans for further progress in several other areas.

THE SUPOR TAKEOVER PROCESS

Following the successful partial public offer of Supor shares by Groupe SEB in November-December 2007, the fl oating portion in Supor capital (11%) no longer complied with Chinese stockmarket regulations (25% required for companies with capital representing fewer than 400 million shares, or


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10% for companies with over 400 million shares). With some 216 million shares in circulation, Supor was in the fi rst category above. For this reason, trading of the share was suspended following the closure of 17 January 2008, pending resolution of this situation. This was done on 28 March by splitting the nominal share in two, so that the number of Supor shares in circulations was above 432 million – and thus in compliance with Chinese stockmarket regulations. The share’s listing resumed on 28 March at 22.92 RMB, compared with 50.93 RMB at the closure of 17 January, prior to the two-way split.

Then, in May 2008 Groupe SEB had the opportunity to increase its control of Supor by acquiring minority interests held by a Hong Kong company in three major Supor subsidiaries. Carried out quickly and on satisfactory fi nancial terms, this operation did not alter the Group’s declared holding in Supor but made it possible to signifi cantly increase the book value of the Groupe SEB consolidated share in the results of Supor. While the acquisition price was not divulged, this generated additional goodwill of €34 million on Supor.

Certain members of Supor management exercised stock options during the second quarter of 2008, which had a diluting effect on Groupe SEB’s holding. After the exercise of these options, we held 51.31% of Supor capital. It should be noted that all existing stock options have now been exercised, so that there is no further risk of dilution of Groupe SEB’s holding in Supor capital.

THREE-FOR-ONE SPLIT OF THE SEB SHARE

On 16 June 2008, Groupe SEB divided the par value of the SEB share by three following the proposal of the Board of Directors on 12 February 2008 and approval of this proposal by the Annual General Meeting of Shareholders of 13 May. Quoted for more than 18 months at above €100, the SEB share was among the highest-priced stocks on the SBF-120 index. The aim of this share split was to bring the SEB share price back into line with the market standard, thus making it more accessible to a larger number of investors and increasing its liquidity. The new shares have the same rights as the old ones in terms of

voting entitlement and dividend supplement payments. The operation has no effect on shareholders, requires no action on their part, and involves no cost or consequence on the value of their shareholdings.

On 16 June 2008, the par value of the SEB share was thus reduced from €3 to €1, and the number of shares making up the capital was multiplied by three from 16,960,186 to 50,880,558 shares. Having closed at a price of €125.31 on Friday 13 June, the share stood at €42 when trading resumed on 16 June after the three-for-one split. For information, the closing price on 31 December 2007 was €124.41, which, after the split, gave a value of €41.47.

GROUPE SEB SIGNS A SCHULDSCHEIN LOAN AGREEMENT FOR €161 MILLION

In a credit market which became more tense in the middle of last year, with limited liquidity in particular for mid-range capitalizations, Groupe SEB explored other solutions to broaden its fi nancing sources. A regular issuer of commercial paper (with a €600 million programme) it sought to extend the maturity of its debt instruments. Thus, in the month of August, it signed a Schuldschein-type loan contract.

A private placement instrument, the Schuldschein allows syndication of the lender base. The Schuldschein offers the Group several advantages: greater fl exibility, notably in terms of maturity, simplifi ed documentation, shorter issue deadlines, and most importantly, no requirement for a covenant clause of compliance with specifi ed fi nancial ratios, as is usually the case with its other medium and long-term loans.

The operation was a success, with a placement of €161 million exceeding the objective of €150 million. With maturities of 5 to 7 years (2013 and 2015), the Group moreover secured conditions similar to those obtained for large capitalizations. This further optimizes the Group’s fi nancial structure.


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COMMENTS ON 2008 SALES

(in € millions) 2007

% variation 2008/2007

2008Current exchange

ratesConstant exchange

ratesConstant structure

and exchange rates

France 640 668 +4.3 +4.3 +4.3

Other Western European countries 718 735 +2.3 +4.2 +1.3

North America 402 394 -1.8 +4.8 +0.6

South America 274 269 -1.9 +0.3 -0.1

Asia-Pacifi c 210 498 +137.1 +142.3 +13.2

Central Europe, CIS countries and other territories 626 666 +6.4 +8.7 +8.7

Total 2,870 3,230 +12.5 +15.0 +4.2

Rounded fi gures.% based on exact fi gures.

The Group’s business in 2008 was carried on in an economic context which varied by geographic zone and by time of the year. Trade was generally brisk in the fi rst half despite retailer cutbacks in inventories which curbed stock replenishment. Demand slackened in the third quarter, with a marked deterioration in the last six weeks of the year. For Groupe SEB, after a strong start to 2008, with sales holding up well in the second quarter, business slowed in some markets from the summer months, dropping steeply in certain major markets from mid-November. Against this background, Groupe SEB achieved sales of €3,230 million in 2008, up by 12.5% for current exchange rates, or by 15% for constant parity. This performance can be broken down as follows:

excluding Supor, organic growth of 4.2% over the whole year, for constant •

structure and exchange rates (8.6% in 2007) due mainly to a favourable product-price mix, though the year-end slowdown meant that volume sales remained level. In the circumstances, the rate of organic growth was satisfactory and on a par with previous good performances by Groupe SEB. Indeed, despite the fi rst effects of the crisis in the fourth quarter, organic growth was 1.3%;

a structural effect of €308 million due to the full-year integration of the •

Chinese company Supor, which had not been fully consolidated in 2007;

a net currency loss of €69 million, much higher than the €39 million loss •

reported in 2007, due mainly to depreciation of the dollar (despite its year-end revival), and to a weaker Korean won, pound sterling, rouble, Turkish pound and Mexican peso; the Brazilian real had only a slight negative effect, while the stronger Japanese yen and Polish zloty made a positive contribution.

The year also saw a number of fortuitous events which infl uenced Group operations. Apart from seasonal weather conditions (such as a poor summer in Brazil penalizing fan sales, or snow paralyzing the Wuhan factory in China in February), and temporary logistics problems (involving All-Clad, for example), other more external structural factors also impacted Group

sales. A slump in consumer demand and the tightening of credit affected the retail industry, placing some of our clients in diffi culty, with cancelled or reduced orders, payment delays, store closures and even some going out of business. The Group had to face such problems notably in Spain, Russia, Brazil and the United States. In the Middle East, the fi nancial problems of our agent-importer-distributor on the one hand, and the embargo on exports to Iran on the other hand, resulted in poor trading in this zone.

SALES PERFORMANCE OF PRODUCTS

Most of the Group’s core business areas contributed to the good performance in 2008, thanks to an enlarged offer and our continued international extension of the previous year’s star products (including the Actifry electric fryer, the Dolce Gusto multi-beverage machine, the Silence Force vacuum cleaner, the Quick Cup hot-water dispenser and breadmakers). Sales patterns were nonetheless more contrasted than in 2007.

Strong contributors to sales growth included:

electric cooking • which enjoyed an exceptional year, with sales driven by fryers (outstandingly, by the Actifry which sold about 700,000 units), breadmakers, steam cookers (Vitacuisine, a pillar of the Nutritious and Delicious line) and slow cookers in the United States. Toasted sandwich makers also performed very well;

home care • in which sales grew strongly, sustained by the big success of Silence Force and its Compact model, which gave added momentum to other canister vacuum cleaner ranges;

beverage preparation • , led by pod coffee makers (the Dolce Gusto, in partnership with Nescafé – over a million units sold in 2008 – and the Nespresso), as well as the Quick & Hot/Quick Cup hot-water dispenser. The Group performed well in the espresso coffee machine segment where demand remained lively.


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More modest contributions were made by:

linen care • , facing some diffi culty, notably in irons which had to cope with tough competition from entry-level products. The Group owes its slight progress in this area to the Tefal Express and Pro Express anti-scale steam generating systems, to new iron models and the success of garment steam brushes in the United States;

cookware • , where the Group pursued its generalist strategy with a broadened international offer (innovative coating, utensils and metals) covering all price segments and materials. Business in mid-range cookware remained lively, while sales of premium ranges stalled in 2008 (All-Clad products, for example, in the United States). The pressure cooker family put in an excellent showing.

Some product areas saw their sales drop from the previous year:

personal-care appliances • . Strong progress in new markets was countered by more diffi cult trading in Europe in depilators and hair-care appliances (with a shift from blow dryers to hair straighteners), and by increased competition. Bathroom scales, however, reported strong sales;

food-preparation • , where lost sales resulted from belated renewal of the offer at the end of the year, diffi culties faced with our import agent in Saudi Arabia, a fall-off in demand in Brazil and, since mid-November in Russia;

home comfort • , where the Group had a difficult year mainly due to unfavourable weather conditions in South America which caused a steep drop in fan sales.

Once again in 2008 innovation served to boost sales growth with renewed ranges (almost 190 new models and products) and with the launch of new concepts such as the Pro Express anti-scale steam generating system and the Compact Silence Force vacuum cleaner. A strong performance was reported for Group-wide brand ranges which are built around a thematic design with a harmonized offer across different product families, or as a response to a particular consumer need.

GEOGRAPHIC PERFORMANCE

Breakdown of 2008 sales by geographic zone

The French small electrical appliances sector got off to a very lively start for the fi rst four months of the year. However, sales then went into steady decline, ending in a poor fourth quarter with its lowest point in November, though a slight recovery was noted in December. Despite massive destocking by retailers – which put a damper on production – and the impact of the economic crisis on consumer spending, particularly at the end of the year, the market grew by 3.3% in 2008 (Gifam statistics). Cookware products followed this pattern. Nearing the end of the year, price competition broke out in small household equipment , including the market’s leading products for which retailers mounted promotional campaigns.

As in 2007, Groupe SEB out-performed the market last year, making gains in electric fryers (Actifry sales up 75% to 300,000 units), in vacuum cleaners with the Silence Force (gaining French market leadership for Rowenta)

breadmakers (the successful Baguette model), irons and steam generators (with a good start for the Ultimate model and anti-scale steam generators) and bathroom scales. Robust sales were also recorded in espresso machines and cookware. Business was less brisk in food processors (with new models taking effect only at the end of the year), and haircare appliances (where sales were up, though market share fell slightly in face of stiffer competition). Sales of fi lter coffee makers, fans and depilators were also down.

Having reinforced its marketing and advertising budgets over the last two years, the Group continued these efforts especially during the end-of-year festive season. This campaign heightened the visibility of the Group’s brands and products with TV spots and point-of-sale marketing operations.

In other Western European countries sales varied both by zone and period of the year, though retail destocking, as in France, was a common year-long feature. Despite this, overall trading for the year was better than expected, with 1.3% organic growth in sales across the zone, and market share gains in most categories. This followed an improvement in the fourth quarter, after a slow third quarter which, for constant structure and exchange rates, was down on the previous year. Several factors combined to give this result:

steady growth in German sales with brisk year-end trade sustained by a •

context of fi rm consumer demand and the impetus of Actifry, Dolce Gusto, Full-automat espresso machines, Tefal steam generating systems, and the well-received launch of the Nespresso Aerocino;

an excellent performance in Austria, and fresh advances over the year in •

Portugal, Spain and Greece despite a clear falling off of business from the summer of 2008, which weakened some retailers, particularly in Spain. These countries (with the exception of Greece ) reported sales growth in the fourth quarter thanks to the Group’s star products;

satisfactory growth in The Netherlands where a lively second half more than •

compensated for a slow start to the year. Simultaneous October launches of two fl agship products – Actifry and Dolce Gusto – served as a relay for sales of steam generating systems, irons and cookware;

annual sales for constant structure were down in Italy, where the market •

was subdued and demand fell in small household equipment , particularly in the fi nal weeks. While the Group’s strongest performers still contributed to sales, the market was more constrained in linen care and food-preparation products, while the Lagostina brand suffered from an Italian decline in wedding-gift sales;

sales remained virtually level for constant structure and exchange rates in •

Great Britain, which saw an excellent fi rst half spurred by the early success of new fl agship products. However, these advances were cancelled out by the very diffi cult economic context in the second half.

In North America, the decline of the US dollar (despite an upturn in the fi nal months), and the year-end fall in value of the Canadian dollar and Mexican peso led to a slight dip in sales at current exchange rates, compared with a much better performance at constant parity. For unchanged structure, sales were slightly up thanks to early advances, which were then gradually eroded. Business in these three countries was badly affected by the economic context over the months, with a slide in consumer spending and massive destocking by retailers who faced temporary or structural fi nancial diffi culty, and even bankruptcy. For example, a major Group client, Linen’N Things, went out of


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business, closing 345 stores in the United States and 40 in Canada, which badly affected our sales. The bankruptcy of Mervyn’s led to the closure of 400 stores. A breakdown of business performance by country is given below:

in the United States • , organic growth for the year was 1.6%, despite the third-quarter slowdown in consumer spending after a very good start. Krups reported another diffi cult year, its sales affected by a more selective focusing of its distribution channels, and by a delay in revamping its coffee range with the new Dahlström assortment. All-Clad faced diffi culties in cookware manufacturing, logistics and sales, penalized by stalled consumer spending and destocking by its leading retail clients. Even so, All-Clad made advances in electrical products such as the slow cooker and waffl e maker. Rowenta, after a satisfactory start to the year was eventually hit by the contraction in demand for irons and drastic inventory cuts by retailers. However, the brand held onto its market share and increased its average sale price thanks in particular to good business in garment steam brushes and steam ironing systems. T-fal put in an excellent performance in 2008, taking advantage of the presence of Mirro WearEver in entry-level ranges to highlight its own premium-quality focus. T-fal was appointed cookware category-management partner by a major distributor;

i • n Canada, where the market remained diffi cult and volatile, the Group managed to limit the erosion of its sales. In a very competitive context, aggravated by the diffi culties of certain retail clients, the Rowenta and All-Clad brands nonetheless made progress in the top-range segment;

i • n Mexico, after an excellent fi rst half, business suffered a sudden downturn in the third quarter under the combined effects of a cancelled contract by one retailer, the bankruptcy of another, and the rapid decline in the value of the peso. Despite these year-end diffi culties, 2008 sales were slightly up for constant exchange rates, though in contrast with a good performance in 2007.

In South America, the economic context gradually worsened over the months, affecting the Group’s business. After several years of uninterrupted growth, 2008 sales remained level for constant exchange rates, mainly refl ecting a decline in demand in Brazil – which accounts for almost 80% of our sales in South America – and in Colombia. In these two countries, the Group had to cope with a depressed market and adverse weather conditions which curbed fan sales in the summer (which is at the turn of the calendar year in South America), though this did not affect our market share. In Brazil, the economic crisis led to a tightening of credit, big cutbacks in retail stocks, and default by certain distributors – though the Group was not fi nancially affected by this, as it held COFACE cover for these client accounts. The fall in Brazil’s currency at the end of the year further complicated this already complex state of affairs: although it helped to make our Brazilian factories more competitive, it led to increased prices for sourced products, reversing the situation of some months earlier. In this diffi cult context, the Group maintained an aggressive sales strategy with new product launches (Laveo washable fans, mini food processors, sandwich makers…) backed by strong advertising and point-of-sale marketing and promotional offers. We also opened two new factory-direct outlets (one Arno and one Panex) in June and September, as well as a new Home & Cook outlet in Sao Paulo in November.

Sales in Colombia came under pressure for the same reasons as in Brazil. In Chile, where competition is tough and retailing highly concentrated, Group

sales fell as a result of a market-share loss in kettles (imports from Brazil being more expensive than imports from China by our competitors), the negative impact of the peso’s loss in value, and price rises which were not well received by the market. On the other hand, business in Venezuela remained robust despite a more delicate economic context and political tensions with neighbouring Colombia. The Group made fresh progress in Argentina where it gained market share with its enlarged offer and the success of several products such as breadmakers (particularly the Baguette model).

The Asia-Pacifi c area (China, Japan, Korea, Southeast Asia, Australia…), now represents more than 15% of Groupe SEB s a les, refl ecting a real change of dimension following the acquisition of Supor. Organic growth for the same structure and exchange rates as in 2007 stood at 13.2% for this zone. This pace of growth was fairly consistent throughout the year, showing that the world economic crisis had still not greatly affected business in the Asia-Pacifi c area in the fourth quarter. In greater detail:

Group trading was robust in Japan despite price rises early in the year •

to offset the weakness of the yen. Business was spurred by pressure cookers (profi ting from a government energy-saving campaign that drew attention to this product), by the continued rise of electric kettles (now an essential item in this market), by the success of the Ingenio removable-handle cookware range, and by steady sales of irons;

Korea saw gratifying growth in sales, helped by substantial advertising (via, •

for example TV shopping), which helped the Group to strengthen its overall positions. Final-quarter sales slowed under the impact of the worsening economic climate and the fall in the value of the won;

in Malaysia and Thailand, the Group continued to see progress, with •

solid growth at constant parity. This growth was helped by the greater purchasing power of middle classes eager to spend, reinforcement of Group sales teams, and market coverage extended to new urban areas outside the main cities;

in Australia and New Zealand, after a very good start, business patterns •

varied for the rest of the year. Demand was strong in December with the approach of the festive season spurring sales despite heightened economic tensions. The Group continued to make the most of its showcase products in cookware, steam cookers and irons. The recent launches of Quick Cup and Actifry, which are expected to be a success, had little impact on 2008 sales;

in China, despite a marked slowdown in the last two months of the year, •

Supor annual sales rose by 26%, driven strongly by the rapid take-off of electrical products.

Central Europe, the CIS countries and other territories (Turkey, Middle E ast countries and Africa). Accounting for just over 20% of the Group’s consolidated sales, this zone is highly diverse, embracing as it does key high-potential markets for the Group alongside more modest though expanding markets, and virgin territory where much work remains to be done over the long term. In this zone of essentially emerging markets, 2008 business was more contrasted than in the past and was affected by sharp and abrupt currency swings.

In Central Europe, the Group’s main markets are Poland (well ahead thanks to the growth of mass retailing in recent years) the Czech Republic, Hungary


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and Slovakia. After a strong start to the year, the Group saw its sales slump in the third quarter, to rebound again at the end of the year with the market success of the Dolce Gusto, breadmaking machines, Actifry and other Groupe SEB products.

The Russian market performed very well in the fi rst six months, reporting robust growth in Group sales. Trade slowed in the third quarter, going on to fall steeply in the fourth quarter. This left retailers weakened and under pressure, while sales in certain of our product families ground to a halt from mid-November. The steep and rapid slide of the rouble at the end of the year was an additional factor which led to increased prices. However, total sales for the year were up for constant structure and exchange rates.

In Turkey, the market maintained its momentum throughout the year and the Group did brisk business despite the negative impact of import duties and a sharp drop in the value of the Turkish pound. We raised prices to maintain

our local profi tability, which did not prevent double-digit sales growth in this market in 2008.

In Ukraine, the Group made very satisfactory progress for the year despite a serious worsening of the economic context and the sudden steep fall of the local currency, which pulled down consumer spending in the fourth quarter.

The diffi culties we encountered in 2007 with our agent-importer-distributor in Saudi Arabia continued in 2008, resulting in virtually no business in this country. The embargo on exports to Iran had the same effect. Loss of sales due to these circumstances is estimated at about €30 million for 2008.

COMMENTS ON THE 2008 RESULTS

The Group’s operating margin for 2008 stood at €341.7 million, up 13.6% on 2007, to represent 10.6% of sales compared with 10.5% a year earlier. This includes a contribution of €29.6 million by the Chinese company Supor, consolidated for a full year in 2008.

For unchanged structure, the operating margin was €312.1 million, up by 3.7% (10.7% of sales). This resulted from contradictory trends, including some very negative factors in the last quarter which was affected by the world economic crisis. On the basis of constant structure, contributing factors included:

organic growth, which is always a key lever in boosting the operating •

margin; while volume sales remained unchanged over the year (advances in the fi rst nine months were eroded by a steep decline in the fi nal quarter), while maintained pricing gained €8 million and a well-oriented product mix contributed €40 million;

the €28 million rise in the cost of purchases had a strongly negative effect, •

mainly in the second half. Most of this rise (€25 million) concerned the higher cost of sourced products, with suppliers passing on 2007 increases in raw materials costs and salaries (notably in China) in their 2008 prices, which rose by an average of 6%;

an increase in costs of €15 million on the previous year, included the •

following:

maintained research and development investments, equivalent to •

€44 million for constant structure, including an R&D tax credit of €6 million booked in 2008. Capitalized research costs amounted to €8 million. The Supor investment was €3 million,

advertising and marketing budgets were further increased to respectively •

€117 million and €118 million (against €113 million and €111 million in 2007) to support our market expansion and extend our star products internationally. The limited growth compared with previous years was mainly due to a policy of more selective spending at the end of the year with cancellation of campaigns in certain unresponsive markets badly affected by the crisis,

an increase in administrative and general management costs is exlained •

partly by continuing after-sales expense due to problems with certain products launched in 2006, and partly by new investment in strategic marketing and Group management services. It will be noted that these costs had increased by €33 million over the fi rst nine months of 2008, but the Group made radical adjustments as soon as the crisis began to make itself felt, so that savings of €18 million were made in the fourth quarter;

there was a modest currency gain of €6 million in 2008, compared with a •

gain of €15 million in 2007. This was due to a combination of two factors: a positive €36 million impact of the dollar for the whole year (mainly in purchasing), this being considerably limited by the revived strength of the dollar in the fourth quarter when the negative effect was €15 million; a negative impact of €30 million caused by the depreciation of several other currencies against the euro, particularly marked in the fourth quarter.

Operating profi t amounted to €279.2 million, on the basis of the new structure including Supor, compared with €237.4 million in 2007. The increase of 5.1% was due mainly to the improved operating margin. The ‘Bonus and profi t-sharing’ heading increased by almost €5 million (+15%) to €38.2 million, mainly resulting from the good performance of the French market in 2008, this being almost fully offset by the drop in total net expense (€24.3 million in 2008, against €30.4 million in 2007). The ‘ Other income and expense’ heading includes restructuring charges for €13.9 million (fi nal adjustments to the 2006-2007 French restructuring plan, logistics rationalization in Great Britain, and the regrouping of support functions in the United States), and impairments for €19.6 million (relating to the Rowenta Erbach factory in Germany, Lagostina’s Omegna plant in Italy, and the Mirro WearEver brands). This heading also includes a reversal of asbestos tax provisioned up to 2007 relating to the acquired Moulinex sites.

Net fi nancial expense amounted to €48.6 million (compared with €34.9 million in 2007), interest expense amounting to €37.9 million, against €32.3 million a year earlier. This increase is accounted for by a rise in the Group’s average debt for unchanged structure in 2008 (€691 million, against €471 million


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in 2007), mainly a consequence of the 2007 acquisition of Supor. On the other hand, and despite the impact of the economic crisis on fi nancing at the end of 2008, the Group managed to slightly reduce the cost of its debt from a rate of 5.95% in 2007 to 5.7% in 2008, mainly due to the lower cost of dollar fi nancing (about 60% of the Group’s debt is dollar denominated). Apart from the cost of debt, fi nancial expense includes other items such as a charge of €3.8 million relating to the ineffective share of metal hedging instruments (aluminium).

Attributable profit, at €151.6 million was up by 4.9%, reflecting the improvement in the operating margin and operating profi t. This takes account of Supor minority interests for an amount of €11.2 million, after a tax charge of €66.5 million rated at 28.9% (down from 30.1% a year earlier) thanks in particular to the positive impact of the integration of Supor.

Consolidated shareholders’ equity stood at €1,037.6 million on 31 December 2008, including Supor minority interests for €131.6 million. This is net of treasury stock, which again rose in 2008 (€150.7 million against €108.6 million at the end of 2007), SEB S.A. holding 4,376,100 of its own shares at the end of December. In a stockmarket context which saw a steep fall in share prices in the second half, the Group carried out a number of buy-back operations (1,956,802 shares for an amount of €43 million). The increase in shareholders equity derives from the year’s trading result less dividends paid in 2008 in respect of 2007 (€46.1 million) and latent losses of €45 million on hedging transactions mainly for aluminium extending to early 2011 (€35.3 million higher than at 31 December 2007). Translation differences which affect the net contribution of certain subsidiaries had a positive impact of €9.2 million at the end of 2008, as the depreciation of the rouble, the Korean won, the Turkish pound, Mexican peso and other currencies was offset by the quick revival of the US dollar and the yen and the Chinese yuan in the fourth quarter.

Net fi nancial debt at 31 December 2008 amounted to €649 million (€658 million at the end of 2007 – €585 million pro forma with Supor), after taking account of Supor cash fl ow of €88 million. In addition to the usual ’expense items’ such as fi nancial expense, taxes, dividends and capital expenditure, this amount also includes fi nancing the acquisition of Supor minority interests in May 2008, the buy-back of shares for €43 million, planned spending of €32 million for French restructuring, and a charge of €17 million related to the slight deterioration in the working capital requirement due to the economic crisis at the end of the year.

On the basis of a debt of €649 million, the gearing ratio was 0.63, refl ecting a robust fi nancial situation. At 1.65, the ratio of net debt to EBITDA followed the same trend, demonstrating the Group’s ability to rapidly pay off its debt.

Detailed analysis of the treasury and fi nancial situation of the Group is given in Note 25 for the Consolidated Financial Statements.

Capital expenditure for constant structure in 2008 amounted to €96 million (against €92 million in 2007). As in previous years, this concerned mainly fi xed assets (about 80%), with a fairly even spread between moulds and special tooling for new products, and industrial machinery (installation of new assembly lines, injection presses etc.), and/or renovation of buildings. The remaining 20% covered mostly capitalized development costs and computer software linked mainly to production. Supor’s capital expenditure amounted to €20 million, bringing the Group’s total capital expenditure to €116 million for the new structure in 2008. In 2009, investments in the new factory at Shaoxing will be continued.


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TRADING RESULTS/SALES †

2

4

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8

10

12

RETURN ON SHAREHOLDERS’ EQUITY †

0

5

10

15

20

25

CASH FLOW AND CAPITAL EXPENDITURE †

FINANCIAL DEBT AND GEARING †


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Outlook for 2009

OUTLOOK FOR 2009

Trading in 2008 was carried on in a very erratic macro-economic context which saw major currency swings, volatile commodity prices, a slowdown in consumer spending, and massive destocking, with retailers in fi nancial diffi culty or going into liquidation. Added to this, the fi nancial crisis which started in the stockmarkets, began to impact the real economy and business activity. The small household equipment market resisted longer than other sectors, but was eventually affected by the economic crisis. For Groupe SEB, this involved an abrupt turnaround in business from mid-November, with a steep drop in sales in several of its major markets.

The outlook for 2009 is diffi cult, if not unpromising. The worsened economic situation has hit consumer spending in many mature and emerging markets. However, the small household appliances sector has some features which should partly protect it from an outright slump:

an average product price of about €55, which is relatively modest compared •

with more substantial family budget items;

a tendency to turn to the home for reassurance in periods of crisis; •

a desire for ’home-made’ food, considered more tasty, wholesome and •

economical (we note the popularity of breadmakers, espresso coffee makers, food-preparation equipment and, more recently, a revival of yogurt makers).

Groupe SEB, world leader in its sector, is moreover well armed to face the current crisis, which is not the fi rst it has had to confront (the Asian crisis in 1997, the collapse of the Russian market in 1998, the Brazilian crisis in 1999, the European crisis in 2004-2005). This crisis is notable for its extent and gravity, but the Group has strengths which will help it to resist and counter its effects. These include:

sound business fundamentals • based on the Groups’ generalist approach and a strategic presence in all market segments, its portfolio of famous brands, a resolute R&D policy which drives its product dynamic, and a balanced geographic spread of sales. Moreover, the Group’s robust fi nancial structure and stable shareholder base allow its management to pursue a long-term strategy whatever the circumstances;

an ability to respond, • as it has done in previous times of crisis, with immediate adaptation, both industrially (restructuring of All-Clad in the United States, and in Brazil during the last quarter of 2008) and by reducing operating costs and expenses (a drastic cost-cutting programme was introduced in December 2008);

sticking to clear long-term goals • , including continued international growth (via the development of Supor in China, for example), ongoing innovation and strengthening of the Group’s market positions (by consolidating both traditional and alternative sales channels) and constant adaptation of its structures. Adaptation is of primary importance in a volatile market. Thus, in 2009, the Group will rationalize its linen care production in Europe (affecting the German factory in Erbach and Pont-Evêque in France). Competitive performance remains a core concern for the Group, as this is essential for its long-term survival and success.

In these circumstances, and in view of our business performance in the early months, the Group expects to face diffi culty in the fi rst half of 2009, which will compare unfavourably with the strong showing in the same period last year. Meanwhile, the Group’s priorities for 2009 are: to pursue the international extension of our star products, to continue gaining market share, to further optimize the fl exibility of our operations, and to maintain our economic and fi nancial equilibrium by focusing on profi tability and cash-fl ow generation.


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Risk management

RISK MANAGEMENT

Groupe SEB pursues a policy of prudent management of the risks inherent in its business, having consideration for the interests of all its stakeholders – clients, consumers, shareholders, employees – and for the environment. This approach is based on a detailed mapping and analysis of the main risks

faced by the company, which makes it possible to rank them on the basis of their potential impact on the functioning or performance of the Group, and on the probability of such risks occurring.

RISKS RELATING TO OPERATIONS

COUNTRY RISK

One of the Group’s strategic priorities is to achieve international market leadership. This involves, notably, selective though energetic expansion in emerging markets. These markets are characterized by a low level of equipment in small electrical appliances and cookware, and strongly growing demand based largely on the rapid emergence of a middle class eager to

spend. They offer real potential for the Group’s development over the long term, independently of economic ups and downs. Such countries also present a certain instability (political, monetary or economic) with a level of risk that could have an impact on the Group’s business performance and fi nancial situation.

Using a methodology based on national debt rating by Standard & Poor’s, and taking account of 2007 and 2008 sales, country risk at 9 January 2009 was rated as follows:

Level of riskCountries whose national debt

(in local currency) is rated between Percentage of 2007 sales Percentage of 2008 sales

Low AAA and BBB- 92.50 90.70

Medium BB+ and B- 6.00 8.10

High CCC+ to D- 1.50 1.20

According to this rating system, if we consider only countries where the Group has established a certain presence, the level of risk is considered medium for Turkey, Ukraine, Argentina and Venezuela. Firm sales growth in these four countries in 2008, and Colombia’s entry into the medium-risk category after a slight downgrading by Standard & Poor’s, explain the increase of just over 2 points in the Group’s exposure in markets where risk is considered moderate. There is no change in the high-risk category which, for the Group, still includes Iran, Syria, Jordan and the Palestinian territories.

The exit of Colombia from the low-risk category, along with relatively weaker growth in markets such as Brazil, Russia and Europe, explain the Group’s reduced exposure in this category. It will be noted that a slightly lower rating of Brazil, Mexico, Thailand and Russia does not affect the low-risk classifi cation of these countries.

The present economic crisis is likely to substantially affect certain countries, which could lead to the downgrading of some of the Group’s markets in 2009.

RISKS RELATING TO SOLD PRODUCTS

Risks of warranty or liability claims

Groupe SEB is exposed to the risk of warranty or civil liability claims by clients or consumers, and reasonable provision has been made for these. The gradual introduction of a two-year guarantee for small electrical appliances in European Union countries has been taken into account in warranty provisions since the end of 2005 (for countries already concerned). To cover the risk of a defective product causing damage, Groupe SEB has subscribed to a civil liability policy (see the Insurance heading below).

Recovery and recycling of end-of-use products

The European Directive 2002/96/CE on Waste Electrical and Electronic Equipment (WEEE) which has been implemented in most European countries since the end of 2005, makes it obligatory to recover and recycle electrical


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Risk management

and electronic appliances at the end of their life-cycle. This imposes new fi nancial constraints on the industry.

In the European countries concerned by this Directive, Groupe SEB decided to participate in eco-organizations which will handle the recycling of ’new’ and ’historical’ waste on behalf of manufacturers. The obligation to collect and process WEEE is pro rata to the equipment put on the market during the year of collection, and is payable in advance. In consequence, there is no need to make provisions for this at the time of putting the electrical products on the market.

RISKS RELATING TO BRANDS ASSETS

Groupe SEB business is built on a powerful portfolio of brands, some of which are treated as assets in its balance sheet. The total book value of its brands amounts to €294 million, and concerns mainly Rowenta, All-Clad, Lagostina and Supor.

Moreover, as Groupe SEB regularly engages in external growth operations, goodwill is shown in the consolidated fi nancial statements for an amount of €420 million, most of this having been taken into account at the time of the All-Clad and Supor acquisitions.

Under IFR standards, the value of brands and goodwill must be reviewed annually to check consistency between the value entered in the balance sheet and the actual performance of the brands and the subsidiaries in their own markets. Any signifi cant disparities, notably with regard to expected cash fl ow, a brand’s commercial under-performance, or increased costs incurred by the subsidiaries concerned, could require an adjustment in the balance sheet which may involve a partial or total depreciation of the book value of the asset. As there is an increased risk of brand values being affected by the present world economic crisis and its impact on consumer demand, the Group will be all the more vigilant in its management of newly-integrated companies. Meanwhile, the Group will continue its R&D drive to bolster its offer with innovative and groundbreaking products, as well as its spending on advertising and marketing to dynamize sales and build further on the market share gains it made in 2007 and 2008. However, at present, the Group does not expect the economic crisis to affect the long-term value of its intangible assets such as brands and goodwill.

Additional details are given in Note 11 to the Consolidated Financial Statements.

RISKS RELATING TO COMPETITION

In recent years, the competitive context has become more severe in both mature and emerging markets, though challenges differ in both.

Mature markets, already with a high level of equipment, are driven more by the product offer than by demand, and are characterized by an ’hour-glass’ structure where the mid-range segment has contracted, to the benefi t of increased volume in top-range and entry-level segments in recent years. Competition is particularly lively, with leading international, regional or national brands selling alongside cheap no-brand products while retailer own-brand products are on the increase. In fact, retail chains often play a catalyst role in

competition. Groupe SEB is long-established and occupies strong front-rank positions in mature markets thanks in particular to its powerful brand portfolio and extensive offer which allows it to cover all segments.

Emerging countries are mainly fi rst-time buyer markets, where the rise of a new middle class with greater purchasing power is stoking demand across a broadening spectrum of products. This trend is relayed by the growing presence of modern retailing formats. Aware from the start that these countries had high potential and that their consumers sought status through products, top brands built up strong positions – in particular Groupe SEB, which holds leadership in many of these countries today. These markets have a pyramid structure, with a broad though not very deep base in entry-level products, a substantial mid-range section, and a top-range niche segment. Competition in these markets is also well developed and increasingly resembles the profi le of mature markets.

It is essential in this severely competitive context to gain market share. This can be achieved by brand reputation and the relevance of the product offer, spurred by innovation and strong advertising and marketing support.

The Group’s ability to develop and launch an innovation at the right time is thus of vital importance. The introduction of a new concept acclaimed by consumers can have a powerful and lasting effect on an entire family of products, with a major impact on sales – very positive for the owner of the breakthrough innovation, but highly negative for its rivals. Groupe SEB strives to limit the risk of this competition by boosting its R&D effort in order to stay ahead and lead the market (this area has seen growing budget allocations over the last three years in both skills and investment). Since the end of 2006, the Group has been able to profi t from showcase products created by its own R&D process. It has achieved major commercial successes with these products by adding dynamism to the point-of-sale offer, thus helping the Group to stand out from its rivals and make substantial market-share gains.

INDUSTRIAL RISK

Groupe SEB places the safety of its production facilities at the centre of its industrial policy. In practice, this means that its European factories are exposed to little or no major risk of natural disaster such as hurricanes or earthquakes.

Moreover, the plants themselves do not present any particular hazard, as the major part of Groupe SEB production involves assembly. While the probability of risk in assembly operations is low, the Group takes every precaution to reduce its likelihood. Other industrial processes include metal stamping (for pressure cookers, frying pans and saucepans), surface coating (e.g., for nonstick cookware), and the manufacture of some components which concern less than 10% of factory staff. The more sensitive processes are closely monitored.

The integration of Supor since 1 January 2008 has involved a detailed review of the four Chinese factories and defi nition of priorities for potential improvement. While there are no signifi cant shortcomings in terms of the management of industrial risk, we are nonetheless gradually bringing these sites up to Group standards.


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Risk management

The Group also gives priority to safeguarding the environment in the context of an eco-production policy involving, for example, ISO 14001 certifi cation of its factories around the world. By the end of 2008, 89% of all its factories and logistics units forming part of the Group for more than fi ve years had obtained this certifi cate.

RAW MATERIALS RISK

Groupe SEB operations involve the use of several major raw materials in its industrial processes: aluminium (for cookware), nickel (for certain steel alloys), copper (mainly wire for motors and electric cables), plastic (a key material in small electrical appliances) and paper or cardboard for printed documents and packaging. These materials weigh variably on the Group’s purchasing budget: aluminium accounted for about 15% of direct purchases for manufacturing in 2008 (17% in 2007), steels 6% (7% in 2007) and plastic and plastic components 22% (these fi gures do not include Supor).

After three years of almost uninterrupted rises in the cost of raw materials (particularly aluminium, stainless steel and copper), prices eased back in 2008, falling more sharply from the last quarter. The price of aluminium, returning from its peak level just after the summer, remained high at an average of USD 2,570 a tonne for the year, against USD 2,640 in 2007. This fall has steepened since, so that at the end of January 2009, the rate was around USD 1,300 a tonne. Nickel began to drop in May, to give an average of USD 21,027 a tonne for the year (against USD 37,180 in 2007, when it saw a peak of USD 50,000 in the spring). By the end of January 2009, nickel was selling for USD 11,100 a tonne. Copper followed the same pattern, though with a later drop (October 2008), averaging USD 6,950 for the year (USD 7,126 in 2007). By the end of January 2009, copper stood at around USD 3,200 a tonne. It should be noted that as metal quotations are in US dollars, variations in euro-dollar parity would lessen or amplify price swings. The dollar’s loss in value in 2008 had a positive effect on the Group’s purchasing of raw materials.

Exposed to the risk of fl uctuating prices of these raw materials, particularly of the metals mentioned above, the Group covers its needs with multi-annual hedging operations to protect itself from sudden swings in the cost of raw materials and thus anticipate, if necessary, the need to increase its prices to its clients. This policy, which has absolutely no speculative interest for the Group can have positive results when prices are high, but negative results when prices fall. While these operations were positive for several years, they turned out to be a drawback in 2008 when faced with rapidly falling commodity prices, even if there was no material basis for this phenomenon. At current raw materials prices, the effect of hedging is likely to be negative again in 2009, as most of the Group’s needs in aluminium, nickel and copper are already covered at rates above current prices.

Apart from this impact on raw materials, erratic oil prices led in 2008 to an increase of 35% in maritime incoming freight transport costs.

In this context, the Group’s purchasing index stood at 98.4 compared with 2007, mainly due to currency effects. At the previous year’s euro-dollar exchange rates, it would have been around 100.4.

In the current economic climate of uncertainty, it is not possible to give a clear forecast for 2009, though economic observers expect to see considerable volatility in metal prices.

The coverage and sensitivity of commodity risks are dealt with in Note 27.2.3 to the Consolidated Financial Statements.

RISKS RELATING TO INFORMATION SYSTEMS

The Group continues to deploy a coherent IT system in all its subsidiaries to ensure better management and client service and to minimize the inherent risks of obsolete local systems. It concentrates its IT budget on a limited number of software packages which it uses selectively throughout the Group, depending on the size of each subsidiary (SAP R/3 for larger entities, or those participating in clusters, and SAP Business One for smaller ones). This targeted deployment reduces setting-up and operating risks.

Meanwhile, the introduction, on 1 January 2009, of an internally designed integrated Group Piloting System (GPS) will make it possible to quickly obtain a picture of the Group’s performance, provide more detailed breakdowns and improve internal control procedures. This far-reaching project, prepared over the last two years, involved 60 IT personnel, and as many from the Financial function, to develop the central system, interfaces and local processing. While the introduction of this worldwide system and the training of local staff to use it has been costly in terms of time and personnel, it will now ensure standardized management practices throughout the Group. The new system will be fully stabilized in 2009 when it will begin to come into general use.

The installation of new IT systems may briefl y affect the quality of client service. To avoid temporary breakdowns which might involve loss of data, errors or delays that could impede the proper functioning of the company and affect its results, thorough testing prior to the start-up of new systems and a strict IT security policy (monitored by a steering committee) aim to ensure that systems are fully reliable, secure and accessible. The Group regularly organizes campaigns to increase employee awareness of IT security.

LABOUR RELATIONS RISKS

Groupe SEB is constantly adapting its structures, particularly its factories, to ensure that it remains competitive. Despite a responsible approach to restructuring, plant closures remain a serious and disagreeable task which can affect the quality of relations between the management, employees and labour unions, which could have repercussions for the Group’s operations, performance and results.

The industrial restructuring plan in France in 2006 and 2007 – closure of three factories, rescaling of another, 890 job-cuts – had a disruptive effect on operations but was carried out, as initially announced, fully in keeping with our ethical standards. The Group met its commitments and allocated substantial and often costly resources to ensure a solution for every employee concerned. Measures adopted, such as internal mobility, help with personal projects, help with external re-employment, age-related measures, or long-term training schemes meant that the vast majority of employees succeeded in fi nding a solution. Meanwhile, the Group managed to ensure


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Risk management

the reindustrialization of the employment zones involved by helping to identify new operators and support the setting up of business activities to create jobs at the affected sites.

The announcement, on 11 February 2009, of a restructuring plan at Pont-Evêque and Erbach (with a total of 108 direct labour cuts, and 106 cuts in indirect labour) should help to restore the competitive performance of these two plants. The management once again undertook to limit outright redundancies, offering the affected employees solutions such as internal mobility, help with re-training and early retirement.

The Group gives high priority to the quality of ongoing dialogue with employee representatives to solve diffi cult labour issues responsibly and in the best possible conditions for everyone.

RISKS RELATING TO ACQUISITIONS

Over the last 40 years, Groupe SEB has developed through organic growth and acquisitions. Today, it continues to play a key active role in consolidating the still-fragmented small household equipment sector.

External growth requires an ability to integrate new acquisitions effectively and generate synergies. With its many acquisitions over the years, Groupe SEB has built up experience in integrating newly acquired companies. Having integrated Moulinex-Krups in 2001-2002, it acquired All-Clad in the United States in 2004, Panex in Brazil and Lagostina in Italy in 2005 and Mirro WearEver in the United States in 2006, it went on to take majority control of the Chinese company Supor at the end of 2007. This latest operation presents major challenges: different cultures, overcoming a language barrier, a new experience for Supor personnel who now form part of a Group, the introduction of regular reporting, coordination of communications by two listed companies, and the harnessing of synergies. Several complex parallel processes, coordinated by a special steering committee, made excellent progress in 2008 – Supor’s fi rst year of full integration within the Group – which bodes well for the future.

Success is never guaranteed from the outset, even with every effort and the allocation of resources, and setbacks or delays can affect trading or fi nancial results. However, the Group does not consider this to be the situation with its recent acquisitions.

DEPENDENCY RISKS

DEPENDENCE ON SUPPLIERS

As part of its policy of bulk buying, Groupe SEB uses a supplier panel which numbered 312 in 2008 (much smaller than in 2007) accounting for 83% of all its European factory supplies last year. The top 50 suppliers accounted for 45% of direct production purchases, in value. On the basis of the fi gures for 2008, the biggest supplier accounted for just under 3% of total purchases, while the second and third suppliers each represented a little over 2%. These fi gures are lower than in 2007, which shows that the Group is particularly attentive to spreading its risk and limiting reliance on too few suppliers. Its priority is to ensure continuity of production in optimum economic conditions in the event of a supply failure, while maintaining healthy competition between viable suppliers.

DEPENDENCE ON CLIENTS

The retailer is Groupe SEB’s direct client, and the consumer is its fi nal customer. Recent concentration of the big international retail chains has altered relations with these distributors, who have become more demanding with their suppliers, while seeking to reduce the cost of logistics and other services.

In 2008, the Group’s ten leading retail clients accounted for 35% of sales for constant structure (32% in 2007), refl ecting the dynamism of specialist retail banners and a strengthening of supermarkets. The largest single client accounted for a little under 7% of total sales (slightly up on 2007), while the second accounted for a little over 6%. The Group’s international presence and the diversity of the distribution channels it uses around the world help to dilute its exposure to risk. However, despite this policy of spreading risk, the insolvency of a client at country level has consequences for the subsidiary involved. The 2008 trading year was, for example, affected by the problems of certain distributors and by the disappearance of banners such as Linen’N Things in the United States and Canada (closure of 385 stores) or Comercial Mexicana in Mexico. As it is the policy of the Group to use COFACE trade receivables cover, these defaulting clients had virtually no impact on the results.


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Risk management

LEGAL RISKS

RISKS RELATING TO PATENTS

Groupe SEB sells its products throughout the world with a portfolio of brands which are internationally or regionally well known. It must therefore constantly defend these brands and protect its business assets by, for example, fi ling patents for brands and products. These measures are not always suffi cient on a global scale, as some countries offer less protection than the Group’s traditional markets in Europe and North America. As a result, sales are often ’appropriated’ by copied and counterfeited products. This obliges the Group

to defend its rights by being actively vigilant in the most critical zones (China and the Middle East), by having these products seized and destroyed by the locally concerned authorities, or by taking legal action. Such measures involve costs, in addition to loss of earnings as a result of counterfeiting. For this reason, the Group works pre-emptively in collaboration with the authorities concerned to limit the impact of these practices on its business.

In 2008, the Group’s investment in industrial patent protection amounted to about €8 million.

FINANCIAL MARKET RISKS

LIQUIDITY RISKS

Groupe SEB business is based on a short-term cycle and does not demand heavy capital investment.

Liquidity risk management is the concern of the Finance and treasury department and is centrally overseen. The Group’s fi nancing policy is to ensure the liquidity needed to fi nance its fi xed assets, working capital requirements and business development on a sound fi nancial basis. It does this with a combination of fi nancing sources including commercial paper, syndicated loans and Schuldschein-type private placement instruments, with no restriction on their use. Groupe SEB also has permanent access to unused confi rmed medium-term credit lines with leading banks. In this way, the Group’s fi nancing is assured over the long term.

Details of maturities of instruments used and available fi nancing sources are shown in Notes 25.1 and 27.3 to the Consolidated Financial Statements.

INTEREST-RATE RISK AND CURRENCY RISK

The Group sells its products in more than 120 countries. With a substantial proportion of our manufacturing still based in Europe (42% of products sold), the Group’s business is strongly export-oriented. Exchange-rate swings thus affect our ability to be competitive, so that these must be effectively managed with the long term in view. To limit the direct impact of currency variations, the Group strives to balance incoming fl ows (such as sales revenue) and outgoing fl ows (such as costs) in each currency, and this, particularly in the fi eld of procurement by diversifying sources geographically. However, this cannot fully redress imbalances, as the Group’s dollar position is short-term, while for several other currencies it is long-term. The Group also uses fi nancial instruments to cover transaction risks.

In 2008, the volatility of exchange rates and the sudden and steep year-end fall in the value of several currencies in relation to the euro (the rouble, Korean won, Turkish pound, Mexican peso and others) seriously disrupted the trading

of some of our subsidiaries in the fourth quarter, which led them to increase the sale price of products to maintain their local profi tability. Continuation of these exchange levels throughout 2009 would have consequences for the Group’s sales (impact of price rises on sales volume, and exchange variations) as well as affecting its margins.

Group fi nancing uses mostly variable-rate loans in currencies that correspond to its needs (mainly the euro and the dollar). Hedging operations covering part of the company’s debt – the longest-term extending to 2015 – make it possible for the Group to protect itself against the likelihood of interest-rate rises.

Details of exchange-rate risks are given in Notes 27.2.1 and 27.2.2 to the Consolidated Financial Statements.

RISKS RELATING TO SHARES

At 31 December 2008, Groupe SEB held 4,376,100 of its own shares for a total amount of €150.7 million. This treasury stock is deducted from Shareholders’ equity at acquisition cost.

On the basis of the closing price of the SEB share at 31 December 2008 (€21.46), the market value of treasury stock was €93.9 million (this market value has no impact on the Group’s consolidated fi nancial statements). An increase or decrease of 10% in the value of the SEB share would therefore involve a variation of €9.39 million in the market value of treasury stock. This variation has no impact on the consolidated income statement or shareholders’ equity.

The general slump in stockmarkets since the autumn of last year nonetheless led to huge devaluation of listed companies. Thus, in 2008, the SEB share shed almost 50% of its value, under-performing the CAC 40 Index and SBF 120 which fell by about 40%.

Further information on share risks is given in Note 27.2.4 to the Consolidated Financial Statements. This data also takes account of risk on the Supor share which is quoted on the Shenzhen stockmarket.


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Risk management

SENSITIVITY ANALYSIS

Groupe SEB conducted a sensitivity analysis of data published in 2008 to assess the impact of euro-dollar currency variations on the operating margin, and the effect of interest-rate variations on pre-tax profi t.

Concerning the euro-dollar exchange rate, Groupe SEB, as a regular buyer in dollars or in ’dollar zones’ (raw materials, products sourced in Asia, etc.), has held a short-term position in this currency for several years. The analysis shows that a 1% variation in the euro-dollar exchange rate would have an impact of about €3 million on the Group’s operating margin. However, other important functional currencies for the Group could equally have a signifi cant impact on operating income. These include the yen, the rouble, the pound sterling, the Turkish pound, the Korean won, the Polish zloty, the Brazilian real and the Mexican peso. The substantial depreciation of most of these currencies in 2008, notably in the fi nal quarter, could – if they were to remain at their starting level – continue to have a negative effect on the Group’s performance in 2009.

This sensitivity analysis does not take into account the impact of currency exchange variations on the competitive capacity of our European plants which still represent a large share of the Group’s production: a strong euro in relation to most other currencies, notably the US dollar, makes European manufacturing more expensive than production in dollar zones, and thus acts as a curb on exports. Conversely, the current recovery of the dollar, combined with the cost of and time taken to transport Asian imports could make our European facilities more competitive.

In the area of interest rates, the analysis shows that the impact on pre-tax profi t of a variation of 100 base points in short-term interest rates would be €6 million.

Note 27.2 to the Consolidated Financial Statements gives additional details on the Group’s exposure to currency fl uctuations, interest rate swings and changes in the prices of raw materials.

INSURANCE

GROUP GENERAL INSURANCE COVER

The policy of the Group on insurance cover is to protect its assets against risks which could affect the Group. This transfer of risk to insurers is accompanied by risk protection and prevention measures.

WORLDWIDE INSURANCE COVER

The Group has established a worldwide insurance plan with major international insurers to cover it against the main risks, which include damage to property and loss of earnings, civil liability, and client and transport risks.

Damage to property and loss of earnings

Cover for risk of damage to property and consequent loss of earnings for usual risks (fi re, explosion, etc.), amounts to €250 million per loss occurrence for factories and warehouses.

This cover ceiling was calculated on the basis of maximum possible risk, in consultation with the insurers and their assessors. This valuation assumes total destruction, in a single year, of one of the Group’s main production sites. Lower thresholds are fi xed for other categories of more specifi c or localized risk, such as risk of earthquake in certain zones where the Group has operations abroad.

This insurance cover takes into consideration additional risk protection measures at Group sites which are regularly visited by specialist risk prevention assessors from the insurance companies concerned.

Civil liability

All the Group’s subsidiaries are included in a worldwide civil liability insurance programme that covers liability relating to their operations, the products they make and the cost of recalling products.

Cover amounts are based on reasonable estimates of the risks incurred by the Group in view of its activities.

The Group also guarantees the civil liability of its management under a specifi c insurance policy.

ENVIRONMENT

On 1 July 2008, Groupe SEB introduced a comprehensive environment insurance programme to improve its coverage in the area of environmental risks.

This covers:

accidental pollution, including gradual damage; •

detriment caused to biodiversity; •

the cost of depollution. •

Transport

The Group’s transport insurance covers damage to transported merchandise for all types of transport: maritime, terrestrial or air transport anywhere in the world.

This insurance covers transport risks up to an amount of €6 million per loss occurrence.


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Risk management

Receivables

The Group’s subsidiaries subscribe to credit risk insurance to cover their risk on client receivables.

LOCAL INSURANCE POLICIES

More specifi c insurance policies are subscribed to locally by each of the Group’s companies, as appropriate.

EXCEPTIONAL EVENTS AND LITIGATION

There were no exceptional events or litigation proceedings other than those referred to in Note 30.1 to the Consolidated Financial Statements.


GROUPE SEB IN 2008

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Social performance indicators

SOCIAL PERFORMANCE INDICATORS

The Groupe SEB human resources policy gives high priority to good labour relations, the development of skills, health and safety standards in the workplace, diversity and fair treatment of all its employees.

The 2008 trading year saw the integration of the Chinese company Supor, which increased our total payroll by 6,430 people. Certain changes in our social performance indicators between 2007 and 2008 are directly linked to this integration: the higher proportion of direct manual labour (60% of

Supor employees are in this category), the increase in fi xed-term employment contracts (a formula which is widespread in China), or the drop in the overall proportion of women in the Group’s workforce. For greater clarity, 2008 indicators also give separate data excluding Supor, where this is possible.

Also noteworthy in 2008 was the substantial drop in the frequency of industrial accidents, thanks to the Group’s greater efforts in this area.

REMUNERATION AND SOCIAL CHARGES

(worldwide)

(in € millions)

2008 2007 2006

Worldwide with Supor

Worldwide excluding Supor France Worldwide France Worldwide France

Remuneration (a) 384.1 360.1 210.3 354.1 210.1 351.6 210.7

Social charges (b) 105.0 99.0 63.6 106.2 64.9 100.8 60.1

Pension charges 35.0 33.8 29.2 36.6 30.3 37.8 32.0

(a) Excluding bonus and profi t-sharing amounts paid – including provisions for paid leave, excluding individual benefi ts.(b) Including provisions for social charges on paid leave.

BREAKDOWN OF EMPLOYEES BY GEOGRAPHIC ZONE

(worldwide)

(number of individuals)2008

with Supor2008

excluding Supor 2007* 2006*

France 6,267 6,267 6,759 7,339

Other Western European countries 1,506 1,506 1,502 1,487

North America 670 670 786 1,010

South America 2,156 2,156 2,355 2,493

Asia-Pacifi c 7,571 1,141 986 873

Central Europe, CIS countries and other territories 709 709 660 539

TOTAL 18,879 12,449 13,048 13,741

Registered employees at 31/12/2008.* Data for 2006 and 2007 are restated on the basis of the Group’s new geographic breakdown for 2008.

The Group continued its industrial restructuring. In France: 7.3% staff reduction. North America: 14.7% staff reduction due mainly to restructuring in Mexico and the United States. South America: 8.5% staff reduction, mainly in Brazil.


GROUPE SEB IN 2008

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BREAKDOWN OF EMPLOYEES BY CATEGORY

(worldwide)

(%) 2008 with Supor 2008 excluding Supor 2007 2006

Direct manual labour 44.6 36.4 41.0 42.5

Offi ce workers 44.4 48.2 45.6 44.7

Managers 11.0 15.4 13.4 12.8

TOTAL 100 100 100 100

In 2008, increase in direct manual labour with the integration of Supor (60% direct manual labour).

BREAKDOWN OF CHANGES IN STAFFING

(w orldwide, excluding Supor)

(number of individuals) 2008 2007 2006

RECRUITMENT (a) 1,921 1,799 1,245

Of which fi xed-term contracts 630 755 623

Of which permanent contracts 1,291 1,044 622

DEPARTURES (a) 2,505 2,527 1,862

Of which economic redundancies 300 427 581

Departures for other motives 429 265 328

AVERAGE STAFF TURNOVER (b) (%) 4.7 4.8 3.2

(a) Excluding internal transfers.(b) Number of resignations from permanent posts/average permanent contracts in 2008.

BREAKDOWN OF EMPLOYEES BY TYPE OF CONTRACT

(worldwide)


PERMANENT CONTRACTS 63.0 93.0 92.8 94.0

Of which full-time 92.5 92.3 92.5 92.9

Of which part-time 7.5 7.7 7.5 7.1

FIXED OR OTHER SHORT-TERM CONTRACTS 36.3 6.0 6.4 5.3

Of which full-time 97.3 75.6 83.0 93.7

Of which part-time 2.7 24.4 17.0 6.3

APPRENTICESHIPS 0.7 1.0 0.8 0.7

TOTAL 100 100 100 100

The integration of Supor caused a rise in the ’Fixed or other short-term contracts’ category, as this type of contract, which is widespread in China, applies to most of Supor’s employees.


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DISABLED EMPLOYEES

(worldwide)

2008 2007 2006

Worldwide with Supor

Worldwide excluding Supor France Worldwide France Worldwide France

Number of disabled 526 512 335 592 388 638 419

Percentage of disabled (a) 2.79 4.11 5.35 4.54 5.74 4.64 5.70

(a) Proportion of disabled employees out of the total of registered employees at 31/12/2008, excluding temporary staff and sheltered employment in France.

STATUTORY WEEKLY WORKING HOURS FOR FULL-TIME EMPLOYEES

(worldwide)

(average working hours (a)) 2008 with Supor 2008 excluding Supor 2007* 2006*

France 35.0 35.0 35.0 35.0

Other Western European countries 38.5 38.5 38.8 38.7

North America 40.1 40.1 39.6 39.6

South America 44.2 44.2 43.0 43.0

Asia-Pacifi c 40.7 39.5 39.8 39.7

Central Europe, CIS countries and other territories 40.6 40.6 40.8 40.7

WORLD AVERAGE 39.6 39.4 39.4 39.4

(a) Weighted average statutory working hours per week, by company.* Data for 2006 and 2007 are restated on the basis of the Group’s new geographic breakdown for 2008.

BREAKDOWN OF EMPLOYEES BY GENDER AND CATEGORY

(worldwide)


MALE


Offi ce workers 25.6 26.1 24.8 25.6

Managers 7.6 10.5 9.6 9.3

TOTAL 58.6 54.1 54.1 54.0

FEMALE


Offi ce workers 18.8 22.1 20.7 19.1

Managers 3.3 4.9 3.9 3.5

TOTAL 41.4 45.9 45.9 46.0

Excluding Supor, the proportion of both female and male managers rose by around one point in 2008.

The inclusion of Supor (60% mainly male manual labour) increased the proportion of male manual labour .


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EXTERNAL STAFF


Temporary staff at 31/12/2008 was equivalent to 482 full-time posts in France (2007: 626 posts) and 2,212 posts worldwide (2007: 2,575 posts).

PAID OVERTIME


2008 France: 41,810 hours, equivalent to 23 full-time posts (2007: 32,529 hours, equivalent to 18 full-time posts).

2008 Worldwide: 372,691 hours, equivalent to 180 full-time posts (2007: 530,424 hours, equivalent to 258 full-time posts).

There was a drop in the number of overtime hours worldwide, particularly in the USA and Brazil, following the deterioration of the economic climate.

WORK SAFETY: FREQUENCY AND SEVERITY OF ACCIDENTS


2008 2007 2006

FRANCE (MONTHLY INDICATORS)

Number of work accidents with absence 110 174 201

Total work days lost (a) 6,733 6,660 9,446

Frequency rate (b) 12.25 18.55 19.46

Severity rate (c) 0.75 0.71 0.97

WORLD (QUARTERLY INDICATORS)

Number of work accidents with absence 182 249 267

Total work days lost (a) 8,525 10,425 10,781

Frequency rate (b) 8.33 9.31 10.41

Severity rate (c) 0.39 0.39 0.42

(a) Data restated on the basis of a more strict calculation method.(b) Number of working days lost because of accidents, per million hours worked.(c) Number of working days lost, per thousand hours worked.

The frequency of industrial accidents fell by 35% in France and by 11% worldwide, compared with 2007.

The severity rate, restated for the last three years on the basis of a stricter method in compliance with regulations to take account of, for example, industrial illnesses.


GROUPE SEB IN 2008

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TRAINING (STAFF AND TRAINING HOURS)

(France)

2008 2007 2006

Number of training hours (a) 148,907 153,913 153,894

Number of trainees 4,346 4,294 3,882

Of which female 1,865 1,878 1,563

Of which male 2,481 2,416 2,319

Number of people trained in environment protection 1,019 1,041 1,009

Number of people trained in work safety 2,594 2,280 1,888

(a) On the basis of the number of trainees multiplied by the number ot training hours (including environment and safety training).

In 2007, in addition to the 153,913 training hours shown above, 85,197 hours of training were provided in connection with restructuring plans.

In 2008, the rise in the number of trainees parallel with a fall in the total number of training hours is explained by training of shorter duration, notably for brand and quality modules.

TRAINING BUDGET (a)

(worldwide, excluding Supor)

(% of total payroll) 2008 2007* 2006*

France 2.65 2.75 2.78

Other Western European countries 1.78 1.00 1.10

North America 1.16 1.86 1.47

South America 2.12 1.69 1.78

Asia-Pacifi c 2.36 1.97 1.69

Central Europe, CIS countries and other territories 2.63 1.97 1.59

TOTAL 2.38 2.30 2.27

(a) Cost of training + expenses, excluding trainee salaries for non-direct labour.* Data for 2006 and 2007 are restated on the basis of the Group’s new geographic breakdown for 2008.

Data for 2007 do not take account of training costs for restructuring plans in France, which represented €1.6 million.

GROUPE SEB ACADEMY TRAINING


2008 2007 2006

Number of trainees 2,226 1,076 1,302

Number of training sessions 201 116 144

Number of training hours (a) 33,777 21,056 27,711

(a) Number of people trained X number of training hours per session.

The strong increase in the number of Groupe SEB Academy trainees is explained by the extension of training programmes (brand workshops abroad , labour union rights and quality and management in France…).


GROUPE SEB IN 2008

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BONUS AND PROFIT-SHARING

(worldwide)

(in € thousands) 2008 2007 2006

Allocation to bonus payments 14,787 10,791 15,355

Allocation to profi t sharing 18,574 14,898 13,940

TOTAL 33,361 25,689 29,295

Amounts paid in the year indicated in respect of the previous trading year.


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Environment performance indicators

ENVIRONMENT PERFORMANCE INDICATORS

Groupe SEB has worked for many years to improve the environmental performance of its factories and logistics platforms. Its worldwide Environment Management System put in place in 2003 aims in particular to reduce waste and emissions and limit the consumption of water and energy.

Since 2007, all Groupe SEB industrial and logistics units forming part of the Group for more than fi ve years hold ISO 14001 certifi cation. Those acquired

since 2004 (All-Clad, Lagostina, Panex and Supor) which became involved in this process more recently, do not yet feature in the environment indicator reporting system, but are preparing to do so.

Apart from its own production units, Groupe SEB ensures that its suppliers also engage in the environmental certifi cation process.

ENERGY CONSUMPTION

(worldwide)*

2008 2007 2006

Worldwide France Worldwide France Worldwide France

Total consumption of gas (in gWh) 166.2 162.6 172.3 167.9 194.6 190.1

Total consumption of electricity (in gWh) 158.7 115.5 163.7 117.7 171.2 122.2

Total consumption of water (in m3 thousands) 1,059.3 968.7 1,052.2 955.1 1,130.9 1,012.8

Consumption of direct energy, by primary source (gas + electricity) (in gWh) 324.9 278.1 336.0 285.6 365.8 312.3

* Excluding Supor, Panex, All-Clad and Lagostina. Constant structure – 2008 basis.

EMISSIONS

(worldwide)*

(tonnes) 2008 2007 2006

Emissions of greenhouse gas (CO2) 31,682 32,816 36,152

* Excluding Supor, Panex, All-Clad and Lagostina. Constant structure – 2008 basis.


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Environment performance indicators

WASTE

(worldwide)*

2008 2007 2006

Worldwide France Worldwide France Worldwide France

Ordinary Industrial Waste (OIW) (tonnes) 11,797 8,857 11,671 8,279 11,121 7,834

Percentage of OIW recycled 82 83 79 79 76 76

Special Industrial Waste (SIW) 100% treated (tonnes) 1,063 960 1,118 1,024 1,195 1,098

Wastewater plant sludge disposed of in class II landfi lls (tonnes) 5,583 5,583 6,063 6,060 6,342 6,342

* Excluding Supor, Panex, All-Clad and Lagostina. Constant structure, excluding closed factories – 2008 basis.

ISO CERTIFICATION


(%) 2008 2007 2006

Sites certifi ed ISO 14001 (a) 89 89 81

(a) Based on industrial and logistics entities at the end of the year concerned (with the Group’s head offi ce included).

All industrial and logistics entities integrated into the Group for more than fi ve years are ISO 14001 certifi ed.



BOARD OF DIRECTORS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Chairman and Chief Executive Offi cer 36

Board members 36

Founder family links 42

Absence of conviction for fraud, involvement in bankruptcy or offi cial public sanction 42

Absence of potential confl ict of interest 42

Service contracts 42

ORGANIZATION AND FUNCTIONING OF THE BOARD OF DIRECTORS... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Functioning of the Board of Directors 43

Board Meetings 43

Attendance fees 44

Board committees 44

Evaluation of the Board of Directors 45

Directors’ Charter and Internal Rules of the Board of Directors 45

Keeping Board members informed 45

GROUP MANAGEMENT BODIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Group Executive Committee 46

Continental General Management 46

Strategic Business Areas 46

Management remuneration 47

Remuneration of company offi cers 47

Allocation and take-up of stock options by company offi cers and by employees with the ten highest allocations 50

Share transactions carried out by members of Seb management (Article L. 621-18-2 of the french monetary and fi nancial code) during 2008 51

REPORT OF THE CHAIRMAN AND CEO ON INTERNAL CONTROL .. . . . . . . . . . . . . . . . . . . . . . . . . 52

The Group’s internal control function 52

Those responsible for internal control 53

Accounting and fi nancial information procedures 55

AUDITORS’ REPORT ON INTERNAL CONTROL .. . 57

STATUTORY AUDITORS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Statutory auditors 58

Substitute auditors 58

Fees paid to Statutory auditors 58


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Board of Directors: 15 members

BOARD OF DIRECTORS: 15 MEMBERS

Other current mandates and functions:

Board member of Club Méditerranée SA, Plastic Omnium and Legrand.

Permanent representative of Sofi naction on the Board of Lyonnaise de Banque.

Mandates in Groupe SEB companies: Chairman of SEB Internationale; Board member of Supor (China).

Expired mandates and functions exercised in the last fi ve years (excluding

Groupe SEB companies):

Board member of Siparex Associés.

BOARD MEMBERS

TRISTAN BOITEUX

Member of the Founder group, member of FÉDÉRACTIVE.

Appointed 2002 - Expiration of term: 2010.

Aged 46.

Having occupied various functions in Alcatel for 11 years, he has been seven years with Gemalto where, before being appointed Product Manager, he held the post of Commercial Engineer.

Number of SEB shares held: 101,310 (of which 98,295 bare-owner shares).


Member of the Advisory Board of FÉDÉRACTIVE.

Expired mandates and functions exercised in the last five years:

Member of the Management Board of VENELLE INVESTISSEMENT.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

THIERRY DE LA TOUR D’ARTAISE

Member of the Founder group.

Appointed 1999 - Expiration of term: 2012

Aged 54.

Chairman and Chief Executive Offi cer of SEB S.A. since 2000.

Entered Groupe SEB in 1994 when he joined Calor, of which he became Chairman, and was appointed Deputy Chairman of SEB S.A. in 1999.

Number of SEB shares held: 104,463 (of which 165 bare-owner shares).

FOUNDING CHAIRMEN

Frédéric Lescure †

Henri Lescure †

HONORARY CHAIRMAN

Emmanuel Lescure


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DAMARYS BRAIDA

Member of the Founder group, member of VENELLE INVESTISSEMENT.

Appointed 2001 - Expiration of term: 2009 (1).

Aged 41.

Head of L’Oréal hair colour R&D laboratory.



Chairperson of VENELLE INVESTISSEMENT.

Managing Director of VENELLE PLUS.



PASCAL CASTRES SAINT MARTIN

Independent Director

Appointed 2001 - Expiration of term: 2009 (2).

Aged 73.

Having spent 15 years in the Indosuez Group, he joined L’Oréal in 1979, where he ended his career as Vice President in charge of Administration and Finance, and Deputy General Manager.

Number of SEB shares held: 1,155.

(1) Renewal proposed at the AGM of 13 May 2009.(2) Mandate not renewed.


Board member of Le Portefeuille Diversifi é mutual fund.

Board member of Fimalac SA.

Vice-Chairman of the Supervisory Board of GML.


Board member of Sanofi /Synthelabo.

Member of the Supervisory Board of the Arc-International S.G.D.I. holding company.

NORBERT DENTRESSANGLE



Aged 54.

In 1979, founded Groupe Norbert Dentressangle, specialized in transport and logistics – of which he was Chairman until 1998, and now presides its Supervisory Board. Since its creation in 1988, he has also been Chairman of Financière Norbert Dentressangle (SAS), a family holding company which, in addition to its majority holding in Groupe Norbert Dentressangle, also holds stakes in real estate, industrial and business services companies.



Chairman of Financière Norbert Dentressangle (SAS).

Chairman of the Supervisory Board of Groupe Norbert Dentressangle.

Chairman of Financière de Cuzieu (SAS).

Chairman of ND Investissements (SAS).

General Manager of Sofade (SAS).

Deputy Chairman of the Supervisory Board of Axa.

Board member of Sogebail.


Member of the Board of Directors or Supervisory Board of:

Finaixam,

Emin Leydier (SAS),

Siparex Croissance,

Egnatia.

Permanent representative of Société Financière Norbert Dentressangle on the Board of Via Location.

Permanent representative of Société Financière Norbert Dentressangle on the Board of Financière Egnatia.


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PHILIPPE DESMARESCAUX



Aged 70.

Former General Manager, Groupe Rhône-Poulenc.



Chairman of the Supervisory Board of Eurotab.

Member of the Supervisory Board of Auriga Partner.

Chairman of Fondation Scientifi que de Lyon et du Sud-Est.

Vice-Chairman of the Board of Directors of CPE.

Co-Chairman of Fondation Biovision – Académie des Sciences.


Board member of Therascope AG.

Chairman of the Board of Directors of Innate Pharma.

FÉDÉRACTIVE

Appointed 2005 (co-opted by the Board Meeting of 16 December 2005) - Expiration of term: 2010.

Shareholder investment company, represented by its Chairman, Pascal Girardot, member of the Founder group.

Pascal Girardot, aged 53, is a member of the Institute of Actuaries. After 15 years in fi nancial markets and fi nancial engineering with the Caisse des Dépôts et Consignations as Financial Markets Manager, and with CPR as Risk Manager responsible for its New York operations, he has been, since 1997, Founder-Chairman of Certual, specialized in fi nancial engineering.

Former Chairman of the Obligatory Standards Committee advising the French Treasury.

Board member of Gaggione SA, Babylone SA, and NewCore SA.

Number of shares held by FÉDÉRACTIVE: 9,834,320 (of which 9,834,317 usufruct shares).


none.

HUBERT FÈVRE



Aged 44.

Chartered accountant. Based in Geneva, he is Financial Offi cer for Pasche Bank. Previously, in London, he held fi nancial functions with the following groups: Sonatrach Petroleum Corporation, VSNL International, Addax & Oryx and Finacor.



Member of the Advisory Board of FÉDÉRACTIVE.




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SOCIÉTÉ FONCIÈRE, FINANCIÈRE ET DE PARTICIPATIONS - FFP

Appointed: 2005 - Expiration of term: 2009 (1).

A holding company listed on the Paris stock exchange and majority-held by the Peugeot family group.

FFP is represented by Christian Peugeot, aged 55, a graduate of France’s Ecole des Hautes Etudes Commerciales, whose entire career has been within Groupe PSA. Marketing and Quality Director for Peugeot from 1998 to 2005, he is today Director of Communications and Brand Strategy for Automobiles Peugeot.

Number of SEB shares held by FFP: 2,901,522.

(1) Renewal proposed at the AGM of 13 May 2009.


FFP is a member of the Supervisory Boards of Immobilière Dassault SA, IDI S.C.A., and Zodiac SA. It also holds the chairmanship of Société Financière Guiraud SAS, and manages the real estate companies SCI FFP-Les Grésillons, SCI Marne-FFP and SCI Valmy-FFP.


Board member of Marco Polo Investissements SA.

JACQUES GAIRARD



Aged 69.

Entered Groupe SEB in 1967. He was appointed General Manager of SEB S.A. in 1976, Deputy Chairman in 1988, and Chairman and Chief Executive Offi cer from 1990 to 2000.



Member of the Supervisory Board of Soparind SCA.

Board member of Bongrain SA.

Board member of Maison Rouge contemporary art foundation.



Member of the Supervisory Board of Siparex Associés.

Member of the Supervisory Board of Groupe Norbert Dentressangle.

PHILIPPE LENAIN



Aged 72.

Former Deputy Chairman, General Manager and Board member of the Danone Group.



Board member of Carlson Wagons Lits France, Nord Est and Eco-Emballages.


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ANTOINE LESCURE



Aged 37.

Chairman and Chief Executive Offi cer of Jomini Participations.

Managing Director of Archipelago Publishing.



none.

FRÉDÉRIC LESCURE


Appointed: 2005 - Expiration of term: 2009 (1).

Aged 48.

A graduate of Harvard University, Frédé ric Lescure is Chairman of Groupe Méaban, specialized in surface treatment.


(1) Renewal proposed at the AGM of 13 May 2009.


Chairman of Socomor GmbH (Germany), Socomor SA (Spain) and Socomor Ltd (England), 7 d’Armor Spzoo (Poland) and Groupement des Fédérations Industrielles Bretagne.

Board member of Magchem (Canada) and CCB Développement (France).

Board member of EMC2 competitivity consultants.


Vice-Chairman of UIC Ouest Atlantique.

VENELLE INVESTISSEMENT

Member of the Founder group.

Appointed: 1998 - Expiration of term: 2012.

VENELLE INVESTISSEMENT a family company formed in 1997, is represented by Olivier Roclore.

After six years as Legal Affairs Manager with CAD software company Cisigraph, Olivier Roclore, aged 54, has been Legal and Finance Director of Groupe Ortec since 1992.

Chairman of the Management Board of VENELLE INVESTISSEMENT.

Number of SEB shares held by VENELLE INVESTISSEMENT: 6,664,491 (of which 6,659,988 usufruct shares).


none.


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JÉRÔME WITTLIN


Appointed: 2004 - Expiration of term: 2012.

Aged 49.

Jérôme Wittlin began his career with Groupe Crédit Lyonnais, notably as Director of Clinvest (a subsidiary specialized in mergers and acquisitions), and from 2004 was Executive Director of the Investment Banking Department of Calyon, a fi nancial and investment bank in the Crédit Agricole group.

Since 2006, he has been Executive Director of the Private Wealth Management Division of Goldman Sachs in France.

Number of SEB shares held: 6,338 (of which 330 bare-owner shares).


General Manager of VENELLE INVESTISSEMENT.

Board member of Trajectoire.



JEAN-DOMINIQUE SENARD (1)

Independent Director.

Appointment: 2009 - Expiration of term: 2013.

Aged 56.

Jean-Dominique Senard began his career in various posts of responsibility in fi nance and operations with Groupe Total, from September 1979 to September 1987, and then with Saint Gobain from 1987 to 1996.

From September 1996 to March 2001, he was Chief Financial Offi cer and a member of the Groupe Péchiney Executive Council. He was head of Péchiney’s Primary Aluminium Division until 2004. As a member of Alcan’s Executive Committee, he was responsible for the integration of Péchiney, and served as President of Péchiney SA.

Jean-Dominique Senard joined Michelin in March 2005 as Chief Financial Offi cer and a member of Michelin’s Executive Council.

In May 2007 he became a Managing Partner of Groupe Michelin.

(1) Nomination proposed at the AGM of 13 May 2009.

At 31 December 2008, directors held 38.80% of share capital and 51.29% of voting rights.

Each Board member is required to hold a number of shares in the SEB S.A. nominal share register equivalent to about two years of attendance fees.


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FOUNDER FAMILY LINKS

All Board members belonging to the Founder group are descendants, •

directly or by marriage, of Founder-Chairmen Frédéric Lescure or Henri Lescure.

There is no family connection between Board members and members of •

the Group Executive Committee, with the exception of Thierry de La Tour d’Artaise, who is a member of the Founder group.

ABSENCE OF CONVICTION FOR FRAUD, INVOLVEMENT IN BANKRUPTCY OR OFFICIAL PUBLIC SANCTION

As far as the company is aware:

no member of the Board of Directors or Group Executive Committee has •

been the subject of a conviction for fraud in the last fi ve years;

no member of the Board of Directors or Group Executive Committee has •

been the subject of a bankruptcy, strike-off notice or liquidation in the last fi ve years;

no member of the Board of Directors or Group Executive Committee •

has been the subject of any offi cial charge or sanction by statutory or regulatory authorities;

no member of the Board of Directors or Group Executive Committee •

has been in the last fi ve years subject to any court order or constraint on serving as a member of a Management Board, Board of Directors or S upervisory B oard, or of being involved in the management or affairs of an issuer of securities.

ABSENCE OF POTENTIAL CONFLICT OF INTEREST

As far as the company is aware, there is no potential confl ict between their duties with regard to SEB S.A. and the individual interests of any member of the Board or general management.

SERVICE CONTRACTS

No member of the Board of Directors or Group Executive Committee has any contractual service relationship with SEB S.A. or its subsidiaries, the terms of which would bestow advantages on the member.


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Organization and functioning of the Board of Directors

ORGANIZATION AND FUNCTIONING OF THE BOARD OF DIRECTORS

The functioning of the Group’s governing and management bodies conforms with corporate governance rules generally applied by French companies with shares traded on the regulated market.

Groupe SEB complies with the AFEP-MEDEF Corporate Governance Code for listed companies, of December 2008.

FUNCTIONING OF THE BOARD OF DIRECTORS

The Board of Directors is a collective body which represents all the •

shareholders, and acts solely in the interests of the company.

On the proposal of the Chairman and Chief Executive Offi cer, the Board of Directors decides on Group strategy, capital expenditure and budgets, deliberates on the management structures of the Group, and decides on acquisitions.

The Board of Directors has made it an internal rule that, in view of their importance, decisions on the cancellation of shares or the possible use of AGM authorizations to increase the capital should be subject to a qualifi ed majority vote of 12/15ths of the members present or represented.

The Board of Directors comprises 15 members: •

the Chairman; •

9 Board members representing the Founder group (5 proposed by •

FÉDÉRACTIVE and 4 by VENELLE INVESTISSEMENT);

FFP; •

4 independent directors. •

The number of independent directors, which is less than the one-third minimum recommended by the AFEP-MEDEF Corporate Governance

Code for controlled companies, is a condition of the Shareholders’ agreement of 5 November 2005 which decided on the composition of the Board of Directors.

To be considered independent, a director must have no relationship with the company, the Group or its management, which could compromise the impartiality of the director’s judgement (AFEP-MEDEF Code defi nition).

Having reviewed the situation of Board members, the Board of Directors considers that Pascal Castres Saint Martin, Philippe Desmarescaux, Norbert Dentressangle and Philippe Lenain are independent directors in the sense of the AFEP-MEDEF Code.

The term of offi ce of Board members is four years. •

Board membership is renewed by rotation, so that shareholders can decide •

more frequently on the makeup of the Board.

In June 2002, the Board of Directors confi rmed the unitary organization of •

management authority. Thus, in the interests of effi ciency, the Chairman, Thierry de La Tour d’Artaise, is also the Chief Executive Offi cer.

The Board of Directors does not constrain the authority of the Chief Executive Offi cer.

BOARD MEETINGS

The Board of Directors met on six occasions in 2008. Average attendance was 91%.

The Board of Directors has met on several occasions in recent years at Groupe SEB sites outside France – for example in Budapest in 2004, Italy in 2006 and Portugal in 2008.

These occasions enable Board members to meet personnel in the subsidiaries and better understand local problems in their context.


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ATTENDANCE FEES

The maximum amount of attendance fees authorized by the Annual General Meeting of 2007 was €420,000. Each Director receives annual attendance fees of €24,000. Members participating in the work of the Board committees receive an additional €8,000 or, in the case of committee chairmen, €12,000.

The total amount of attendance fees allocated to Board members in 2008 amounted to €410,000.

This represents attendance fees due for the period from 1 May 2007 to 30 April 2008, and paid in May 2008.

BOARD COMMITTEES

To assist it in specialist matters, the Board formed two committees in 1995, drawn from its members:

The Audit Committee • comprises three members, Pascal Castres Saint Martin*, as chairman, Norbert Dentressangle and Jérôme Wittlin.

Two of the three members including its chairman are independent directors.

This committee informs the Board on the identifi cation, evaluation and handling of the main fi nancial risks to which the Group may be exposed. It is concerned in particular with ensuring the conformity of fi nancial reporting methods. It assists the Board with observations or recommendations, and participates in the preparatory procedure for appointing statutory auditors.

The Audit Committee met on four occasions in 2008, with 92% attendance.

Activities of the Audit Committee

In 2008, the Audit Committee, examined the following annually recurring items:

the draft annual accounts for 2007 and the draft half-year accounts for •

2008, prior to their submission to the Board of Directors;

the Chairman’s report on internal control; •

the nature and results of the work done by the statutory auditors, and •

their comments and recommendations on internal control;

review of the main fi ndings of the internal audits carried out in 2008; •

review of the internal audit plan for 2009; •

a review and analysis of risks. •

In addition, the Audit Committee dealt with the following specifi c items:

review of objectives, tools and the main points of Group fi scal policy; •

review of the main points of Group insurance policy; •

review of policy on coverage of risk relating to assets; •

review of the process of appointing statutory auditors in view of pending •

renewal of appointment;

review of procedures relating to data security and confi dentiality, and •

user access profi les for operational IT systems.

The Nominations and Remuneration Committee • comprises three members, Pascal Girardot, permanent representative of FÉDÉRACTIVE, as chairman, Philippe Desmarescaux and Philippe Lenain. Two of the three members are independent directors.

The committee reports on its work to the Board of Directors and makes recommendations on the composition of the Board, on the terms of offi ce of directors, and on the Group’s organization and structures; it also makes proposals to the Board on policy for the remuneration of executives, as well as on the introduction of stock option plans and on the terms and conditions applying to these.

The Nominations and Remuneration Committee met on four occasions in 2008, with 92% attendance.

Activities of the Nominations and Remuneration Committee

The Nominations and Remuneration Committee dealt with the following matters in 2008:

review of a stock option plan for 401 members of Group •

management;

review of 2007 bonus payments, and of fi xed remuneration for Group •

Executive Committee members in 2008;

annual evaluation of the Board of Directors; •

review of the makeup of the Board of Directors; •

proposal to the Board on performance criteria for deferred payments •

to company offi cers.

All the items dealt with by the Audit Committee and the Nominations and Remuneration Committee are the subject of a report to the Board of Directors.

* Replaced by Philippe Lenain on 13 May 2009


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EVALUATION OF THE BOARD OF DIRECTORS

At its meeting of 12 December 2008, the Board of Directors, in line with the recommendations of the AFEP-MEDEF Corporate Governance Code, included, for the sixth successive year, an item on its agenda to discuss the functioning of the Board; this item was prepared by the Nominations and Remuneration Committee.

The Board considered that its functioning was fully satisfactory and noted that most of the improvements suggested by previous reviews have been implemented.

The members expressed the wish for a presentation on quality management and a regular update on recent acquisitions.

The members also asked that more information on sustainable development and corporate governance be given in the news review sent to them regularly.

DIRECTORS’ CHARTER AND I NTERNAL R ULES OF THE BOARD OF DIRECTORS

Reaffi rming its commitment to the principles of corporate governance, the Board, at its meeting of 18 June 2003, approved a Directors’ Charter and Internal Rules, combined in a single document.

DIRECTORS’ CHARTER

This Charter was drawn up to ensure that Board members have a clear understanding of their role, rights and duties.

The main points of the Charter cover: respect for and defence of the interests of the company, regular attendance at meetings, attention to possible confl icts of interest, access to information, confi dentiality, objective analysis, and vigilance with regard to the regulations governing privileged information.

INTERNAL RULES

The Internal Rules cover the makeup and functioning of the Board, the role and mission of the Board and its committees, and policy on the remuneration of Board members.

KEEPING B OARD MEMBERS INFORMED

When a new member is appointed to the Board, he or she is given a dossier containing comprehensive information on the Group and its working context. This includes the company bylaws, the Directors’ Charter and Internal Rules, a draft agenda of each meeting of the Board and its committees, data on its manufacturing and marketing subsidiaries, human resources policy, a breakdown of employees by continent and by subsidiary company, brand strategy, information on competition, and a review of our main clients.

Each Board member also receives monthly sales fi gures and results data, reviews of press releases, reports on meetings of the Board of Directors and

of the Audit and Nominations and Remuneration Committees, as well as the results of published studies by fi nancial analysts concerning the Group.

In 2006, a documentary database for SEB directors was made available via a secure link on the Internet. This database includes all the above documents and any other information of interest to the directors.


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Group management bodies

GROUP MANAGEMENT BODIES

GROUP EXECUTIVE COMMITTEE

Thierry de La Tour d’Artaise Chairman and CEO

Jacques Alexandre Executive Vice-President, Strategy and Strategic Business Areas

Rémi Descosse Executive Vice-President, Industrial Operations

Jean-Pierre Lac Executive Vice-President, Finance

Harry Touret Executive Vice-President, Human Resources

Frédéric Verwaerde Executive Vice-President, Continental Structures

CONTINENTAL G ENERAL M ANAGEMENT

Cyril Buxtorf President, West and South Europe

Marcio Cuñha President, South America

Volker Lixfeld President, North and Central Europe

Patrick Llobregat President, Asia and other territories

Marc Navarre President, North America

STRATEGIC B USINESS A REAS

Philippe Crevoisier President, Electric cooking and Food preparation

Jean-Pierre Lefèvre President, Linen and Personal care, Home comfort and Home care

Christian Ringuet President, Cookware

François Sydorowicz President, Food and Beverage preparation

Luc Dohan Chief Science and Technology Offi cer

The Group Executive Committee defi nes and implements overall Group strategy. Meeting twice a month, it defi nes consolidated goals, monitors strategic plans, decides on priorities and allocates the resources needed for Strategic Business Areas, Continental Structures and Group Functions.

The Group Management Board comprises the members of the Group Executive Committee, the Presidents of the Strategic Business Areas and Continental Structures and the Chief Science and Technology Offi cer. This meets on average every two months to follow up and monitor the Group’s performance and results, and, if necessary, adjust its commercial or industrial strategy. A forum for exchanging views and refl ection, the Group Management Board plays a supervisory role and ensures the proper overall functioning of the Group.


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MANAGEMENT REMUNERATION

The Board of Directors, on the recommendation of the Nominations and Remuneration Committee, has laid down the policy on management remuneration as follows:

remuneration levels are set by reference to market practice. These salaries •

include a fi xed amount and a variable component;

the fi xed amount takes account of level of responsibility and experience, •

as well as of performance and potential;

the variable ’bonus’ component is linked to the achievement of quantitative •

targets for the Group’s growth and profi tability, as well as qualitative goals. These targets are set annually by the Board. This component can range from 0% to 200% of fi xed remuneration, depending on the individual’s category and the level of performance achieved.

On this basis, the committee proposes to the Board of Directors the fi xed amount of remuneration for each executive, and the targets to be used in calculating the variable component.

In 2008, remuneration of the current members of the Group Executive Committee amounted to €4,888,980 (€4,170,665 in 2007) of which €2,390,910 for the fi xed amount and €2,498,070 for the variable component.

REMUNERATION OF COMPANY OFFICERS

The French law of 26 July 2005 for confi dence and modernization of the economy (the so-called Breton Law) imposes legal requirements on disclosure of executive remuneration: in addition to salary and other benefi ts, this law requires disclosure of remuneration policies and any commitments made by companies to their executives, as well as the terms and conditions of such commitments.

This includes any indemnities or other benefi ts due or likely to be due on or after assumption, termination or change of offi cial corporate functions.

The information given below covers all remuneration (fi xed and variable components) and benefi ts of every kind (subscription or purchase options, departure indemnities, in-kind benefi ts and supplementary pension provision) concerning Thierry de La Tour d’Artaise, the only company offi cer to receive remuneration (the other Board members receiving attendance fees only).

In respect of his mandate as Chairman and Chief Executive Officer of SEB S.A., Thierry de La Tour d’Artaise receives:

a basic annual salary; •

a variable component bonus payment, up to a maximum of 200% of the •

basic salary.

He receives no other remuneration from the company or other Groupe SEB companies, apart from attendance fees for his membership of the SEB S.A. Board of Directors, being €24,000 in 2008.

BASIC REMUNERATION

The amount of annual salary is discussed and then proposed by the Nominations and Remuneration Committee to the Board of Directors.

In 2008, the fi xed salary component for Thierry de La Tour d’Artaise was €800,320, identical to the previous year.

VARIABLE COMPONENT

The annual bonus of Thierry de La Tour d’Artaise is established in the same way as for the other Group executives.

This is calculated on the basis of the fi xed annual salary. The annual targets are discussed and then proposed by the Nominations and Remuneration Committee, to be decided by the Board of Directors.

The variable-component bonus paid in 2008 in respect of the 2007 trading year was €1,296,000 (€940,000 the previous year in respect of 2006).

The variable-component bonus to be paid in 2009 in respect of the 2008 trading year will be €1,031,000.

IN-KIND BENEFITS

Thierry de La Tour d’Artaise is provided with a company car, being equivalent to a benefi t of €9,060 for the year, and €14,580 as part contribution for the use of an apartment in Paris.

SUPPLEMENTARY PENSION PLAN

Thierry de La Tour d’Artaise benefi ts from a collective supplementary pension plan, open to the company’s executives (members of the Group Executive Committee and Group Management Board) which is in addition to the statutory pension scheme. This supplementary pension scheme comprises a differential plan which guarantees to the benefi ciary 25% of their annual remuneration, including the statutory pension. This amount is calculated on the average of remuneration (gross pay + target bonus) over the three previous years.

In addition to this, he benefi ts from a fi xed benefi t scheme (French Tax Code Article 39) and a fi xed contribution scheme (Article 83). This arrangement, which is common to Groupe SEB executives, comprises a target pension amount equivalent to 16% of average annual remuneration (fi xed component


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+ target bonus) over the last three years. The pension level accrued each year is equivalent to 0.8% of the annual remuneration; consideration of length of service cannot exceed 20 years. This ensures a maximum salary replacement rate of 41% of annual remuneration.

To benefi t from this arrangement, Thierry de La Tour d’Artaise (as with other Groupe SEB executives), must have occupied functions within the Group Executive Committee or Group Management Board for at least eight years.

The Group plans to externalize the whole of this commitment between now and the retirement due date, by means of contributions to a fund into which payments were already made in 2008.

SEVERANCE ALLOWANCE

Thierry de La Tour d’Artaise does not benefi t from any compensation payment by the Board of Directors in the event of termination of his mandate as a director.

The employment contract under which he joined the Group in 1994, which would eventually lead to his appointment as Chief Executive Offi cer, was suspended on 1 March 2005 for the duration of his mandate as a director.

This contract stipulates that (as for other members of the Group Executive Committee) in the event of termination of his contract by the employer (except for reasons of serious professional misconduct, or in the event of a change in the control of the Group), he would benefi t from a severance payment equal to two years of his total remuneration. In application of the TEPA law, a new rider to this contract defi nes the conditions of performance to which this indemnity is subject. It is fi xed at two years of remuneration (basic pay + bonus), which can be varied according to the extent of achievement of targets over the previous four trading years, as follows:

if the average rate of target achievement is less than 50%, no indemnity •

is payable;

if the average rate is between 50% and 100%, the indemnity shall be •

between 75% and 100%, based on a linear calculation;

if the average rate is above 100%, the indemnity shall remain at 100%. •

This indemnity shall be made up of the sum of the two total cash annual salaries (basic + bonus) received in the previous two trading years.

The Board of Directors reserves the right to reduce this indemnity by a maximum of one-half if the last trading year showed a net loss; however, the indemnity may not be less than the fi xed basic salary plus bonus for the last trading year if application of the performance criteria based on achievement of targets gives entitlement to payment of an indemnity.

It was agreed to suspend the non-competition clause on 12 December 2008.

RETIREMENT INDEMNITY

The total retirement indemnity entitlement of Thierry de La Tour d’Artaise amounts to €206,612.

STOCK OPTIONS

105,000 share purchase options were allocated to Thierry de La Tour d’Artaise in respect of the 2008 trading year (identical with 2007, 2006 and 2005). The details of share purchase and subscription options allocated to him are shown below.

In compliance with the law of 30 December 2006 on employee profi t-sharing and shareholding, the Board of Directors decided, on recommendation of the Nominations and Remuneration Committee to apply the following retention rules to the stock options allocated on 20 April 2007 and 13 May 2008 to Thierry de La Tour d’Artaise, in his capacity as a company offi cer:

Thierry de La Tour d’Artaise is required to retain a number of shares •

corresponding to 50% of the gain on acquisition, net of tax and statutory deductions, realized at the time of take-up of the options;

The above obligation shall apply so long as the value of the shares he holds •

has not reached the equivalent of two years of his remuneration. Beyond this threshold, the retention obligation shall be reduced to a number of shares equivalent to 20% of the gain on acquisition.

It is noted that in the event of termination of his corporate mandate or his employment contract (except for reasons of serious professional misconduct), or in the case of a change of control of Groupe SEB, Thierry de La Tour d’Artaise would continue to enjoy the benefi t of the options allocated to him.

If, however, he were to decide on his own initiative to give up his corporate mandate (irrespective of the status of his employment contract), he would forfeit the benefi t of the options allocated to him during the 18 months preceding this event.


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TABLE 1

Remuneration, stock options and shares allocated to each company offi cer

Name and function of company offi cer:Thierry de La Tour d’ArtaiseChairman and Chief Executive Offi cer Year N-1 Year N

Remuneration due for the year(details in table 2) €2,131,986 €1,878,960

Valuation of stock options allocated during the year(details in table 4) €1,289,904 €925,680

Valuation of performance-related shares allocated during the year - -

TOTAL €3,421,890 €2,804,640

TABLE 2

Breakdown of remuneration of each company offi cer

Name and function of company offi cer:Thierry de La Tour d’ArtaiseChairman and Chief Executive Offi cer

Amounts in respect of year N-1 Amounts in respect of year N

Due paid Due paid

Fixed pay component €800,310 €800,310 €800,320 €800,320

Variable component €1,296,000 €940, 000 €1,031,000 €1,296,000

Exceptional remuneration - - - -

Attendance fees €15,000 €15,000 €24,000 €24,000

In-kind benefi ts: – Car allowance €7,716 €7,716 €9,060 €9,060

– Accommodation €12,960 €12,960 €14,580 €14,580

TOTAL €2,131,986 €1,775,986 €1,878,960 €2,143,960

TABLE 3

Attendance fees

Board members Attendance fees paid in year N-1 Attendance fees paid in year N

Tristan BOITEUX €15,000 €24,000

Damarys BRAIDA €15,000 €24,000

Pascal CASTRES SAINT MARTIN €24,000 €36,000

Thierry de LA TOUR d’ARTAISE €15,000 €24,000

Norbert DENTRESSANGLE €21,000 €32,000

Philippe DESMARESCAUX €21,000 €32,000

Hubert FEVRE €11,250 €18,000

Jacques GAIRARD €15,000 €24,000

FÉDÉRACTIVE (Pascal GIRARDOT) €24,000 €36,000

Philippe LENAIN €21,000 €32,000

Antoine LESCURE €15,000 €24,000

Frédéric LESCURE €15,000 €24,000

FFP (Christian PEUGEOT) €15,000 €24,000

VENELLE INVESTISSEMENT (Olivier ROCLORE) €15,000 €24,000

Jérôme WITTLIN €21,000 €32,000

TOTAL €263,250 €410,000


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TABLE 4

Share subscription or purchase options allocated to each company offi cer during the year

Options allocated to each company offi cer by the issuer and any other company within the Group

Date of the plan

Type of option (purchase or subscription)

Valuation of options based

on the method used in the consolidated

accounts

Number of options allocated

during the yearExercise

priceExercise

period

Thierry de La Tour d’Artaise 13/05/2008Purchase

options €8,816 105,000 38.3513/05/201213/05/2016

TABLE 5

Subscription or purchase options exercised during the year by each company offi cer

Options exercised by company offi cers Date of the plan

Number of options exercised during

the year Exercise price Year of allocation

Thierry de La Tour d’Artaise 18/06/2003 60,000 24,24 2003

ALLOCATION AND TAKE-UP OF STOCK OPTIONS BY COMPANY OFFICERS AND BY EMPLOYEES WITH THE TEN HIGHEST ALLOCATIONS

CURRENT STOCK OPTION PLANS

At 31 December 2008Subscription

planPurchase

planPurchase

planPurchase

planPurchase

planPurchase

planPurchase

planPurchase

planPurchase

plan

Date of Board Meeting 14.06.2001 19.04.2002 17.10.2002 18.06.2003 18.06.2004 08.04.2005 11.05.2006 20.04.2007 13. 05. 2008

Options allocated to company offi cers (b) 66,000 49,500 6,600 115,500 105,000 105,000 105,012 105,000 105,000

Options allocated to employees (10 highest allocations) (a) (b) 171,600 145,200 43,230 237,600 210,000 222,000 234,000 234,000 104,400

Number of employee benefi ciaries counted 10 10 16 15 15 14 12 12 29

Option exercise date 14.06.2005 19.04.2006 17.10.2006 18.06.2007 18.06.2008 08.04.2009 16.06.2010 20.04.2011 13. 05. 2012

Expiry date 14.06.2009 19.04.2010 17.10.2010 18.06.2011 18.06.2012 08.04.2013 16.06.2014 20.04.2015 13. 05. 2016

Subscription or purchase price (in €) (b) €18.18 €27.88 €25.15 €24.24 €31.67 €28.00 €29.33 €44.00 €38.35

(a) 10 highest allocations to employees, or more than 10 if the same number of options was allocated to more than 10 employees.(b) Including the allocation of free shares in March 2004 (1 for 10).NB: Data takes account of the three-for-one division of the nominal share price on 16 June 2008.

STOCK OPTION ALLOCATION AND TAKE-UP IN RESPECT OF COMPANY OFFICERS

Under the share purchase option plan of 13 May 2008, 105,000 options at a price of €38.35 were allocated to Mr de La Tour d’Artaise. He also exercised 60,000 options during the year relating to the share purchase option plan of 18 June 2003.


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HIGHEST ALLOCATIONS OF STOCK OPTIONS TO GROUP EMPLOYEES (EXCLUDING COMPANY OFFICERS)

Under the purchase option plan of 13 May 2008, 104,400 options at a price of €38.35 were allocated to the 29 employees who received the highest allocations.

HIGHEST TAKE-UP OF STOCK OPTIONS BY GROUP EMPLOYEES (EXCLUDING COMPANY OFFICERS)

From 1 January to 31 December 2008

Subscrip-tion plan

Subscrip-tion plan

Purchase plan

Purchase plan

Purchase plan

Purchase plan

Purchase plan

Purchase plan

Purchase plan

Purchase plan

Date of Board Meeting 04/05/2000 14/06/2001 19/04/2002 17/10/2002 18/06/2003 18/06/2004 08/04/2005 11/05/2006 20/04/2007 13/05/2008

Highest take-up of stock options by group employees (a) (b) 25,650 5,930 6,450 6,195 37,233 12,100 0 0 0 0

Number of employee benefi ciaries counted 5 3 3 10 12 5 0 0 0 0

(a) 10 highest allocations to employees, or more than 10 if the same number of options was allocated to more than 10 employees.(b) Including the allocation of free shares in March 2004 (1 for 10), and the three-for-one division of the nominal share price on 16 June 2008.

SHARE TRANSACTIONS CARRIED OUT BY MEMBERS OF SEB MANAGEMENT (ARTICLE L. 621-18-2 OF THE FRENCH MONETARY AND FINANCIAL CODE) DURING 2008

Name Function

Number of shares bought

or subscribed

Average acquisition

priceNumber

of shares soldAverage

sale price

Tristan Boiteux Board member 636 €37.47

Persons linked to Tristan Boiteux Board member 43 €37.53

Thierry de La Tour d’Artaise Chairman & CEO 60,000 €24.24

Hubert Fèvre Board member 635 €37.47

FFP - Sté Foncière Financière et de Participation Board member 329,511 €37.07

Jacques Gairard Board member 10,000 €33.70

Persons linked to Jacques Gairard Board member 6,570 €42.48

Pascal Girardot, permanent representative of FÉ DÉ RACTIVE Board member 3,072 €30.52

Persons linked to Pascal Girardot, rep. of FÉ DÉ RACTIVE Board member 10 €39.09

Frédéric Lescure Board member 389 €37.54

Persons linked to Frédéric Lescure Board member 40 €38.02

Persons linked to Damarys Braida Board member 25,500 €26.71

Jérôme Wittlin Board member 200 €29.69

Persons linked to Jé rôme Wittlin Board member 230 €31.40


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Report of the Chairman and CEO on Internal Control

REPORT OF THE CHAIRMAN AND CEO ON I NTERNAL C ONTROL

In accordance with Article 117 of the French Financial Securities Act of 1 August 2003, and the provisions of Article L 225-37 of the Commercial Code, as amended on 3 July 2008 (law No 2008-649), the object of this report is to describe the organization of the work of the Board of Directors, and the internal control procedures adopted by Groupe SEB for the year ended 31 December 2008.

This report, drawn up under the supervision of the Chairman, is based essentially on the coordinated work of the Group’s Audit and Organization

department, in liaison with the Finance department and the main corporate support functions and operational management. It also takes account of consultations with the Audit Committee and the statutory auditors.

In accordance with the new provisions of the law of 3 July 2008 which requires each company to identify to which Corporate Governance Code it refers, Groupe SEB hereby indicates that it refers to the AFEP-MEDEF Corporate Governance Code of December 2008.

THE GROUP’S INTERNAL CONTROL FUNCTION

In the course of its operations and in pursuit of its business strategy, Groupe SEB is exposed to a number of risks and unknown factors, internal or external. To tackle this situation, it has set up an organization and procedures, the aim of which is to identify, quantify, anticipate and manage these risks in order, as far as possible, to reduce their negative impact and thus help to achieve the company’s operational and strategic goals.

The internal control system is a process defi ned and implemented by the Group under its own responsibility to ensure:

compliance with laws and regulations; •

application of instructions and guidelines, and conformity with the Group’s •

internal practices;

the proper functioning of the company’s internal processes; •

the quality, integrity and relevance of its internal and external information, •

particularly fi nancial information;

adaptation of its organization to changes in laws and regulations; •

consistency between identifi ed risks, objectives and expected benefi ts; •

reduced exposure to risks of fraudulent behaviour; •

prevention, and if necessary censure, of unethical conduct. •

As with any control system, it cannot provide an absolute guarantee that these risks are totally eliminated.

Groupe SEB is an international company with a three-fold organizational structure: Strategic Business Areas (responsible for product lines), Continental Management Structures (responsible for product marketing by geographic zone), and centralized shared Corporate Support Functions. It functions on the basis of decentralized operational responsibility and broad delegation of authority. To guarantee effi cient overall management, Groupe SEB applies

clearly-defined functional and delegation rules. It also benefits from a well-established corporate culture which is rooted in shared fundamental values that foster an ethical working environment: high-quality work, mutual respect, team spirit, loyalty and thoroughness.

The internal control process is based on a structured Quality Management System defi ning 14 key functional areas which integrate the demands and constraints of Sustainable Development.

A signatory of the Global Compact since 2003, Groupe SEB supports the values set out in this document and promotes them throughout the company. The Human Resources department states in its guiding principles that “The Group is a community of men and women who share the same objectives and values”.

Against this background, Groupe SEB enjoins all its employees to uphold ethical standards and act in accordance with them.

The integrity of the control function is also assured by an internal control manual, detailing the main internal control guidelines for each Group structure:

delegation guidelines which defi ne the limits of delegated authority; •

internal control rules governing commercial operations, the management of •

client credit and methods of settlement, relations with banking institutions, payroll management, control of purchasing, fi nancial asset management and the protection of corporate property and assets;

respect for rules governing division of responsibilities; •

policies applying to insurance cover and hedging; •

fi nancial reporting control principles. •


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The risk analysis and internal control processes use two basic tools:

an annual top-down review and analysis of the main risks, via formalized •

interviews with all 23 members of Group General Management. The individuals responsible for each operational or Group-wide function present a review of the risks in their particular sphere and their assessment of the probable impact of each risk. A synthesis of this information is used to draw up a chart of the main areas of risk facing the company;

a bottom-up process involving self-evaluation questionnaires, based on •

functions. These are sent out to each operational entity and are designed to identify possible weak points and encourage the practice of self-evaluation at all levels, with a view to the more effi cient functioning of the Group.

In 2008, this computerized self-evaluation questionnaire was used with some 30 subsidiaries for 11 functions: Finance, Purchasing, Information Systems, Production, Research & Development, Quality, Consumer Services, Human Resources, After-sales Service, Logistics and Marketing.

The self-evaluation process will be carried out every two years for each of the Group’s entities.

Added to these two methods of evaluation are regular internal audits of all entities and of all the Group’s functions, as well as the annual and half-yearly reviews carried out by the statutory auditors.

THOSE RESPONSIBLE FOR INTERNAL CONTROL

THE BOARD OF DIRECTORS, THE AUDIT COMMITTEE AND THE NOMINATIONS AND REMUNERATION COMMITTEE

The role of these bodies is described in the section ’Organization and Functioning of the Board of Directors’.

THE GROUP EXECUTIVE COMMITTEE AND THE GROUP MANAGEMENT BOARD

Their role is described in the section ’Group Management Bodies’.

THE INTERNAL AUDIT DEPARTMENT

Internal audit as defined by professional standards consists of “an independent and objective process which ensures that the Group has adequate control of its operations, and which offers advice on improving the latter while contributing to added value. The internal audit function helps the Group to achieve its objectives by systematic and methodical evaluation of its risk management, control and corporate-governance procedures, and by making recommendations for their improvement.”

The mission assigned to the Groupe SEB Internal Audit department is fully consistent with this approach.

The Internal Audit department is responsible for evaluating, at all locations where the Group is established and for all functions, compliance with the Group’s internal rules and procedures and any non-compliance with legislation, and for ensuring that the Group’s assets are protected. It is also required to evaluate the effi cient conduct of operations, and to ensure that all business risks are anticipated and controlled.

In the area of risk management, the Internal Audit department draws up a chart of high-level risk.

Based on this chart, on the self-evaluation questionnaires, and on the principle of an audit in each entity every three or four years, the Audit department proposes an internal audit plan for the following year.

This plan is submitted to the Audit Committee.

Each internal audit – adapted to circumstance and conducted locally by an average of three auditors over a two-week period – gives rise to an audit report which is sent to the audited structures and their upstream line management, to the members of the Group Executive Committee and to the Group Chairman and CEO, describing the basic organization of each functional area and making recommendations.

Steps are then taken by operational management to remedy identifi ed shortcomings in internal control, and to make any other necessary improvements. The progress of resulting action plans is subjected to a systematic internal audit review within 12 months of the audit.

The results of these audits are compared with the results of the self-evaluations, thus completing the full circle of the internal audit process.

The Internal Audit department prepares an annual summary report of work done, which is presented to the Group Executive Committee and the Audit Committee.

The Audit Committee reviews the resources needed by the Internal Audit department to carry out its work, and makes observations or recommendations as required. The staffi ng of the Internal Audit department was increased to eight at the end of 2008.


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THE LEGAL AND INSURANCE DEPARTMENT

The role of the Group Legal department is to ensure that the Group complies with legal and regulatory requirements wherever it operates, to protect the Group’s assets, and to defend the interests of the Group, its management and employees in carrying out their functions. The legal department is concerned with three main areas of internal control:

it drafts and updates model contracts and their related procedures •

for frequently recurring transactions (purchase of goods and services, conditions of sale, advertising campaigns, damages claims, etc.);

it makes recommendations to the Group Executive Committee on rules for •

delegating authority, and on the circulation and protection of confi dential information, and it applies and monitors these rules;

it selects external legal advisors, monitors their services and performance, •

and oversees invoicing follow-up in liaison with the Management Control department.

The role of the Legal department in the area of insurance is to see that there is adequate insurance cover of the risks to which the Group is exposed. Groupe SEB insurance cover is managed on a worldwide consolidated basis. Worldwide insurance cover is arranged in partnership with leading insurance pools; additional specifi c policies can be subscribed to locally.

THE FINANCE, TREASURY AND TAX DEPARTMENT

The role of this department is to ensure the security, transparency and effi ciency of treasury and fi nancial transactions, and to ensure compliance with regulations and tax obligations in all the countries where the Group is based.

Its responsibilities in this area cover:

fi nancial resources management, in consultation with the Executive Vice- •

President, Finance, to ensure the Group’s liquidity;

cash fl ow management; •

fi nancial risk assessment and hedging (particularly in the areas of foreign •

exchange and raw materials prices);

ongoing relations with banks; •

fi nancial management support for subsidiaries, and support for the Group’s •

General Management in fi nancial planning for new projects.

This department has a triple responsibility in the area of internal control:

to follow up tax inspections carried out by taxation authorities in all the •

Group’s entities;

to ensure consistency in the tax procedures used by the Group’s entities •

and, in liaison with tax consultants, to verify the compliance of the Group’s main activities with current legislation;

to select tax consultants and monitor the services provided, and their •

cost.

THE MANAGEMENT CONTROL DEPARTMENT

The Group Executive Committee attaches high importance to the Group’s planning procedures. These prepare the ground for the annual budget, which makes it possible to defi ne the Group’s strategic priorities and draw up operational plans.

The Management Control department is responsible for issuing appropriate directives and guidelines for those involved in drawing up the budget.

It coordinates budget planning and control, using a handbook of management procedures and rules applicable to all the entities, including Group budgeting, forecasting and management reporting methods.

The management reporting system uses a consolidation management tool for calculating the Group results.

Physical or fi nancial controls make it possible to verify balance-sheet items such as components of the working capital requirement and cash fl ow.

These various aggregates are budgeted at the end of the year and followed up monthly.

The Management Control department draws up a Group budget forecast chart and distributes this, with an analysis of signifi cant variances and trends based on the information provided by the Group’s entities in their monthly business reports.

The new computerized Group consolidated management system came online at the end of 2008. In 2009, this will ensure more detailed fi nancial analysis better adapted to operational needs. Its integration with consolidated fi nancial reporting and more extensive use of common management practices will help to promote greater awareness of the internal control process within the Group.

THE INFORMATION SYSTEMS DEPARTMENT

The Group’s IT system is designed to guarantee the security, integrity, availability and traceability of information.

To ensure the proper use of these tools and the utility of data, an operating manual adapted to the needs of users has been drawn up.

The Group has also introduced procedures to ensure the security and integrity of its information systems.

An Information Systems Steering Committee is responsible for drawing up an IT master plan which corresponds to the Group’s organizational needs and general development policy. This committee, chaired by the Executive Vice-President, Industry, comprises the Information Systems department and representatives of user entities (including Continental General Management, General Management Strategy and SBA’s, the Group Finance department and the Human Resources department). Within this framework, it determines the nature of IT system projects and decides on priorities for resource allocation and IT security.

The IT data security committee has distributed IT security guidelines and arranged an information and awareness programme for all the subsidiaries on the subject of IT system intrusion risks.


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Internal audits now include more detailed scrutiny of IT security risk areas.

In 2008, a detailed review of system access rights and user profi les was carried out for part of the integrated IT system. This will be extended and gradually applied to all the Group’s information systems.

The risk of intrusion into the network and/or into a centralized application is periodically evaluated and tested. Data security audits have also been conducted in some supplier companies.

THE QUALITY DEPARTMENT

The desire to improve the quality of its products and processes has always been a central concern of Groupe SEB.

The Group uses a Quality Management System (QMS) with common Group-wide standards, which are posted on the company’s intranet.

Documentation for this system includes reference to all procedures, tools and methods relating to the Group’s key processes:

management procedures, defi nition of Group policy, strategic planning, •

constant improvement in quality, and safeguarding the environment;

operational processes including strategic marketing, R&D, sales and •

marketing, client order processing and production transfers;

operational support functions, covering human resources, information •

systems, purchasing, finance, after-sales service and customer assistance.

The Quality department uses monthly feedback reporting to fi ne-tune its action plans, which are then submitted to the Group Executive Committee.

All the Group’s industrial sites are certifi ed ISO 9001 version 2000. ISO 14001 certifi cation is held by 24 sites, while 12 factories also hold OHSAS 18001 certifi cation.

A new post was created in 2008 to oversee the improvement of health & safety standards in all the Group’s entities worldwide.

THE FINANCIAL COMMUNICATIONS DEPARTMENT

Each year, this department draws up a schedule of the Group’s regular fi nancial communications directed at fi nancial markets and institutional investors. It identifi es, in collaboration with the Legal department, legal and regulatory requirements for publication of fi nancial notices concerning the Group.

ACCOUNTING AND FINANCIAL INFORMATION PROCEDURES

Internal control procedures for accounting and fi nancial information aim to ensure the quality of the fi nancial information provided by the consolidated subsidiaries, and the fairness and accuracy of the fi nancial information issued by the Group, while safeguarding against risks of error, inaccuracy or omission in the Group’s fi nancial statements.

Groupe SEB uses internal control guidelines based on AMF framework guidelines and accounting and fi nancial audit principles.

CENTRALIZED TREASURY AND FINANCING FUNCTIONS

The Group Finance department, local regulations permitting, ensures the financing of its subsidiaries via cash pooling, inter-company financing contracts and the use of currency fl ows for payments and receipts.

This centralized function allows the Finance department to:

control external debt and monitor its development; •

manage the interest-rate risk inherent in contracted debts; •

fi nance its subsidiaries in their local currency where regulations permit; •

anticipate and manage the currency risks inherent in commercial and •

fi nancial fl ows.

Another important element of internal control is the Group’s centralized choice of working-partner banks and effective long-term management of these relations.

By this means, the Finance department can ensure overall control of the Group’s treasury operations.

CONSOLIDATED ACCOUNTS MANAGEMENT AND CONTROL

We have already described the Group management control function in overseeing monthly consolidated fi nancial management information.

Budgetary control identifi es variances between targets and results, on a monthly consolidation basis, by comparison with an analysis of Group operational directives. This makes it possible to identify any changes or discrepancies in relation to fi nancial budget data and previous years.

As from 2009, the Group’s statutory monthly, quarterly and half-yearly consolidation will use the same SAP integrated financial management software system.

This decentralized statutory consolidation includes all the companies directly or indirectly controlled by the Group’s holding company, SEB S.A.

Each consolidated subsidiary prepares a set of accounts restated to comply with the Group’s accounting procedures, and based on accounting data from local information systems. All the Group’s entities apply IFR standards.

The fi nance managers of the subsidiaries prepare the restated accounts on the basis of the Group’s accounting procedures manual which sets out rules for accounting entries and evaluation.


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This manual describes the principles used for drawing up fi nancial statements. These cover areas such as preparation of accounts on the assumption of operational continuity, compliance with accounting periods, and ensuring the integrity of the information in the fi nancial statements. This manual is regularly updated to take account of changes in legislation and regulations on preparing consolidated accounts in France.

The accounting procedures manual also gives a precise description of the principles used by the Group for accounting entries, and evaluation and presentation of the main items in the fi nancial statements:

descriptions of items making up the consolidated income statement, with •

their defi nitions, as well as tests of reasonableness for the purpose of taxation;

rules for balance-sheet and off-balance-sheet items and their •

presentation;

rules for evaluating certain items which depend on estimates, such as: •

provisions for depreciation of receivables, •

provisions for depreciation of stocks of raw materials and fi nished •

products,

provisions for depreciation of fi xed assets, •

provisions relating to sales (e.g., warranties and unsold returns), •

other provisions for risks and charges and, in particular, provisions for •

restructuring;

accounting principles applied to reporting intra-Group transactions. •

Prior to each consolidation period, the Group Consolidation department issues a reminder of the reporting deadline, and indicates any newly applicable changes in standards, rules and principles.

On receiving the sets of accounts for consolidation, the Group Consolidation department conducts the usual verifi cations before carrying out the actual consolidation. This review of accounts submitted provides an opportunity to check the evaluation and accounting methods used for large, unusual or exceptional transactions.

To ensure the integrity of the fi nancial data received from the subsidiaries, the Group Consolidation department refers to the covering letter sent in by the management of each subsidiary (whether or not consolidated), at the time of closure of the half-yearly and annual accounts. In this covering letter, the offi cial representative and the fi nance director of the entity concerned certify the compliance of the fi nancial statements with the Group’s accounting rules and principles, the effective functioning of the internal control procedures used for processing and drawing up the financial statements, and the absence of irregularities involving personnel or management. In addition, they comment on any signifi cant events which occurred during the accounting period under review, and describe all elements which, in themselves or in their overall effect, infl uence the comprehension and evaluation of the fi nancial statements of the entity concerned.

FINANCIAL PUBLICATIONS

The Group’s fi nancial statements, accounts and notes to the accounts are drawn up on the basis of the fi nal data processed by the consolidation software. These are then integrated into the annual or half-year reports.

The texts of all the Group’s fi nancial publications (annual and half-year reports, letters to shareholders, shareholder guide, etc.), are drawn up by reference to information gathered throughout the year and specifi c interviews conducted at least twice a year (or more frequently as dictated by current concerns or special issues) with the senior management of the SBAs, Continental Structures and Corporate Support Functions. They are validated by the latter and by the Group Executive Committee.


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Auditors’ report on internal control

AUDITORS’ REPORT ON INTERNAL CONTROL

To the Shareholders,

In our capacity as statutory auditors of SEB S.A. and in accordance with Article L. 225-235 of the French Commercial Code (Code de Commerce), we hereby report to you on the report prepared by the Chairman of your Company in accordance with Article L. 225-37 of the French Commercial Code for the year ended December 31, 2008.

It is the Chairman’s responsibility to prepare, and submit to the Board of Directors for approval, a report on the internal control and risk management procedures implemented by the Company and containing the other disclosures required by Article L. 225-37 of the French Commercial Code, particularly in terms of corporate governance.

It is our responsibility:

to report to you on the information contained in the Chairman’s report in •

respect of the internal control procedures relating to the preparation and processing of accounting and fi nancial information; and

to attest that this report contains the other disclosures required by Article •

L. 225-37 of the French Commercial Code, it being specifi ed that we are not responsible for verifying the fairness of these disclosures.

We conducted our work in accordance with professional standards applicable in France.

INFORMATION ON THE INTERNAL CONTROL PROCEDURES RELATING TO THE PREPARATION AND PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION

The professional standards require that we perform the necessary procedures to assess the fairness of the information provided in the Chairman’s report

in respect of the internal control procedures relating to the preparation and processing of accounting and fi nancial information. These procedures mainly consisted in:

obtaining an understanding of the internal control procedures relating to •

the preparation and processing of accounting and fi nancial information on which the information presented in the Chairman’s report is based and the existing documentation;

obtaining an understanding of the work involved in the preparation of this •

information and the existing documentation;

determining whether any signifi cant weaknesses in the internal control •

procedures relating to the preparation and processing of accounting and fi nancial information that we would have noted in the course of our engagement are properly disclosed in the Chairman’s report.

On the basis of our work, we have nothing to report on the information in respect of the Company’s internal control procedures relating to the preparation and processing of accounting and fi nancial information contained in the report prepared by the Chairman of the Board of Directors in accordance with Article L. 225-37 of the French Commercial Code.

OTHER DISCLOSURES

We hereby attest that the report of the Chairman of the Board includes the other disclosures required by Article L. 225-37 of the French Commercial Code.

Lyon et Villeurbanne, March 2, 2009

The Statutory a uditors

PRICEWATERHOUSECOOPERS AUDIT

Bernard RASCLE

DELOITTE & ASSOCIÉS

Dominique VALETTE

This is a free translation into English of the statutory auditors’ report issued in French prepared in accordance with Article L. 225-235 of the French Commercial Code on the report prepared by the Chairman of the Board of Directors of SEB S.A. on the internal control procedures relating to the preparation and processing of accounting and fi nancial information issued in French and is provided solely for the convenience of English speaking users.

This report should be read in conjunction with, and construed in accordance with, French law and the relevant professional standards applicable in France.


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Statutory Auditors

STATUTORY A UDITORS

STATUTORY A UDITORS

PricewaterhouseCoopers Audit, 63 rue de Villiers •

92200 Neuilly-sur-Seine, France.Appointed by the General Meeting of Shareholders of 13 May 2003.Represented by Bernard Rascle.

Expiration of term: General Meeting of Shareholders, 2009.

Deloitte & Associés, 185 avenue Charles-de-Gaulle •

92200 Neuilly-sur-Seine, France.Appointed by the General Meeting of Shareholders of 3 May 1999.Represented by Dominique Valette.


Each of these statutory auditors is a member of the Compagnie Régionale des Commissaires aux Comptes de Versailles.

SUBSTITUTE AUDITORS

for PricewaterhouseCoopers Audit: •

Pierre Coll, 63 rue de Villiers, 92200 Neuilly-sur-Seine, France.Appointed by the General Meeting of Shareholders of 13 May 2003.


for Deloitte & Associés: •

BEAS - 7/9 Villa Houssaye, 92200 Neuilly-sur-Seine, France.Appointed by the General Meeting of Shareholders of 3 May 1999.


FEES PAID TO STATUTORY A UDITORS

The breakdown of fees paid to statutory auditors and members of their networks is as follows:

Audit

(€ thousands)

PricewaterhouseCoopers Audit Deloitte & Associés

Amount net of VAT in % Amount net of VAT in %

2008 2007 2008 2007 2008 2007 2008 2007

AUDIT

Audit and certifi cation of parent company and consolidated accounts

SEB S.A., issuer coordination and consolidation 140 127 101 92

Fully integrated subsidiaries 1,157 1,000 1,134 1,137

Other procedures and services directly relating to audit assignment

SEB S.A., issuer coordination and consolidation

Fully integrated subsidiaries

SUB-TOTAL 1,297 1,127 92% 85% 1,235 1,229 99% 99%

OTHER SERVICES RENDERED BY THE NETWORKS TO FULLY-INTEGRATED SUBSIDIARIES

Legal, fi scal, corporate 96 171 5 16

Information systems

Other 14 34 2

SUB-TOTAL 110 205 8% 15% 7 16 1% 1%

TOTAL 1,407 1,332 100% 100% 1,242 1,245 100% 100%



10-YEAR FINANCIAL SUMMARY... . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

CONSOLIDATED RATIOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

FINANCIAL STATEMENTS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Consolidated income statement 62

Consolidated balance sheet 63

Consolidated cash fl ow statement 64

Consolidated statement of changes in equity 65

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Years ended 31 December, in millions of euros 67

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124

Opinion on the consolidated fi nancial statements 124

Justifi cation of our assessments 124

Specifi c verifi cation 125


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10-year fi nancial summary

10-YEAR FINANCIAL SUMMARY

(in € millions) 2008 2007 (i) 2006 (i)2005

IFRS (c) (i)2004

IFRS (b) 2004 (b) 2003 2002 (a) 2001 2000 1999

RESULTS

Sales in France 667 640 595 591 624 636 660 660 527 485 484

Sales outside France 2,563 2,230 2,057 1,872 1,665 1,703 1,688 1,836 1,328 1,340 1,210

Total sales 3,230 2,870 2,652 2,463 2,289 2,339 2,348 2,496 1,855 1,825 1,694

Operating margin 342 301 262 262 261 248 234 217 175 153 125

Operating profi t 279 237 153 183 187 175 196 143 119 132 102

Profi t attributable to equity holders of the parent 152 145 87 102 131 123 148 118 74 51 35

Depreciation, amortisation and impairment losses 110 88 97 114 85 91 86 95 83 87 79

Personnel costs (d) 563 540 534 516 499 506 514 536 424 425 404

Discretionary and non-discretionary profi t sharing and matching contributions to employee savings plans 38 33 26 29 34 34 36 51 29 20 19

EBITDA (e) 388 329 247 291 270 259 278 230 196 211 174

Adjusted EBITDA (h) 394 351 324 323 310 296 279 252 222 211 181

BALANCE SHEET (AT 31 DECEMBER)

Equity attributable to equity holders of the parent 992 814 770 757 644 642 557 471 464 437 442

Net debt 649 658 422 423 331 331 189 327 404 393 381

Non-current assets 1,184 1,060 766 773 679 624 476 481 535 509 545

Investments 116 92 85 99 99 87 99 85 81 72 78

Inventories 615 528 517 450 386 387 359 415 352 317 302

Trade receivables 646 627 646 630 552 552 544 580 471 466 436

Number of employees at 31 December 18,879 13,048 13,741 14,396 14,500 14,500 14,690 15,780 13,939 12,474 12,545

PER SHARE DATA (IN €) (j)

Total number of shares outstanding (in thousands) 50,912 50,881 51,057 50,940 51,228 51,228 46,347 46,317 46,320 46,320 46,320

Weighted average number of shares, excluding treasury stock (in thousands) 47,326 48,620 48,610 48,888 48,468 48,468 48,369 48,306 48,276 48,828 49,881

Adjusted diluted earnings per share (g) 3.18 2.92 1.78 2.07 2.67 2.52 3.02 2.42 1.53 1.16 0.69

Basic earnings per share (g) 0.94 0.93 0.85 0.80 0.80 0.80 0.76 0.65 0.61 0.58 0.58

Dividend yield per share (in %) (f) (g) 4.38 2.26 2.37 2.61 3.04 3.04 2.52 2.56 3.19 3.28 2.71

Price range: High (g) 44.00 48.15 38.07 30.88 35.73 35.73 32.12 29.11 20.85 27.88 26.12

Low (g) 19.71 35.33 26.70 26.10 24.45 24.45 20.92 18.48 11.85 16.67 13.86

Price at 31 December 21.46 41.33 35.87 30.67 26.30 26.30 30.00 25.64 18.98 17.56 21.21

Stock market capitalisation (in € millions) 1,093 2,103 1,831 1,562 1,347 1,347 1,529 1,306 967 895 1,081

Average daily trading volume (number of shares) 117,527 127,638 75,681 63,243 87,183 87,183 85,608 74,664 65,547 75,708 62,358

(a) Including the new Moulinex subsidiaries since 1 January 2002.(b) Including All-Clad since 28 July 2004.(c) Including Lagostina since 1 May 2005 and Panex since 1 June 2005.(d) Excluding discretionary and non-discretionary profi t sharing and matching contributions to employee savings plans but including temporary staff costs. From 2004, the reported

amounts also include the service cost of pension and other post-employment benefi t plans, in accordance with IFRS.(e) Earnings before interest, taxes, depreciation and amortisation (including amortisation and impairment of trademarks and goodwill, and depreciation, amortisation and impairment

losses reported under “Other operating income and expense”).(f) Dividend for the year expressed as a percentage of the closing share price at the year-end.(g) Adjusted for the March 2004 1-for-10 bonus share issue.(h) Earnings before interest, taxes, depreciation and amortisation (excluding depreciation, amortisation and impairment losses reported under “Other operating income and expense”).(i) Adjustments made to the reported balance sheet and income statement in order to present restated information for 2005, 2006 and 2007 are described in Note 2.(j) Adjusted for the three-for-one stock-split.


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Consolidated ratios

CONSOLIDATED RATIOS

(i n %) 2008 2007 2006 (d) 2005 (c)2004

IFRS (b) 2004 2003 2002 (a) 2001 2000 1999 1998

PROFITABILITY RATIOS

Return on equity 17.55 17.71 10.88 14.83 21.90 20.60 29.33 23.66 15.79 10.87 6.83 1.36

Net margin 4.69 5.04 3.28 4.13 5.72 5.26 6.33 4.71 3.99 2.81 2.04 0.45

FINANCIAL RATIOS

Net debt/equity ratio 71.64 76.12 51.70 52.85 48.14 48.28 31.64 64.65 81.43 83.86 80.63 86.07

Finance costs, net/Revenue 1.50 1.21 1.15 1.02 0.54 0.33 0.33 0.37 1.11 1.52 0.92 0.96

Net debt/adjusted EBITDA 1.65 1.87 1.30 1.31 1.07 1.11 0.68 1.30 1.83 1.87 2.11 2.52

INVESTMENT RATIOS (e)

Investments/Revenue 3.60 3.20 3.21 4.03 4.33 3.71 4.20 3.40 4.37 3.95 4.59 5.73

CASH RATIOS

Realisable and liquid assets/short-term debt 70.38 59.22 73.53 78.79 69.08 79.61 89.30 77.20 73.30 71.21 72.13 67.09

(a) Including the new Moulinex subsidiaries.(b) Including All-Clad since 28 July 2004.(c) Including Lagostina since 1 May 2005 and Panex since 1 June 2005.(d) Including Mirro WearEver since 16 August 2006.(e) Excluding acquisitions (capital expenditure and investments in software).


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Financial statements

FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

Years ended 31 December


restated (a)2006

restated (a)

Revenue (Note 4) 3,230.2 2,869.6 2,651.7

Operating expenses (Note 5) (2,888.5) (2,568.5) (2,389.3)

OPERATING MARGIN 341.7 301.1 262.4

Discretionary and non-discretionary profi t-sharing (Note 6) (38.2) (33.3) (25.8)

RECURRING OPERATING PROFIT 303.5 267.8 236.6

Other operating income and expense (Note 7) (24.3) (30.4) (83.6)

OPERATING PROFIT 279.2 237.4 153.0

Finance costs (Note 8) (37.9) (32.3) (25.6)

Other fi nancial income and expense (Note 8) (10.7) (2.6) (4.9)

Share of profi ts (losses) of associates (Note 3.1.2) (1.3) 2.9 (1.0)

PROFIT BEFORE TAX 229.3 205.4 121.5

Income tax expense (Note 9) (66.5) (60.9) (34.4)

PROFIT FOR THE PERIOD 162.8 144.5 87.1

Minority interests (Note 21) (11.2) 0.0 (0.1)

PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 151.6 144.5 87.0

EARNINGS PER SHARE (IN €)

Basic earnings per share (Note 10) 3.20 2.97 1.79

Diluted earnings per share (Note 10) 3.18 2.92 1.78

(a) Adjustments made to the reported income statement in order to present restated data for 2006 and 2007, with a negative impact of €0.6 million and a positive impact of €1.6 million, respectively, are described in Note 2.

The accompanying Notes 1 to 33 are an integral part of these consolidated fi nancial statements.


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CONSOLIDATED BALANCE SHEET

At 31 December

ASSETS(in € millions) 2008

2007restated (a)

2006restated (a)

Goodwill (Note 11) 419.8 111.1 118.9

Other intangible assets (Note 11) 368.9 261.1 275.4

Property, plant and equipment (Note 12) 381.2 328.9 332.5

Investments in associates (Note 14) 0.1 342.7 0.0

Other investments (Note 14) 0.7 0.8 2.7

Other non-current fi nancial assets (Note 14) 9.9 9.5 31.3

Deferred tax assets (Note 9) 48.2 24.9 42.0

Other non-current assets (Note 18) 3.2 6.2 5.1

NON-CURRENT ASSETS 1,232.0 1,085.2 807.9

Inventories (Note 16) 614.6 528.2 517.1

Trade receivables (Note 17) 645.6 627.2 646.4

Other receivables (Note 18) 54.6 53.7 66.9

Current tax assets 38.8 11.4 29.0

Derivative instruments (Note 26) 12.0 4.1 2.5

Cash and cash equivalents (Note 19) 224.6 134.0 54.1

CURRENT ASSETS 1,590.1 1,358.6 1,316.0

TOTAL ASSETS 2,822.1 2,443.8 2,123.9

EQUITY & LIABILITIES(in € millions) 2008

2007restated (a)

2006restated (a)

Share capital (Note 20) 50.9 50.9 51.1

Reserves and retained earnings (Note 20) 1,005.7 921.7 838.7

Treasury stock (Note 20) (150.7) (108.6) (73.9)

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 905.9 864.0 815.9

MINORITY INTERESTS (NOTE 21) 131.6 - -

EQUITY 1,037.5 864.0 815.9

Deferred tax liabilities (Note 9) 91.8 37.1 59.2

Long-term provisions (Note 22) 102.3 109.2 118.4

Long-term borrowings (Note 25) 213.5 65.9 80.2

Other non-current liabilities (Note 24) 36.4 15.3 9.5

NON-CURRENT LIABILITIES 444.0 227.5 267.3

Short-term provisions (Note 22) 77.2 85.8 101.3

Trade payables (Note 24) 366.3 333.4 342.7

Other current liabilities (Note 24) 158.8 176.7 165.5

Current tax liabilities 25.6 16.7 33.6

Derivative instruments (Note 26) 51.2 10.4 0.9

Short-term borrowings (Note 25) 661.5 729.3 396.7

CURRENT LIABILITIES 1,340.6 1,352.3 1,040.7

TOTAL EQUITY AND LIABILITIES 2,822.1 2,443.8 2,123.9

(a) Adjustments made to the reported balance sheet in order to present restated information at 31 December 2006 and 31 December 2007 are described in Note 2. These adjustments had a negative impact of €0.7 million and a positive impact of €1.6 million, respectively, on consolidated equity.

The accompanying Notes 1 to 33 are an integral part of these consolidated fi nancial statements.


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CONSOLIDATED CASH FLOW STATEMENT

Years ended 31 December


restated (a)2006

restated (a)

PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 151.6 144.5 87.0

Depreciation, amortisation and impairment losses 110.3 88.3 97.2

Change in provisions (22.5) (24.5) 43.0

Unrealised gains and losses on fi nancial instruments 1.8 (5.5) (1.1)

Income and expenses related to stock options 7.2 4.4 3.1

Gains and losses on disposals of assets 0.7 2.1 0.8

Other 2.9 (2.4) 0.3

Minority interests 11.2 - 0.1

Current and deferred taxes 66.5 60.9 34.4

Finance costs, net 37.9 32.3 25.6

CASH FLOW (b) 367.6 300.1 290.4

Change in inventories (66.8) (22.2) (71.3)

Change in trade receivables (24.3) 16.9 (20.7)

Change in trade payables 0.6 (6.8) 41.6

Change in other receivables and payables (0.3) 34.1 (23.8)

Income taxes paid (76.7) (61.8) (36.7)

Interest paid and received, net (35.6) (32.8) (25.2)

NET CASH FROM OPERATING ACTIVITIES 164.5 227.5 154.3

Proceeds from disposals of assets 8.6 4.8 4.4

Purchases of property, plant and equipment (96.0) (76.3) (67.3)

Purchases of software and other intangible assets (20.3) (15.5) (17.9)

Purchases of fi nancial assets (2.8) (4.3) (0.4)

Acquisitions of subsidiaries, net of the cash acquired 26.4 (319.7) (54.2)

Effect of other changes in scope of consolidation (0.8) 0.7 0.4

NET CASH USED BY INVESTING ACTIVITIES (84.9) (410.4) (135.0)

Change in long-term borrowings 146.7 (14.3) (24.1)

Change in short-term borrowings (65.2) 330.0 32.4

Proceeds from issue of share capital (including minority interests) 4.9 1.9 2.2

Change in treasury stock (43.5) (40.3) (8.6)

Dividends paid (including to minority shareholders) (46.3) (43.0) (40.4)

NET CASH FROM/(USED BY) FINANCING ACTIVITIES (3.4) 234.3 (38.5)

Effect of changes in foreign exchange rates 14.4 28.6 23.9

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 90.6 79.9 4.7

Cash and cash equivalents at beginning of period 134.0 54.1 49.4

Cash and cash equivalents at end of period 224.6 134.0 54.1

(a) Restatements of 2006 and 2007 balance sheet and income statement items compared with the reported fi gures are presented in Note 2. The amounts involved are not material.(b) Before interest paid and received and before income taxes paid.


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in € millions)Share

capital

Share premium account

Reserves and

retained earnings

Transla tion reserve

Total reserves

Treasury stock

Minority interests Equity

Total recognised income and expense for

the period

AT 1 JANUARY 2006 – IFRS (a) 50.9 111.2 652.9 44.2 808.3 (59.7) 1.2 800.7 154.8

IAS 32 AND IAS 39 ADJUSTMENTS

AT 1 JANUARY 2006 - IFRS 50.9 111.2 652.9 44.2 808.3 (59.7) 1.2 800.7 154.8

2006 profi t 87.0 87.0 87.0 87.0

Dividends paid (40.4) (40.4) (40.4)

Issue of share capital 0.2 2.1 2.1 2.3

Reduction of share capital

Exchange differences on translating foreign operations (23.0) (23.0) (23.0) (23.0)

Change in treasury stock (14.2) (14.2)

Gains (losses) on sales of treasury stock, after tax 3.5 3.5 3.5 3.5

Gains (losses) on cash fl ow hedges taken to equity (2.0) (2.0) (2.0) (2.0)

Exercise of stock options 3.1 3.1 3.1 3.1

Other movements 0.1 0.1 (1.2) (1.1) (1.1)

AT 31 DECEMBER 2006 (a) 51.1 113.3 704.2 21.2 838.7 (73.9) 0.0 815.9 67.5

2007 profi t 144.5 144.5 144.5 144.4

Dividends paid (43.0) (43.0) (43.0)

Issue of share capital 0.1 1.7 1.7 1.8

Reduction of share capital 0.0 0.0

Exchange differences on translating foreign operations (5.0) (5.0) (5.0) (5.0)

Change in treasury stock (0.3) (7.7) (7.7) (34.7) (42.7)

Gains (losses) on sales of treasury stock, after tax 1.6 1.6 1.6 1.6


Exercise of stock options 4.4 4.4 4.4 4.4

Other movements (0.3) (0.3) (0.3) (0.2)

AT 31 DECEMBER 2007 (a) 50.9 107.3 798.2 16.2 921.7 (108.6) 0.0 864.0 132.0

2008 profi t 151.6 151.6 11.2 162.8 151.6

Dividends paid (46.1) (46.1) (0.2) (46.3)

Issue of share capital 0.6 0.6 0.6

Reduction of share capital 0.0 0.0

Exchange differences on translating foreign operations 9.3 9.3 14.6 23.9 9.3

Change in treasury stock 0.0 (42.1) (42.1)

Gains (losses) on sales of treasury stock, after tax (1.0) (1.0) (1.0) (1.0)


Exercise of stock options 5.9 5.9 1.3 7.2 5.9

Other movements (c) (1.0) (1.0) 104.7 103.7 (1.0)

AT 31 DECEMBER 2008 (NOTE 20) 50.9 107.9 872.3 25.5 1,005.7 (150.7) 131.6 1,037.5 129.5

2008 recommended dividend (b) (45.5) (45.5) (45.5)

AT 31 DECEMBER 2008 AFTER APPROPRIATION 50.9 107.9 826.8 25.5 960.2 (150.7) 131.6 992.0 129.5

(a) Adjustments made to reported equity in order to present restated data at 1 January 2006, 31 December 2006 and 31 December 2007 are described in Note 2.(b) Including the €1.8 million estimated supplementary dividend for 2008.(c) “Other movements” for 2008 mainly correspond to minority interests in ZJ Supor, which was fully consolidated as from 1 January 2008.


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Notes to the consolidated fi nancial statements

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 67

1.1. Basis and scope of consolidation 681.2. Foreign currency translation 681.3. Use of estimates 681.4. Accounting policies and valuation methods 691.5. Income statement presentation 73

NOTE 2 RESTATED FINANCIAL INFORMATION (2006 AND 2007) 74

2.1. 2006 restatements 742.2. 2007 restatements 74

NOTE 3 CHANGES IN THE SCOPE OF CONSOLIDATION 75

3.1. Changes in 2008 753.2. Changes in 2007 763.3. Changes in 2006 76

NOTE 4 SEGMENT INFORMATION 77

4.1. Geographical segment information (by location of assets) 784.2. Revenue by geographical location of the customer 81

NOTE 5 OPERATING EXPENSES 81

NOTE 6 PERSONNEL COSTS 81

NOTE 7 OTHER OPERATING INCOME AND EXPENSE 82

7.1. Restructuring costs 827.2. Impairment losses 837.3. Gains and losses on asset disposals and other 84

NOTE 8 FINANCE COSTS AND OTHER FINANCIAL INCOME

AND EXPENSE, NET 84

NOTE 9 INCOME TAX 85

9.1. Income tax expense 859.2. Effective tax rate 859.3. Deferred tax assets and liabilities 859.4. Other information 86

NOTE 10 EARNINGS PER SHARE 86

NOTE 11 INTANGIBLE ASSETS 87

NOTE 12 PROPERTY PLANT AND EQUIPMENT 90

NOTE 13 LEASES 92

NOTE 14 INVESTMENTS IN ASSOCIATES, OTHER INVESTMENTS

AND OTHER NON-CURRENT FINANCIAL ASSETS 93

14.1. Investments in associates and other investments 9314.2. Other non-current fi nancial assets 93

NOTE 15 PRODUCT DEVELOPMENT COSTS 94

NOTE 16 INVENTORIES 94

NOTE 17 TRADE RECEIVABLES 95

NOTE 18 OTHER RECEIVABLES 95

NOTE 19 CASH AND CASH EQUIVALENTS 95

NOTE 20 EQUITY 96

20.1. Share capital 9620.2. Stock options 9620.3. Reserves and retained earnings

(before appropriation of profi t) 9720.4. Treasury stock 97

NOTE 21 MINORITY INTERESTS 98

NOTE 22 PROVISIONS 98

22.1. Product warranties 9922.2. Claims and litigation and other contingencies 9922.3. Sales returns 10022.4. Restructuring provisions 100

NOTE 23 PENSION AND OTHER POST-EMPLOYMENT BENEFIT

OBLIGATIONS 100

23.1. Assumptions 10023.2. Analysis of pension and other post-employment benefi t

obligations 10123.3. Recognised cost 10223.4. Movements in provisions 10323.5. Movements in pension and other post-employment benefi t

obligations 10323.6. Analysis of plan assets 10423.7. Early retirement schemes 105

NOTE 24 TRADE AND OTHER PAYABLES 105

NOTE 25 BORROWINGS 106

25.1. Total borrowings 10625.2. Net debt 108

NOTE 26 FAIR VALUE OF FINANCIAL INSTRUMENTS 109

26.1. Financial instruments 10926.2. Derivative instruments 111

NOTE 27 MARKET RISK MANAGEMENT 112

27.1. Risk management 11227.2. Market risks 11227.3. Liquidity risk 11627.4. Credit risk 116

NOTE 28 ENVIRONMENTAL EXPENDITURE 117

NOTE 29 OFF-BALANCE SHEET COMMITMENTS 117

29.1. Specifi c commitments 11729.2. Commitments arising in the ordinary course of business 118

NOTE 30 CONTINGENT ASSETS AND LIABILITIES 118

30.1. Contingent assets 11830.2. Contingent liabilities 118

NOTE 31 RELATED PARTY TRANSACTIONS 119

31.1. Transactions with associates and non-consolidated companies 119

31.2. Management remuneration and benefi ts 120

NOTE 32 SUBSEQUENT EVENTS 120

NOTE 33 LIST OF CONSOLIDATED COMPANIES 121

33.1. Fully consolidated companies 12133.2. Associates 12333.3. Non-consolidated companies 123

CONTENTS


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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED 31 DECEMBER, IN MILLIONS OF EUROS

SEB S.A. (“the Company”) and its subsidiaries (together “Groupe SEB” or “the Group”) are a world leader in the design, manufacture and marketing of cookware and small household equipment such as pressure cookers, irons and steam generators, kettles, coffeemakers, deep fryers, toasters and food processors.

SEB S.A.’s registered office is at Chemin du Petit Bois, Ecully (69130 Rhône, France). The Company is listed on Eurolist by Euronext Paris (ISIN FR0000121709).

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated fi nancial statements were approved for publication by the Board of Directors on 27 February 2009.

As a company listed in a European Union country and in compliance with European Commission regulation 1606/2002/EC dated 19 July 2002, the 2008 consolidated fi nancial statements and the 2007 and 2006 restated information have been prepared in accordance with the International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) adopted by the European Union as of 31 December 2008, including the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and its predecessor, the Standing Interpretations Committee (SIC). These documents can be downloaded from the European Commission’s website, http://ec.europa.eu/internal_market/accounting/ias_en.htm.

The new standards, interpretations and amendments to existing standards that are applicable for annual periods beginning on or after 1 January 2008 had no material impact on the consolidated fi nancial statements. They are as follows:

IFRIC 11: Group and Treasury Share Transactions; •

IFRIC 12: Service Concession Arrangements; •

IFRIC 13: Customer Loyalty Programmes; •

IFRIC 14: IAS 19 – The Limit on a Defi ned Benefi t Asset, Minimum Funding •

Requirements and their Interaction.

The main standards applicable for annual periods beginning on or after 1 January 2007 that concern the Group are IFRS 7 and the amendment to IAS 1 – Presentation of Financial Statements. Information has been reported in compliance with these standards for the three years presented.

Groupe SEB has elected not to use the option available in the amended version of IAS 19 – Employee Benefi ts whereby actuarial gains and losses on pension and other post-employment benefi t obligations may be recognised directly in equity.

In 2007, the Emerging Issues Task Force of the French National Accounting Board (Conseil National de la Comptabilité) issued an opinion (no. 2007-A) on the accounting treatment of fi nancial contributions to the unit costs borne by companies for the elimination of waste electrical and electronic equipment. The accounting treatment set out in this opinion was not used in preparing the 2006 fi nancial statements, as its impact would not have been material, but has been applied as from 1 January 2007 (see Note 4.2 and Note 30.2).

The new standards, interpretations and amendments to existing standards that are applicable for annual periods beginning on or after 1 January 2009 and were not early adopted in 2008 are as follows:

IFRS 8 – Operating Segments, which requires segment information to be •

presented based on internal reports that are regularly reviewed by the Group’s chief operating decision makers;

IAS 1 (revised) – Presentation of Financial Statements; •

Amendments to IAS 23 – Borrowing Costs, which requires capitalisation •

of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset (applicable to capital expenditure projects that begin on or after 1 January 2009);

IFRIC 16 – Hedges of a Net Investment in a Foreign Operation. •

Application of the above texts in 2009 is not expected to have a material impact on the consolidated fi nancial statements. IFRS 8, in particular, will not change the structure of reported data or the amount of goodwill allocated to each Cash-Generating Unit (CGU).

Lastly, the revised version of IFRS 3 – Business Combinations is being reviewed for adoption by the European Union. Early adoption of the revised standard from 1 January 2009 is expected to be recommended, with prospective application. It may have a material impact on business combinations carried out on or after 1 January 2010, particularly as regards acquisitions of minority interests.


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1.1. BASIS AND SCOPE OF CONSOLIDATION

Material companies that are exclusively controlled by SEB S.A. either directly or indirectly are fully consolidated.

Identifi able assets and liabilities and contingent liabilities acquired in business combinations are measured at fair value at the acquisition date. Minority interests are measured based on their proportionate share of the fair value of the underlying assets and liabilities.

The profi ts of subsidiaries acquired or disposed of during the year are recognised in the consolidated income statement from the acquisition date or up to the disposal date.

Where necessary, the fi nancial statements of subsidiaries are restated to comply with Group accounting policies.

Material companies over which SEB S.A. exercises signifi cant infl uence, directly or indirectly, are accounted for by the equity method.

Certain companies fulfi lling the above criteria are accounted for by the equity method or are not consolidated because they are not material in relation to the Group as a whole. The materiality criteria applied by the Group are as follows:

revenue of at least €10 million; •

total assets of at least €10 million; •

total debt of at least €5 million. •

The list of consolidated companies is presented in Note 33.

All material intra-group transactions have been eliminated in consolidation.

1.2. FOREIGN CURRENCY TRANSLATION

1.2.1. Translation of the fi nancial statements of foreign operations

The fi nancial statements of foreign entities are prepared in their functional currency, corresponding to the currency of the primary economic environment in which the entity operates. The functional currency of most foreign entities is their local currency.

The fi nancial statements of foreign entities are translated into euros by the closing rate method, as follows:

assets and liabilities in a functional currency other than the euro are •

translated at the closing rate at the balance sheet date and income statement items are translated at the weighted average rate for the year;

the resulting exchange differences are recognised as a separate component •

of equity, under “Translation reserve”.

The fi nancial statements of subsidiaries whose functional currency is not the local accounting currency are initially translated into the functional currency using the historical rate method, as follows:

non-monetary assets and liabilities (non-current assets, inventories and •

securities) and the corresponding movements recorded in the income statement are translated at the historical exchange rate;

monetary assets and liabilities (cash, short and long-term loans and •

borrowings, operating receivables and payables) are translated at the closing rate at the balance sheet date;

income statement items are translated at the weighted average rate for •

the year, apart from depreciation, amortisation and impairment losses on non-monetary items;

the resulting exchange differences are recognised in the income •

statement.

These fi nancial statements in the functional currency are then translated into euros using the closing rate method.

In accordance with the option available to fi rst-time adopters under IFRS 1, Groupe SEB elected to reset to zero at 1 January 2004 the cumulative translation differences arising on consolidation of foreign entities.

1.2.2. Translation of foreign currency transactions

Foreign currency transactions are recognised and measured in accordance with IAS 21 – The Effects of Changes in Foreign Exchange Rates. Transactions in currencies other than the euro are initially recognised at the exchange rate prevailing on the transaction date. Monetary assets and liabilities denominated in currencies other than the euro are translated at the closing exchange rate, and the resulting exchange differences are recognised in the income statement.

The effect of changes in exchange rates on the fair value of non-monetary fi nancial assets and liabilities is recognised by the accounting method applied to the category of fi nancial assets or liabilities concerned.

Monetary fi nancial assets classifi ed as available-for-sale are measured at amortised cost in the original currency and changes in amortised cost corresponding to exchange differences are recognised in the income statement, while other changes are recognised directly in equity.

The Group’s exposure to certain currency risks is hedged using forward contracts and options (see Note 1.4.4 c) Derivative Instruments).

1.3. USE OF ESTIMATES

The preparation of consolidated fi nancial statements in accordance with IFRS requires the use of estimates and assumptions that have an impact on the reported amounts of assets and liabilities – such as accumulated depreciation, amortisation and impairment losses – and contingent assets and liabilities at the balance sheet date and income and expenses for the year.

All such estimates are made on a going concern basis using the information available when the fi nancial statements are drawn up. They refl ect amounts and assumptions that management considers relevant and reasonable given the Group’s operating environment and past experience. In the current economic environment, short and medium-term forecasting has become more diffi cult. The estimates and assumptions used to prepare the 2008 consolidated fi nancial statements refl ected the economic and fi nancial crisis and the fi nancial parameters shaping the market at 31 December. The immediate effects of the crisis were taken into account, particularly in measuring assets – such as inventories and trade receivables – and


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liabilities. In valuing non-current assets, such as goodwill and trademarks, the assumption was made that the crisis would last for only a limited period. The value of these assets was estimated at the year-end based on the long-term economic outlook and management’s best estimates, taking into account the reduced visibility of future cash fl ows.

The assumptions used – which mainly concern impairment tests on non-current assets – and the sensitivity of reported amounts to changes in these assumptions are presented in the relevant notes to these consolidated fi nancial statements, in accordance with IAS 36.

Estimates are adjusted following any change in the circumstances on which they were based or when any new information comes to light. Actual results may differ from these estimates and assumptions.

The main estimates and assumptions used to prepare the consolidated fi nancial statements concern the measurement of pension and other post-employment benefi t obligations (Note 23.1), deferred taxes (Note 1.4.9), property, plant and equipment (Note 1.4.3), intangible assets (Notes 1.4.1 and 11), investments in associates and other investments, impairment of current assets (Notes 1.4.5 and 1.4.6), short and long-term provisions (Notes 1.4.10 and 1.4.11), certain fi nancial instruments (Note 1.4.4 c) Derivative instruments) and share-based payments (Note 1.4.10).

1.4. ACCOUNTING POLICIES AND VALUATION METHODS

The fi nancial statements of Group companies are prepared in accordance with local generally accepted accounting principles. They are restated where necessary to comply with Group accounting policies.

The notes to the consolidated fi nancial statements include analyses of assets and liabilities by maturity where disclosure of this information is required under IFRS.

The methods used to measure intangible assets, property, plant and equipment, inventories and trade receivables are described below.

1.4.1. Intangible assets

A) DEVELOPMENT COSTS

Under IAS 38 – Intangible Assets, research costs are recognised as an expense and development costs are recognised as an intangible asset when the Group can demonstrate (IAS 38, paragraph 57):

its intention to complete the development project; •

that it is probable that the expected future economic benefi ts attributable •

to the asset will fl ow to the Group;

its ability to measure reliably the cost of the asset. •

Development costs that do not fulfi l the above criteria are expensed as incurred.

In the consolidated fi nancial statements, qualifying development costs incurred after the advance design phase and before the manufacturing phase are recognised as intangible assets.

Development costs are amortised on a straight-line basis over three to fi ve years, corresponding to the same useful life as that applied to specifi c tooling.

B) OTHER INTANGIBLE ASSETS

Software licences and internal software development costs are recognised as intangible assets when it is probable that they will generate future economic benefi ts. They are amortised by the straight-line method over periods ranging from three to fi ve years. Other software licences and software development costs are expensed as incurred.

Patents, licences and trademarks with a fi nite useful life are amortised over the shorter of the period of legal protection and their expected useful life, not to exceed fi fteen years.

Trademarks with an indefi nite useful life are not amortised but are tested for impairment.

C) GOODWILL

Goodwill, corresponding to the excess of the Group’s interest in the net fair value of identifi able assets, liabilities and contingent liabilities acquired in a business combination over the cost of the business combination, is recognised as an asset under “Goodwill”.

In accordance with IFRS 3 – Business Combinations, goodwill is not amortised but is tested for impairment at least once a year. For impairment testing purposes, goodwill is allocated to a Cash-Generating Unit (CGU), defi ned as the smallest identifi able group of assets that generates cash infl ows that are largely independent of the cash infl ows from other assets or groups of assets.

The method used to test CGUs for impairment is described in Note 1.4.3.

When a CGU is found to be impaired, an impairment loss corresponding to the difference between the carrying amount of the goodwill and its recoverable amount is recognised in “Other operating expense”. Impairment losses on goodwill are not reversible.

Negative goodwill is recognised directly in the income statement for the period of acquisition.

1.4.2. Property, plant and equipment

buildings: 10 to 40 years •

plant and machinery: 10 years •

offi ce equipment: 3 to 10 years •

vehicles: 4 to 5 years •

tooling: 1 to 5 years. •

Each signifi cant part of an item of property, plant and equipment with a useful life that is different from that of the asset to which it belongs is depreciated separately. Useful lives are reviewed at regular intervals and the effect of any adjustments – corresponding to a change in accounting estimates – is applied prospectively.

The cost of property, plant and equipment does not include any borrowing costs.


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No items of property, plant or equipment have been revalued.

In accordance with IAS 17 – Leases, fi nance leases that transfer substantially all the risks and rewards incidental to ownership of an asset are recognised in property, plant and equipment for an amount corresponding to the lower of the fair value of the leased asset and the present value of the minimum lease payments.

A liability for the same amount is recorded under “Finance lease liabilities”.

1.4.3. Impairment of non-current assets

Under IAS 36 – Impairment of Assets, the recoverable amount of property, plant and equipment and intangible assets must be measured at each period-end or whenever there is an indication that the asset may be impaired. Assets with an indefi nite life – corresponding in the case of Groupe SEB to goodwill and trademarks – are tested for impairment at least once a year.

Assets with a fi nite life are tested whenever events or circumstances indicate that their carrying amount may not be recovered.

Impairment tests are performed at the level of each Cash-Generating Unit (CGU). A CGU is defi ned as the smallest identifi able group of assets that generates cash infl ows that are largely independent of the cash infl ows from other assets or groups of assets. The fair value of CGUs is determined by the discounted cash fl ows method. An impairment loss is recognised for any excess of an asset’s carrying amount over its recoverable amount. Recoverable amount corresponds to the higher of the asset’s fair value less costs to sell and its value in use. The impairment loss is allocated to reduce the carrying amount of goodwill and then rateably to the other assets of the CGU based on their respective carrying amounts.

The capitalised amount of development projects in progress is also tested for impairment.

Impairment losses on CGUs and on assets with an indefi nite useful life are recorded in “Other operating expense”.

At Groupe SEB, CGUs correspond to individual production sites, broken down where appropriate by product family. The assets allocated to each CGU correspond mainly to tooling and other manufacturing assets (primarily buildings and machinery). Marketing subsidiaries and integrated manufacturing and sales entities are each treated as separate CGUs, but marketing subsidiaries that share resources are combined in a single CGU.

Provisions for impairment of non-financial assets other than goodwill are reviewed at each annual and interim period-end and adjusted as necessary.

1.4.4. Financial instruments

Financial instruments are accounted for in accordance with IAS 39 – Financial Instruments: Recognition and Measurement.

Financial assets and liabilities are recognised in the balance sheet when the Group becomes a party to the contractual provisions of the instrument. They are initially recognised at cost, corresponding to the fair value of the consideration paid or received plus external transaction costs that are directly attributable to the acquisition or issue of the fi nancial asset or fi nancial liability.

A) FINANCIAL ASSETS

Financial assets consist of non-current fi nancial assets, as well as operating receivables, debt securities and other cash equivalents classified as current assets.

Available-for-sale fi nancial assets are assets that are intended to be held for an indefi nite period but which may be sold in response to changes in market interest rates or liquidity needs. They comprise investments in non-consolidated companies. At each period-end, they are measured at fair value and the resulting unrealised gain or loss is recognised directly in equity. When the assets are sold or there is objective evidence of impairment, the cumulative gains and losses previously recognised in equity are reclassifi ed to profi t.

Held-to-maturity investments are fi nancial assets with a fi xed maturity that the Group has the positive intention and ability to hold to maturity. They are measured at amortised cost, determined by the effective interest method.

B) FINANCIAL LIABILITIES

Financial liabilities comprise borrowings and other fi nancing, including bank overdrafts, and operating liabilities.

Borrowings and other fi nancial liabilities are measured at amortised cost, determined by the effective interest method.

When interest rate risks on fi nancial liabilities are hedged by swaps qualifying as cash fl ow hedges, the swaps are also recognised in the balance sheet at fair value. The effective portion of changes in their fair value is recognised directly in equity and the ineffective portion is recognised in profi t.

C) DERIVATIVE INSTRUMENTS

Market risks (interest rate, currency and commodity price risks) are hedged, generally through the use of derivative instruments.

In accordance with IAS 32 and IAS 39, derivative instruments are measured at fair value.

The accounting treatment of changes in fair value depends on the future use of the derivative and the resulting accounting classifi cation.

Derivative instruments designated as the hedging instrument in a hedging relationship may be classifi ed as either fair value or cash fl ow hedges:

a fair value hedge is a hedge of the exposure to changes in fair value of a •

recognised asset or liability or an unrecognised fi rm commitment that is attributable to a particular risk and could affect profi t;

a cash fl ow hedge is a hedge of the exposure to variability in cash fl ows •

that is attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction and could affect profi t.

The gain or loss arising from remeasurement at fair value of derivative instruments designated as fair value hedges is recognised in profi t, offsetting all or part of the gain or loss recognised on the hedged item.

In the case of cash fl ow hedges, the effective portion of the gain or loss arising from remeasurement of the derivative instrument at fair value is recognised in equity and the ineffective portion is recognised in profi t. The cumulative gains and losses on cash fl ow hedges recognised directly in equity are reclassifi ed into profi t when the hedged item affects profi t.


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Hedge accounting is applied when:

the hedging relationship is formally designated and documented at the •

inception of the hedge;

the hedge is expected to be highly effective and is determined actually to •

have been highly effective throughout the fi nancial reporting periods for which it was designated.

At the inception of each hedge, the hedging relationship is formally documented, specifying in particular the Group’s risk management objective and strategy for undertaking the hedge. The initial documentation also includes details of how the Group will assess the hedging instrument’s effectiveness. In subsequent periods, the hedging instrument’s actual effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash fl ows attributable to the hedged risk is also fully documented.

Hedge accounting is discontinued prospectively when the derivative instrument ceases to be a highly effective hedge or when it expires or is sold, terminated or exercised.

Changes in the fair value of derivative instruments that do not qualify for hedge accounting are recognised in profi t.

1.4.5. Inventories

Raw materials and goods purchased for resale are measured at purchase cost, using the weighted average cost method.

Work-in-progress and fi nished products are measured at cost, including raw materials and labour and a portion of direct and indirect production costs.

In accordance with IAS 2, inventories are measured at the lower of cost, determined as explained above, and net realisable value.

Net realisable value corresponds to the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale (mainly distribution costs).

The carrying amount of inventories does not include any borrowing costs.

1.4.6. Trade receivables

Trade receivables are measured at the lower of their nominal amount – which approximates fair value due to their short maturity – and their estimated net realisable value. Provisions for impairment are determined on the basis of the age of the receivables, taking into account any identifi ed recovery risks.

1.4.7. Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand and short-term investments in money market instruments. These instruments have maturities of less than three months; they are readily convertible into known amounts of cash and are not exposed to any material price risk.

1.4.8. Treasury stock

Treasury stock is deducted from equity at cost. Any gains or losses arising from the purchase, sale, issue or cancellation of treasury stock are recognised directly in equity without affecting profi t.

1.4.9. Income taxes

Income tax expense reported in the income statement corresponds to current tax for the period and changes in deferred taxes.

In accordance with IAS 12 – Income Taxes, deferred taxes are recognised by the liability method for temporary differences between the carrying amounts of assets and liabilities and their tax base. They are determined using tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date.

Temporary differences include:

a) taxable temporary differences, which are temporary differences that will result in taxable amounts in determining taxable profi t (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled; and

b) deductible temporary differences, which are temporary differences that will result in amounts that are deductible in determining taxable profi t (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled.

Deferred tax assets are recognised for deductible temporary differences and tax loss carryforwards to the extent that it is probable that future taxable profi ts will be available against which they can be utilised, generally within fi ve years.

In accordance with IAS 12, deferred tax assets and liabilities are not discounted.

1.4.10. Employee benefi ts

A) PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS

In some countries, the Group is required to pay length-of-service awards to employees on retirement or pension benefi ts under formal pension plans. The Group also pays contributions to government-sponsored pension schemes in its various host countries. The accounting treatment of these pension and other post-employment benefi t plans depends on the type of plan, as follows:

Defi ned contribution plans

Contributions to these plans are recognised as an expense for the period to which they relate.

Defi ned benefi t plans

In accordance with IAS 19 – Employee Benefi ts, obligations under defi ned benefi t plans are calculated annually by qualifi ed actuaries using the projected unit credit method based on fi nal salaries. The projected unit credit method sees each period of service as giving rise to an additional unit of benefi t entitlement and measures each unit separately to build up the fi nal obligation, which is then discounted. The actuarial assumptions used to calculate the obligation include staff turnover rates, mortality rates, the discount rate and the expected retirement age.

The assumptions vary according to local laws and regulations in the host countries concerned.


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Actuarial gains and losses arising from the effects of changes in actuarial assumptions and experience adjustments on plan obligations and assets are recognised in profi t by the corridor method. Under this method, the portion of the net cumulative unrecognised actuarial gains and losses that exceeds the greater of 10% of the present value of the defi ned benefi t obligation and 10% of the fair value of any plan assets at that date is amortised over the remaining service lives of the employees concerned.

A provision is recorded in the balance sheet for any unfunded obligations, corresponding to defi ned benefi t obligations not covered by plan assets, net of unrecognised gains and losses.

For plans that have a surplus – corresponding to the excess of plan assets over the defi ned benefi t obligation – an asset is recognised only when the criteria specifi ed in IAS 19 are fulfi lled.

B) OTHER LONG-TERM BENEFIT PLANS

Certain subsidiaries pay jubilees to employees who have completed a certain number of years’ service or offer employees “time savings accounts”. The cost of these long-term benefi ts is calculated on an actuarial basis and recognised in profi t over the service lives of the employees concerned. Actuarial gains and losses are recognised immediately in profi t during the period in which they are generated, as their deferral is not allowed under IFRS.

Pension and other post-employment benefi t costs are classifi ed as operating expenses, except for the interest cost, which is included in other fi nancial income and expense in accordance with the alternative treatment allowed under IAS 19.

In accordance with IFRS 1 – First-Time Adoption of IFRS, cumulative actuarial gains and losses at 1 January 2004 were included in provisions for pensions and other post-employment benefi t obligations at that date by adjusting equity. Groupe SEB has elected not to use the option available in the amended version of IAS 19 whereby entities may recognise actuarial gains and losses under defi ned benefi t pension plans directly in equity as from 1 January 2006.

C) SHARE-BASED PAYMENTS

Stock option plans are measured and recognised in accordance with IFRS 2 – Share-Based Payment. Stock options represent a benefi t for the grantee and, accordingly, are treated as part of the Group’s compensation costs. Option grants are not cash-settled, and the benefi t is therefore recognised as an expense over the vesting period by adjusting equity, for an amount corresponding to the fair value of the underlying equity instruments.Stock options granted to employees of Group subsidiaries that are exercisable for SEB S.A. shares are deemed to be equity-settled share-based payments.

Fair values are determined using the Black & Scholes option pricing model. This model takes into account the option exercise price and period, market data at the grant date (risk-free interest rate, share price, volatility, expected dividends) and grantee behaviour assumptions.

IFRS 2 has been applied only to stock options granted after 7 November 2002 that had not yet vested at 1 January 2005. As allowed under IFRS 1, options granted prior to 7 November 2002 have not been restated.

1.4.11. Provisions

In accordance with IAS 37 – Provisions, Contingent Liabilities and Contingent Assets, a provision is recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

A) PROVISIONS FOR WARRANTY COSTS

The Group provides a warranty on its products. The estimated costs of the warranty are accrued at the time of sale, based on historical data.

This item also includes provisions for product recalls, which are set up when the recall is decided.

B) PROVISIONS FOR CLAIMS AND LITIGATION

As a general principle, all known claims and litigation involving the Group are reviewed by management at each period-end. All necessary provisions have been recorded to cover the related risks, as estimated after obtaining advice from outside legal advisors.

C) RESTRUCTURING PROVISIONS

The Group is considered as having a constructive obligation when management has a detailed formal plan for the restructuring, has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features and no infl ow of economic benefi ts is expected that would offset the costs of the plan.

The amount of the related provision corresponds to forecast cash outfl ows under the plan.

1.4.12. Off-balance sheet commitments

For several years now, the Group’s reporting system has included detailed reporting of off-balance sheet commitments. The process provides for the reporting by consolidated subsidiaries, in their consolidation packages, of information about the following commitments that they have given:

guarantees, endorsements and bonds; •

security interests (mortgages and pledges); •

commitments under non-cancellable operating leases and fi rm orders •

for fi xed assets;

other commitments. •

1.4.13. Changes in minority interests

The Group has elected to recognise changes in minority interests as follows:

when additional minority interests are acquired, the excess of the purchase •

price over the Group’s additional share of the fair value of the net identifi able assets of the entity is allocated to goodwill;

previously acquired assets and liabilities are not remeasured at fair value •

at the acquisition date;


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transactions that lead to a reduction in the Group’s interest – but not to a •

loss of control – are treated as a sale of minority interests and the resulting gain or loss is recognised in the income statement.

The revised version of IFRS 3 – Business Combinations, which is being reviewed for adoption by the European Commission, specifi es that changes in non-controlling (minority) interests, i.e. without a change of control of the entity concerned, should be recognised in equity, thereby eliminating the possibility of recognising additional goodwill.

1.5. INCOME STATEMENT PRESENTATION

1.5.1. Revenue

Revenue corresponds to the value, excluding tax, of goods and services sold by consolidated companies in the course of their ordinary activities, after eliminating intra-group sales.

Revenue is recognised when the signifi cant risks and rewards of ownership are transferred to the buyer – generally when the customer receives a product – for an amount corresponding to the fair value of the consideration received or receivable as determined after deducting rebates and discounts.

The cost of advertising expense contributions billed by customers and of consumer promotions is recognised in the reported amount of revenue, along with miscellaneous revenues.

Freight and other costs billed to customers are treated as an integral part of revenue.

Accruals are booked for deferred rebates granted to customers on the basis of contractual or constructive commitments identifi ed at the period-end.

1.5.2. Operating margin and operating expenses

Operating margin corresponds to revenue less operating expenses. Operating expenses comprise the cost of sales, research and development costs, advertising costs and distribution and administrative expenses. Statutory and discretionary employee profi t sharing and other operating income and expenses are excluded from the calculation.

1.5.3. Recurring operating profi t

Recurring operating profi t corresponds to operating margin less statutory and discretionary employee profi t sharing.

1.5.4. Operating profi t

Operating profi t comprises all the recurring and non-recurring income and expenses generated in the course of the Group’s ordinary activities, including income and expenses resulting from one-off decisions or transactions that are unusual in terms of their amount, such as costs relating to major restructuring plans and asset disposals.

1.5.5. Other income statement items

Accrued interest on interest-bearing instruments is recognised by the effective interest method based on the purchase price.

Dividend income is recognised when the shareholder’s right to receive payment is established.

Finance costs are recognised in the income statement on an accruals basis.

1.5.6. Earnings per share

Basic earnings per share correspond to profi t attributable to equity holders of the parent divided by the weighted average number of shares outstanding during the period, excluding treasury stock. Diluted earnings per share are calculated by adjusting the weighted average number of shares outstanding to take into account the dilutive effect of stock options and other equity instruments issued by the Company.


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The related after tax impact on consolidated equity as reported at 31 December 2006 was as follows:

(in € millions) Reported

Business combinations

and other Restated

EQUITY AT 1 JANUARY 2006 800.7 800.7

Income and expenses recognised directly in equity 3.5 3.5

Profi t for the period 87.6 (0.6) 87.0

Other movements (75.2) (0.1) (75.3)

EQUITY AT 31 DECEMBER 2006 816.6 (0.7) 815.9

NOTE 2 - RESTATED FINANCIAL INFORMATION (2006 AND 2007)

Under IFRS, reported prior-period data must be restated for:

operations meeting the criteria in IFRS 5 – Non-current Assets Held for •

Sale and Discontinued Operations;

business combinations (recognition of the defi nitive fair value of assets •

acquired and liabilities and contingent liabilities assumed when such fair value was determined on a provisional basis at the previous balance sheet date);

changes in accounting methods (subject to any transitional provisions to •

the contrary applicable on fi rst-time adoption of new standards);

corrections of accounting errors. •

As a result, certain fi nancial information relating to 2006 and 2007 has been restated, as described below.

2.1. 2006 RESTATEMENTS

In the 2006 fi nancial statements, €1.9 million in negative goodwill was recognised in “Other income and expense” on acquisition of the US-based Mirro WearEver business in August 2006, based on the estimated fair value of the acquired assets at 31 December 2006. The accounting for the business combination was fi nalised in fi rst-half 2007, and the fair value of the assets was adjusted through profi t, with a €0.7 million negative impact on equity at 31 December 2006.

2.2. 2007 RESTATEMENTS

Goodwill arising on the acquisition of shares in Supor was accounted for provisionally at 31 December 2007. During 2008, further analyses were carried out to identify and value the acquired intangible assets.

These analyses led to an adjustment to the share of Supor’s profi t accounted for by the equity method in 2007, with the following impact on opening consolidated equity:

(in € millions) ReportedBusiness

combinations Restated

EQUITY AT 1 JANUARY 2007 815.9 815.9

Income and expenses recognised directly in equity (7.2) (7.2)

Profi t for the period 142.8 1.6 144.4

Other movements (89.1) (89.1)

EQUITY AT 31 DECEMBER 2007 862.4 1.6 864.0


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NOTE 3 - CHANGES IN THE SCOPE OF CONSOLIDATION

3.1. CHANGES IN 2008

3.1.1 Supor

DESCRIPTION OF THE COMPANY

Supor is China’s leading cookware manufacturer, with a very broad product range that includes pressure cookers, woks and frying pans. It also manufactures small home equipment, such as rice cookers, electric pressure cookers, slow-cookers and induction hotplates, which are sold mainly under the Supor brand. Supor employs roughly 6,600 people, of whom 80% are production workers based at the company’s four plants in mainland China, in Yuhan, Wuhan, Hangzhou and Dongguan. A signifi cant portion of its revenue is generated internationally through sub-contracting agreements with major small household equipment manufacturers, including Groupe SEB.

Supor reported revenue of €351 million in 2008, €281 million in 2007 and €207 million in 2006.

Supor’s contribution to consolidated operating margin was €30 million in 2008.

Acquisition of control of Supor on 1 January 2008

Groupe SEB acquired 52.74% of the capital of Supor in two stages:

on 28 August 2007, SEB acquired 30% of the voting rights in the Group’s •

parent company Zhejiang Supor Co. Ltd. (ZJ Supor), listed on the Shenzhen stock exchange under code 002032.SZ, at a total cost of €115.8 million;

on 21 December 2007, following a public tender offer for part of the •

remaining shares launched in November, SEB acquired a further 22.74% of the capital and voting rights for €228.8 million.

For the preparation of the 2007 consolidated fi nancial statements, the Group considered that it exercised signifi cant infl uence over ZJ Supor from 1 September 2007. ZJ Supor was therefore accounted for by the equity method in the last four months of 2007, based on the Group’s 30% interest.

In January 2008, Groupe SEB acquired control of ZJ Supor following a General Meeting at which the company’s shareholders elected the fi ve directors nominated by Groupe SEB (four Groupe SEB executives and one independent director) to the nine-member Board of Directors, thereby giving Groupe SEB the majority. ZJ Supor and its subsidiaries have therefore been fully consolidated from 1 January 2008.

The following table analyses the fair value of the assets acquired and liabilities assumed and provides a reconciliation with the corresponding cash fl ows:

(in € millions) 1 January 2008

Non-current assets (a) 153.3

Inventories 38.5

Trade and other receivables 31.9

Net cash and cash equivalents 73.2

Trade and other payables (32.5)

Other liabilities (including deferred taxes) (36.8)

Minority interests (16.6)

TOTAL NET ASSETS 211.0

PERCENT INTEREST 52.74%

NET ASSETS ACQUIRED 111.3

COST OF THE BUSINESS COMBINATION 344.6

Goodwill 233.3

(a) Including the Supor brand, valued by independent experts at €75.1 million.

Goodwill corresponds mainly to market shares and projected synergies, particularly in terms of manufacturing, supply chain operations and product development, that cannot be separately identifi ed.

Acquisition of minority interests in certain ZJ Supor subsidiaries

During the second quarter of 2008, Groupe SEB acquired Hong Kong-based Grain Harvest Development Ltd, which holds signifi cant stakes in three ZJ Supor subsidiaries, as follows:

25% of Wuhan Supor Cookware; •

25% of Zhejiang Supor Electrical Appliances; •

30% of Dongguan Supor Electrical Appliances. •

This transaction, which enabled the Group to increase its share of ZJ Supor’s profi t, was accounted for based on the three companies’ fair values at 31 March 2008, leading to the recognition of additional goodwill of €35.7 million.

Exercise of stock options by certain Supor Group executives

Prior to the acquisition, certain Supor Group senior executives were granted options to purchase new ZJ Supor shares that were exercisable upon the change of control of Supor. Following administrative processing by the Chinese authorities, the options were exercised at the end of June 2008 for a total of 12 million Supor shares, lowering Groupe SEB’s share in the company to 51.31%.

All the options were exercised, and there are no remaining stock options likely to have a dilutive impact on Groupe SEB’s stake in ZJ Supor.


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3.1.2. Other changes

Two newly-created subsidiaries, Groupe SEB Bulgaria and Groupe SEB Baltic, have been fully consolidated from 1 January 2008. Both companies are wholly owned by Groupe SEB. Their consolidation did not have a material impact on the consolidated fi nancial statements.

Groupe SEB Retailing (France) was accounted for by the equity method for the fi rst time in 2008, leading to the recognition in the income statement for the period, under “Share of profi ts/(losses) of associates”, of a negative amount of €1.2 million corresponding to the cumulative losses generated by the company since its formation.


3.2.1. Supor

As explained in section 3.1.1, the purchase of the initial 30% stake gave Groupe SEB signifi cant infl uence over ZJ Supor’s operating and fi nancial policies as from 1 September 2007. Consequently, in compliance with IAS 28 and IFRS 3, ZJ Supor was accounted for by the equity method as from that date. The purchase of the additional 22.74% in December 2007, although it gave Groupe SEB a majority interest in the capital and voting rights of ZJ Supor, did not result in exclusive control over the company in 2007. At 31 December 2007, Groupe SEB had neither de jure nor de facto control over the company’s operating and fi nancial policies, having no seats on the Board of Directors or on other decision-making bodies. Consequently, in the 2007 fi nancial statements the second transaction was treated as a bolt-on acquisition that strengthened the Group’s signifi cant infl uence in Supor at 31 December 2007.

3.2.2. Other changes in 2007

Two new subsidiaries were fully consolidated at 31 December 2007 – Groupe SEB Ukraine, which was set up at the end of 2006, and Groupe SEB Slovenia, set up in early 2007. Both of these companies are wholly owned by Groupe SEB and their consolidation had no material impact on the 2007 consolidated fi nancial statements.

Two wholly owned subsidiaries in Brazil, Arno and Panex, were merged on 1 January 2007 to form Groupe SEB do Brasil. The merger had no impact on profi t for the period or on equity at 31 December 2007.


3.3.1. Mirro WearEver

On 16 August 2006, Groupe SEB acquired certain assets of the U.S.-based company Mirro WearEver, a subsidiary of Global Home Products. Mirro WearEver is a leader in the retail distribution of cookware and bakeware in the United States.

The acquisition represented a total investment of $37.1 million (€28.6 million based on the exchange rate at the acquisition date) and took place following an auction organised by the U.S. Bankruptcy Court for the District of Delaware after Global Home Products fi led for Chapter 11 bankruptcy protection on 11 April 2006.

The transaction – which constituted a business combination within the meaning of IFRS 3 – involved the following assets:

intangible assets including the Mirro, WearEver and AirBake brands as •

well as contracts with certain key executives;

equipment and tooling at Mirro WearEver’s Nuevo Laredo plant in Mexico •

operated by a sub-contractor;

inventories and trade receivables related to the acquired business. •

The following table analyses the fair value of the assets acquired and liabilities assumed and provides a reconciliation with the corresponding cash fl ows:

(in € millions) 16 August 2006

Non-current assets (a) 17.8

Inventories 8.7

Trade and other receivables 4.6

Trade and other payables (0.6)

Other liabilities (0.7)

Negative goodwill (1.2)

NET CASH OUTFLOW FOR THE ACQUISITION OF MIRRO WEAREVER 28.6

(a) Including the Mirro, WearEver and Air Bake brands valued by independent valuers at €12.2 million.

Mirro WearEver’s contribution to consolidated revenue was €25.4 million for the period from the acquisition date to 31 December 2006 and €54 million for the year ended 31 December 2007.

Production at the Nuevo Laredo plant was discontinued during the second quarter of 2007.

3.3.2. Other changes

Four wholly owned subsidiaries – Groupe SEB Singapore (set up in 2004), Groupe SEB Malaysia, Groupe SEB Switzerland and Groupe SEB Romania (all set up in 2005) – were fully consolidated for the first time as of 1 January 2006.

In 2006, these subsidiaries contributed €9.0 million to consolidated revenue and generated a net loss of €1.0 million.

In Mexico, T-Fal de Mexico and Vistar were merged on 1 January 2006 and, in France, Lagostina SML (the Lagostina Group’s French subsidiary) was merged into Groupe SEB France in September 2006.

All of these companies were previously wholly owned by Groupe SEB and the mergers therefore had no impact on the Group’s equity or earnings for the year ended 31 December 2006.


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NOTE 4 - SEGMENT INFORMATION

IAS 14 requires disclosure of segment information based on the Group’s primary and secondary segment formats. Reportable segments correspond to distinguishable components of the Group that are subject to risks and returns that are different from those of other components. Primary segments, for which detailed disclosures are required, correspond to the dominant source of risks and returns.

Groupe SEB is organised around three structures:

the Strategic Business Areas (SBAs), which determine global strategy •

for their respective product families. Each SBA is responsible for developing new products, from the design phase to the implementation of manufacturing strategies, as well as for all marketing strategies (ranges, pricing, advertising and channel strategies);

the Regional Divisions, which are responsible for expanding the Group’s •

positions in their respective regions. In 2008, the Group had fi ve Regional Divisions, covering Western and Southern Europe, Northern and Central Europe, North America, South America, Asia and the Rest of the World. Each Regional Division manages the distribution network in its territory, in accordance with the sales and marketing strategy defi ned by the SBAs, and assumes the related commercial risks;

the Corporate functions, which support the SBAs and Regional Divisions. •

Reporting to the Executive Vice Presidents, these functions include Human Resources, Corporate Finance, Strategic Planning, Brands, Manufacturing, Technology, Sustainable Development, Information Systems, Quality, Procurement and Legal Affairs.

The main sources of risks and returns are manufacturing processes, marketing strategies and distribution methods. Based on internal analyses, they are determined primarily by the country where the Group conducts operations and markets its products and are shared by all product families.

Consequently, the Group’s primary segment format is the geographical segment, determined by reference to the location of assets. Based on the IAS 14 defi nition, Groupe SEB operates in only one business segment – small domestic equipment.

IFRS 8 – Operating Segments

Groupe SEB decided not to early adopt IFRS 8 – Operating Segments, which will therefore be applied from 1 January 2009. IFRS 8, which replaces IAS 14, will be applicable retrospectively, requiring 2007 and 2008 data to be restated. It requires entities to use the management approach, which means segment reporting must be based on the segmentation used for internal management purposes, both for allocating resources to operating segments and evaluating segment performance.

Given that segment information under IAS 14 is similar to segment information based on internal reporting, in terms of resource allocation and accounting methods, Groupe SEB does not expect the new standard to have a material impact on its presentation of segment information. For example, it will not affect the allocation of goodwill recognized in business combinations.


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4.1. GEOGRAPHICAL SEGMENT INFORMATION (BY LOCATION OF ASSETS)

(in € millions) France

Other Western

European countries (a)

North America

South America Asia/Pacifi c

Central Europe

and other countries

Intra-group transactions Total

2008

Revenue

Inter-segment revenue 666.0 706.4 376.2 263.1 498.8 642.7 3,153.2

External revenue 693.8 48.8 2.8 26.9 594.9 1.2 (1,291.4) 77.0

TOTAL REVENUE 1,359.8 755.2 379.0 290.0 1,093.7 643.9 (1,291.4) 3,230.2

Results

Operating profi t 62.7 3.5 0.1 24.3 84.2 104.4 279.2

Finance costs and other fi nancial income and expense, net (48.6)

Share of profi t of associates (1.3) (1,3)

Income tax expense (66.5)

PROFIT FOR THE PERIOD 162.8

Balance sheet

Segment assets 641.5 514.4 370.7 214.5 731.4 239.6 (224.4) 2,487.7

Financial assets 247.3

Tax assets - - - - - - 87.1

TOTAL ASSETS 2,822.1

Segment liabilities 364.4 237.3 39.9 56.1 150.7 93.4 (200.9) 740.9

Borrowings - - - - - - 926.2

Tax liabilities - - - - - - 117.4

Equity - - - - - - 1,037.6

TOTAL EQUITY AND LIABILITIES 2,822.1

Other information

Capital expenditure and purchases of intangible assets 59.7 13.2 5.5 10.5 24.7 2.7 116.3

Depreciation and amortisation expense 54.4 10.5 4.1 8.4 11.1 1.3 89.8

Impairment losses 2.3 14.3 3.9 20.5

(a) “Other Western European countries” correspond to the 15 countries other than France comprising the pre-enlargement European Union. The new EU countries are included in the “Central Europe and other countries” segment.


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Other Western


North America


Central Europe

and other countries


2007

Revenue


External revenue 720.2 55.0 4.5 23.4 450.6 0.7 (1,207.5) 46.9

TOTAL REVENUE 1,357.7 757.1 402.9 296.7 658.1 604.6 (1,207.5) 2,869.6

Results

Operating profi t 37.9 23.8 7.7 27.5 54.4 86.0 237.3


Share of profi t of associates 2.9



Balance sheet

Segment assets 635.6 526.1 377.7 253.9 132.2 219.4 (228.6) 1,916.3

Financial assets 491.2

Tax assets 36.3

TOTAL ASSETS - - - - - - 2,443.8


Borrowings - - - - - - 805.5


Equity - - - - - - 864.0

TOTAL EQUITY AND LIABILITIES - - - - - - 2,443.8

Other information






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Other Western


North America


Central Europe

and other countries


2006 RESTATED

Revenue


External revenue 619.8 58.9 6.7 12.0 364.7 0.9 (1,118.1) (55.1)

TOTAL REVENUE 1,318.0 730.9 393.6 260.2 572.3 494.8 (1,118.1) 2,651.7

Results

Operating profi t (26.3) 10.2 30.0 19.9 54.1 65.1 153.0


Share of profi t of associates (1.2)



Balance sheet

Segment assets 675.9 521.3 427.2 225.2 134.2 196.6 (218.1) 1,962.3

Financial assets - - - - - - 90.6

Tax assets - - - - - - 71.0

TOTAL ASSETS - - - - - - 2,123.9


Borrowings - - - - - - 477.8


Equity - - - - - - 815.9

TOTAL EQUITY AND LIABILITIES - - - - - - 2,123.9

Other information





Inter-segment transactions correspond to sales to external customers located within the geographical segment.

External revenues correspond to sales to external customers and Group subsidiaries located in other geographical segments.

Intragroup transactions are carried out on an arm’s length basis.


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4.2. REVENUE BY GEOGRAPHICAL LOCATION OF THE CUSTOMER

(in € millions) 2008 2007 2006

France 667.1 640.3 595.0

Other Western European countries (a) 729.0 717.9 691.6

North America 393.2 401.1 389.7

South America 264.8 274.4 246.6

Asia/Pacifi c 500.3 210.1 213.8

Central Europe and other countries 675.8 625.8 515.0

TOTAL 3,230.2 2,869.6 2,651.7


Since 2007, the fi nancial contribution to the elimination of waste electrical and electronic equipment invoiced to customers is included under “Revenue”. In 2006, this contribution was recorded as a deduction from operating expenses. It was not reclassifi ed as the amount involved (€0.7 million) was not material.

NOTE 5 - OPERATING EXPENSES

(in € millions) 2008 2007 2006

Purchased raw materials and goods (1,423.2) (1,226.4) (1,136.4)

Labour costs (126.0) (123.4) (126.0)

Freight costs (24.0) (21.2) (20.6)

Other production costs (274.7) (254.2) (256.3)

COST OF SALES (SUB-TOTAL) (1,847.9) (1,625.2) (1,539.3)

Research and development costs (40.9) (40.4) (35.8)

Advertising expense (119.8) (113.4) (92.2)

Distribution and administrative expenses (879.9) (789.5) (722.0)

OPERATING EXPENSES (2,888.5) (2,568.5) (2,389.3)

NOTE 6 - PERSONNEL COSTS

(in € millions) 2008 2007 2006

Wages and salaries (excluding temporary staff costs) (384.1) (354.1) (351.6)

Payroll taxes (105.0) (106.2) (100.8)

Pension and other post-employment benefi t plan costs (34.9) (36.6) (37.8)

Service cost under defi ned benefi t plans (5.3) (4.3) (4.6)

Discretionary and non-discretionary profi t-sharing (38.2) (33.3) (25.8)

TOTAL PERSONNEL COSTS (567.5) (534.5) (520.6)


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Breakdown by geographical segment 2008 France

Other Western European

countries (a)North

AmericaSouth

America Asia/Pacifi c

Central Europe

and other countries Total

Personnel costs (excluding temporary staff costs) (344.8) (73.7) (35.6) (42.2) (52.4) (18.8) (567.5)

Average number of employees 6,422 1,451 746 2,289 6,535 607 18,050


Breakdown by geographical segment 2007 France

Other Western European

countries (a)North

AmericaSouth

America Asia/Pacifi c

Central Europe

and other countries Total

Personnel costs (excluding temporary staff costs) (339.1) (74.2) (41.0) (42.3) (18.8) (19.1) (534.5)

Average number of employees 6,907 1,426 929 2,405 936 579 13,182


Employees by category (%) 2008 2007 2006

Direct labour 44.5 40.8 42.6

Offi ce workers 44.5 45.7 44.5

Managers 11.0 13.5 12.9

TOTAL 100.0 100.0 100.0

NOTE 7 - OTHER OPERATING INCOME AND EXPENSE

(in € millions) 2008 2007 2006

Restructuring costs (13.9) (18.9) (72.2)

Impairment losses (19.6) (4.8) (8.7)

Gains and losses on asset disposals and other 9.2 (6.7) (2.7)

OTHER OPERATING INCOME AND EXPENSE, NET (24.3) (30.4) (83.6)

7.1. RESTRUCTURING COSTS

2008

Restructuring costs for the year amounted to €13.9 million and mainly concerned plans in the following countries:

France, for €5 million, corresponding to the additional costs of three plant •

closures launched in 2006, mainly the increase in payroll taxes on early

retirement benefi ts and the cash cost of measures to assist the affected employees for which provisions could not be booked according to IFRS;

the United Kingdom, for €6.6 million, related to the outsourcing of logistics •

operations;

the United States, for €2.2 million, following the closure of the Medford, •

Los Angeles and Budd Lake offi ces and the transfer of their sales and marketing activities to the West Orange and Millville sites.


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2007

Restructuring costs for 2007 amounted to €18.9 million, as follows:

France, for €14.9 million, of which: •

€7.4 million in additional charges following the reassessment of costs •

and provisions for three plant closures launched in 2006, refl ecting higher than anticipated early-retirement plan costs, mainly due to the increase in the payroll tax rate on early retirement benefi ts from 24.5% to 50%,

€7.5 million in non-recurring manufacturing costs following the effective •

closure of the plants in 2007;

Mexico, for €1.8 million, following the closure of the Celaya plant in the •

last quarter of 2007;

Belgium, for €1.0 million, related to the fi rst-quarter 2007 reorganisation •

of supply chain operations.

2006

Restructuring costs amounted to €72.2 million in 2006. The plans primarily concerned the following countries:

France, where the closure of manufacturing plants in Fresnay (Sarthe), Le •

Syndicat (Vosges) and Dampierre (Jura) was announced at the beginning of the year, along with the reorganisation of the Vernon site in the Eure region. The related costs recognised in 2006 came to €66.5 million, as follows:

Employee-related expenses due to the implementation of early retirement •

schemes, for €28.9 million (taking into account the €1.9 million impact of discounting the long-term portion of the provision),

Almost €25.6 million relating to measures to assist employees affected •

by the restructuring plans, including inplacement and outplacement measures, assistance in setting up or acquiring a business, and paid retraining leave,

€6 million in plant conversion costs, including buyer grants and •

contributions to re-industrialisation programmes,

€6 million in non-recurring manufacturing costs incurred during the •

plant closure process;

Brazil and Mexico, where manufacturing rationalization plans were •

implemented during the second half of 2006, involving site closures and signifi cant capacity reductions, as well as the elimination of 103 and 87 jobs respectively.

7.2. IMPAIRMENT LOSSES

2008

In application of the principle described in Note 1.4.3, certain manufacturing CGUs were tested for impairment by comparing the carrying amount of the assets of each CGU with their value in use, defi ned as the sum of discounted future cash fl ows for the 5-year period covered by the business plan, assuming a residual value based on the expected future cash fl ows to be derived from the assets in the last year of the plan. CGUs comprising intangible assets with indefi nite useful lives were tested for impairment on

a regular basis and CGUs comprising depreciable or amortisable assets were tested only when there was an indication that they may have been impaired. The main impairment tests and CGUs concerned are discussed in Note 11 – Intangible Assets.

In 2008, impairment tests led to the recognition of impairment losses totalling €16.1 million on the following European manufacturing CGUs:

Erbach (Germany), for €9.3 million, following the ramp-down of its •

production capacity and the announcement of staff-reduction measures to take place after the year-end (see Note 32);

Omegna (Italy), for €5.0 million, due to the plant operating signifi cantly •

below capacity;

Mayenne (France), for €1.8 million, due to inadequate margins, particularly •

on coffeemakers.

The main actuarial assumptions used in 2008 for impairment tests on the manufacturing CGUs in Europe were as follows:

the weighted average cost of capital was estimated at 8.83% (vs. 8.46% •

in 2007 and 8.30% in 2006);

the long-term growth rate beyond the 5-year period covered by the •

business plan was set between 0% and 2%, depending on the business of the CGU concerned.

The sensitivity of the values obtained to changes in these assumptions was as follows:

a one-point change in the weighted average cost of capital would have •

a €6 million positive impact or a €5.8 million negative impact on the impairment charge recorded in 2008;

a one-point decrease in the long-term growth rate would have increased •

impairment by €4.7 million;

a 10% decrease in volumes, compared with current assumptions for the •

last year of the business plans used to calculate the residual amounts of the assets, would have increased impairment by €10.8 million.

In addition, a further impairment loss of €3.5 million was recognised on the Mirro, WearEver and Airbrake brands. The impairment tests conducted in 2008 were based on the fair values of these specifi c assets. Their fair values were estimated using the relief from royalty method, assuming:

a discount rate of 14.4%; •

a long-term growth rate of 1%; •

a royalty rate of between 1.5% and 2%, depending on the brand. •

A one-point increase in the discount rate, combined with a one-point decrease in the long-term growth rate would have increased the impairment loss by €0.4 million.

2007

Impairment losses of €4.7 million were recorded in the 2007 financial statements mainly in respect of the Mirro, WearEver and AirBake brands following the impairment tests conducted at the end of the year on the CGU containing these assets.

Impairment tests of other manufacturing CGUs in France and Italy did not lead to the recognition of any impairment losses.


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2006

Following impairment tests of certain CGUs in France, Germany and Mexico, impairment losses of €8.7 million were recorded for the period in “Other income and expense”.

Additional impairment losses recognised on plants that were in the process of being closed at the year-end (Dampierre, Fresnay and Le Syndicat) amounted to €3.0 million.

7.3. GAINS AND LOSSES ON ASSET DISPOSALS AND OTHER

2008

This item mainly includes:

the reversal of a provision for €8.0 million, following the abolition, in the •

2009 Social Security Financing Act, of employer contributions to the fund for early retirement benefi ts payable to workers exposed to asbestos in the course of their work. Certain sites that were acquired in 2001 after Moulinex fi led for bankruptcy met the Act’s asbestos plan criteria. A provision of €11.6 million was therefore set aside in 2004 and 2005, corresponding to the discounted present value of Groupe SEB’s contribution to the early retirement benefi t fund. Following abolition of the funding obligation, the corresponding provision was reversed, with the exception of an amount of €0.8 million required to cover the 2008 contribution;

proceeds of €1.5 million from the out-of-court settlement of a trademark •

infringement claim made against a competitor.

2007

In 2007, this item included the €1.6 million cost of terminating a licence for the use of the Lagostina brand granted by Lagostina SpA to its North American distributor and the €1.5 million fi nal cost resulting from an investigation by the German competition authorities into Groupe SEB Deutschland and Krups GmbH pricing policies following a complaint regarding the prices charged by a Groupe SEB selective distribution network in Germany. It also included €2.3 million in non-recurring expenses arising from the halting of production of certain Mirro WearEver products at the Groupe SEB USA plant in Mexico and of T-Fal products in the United States.

2006

In 2006, this item included €1.2 million in negative goodwill on Mirro WearEver, €2.0 million in strategic transaction costs and €1.2 million in losses on disposals.

The balance was comprised of non-recurring expenses mainly concerning claims and litigation.

NOTE 8 - FINANCE COSTS AND OTHER FINANCIAL INCOME AND EXPENSE, NET

(in € millions) 2008 2007 2006

FINANCE COSTS (37.9) (32.3) (25.6)

Interest cost on long-term employee benefi t obligations (6.2) (5.9) (4.6)

Exchange gains and losses (0.2) 1.8 0.5

Income and expenses from fi nancial instruments (3.8) 2.7 0.1

Other (0.5) (1.2) (0.9)

OTHER FINANCIAL INCOME AND EXPENSE, NET (10.7) (2.6) (4.9)

The interest cost on long-term employee benefi t obligations corresponds to the difference between the discounting adjustment for the year – arising from the fact that benefi t payments are one year closer to being paid – and the expected return on the corresponding plan assets. Discounting adjustments to other long-term liabilities and provisions are also included under this caption.

Exchange gains and losses on foreign currency transactions are included in operating margin. Gains and losses on hedges of foreign currency borrowings are reported under “Other fi nancial income and expense.”

Income and expenses from fi nancial instruments correspond to amortisation of the time value of hedging instruments, and derivative instruments for which the hedging relationship has not been documented.


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NOTE 9 - INCOME TAX

9.1. INCOME TAX EXPENSE

(in € millions) 2008 2007 2006

Current taxes 55.3 61.2 48.1

Deferred taxes, net 11.2 (0.3) (13.7)

INCOME TAX EXPENSE 66.5 60.9 34.4

Current income tax expense corresponds to taxes paid or payable in the short term on profi t for the year, based on local tax rates and tax laws in the Group’s host countries.

Group companies in France, Germany, Italy and the United States have elected for group relief. The companies in each tax group record in their

accounts the income tax charge or benefi t that they would have paid or received if they had been taxed on a stand-alone basis (Note 33). Tax savings resulting from the election for group relief are not material; the main benefi t lies in the fact that any tax losses can be set off immediately against the taxable income of other companies in the tax group.

9.2. EFFECTIVE TAX RATE

The following table provides a reconciliation between the Group’s effective tax rate of 29.0% (29.9% in 2007 and 28.2% in 2006) and the statutory French tax rate of 34.43%:

(in %) 2008 2007 2006

STATUTORY FRENCH TAX RATE 34.4 34.4 34.4

Effect of different tax rates (9.6) (7.4) (4.1)

Unrecognised and unrelieved tax loss carryforwards 3.5 3.9 4.7

Prior period tax loss carryforwards recognised and utilised during the period (0.0) (1.0) (9.7)

Other (a) 0.7 0.0 2.9

EFFECTIVE TAX RATE 29.0 29.9 28.2

(a) The caption “Other” primarily includes unrecognised deferred tax assets other than for tax losses, and changes in deferred tax assets not recognised in prior periods.

9.3. DEFERRED TAX ASSETS AND LIABILITIES

(in € millions) 31 December 2008 31 December 2007 31 December 2006

Intangible assets (brands) (82.7) (56.4) (67.3)

Capitalised development costs (6.5) (7.4) (8.0)

Property, plant and equipment (27.6) (23.3) (27.4)

Net tax loss carryforwards 24.8 12.7 13.6

Provisions for pensions and other employee-related liabilities 30.9 37.0 46.1

Elimination of intra-group gains 14.2 12.0 11.5

Other timing differences (net) 3.3 13.2 14.3

NET DEFERRED TAX ASSET/(LIABILITY) (43.6) (12.2) (17.2)

Of which:

Deferred tax assets 48.2 24.9 42.0

Deferred tax liabilities 91.8 37.1 59.2


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The following table shows changes in net deferred taxes recognised in the balance sheet:

(in € millions)

NET DEFERRED TAX LIABILITY AT 31 DECEMBER 2007 (12.2)

Deferred tax charges and benefi ts for the period recognised in profi t (11.2)

Effect of changes in foreign exchange rates (2.2)

Effect of changes in the scope of consolidation (17.4)

Other (0.6)

NET DEFERRED TAX LIABILITY AT 31 DECEMBER 2008 (43.6)

The effect of changes in the scope of consolidation refl ects the acquisition of ZJ Supor, which was fully consolidated in 2008.

At the start of the period, ZJ Supor had deferred tax assets of €4.6 million and deferred tax liabilities of €22.7 million.

9.4. OTHER INFORMATION

At 31 December 2008, the Group had unrecognised deductible temporary differences and tax losses expiring in the following periods:

At 31 December 2008(in € millions)

Deductible temporary differences Tax losses Total

2009 1.8 0.2 2.0

2010 0.2 1.5 1.7

2011 0.7 0.2 0.9

2012 0.8 0.3 1.1

2013 and beyond 3.6 19.1 22.7

AVAILABLE INDEFINITELY 51.8 51.8

TOTAL 7.1 73.1 80.2

Unrecognised tax loss carryforwards increased very slightly to €73 million in 2008 from €69 million in 2007. As in prior years, they primarily concerned operations in Germany (€42 million in 2008, €39 million in 2007 and €51 million in 2006), Spain (€13 million in 2008 and €15 million in both 2007 and 2006) and the United Kingdom (€9 million in 2008 and €6 million in 2007).

NOTE 10 - EARNINGS PER SHARE

(in € millions) 2008 2007 2006

Numerator

Profi t for the period 151.6 144.5 87.0

After tax effect of dilutive potential shares

Profi t used to calculate diluted earnings per share 151.6 144.5 87.0

Denominator

Weighted average number of ordinary shares used to calculate basic earnings per share 47,325,540 48,620,100 48,610,470

Effect of dilutive potential shares 366,772 792,134 276,234

Weighted average number of ordinary shares used to calculate diluted earnings per share 47,692,312 49,412,234 48,886,704

BASIC EARNINGS PER SHARE (IN €) 3.20 2.97 1.79

DILUTED EARNINGS PER SHARE (IN €) 3.18 2.92 1.78


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NOTE 11 - INTANGIBLE ASSETS

In accordance with IAS 38, intangible assets with an indefi nite useful life – corresponding to trademarks and goodwill – are no longer amortised but are tested for impairment at each year-end. The impairment testing method is described in Note 1.4.

Intangible assets with a fi nite useful life are amortised by the straight-line method over their estimated useful life. Amortisation expense is deducted from operating margin.

The Group also holds certain trademarks – such as the Tefal international brand and the SEB and Calor regional brands – which are not recognised in the balance sheet.

2008(in € millions)

Patents and licences Trademarks Goodwill Software

Development costs Other Total

Cost

At 1 January 18.5 217.7 111.1 51.2 29.9 19.2 447.6

Acquisitions and additions 0.2 4.3 2.6 13.2 20.3

Disposals (1.0) (2.2) (0.5) (3.7)

Other movements (a) 75.1 269.0 1.9 5.4 17.6 369.0

Translation adjustment (0.1) 8.0 39.7 (2.3) (0.1) 3.3 48.5

AT 31 DECEMBER 18.6 300.8 419.8 54.1 35.6 52.8 881.7

Amortisation and impairment losses

At 1 January 14.5 4.4 0.0 36.3 16.3 3.9 75.4

Translation adjustment 0.4 (1.4) 0.4 (0.6)

Amortisation for the period 1.0 5.6 8.1 1.7 16.4

Impairment losses (b) 0.8 2.1 0.9 0.6 4.4

Amortisation and impairment losses written off on disposals (1.0) (2.0) (3.0)

Other movements (a) 0.5 0.5

AT 31 DECEMBER 16.3 6.9 0.0 39.5 23.3 7.1 93.1

Carrying amount at 1 January 4.0 213.3 111.1 14.9 13.6 15.3 372.2

CARRYING AMOUNT AT 31 DECEMBER 2.3 293.9 419.8 14.6 12.3 45.7 788.6

(a) Including changes in scope of consolidation.(b) Corresponding to impairment of the Mirro brand and other intangibles within the CGUs referred to in Note 7.


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Cost

At 1 January 18.6 227.5 118.9 49.2 26.3 20.8 461.3

Acquisitions and additions 0.1 4.7 2.0 8.7 15.5

Disposals (0.1) (3.3) (3.7) (7.1)

Other movements (a) 0.1 1.1 0.3 5.3 (9.3) (2.5)

Translation adjustment (0.2) (9.8) (8.9) 0.3 (1.0) (19.6)

AT 31 DECEMBER 18.5 217.7 111.1 51.2 29.9 19.2 447.6


At 1 January 14.0 38.4 11.3 3.3 67.0

Translation adjustment (0.3) (0.3) (0.6)


Impairment losses 4.7 4.7

Amortisation and impairment losses written off on disposals (0.1) (7.1) (3.5) (0.1) (10.8)

AT 31 DECEMBER 14.5 4.4 0.0 36.3 16.3 3.9 75.4



(a) Including changes in scope of consolidation.




Cost

At 1 January 17.0 229.4 129.4 44.7 16.0 21.9 458.4

Acquisitions and additions 4.6 4.1 9.2 17.9

Disposals (2.2) (0.7) (2.9)

Other movements (a) 1.8 12.2 2.9 6.9 (10.0) 13.8

Translation adjustment (0.2) (14.1) (10.5) (0.8) (0.3) (25.9)

AT 31 DECEMBER 18.6 227.5 118.9 49.2 26.3 20.8 461.3


At 1 January 13.3 36.2 4.4 2.5 56.4

Translation adjustment (0.6) (0.2) (0.8)


Impairment losses (b) 0.8 0.8

Amortisation and impairment losses written off on disposals 0.1 (1.2) (0.1) (0.4) (1.6)

AT 31 DECEMBER 14.0 0.0 0.0 38.4 11.3 3.3 67.0



(a) Including changes in scope of consolidation.(b) Related to the plant closures announced on 24 January 2006 (see Note 7).


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In 2008, other movements mainly comprise the effect of acquiring control of Supor, which was fully consolidated for the fi rst time during the period, and include recognition of the trademark for €75.1 million and goodwill for €269 million (see Note 3.1).

In 2007, a €1.1 million increase in goodwill was recognised on All-Clad following an additional earn-out payment to the former owner of the business, bringing to an end the arbitration procedure launched in 2006.

In 2006, other movements corresponded mainly to the recognition of Mirro WearEver’s intangible assets, including €12.2 million for the Mirro, WearEver and AirBake brands.

Trademarks and goodwill were tested for impairment according to the method described in Note 1.4.3. by comparing their carrying amount to their value in use, with the exception of the trademarks mentioned below, which were valued using the relief from royalty method.

The discount rates used were determined based on the weighted average cost of capital, taking into account market interest rates, and debt ratio, beta and average equity risk premium based on historical data. The equity risk premium used for 2008 was 5.65%. Specifi c equity risk premiums ranging from 0.5% to 4.0% were applied to the Group’s different CGUs, according to their size, region and other specifi c characteristics.

In light of the specifi c economic conditions prevailing in 2008, impairment tests were based on:

a revised 2009 budget refl ecting the anticipated effects of worsening •

economic and fi nancial conditions and the main initiatives implemented by management;

the assumption that the economy will recover in time to enable the Group •

to meet the medium-term targets set out in the business plan prepared prior to the crisis.

In 2007 and 2008, impairment losses of €4.7 million and €3.5 million were recognised respectively on the Mirro WearEver brands (Mirro, WearEver and AirBake) and other related intangible assets, following an impairment test of the Mirro WearEver CGU (see Note 7), refl ecting lower-than-expected profi ts and their impact on the business plan for future years. Following recognition of the impairment loss, the carrying amount of these trademarks stood at €4.3 million at 31 December 2008.

Impairment tests on other trademarks and goodwill in 2008, 2007 and 2006 did not result in the recognition of any impairment losses.

The All-Clad CGU – including the trademark for €104.0 million and goodwill for €82.0 million at 31 December 2008 – was tested for impairment by comparing its carrying amount to its value in use, defi ned as the sum of discounted future cash fl ows for the 5-year period covered by the business plan. Residual value was determined based on the expected future cash fl ows to be derived from the assets in the last year of the plan. The main actuarial assumptions used in 2008 were as follows:

discount rate of 9.37%, virtually unchanged from the 2007 rate of 9.36%, •

owing to offsetting changes in the risk-free rates and risk premiums;

long-term growth rate of 3%, in line with forecasts for the high-end •

household equipment market, and similar to the rate used since All-Clad was acquired.

The test performed at 31 December 2008 did not result in the recognition of an impairment loss, although the CGU’s value in use was just 1% above its carrying amount. The sensitivity of test results to changes in the individual assumptions used in 2008 to determine the value in use of the All-Clad CGU assets is as follows:

a one-point decrease in the discount rate would result in a €36.6 million •

increase in the CGU’s value in use;

0.5- and 1-point increases in the discount rate would result in impairment •

losses of €12.0 million and €24.3 million, respectively;

a one-point decrease in the growth rate to perpetuity would result in an •

impairment loss of €16.5 million;

a one-point decrease in operating margin in the last year of the business •

plan – used to calculate residual value – would result in an impairment loss of €6.1 million;

a 10% decrease in sales in the last year of the business plan – used •

to calculate residual value – would result in an impairment loss of €20.7 million;

a 10% decrease in sales over the business plan period would result in •

an impairment loss of €38.4 million, demonstrating the sensitivity of the test results to the length and depth of the current economic crisis in the United States.

The Supor CGU – including the trademark for €85.1 million and goodwill for €304.9 million – was tested for impairment for the fi rst time at 31 December 2008. The main actuarial assumptions used were as follows:

discount rate after tax of 11.1%; •

long-term growth rate of 5%. •

The test did not result in the recognition of any impairment loss. In addition, a sensitivity analysis of the assumptions used to test the Supor CGU was performed, showing that a one-point increase in the discount rate or a one-point decrease in the growth rate to perpetuity would lower the value in use of the CGU without leading to any impairment loss at the year-end.

The Lagostina, Arno, Rowenta, Krups and Moulinex trademarks, which are carried in the balance sheet at 31 December 2008 for €30.4 million, €28.0 million, €23.2 million, €7.8 million and €1.0 million respectively, were tested by discounting estimated future royalty revenues from the licensing of the trademarks. The main assumptions used in 2008 were as follows:

royalty rate: 2% to 5.5%, unchanged from 2007; •

discount rate after tax: 8.70% (Rowenta) to 15.39% (Arno) versus 8.65% •

to 13.94% in 2007;

long-term growth rate: 1% to 3%, unchanged from 2007. •

For all of these assets, the sensitivity of different assumptions was analysed for the period between 2010 and 2013, including the probability of a more gradual economic recovery than under the central scenario. Their sensitivity to a one-point increase in the discount rate and a one-point decrease in the growth rate to perpetuity was also tested. The decreases in value in use under each of these simulations would not result in the recognition of any impairment losses on goodwill or trademarks in the balance sheet.


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NOTE 12 - PROPERTY PLANT AND EQUIPMENT

2008(in € millions) Land Buildings

Machinery and

equipment OtherAssets in progress Total

Cost

At 1 January 26.7 223.6 613.9 95.2 31.7 991.1

Acquisitions and additions 0.1 4.3 34.3 13.7 43.6 96.0

Disposals (1.1) (10.9) (38.2) (11.7) (0.7) (62.6)


Translation adjustment (1.4) 1.6 (3.3) (1.8) 0.4 (4.5)

AT 31 DECEMBER 24.4 253.2 662.0 103.9 44.3 1,087.8

Depreciation and impairment losses

At 1 January 5.4 129.4 461.1 66.2 662.1

Translation adjustment (0.7) (3.3) (2.0) (6.0)

Depreciation for the period 0.3 9.8 53.1 11.0 74.2

Impairment losses 1.4 5.6 8.7 0.5 16.2

Depreciation and impairment losses written off on disposals (0.4) (7.4) (35.4) (10.9) (54.1)

Other movements (a) 9.8 4.4 14.2

AT 31 DECEMBER 6.7 136.7 494.0 69.2 0.0 706.6

Carrying amount at 1 January 21.3 94.2 152.8 29.0 31.7 329.0

CARRYING AMOUNT AT 31 DECEMBER 17.7 116.5 168.0 34.7 44.3 381.2



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Machinery and


Cost

At 1 January 27.3 229.5 660.8 95.4 24.7 1,037.7


Disposals (1.7) (10.8) (95.7) (11.9) (120.1)


Translation adjustment 0.3 (1.9) (0.6) (1.1) (0.1) (3.5)

AT 31 DECEMBER 26.7 223.6 613.9 95.2 31.7 991.1


At 1 January 5.4 127.6 503.8 68.4 705.2

Translation adjustment 0.0 (0.5) (0.7) (0.8) (2.1)


Impairment losses 0.9 0.6 1.5


AT 31 DECEMBER 5.4 129.4 461.1 66.2 662.1





Machinery and


Cost

At 1 January 31.5 234.4 647.8 99.6 19.9 1,033.2


Disposals (4.2) (9.4) (36.3) (8.9) (58.8)

Other movements (a) 3.3 22.5 (0.2) (18.3) 7.3

Translation adjustment (0.5) (3.2) (5.4) (1.8) (0.4) (11.3)

AT 31 DECEMBER 27.3 229.5 660.8 95.4 24.7 1,037.7


At 1 January 9.0 122.3 479.2 67.6 678.1

Translation adjustment (0.2) (0.9) (1.0) (2.1)


Impairment losses 0.6 7.0 7.6


AT 31 DECEMBER 5.4 127.6 503.8 68.4 705.2





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The Group’s operations are mainly carried out at 21 major plants worldwide, as follows:

ten in Europe; •

one in Russia; •

six in Asia; •

one in North America; •

three in South America. •

The Group owns all of its plants, except for one in Brazil and another in China.

Logistics warehouses and commercial and offi ce buildings are generally leased, except for the Group’s headquarters building in Ecully and another offi ce building in Lyon.

All leases are with unrelated lessors and refl ect normal market terms.

At 31 December 2008, the aggregate carrying amount of property, plant and equipment held for sale was €3.8 million (€8.4 million at 31 December 2007 and €5.6 million at 31 December 2006).

These items correspond primarily to assets at the facilities (Le Syndicat and Fresnay) affected by the restructuring plan announced in France in 2006, and are measured at fair value less costs to sell. They also include manufacturing assets in Brazil and Germany, measured at either the values provided for in contracts signed with the purchasers of the sites, or at the amounts resulting from valuations performed by independent property valuers.

Other movements for 2008 refl ect mainly the fi rst-time consolidation of Supor. Other movements for 2006 corresponded mainly to the recognition of Mirro WearEver property, plant and equipment for €3.1 million, corresponding to the assets’ fair value at the acquisition date.

NOTE 13 - LEASES

Finance leases can be analysed as follows:


Land

Buildings 0.2 2.6 5.0

Machinery and equipment 2.9 3.0 2.5

Other 0.1 0.1 0.3

CARRYING AMOUNT 3.2 5.7 7.8

These amounts are included in the tables in Note 12 – Property, plant and equipment.

Groupe SEB does not have any fi nance leases related to intangible assets or investment property.

Commitments under fi nance leases and non-cancellable operating leases are as follows:

AT 31 DECEMBER 2008(in € millions) Finance leases Operating leases

LEASE COMMITMENTS

Due within one year 1.0 21.5

Due in one to fi ve years 1.8 39.7

Due beyond fi ve years 6.3

TOTAL MINIMUM FUTURE LEASE PAYMENTS 2.8 67.5

Future interest costs 0.2

DISCOUNTED PRESENT VALUE OF LEASE COMMITMENTS 3.0 67.5


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Lease costs recorded in expenses for the year are as follows:

(in € millions) 2008 2007 2006

Lease costs 33.4 31.1 31.1

NOTE 14 - INVESTMENTS IN ASSOCIATES, OTHER INVESTMENTS AND OTHER NON-CURRENT FINANCIAL ASSETS

14.1. INVESTMENTS IN ASSOCIATES AND OTHER INVESTMENTS

14.1.1. Investments in associates


COMPANY

Groupe SEB Retailing 0.1

ZJ Supor 342.7

Tefal & KV -

0.1 342.7 -

At 31 December 2008, investments in associates corresponded to Groupe SEB Retailing, a wholly-owned French company that will be fully consolidated as from 1 January 2009.

Investments in associates at 31 December 2007 corresponded to shares in ZJ Supor held at that date.

The reduction in investments in associates was due to the full consolidation of ZJ Supor as from 1 January 2008.

14.1.2. Other investments

At 31 December 2008, there were no material changes in Groupe SEB’s other investments.

The decrease in “Other investments” at 31 December 2007 was mainly attributable to the full consolidation of Groupe SEB Ukraine in the 2007 consolidated fi nancial statements.

At 31 December 2006, other investments included the new Groupe SEB Ukraine subsidiary, which began operations in November 2006.

14.2. OTHER NON-CURRENT FINANCIAL ASSETS

The decrease in “Other non-current fi nancial assets” at 31 December 2007 was attributable to the recovery of the €23.7 million deposit paid to the Chinese market authorities on completion of the acquisition of 52.74% of ZJ Supor.


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NOTE 15 - PRODUCT DEVELOPMENT COSTS

(in € millions) 2008 2007 2006

RESEARCH AND DEVELOPMENT EXPENDITURE 49.2 46.8 46.3

as a % of revenue 1.5% 1.6% 1.7%

CAPITALISED DEVELOPMENT COSTS (8.3) (6.4) (10.5)

as a % of R&D costs 17.0% 13.6% 22.7%

AMORTISATION FOR THE PERIOD RECOGNISED IN COST OF SALES (8.9) (8.6) (7.0)

RESEARCH AND DEVELOPMENT COSTS RECOGNISED DIRECTLY IN THE INCOME STATEMENT (NOTE 5) (40.9) (40.4) (35.8)

TOTAL COST RECOGNISED IN THE INCOME STATEMENT (49.8) (49.0) (42.8)

as a % of revenue 1.5% 1.7% 1.6%

Research and development expenditure totalled €49.2 million in 2008, after deducting French research tax credits of €5.9 million, versus €46.8 million in 2007 and €46.3 million in 2006. Prior to 2008, research tax credits were recorded as a deduction from income tax expense. Research tax credits in 2007 (€1 million) and 2006 (€2 million) have not been reclassifi ed because they were not material.

Capitalised development costs amounted to €8.4 million, versus €6.4 million in 2007 and €10.5 million in 2006.

In all, research and development costs recognised in the income statement came to €49.8 million, versus €49.0 million in 2007 and €42.8 million in 2006.

Development costs have been capitalised since 1 January 2004. This change of method had a temporary positive impact in the initial years, as the amounts capitalised were greater than the amortisation charge.

NOTE 16 - INVENTORIES

(in € millions)

31 December 2008 31 December 2007 31 December 2006

Cost ProvisionsCarrying amount Cost Provisions

Carrying amount Cost Provisions

Carrying amount

Raw materials 119.4 (11.1) 108.3 95.5 (10.8) 84.7 99.0 (12.2) 86.8

Work in progress 40.6 (0.4) 40.2 40.8 (0.6) 40.2 42.2 (0.4) 41.8

Finished products 370.3 (23.4) 346.9 335.7 (22.8) 312.9 335.8 (22.2) 313.6

Goods purchased for resale 120.1 (0.9) 119.2 91.8 (1.5) 90.3 76.0 (1.1) 74.9

TOTAL 650.4 (35.8) 614.6 563.8 (35.7) 528.1 553.0 (35.9) 517.1


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NOTE 17 - TRADE RECEIVABLES


Trade receivables (including discounted bills) 656.4 636.6 655.4

Provisions for doubtful debts (10.8) (9.4) (9.0)

645.6 627.2 646.4

The fair value of trade receivables is equivalent to their carrying amount, in view of their short maturities.

A receivables aging analysis is presented in Note 27.4.

NOTE 18 - OTHER RECEIVABLES


OTHER NON-CURRENT RECEIVABLES 3.2 6.2 5.1

Prepaid expenses 8.5 7.1 13.1

Prepaid and recoverable taxes and other receivables 46.1 46.6 53.8

OTHER RECEIVABLES 54.6 53.7 66.9

The fair value of prepaid and recoverable taxes and other receivables is equivalent to their carrying amount.

At 31 December 2008, other receivables broke down as follows:

(in € millions) Current Non-current Total

Prepaid expenses 8.5 8.5

Prepaid and recoverable taxes and other receivables 46.1 3.2 49.3

54.6 3.2 57.8

NOTE 19 - CASH AND CASH EQUIVALENTS

(in € millions) 2008 2007 2006

Cash 224.3 77.6 53.3

Cash equivalents 0.3 56.4 0.8

224.6 134.0 54.1

Cash equivalents at 31 December 2008 consist mainly of euro-denominated very short-term investments, such as SICAV money market funds, measured at market value at the balance sheet date.


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NOTE 20 - EQUITY

20.1. SHARE CAPITAL

At 31 December 2008, the share capital was made up of 50,912,138 ordinary shares with a par value of €1, following the three-for-one stock-split approved by the General Meeting of 13 May 2008 (16,960,186 ordinary shares with a par value of €3 at 31 December 2007 and 17,018,820 shares with a par value of €3 at 31 December 2006). One class of shares carries double voting

rights and the right to a supplementary dividend. The weighted average number of shares outstanding during the year was 47,325,540 (48,620,100 in 2007 and 48,610,470 in 2006 adjusted for the effects of the three-for-one stock-split).

At 31 December 2008, 42.70% of the capital was held by the family group (of which 19.32% by Fédéractive and 13.09% by Venelle Investissement), representing 60.57% of the voting rights.

20.2. STOCK OPTIONS

Information about stock option plans at 31 December 2008 is provided below:

STOCK OPTIONS

At 31 December 2008

Type of option

Option grant

date***

Option exercise

date

Option expiry

date

Number of options**

Outstanding

Exercise price**

(in €)Granted Exercised Cancelled

To purchase new shares 4/05/2000 4/05/2004 4/05/2008 483,600 440,688 42,912 0 19.70

To purchase new shares 14/06/2001 14/06/2005 14/06/2009 493,500 434,004 19,808 39,688 18.18

To purchase existing shares 19/04/2002 19/04/2006 19/04/2010 417,450 240,000 21,450 156,000 27.88




To purchase existing shares 8/04/2005 8/04/2009 8/04/2013 554,700 0 16,800 537,900 28.00



To purchase existing shares 13/05/2008 13/05/2012 13/05/2016 1,005,900 0 6,000 999,900 38.35

TOTAL* 5,873,473 1,741,184 246,079 3,886,210

* Of which, movements in 2008 1,006,048 161,993 27,214 816,841

Total options to purchase existing shares 4,896,373 866,492 183,359 3,846,522

Total options to purchase new shares 977,100 874,692 62,720 39,688

** The number of options and the exercise price for plans prior to 16 June 2008 were adjusted following the three-for-one stock split that took place on 16 June 2008.*** The grant date corresponds to the date of the Board Meeting when the option grants were decided.

In accordance with IFRS 2 – Share-Based Payment, stock options are measured at the grant date. The valuation method used is based on the Black & Scholes option pricing model. The initial valuation is not adjusted for any subsequent changes in value after the grant date.

The value is recognised in employee benefi ts expense on a straight-line basis over the option vesting period by adjusting equity.

IFRS 2 has been applied only to stock options granted after 7 November 2002 that had not yet vested at 1 January 2005. As allowed under IFRS 2, options granted before 7 November 2002 have not been measured or recognised in the accounts.


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The amount recognised in employee benefi ts expense in 2008 in respect of stock options was €4.7 million, versus €4.4 million in 2007 and €3.1 million in 2006. The assumptions used to value options under the Black & Scholes model are as follows:

2008 plan 2007 plan 2006 plan 2005 plan 2004 plan

INITIAL VALUE 8.72 6.83 2.49 2.11 3.29

AMOUNT RECOGNISED IN PERSONNEL COSTS IN 2008 (in € millions) 1.53 1.71 0.62 0.53 0.38

ASSUMPTIONS

Share price at the option grant date (in €) 37.6 44.0 29.3 28.4 31.5

Volatility 25.0% 30.0% 20.0% 19.5% 25.0%

Risk-free interest rate 4.50% 4.42% 3.80% 3.62% 4.40%

Exercise price (in €) 38.35 44.00 29.33 28.00 31.67

Life of the options (in years) (1) 5 5 5 5 5

Dividend rate 3% 2% 3% 3% 2%

(1) Corresponding to the average exercise period.

20.3. RESERVES AND RETAINED EARNINGS (BEFORE APPROPRIATION OF PROFIT)

Reserves and retained earnings comprise the reserves recorded in the balance sheet of SEB S.A. (including €702 million available for distribution at 31 December 2008, versus €608 million at 31 December 2007 and €591 million at 31 December 2006), and SEB S.A.’s share of the post-acquisition retained earnings of consolidated subsidiaries.

SEB S.A.’s share of the retained earnings of foreign subsidiaries is considered as being permanently reinvested and withholding taxes or additional taxes on distributed income are recognised only when distribution of these amounts is planned or considered probable.

20.4. TREASURY STOCK

The Group’s share buyback policy is to acquire shares:

for cancellation in order to reduce the Company’s capital; •

for allocation to employees, managers or senior executives of the Company •

or of related companies upon exercise of stock options;

for delivery on redemption, conversion, exchange or exercise of share •

equivalents.

Share buybacks are carried out based on market opportunities and only when the Group has suffi cient cash to fund the transactions.

In 2008, the Group bought back 1,956,802 SEB shares on the market at a weighted average price of €31.47 and sold 564,217 shares on the market at an average price of €31.95. The after-tax gain on the sales, in the amount of €1 million, was recognised directly in equity without affecting profi t for the period. At 31 December 2008, the Group held 4,376,100 shares in treasury, acquired at an average price of €34.43.

Movements in 2008 and 2007 were as follows:

(in number of shares) 2008 2007

Shares held in treasury at 1 January 2,983,515 2,446,350

Purchases

Buyback plan 1,518,500 1,227,384

Liquidity contract 438,302 374,850

Sales

Shares sold on the market (433,718) (375,762)

Shares allocated on exercise of stock options (130,499) (415,947)

Shares cancelled during the period (273,360)

SHARES HELD IN TREASURY AT 31 DECEMBER 4,376,100 2,983,515

At its meeting of 27 February 2009, the Board of Directors decided to cancel 1,000,000 treasury shares. The cancellation will not have any impact on the consolidated fi nancial statements, as the shares are already recorded as a deduction from equity, at cost.


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NOTE 21 - MINORITY INTERESTS

Changes in minority interests are as follows:

(in € millions) 2008 2007 2006

AT 1 JANUARY 0.0 - 1.2

Minority interests in profi t 11.2 0.1

Stock options issued 1.3

Minority interests in share issues by subsidiaries 4.3

Changes in scope of consolidation 100.2 (1.3)

Translation adjustment 14.6

AT 31 DECEMBER 131.6 0.0 0.0

Minority interests at 31 December 2008 primarily concern ZJ Supor and will therefore change mainly in line with changes in ZJ Supor’s retained earnings – essentially profi t or loss for the period and the translation reserve – or, exceptionally, as a result of purchases, sales or any other voluntary adjustments to the Group’s interest in ZJ Supor.

There were no minority interests at 31 December 2007.

In December 2006, Groupe SEB bought out the remaining 1.27% minority interests in Brazil-based Arno, raising its interest in the subsidiary to 100%.

NOTE 22 - PROVISIONS

(in € millions)

2008 2007 2 006

Long-term Short-term Long-term Short-term Long-term Short-term

Pension and other post-employment benefi t obligations (Note 23) 72.2 12.3 74.5 9.7 75.7 7.1

Product warranties (Note 22.1) 1.1 38.3 1.0 33.4 0.3 26.9

Claims and litigation and other contingencies (Note 22.2) 13.4 10.6 19.0 8.6 22.9 6.8

Sales returns (Note 22.3) 5.7 5.2 5.1

Restructuring provisions (Note 22.4) 15.6 10.3 14.7 28.9 19.5 55.4

102.3 77.2 109.2 85.8 118.4 101.3

Provisions are classifi ed as short-term or long-term according to whether the obligation is expected to be settled within or beyond one year.

Provision movements (other than provisions for pensions and other post-employment benefi ts) were as follows in 2008:

(in € millions)1 January

2008 Increases Reversals Utilisations Other*31 December

2008

Product warranties (Note 22.1) 34.4 37.3 32.4 0.1 39.4


Sales returns (Note 22.3) 5.2 1.7 0.9 0.6 0.3 5.7

Restructuring provisions (Note 22.4) 43.6 11.0 2.9 24.9 (0.8) 26.0

110.8 58.4 13.8 62.0 1.7 95.1

* Other movements include translation adjustments and the effect of changes in the scope of consolidation.


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2007

Product warranties (Note 22.1) 27.2 33.7 0.4 25.8 (0.3) 34.4

Claims and litigation and other contingencies (Note 22.2) 29.7 5.3 2.7 2.6 (2.1) 27.6

Sales returns (Note 22.3) 5.1 2.4 0.4 1.8 (0.1) 5.2

Restructuring provisions (Note 22.4) 74.9 10.6 2.3 39.7 0.1 43.6

136.9 52.0 5.8 69.9 (2.4) 110.8




2006

Product warranties (Note 22.1) 24.6 17.4 0.7 13.0 (1.1) 27.2


Sales returns (Note 22.3) 2.4 3.7 0.4 2.2 1.6 5.1

Restructuring provisions (Note 22.4) 28.9 62.4 1.0 14.3 (1.1) 74.9

85.5 88.2 4.2 33.2 0.6 136.9


22.1. PRODUCT WARRANTIES

Provisions are recorded for the estimated cost of repairing or replacing products sold under warranty to customers and consumers. The warranty, which is either legal or contractual, is generally for a period of one or two years. Provisions for product recalls are recorded as soon as the recall is decided.

22.2. CLAIMS AND LITIGATION AND OTHER CONTINGENCIES

Certain subsidiaries are involved in claims and litigation with third parties. The corresponding provisions are determined in accordance with the principle described in Note 1.4.

At 31 December 2008, the main provisions were as follows:

(in € millions) 2008 2007 2006

Supplier claims and litigation 1.5 0.5 0.2

Local government claims, litigation and contingencies 8.6 6.6 7.3

Commercial claims, litigation and contingencies 2.3 4.1 5.7

Employee claims, litigation and contingencies 11.3 16.0 16.3

Other claims, litigation and contingencies 0.3 0.4 0.2

Total 24.0 27.6 29.7

In 2004, a provision was set aside to cover the Group’s contribution to the cost of the government-sponsored early-retirement scheme available to workers exposed to asbestos during their working lives. In 2005, the provision was increased to €11.6 million. In 2008, the asbestos levy was abolished

and €8.0 million was reversed from the provision. At 31 December 2008, the provision amounted to €0.8 million, versus €9.4 million at 31 December 2007 and €10.3 million at 31 December 2006.


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22.3. SALES RETURNS

Provisions for sales returns are determined using appropriate historical data for each local market, in order to estimate as accurately as possible the cost of sales returns for the year.

22.4. RESTRUCTURING PROVISIONS

Restructuring provisions break down as follows:

(in € millions) 2008 2007 2006 (a)

Severance costs 17.0 37.7 67.2

Site closure costs 8.9 5.9 7.7

TOTAL 25.9 43.6 74.9

(a) Including a €59.8 million charge relating to the January 2006 restructuring plan (see Note 7.1).

The short-term portion of the 2008 restructuring provision amounted to €10.3 million. The remaining €15.6 million were set aside to be paid out over the next one to fi ve years, mainly for early retirement schemes and for rent on sites no longer being used.

NOTE 23 - PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS

23.1. ASSUMPTIONS

Provisions for pension and other post-employment benefi t obligations, determined as explained in Note 1.4, mainly concern France and Germany. The obligations are estimated by qualifi ed actuaries using a certain number of assumptions. These assumptions are revised once a year.

Discount rates are determined based on the yields of investment grade corporate bonds with maturities that match the remaining life of the obligations at the measurement date.

Assumptions France 2008 Germany 2008

Economic assumptions

Rate of salary increases 3.00% 2.00%

Discount rate 5.60% 6.10%

Expected return on plan assets 4.75%

Average remaining service life of participating employees 8 to 10 years

Demographic assumptions

Retirement age 60 to 65 (a) RRG 2007

Staff turnover 0% to 7% (a)

Mortality tables INSEE TV 2004-2006 HEUBECK 2005 G

(a) Depending on the age of employees and their category (management or other).


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Rate of salary increases 3% to 3.4% 2.5%



Average remaining service life of participating employees 8 to 18 years 8 to 10 years


Retirement age 60 to 65 (a)






Rate of salary increases 3% to 3.4% 0% to 1.8%



Average remaining service life of participating employees 7 to 17 years 8 to 10 years


Retirement age 60 to 65 (a)




23.2. ANALYSIS OF PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS

The total obligation breaks down as follows:

(in € millions)

2008

France Germany Other countries Total

Projected benefi t obligation based on fi nal salaries 67.7 52.5 18.9 139.1

Present value of plan assets (24.4) (2.4) (9.0) (35.8)

DEFICIT 43.3 50.1 9.8 103.2

Unrecognised gains and (losses) (21.2) 3.1 (0.6) (18.7)

Initial benefi t obligation 0.0

Unrecognised past service cost 0.0

Recognised liability 22.1 53.2 9.2 84.4

Recognised asset 0.0

NET 22.1 53.2 9.2 84.4


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(in € millions)

2007




DEFICIT 39.4 55.4 5.3 100.1

Unrecognised gains and (losses) (16.7) (1.1) 2.0 (15.9)

Initial benefi t obligation

Unrecognised past service cost


Recognised asset

NET 22.7 54.3 7.3 84.2

(in € millions)

2006




DEFICIT 28.0 63.1 7.5 98.6

Unrecognised gains and (losses) (8.4) (8.0) 0.6 (15.8)

Initial benefi t obligation

Unrecognised past service cost


Recognised asset

NET 19.6 55.1 8.1 82.8

Obligations for the payment of jubilees, calculated using the same assumptions as for pension obligations, amounted to €5.5 million at 31 December 2008, €5.7 million at 31 December 2007 and €5.1 million at 31 December 2006.

23.3. RECOGNISED COST

The cost recognised in the income statement for pension and other post-employment benefi t plans breaks down as follows:

(in € millions)

2008


Service cost 3.7 0.3 1.2 5.3

Interest cost 3.2 2.8 1.1 7.1

Expected return on plan assets (1.2) (0.5) (1.7)

Recognised (gains) and losses and other 0.9 0.1 1.0

COST FOR THE PERIOD 6.7 3.2 1.9 11.7


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(in € millions)

2007


Service cost 3.1 0.4 0.8 4.3



Recognised (gains) and losses and other 1.5 0.2 1.7


(in € millions)

2006


Service cost 3.4 0.4 0.8 4.6



Recognised (gains) and losses and other (4.8) 0.4 (0.1) (4.5)


In 2006, gains in France corresponded to reversals of provisions for length-of-service awards payable on retirement to employees affected by restructuring plans (see Note 7.1) and who left the Group before retirement age. A provision of substantially the same amount was set aside to cover severance payments to these employees.

23.4. MOVEMENTS IN PROVISIONS

Movements in provisions for pension and other post-employment benefi t obligations break down as follows:

(in € millions) 2008 2007 2006

Net at 1 January 84.2 82.8 88.3

Cost for the period 11.7 10.2 4.4

Contributions paid (13.2) (7.4) (9.7)

Other movements 1.7 (1.4) (0.2)

NET AT 31 DECEMBER 84.4 84.2 82.8

23.5. MOVEMENTS IN PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS

MOVEMENTS IN PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS IN 2008

(in € millions) France Other countries Total

PROJECTED BENEFIT OBLIGATION AT 1 JANUARY 2008 66.8 73.2 140.0

Service cost 3.7 1.6 5.3

Interest cost 3.2 3.9 7.1

Benefi ts paid (6.4) (5.3) (11.7)

Plan amendments 0.0

Changes in assumptions (2.3) (2.3)

Curtailments/settlements 0.0

Actuarial gains and losses and other 2.7 (2.0) 0.7

PROJECTED BENEFIT OBLIGATION AT 31 DECEMBER 2008 67.7 71.4 139.1


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Benefi ts paid (5.8) (5.3) (11.1)

Plan amendments 7.0 7.0

Changes in assumptions 1.1 (0.3) 0.8

Curtailments/settlements (0.4) 0.0 (0.4)

Actuarial gains and losses and other 0.9 (7.8) (6.9)







Benefi ts paid (3.3) (4.6) (7.9)

Plan amendments (0.4) (0.2) (0.6)

Changes in assumptions (1.8) 0.4 (1.4)

Curtailments/settlements (5.4) (5.4)

Actuarial gains and losses and other 0.4 (0.1) 0.3


23.6. ANALYSIS OF PLAN ASSETS

CHANGE IN PLAN ASSETS IN 2008


PLAN ASSETS AT 1 JANUARY 2008 27.3 12.6 39.9

Expected return on plan assets (4.7) 0.5 (4.2)

Contributions paid 6.2 1.6 7.8

Benefi ts paid (4.4) (0.3) (4.7)

Actuarial gains and losses and other (3.0) (3.0)

PLAN ASSETS AT 31 DECEMBER 2008 24.4 11.4 35.8


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Expected return on plan assets 1.3 0.4 1.7


Benefi ts paid (5.2) (1.0) (6.2)

Actuarial gains and losses and other (0.4) 0.3 (0.1)





Expected return on plan assets 1.2 0.3 1.5


Benefi ts paid (2.7) (0.2) (2.9)

Actuarial gains and losses and other (0.2) 0.3 0.1


Plan assets in France are managed by an insurance company and are invested as follows:

approximately 15% in the general assets of the insurance company, •

primarily composed of government bonds, corporate bonds mostly rated AAA or AA, shares in international blue-chip companies (managed directly) and high-yield offi ce property;

approximately 50% in corporate bond funds; •

the balance in equity funds. •

The actual return on plan assets for 2009 should be in line with the expected rate of 4.75%. Actuarial gains and losses generated in 2009 are not expected to be material.

Plan assets in other countries primarily comprise funds invested with an insurer amounting to €7.8 million, relating to the obligations of Groupe SEB Nederland.

23.7. EARLY RETIREMENT SCHEMES

As part of the employee support measures implemented in connection with the industrial reorganisation carried out in France (see Note 7), in mid-2006 Groupe SEB offered eligible employees the possibility of early retirement. The programme was in addition to the early retirement scheme described below for workers exposed to asbestos at the Fresnay site, which formed part of the assets acquired from Moulinex SA in 2001 and is in the process of being closed. A total of 321 employees had joined the “asbestos scheme” as of 31 December 2008.

A provision was recorded at 31 December 2006 to cover the Group’s obligations under the programme, discounted at a rate of 3.75% as the amounts will be paid out in the medium term. At 31 December 2008, the provision amounted to €14.5 million, versus €17.4 million at 31 December 2007.

NOTE 24 - TRADE AND OTHER PAYABLES


TRADE PAYABLES 0.0 333.4 342.7

Accrued taxes and employee benefi ts expense 177.8 180.1 160.2

Due to suppliers of fi xed assets 10.5 9.8 11.8

Other payables 6.8 2.1 3.0

OTHER PAYABLES 195.1 192.0 175.0


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At 31 December 2008, trade and other payables broke down as follows:

Current Non-current Total

TRADE PAYABLES 0.0 0.0 0.0

Accrued taxes and employee benefi ts expense 141.4 36.4 177.8

Due to suppliers of fi xed assets 10.5 10.5

Other payables 6.9 6.9

OTHER PAYABLES 158.8 36.4 195.2

Non-current accrued taxes and employee benefi ts expense correspond mainly to employee time savings accounts in France.

NOTE 25 - BORROWINGS

25.1. TOTAL BORROWINGS


Bank borrowings 193.0 46.1 59.9

Finance lease liabilities 2.0 2.1 2.0

Other debt 1.9 1.1 1.3

Non-discretionary profi t sharing liability 16.6 16.6 17.0

LONG-TERM BORROWINGS 213.5 65.9 80.2

Bank borrowings 246.0 305.1 120.0

Commercial paper 394.0 402.0 260.0

Current portion of long-term borrowings 21.5 22.2 16.7

SHORT-TERM BORROWINGS 661.5 729.3 396.7

TOTAL BORROWINGS 875.0 795.2 476.9

At 31 December 2008, the Group’s borrowings were mainly comprised of short-term borrowings.

Bank borrowings consist of:

three loans taken out in 2005 with Brazilian banks in connection with •

the purchase of Panex, representing an initial amount of BRL 45 million (€14 million at the historical exchange rate), of which some €5.1 million was outstanding at 31 December 2008;

a €40 million credit line set up in France, of which €30 million due beyond •

one year;

a medium-term credit facility for €50 million available for short-term •

drawdowns;

a Schuldschein loan for €113.5 million due in 2013; •

a Schuldschein loan for €47.5 million due in 2015. •

At 31 December 2008, the weighted average interest rate on long-term borrowings denominated in euros was 5.23%, compared with 4.36% at 31 December 2007.

The Group’s main source of fi nancing is its €600 million commercial paper programme, which is rated A2 by Standard & Poor’s. Outstanding commercial paper under this programme totalled €394 million at the year-end.


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CHARACTERISTICS OF BORROWINGS (NOMINAL AMOUNTS)


Issuing currency Due

Outstanding balance

Due

Original interest rate

Rate after hedging

in less than 1 year

in 1 to 5 years

in more than 5 years

Brazilian loans BRL 2010 5.1 3.5 1.6 Floating CDI (a)

French loan EUR 2012 40.0 10.0 30.0Floating Euribor Fixed

Schuldschein loan EUR 2013 55.0 55.0 Fixed

Schuldschein loan EUR 2013 58.5 58.5Floating Euribor

Schuldschein loan EUR 2015 30.0 30.0 Fixed

Schuldschein loan EUR 2015 17.5 17.5Floating Euribor

French loan EUR 2009 50.0 50.0Floating Euribor

Commercial paper EUR 2009 394.0 394.0 Floating Eonia Floating (b)

Other bank borrowings, incl. overdrafts - 2009 202.7 200.4 2.0 0.3 Floating

Finance lease liabilities - - 3.0 1.0 2.0

Non-discretionary profi t sharing liability EUR - 19.2 2.6 16.6

TOTAL 875.0 661.5 165.7 47.8

(a) CDI = Brazilian weighted average overnight interbank rate.(b) A portion of issued commercial paper is hedged by fl oating-rate cross-currency swaps in order to cover subsidiaries’ fi nancing needs in their functional currency. Consequently,

interest rates on this fi nancing are those applicable to borrowings in the main currencies concerned – US dollars, pounds sterling and Hungarian forints (see Note 27.2).

All commercial paper is repayable in less than three months.

LOAN MATURITIES (UNDISCOUNTED NOMINAL AMOUNTS, INCLUDING ACCRUED INTEREST)


Issuing currency Due

Scheduled repayments

Due

in less than 1 year

in 1 to 5 years

in more than 5 years

Brazilian loans BRL 2010 5.6 4.0 1.6

French loan EUR 2012 42.6 11.3 31.3

Schuldschein loan EUR 2013 70.7 3.4 67.3

Schuldschein loan EUR 2013 74.7 3.5 71.2

Schuldschein loan EUR 2015 42.6 1.9 9.6 31.1

Schuldschein loan EUR 2015 24.8 1.1 5.5 18.2

French loan EUR 2009 50.1 50.1

TOTAL 311.1 75.3 186.5 49.3


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CONFIRMED CREDIT FACILITIES

The Group also has unused, confi rmed credit facilities that break down as follows by maturity:

At 31 December (in € millions)Confi rmed credit

facilities 2008*

2008 486.1

2009 486.1

2010 486.1

2011 486.1

2012 -

2013 -

* Unused confi rmed lines of credit at 31 December 2008, of which:- a syndicated credit facility for €456.1 million, expiring in June 2011;- a bank line of credit set up in 2007 for €30 million, expiring in December 2011.

The syndicated credit facility includes an option to extend the expiry date by two years until 2013.

None of these credit lines include any acceleration clauses.

25.2. NET DEBT

(in € millions) 2008 2007 2006

Long-term borrowings 213.5 65.9 80.2

Short-term borrowings 661.4 729.3 396.7

TOTAL BORROWINGS 874.9 795.2 476.9

Cash and cash equivalents, net (224.6) (134.0) (54.1)

Derivative instruments, net (1.3) (3.5) (1.0)

NET DEBT 649.0 657.7 421.8

Net debt corresponds to total long and short-term borrowings less cash and cash equivalents and derivative instruments used for Group fi nancing purposes that are readily convertible into cash.

At 31 December 2008, no borrowings were subject to acceleration clauses. Only two medium-long-term loans in France were subject to debt covenants that could have an impact on the interest rate of the debt. Interest paid in 2008 was determined in the highest tranche provided for in the loan agreement. Shifting to a different tranche would enable the Group to reduce its interest payments. The amount of the saving would be less than €0.1 million.


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NOTE 26 - FAIR VALUE OF FINANCIAL INSTRUMENTS

26.1. FINANCIAL INSTRUMENTS

(in € millions)

2008 Financial instruments by category

Carrying amount Fair value

At fair value through

profi tAvailable

for saleLoans and

receivablesHeld to

maturityDerivative

instruments

ASSETS

Investments in non-consolidated companies 0.7 0.7 0.7

Other non-current fi nancial assets 9.9 9.9 9.9

Other non-current assets 3.2 3.2 3.2

Trade receivables 645.6 645.6 645.6

Other current receivables, excl. prepaid expenses 46.0 46.0 46.0

Derivative instruments 12.0 12.0 12.0

Cash and cash equivalents 224.6 224.6 224.6

TOTAL FINANCIAL ASSETS 942.0 942.0 224.6 0.7 704.7 0.0 12.0

LIABILITIES


Other non-current liabilities 36.4 36.4 36.4

Trade payables 366.3 366.3 366.3

Other current liabilities 158.8 158.8 158.8



TOTAL FINANCIAL LIABILITIES 1,487.7 1,486.8 0.0 0.0 0.0 1,435.6 51.2


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(in € millions)




profi tAvailable

for saleLoans and

receivablesHeld to

maturityDerivative

instruments

ASSETS









LIABILITIES







TOTAL FINANCIAL LIABILITIES 1,330.9 1,330.5 0.0 0.0 0.0 1,320.1 10.4

(in € millions)




profi tAvailable

for saleLoans and

receivablesHeld to

maturityDerivative

instruments

ASSETS









LIABILITIES







TOTAL FINANCIAL LIABILITIES 995.5 995.6 0.0 0.0 0.0 994.7 0.9


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The fair value of trade and other receivables (classifi ed as held-to-maturity investments) is equivalent to their carrying amount, in view of their short maturities.

Non-current fi nancial assets consist mainly of investments in non-consolidated companies, certain receivables related to those investments and operating receivables due beyond one year.

In 2006, non-current fi nancial assets included €25.7 million placed in escrow at the request of Chinese market authorities in connection with the Group’s planned acquisition of a majority stake in Supor (See Note 3.1.2).

Financial assets that are not quoted in an active market are recognised in the balance sheet at cost, which is representative of their fair value.

Borrowings that are not quoted in an active market are measured by the discounted cash fl ows method, applied separately to each individual facility, based on market rates observed at the period-end for similar facilities and the average spread obtained by the Group for its own issues.

Other fi nancial liabilities consist mainly of accrued taxes and employee benefi ts expense, which are due within one year.

26.2. DERIVATIVE INSTRUMENTS

The fair value of derivative instruments is as follows:

(in € millions)

2008 2007

Assets Liabilities Assets Liabilities

Nominal amount Fair value




FAIR VALUE HEDGES

Forward sales of foreign currencies 71.5 5.2 14.2 (0.2) 20.8 0.3 12.7 (0.1)

Forward purchases of foreign currencies 29.3 0.3 25.0 (1.8) 13.6 -

TOTAL

SUPERHEDGES AND TRADING TRANSACTIONS 5.5 (2.0) 0.3 (0.1)

Currency swaps (foreign currency borrower)

USD 83.1 5.3 145.5 (3.6) 156.8 2.4 67.7 (0.2)

HUF 12.0 - 10.2

GBP 14.6 (0.3) 43.2 0.3

Interest rate derivatives

Commodity derivatives

TOTAL 5.3 (3.9) 2.7 (0.2)

CASH FLOW HEDGES

Floating/fi xed rate swaps 40.0 (0.4) 50.0 1.1

Zero-premium collars (aluminium) 93.7 (39.0) 67.6 (8.1)

Zero-premium collars (nickel) 8.6 (3.2) 3.4 (1.5)

Zero-premium collars (copper) 4.7 (2.7) 3.8 (0.5)

TOTAL 0.0 (45.3) 1.1 (10.1)

TOTAL DERIVATIVE INSTRUMENTS 10.8 (51.2) 4.1 (10.4)

NET IMPACT ON EQUITY (INCLUDING FAIR VALUE ADJUSTMENTS RECOGNISED IN PROFIT) (40.6) (6.3)


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The only derivatives with maturities beyond one year are cash fl ow hedges. The non-current portion of the fair value of these hedges is as follows:

At 31 December 2008Expiring in

less than 1 yearExpiring in

1 to 5 yearsExpiring in

more than 5 years Total

Floating/fi xed rate swaps (0.1) (0.3) 0 (0.4)

Zero-premium collars (aluminium) (20.1) (18.9) 0 (39.0)

Zero-premium collars (nickel) (2.1) (1.1) 0 (3.2)

Zero-premium collars (copper) (1.6) (1.1) 0 (2.7)

TOTAL (23.9) (21.4) 0 (45.3)

The fair value of derivative instruments is determined by the discounted cash fl ows method using forward exchange rates, market interest rates and aluminium prices at 31 December 2008.

NOTE 27 - MARKET RISK MANAGEMENT

27.1. RISK MANAGEMENT

Risks are managed by Corporate Finance, based on financial market conditions and in accordance with procedures established by the Group.

Hedging transactions are carried out in the financial markets with a limited number of high-quality partners in order to avoid counterparty risk. Subsidiaries’ risks are hedged at corporate level when this is allowed under the laws and regulations of the country concerned and when the hedges can be arranged on the fi nancial markets.

Subsidiaries that are prevented from hedging financial risks through Corporate Finance due to local laws and regulations enter into hedging transactions directly with local banks in compliance with Group procedures and policies.

27.2. MARKET RISKS

27.2.1 Currency risks

The majority of Group sales are billed in currencies other than the euro, mainly the US dollar, pound sterling, Brazilian real and Japanese yen. Most billing currencies correspond to the functional currencies of the subsidiaries concerned and do not give rise to any transactional currency risk at the local level.

Similarly, goods purchased for resale billed in US dollars are bought from Asian suppliers by SEB Asia whose functional currency is also the US dollar.

The main sources of transactional currency risks therefore arise from:

intra-group billings between two Group companies with different functional •

currencies, as follows:

exports by manufacturing subsidiaries in the euro zone billed in the •

local currency of the marketing subsidiaries,

imports of goods from SEB Asia billed in US dollars by marketing •

subsidiaries whose functional currency is not the US dollar;

purchases of industrial components from external suppliers by the •

manufacturing subsidiaries, that are billed in a currency other than their functional currency (for example, components purchases by French subsidiaries that are billed in US dollars).

These risks are managed at Group level by SEB S.A., which acts as the subsidiaries’ sole counterparty except where this is not possible due to local regulations. The resulting balance sheet currency positions in the main currencies are partly hedged by means of forward sales and purchases of foreign currency against the euro. Part of SEB Asia’s US dollar billings to subsidiaries is hedged. In 2008, 2007 and 2006 the Group was a net buyer of US dollars.

The Group’s overall currency risk management policy sets very strict rules for the hedging of currency risks associated with highly probable future transactions.


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ANALYSIS OF CURRENCY RISKS ON INTER-COMPANY TRANSACTIONS

The Group’s net exposure to transactional currency risks primarily concerns the following currencies (excluding the functional currencies of Group companies):

At 31 December 2008 (in € millions) USD GBP HUF JPY Other

Total assets 5 14 15 51

Total liabilities (34) (1)

Future transactions (29) 4 2 0 6

NET POSITION BEFORE HEDGING (63) 9 16 15 56

Forward purchases of foreign currencies 53

Forward sales of foreign currencies (8) (15) 0 (12)

NET POSITION AFTER HEDGING (10) 1 1 15 44


Total assets 48 6 16 7 30

Total liabilities (63) (1)




Forward sales of foreign currencies (7) (14) (12) (17)

NET POSITION AFTER HEDGING (2) 4 3 2 16


Total assets 34 6 12 12 20

Total liabilities (61)




Forward sales of foreign currencies (8) (11) (15) (15)

NET POSITION AFTER HEDGING 0 3 2 1 10

At 31 December 2008, the euro was trading at USD 1.3917, GBP 0.9525, HUF 266.7 and JPY 126.14.

The appreciation of these currencies, assuming all other variables remained the same, would have a positive impact on profi t.

At 31 December 2008, the sensitivity analysis of the net position after hedging was as follows:

(in € millions) USD GBP HUF JPY Other

Hypothetical currency appreciation 1% 1% 1% 1% 1%

IMPACT ON PROFIT (0.1) 0.0 0.0 0.0 0.0

The sensitivity analysis was the same at 31 December 2007.


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CURRENCY RISKS ON FINANCING

SEB S.A. is the main provider of fi nancing for its subsidiaries. Current account advances are made in the subsidiaries’ functional currency. As SEB S.A. raises long-term fi nancing in euros, it is exposed to currency risks on these advances. To hedge these risks, the Company borrows or lends funds in the subsidiary’s currency, according to whether the current account

balance is a debit or a credit, or uses currency swaps to refi nance its debt in the subsidiary’s local currency. Currency risks on fi nancing are therefore systematically hedged.

The Group does not however apply hedge accounting to these transactions.

At 31 December 2008 (in € millions) USD GBP Other

Total assets 340 15 53

Total liabilities 138 2

NET POSITION BEFORE HEDGING 202 15 51

Hedging positions (209) (15) (12)

NET POSITION AFTER HEDGING (7) 0 39






NET POSITION AFTER HEDGING (2) (3) 34






NET POSITION AFTER HEDGING (2) 0 25

The appreciation or depreciation of these currencies, assuming all other variables remained the same, would have an impact on profi t.

At 31 December 2008, the sensitivity analysis of the net position after hedging was as follows:

(in € millions) USD GBP Other

Hypothetical currency appreciation 1% 1% 1%

IMPACT ON PROFIT (0.1) 0.0 0.0

The sensitivity analysis was the same at 31 December 2007.

CURRENCY RISKS ON NET INVESTMENTS IN FOREIGN OPERATIONS

Groupe SEB is also exposed to currency risks on its net investment in foreign operations, corresponding to the impact of changes in exchange rates for the subsidiaries’ functional currencies on SEB S.A.’s share in their net assets. These risks are not hedged.


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27.2.2 Interest rate risks

Group policy consists of hedging interest rate risks based on trends in market interest rates and changes in the Group’s overall debt structure. These risks are not hedged systematically.

The following table analyses fi nancial assets and liabilities at 31 December 2008, based on interest rate re-set dates:

At 31 December 2008 (in € millions) Overnight to 1 year 1 to 5 years More than 5 years

Floating rate Fixed rate Fixed rate Fixed rate

Total assets 224.6

Total liabilities (789.9) (55.0) (30.0)

NET POSITION BEFORE HEDGING (565.3) 0.0 (55.0) (30.0)

Hedging positions 40.0 (10.0) (30.0)

NET POSITION AFTER HEDGING (525.3) (10.0) (85.0) (30.0)

Interest payable between January 2007 and March 2012 is hedged by a fl oating/fi xed rate swap. This swap qualifi es for hedge accounting under IAS 39.

AT 31 DECEMBER 2008

(in € millions) Expiring within one year 2008 Expiring in 1 to 5 years Expiring beyond 5 years

Floating/fi xed rate swap 10 30

Based on net debt at 31 December 2008, assuming debt remains constant throughout the year and is denominated in the same currencies as at that date, a 1-point increase in interest rates would lead to an estimated €6.6 million increase in interest expense.

The impact of the interest rate swap on equity at 31 December 2008 would be as follows:

(in € millions) 31 December 2008

FAIR VALUE AT 1 JANUARY 1.1

Change in fair value (0.9)

Amount reclassifi ed into profi t (0.6)

FAIR VALUE AT 31 DECEMBER (0.4)

The ineffective portion recognised in profi t is not material.

27.2.3. Commodity risks

Commodity risks arising from changes in the prices of certain raw materials used by the Group – mainly aluminium, copper and nickel used to produce stainless steel – are hedged by derivative instruments. The Group anticipates its needs for the coming year and hedges them on a conservative basis, covering 80% of its estimated purchases for Y+1, 50% for Y+2 and 25% for Y+3. At 31 December 2008, 49,699 tonnes of aluminium purchases, 910 tonnes of copper purchases and 670 tonnes of nickel purchases were hedged.

Prices are fi xed in advance using zero-premium collars and average monthly price options.

These hedges of raw material purchases are qualifi ed as cash fl ow hedges under IAS 39 when the criteria listed in Note 1.4.4 are met.

At 31 December 2008, remeasurement of commodity hedges at fair value led to the recognition in equity of an unrealised loss of €44.9 million.

At 31 December 2007, remeasurement of commodity hedges at fair value led to the recognition in equity of an unrealised loss of €12.3 million.

At 31 December 2006, remeasurement of commodity hedges at fair value led to an unrealised gain of €1.2 million.

Derivatives that expired in 2008 led to a loss of €6.0 million. Gains on hedged metal purchases amounted to €4.3 million in 2008.

The ineffective portion of commodity hedges recorded under “Other fi nancial income and expense” represented a €1.0 million loss in 2008 compared to a €2.7 million gain in 2007 and a €0.1 million gain in 2006.

SENSITIVITY ANALYSIS

A 10% increase in metal prices at 31 December 2008 would have a €6.2 million positive impact on equity, while a 10% decrease would have €6.2 million negative impact, assuming all other variables remained constant.

A 10% increase or decrease in metal prices versus their average prices in 2008 would have a €1.5 million positive or negative impact on operating margin.


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27.2.4. Equity risk and treasury stock

It is not Group policy to hold signifi cant portfolios of equities or equity funds.

The Group does, however, hold a portfolio of SEB shares, purchased in connection with:

a liquidity contract set up in order to ensure that there is a suffi ciently liquid •

market for SEB shares and to stabilise the share price, and;

the share buyback programme, mainly for allocation on exercise of •

employee stock options.

Treasury stock is deducted directly from equity. Profi ts and losses from sales of treasury stock are also recognised in equity.

Based on the closing share price on 31 December 2008 (€21.46), the fair value of shares held in treasury at that date stood at €93.9 million. A 10% increase or decrease in the share price would therefore lead to a €9.4 million change in the fair value of treasury stock.

ZJ Supor, which is 51.31%-owned by Groupe SEB, is listed on the Shenzen stock exchange. At 31 December 2008, ZJ Supor’s share price was RMB 12.28, valuing Groupe SEB’s investment at €294.7 million. The change in the Supor share price had no impact on Groupe SEB’s consolidated fi nancial statements, as ZJ Supor is fully consolidated. Similarly, the change in the share price had no impact on the company accounts of SEB Internationale because its interest in ZJ Supor is classifi ed as a long-term investment and is not marked to market.

27.3. LIQUIDITY RISK

To manage the liquidity risk that may arise due to fi nancial liabilities reaching maturity or needing to be settled early, the Group implements a fi nancing strategy based on:

maintaining cash and cash equivalents at a certain level at all times •

(€224.6 million at 31 December 2008);

• a €600 million commercial paper programme, with €394 million outstanding at 31 December 2008;

other debt facilities, including: •

a €50 million loan repayable in instalments of €10 million per year •

through 2012,

a €456.1 million syndicated credit facility expiring in 2011, which had •

not been drawn down at 31 December 2008,

a €30 million bank line of credit expiring in 2011, that had not been •

drawn down at 31 December 2008,

a Schuldschein loan, repayable in two instalments in 2013 and 2015 for •

€113.5 million and €47.5 million, respectively.

Cash and cash equivalents and debt are discussed in Note 19 and Note 25, respectively.

With currency swaps, the notional amounts are exchanged at maturity, while with interest rate swaps, only the interest differential is paid or received.

27.4. CREDIT RISK

At 31 December 2008, trade receivables broke down as follows based on their age:

(in € millions) Current

Past due

Total0-90 days 91-180 days Over 181 days

Net trade receivables 535.8 103.0 7.1 (0.3) 645.6

To avoid default risks, Groupe SEB sets individual credit limits that are regularly updated based on the customer’s financial position and payment history.

The Group’s main customers are well-known international retailers. In 2008, no single customer accounted for more than 7% of total revenue.

For more than four years, the risk of losses has been covered by credit insurance taken out with Coface. At 31 December 2008, 69% of net trade receivables were covered by insurance that would apply in the event of non-recovery.


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NOTE 28 - ENVIRONMENTAL EXPENDITURE

Environmental expenditure amounted to €4.3 million in 2008, compared with €4.4 million in 2007 and €5.2 million in 2006.

These amounts include routine environmental management system costs, covering areas such as water and waste management. They do not include

taxes on packaging or the cost of disposing of waste electrical and electronic equipment.

The main costs are presented below, including the breakdown between amounts recognised as expenses and as capital expenditure.

(in € millions)

2008 2007 2006

ExpensesCapital

expenditure Total ExpensesCapital

expenditure Total ExpensesCapital

expenditure Total

Ambient air quality 0.3 0.2 0.5 0.3 0.2 0.5 0.3 0.8 1.1

Waste water management and water saving systems 0.7 0.2 0.9 0.8 0.4 1.2 0.8 0.2 1.0

Waste management 1.7 0.1 1.8 1.5 0.1 1.6 1.7 0.1 1.8

Soil protection and decontamination 0.1 0.2 0.3 0.1 0.1 0.2 0.2 0.1 0.3

Other environmental protection measures 0.7 0.1 0.8 0.6 0.3 0.9 0.9 0.1 1.0

3.5 0.8 4.3 3.3 1.1 4.4 3.9 1.3 5.2

There were no provisions for environmental risks at 31 December 2008 or at 31 December 2007. Such provisions amounted to €0.1 million at 31 December 2006.

NOTE 29 - OFF-BALANCE SHEET COMMITMENTS

29.1. SPECIFIC COMMITMENTS

Specifi c commitments are discussed in the following notes:

Note 23 – Pension and other post-employment benefi t obligations; •

Note 25 – Borrowings; •

Note 26 — Fair value of fi nancial instruments. •


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29.2. COMMITMENTS ARISING IN THE ORDINARY COURSE OF BUSINESS

(in € millions) 2008 2007 2006

Firm orders for property, plant and equipment 14.6 10.2 20.1

Forward purchases of raw materials, components and bought-in products 1.8 7.3 18.6

Guarantees and bonds given 4.9 6.2 9.4

Commitments under non-cancellable operating leases 67.7 60.1 40.6

Miscellaneous fi nancial commitments 11.3 5.9 0.7

TOTAL COMMITMENTS GIVEN 100.2 89.7 89.4

Firm orders for property, plant and equipment 14.6 10.2 20.1

Forward purchases of raw materials, components and bought-in products 1.8 7.3 18.6

Guarantees received from customers 424.7 468.8 437.3

Commitments under non-cancellable operating leases 67.7 60.1 40.6

Miscellaneous fi nancial commitments 8.9 5.9 0.7

TOTAL COMMITMENTS RECEIVED 517.6 552.3 517.3

It is not the Group’s policy to sell receivables to factoring companies or banks.

The French companies in the Group are committed to funding Fondation Groupe SEB over several years. At 31 December 2008, their remaining commitment amounted to €1.8 million.

NOTE 30 - CONTINGENT ASSETS AND LIABILITIES

30.1. CONTINGENT ASSETS

Pentalpha dispute

In April 2006, a jury in New York returned a verdict in favour of Groupe SEB in relation to a patent infringement suit fi led against Pentalpha Enterprises Ltd. and Global-Tech Appliances, Inc., concerning a deep fryer marketed in the United States. The jury found that SEB was entitled to a reasonable royalty payment in an amount of $4.7 million. However, the outcome of the case is still uncertain as SEB has moved to enhance the judgement with the addition of damages and prejudgement interest and the District Court has not yet entered fi nal judgement based upon the jury’s verdict. No date has been set for such fi nal judgement by the District Court.

Sale of Plant 3 in Brazil

In August 2008, Groupe SEB do Brasil signed an agreement to sell Plant 3 in Sao Paulo, Brazil. The sale will be deemed complete once a decontamination certifi cate is presented to the buyer. Decontamination of the site has begun and should be completed during the second half of 2009. The agreed sale price is €11.7 million. The site’s carrying amount was €1.1 million at 31 December 2008. The transaction was not recognised in the 2008 fi nancial statements, as title had not yet been transferred.

30.2. CONTINGENT LIABILITIES

Recycling end-of-life products

European directive 2002/96/EC on waste electrical and electronic equipment adopted in February 2003 requires Member States to recycle end-of-life household appliances. This directive was transposed into the national laws of EU member countries during 2006.

The directive states that household appliance manufacturers and importers are responsible for fi nancing the cost of collecting, sorting and reusing/recycling end-of-life electrical and electronic equipment. Concerning products sold to private households before the directive was transposed into national legislation (historical waste), the directive requires that all producers contribute to fi nancing the costs in proportion to their respective share of the equipment put on the market during a “reference period”, generally the year the waste was collected and recycled. This system is known as “one for one” (one product recycled for every one sold) or “pay as you go”.

IFRIC interpretation no. 6 adopted by the European Union in a regulation published in the Offi cial Journal of the European Communities on 27 January 2006, which was early adopted by Groupe SEB in 2005, states that no provision is required for historical waste, other than in respect of recycling costs incurred during the reference period. As these costs are or will be offset


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in most countries by an environmental charge payable by the consumer until 2011, the net cost of recycling historical waste will not have a material impact on the Group’s income statement.

Concerning the treatment of products put on the market after the date of transposition (13 August 2005 in the case of France), the directive states that producers are individually responsible for guaranteeing fi nancing for the recovery and recycling of the related waste.

To meet these obligations, Groupe SEB has joined collective pay-as-you-go schemes similar to those in place for fi nancing historical waste. These schemes are managed by coordinating organisations, such as Eco-Systèmes SAS in France, in which Groupe SEB plays an active role.

The fi nancial guarantees generally take the form of advances to these organisations, based on the expected costs. While joining these schemes does not exempt Groupe SEB from its individual liability, no provision (within the meaning of IAS 37) is recognised as new products are brought to market, because a producer can withdraw from the market concerned without having to individually fulfi l its guarantee obligations, leaving the remaining producers to jointly cover the costs of recycling. For this reason, provisions are recognised not when a product is introduced but when it has been on the market during the period of reference. As in 2007, the provisions recorded

in 2008 only covered the contributions called by the above organisations, which can adjust contribution amounts in later periods based on actual recycling costs.

Costs of recycling “new waste” are expected to rise in coming years with the probable increase in return rates and gradual introduction of recycling schemes. These costs will also refl ect average product life cycles, changes in sorted collection logistics costs and technological improvements related to product design and recycling techniques.

Statutory employee training rights

Employees of Groupe SEB in France with permanent contracts are entitled to 20 hours’ training per year, which may be carried forward for up to six years. If all or part of this entitlement is not used within six years, it is capped at 120 hours. The costs of supplying training as a result of this entitlement and of the training allowances paid to employees who follow courses outside working hours are covered by the employer. As the decision to incur these costs is made by Group management and they relate to employee services to be received in future periods, they are expensed as incurred. At 31 December 2008 the total amount of unused training hours accumulated by Groupe SEB employees stood at 552,678 versus 459,779 at 31 December 2007.

NOTE 31 - RELATED PARTY TRANSACTIONS

31.1. TRANSACTIONS WITH ASSOCIATES AND NON-CONSOLIDATED COMPANIES

The consolidated fi nancial statements include transactions carried out in the normal course of business with associates and non-consolidated companies.

All of these transactions are carried out on arm’s length terms.

(in € millions) 2008 2007 2006

Revenue 10.9 6.7 2.2

Other income 2.2

Purchases 11.5



Trade payables 2.5

In 2007, purchases and trade payables corresponded to transactions with Supor as from the acquisition date.


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31.2. MANAGEMENT REMUNERATION AND BENEFITS

Details of members of the Board of Directors and the Executive Committee are provided in the Corporate Governance section of this document. The following table provides an analysis of the remuneration and benefi ts paid to the members of the Board of Directors and the Executive Committee in 2008, 2007 and 2006:

(in € millions) 2008 2007 2006

SHORT-TERM BENEFITS

Fixed remuneration 2.4 2.3 2.1

Variable remuneration 2.5 1.8 1.2

Directors’ fees 0.4 0.3 0.3

OTHER BENEFITS

Post-employment benefi ts 2.0 1.3 0.8

Share-based payments (stock options) 1.8 2.0 1.3

TOTAL 9.1 7.7 5.7

NOTE 32 - SUBSEQUENT EVENTS

Reorganisation of manufacturing operations

On 11 February 2009, the Group announced a plan to reorganise its manufacturing operations at the Pont-Evêque site in France and the Erbach site in Germany.

For several years, the international steam iron market has been undergoing structural changes that have eroded average prices. These changes have particularly affected the entry-level segment, which mainly includes products manufactured in China. The Group has seen its market position weaken and is obliged to improve the competitiveness of its Pont-Evêque and Erbach manufacturing sites in order to restore sales volumes.

A plan will be implemented to cut operating costs and improve responsiveness to seasonal demand.

Employee numbers will have to be scaled back at the Pont-Evêque site, where the Group has concentrated its core competencies in steam irons. The reorganisation plan will involve the elimination of 45 assembly line jobs and 50 other production-related jobs in the linen care business at Pont-Evêque, which employs a total of 1,020 people, but no redundancies are planned. The affected employees will be provided assistance, mainly in the form of internal transfer, retraining and early-retirement plans currently being negotiated with employee representatives.

In response to declining volumes and productivity, operations at the Erbach site in Germany will be refocused on manufacturing mid-range and high-end irons. As part of this adjustment, 63 assembly line jobs and 56 other production-related jobs will be eliminated at the plant, which employs a total of 290 people. Groupe SEB will do everything in its power to enable each affected employee to fi nd alternative employment or other solutions. The plan and employees’ severance packages will be negotiated with employee representatives.

As of the date when the fi nancial statements were drawn up, the costs of the reorganisation plan could not be reliably estimated as the terms and conditions of employee departures had not yet been negotiated with the employee representative bodies. No restructuring provisions were set aside at 31 December 2008, as the plan was not announced until 2009.

Shares cancelled during the period

At its meeting of 27 February 2009, the Board of Directors of SEB S.A. decided to cancel 1,000,000 treasury shares as of 30 March 2009, thereby reducing the number of shares outstanding to 49,912,138.


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NOTE 33 - LIST OF CONSOLIDATED COMPANIES

(showing the % interest held by the Group)

33.1. FULLY CONSOLIDATED COMPANIES

Company Core business (b) Headquarters Siren no. % interest

FRANCE

SEB S.A. (a) Parent company France 300,349,636

Calor SAS (a) * France 956,512,495 100

SAS SEB (a) * France 302,412,226 100

Tefal SAS (a) * France 301,520,920 100

Rowenta France SAS (a) * France 301,859,880 100

Groupe SEB Moulinex SAS (a) * France 407,982,214 100

SIS SAS (a) *** France 399,014,216 100

SEB Développement SAS (a) *** France 16,950,842 100

Groupe SEB France SAS (a) ** France 440,410,637 100

SEB Internationale SAS (a) Holding company France 301,189,718 100

Groupe SEB Export (a) ** France 421,266,271 100

OTHER EU COUNTRIES

Rowenta Werke GmbH * Germany 100

Krups GmbH ** Germany 100

Groupe SEB Deutschland GmbH ** Germany 100

Rowenta Deutschland GmbH Holding company Germany 100

SEB Osterreich GmbH ** Austria 100

Groupe SEB Belgium SA NV ** Belgium 100

Groupe SEB Nordik AS ** Denmark 100

Groupe SEB Iberica SA ** Spain 99.8

Groupe SEB UK Ltd. ** United Kingdom 100

Tefal UK Dormant United Kingdom 100

Groupe SEB Hellados S.A. ** Greece 100

Groupe SEB Italia SpA ** Italy 100

Lagostina SpA * Italy 100

Casa Lagostina s.r.l. ** Italy 100

Groupe SEB Nederland BV ** Netherlands 100

Rowenta Invest BV Holding company Netherlands 100

Groupe SEB Portugal Ltd. ** Portugal 99.9

AMERICAS

Groupe SEB Canada Inc. ** Canada 100

Groupe SEB USA ** United States 100

All Clad USA, Inc. Delaware Holding company United States 100

All Clad Metal-Crafters LLC * United States 100

Clad Holdings Corp. Delaware *** United States 100

Groupe SEB Holdings USA Holding company United States 100

Groupe SEB Argentina SA ** Argentina 100

Grupo SEB do Brasil * Brazil 100


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Groupe SEB Chile Ltda. ** Chile 100

Groupe SEB Colombia SA * Colombia 100

G.S.E.B. Mexicana S.A. de CV ** Mexico 100

Vistar S.A. de CV * Mexico 100

Groupe SEB Servicios Mexico *** Mexico 100

Groupe SEB Venezuela SA ** Venezuela 100

OTHER COUNTRIES

Groupe SEB Schweiz GmbH ** Switzerland 100

Groupe SEB Australia Ltd. ** Australia 100

SSEAC Co. Ltd. * China 100

SEB Trading Co. Ltd. ** China 100

Groupe SEB Korea ** South Korea 100

SEB Asia Ltd. **/*** Hong Kong 100

Groupe SEB Thailand ** Thailand 100

Groupe SEB Singapore Pty Ltd ** Singapore 100

Groupe SEB Malaysia SDN. BHD ** Malaysia 100

Groupe SEB Central Europe ** Hungary 100

Groupe SEB Japan Co. Ltd. ** Japan 100

Groupe SEB Polska Zoo ** Poland 100

Groupe SEB CR s.r.o/Groupe SEB Slovensko s.r.o **Czech Republic/

Slovakia 100

Groupe SEB Romania ** Romania 100

Groupe SEB Baltic ** Lithuania 100

Grain Harvest Development Ltd Holding company Hong Kong 100

Groupe SEB d.o.o. ** Slovenia 100

Groupe SEB Bulgaria EOOD ** Bulgaria 100

Groupe SEB Istanbul A.S. ** Turkey 100

Groupe SEB Ukraine ** Ukraine 100

Groupe SEB Vostok * Russia 100

ZJ Supor Zehjiang Supor Co., Ltd Holding company China 51.31

DG Supor Dongguan Supor Electrical Appliances * China 65.92

SX Supor Shaoxing Supor Domestic Appliance Co., Ltd * China 51.31

Vietnam Supor Supor (Vietnam) Co., Ltd ** Vietnam 51.31

WH CKW Wuhan Supor Cookware Co., Ltd * China 62.76

WH Pressure Wuhan Supor Pressure Cooker Co., Ltd Holding company China 50.34

WH Supor Wuhan Supor Co., Ltd *** China 49.51

WH Waste Wuhan Supor Waste Recovery Co., Ltd *** China 30.79

YH Waste Yuhuan Supor Waste Recovery Co., Ltd *** China 51.31

ZJ Rubber Zhejiang Supor Rubber & Plastics Products Co., Ltd. * China 47.82

ZJ Lesu Zhejiang Lesu Metal Material Co. Ltd. * China 26.17

ZJ Supor EA Zhejiang Supor Electrical Appliances Manufacturing Co., Ltd * China 63.48

(a) A member of the French tax group.(b) Core business:* Manufacturing, sales and marketing;** Sales and marketing;*** Service.


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33.2. ASSOCIATES


Tefal & KV St Petersbourg A/O Dormant Russia 100

Groupe SEB Retailing (a) ** France 100

33.3. NON-CONSOLIDATED COMPANIES


Iran SEB (not material in relation to the Group as a whole) Dormant Iran 70

Tefal India Dormant India 100

Groupe SEB Pars (not material in relation to the Group as a whole) ** Iran 72

(a) A member of the French tax group.(b) Core business:* Manufacturing, sales and marketing;** Sales and marketing;*** Service.


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Statutory auditors’ report on the consolidated fi nancial statements

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 DECEMBER 2008

To the Shareholders

In compliance with the assignment entrusted to us by your Annual General Meeting, we hereby report to you, for the year ended December 31, 2008, on:

the audit of the accompanying consolidated financial statements of •

SEB SA;

the justifi cation of our assessments; •

the specifi c verifi cation required by law. •

These consolidated fi nancial statements have been approved by the Board of Directors. Our role is to express an opinion on these consolidated fi nancial statements based on our audit.

OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS

We conducted our audit in accordance with professional standards applicable in France. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated fi nancial statements are free of material misstatement. An audit involves performing procedures, on a test basis or by selection, to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as

well as the overall presentation of the consolidated fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

In our opinion, the consolidated fi nancial statements give a true and fair view of the assets and liabilities and of the fi nancial position of the Group as at 31 December 2008 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

JUSTIFICATION OF OUR ASSESSMENTS

The accounting estimates used in the preparation of the fi nancial statements for the year ended December 31, 2008 were made in the context of heavy market volatility and undeniable uncertainty regarding the economic outlook. These conditions are described in Note 1.3 to the fi nancial statements. It is in this context and in accordance with Article L.823-9 of the French Commercial Code (Code de Commerce) that we conducted our own assessments, which we bring to your attention.

ACCOUNTING ESTIMATES

At each balance sheet date, the Group assesses the existence of any •

indication of impairment loss with respect to long-term assets belonging to various cash-generating units (CGU) and performs annual impairment tests on goodwill and assets with indefi nite lives in accordance with the terms and conditions described in Notes 1.4.1 and 1.4.3 to the consolidated fi nancial statements.

We have examined the terms and conditions for performing these impairment tests as well as the cash fl ow forecasts and assumptions used and we have verifi ed that Notes 7.2 and 11 contain the appropriate disclosures.

ACCOUNTING POLICIES

As indicated in Note 1.1 to the group financial statements, material •

companies that are exclusively controlled, are fully consolidated. Note 3.1 describes the impact on the group fi nancial statements of the principal acquisitions for the year and substantiates the choice of consolidation method retained.

Note 1.4.9 to the consolidated financial statements describes the •

accounting methods used for deferred taxes and note 9 sets forth their impacts on the fi nancial statements.

As part of our assessment of the accounting policies used by your company, we have verifi ed the appropriateness of the above-mentioned accounting methods, their correct application by the company and the disclosures provided in the notes to the consolidated fi nancial statements

These assessments were made in the context of our audit of the consolidated fi nancial statements taken as a whole, and therefore contributed to the opinion we formed which is expressed in the fi rst part of this report.


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Statutory auditors’ report on the consolidated fi nancial statements

SPECIFIC VERIFICATION

As required by law we have also verifi ed the information given in the Group’s management report.

We have no matters to report as to its fair presentation and its consistency with the consolidated fi nancial statements.

Lyon and Villeurbanne, March 2, 2009



Bernard RASCLE


Dominique VALETTE

This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience of English speaking users. The statutory auditors’ report includes information specifi cally required by French law in such reports, whether modifi ed or not. This information is presented below the opinion on the consolidated fi nancial statements and includes an explanatory paragraph discussing the auditors’ assessments of certain signifi cant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the consolidated fi nancial statements taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the consolidated fi nancial statements.

This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.


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BALANCE SHEET OF SEB S.A. – AT 31 DECEMBER .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128

INCOME STATEMENT – YEARS ENDED 31 DECEMBER... . . . . . . . . . . . . . . . . . . . . . . . . . .130

REPORT OF THE BOARD OF DIRECTORS .. . . . . . . . . . .131

Financial review 131

Signifi cant events of the year 131

NOTES TO THE COMPANY FINANCIAL STATEMENTS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .132

AUDITORS’ REPORT ON THE COMPANY FINANCIAL STATEMENTS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .143

Opinion on the fi nancial statements 143

Justifi cation of our assessments 143

Specifi c verifi cations and disclosures 144


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Balance sheet of SEB S.A. – at 31 December

BALANCE SHEET OF SEB S.A. – AT 31 DECEMBER

Assets

(in € millions)

2008 2007

GrossDepreciation/amortisation Net Net

NON-CURRENT ASSETS

Intangible assets 0.1 0.0 0.1 0.0

Patents, licenses and other rights 7.3 7.3 0.0 0.1

Shares in subsidiaries and affi liates 736.8 46.4 690.4 620.4

Loans to subsidiaries and affi liates 1,106.4 0.0 1,106.4 949.5

Other non-current assets 22.3 8.4 13.9 26.9

TOTAL 1,873.0 62.1 1,810.8 1,596.9

CURRENT ASSETS

Trade receivables 0.4 0.0 0.4 0.6

Other receivables 62.5 0.0 62.5 6.8

Marketable securities 129.1 45.1 84.0 137.8

Cash and cash equivalents 69.3 0.0 69.3 15.1

PREPAID EXPENSES 0.2 0.0 0.2 0.1

TOTAL 261.5 45.1 216.4 160.4

Conversion losses 7.3 0.0 7.3 1.2

TOTAL ASSETS 2,141.8 107.2 2,034.5 1,758.5


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Balance sheet of SEB S.A. – at 31 December

Liabilities and shareholders’ equity (before appropriation of profi t)

(in € millions) 2008 2007

SHAREHOLDERS’ EQUITY

Share capital 50.9 50.9

Additional paid-in capital 107.8 107.2

Revaluation reserve 16.9 16.9

Legal reserve 5.2 5.2

Regulated reserves 0.8 0.8

Revenue reserves 7.9 7.9

Retained earnings 472.6 426.9

Net profi t for the year 152.9 91.8

TOTAL 815.0 707.6

PROVISIONS FOR CONTINGENCIES AND CHARGES

Provisions for contingencies 7.3 2.2

Provisions for charges 97.1 68.3

TOTAL 104.3 70.5

LIABILITIES

Bank borrowings 354.5 302.8

Other borrowings 733.2 662.3

Trade payables 1.1 1.0

Accrued taxes and payroll costs 1.1 3.4

Other payables 17.7 10.3

TOTAL 1,107.7 979.8

Conversion gains 7.5 0.6

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 2,034.5 1,758.5


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Income statement – years ended 31 December

INCOME STATEMENT – YEARS ENDED 31 DECEMBER

(in € millions) 2008 2007

OPERATING REVENUES

Service revenues 0.0 0.0

Reversals of depreciation, amortisation and provisions, expense transfers 0.7 0.0

Other income 0.4 1.4

TOTAL 1.1 1.4

OPERATING EXPENSES

Other purchases and external charges 5.0 4.1

Taxes other than on income 1.0 1.2

Wages and salaries 1.5 2.3

Payroll taxes 2.7 0.6

Depreciation and amortisation 0.2 0.3

Other expenses 0.4 0.4

TOTAL 10.8 8.9

LOSS FROM ORDINARY ACTIVITIES BEFORE NET FINANCIAL INCOME (9.7) (7.5)

FINANCIAL REVENUES

Dividends from subsidiaries and affi liates 179.4 142.2

Interest income 3.4 0.0

Reversals of provisions, expense transfers 51.2 1.4

Gains on foreign exchange 224.8 55.8

Net income from sales of marketable securities 0.7 0.6

TOTAL 459.5 200.0

FINANCIAL EXPENSES

Charges to provisions for impairment of fi nancial assets 66.8 17.2

Interest expense 44.1 33.4

Loss on foreign exchange 224.1 55.9

TOTAL 335.0 106.5

NET FINANCIAL INCOME 124.5 93.5

PROFIT FROM ORDINARY ACTIVITIES 114.9 86.0

OTHER INCOME

Other income from revenue transactions 30.1 23.5

Other income from capital transactions 2.5 5.2

Reversals of provisions, expense transfers 2.3 0.9

TOTAL 34.9 29.6

OTHER EXPENSES

Other expenses on revenue transactions 1.9 0.8

Other expenses on capital transactions 4.0 2.7

Charges to provisions 30.1 23.8

TOTAL 36.0 27.3

NET OTHER INCOME/(EXPENSES) (1.1) 2.3

Income tax (39.1) (3.5)

NET PROFIT 152.9 91.8


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Report of the Board of Directors

REPORT OF THE BOARD OF DIRECTORS

FINANCIAL REVIEW

SEB S.A., the parent company of Groupe SEB, is a holding company whose activities are largely confi ned to overseeing the manufacturing and sales activities carried out by its subsidiaries.

As a result, SEB S.A.’s earnings only partly refl ect the performance of the Group and year-on-year changes in the Group’s performance are not visible at the level of the Company’s results until the following year, because its revenues consist essentially of dividends received from subsidiaries.

The main items refl ected in the Company’s accounts are as follows:

Income: •

dividends from subsidiaries, in the amount of €142.5 million •

(€107.6 million in 2007);

Expenses: •

fees for services provided by SEB Développement, a subsidiary of SEB •

S.A., for an amount of €973,000.

Since 1 January 2005, SEB Développement has taken over the market prospecting, international sales promotion and development, administrative, fi nancial, research, innovation and industrial property services previously supplied by the Company to subsidiaries. The Company ended the year with net profi t of €152.89 million versus €91.77 million in 2007.

SIGNIFICANT EVENTS OF THE YEAR

As part of the fi nancing strategy for the Supor acquisition, SEB S.A. obtained two Schuldschein loans in August 2008, as follows:

€113.5 million, due in 2013, including a €55 million fi xed rate tranche; •

€47.5 million, due in 2015, including a €30 million fi xed rate tranche. •

In accordance with the decision of the 13 May 2008 Annual General Meeting, SEB S.A. conducted a three-for-one stock split during the year. At 31 December 2008, the share capital was made up of 50,912,138 shares with a par value of €1.

On 2 March 2008, SEB S.A. agreed to pay compensation of €0.6 million in settlement of a dispute with Spector, one of the Group’s former distributors. The payment was offset by the reversal of the related provision of €1 million set aside in 2004.


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Notes to the Company fi nancial statements

NOTES TO THE COMPANY FINANCIAL STATEMENTS

NOTE 1 - ACCOUNTING POLICIES AND VALUATION METHODS

1.1 PRINCIPLES

The Company fi nancial statements have been prepared in line with the principle of prudence and in compliance with the preparation and presentation rules set out in French law and France’s Plan Comptable Général of 1999. Adoption of standard CRC 2008-15 of 4 December 2008, which changed the accounting treatment of stock options, had no impact on the fi nancial statements.

The estimates and assumptions used to prepare the 2008 fi nancial statements refl ected the economic and fi nancial crisis and the fi nancial parameters shaping the market at 31 December. The immediate effects of the crisis were taken into account in valuing current assets such as marketable securities. In valuing non-current assets, such as shares in and loans to subsidiaries and affi liates, the assumption was made that the crisis would last for only a limited period. The value of these assets was estimated at the year-end based on the long-term economic outlook and management’s best estimates, taking into account the reduced visibility of future cash fl ows.

1.2. INTANGIBLE ASSETS

Intangible assets are stated at acquisition cost, excluding transaction costs and interest expense.

They mainly consist of patents amortised over periods ranging from fi ve to ten years.

1.3. SHARES IN SUBSIDIARIES AND AFFILIATES

Shares in subsidiaries and affi liates are stated at the lower of cost and net realisable value. Cost corresponds to acquisition cost, except for shares acquired before 31 December 1976 and included in the legal revaluation which are stated at valuation. Net realisable value is determined based on the Company’s equity in the investee’s net assets, market value or the investee’s earnings outlook.

1.4. OWN SHARES

SEB S.A. shares held by the Company are classifi ed as follows:

Shares bought back for allocation on exercise of existing or future stock •

options are classifi ed under “Marketable securities”;

All other SEB S.A. shares held by the Company – mainly under the liquidity •

contract – are classifi ed under “Other non-current assets”.

At the year-end, an impairment loss is recognised whenever the shares’ purchase price is lower than the average share price for the last month of the year.

1.5. CASH AND CASH EQUIVALENTS AND FINANCIAL INSTRUMENTS

SEB S.A. manages cash and cash equivalents and currency risk on behalf of the Group:

The Company meets the short-term fi nancing needs of virtually all Group •

subsidiaries. A daily bank balance reporting system has been set up to monitor the fi nancing needs of the French, German, Spanish, Italian, Hungarian, Austrian, Swiss and Hong Kong subsidiaries. Current account advances to and from the cash pool pay interest at the overnight rate for the currency concerned plus 0.15 bps.

Commercial paper is issued in euros under a €600 million programme rated A2 by Standard & Poor’s and is converted into the functional currency of the subsidiaries concerned outside the euro zone by means of swaps, thereby limiting the Company’s exposure to currency risks on these fi nancing transactions. A provision may be set aside to cover the unhedged portion of the risk.

SEB S.A. fi xes the exchange rates for intercompany import and export •

transactions on behalf of its subsidiaries. Net currency positions (arising when exports exceed imports) are hedged by forward foreign exchange contracts, allowing the hedged transactions to be recognised directly in the subsidiary’s local currency at the hedging rate. The unrealised gain or loss, i.e. the difference between the hedging rate and the closing rate, is recognised in the fi nancial statements of SEB S.A. at the period-end. Any unrealised losses arising on such transactions are recognised on the assets side of the balance sheet under “Conversion losses” and lead to the recognition of a provision for contingencies. Unrealised gains are recognised in liabilities under “Conversion gains” without affecting profi t for the year.

The contango or backwardation is recorded in the income statement when the swap expires.

1.6. CONVERSION AND MEASUREMENT OF CASH AND SHORT-TERM BANK LOANS IN FOREIGN CURRENCY

Cash and short-term bank loans denominated in foreign currency at the period-end are converted into local currency at the exchange rate on the last business day of the period, and conversion differences are recognised in profi t for the period under “Exchange gains” or “Exchange losses”.


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1.7. INCOME TAX

SEB S.A. and its French subsidiaries fi le a consolidated tax return under the Group relief system provided for in Article 223-1 et seq. of the General French Tax Code (Code Général des Impôts).

No group relief agreement has been signed and each member of the tax group therefore calculates the income tax charge or benefi t they would have paid or received if they had been taxed on a stand-alone basis. As the parent company, SEB S.A. recognises in its income statement any tax savings or additional tax expense arising on the consolidation of the French subsidiaries’ taxable results. Tax savings resulting from group relief for tax losses incurred by companies in the tax group are initially recognised by SEB S.A. and are transferred back to the companies concerned when they return to profi t.

NOTE 2 - MOVEMENTS IN NON-CURRENT ASSETS

2.1. INTANGIBLE ASSETS

There were no material acquisitions or disposals of intangible assets during the period.

2.2. PROPERTY, PLANT AND EQUIPMENT

There were no material acquisitions, disposals or retirements of property, plant and equipment during the period.

2.3. NON-CURRENT FINANCIAL ASSETS

(in € thousands) 31 December 2007 Additions Disposals 31 December 2008

Shares in subsidiaries and affi liates 710,836 26,000 736,836

Loans to subsidiaries and affi liates 949,481 228,956 72,002 1,106,435

Own shares 26,474 14,906 19,520 21,860

Other investments 409 409

Other non-current fi nancial assets

TOTAL COST 1,687,200 269,862 91,522 1,865,540

Provisions for impairment of shares in subsidiaries and affi liates (90,394) (6,000) (50,000) (46,394)

Provisions for impairment of other investments (7) (8,427) (8,434)

TOTAL PROVISIONS (90,401) (14,427) (50,000) (54,828)

TOTAL CARRYING AMOUNT 1,596,799 255,435 41,522 1,810,712

(in € thousands) 31 December 2006 Additions Disposals 31 December 2007

Shares in subsidiaries and affi liates 648,836 62,000 710,836

Loans to subsidiaries and affi liates 682,754 401,516 134,789 949,481

Own shares 42,593 15,987 32,106 26,474

Other investments 409 - - 409

Other non-current fi nancial assets

TOTAL COST 1,374,592 479,503 166,895 1,687,200

Provisions for impairment of shares in subsidiaries and affi liates (74,394) (16,000) (90,394)

Provisions for impairment of other investments (7) (7) (7)

TOTAL PROVISIONS (74,401) (16,007) (90,401)

TOTAL CARRYING AMOUNT 1,300,191 463,496 166,895 1,596,799


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Loans to subsidiaries and affi liates include advances by the parent company SEB S.A. to its subsidiaries under the Group’s fi nancial policy (see 1.5).

The revaluation reserve in shareholders’ equity relates mainly to non-current fi nancial assets.

At 31 December 2008, the Company held 4,376,100 SEB S.A. shares acquired at an average price of €34.43 per share (before impairment). The shares are being held mainly for allocation on exercise of stock options (343,785 options under the 2002 plan, 297,823 under the 2003 plan, 511,370 under the 2004 plan, 537,900 under the 2005 plan, 580,494 under the 2006 plan, 575,250 under the 2007 plan and 999,900 under the 2008 plan).

In 2008, the Company bought back 1,956,802 shares on the market at a weighted average price of €31.47 and sold 564,217 shares on the market at an average price of €31.95.

Provision reversals amounting to €50 million mainly concerned SAS SEB and Rowenta Invest (the holding company for the Group’s German subsidiaries), refl ecting the improved long-term outlook of these subsidiaries.

NOTE 3 - LIST OF SUBSIDIARIES AND AFFILIATES

3.1. INFORMATION CONCERNING SHARES IN SUBSIDIARIES AND AFFILIATES

3.1.1. Subsidiaries (more than 50%-owned)

(in € thousands)Shareholders’

equity % interest

Carrying amount of

investment

Loans and advances

given

Guarantees and bonds

given

Dividends received

during the period

Calor SAS 16,397 100% 39,575 22,027 295

SAS SEB 10,299 100% 91,149 9,086 - -

Tefal SAS 33,466 100% 9,400 50,597 - -

Rowenta France SAS (625) 100% 7,565 4,038 - -

SEB Développement SAS 6,458 100% 5,718 20,769 - -

Rowenta Invest BV - 100% 183,499 80 - -

SEB Internationale SAS 309,016 100% 215,421 418,697 - 68,400

Groupe SEB France 198,084 98% 73,889 - - 58,888

Groupe SEB Export 38,781 100% 38,036 73,498 - 14,129

Groupe SEB Moulinex SAS 9,691 100% 40,548 6,522 - -

Groupe SEB Retailing (93) 100% 2,038 3,151 - -

3.1.2. Affi liates (10% to 50%-owned)

(in € thousands)Shareholders’

equity % interest

Carrying amount of

investment

Loans and advances

given

Guarantees and bonds

given

Dividends received

during the period

S.I.S. 2,781 46.81% 472 6,603 - 1,067

Domaine de Seillac S.A. (at 31 December 2003) (789) 24.75% 76 - - -


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As allowed by Article 24 paragraph 11 of decree 83.1020 dated 29 November 1983, the results of individual subsidiaries are not disclosed because the Company considers that disclosure of this information could be seriously prejudicial to its interests. Additional information analysed by geographic segment is provided in the notes to the consolidated fi nancial statements (Note 4 – Segment Information). Subsidiaries and affiliates generated aggregate revenues of €2,046.6 million and aggregate profi t of €120.84 million in 2008.

3.2. GENERAL INFORMATION CONCERNING OTHER SUBSIDIARIES AND AFFILIATES

Carrying amount of investments: €13,825 thousand.

Investments in other subsidiaries and affi liates correspond mainly to SEB S.A. shares acquired at a total cost of €21,860 thousand. The shares’ carrying amount was €13,433 thousand at 31 December 2008, after deducting provisions of €8,427 thousand.

NOTE 4 - OTHER RECEIVABLES

Other receivables correspond to income tax prepayments for €49,266 thousand. The tax group reported a tax loss in 2008 and the prepayments

were refunded in February 2009. In 2007 and 2006, the tax group reported taxable income.

NOTE 5 - PROVISIONS FOR CONTINGENCIES AND CHARGES

Changes in provisions for contingencies and charges for the period were as follows:

In line with the principles described in Note 1.5, a provision for currency risks of €7,269 thousand was recorded at 31 December 2008.

Provisions for claims and litigation mainly concerned ongoing disputes with third parties and were reversed at 31 December 2008 after the payment of a €600,000 settlement.

Tax savings resulting from group relief for tax losses incurred by certain companies in the tax group will be transferred back to the companies concerned if and when they return to profi t. They are covered by a provision for an aggregate amount of €97,059 thousand at 31 December 2008.

(in € thousands)31 December

2007 Increases Reversals Utilisations31 December

2008

Provisions for claims and litigation 1,000 400 600

Provisions for currency risks 1,245 7,269 1,245 7,269

TOTAL PROVISIONS FOR CONTINGENCIES 2,245 7,269 1,645 600 7,269

Provisions for group relief 68,319 30,083 1,343 97,059

TOTAL PROVISIONS FOR CHARGES 68,319 30,083 1,343 97,059

TOTAL 70,564 37,352 1,645 1,943 104,328

(in € thousands)31 December

2006 Increases Reversals Utilisations31 December

2007

Provisions for claims and litigation 1,183 183 1,000

Provisions for currency risks 1,352 1,245 1,352 1,245

TOTAL PROVISIONS FOR CONTINGENCIES 2,535 1,245 1,535 2,245

Provisions for group relief 45,282 23,791 754 68,319

TOTAL PROVISIONS FOR CHARGES 45,282 23,791 754 68,319

TOTAL 47,817 25,036 1,535 754 70,564


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NOTE 6 - MATURITIES OF RECEIVABLES AND PAYABLES

All receivables are due within one year, with the exception of a €15,910 thousand subordinated loan to the Spanish subsidiary, a €2,142 thousand long-term loan to the Swiss subsidiary and an €819 thousand loan to SEB PARS.

All payables are due within one year, with the exception of:

employee profit-sharing accounts of €3,432 thousand due in 2010, •

€2,973 thousand due in 2011, €3,366 thousand due in 2012 and €6,245 thousand due in 2013;

the €40,000 thousand balance outstanding at 31 December 2008 on the •

CA Lyon loan repayable in annual instalments of €10,000 thousand through March 2012;

the Schuldschein loan of €113,500 thousand at 31 December 2008 •

due August 2013 and the Schuldschein loan of €47,500 thousand due August 2015.

(in € thousands) 31 December

200731 December

2008

Due

within 1 year

in 1 to 5 years

beyond 5 years

Bonds 0 0 0 0 0

Bank borrowings 302,846 354,505 163,505 143,500 47,500

Commercial paper 402,000 393,960 393,960

Intra-group borrowings 237,841 319,800 319,800

Other borrowings 266 266 266

Non-discretionary profi t sharing liability 22,226 19,221 3,205 16,016

TOTAL 965,179 1,087,752 880,470 159,516 47,766

The Group’s main source of fi nancing is its €600 million commercial paper programme, which is rated A2 by Standard & Poor’s. Outstanding issues under this programme totalled €394 million at the year-end. All commercial paper is due in less than three months.

At 31 December 2008, no borrowings were subject to acceleration clauses. Only two long-term loans are subject to debt covenants that could have an impact on the interest rate on the debt. Interest paid in 2008 was determined in the highest tranche provided for in the loan agreement. Shifting to a different tranche would enable the Group to reduce its interest payments. The amount of the saving would be less than €0.1 million.

NOTE 7 - RELATED PARTY TRANSACTIONS

Certain balance sheet items contain amounts concerning related party transactions, as follows:

(in € thousands)

2008Related parties

2008Direct

investments

2007Related parties

2007Direct

investments

Non-current fi nancial assets 491,339 615,096 475,265 474,217

Receivables 132 2,096 277 3,377

Payables 101,252 226,188 40,899 205,747

TOTAL 592,723 843,380 516,441 683,341


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NOTE 8 - INCOME AND EXPENSES CONCERNING RELATED PARTIES

(in € thousands) 2008 2007

OPERATING EXPENSES

Management fees 973 806

OPERATING INCOME

Royalties 351 881

FINANCIAL EXPENSE

Interest expense 8,413 7,570

FINANCIAL INCOME

Investment income 142,484 107,615

Income from receivables 36,894 34,073

NOTE 9 - PREPAID EXPENSES AND DEFERRED INCOME

9.1. DEFERRED CHARGES

Category (in € thousands) 2008 2007

Financial expenses 747 280

TOTAL 747 280

9.2. PREPAID EXPENSES


Operating expenses 228 110

Financial expenses 1,488 1,089

TOTAL 1,516 1,199

9.3. DEFERRED INCOME


Loans to subsidiaries and affi liates 7,546 8,978

Trade receivables 124 342

Interest on VAT credits and swaps 25 0

Cash equivalents 98 49

TOTAL 7,793 9,369


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9.4. ACCRUED EXPENSES


Bank borrowings 4,276 1,380

Other borrowings 266 456

Trade payables 120 161

Accrued taxes and payroll costs 0 12

Other payables 162 339

TOTAL 4,824 2,348

NOTE 10 - OTHER INCOME AND EXPENSE, NET

(in € thousands) 2008 2007

Group relief 28,740 22,729

Provisions for group relief to be transferred to subsidiaries (28,740) (23,036)

Gains and (losses) on sales of own shares (1,495) 2,484

(Charges to)/reversals of provisions for contingencies 1,000 183

Other (611) 4

TOTAL (1,106) 2,364

A total of 564,217 SEB S.A. shares were sold during the year, generating a net loss of €1,495 thousand.

Group relief is discussed in Note 11 and provisions for contingencies in Note 5.

NOTE 11 - GROUP RELIEF

The tax group reported a tax loss in 2008, leading to the recognition in SEB S.A.’s accounts of a tax benefi t corresponding to the difference between the tax group’s income tax expense (€0) and the sum of the income tax expense recorded in the individual fi nancial statements of the members of the tax group (€39,145 thousand). In 2007, a net tax benefi t was recorded, corresponding mainly to the neutralisation of transactions within the tax group for €3,723 thousand.

Tax savings resulting from group relief for tax losses incurred by companies in the tax group are initially recognised by SEB S.A. and are transferred back to the companies concerned when they return to profi t. Following the return to profi t of SEB Développement, the Company transferred back to this subsidiary the tax saving realised in prior years through the use of its tax losses in an amount of €1,343 thousand (2007: €754 thousand). This transfer is reported in the income statement under “Other expenses” and is offset by the reversal of the corresponding provision in the same amount, reported under “Other income”.


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NOTE 12 - INCOME TAX ANALYSIS

Income tax for 2008 can be analysed as follows:

(in € thousands) Before tax Tax expense/(benefi t) After tax

Profi t from ordinary activities 114,854 19,567 134,421

Net other income/(expense) (1,106) 381 (725)

T ax loss carryforwards (19,948) (19,948)

Group relief (39,145) 39,145

TOTAL 113,748 (39,145) 152,893

The theoretical tax due by profi table subsidiaries was recognised for €39,136 thousand.

NOTE 13 - OFF-BALANCE SHEET COMMITMENTS

(in € thousands)

31 December 2008 31 December 2007

Notional amount Market value Notional amount Market value

MARKET CONTRACTS

Currency swaps (foreign currency borrower) 243,887 1,211 277,929 2,466

Currency swaps (foreign currency lender) 8,200 86 - -

Forward sales of foreign currencies 85,780 5,033 50,209 222

Forward purchases of foreign currencies 54,260 (1,483) 29,427 0

Interest rate options

Floating/fi xed rate swaps 40,000 (396) 60,000 1,089

Zero-premium collars (aluminium) 77,236 (32,216) 49,200 (4,500)

Zero-premium collars (nickel) 7,034 (2,450) 3,400 (1,500)

Zero-premium collars (copper) 3,800 (500)

CONTRACTS WITH SUBSIDIARIES

Currency swaps (foreign currency lender) 3,618 - 1,726 -

Forward purchases of foreign currencies 51,083 (3,143) 43,335 (794)

Zero-premium collars (aluminium) 77,236 32,216 49,200 4,500

Zero-premium collars (nickel) 7,034 2,450 3,400 1,500

Zero-premium collars (copper) 3,800 500

The use and accounting treatment of fi nancial instruments are discussed in Note 1.5.

The market value of financial instruments represents the gain or loss that would be recognised if the contracts were settled on the market on

31 December. It is estimated based on the exchange rate and interest rate on 31 December or obtained from the counterparty banks.

Notional amounts represent the notional amounts of the contracts.


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NOTE 14 - PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS

Thierry de La Tour d’Artaise participates in the top-hat pension scheme for members of the Executive and Management Committees, which guarantees a replacement rate of 25% of the executive’s average annual compensation (basic salary and target bonus) for the last three years, taking into account benefi ts paid under statutory plans.

The top-hat plan is in addition to an “Article 39” defi ned benefi t plan and an “Article 83” defi ned contribution plan. These plans, which cover all Groupe SEB senior executives, are based on a target pension equal to 16% of the executive’s average annual compensation (basic salary and target bonus) for the last three years. Benefi t entitlements vest at the rate of 0.8% of annual compensation per year, up to a maximum of 20 years, providing a total replacement rate, including the top-hat plan, of up to 41%.

To qualify for the plans, Thierry de La Tour d’Artaise, like other senior executives, must have been a member of the Executive or Management Committee for at least eight years.

SEB S.A.’s objective is for the entire benefi t obligation to be funded by external funds by the time the plan participants reach retirement age. Contributions to these external funds are recorded as an expense for the year under “Payroll taxes”.

TERMINATION BENEFITS

Thierry de La Tour d’Artaise will not be entitled to any compensation for loss of offi ce when he ceases to be a corporate offi cer.

His employment contract, signed when he joined the Group in 1994 and last amended when he was appointed Chief Executive Offi cer, was suspended on 1 March 2005 for the duration of his term as corporate offi cer.

In the same way as for other Executive Committee members, the contract stipulates that in the event of termination of his employment contract at Groupe SEB’s initiative, except as a result of gross negligence or serious misconduct, or at his own initiative following a change of control of Groupe SEB, Thierry de La Tour d’Artaise will be eligible for a total termination benefi t equal to two years’ remuneration. Following adoption of France’s TEPA Act, an addendum to this contract was signed making the termination benefi t subject to performance conditions. The revised contract stipulates that the termination benefi t, set at a maximum of two years’ gross salary and bonus, will be adjusted based on actual performance in relation to targets over Thierry de La Tour d’Artaise’s last four years of service, as follows:

if average actual performance falls short of the targets by 50% or more, •

no termination benefi t will be paid;

if average actual performance represents 50% to 100% of the targets, •

between 75% and 100% of the termination benefi t will be paid;

if average actual performance exceeds the targets, the termination benefi t •

will be paid in full.

The maximum termination benefi t will be equal to the sum of the salaries and cash bonuses paid to Thierry de La Tour d’Artaise in his last two years of service. The Board of Directors may, at its discretion, reduce the termination benefi t by as much as 50% if the Group reports a loss for the year preceding the one in which he is removed from offi ce, provided that the termination benefi t does not represent less than his salary and bonus for his fi nal year of service if average actual performance is at least equal to 50% of targets.

The no-compete clause was deleted from Thierry de La Tour d’Artaise’s employment contract on 12 December 2008, by mutual agreement.

NOTE 15 - UNRECOGNISED DEFERRED TAXES

At 31 December 2008, the Company had an unrecognised deferred tax asset of €2,599 thousand (€205 thousand at 31 December 2007), corresponding to

non-deductible provision charges and unrealised exchange gains deductible in the following year.


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NOTE 16 - STOCK OPTION PLANS

Information about stock option plans at 31 December 2008 is provided below:

Options exercisable for

Option grant date

Option exercise date

Option expiry date

Number of optionsExercise price

(in €)Granted Exercised Cancelled Outstanding

New shares 04/05/2000 04/05/2004 04/05/2008 483,600 440,688 42,912 0 19.70

New shares 14/06/2001 14/06/2005 14/06/2009 493,500 434,004 19,808 39,688 18.18

Existing shares 19/04/2002 19/04/2006 19/04/2010 417,450 240,000 21,450 156,000 27.88

Existing shares 17/10/2002 17/10/2006 17/10/2010 598,125 330,075 80,265 187,785 25.15

Existing shares 18/06/2003 18/06/2007 18/06/2011 612,150 284,287 30,040 297,823 24.24

Existing shares 18/06/2004 18/06/2008 18/06/2012 539,100 12,130 15,600 511,370 31.67

Existing shares 08/04/2005 08/04/2009 08/04/2013 554,700 0 16,800 537,900 28.00

Existing shares 16/06/2006 16/06/2010 16/06/2014 589,798 0 9,304 580,494 29.33

Existing shares 20/04/2007 20/04/2011 20/04/2015 579,150 0 3,900 575,250 44.00

Existing shares 13/05/2008 13/05/2012 13/05/2016 1,005,900 0 6,000 999,900 38.35

TOTAL 5,873,473 1,741,184 246,079 3,886,210

Adjusted for the 16 June 2008 three-for-one stock-split.

NOTE 17 - SHAREHOLDERS’ EQUITY

Share capital •

At 31 December 2008, the share capital amounted to €50,912 thousand made up of 50,912 thousand shares with a par value of €1, representing 70,491,203 voting rights.

Changes in shareholders’ equity • (in € thousands)

SHAREHOLDERS’ EQUITY AT 31 DECEMBER 2006 BEFORE APPROPRIATION OF PROFIT 664,929

2006 dividend paid in 2007 (43,035)

Net profi t for the year 91,775

Shares issued on exercise of stock options (loss) (176)

Issue premium (loss) (5,955)

Exit tax

SHAREHOLDERS’ EQUITY AT 31 DECEMBER 2007 707,538

SHAREHOLDERS’ EQUITY AT 31 DECEMBER 2007 BEFORE APPROPRIATION OF PROFIT 707,538

2007 dividend paid in 2008 (46,065)

Net profi t for the year 152,894

Shares issued on exercise of stock options (gain) 31

Issue premium (gain) 581

Exit tax

SHAREHOLDERS’ EQUITY AT 31 DECEMBER 2008 814,979


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Potential ordinary shares at 31 December 2008 •

There are no convertible bonds or equity notes outstanding or securities not representing capital.

The exercise of all of the stock options granted under the 2001 plan would lead to the issue of 39,688 ordinary shares. The options are exercisable until 14 June 2009 at a price of €18.18.

NOTE 18 - EMPLOYEES

The Company had one employee in 2008, 2007 and 2006.

NOTE 19 - SUBSEQUENT EVENTS

SHARE CANCELLATIONS

At its meeting of 27 February 2009, the Board of Directors of SEB S.A. decided to cancel 1,000,000 treasury shares as of 30 March 2009, thereby reducing the number of shares outstanding to 49,912,138.


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Auditors’ report on the Company fi nancial statements

AUDITORS’ REPORT ON THE COMPANY FINANCIAL STATEMENTSYEAR ENDED 31 DECEMBER 2008

In accordance with our appointment as statutory auditors at your Annual General Meeting, we hereby report to you for the year ended December 31, 2008 on:

the audit of the accompanying fi nancial statements of SEB SA; •

the justifi cation of our assessments; •

the specifi c verifi cations and disclosures required by law. •

The fi nancial statements have been approved by the Board of Directors. Our role is to express an opinion on these fi nancial statements, based on our audit.

OPINION ON THE FINANCIAL STATEMENTS

We conducted our audit in accordance with professional standards applicable in France. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes examining, using sample testing techniques or other selection methods, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made, as well as

evaluating the overall fi nancial statement presentation. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a reasonable basis for our opinion.

In our opinion, the fi nancial statements give a true and fair view of the fi nancial position and the assets and liabilities of the Company as of December 31, 2008 and the results of its operations for the year then ended in accordance with accounting principles generally accepted in France.

JUSTIFICATION OF OUR ASSESSMENTS

The accounting estimates used in the preparation of the fi nancial statements for the year ended December 31, 2008 were made in the context of heavy market volatility and undeniable uncertainty regarding the economic outlook. These conditions are described in Note 1.1 to the fi nancial statements. It is in this context and in accordance with Article L.823.9 of the French Commercial Code (Code de Commerce) that we conducted our own assessments, which we bring to your attention.

As indicated in Note 1.3 to the fi nancial statements, the Company records provisions for impairment of its equity investments when their carrying

value falls below their historical cost. Provisions are determined based on the share of equity held, the market value of the securities, when it can be known and the medium and long-term profi tability outlook of the equity investments concerned. Our procedures consisted in assessing the data and assumptions on which such provisions are based and verifying the Company’s calculations.

These assessments were made as part of our audit approach for the fi nancial statements taken as a whole and contributed to the expression of our opinion in the fi rst part of this report.


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Auditors’ report on the Company fi nancial statements

SPECIFIC VERIFICATIONS AND DISCLOSURES

Lyon and Villeurbanne, March 2, 2009

The Statutory auditors


Bernard RASCLE


Dominique VALETTE

We have also performed the specifi c verifi cations required by law.

We have no comment to make as to:

the fair presentation and consistency with the fi nancial statements of the •

information given in the Board of Directors’ management report and the documents addressed to the shareholders with respect to the fi nancial position and the fi nancial statements;

the fair presentation of the information given in the management report •

on the compensation and benefi ts paid to relevant corporate offi cers as well as commitments granted in their favor when they assumed, changed or terminated duties or subsequent thereto.

Pursuant to the law, we have verifi ed that the management report contains the appropriate disclosures as to the identity of and percentage interests and votes held by shareholders.

This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience of English speaking users. The statutory auditors’ report includes information specifi cally required by French law in such reports, whether modifi ed or not. This information is presented below the opinion on the Company fi nancial statements and includes an explanatory paragraph discussing the auditors’ assessments of certain signifi cant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the Company fi nancial statements taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the Company fi nancial statements. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.



REPORT OF THE BOARD OF DIRECTORS ON THE RESOLUTIONS PROPOSED TO THE ANNUAL GENERAL MEETING OF MAY 13, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .146

Trading in the Company’s shares 146

Dividends 146

Agreements governed by Article L. 225-42-1 of the French Commercial Code 147

Board of Directors 147

Statutory a uditors 147

Stock options – stock grants 148

Financial authorisations 148

Employee share issue 149

AUDITORS’ SPECIAL REPORT ON RELATED PARTY AGREEMENTS AND COMMITMENTS .. . .150

Agreements and commitments authorised during the year 150

Agreements and commitments authorised in previous years that remained in effect during the year 151

PROPOSED RESOLUTIONS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .152

Ordinary resolutions 152

Extraordinary resolutions 154


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Report of the Board of Directors on the resolutions proposed to the Annual General Meeting of May 13, 2009

REPORT OF THE BOARD OF DIRECTORS ON THE RESOLUTIONS PROPOSED TO THE ANNUAL GENERAL MEETING OF MAY 13, 2009

TRADING IN THE COMPANY’S SHARES

At 31 December 2008, the Company held 4,376,100 of its own shares with a par value of €1.00, acquired at a total cost of €150,685,526.83. These shares represent 8.6% of the Company’s capital.

As allowed under Article L. 225-209 of the French Commercial Code, in 2008 the Company purchased 1,518,500 SEB S.A. shares on the market at an average price of €30.73 per share, for allocation on exercise of stock options.

A total of 130,499 shares were sold during the year upon exercise of stock options, at an average price of €25.18 per share.

Transaction costs for shares purchased under the buyback programme amounted to €102,754.

On 20 September 2005, the Company signed a liquidity contract with the Gilbert Dupont stockbroking fi rm. The contract complies with the Ethical Charter drawn up by AFEI (French association of investment fi rms), which was approved by the French securities regulator (Autorité des Marchés Financiers) on 22 March 2005.

During 2008, 438,302 SEB S.A. shares were purchased and 433,718 shares were sold under this contract. The transaction costs amounted to €30,000.

Shareholders are asked to authorise the Company to trade in its own shares in compliance with the new European regulations. Under the terms of the resolution, the Company would be authorised to buy back the maximum shares allowed by law in order to:

maintain a liquid market for the Company’s shares through an investment •

service provider acting on a fully independent basis;

purchase shares for allocation to eligible employees and offi cers of the •

Company;

purchase shares for cancellation, in order to increase return on equity and •

earnings per share or to offset the dilutive impact of any capital increases on existing shareholders’ interests;

purchase shares for delivery or exchange in connection with any future •

external growth transactions;

purchase shares for allocation on exercise of rights attached to securities •

that are convertible, exercisable, redeemable or otherwise exchangeable for Company shares.

The purchase price per share would be capped at €40, and the amount invested in the buyback program would therefore not exceed €199,648,520.

DIVIDENDS

The Board recommends maintaining the dividend at €0.94 per share.

For the fourteenth year running, shareholders will be entitled to a supplementary dividend on all shares registered in their name prior to 31 December 2006 and still held in their portfolio on the dividend payment date (15 May 2009). More than 55.43% of the Company’s shares will be entitled to a supplementary dividend in respect of 2008.

No single shareholder will be entitled to the supplementary dividend on any shares in excess of 0.5% of the Company’s capital stock.

Under the new tax rules applicable since 1 January 2005, the dividend will not give rise to any avoir fiscal tax credit.


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AGREEMENTS GOVERNED BY ARTICLE L. 225-42-1 OF THE FRENCH COMMERCIAL CODE

Shareholders will be asked to approve an agreement entered into between Thierry de La Tour d’Artaise and the Company.

The purpose of the agreement is to link Thierry de La Tour d’Artaise’s termination benefi t to performance targets, as required by Article 17 of the TEPA Act of 21 August 2007.

The agreement stipulates that the termination benefi t payable to the •

Chairman and Chief Executive Offi cer, set at a maximum of two years’ gross salary and bonus, will be adjusted based on actual performance in relation to targets over his last four years of service, as follows:

if average actual performance falls short of the targets by 50% or more, •

no termination benefi t will be paid;

if average actual performance represents 50% to 100% of the targets, •

between 75% and 100% of the termination benefi t will be paid;

if average actual performance exceeds the targets, the termination •

benefi t will be paid in full.

The performance targets are the same as those set by the Board for the determination of the Chairman and Chief Executive Offi cer’s annual bonus.

The maximum termination benefi t will be equal to the sum of the salaries •

and cash bonuses paid to the Chairman and Chief Executive Offi cer in his last two years of service.

The Board of Directors may, at its discretion, reduce the termination benefi t by as much as 50% if the Group reports a loss for the year preceding the one in which the Chairman and Chief Executive Offi cer is removed from offi ce provided that the termination benefi t does not represent less than the Chairman and Chief Executive Offi cer’s salary and bonus for his fi nal year of service if average actual performance is at least equal to 50% of targets.

BOARD OF DIRECTORS

The terms as director of Damarys Braida, Frédéric Lescure and FFP will •

expire at this Meeting and shareholders will be asked to re-elect them for a further four-year term.

Damarys Braida, 41, is head of the L’Oréal hair colour R&D laboratory.

Frédéric Lescure, 48, is Chairman of Groupe Meaban, which specializes in surface treatment processes.

Damarys Braida and Frédéric Lescure are directors from the Company’s founding group.

FFP is a holding company listed on the Paris stock exchange and majority held by the Peugeot family group.

FFP will continue to be represented by Christian Peugeot, Director of Communications and Brand Strategy for Automobiles Peugeot.

Pascal Castres Saint Martin, whose term as director will expire at this •

Meeting, is not standing for re-election.

We would like to extend warm thanks to him for his contribution to the Board and to the Audit Committee, which he chaired for eight years.

On the recommendation of the Nominations and Remuneration Committee, •

shareholders will be asked to elect Jean-Dominique Senard as director to replace Pascal Castres Saint Martin.

Jean-Dominique Senard, 56, is a Managing Partner of the Michelin Group. A graduate of HEC with a Master’s in Law, he held various management positions in fi nance with Total and Saint-Gobain between 1979 and 1996, before moving to Péchiney where he was fi rst Chief Financial Offi cer and then Chairman. In March 2005, he joined Michelin as Chief Financial Offi cer and member of the Executive Board. Jean-Dominique Senard will qualify as an independent director based on the defi nition contained in the AFEP-MEDEF corporate governance code for listed companies.

STATUTORY A UDITORS

The terms of the Statutory a uditors will expire at this Meeting and shareholders will be asked to re-appoint them for a further six-year period.

The Statutory a uditors are PricewaterhouseCoopers Audit, represented by Bernard Rascle, and Deloitte & Associés, represented by Dominique Valette. The substitute Statutory a uditors are Pierre Coll and BEAS.


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STOCK OPTIONS – STOCK GRANTS

In order to provide an ongoing incentive to key Group employees by offering them an opportunity to share in the Group’s development and results, shareholders will be asked to give the Board an authorisation to grant stock options exercisable for a number of shares not representing more than 1.2% of the Company’s capital.

The options will be granted in compliance with the AFEP-MEDEF recommendations of 6 October 2008.

Shareholders will also be asked to authorise the Board to make stock grants representing up to 0.4% of the Company’s share capital, in the form of existing shares (bought back for this purpose by the Company). The grants would be made to all or some employees of the Company and its subsidiaries, to certain categories of those employees and/or to offi cers as provided by Article L. 225-197-1 II of the French Commercial Code.

The stock grants would be subject to a two-year vesting period and a two-year lock-up.

For grantees resident outside France, in accordance with the law, the minimum vesting period would range from two to four years, with no lock-up period applying where the vesting period was four years.

Shareholders will be asked to give the Board full powers to set the stock grant terms, particularly to draw up the list of grantees and to determine any eligibility criteria.

FINANCIAL AUTHORISATIONS

At the Annual General Meeting, we will ask shareholders to give the Board the necessary powers to issue shares and share equivalents with or without pre-emptive subscription rights, in order to enable us to raise fi nancing to support our Group’s ongoing development as and when required and based on opportunities arising in the fi nancial markets.

The aggregate par value of shares issued under the authorisation would be capped at €20 million for issues with pre-emptive subscription rights, representing 20,000,000 shares, and at €5 million for issues without pre-emptive subscription rights.

To capitalize on opportunities to raise funds from the public, particularly on international markets, we need to be able to act quickly. That is why we are asking shareholders to authorise the Board – and, if the circumstances so warrant, the Chairman acting on the Board’s behalf – to issue shares and share equivalents without pre-emptive subscription rights. Under the terms of the proposed resolution, the Board could offer shareholders the opportunity to subscribe for the new shares or share equivalents on a priority basis, pro rata to their existing interests, during a period and on terms to be decided by the Board.

If the Board were to decide not to offer pre-emptive subscription rights to existing shareholders, any new shares issued directly or on conversion, redemption or exercise of rights attached to share equivalents without pre-

emptive subscription rights would be offered at a discount of no more than 5% to the weighted average share price for the three trading days preceding the Board’s decision.

The aggregate nominal amount of any debt securities with stock rights issued under the authorisation would be capped at €600 million for issues with pre-emptive subscription rights or at €150 million for issues without pre-emptive subscription rights.

If and when the authorisations are used, the Board of Directors will draw up an additional report describing the fi nal terms of the issue, including the basis for setting the issue price, the impact of the issue on the situation of existing shareholders and the estimated impact on the share price, as required by law.

In a separate resolution, we are also seeking an authorisation to issue up to €10 million worth of bonus shares, to be paid up by capitalizing reserves, profi ts or additional paid-in capital.

Lastly, we are recommending that the maximum aggregate amount of share issues that may be carried out under these authorisations be set at €25 million.

All of these authorisations are being sought for a period of fourteen (14) months.


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EMPLOYEE SHARE ISSUE

In accordance with Article L. 225-129-6 of the French Commercial Code, the Board of Directors is required to submit to shareholders a proposal to authorise the Board to carry out issues of shares and/or share equivalents without pre-emptive subscription rights for existing shareholders, reserved for members of a corporate savings plan (Plan d’Épargne d’Entreprise). The total number of shares that would be issued under this authorisation would be capped at 1% of the Company’s share capital as at the close of this Meeting. Any shares and/or share equivalents issued under this proposed resolution

would not be deducted from the ceilings specifi ed in the other fi nancial authorisations granted by shareholders. In application of Articles 443-5 and 443-6 of the French Labour Code, shares issued directly or indirectly under this authorisation would be offered at a discount of up to 20%, or 30% if they were subject to a lock-up of ten years or more.

This authorisation is being sought for a period of fourteen (14) months.


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Auditors’ special report on related party agreements and commitments

STATUTORY AUDITORS’ SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS WITH THIRD PARTIESYEAR ENDED 31 DECEMBER 2008

In our capacity as statutory auditors of your Company, we hereby report to you on regulated agreements and commitments with third parties.

AGREEMENTS AND COMMITMENTS AUTHORISED DURING THE YEAR

Pursuant to Article L.225-40 of the French Commercial Code (Code de Commerce), the following agreements and commitments, which were previously authorized by your Board of Directors, have been brought to our attention.

The terms of our engagement do not require us to identify such agreements and commitments, if any, but to communicate to you, based on information provided to us, the principal terms and conditions of those agreements and commitments brought to our attention, without expressing an opinion on their usefulness and appropriateness. It is your responsibility, pursuant to Article R.225-31 of the French Commercial Code, to assess the interest involved in respect of the conclusion of these agreements for the purpose of approving them.

We conducted our procedures in accordance with the professional guidelines of the French National Institute of Statutory a uditors (Compagnie Nationale des Commissaires aux Comptes) relating to this engagement. Those procedures consisted in verifying the information provided to us with the relevant source documents.

With Thierry de La Tour d’Artaise

Nature and purpose: Determination of the performance criteria governing the Chairman’s termination benefi ts; withdrawal of the non-competition clause.

Terms and conditions: As recommended by the Appointment and Compensation Committee and pursuant to Article 17 the Law of August 21, 2007 promoting work, employment and purchasing power (known as the TEPA law), your Board of Directors in its December 12, 2008 meeting determined

the performance criteria governing the payment of the termination benefi ts provided for in Mr. Thierry de La Tour d’Artaise’s employment contract, it being understood that such benefi ts shall be paid in the event such contract is terminated at the employer’s initiative, except on grounds of serious misconduct or gross negligence, or at Mr. Thierry de La Tour d’Artaise’s initiative as a result of a change in the control of the SEB Group.

The Chairman’s termination benefits, equivalent to two years’ earned compensation plus bonuses, are adjusted for the percentage of objectives achieved over the 4 previous year-ends:

if the average percentage achieved is below 50%, no termination benefi ts •

shall be paid;

if the average percentage achieved is between 50% and 100%, termination •

benefi ts shall range from 75% to 100%, calculated on a straight-line basis;

if the average percentage achieved is higher than 100%, termination •

benefi ts shall be 100%.

The Board of Directors retains the right to reduce, by half at a maximum, such termination benefi ts if the previous year-end net result is a net loss, without such benefi ts falling below the fi xed compensation plus bonuses of the previous year-end, if applying the performance criteria based on achieving the objectives entitles Mr. Thierry de La Tour d’Artaise to receive termination benefi ts.

In addition, the non-competition clause in Mr. Thierry de La Tour d’Artaise’s employment contract is withdrawn.


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Auditors’ special report on related party agreements and commitments

AGREEMENTS AND COMMITMENTS AUTHORIZED IN PREVIOUS YEARS AND HAVING CONTINUING EFFECT DURING THE YEAR

In addition, pursuant to the French Commercial Code, we have been advised that the following agreements and commitments authorized in previous years have had continuing effect during the year.

With Thierry de La Tour d’Artaise

1. Nature and purpose: The employment contract of Mr. Thierry de La Tour d’Artaise, Chairman of SEB SA, it being understood that such contract has been suspended for the duration of his term of offi ce as corporate offi cer.

Terms and conditions:

In the event such employment contract is terminated at the employer’s •

initiative, except on grounds of serious misconduct or gross negligence, or at Mr. Thierry de La Tour d’Artaise’s initiative as a result of a change in the control of the SEB Group, his overall termination benefi ts shall be equivalent to two years’ compensation. Payment of such benefi ts is now subject to the performance criteria described in the paragraph entitled Agreements and commitments authorized during the year.

In the event Mr. Thierry de La Tour d’Artaise’s employment contract is •

terminated, except on grounds of serious misconduct or gross negligence, he shall be entitled to exercise all the share purchase or subscription options granted to him under the same terms and conditions as would have prevailed had he remained in offi ce. This provision shall also apply in the event Mr. Thierry de La Tour d’Artaise’s employment contract is terminated pursuant to his resignation from the Group, were such resignation to arise from a change in the control of the Group. However, in case he resigns from his post as corporate offi cer, he shall forfeit the options that will have been granted to him over the 18 months prior to the termination of his term of offi ce.

2. Nature and purpose: Individual life insurance plan in favor of Mr. Thierry de La Tour d’Artaise, Chairman of SEB SA.

Terms and conditions: In addition to senior management’s Group death, disability and related benefi t insurance, Mr. Thierry de La Tour d’Artaise is the benefi ciary of an individual life insurance policy with death benefi ts totaling €3,418,000. Given that these terms and conditions became effective on October 1, 2008, the expense recorded over three months totals €9,564, i.e.: €38,256 over a full year.

3. Nature and purpose: Supplementary pension plan.

Terms and conditions: As all other members of the Executive and Management Committees, Mr. Thierry de La Tour d’Artaise is entitled to a supplementary and top-up retirement plan guaranteeing annuities equivalent to a 41% income replacement rate, including the benefi ts of statutory retirement plans. Guaranteed payment is subject to:

Mr. Thierry de La Tour d’Artaise being at least 60 years of age, having •

defi nitely stopped working and having obtained the calculation of the supplementary and mandatory AGIRC and ARCCO (management) retirement entitlements.

Mr. Thierry de La Tour d’Artaise only being entitled to this guaranteed rate •

if he leaves the Group to enforce his rights to retirement. However, he shall be entitled to benefi ts in the event his employment contract is terminated after he is 55, if he subsequently stops working.

Mr. Thierry de La Tour d’Artaise having sat on the Executive or the •

Management Committee for 8 years. The maximum vesting period is 20 years.

The supplementary and top-up plan actuarial expenses relating to Mr. Thierry de La Tour d’Artaise and recorded in the fi nancial statements of SEB SA for the year ended December 31, 2008 totals €783,567 plus a €462,941 amortization charge, primarily arising from the recent setting up of the top-up plan.

Lyon et Villeurbanne, March 2, 2009



Bernard RASCLE


Dominique VALETTE

This is a free translation into English of the statutory auditors’ special report on regulated agreements and commitments with third parties that is issued in the French language and is provided solely for the convenience of English speaking readers. This report on regulated agreements and commitments should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France. It should be understood that the agreements reported on are only those provided by the French Commercial Code and that the report does not apply to those related party transactions described in IAS 24 or other equivalent accounting standards.


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Proposed resolutions

PROPOSED RESOLUTIONS(ANNUAL GENERAL MEETING OF 13 MAY 2009)

ORDINARY RESOLUTIONS

FIRST RESOLUTION

Approval of the Company fi nancial statements

The Annual General Meeting, having considered the reports of the Board of Directors, the Chairman and the A uditors on the Company’s operations and results for the year ended 31 December 2008, approves the annual fi nancial statements as presented, which show net profi t of €152,893,729.53.

The Meeting also approves the transactions refl ected in these fi nancial statements or described in these reports, including non-deductible expenses incurred in the Company’s interests, which amount to €676,478.33.

SECOND RESOLUTION

Income appropriation

The Annual General Meeting resolves to appropriate net profi t for the year as follows:

(in €)

Net profi t 152,893,729.53

Retained earnings 472,637,176.17

Dividends on treasury shares credited to retained earnings 3,183,216.00

Total available for distribution 628,714,121.70

Dividend 47,857,409.72

Supplementary dividend 2,644,851.68

Retained earnings 578,211,860.30

The dividend per share amounts to €0.94.

It will be paid as from 20 May 2009.

As provided for in Article 48 of the bylaws, a supplementary dividend of €0.094 per share, corresponding to 10% of the ordinary dividend, will be paid on shares registered in the name of the same holder throughout the period between 31 December 2006 and the ex-dividend date (15 May 2009).

However, no single shareholder will be entitled to the supplementary dividend on any shares in excess of 0.5% of the Company’s capital.

Dividends for the last three years were as follows:

(in €)

2007 2006 2005

Ordinary dividend

Supplementary dividend

Ordinary dividend


Ordinary dividend


Distributed amount 0.93 0.093 0.85 0.085 0.80 0.08

THIRD RESOLUTION

Approval of the consolidated fi nancial statements

The Annual General Meeting, having considered the reports of the Board of Directors and the Auditors, approves the consolidated fi nancial statements for the year ended 31 December 2008, which show net profi t of €151,640,000.

FOURTH RESOLUTION

Approval of an agreement governed by Article L. 225-42-1

of the French Commercial Code concerning

Thierry de La Tour d’Artaise

The Annual General Meeting, having considered the report of the Board of Directors and the Auditors’ special report on agreements governed by Article L. 225-42-1 of the Commercial Code, notes the conclusions set out in these reports and approves the commitments described therein concerning the remuneration and benefi ts that would or might be due to Thierry de La Tour d’Artaise in the event that his position were to be terminated or changed.


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FIFTH RESOLUTION

Agreements governed by Article L. 225-38 of the French

Commercial Code

Having considered the A uditors’ special report on agreements governed by Article L. 225-38 of the Commercial Code, the Annual General Meeting approves the A uditors’ conclusions and the agreements referred to in their report.

SIXTH RESOLUTION

Re-election of Damarys Braida as Director for four years

The Annual General Meeting re-elects Damarys Braida as director for a period of four years expiring at the close of the Annual General Meeting to be called to approve the 2012 fi nancial statements.

SEVENTH RESOLUTION

Re-election of FFP as Director for four years

The Annual General Meeting re-elects FFP as director for a period of four years expiring at the close of the Annual General Meeting to be called to approve the 2012 fi nancial statements.

FFP will be represented at Board Meetings by Christian Peugeot.

EIGHTH RESOLUTION

Re-election of Frédéric Lescure as Director for four years

The Annual General Meeting re-elects Frédéric Lescure as director for a period of four years expiring at the close of the Annual General Meeting to be called to approve the 2012 fi nancial statements.

NINTH RESOLUTION

Election of Jean-Dominique Senard as Director for four years.

The Annual General Meeting elects Jean-Dominique Senard as director for a period of four years expiring at the close of the Annual General Meeting to be called to approve the 2012 fi nancial statements.

TENTH RESOLUTION

Re-appointment of a Statutory a uditor

The Annual General Meeting re-appoints PricewaterhouseCoopers Audit, 63 rue de Villiers – 92200 Neuilly-sur-Seine as co-Statutory a uditor for a period of six years expiring at the close of the Annual General Meeting to be called to approve the 2014 fi nancial statements.

ELEVENTH RESOLUTION

Re-appointment of a substitute Statutory a uditor

The Annual General Meeting re-appoints Pierre Coll – 63 rue de Villiers – 92200 Neuilly-sur-Seine as substitute for PricewaterhouseCoopers Audit for a period of six years expiring at the close of the Annual General Meeting to be called to approve the 2014 fi nancial statements.

TWELFTH RESOLUTION

Re-appointment of a Statutory a uditor

The Annual General Meeting re-appoints Deloitte & Associés, 185 avenue Charles-de-Gaulle - 92200 Neuilly-sur-Seine as co-Statutory audito r for a period of six years expiring at the close of the Annual General Meeting to be called to approve the 2014 fi nancial statements.

THIRTEENTH RESOLUTION

Re-appointment of a substitute Statutory a uditor

The Annual General Meeting re-appoints BEAS – 7/9, Villa Houssaye – 92200 Neuilly-sur-Seine as substitute for Deloitte & Associés for a period of six years expiring at the close of the Annual General Meeting to be called to approve the 2014 fi nancial statements.

FOURTEENTH RESOLUTION

Authorisation to trade in the Company’s shares

The Annual General Meeting, having considered the Board of Directors’ report, resolves:

to terminate the share buyback program authorised at the Annual General •

Meeting of 13 May 2008.

to adopt the program described below and accordingly: •

to authorise the Board of Directors, or any representative of the •

Board empowered to act on the Board’s behalf in accordance with Articles 225-209 et seq. of the French Commercial Code, to buy back shares of the Company subject to the limits set down by law;

that the shares may be bought back for the following purposes: •

to maintain a liquid market for the Company’s shares through an •

independent investment service provider under a liquidity contract that complies with the AFEI code of ethics recognized by the Autorité des Marchés Financiers,

to purchase shares for allocation to eligible employees and offi cers of •

the Company upon exercise of stock options governed by Articles 225-179 et seq. of the Commercial Code, or in the form of stock grants governed by Articles 225-197-1 et seq. of the Commercial Code, or in payment of statutory employee profi t-shares or in connection with an employee stock ownership or stock savings plan,

purchase shares for cancellation, in order to increase return on equity •

and earnings per share and/or to offset the dilutive impact of any capital increases on existing shareholders’ interests, provided that such cancellation is authorised by the Extraordinary General Meeting,

to purchase shares for delivery or exchange in connection with any •

future external growth transactions,

to purchase shares for allocation on exercise of rights attached to •

securities that are convertible, exchangeable, redeemable or otherwise exercisable for Company shares, in accordance with the applicable securities regulations;

that shares may not be bought back under this authorisation at a price of •

more than €40 per share, excluding trading fees;


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that the Board of Directors may adjust the above price, in the case of •

any change in the shares’ par value, any bonus share issue paid up by capitalizing reserves, any stock-split or reverse stock-split, any return of capital or capital reduction, any distribution or reserves or assets, or any other corporate action, to take into account the effect thereof on the share price. In this case, the price will be adjusted based on the ratio between the number of shares outstanding before and after the corporate action;

that the total amount invested in the share buyback program may not •

exceed €199,648,520;

that the shares may be bought back by any appropriate method and •

accordingly that all or part of the program may be implemented on the market or through block purchases – and, if appropriate, through over-the-counter sales – or by means of public buyback or exchange offers, or through the use of options and derivative instruments, other than written puts. The buybacks may be carried out at any time at the Board’s discretion, including while a public tender offer is in progress, subject to compliance with the applicable securities regulations. The shares purchased under this authorisation may be kept, sold or transferred by any method, including block sales, at any time including while a public tender offer is in progress;

to give full powers to the Board of Directors, including the power of •

delegation, to:

carry out the transactions and set the related terms and conditions, •

place any and all buy and sell orders, on or off-market, •

adjust the maximum purchase price of the shares to take into account •

the effect on the share price of any of the corporate actions referred to above,

enter into any and all agreements for the keeping of a register of share •

purchases and sales or for any other purpose,

fulfi l any and all reporting obligations with the Autorité des Marchés •

Financiers and any other organizations,

carry out any and all formalities, •

that this authorisation is given for a period expiring at the Annual General •

Meeting to be called to approve the fi nancial statements for the year ending 31 December 2009 or fourteen months, whichever is shorter.

EXTRAORDINARY RESOLUTIONS

FIFTEENTH RESOLUTION

Authorisation to cancel shares

The Extraordinary General Meeting, having considered the report of the Board of Directors and the Auditors’ special report:

authorises the Board of Directors to cancel, through one or several •

transactions at its discretion, all or some of the shares currently held or that may be held in the future by the Company following share buybacks carried out pursuant to Article L. 225-209 of the Commercial Code, provided that the number of shares cancelled in any 24-month period may not exceed 10% of the total shares outstanding. The difference between the purchase price of the cancelled shares and their par value will be deducted from additional paid-in capital and retained earnings, with an amount corresponding to 10% of the capital reduction being deducted from the legal reserve;

authorises the Board of Directors to place on record the capital reduction(s), •

amend the bylaws to refl ect the new capital and carry out any and all necessary formalities;

authorises the Board of Directors to delegate all necessary powers to •

permit the implementation of its decisions, subject to compliance with the laws and regulations in force when this authorisation is used;

resolves that this authorisation may be used within a fourteen-month •

period from the date of this Meeting;

resolves that this authorisation cancels and replaces the authorisation to •

the same effect given at the General Meeting of 13 May 2008.

SIXTEENTH RESOLUTION

Authorisation to grant stock options

The Extraordinary General Meeting, having considered the reports of the Board of Directors and the Auditors, authorises the Board of Directors to grant options to purchase shares of the Company to certain employees of the Company and its subsidiaries. The authorisation is given for a period of 14 months from the date of this Meeting and may be used on one or several occasions during the period.

The exercise price of the options may not be less than the average of the prices quoted for SEB shares over the twenty trading days preceding the date of grant of the options. The life of the options may not exceed 10 years and the total number of options granted may not be exercisable for a number of shares exceeding 1.2% of the Company’s current share capital.

The Meeting gives full powers to the Board of Directors to set the terms and conditions of the stock option plan or plans.

This authorisation cancels and replaces an earlier authorisation to the same effect given at the Extraordinary General Meeting of 13 May 2008.


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SEVENTEENTH RESOLUTION

Authorisation to make stock grants

The Extraordinary General Meeting, having considered the report of the •

Board of Directors and the Auditors’ special report:

authorises the Board of Directors, in accordance with Articles •

L. 225-197-1 to L. 225-197-5 of the Commercial Code, to make stock grants on one or more occasions, to employees of the Company or certain categories of employee and/or to the senior executives referred to in Article L. 225-197-1 II of the Commercial Code, and to employees and senior executives of companies or economic interest groupings related to the Company within the meaning of Article L. 225-197-2 of the Commercial Code;

resolves that the total number of shares that may be granted shall not •

exceed 0.4% of the Company’s share capital on the grant date.

The Extraordinary General Meeting authorises the Board of Directors to •

make the stock grants, within the limits set out in the preceding paragraph, using shares bought back by the Company in accordance with Articles L. 225-208 and L. 225-209 of the Commercial Code.

The Extraordinary General Meeting resolves: •

A) In respect of stock grants made to grantees resident in France:

to set a minimum vesting period of two years with effect from the date •

of grant by the Board of Directors, during which the rights shall not be transferable pursuant to Article L. 225-197-3 of the Commercial Code;

to set a lock-up period of two years with effect from the vesting date, •

during which the vested shares may not be sold. However, the shares shall be freely transferable in the event of the grantee’s death or second or third degree disability within the meaning of Article L. 341-4 of the Social Security Code.

B) In respect of stock grants made to grantees not resident in France:

to set a minimum vesting period of between two and four years with •

effect from the date of grant by the Board of Directors, during which the rights shall not be transferable pursuant to Article L. 225-197-3 of the Commercial Code;

If the vesting period is set at four years, to waive the lock-up period •

such that the shares shall be freely transferable with effect from their vesting date in accordance with Article L. 225-197-1 paragraph 7 of the Commercial Code.

However, for stock grants made pursuant to both paragraphs A and B above, in the event of the grantee’s death, the shares shall vest immediately in the heirs should they so request no later than six months after the date of death. Furthermore, the shares shall vest immediately in the event of the grantee’s second or third degree disability within the meaning of Article L. 341-4 of the Social Security Code.

The Extraordinary General Meeting gives full powers to the Board of •

Directors, within the limits set out above, to:

draw up the list of grantees or decide the category/categories of •

grantees, provided that no stock grants may be made to employees or offi cers who individually hold over 3% of the capital and that the stock grants would not have the effect of raising the interest held by any employee or offi cer to above the 3% ceiling;

determine the amounts and timing of the stock awards; •

set the criteria and any other conditions of eligibility for stock grants, •

including but not limited to years of service, continued employment by the Company throughout the vesting period, and any other individual or collective performance criteria (fi nancial or otherwise);

set the vesting period and lock-up period, within the limits specifi ed •

above;

record the shares in a registered share account opened in the name of •

their holder, with a lock-up clause covering the entire lock-up period;

if any corporate actions governed by Article L. 228-99, fi rst paragraph, •

of the Commercial Code are carried out during the vesting period, take any and all appropriate measures to protect and adjust the rights of recipients of stock grants, on the basis prescribed in the third paragraph of said Article.

In accordance with Articles L. 225-197-4 and L. 225-197-5 of the Commercial Code, the Board of Directors shall report to each Annual General Meeting on the transactions carried out under this authorisation.

This authorisation is given for a period of fourteen (14) months.

EIGHTEENTH RESOLUTION

Authorisation to issue shares and share equivalents

with pre-emptive subscription rights

The Extraordinary General Meeting, having considered the report of the Board of Directors and the Auditors’ special report, resolves, in accordance with Articles L. 225-129-2 and L. 228-91 of the Commercial Code:

to give the Board of Directors the necessary powers to issue shares and •

securities convertible, exchangeable, redeemable or otherwise exercisable for shares, denominated in euros or in foreign currencies, in France or on the international market, and to determine the timing and amounts of said issues within the limits prescribed below;

that the aggregate par value of the shares to be issued directly and/or •

on conversion, exchange, redemption or exercise of share equivalents pursuant to this authorisation shall not exceed €20,000,000, not including the par value of any additional shares to be issued to protect the rights of holders of existing share equivalents pursuant to the law;

that the aggregate nominal value of debt securities issued pursuant to •

this authorisation shall not exceed €600,000,000 or the equivalent of this amount in the case of issues denominated in foreign currencies;


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that shareholders will have a pre-emptive right to subscribe for the shares •

and/or share equivalents issued under this authorisation, pro rata to their existing interest in the Company’s capital. In addition, the Board of Directors may grant shareholders a pre-emptive right to subscribe for any shares and/or share equivalents not taken up by other shareholders. If the issue is oversubscribed, such additional pre-emptive right shall also be exercisable pro rata to the existing interest in the Company’s capital of the shareholders concerned.

If the issue is not taken up in full by shareholders exercising their pre-emptive rights as described above, the Board of Directors may take one or other of the following courses of action, in the order of its choice:

limit the amount of the issue to the subscriptions received provided that •

at least three-quarters of the issue is taken up,

freely allocate the remaining shares or share equivalents, •

offer all or some of the remaining shares or share equivalents for •

subscription by the public;

that warrants to subscribe for the Company’s shares may be offered for •

subscription on the above basis or allocated among holders of existing shares without consideration;

that, having noted that this authorisation will automatically entail the waiver •

of shareholders’ pre-emptive right to subscribe for the shares to be issued on conversion, exchange, redemption or exercise of share equivalents, decides that said pre-emptive right will be cancelled;

that the amount to be received by the Company for each share issued •

directly or indirectly under this authorisation shall not represent less than the shares’ par value. In the case of shares issued on exercise of stand-alone warrants or other primary securities, the amount received by the Company shall be determined after taking into account the issue price of said warrants or other primary securities;

that the Board of Directors shall have full powers to use this authorisation •

and to delegate such powers to the Chairman, subject to compliance with the law. In particular, the Board of Directors or the Chairman shall have full powers to set the date and terms of the issues, as well as the form and characteristics of the securities to be issued, the issue price and terms, the amount of each issue, the cum-rights date which may be set retrospectively, the terms of settlement of the subscription price and, if appropriate, the conditions under which the securities may be bought back on the open market or the conversion, exchange, redemption or exercise rights attached to the share equivalents may be suspended, provided that said rights are not suspended for more than three months, and the method by which the rights of holders of share equivalents will be protected pursuant to the applicable laws and regulations. The Board of Directors or the Chairman shall also have full powers to charge any and all amounts against the issue premium, including the issuance costs, and to take all necessary or appropriate measures and enter into any and all agreements in connection with the placement of the issues, to place on record the resulting capital increase(s) and to amend the bylaws to refl ect the new capital.

In the case of any issue of debt securities, the Board of Directors shall have full powers, including the right to delegate such powers to the Chairman, to decide whether to issue subordinated or unsubordinated debt, to set the interest rate, the life of the securities, the redemption price – which

may be fi xed or variable and may or may not include a call premium – the terms of early redemption depending on market conditions and the basis on which the debt securities are convertible, exchangeable, redeemable or otherwise exercisable for shares of the Company;

that this authorisation cancels and replaces all earlier authorisations •

to issue shares and share equivalents with pre-emptive subscription rights.


NINETEENTH RESOLUTION

Authorisation to issue shares and share equivalents

without pre-emptive subscription rights

The Extraordinary General Meeting, having considered the report of the Board of Directors and the Auditors’ special report, resolves, in accordance with Articles L. 225-129-2, L. 225-136 and L. 225-91 of the Commercial Code:

to give the Board of Directors the necessary powers to issue shares and •

securities convertible, exchangeable, redeemable or otherwise exercisable for shares, denominated in euros or in foreign currencies, in France or on the international market, and to determine the timing and amounts of said issues within the limits prescribed below;

that the aggregate par value of the shares to be issued directly and/or •

on conversion, exchange, redemption or exercise of share equivalents pursuant to this authorisation shall not exceed €5,000,000, not including the par value of any additional shares to be issued to protect the rights of holders of existing share equivalents pursuant to the law;

that the aggregate nominal value of debt securities issued pursuant to •

this authorisation shall not exceed €150,000,000 or the equivalent of this amount in the case of issues denominated in foreign currencies;

that existing shareholders shall not have a pre-emptive right to subscribe •

to the shares or share equivalents issued under this authorisation, but that the Board of Directors may grant shareholders a priority right to subscribe to all or part of each issue, for a period and on terms to be decided by the Board, provided that the right is exercisable during at least three trading days. Said priority right shall not be transferable but the Board of Directors may allow shareholders to subscribe to the issue and to any securities not taken up by other shareholders pro rata to their existing shareholdings;

that if any issue of shares or share equivalents is not taken up in full by •

existing shareholders and the public, the Board of Directors may limit the amount of the issue to the value of the subscriptions received, provided that at least three-quarters of the issue is taken up;

that, having noted that this authorisation will automatically entail the waiver •

of shareholders’ pre-emptive right to subscribe for the shares to be issued on conversion, exchange, redemption or exercise of share equivalents, decides that said pre-emptive right will be cancelled;

that the amount to be received by the Company for each share issued •

directly or indirectly under this authorisation shall not represent less than the minimum amount prescribed by law. In the case of shares issued on exercise of stand-alone warrants or other primary securities, said amount shall be determined after taking into account the issue price of said warrants or other primary securities;


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that the Board of Directors shall have full powers to use this authorisation •

and to delegate such powers to the Chairman, subject to compliance with the law. In particular, the Board of Directors or the Chairman shall have full powers to set the date and terms of the issues, as well as the form and characteristics of the securities to be issued, the issue price and terms, the amount of each issue, the cum-rights date which may be set retrospectively, the terms of settlement of the subscription price and, if appropriate, the conditions under which the securities may be bought back on the open market or the conversion, exchange, redemption or exercise rights attached to the share equivalents may be suspended, provided that said rights are not suspended for more than three months.

The Board of Directors or the Chairman shall also have full powers to charge any and all amounts against the issue premium, including the issuance costs, and to take all necessary or appropriate measures and enter into any and all agreements in connection with the placement of the issues, to place on record the resulting capital increase(s) and to amend the bylaws to refl ect the new capital.

In the case of any issue of debt securities, the Board of Directors shall have full powers, including the right to delegate such powers to the Chairman, to decide whether to issue subordinated or unsubordinated debt, to set the interest rate, the life of the securities, the redemption price – which may be fi xed or variable and may or may not include a call premium – the terms of early redemption depending on market conditions and the basis on which the debt securities are convertible, exchangeable, redeemable or otherwise exercisable for shares of the Company;

that this authorisation cancels and replaces all earlier authorisations to •

issue shares and share equivalents without pre-emptive subscription rights.


TWENTIETH RESOLUTION

Authorisation to issue shares to be paid up by capitalizing

retained earnings, profi t or additional paid-in capital

The Extraordinary General Meeting, voting in accordance with the quorum and majority voting rules applicable to Ordinary Meetings, having considered the report of the Board of Directors, gives the Board the necessary powers to increase the capital on one or several occasions by a maximum aggregate amount of €10,000,000 to be paid up by successively or simultaneously capitalizing all or part of the Company’s retained earnings, net profi t or additional paid-in capital, and to issue bonus shares and/or raise the par value of existing shares.

The Meeting resolves that the Board of Directors shall have discretionary powers to decide that fractional shares will be non-transferable and that the corresponding shares will be sold, with proceeds of such sale attributed to holders of rights to fractional shares no later than 30 days following the date on which the whole number of shares allocated to them are recorded in their securities account.

The Meeting gives full powers to the Board of Directors, including the right to delegate such powers to the Chairman subject to compliance with the law, to determine the timing and terms of the capital increases, as well as the amounts thereof, to take the necessary action to protect the rights of

existing holders of share equivalents, to deduct from the issue proceeds the amounts necessary to increase the legal reserve to 10% of the new capital, to take all appropriate measures to permit the execution of the operation, to carry out all actions and formalities required to effect the capital increase(s) and to amend the bylaws to refl ect the new capital.


TWENTY-FIRST RESOLUTION

Blanket ceiling on fi nancial authorisations

The Extraordinary General Meeting, having considered the report of the Board of Directors, resolves, pursuant to the adoption of the above resolutions, to set at €25,000,000 the maximum aggregate par value of shares to be issued directly or on conversion, exchange, redemption or exercise of share equivalents pursuant to the above authorisations, provided that said ceiling shall not include the par value of any additional shares to be issued to protect the rights of existing holders of share equivalents as required by law.

Consequently, the value of each issue carried out under any of the above authorisations shall be deducted from this ceiling.

TWENTY-SECOND RESOLUTION

Employee share issue

The Extraordinary General Meeting, having considered the report of the Board of Directors and the Auditors’ special report, resolves, in accordance with Articles L. 225-129 to L. 225-129-6 and L. 225-138-1 of the Commercial Code and Articles L. 443-1 et seq. of the Labour Code:

to authorise the Board of Directors to issue shares and share equivalents, •

on one or several occasions at its discretion, including in separate tranches, for subscription by members of an employee stock ownership plan set up for this purpose. The aggregate par value of shares issued directly or indirectly, on conversion, exchange, redemption or exercise of share equivalents, pursuant to this authorisation, shall not exceed €510,000. These powers may be delegated to any legally authorised person;

that, having noted that this authorisation will automatically entail the •

waiver of shareholders’ pre-emptive right to subscribe for shares and share equivalents issued under the authorisation in favour of members of the employee stock ownership plan, decides that said pre-emptive right will be cancelled;

that – in accordance with Article L. 443-5 of the Labour Code – the shares •

may be offered for subscription at a 20% discount to the average of the prices quoted for the Company’s shares on NYSE Euronext Paris over the twenty trading days preceding the Board’s decision setting the opening date of the subscription period, or a 30% discount if the shares are offered to members of an employee stock ownership plan governed by Article L. 443-6 of the Labour Code provided that the lock-up period under the plan is at least ten years. The Board of Directors may replace all or part of the discount with a grant of shares or share equivalents, or reduce the discount or offer the shares at their market price, subject to compliance with the applicable legal and regulatory limits;


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that the Board of Directors may make matching payments to the employee •

stock ownership plan, in the form of shares or share equivalents, within the limits prescribed by Article L. 443-5 of the Labour Code;

to give this authorisation for a period of fourteen months; •

to give full powers to the Board of Directors, including the power of •

delegation, to set all the terms and conditions of the issues. In particular, the Board shall be authorised to:

decide to offer shares and share equivalents to employees of selected •

entities among the companies whose employees are eligible to invest in the employee stock ownership plan,

set the terms and conditions of the issues to be carried out pursuant •

to this authorisation, decide the amount of each issue, the issue price and date, the subscription period and other terms and conditions, the terms and conditions of settlement and delivery, and the cum-rights dates of the shares or share equivalents,

at its discretion, after each share issue, charge the issuance costs •

against the related premium and deduct from the premium the amount necessary to increase the legal reserve to one-tenth of the new capital,

carry out any and all formalities in order to effect the share issue(s) •

pursuant to this authorisation, amend the bylaws to refl ect the new capital and generally take all necessary or useful measures.

TWENTY-THIRD RESOLUTION

Powers to carry out formalities

The General Meeting gives full powers to the bearer of an original, extract or copy of the minutes of this Meeting to carry out any and all formalities required by law.



GENERAL INFORMATION ON SEB S.A. . . . . . . . . . . . . . . . .160

Corporate object (Article 3, company bylaws) 160

Appropriation of profi ts (Article 48, company bylaws) 160

General Meetings of Shareholders (Article 30 and following, company bylaws) 160

Double voting rights (Article 37, company bylaws) 161

Limitation of voting rights 161

Statutory threshold clause (Article 8, company bylaws) 161

Identity of bearer shareholders 161

Share capital at 31 December 2008 161

Elements which could affect 162

SHARE CAPITAL BREAKDOWN AND CHANGES .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163

Shareholders and voting rights at 31 December 2008 163

Changes in shareholding and voting rights over the last three years 164

Agreements 164

Share capital over the last fi ve years 165

Potential capital at 31 December 2008 166

Changes in shareholding over the last three years 166

FINANCIAL AUTHORIZATIONS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .167

Authorization to issue shares and other securities 167

Authorization for the company to trade in its own shares 167

EMPLOYEE SHAREHOLDING... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168

Staff mutual investment fund and direct shareholding 168

Incentive bonus and profi t-sharing schemes 168

SEB share options allocated to employees 169

Stock option policy 170

STOCKMARKET INFORMATION .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .171

Stockmarket transactions over the last 18 months 171

Dividends and supplementary dividend 172

CONSULTATION OF LEGAL DOCUMENTS .. . . . . . . . . . .172


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General information on SEB S.A.

GENERAL INFORMATION ON SEB S.A.

Corporate name: SEB S.A.

Registered offi ce: Les 4M, Chemin du Petit Bois, 69130, Ecully, France.

Tel: +33 (0) 472 18 18 18. Fax: +33 (0) 472 18 16 55.

Business registration number: 300 349 636 RCS Lyon

Industrial classifi cation (NACE) code: 6420 Z

Status: Public limited company under the French Companies Act.

Trading year: 1 January to 31 December

Legislation: French

Duration: 99 years from 1973

CORPORATE OBJECT (ARTICLE 3, COMPANY BYLAWS)

The object of the company in France and abroad covers:

investment in any company involved in any form of business and, in •

consequence, the acquisition or subscription of all types of shares, warrants, partnership holdings and interests, and all types of securities, as well as the disposal of the said investments and marketable securities;

all operations relating to the financing of its subsidiaries and other •

companies in which it owns or may acquire a holding;

the acquisition and registration of patents or inventions, and the granting •

of all forms of licences for the use of these patents;

the acquisition, construction and management of real estate, and its •

disposal;

any operation which contributes to the development of the company and •

achievement of the objectives set out above.

APPROPRIATION OF PROFITS (ARTICLE 48, COMPANY BYLAWS)

Profi ts are appropriated in accordance with legal requirements and regulations. The dividend payment has a priority claim on distributable profi ts. The Annual General Meeting may offer shareholders an option to choose payment of dividends in cash or in the form of new shares. A supplementary dividend payment of 10% of the unit value of the dividend in question, which may be rounded down to the nearest even number of euro cents, shall be paid in respect of shares registered without interruption by the same shareholder in the nominal register for at least the two preceding accounting periods, and still registered on the date of detachment of the coupon. For any one

shareholder, this supplement is limited to a number of shares which may not exceed 0.5% of share capital. This supplement can be altered or cancelled by decision of an Extraordinary General Meeting of Shareholders which then decides on any new terms and conditions.

The Meeting of Shareholders, however, has the power to decide on the distribution of amounts to be drawn from the reserves at its disposal. This decision specifi es the reserve headings from which funds are to be drawn.

GENERAL MEETINGS OF SHAREHOLDERS (ARTICLE 30 AND FOLLOWING, COMPANY BYLAWS)

Shareholders are notifi ed of the AGM in accordance with legal requirements. All shareholders, irrespective of the number of shares they hold, may attend or be represented at General Meetings of Shareholders.

To have the right to attend the AGM, shareholders who own nominal shares should have these shares registered at least fi ve clear days prior to the Meeting.

Shareholders who own bearer shares must, within the same time limit, deposit with the registered offi ce of the company, or at any place indicated in the convening notice, a receipt showing that their shares have been lodged until after the Meeting.


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DOUBLE VOTING RIGHTS (ARTICLE 37, COMPANY BYLAWS)

Each member attending the Meeting is entitled to exercise one vote for every share held or represented. However, double voting rights are conferred on fully subscribed, registered nominal shares held by the same person for at least fi ve years (decision of the General Meeting of Shareholders of 15 June 1985). Entitlement to double voting rights expires if the shares concerned are converted to bearer status, or if their ownership is transferred, except in

cases where the transfer involves a change of name in the nominal register subsequent to family inheritance or endowment. In the event of an increase in capital by incorporation of reserves, income or issue premiums, double voting rights are conferred, as from their issue, on nominal shares allocated free to a shareholder on the basis of shares already held which bear this entitlement.

LIMITATION OF VOTING RIGHTS

There is no statutory limitation on voting rights.

STATUTORY THRESHOLD CLAUSE (ARTICLE 8, COMPANY BYLAWS)

There exists an obligation to disclose any holding which reaches a threshold of 2.5% (or any multiple thereof) of the company’s capital or voting rights.

IDENTITY OF BEARER SHAREHOLDERS

The company may at any time, in accordance with legal provisions and regulations in force, ask the Euroclear France securities settlement agency to provide:

the name or corporate name, address and nationality of those holding •

shares in the company;

the quantity of shares held by each of them; •

where applicable, any restrictions to which these shares may be •

subject.

SEB S.A. made such a request for the identity of bearer shareholders on 31 December 2008.

SHARE CAPITAL AT 31 DECEMBER 2008

At 31 December 2008, share capital stood at €50,912,138 and was made up of 50,912,138 shares, representing 74,867,303 total voting rights, and 70,491,203 effective voting rights (excluding treasury stock).


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ELEMENTS WHICH COULD AFFECT A HYPOTHETICAL TAKEOVER BID

In compliance with Article L 225-100-3 of the French Commercial Code, elements which could affect a hypothetical takeover bid are stated below:

CAPITAL STRUCTURE OF THE COMPANY

See the table on following page, ’Share capital breakdown at 31/12/2008’.

SHAREHOLDER AGREEMENTS OF WHICH THE COMPANY IS AWARE

See below: ’Shareholder agreement’.

POWERS OF THE BOARD OF DIRECTORS IN THE EVENT OF A TAKEOVER BID

The General Meeting of Shareholders of 13 May 2008 authorized the Board of Directors to launch a share buy-back operation in the event of a takeover bid, subject to legal and regulatory provisions.


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Share Capital Breakdown and Changes

SHARE C APITAL B REAKDOWN AND C HANGES

SHAREHOLDERS AND VOTING RIGHTS AT 31 DECEMBER 2008

Registered nominal shares held by the same person for at least fi ve years give entitlement to double voting rights.

Capital Voting rights (a)

OGM EGM OGM EGM

FÉDÉRACTIVE (b) 9,741,920 19.13% 3 0.00% 19,179,494 27.21% 3 0.00%

FÉDÉRACTIVE associates 1,943,892 3.82% 11,685,809 22.95% 3,709,827 5.26% 22,889,318 32.47%

SUB-TOTAL 11,685,812 22.95% 11,685,812 22.95% 22,889,321 32.47% 22,889,321 32.47%

VENELLE INVESTISSEMENT (c) 6,664,491 13.09% 4,503 0.01% 13,321,398 18.90% 4,506 0.01%

VENELLE INVESTISSEMENT associates 2,919,141 5.74% 10,055,991 19.75% 5,537,297 7.85% 19,807,913 28.10%

SUB-TOTAL 9,583,632 18.83% 10,060,494 19.76% 18,858,695 26.75% 19,812,419 28.11%

FOUNDER GROUP 21,269,444 41.78% 21,746,306 42.71% 41,748,016 59.22% 42,701,740 60.58%

FFP 2,901,522 5.70% 2,901,522 5.70% 2,901,522 4.12% 2,901,522 4.12%

Employees 1,802,954 3.54% 1,802,954 3.54% 3,406,036 4.83% 3,406,036 4.83%

French investors 10,828,851 21.27% 10,351,989 20.34% 11,883,336 16.87% 10,929,612 15.51%

Foreign investors 7,006,550 13.76% 7,006,892 13.76% 7,046,073 9.99% 7,046,757 9.99%

Individual French shareholders 2,726,717 5.35% 2,726,375 5.35% 3,506,220 4.97% 3,505,536 4.97%

Treasury stock 4,376,100 8.60% 4,376,100 8.60%

50,912,138 SHARES 70,491,203 VOTES

(a) Voting rights relating to split-right shares belong to the benefi cial owner at the Ordinary General Meeting (OGM) and to the bare owner at the Extraordinary General Meeting (EGM).(b) A holding company and investment vehicle which holds mainly benefi cial-owner shares, bare-owner shares being held mostly by Founder-group individuals.(c) A family shareholder company which holds mainly benefi cial-owner shares, bare-owner shares being held by Founder-group individuals.


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CHANGES IN SHAREHOLDING AND VOTING RIGHTS OVER THE LAST THREE YEARS

31/12/2006 31/12/2007 31/12/2008

Capital Votes Capital Votes Capital Votes

OGM EGM OGM EGM OGM EGM OGM EGM OGM EGM OGM EGM

FÉDÉRACTIVE 18.49% 0.00% 25.82% 0.00% 19.18% 0.00% 26.78% 0.00% 19.13% 0.00% 27.21% 0.00%

FÉDÉRACTIVE associates 4.31% 22.80% 5.62% 31.44% 3.72% 22.90% 5.03% 31.81% 3.82% 22.95% 5.26% 32.47%

SUB-TOTAL 22.80% 22.80% 31.44% 31.44% 22.90% 22.90% 31.81% 31.81% 22.95% 22.95% 32.47% 32.47%

VENELLE INVESTISSEMENT 13.04% 0.00% 18.41% 0.00% 13.09% 0.00% 18.54% 0.00% 13.09% 0.01% 18.90% 0.01%

VENELLE INVESTISSEMENT associates 5.65% 19.59% 7.67% 27.36% 5.54% 19.57% 7.56% 27.43% 5.74% 19.75% 7.85% 28.10%

SUB-TOTAL 18.69% 19.59% 26.08% 27.36% 18.63% 19.57% 26.10% 27.43% 18.83% 19.76% 26.75% 28.11%

FOUNDER GROUP 41.49% 42.39% 57.52% 58.80% 41.53% 42.47% 57.91% 59.24% 41.78% 42.71% 59.22% 60.58%

FFP 5.04% 5.04% 3.56% 3.56% 5.05% 5,05% 3.58% 3.58% 5.70% 5.70% 4.12% 4.12%

Employees 3.79% 3.79% 4.74% 4.74% 3.57% 3.57% 4.73% 4.73% 3.54% 3.54% 4.83% 4.83%

French investors 24.94% 24.04% 18.93% 17.65% 24.78% 23.84% 18.96% 17.63% 21.27% 20.34% 16.87% 15.51%

Foreign investors 14.57% 14.57% 10.41% 10.41% 14.10% 14.10% 10.05% 10.05% 13.76% 13.76% 9.99% 9.99%

Individual French shareholders 5.38% 5.38% 4.84% 4.84% 5.11% 5.11% 4.77% 4.77% 5.35% 5.35% 4.97% 4.97%

Treasury stock 4.79% 4.79% - - 5.86% 5.86% - - 8.60% 8.60% - -

51,046,460 SHARES

72,303,741 VOTES

50,880,558 SHARES

71,837,256 VOTES

50,912,138 SHARES

70,491,203 VOTES

Although the company is subject to controls, the organization and functioning of the Board of Directors and its committees also contribute to ensuring a balance of control:

fi ve of the directors (four of whom are independent) do not belong to the •

Founder group;

each year, the Board of Directors carries out a review of its own •

functioning;

board committees comprise a majority of independent directors; •

the nine directors representing the Founder group are subject to the same •

obligations as the other directors with regard to protecting the interests of the company, complying with the Directors’ Charter and Internal Rules, and rules of good governance.

At 31 December 2008, there were almost 5,200 shareholders with nominal shares, and 12,000 shareholders with bearer shares (Euroclear information, 31 December 2008).

There are no other shareholders who own directly, indirectly, or jointly with others, 5% or more of share capital or voting rights.

AGREEMENTS

SHAREHOLDER AGREEMENTS

On 5 November 2005, the family shareholders of the Founder group signed a shareholder agreement which replaced the previous voting-block agreement signed on 7 November 1992, and renewed in 1997. The shareholders agreed to continue voting in concert with regard to SEB S.A. (AMF notifi cation no. 205C2064 of 2 December 2005).

The new agreement which seeks to ensure continuity of family control of SEB S.A. takes account of the evolution of the Founder group, which today spans four generations and numbers 242 individual shareholder members from different walks of life.

The four-year agreement, renewable for identical periods, is organized around two usufruct shareholder companies which jointly make up the SEB S.A.


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reference shareholder group: FÉDÉRACTIVE, a holding company and investment vehicle , and VENELLE INVESTISSEMENT a family shareholder company.

At 31 December 2008, the shareholders who are party to the above agreement owned 42.60% of capital and 60.49% of voting rights, which covers virtually all the capital held by the Founder group.

Key features of this agreement include:

mutual fi rst-refusal and tag-along rights which apply to more than three- •

quarters of the shares involved;

a second-level right of purchase for SEB S.A. on shares not already bought •

by family shareholders under the fi rst-refusal right;

guidelines on membership of the Board of Directors and its committees •

and on the allocation of nine of the Board’s 15 seats to FÉDÉRACTIVE (fi ve seats) and VENELLE INVESTISSEMENT (four seats);

an option for the holding companies to open their capital to third-party •

minority interests under certain conditions. FÉDÉRACTIVE has already indicated that it plans to use this option to ensure the long-term stability of the SEB S.A. shareholder base, which is a key objective of this new agreement.

On 9 July 2008, SEB shareholders associated with FÉDÉRACTIVE signed an agreement reinforcing their commitment to the Group. This follows on from the agreement of 5 November 2005, but involves additional commitments binding only on the FÉDÉRACTIVE signatories, and envisages the participation of other investors willing to accompany the FÉDÉRACTIVE Founder-group shareholders in supporting the long-term development of Groupe SEB.

Under this agreement, the signatories would enjoy preferential conditions in the sale or purchase of their SEB shares, which could apply, for example, in the event of termination of the 5 November 2005 agreement (AMF notifi cation n° 208C1659 of 11 September 2008).

COLLECTIVE UNDERTAKING TO RETAIN SHARES

A collective share-retention agreement covering 22.66% of capital and 26.60% of voting rights of SEB S.A., was signed on 28 December 2005 by a number of SEB S.A. shareholders: VENELLE INVESTISSEMENT, Thierry de La Tour d’Artaise in his capacity as Chairman and Chief Executive Offi cer, individual family group shareholders, Foncière Financière et de Participation (FFP) and some other shareholders (AMF notification no. 206C0032 of 5 January 2006).

This agreement was concluded for a period of six years under the terms of Article 885 I b of the French Income Tax Code (a “Dutreil” agreement).

FFP has prior rights in the event of a family shareholder signatory deciding to sell more than 50,000 SEB shares to a third party, following discharge of prior-right obligations under the terms of the agreement of 5 November 2005.

SHARES IN THE SEB S.A. NOMINAL REGISTER USED AS COLLATERAL, AT 31 DECEMBER 2008

During the year, 13 individual shareholders used SEB shares registered in the SEB S.A. nominal register as collateral for loans in favour of their fi nancial intermediaries. This concerned a total of 90,137 shares, or 0.18% of share capital.

SHARE CAPITAL OVER THE LAST FIVE YEARS

Year Type of capital increase

Amount of increase in

shares Nominal (€)

Additional paid-in

capital (€)Total share

capital (€)

2004 March Allocation of free shares (1 for 10) 1,544,904 4,634,712 50,981,826

December Issue of shares arising from the exercise of share subscription options 82,220 246,660 4,611,719.80 51,228,486

2005 December Issue of shares arising from the exercise of share subscription options 117,558 352,674 6,148,765.94 51,581,160

Cancellation of shares (213,680) (641,040) (13,266,805.91) 50,940,120

2006 December Issue of shares arising from the exercise of share subscription options 38,780 116,340 2,052,227.00 51,056,460

2007 December Issue of shares arising from the exercise of share subscription options 32,486 97,458 1,764,999 51,153,918

Cancellation of shares (91,120) (273,360) (7,719,631) 50,880,558

2008 June 3-for-1 split of the nominal share price 33,920,372 50,880,558

December Issue of shares arising from the exercise of share subscription options 31,580 31,580 581,463 50,912,138


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POTENTIAL CAPITAL AT 31 DECEMBER 2008

Exercise of share subscription options represents a total maximum potential of 39,688 shares subscribable up to 14 June 2009.

There are no convertible bonds which can be exchanged for or converted into shares giving access to the company’s capital, and there are no instruments that do not represent capital.

CHANGES IN SHAREHOLDING OVER THE LAST THREE YEARS

There was no signifi cant change in the distribution of the company’s capital during 2006, 2007 or 2008.


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Financial authorizations

FINANCIAL AUTHORIZATIONS

AUTHORIZATION TO ISSUE SHARES AND OTHER SECURITIES

Type of operationDate of

authorizationExpiry of

authorization Maximum amount authorizedUsed at

31/12/2008

Capital increase by incorporation of reserves, income, shares or other premiums 05/2008 07/2009 €10,000,000 -

Issue of all types of securities with preferential subscription rights 05/2008 07/2009

Capital increase: €20,000,000Bond issue: €600,000,000 -

Issue of all types of securities without preferential subscription rights 05/2008 07/2009

Capital increase: €20,000,000Bond issue: €600,000,000 -

Increase in the number of shares issued 05/2008 07/2009 15% of the initial issue -

Purchase of its own shares by the company at a maximum price of €66.67 05/2008 07/2009 €339,203,600 €30,821,745

Cancellation of its own shares by the company 05/2008 07/200910% of nominal capital: 5,088,804 shares

by 24-month period -

Issue of shares reserved for employees participating in the company savings scheme 05/2008 07/2009 Nominal capital of €510,000: 510,000 shares -

Share purchase options 05/2008 07/2009 2% of nominal capital: 1,017,761 shares 1,005,900

Allocation of free shares 05/2008 07/20092% of nominal capital

on the date of the operation -

Figures adjusted to take account of the 3-for-1 split in June 2008.

AUTHORIZATION FOR THE COMPANY TO TRADE IN ITS OWN SHARES

Pursuant to the authorization given to your Board of Directors by the last Annual General Meeting, under the terms of Article 225-209 of the French Commercial Code, the Board acquired 1,518,500 shares at an average price of €30.73 in 2008 to cover share purchase option plans, and 130,499 shares were sold on the occasion of exercise of purchase options, at an average price of €25.18.

Moreover, 438,302 shares were acquired and 433,718 shares were sold under a liquidity agreement.

At 31 December 2008, the company held 4,376,100 of its own shares, or 8.6% of share capital.

The company will ask the Annual General Meeting of 13 May 2009 for a new authorization to trade in its own shares.


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Employee shareholding

EMPLOYEE SHAREHOLDING

STAFF MUTUAL INVESTMENT FUND AND DIRECT SHAREHOLDING

At 31 December 2008, employees of the Group’s companies held 1,175,383 shares in a company savings scheme mutual investment fund, being 2.31% of share capital and 3.18% of voting rights. With the addition of directly

owned shares, employees held a total of 3.54% of share capital and 4.83% of voting rights.

INCENTIVE BONUS AND PROFIT-SHARING SCHEMES

Groupe SEB has for many years pursued an active policy of employee shareholding and association of staff with the company’s results. In France, it was one of the fi rst to introduce voluntary incentive bonus schemes linked to trading performance (Decree of 1959) and employee shareholding, making it possible for employees to share in the fruits of expansion (Decrees of 1967 and 1986).

In France, the employee shareholding agreement is a Group contract which associates all employees with the results.

Profi t-sharing and incentive bonus schemes are a fundamental feature of the Groupe SEB human resources policy. The Group bonus system agreed in 2008 for three years harmonizes these schemes for all the Group’s employees in France, irrespective of the company or activity to which they belong.

Over the last fi ve years, the following amounts have been allocated under this heading:

(in € millions) 2008 2007 2006 2005 2004

38.2* 33.3 25.7 29.2 34.1

* Including €0.7 million in social taxes.


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SEB SHARE OPTIONS ALLOCATED TO EMPLOYEES

At 31 December 2008Subscrip-tion plan

Subscrip-tion plan

Purchase plan

Purchase plan

Purchase plan

Purchase plan

Purchase plan

Purchase plan

Purchase plan

Purchase plan

Date of AGM 04/05/2000 04/05/2000 03/05/1999 14/05/2002 14/05/2002 06/05/2004 06/05/2004 11/05/2006 11/05/2006 13/05/2008

Options authorized by the AGM 1,157,976 1,157,976 1,387,356 1,389,573 1,389,573 1,529,454 1,529,454 1,529,355 1,529,355 1,017,761

Period of authorization 5 years 5 years 5 years 3 years 3 years 3 years 3 years 3 years 3 years 3 years

Date of Board Meeting 04/05/2000 14/06/2001 19/04/2002 17/10/2002 18/06/2003 18/06/2004 08/04/2005 16/06/2006 20/04/2007 13/05/2008

Number of shares allocated (b) 483,600 493,500 417,450 598,125 612,150 539,100 554,700 589,798 579,150 1,005,900

of which to the Group Management Board (b) 189,750 234,300 214,500 44,055 334,290 310,500 318,600 357,000 346,350 261,600

of which to company offi cers (b) 66,000 66,000 49,500 6,600 115,500 105,000 105,000 105,012 105,000 105,000

of which to employees (10 highest allocations) (a) (b) 166,800 171,600 145,200 43,230 237,600 210,000 222,000 234,000 234,000 104,400

Number of original benefi ciaries: 48 82 76 645 103 111 110 111 109 395

of which current members of the Group Management Board 9 12 14 15 15 15 15 16 15 15

of which employees (10 highest allocations) (a) 10 10 10 16 15 15 14 12 12 29

Option exercise date 04/05/2004 14/06/2005 19/04/2006 17/10/2006 18/06/2007 18/06/2008 08/04/2009 16/06/2010 20/04/2011 13/05/2012

Expiry date 04/05/2008 14/06/2009 19/04/2010 17/10/2010 18/06/2011 18/06/2012 08/04/2013 16/06/2014 20/04/2015 13/05/2016

SUBSCRIPTION OR PURCHASE PRICE (€) (b) 19.70 18.18 27.88 25.15 24.24 31.67 28.00 29.33 44.00 38.35

Average of last 20 quotes prior to Board Meeting (€) (b) 19.78 17.95 27.78 26.65 24.03 31.52 28.20 29.01 43.73 38.35

Options exercised at 31/12/2008 (b) 440,688 434,004 240,000 330,075 284,287 12,130 0 0 0 0

Options cancelled at 31/12/2008 (b) 42,912 19,808 21,450 80,265 30,040 15,600 16,800 9,304 3,900 6,000

BALANCE OF UNEXERCISED OPTIONS AT 31/12/2008 (b) 39,688 156,000 187,785 297,823 511,370 537,900 580,494 575,250 999,900

(a) The 10 highest allocations to employees, or more than 10 if the same quantity of options was allocated to more that 10 employees.(b) Including the allocation of free shares in March 2004 (1 for 10), and taking account of the 3-for-1 split of 16 June 2008.


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STOCK OPTION POLICY

Groupe SEB operates two types of stock option scheme:

periodically, an allocation of stock options to members of management, •

extended to the Group’s different entities, taking account of individual potential, responsibilities and performance;

occasionally, a broader allocation with a view to mobilizing employees •

around a specifi c project.

The exercise price is at least equal to the stockmarket price. Options cannot be exercised for four years following allocation, and the time-limit for exercise is then four years from this date.

The Board of Directors decided at its meeting of 18 April 2008 that, as with Thierry de La Tour d’Artaise in his capacity as a company offi cer (see the section Corporate Governance), members of the Group Executive Committee should retain a number of shares corresponding to 20% of the acquisition gain (net of tax and obligatory contributions) at the time of exercise of options.

This obligation to retain shares shall continue to apply for the duration of their function on the Group Executive Committee, and for as long as the number of shares held has not reached the equivalent in value of one year of remuneration (fi xed salary + target bonus).


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Stockmarket information

STOCKMARKET INFORMATION

STOCKMARKET TRANSACTIONS OVER THE LAST 18 MONTHS

The company’s shares are listed on the Paris Bourse Primary Euronext Market, compartment A, under the code ISIN FR0000121709. They are included in the Euronext 3722 Durable Household Products index.

Highest (€) Lowest (€)

Number of shares exchanged Capital exchanged (€ thousands)

Daily averages

2007 48.17 35.33 127,638.0 5,476.0

08 45.67 38.57 172,734 7,213

09 45.06 42.67 134,613 5,910

10 44.98 41.03 101,517 4,397

11 44.00 38.33 155,238 6,354

12 42.06 36.73 124,779 4,946

2008 44.00 19.71 116,564.7 4,011.5

01 42.04 30.38 153,546 5,555

02 42.33 34.04 138,159 5,289

03 38.82 34.16 96,876 3,510

04 41.33 35.61 121,050 4,598

05 43.56 38.45 127,752 5,300

06 44.00 36.17 97,004 3,960

07 39.43 31.00 109,596 3,829

08 38.30 33.26 101,458 3,597

09 39.84 28.70 107,670 3,789

10 31.43 21.12 151,576 3,979

11 29.48 22.11 96,153 2,427

12 25.29 19.71 97,937 2,306

2009

01 23.28 16.44 128,705 2,498

Source: Euronext ParisPrices and volumes adjusted to take account of the 3-for-1 split on 16 June 2008.


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Stockmarket information

DIVIDENDS AND SUPPLEMENTARY DIVIDEND

CONSULTATION OF LEGAL DOCUMENTS

The company bylaws, reports on General Meetings of Shareholders and other company documents may be consulted at the company’s registered offi ces: Chemin du Petit-Bois, 69130 Ecully, France.

Company regulatory documents may be consulted on the Groupe SEB website: www.groupeseb.com.

It is the policy of the Group to ensure that its shareholders are given a fair return on the capital they invest in it. The Board of Directors aims to ensure regular and continuous growth in the dividend payment.

A 10% fi delity supplement, rounded down to the nearest equal number of euro cents, will be paid in 2009 to long-term shareholders in respect of shares held by the same shareholder in the nominal register, at least since 31 December 2006, and still held on the date of detachment of the coupon.

This supplement to the dividend is limited to a number of shares which may not exceed 0.5% of share capital for any single shareholder.

The term of dividend limitation is fi ve years, as from the payment date. After fi ve years, unclaimed dividends are transferred to the French State.

Years Number of shares remunerated

Income per share (€)

Net dividend French tax credit Total income

2003

dividend 47,926,695 0.75667 0.37833 1.13500

dividend supplement 15,100,320 0.07567 0.03783 0.11350

2004

dividend 48,594,438 0.80000 0.80000

dividend supplement 18,997,974 0.08000 0.08000

2005

dividend 48,656,769 0.80000 0.80000


2006

dividend 48,806,556 0.85000 0.85000


2007

dividend 47,469,969 0.93333 0.93333


Data adjusted to take account of the 3-for-1 split on 16 June 2008.

A net dividend of €0.94 per share based on the 2008 results will be proposed at the Annual General Meeting of 13 May 2009. The coupon will be detached on 15 May for payment as from 20 May 2009.


This 2008 Registration Document was printed on 100% PEFC certifi ed paper, acid-free, recyclable and biodegradable by an “Imprim’vert” printer (Charter for the respect of the environment).

Photos:GroupeSEB-GettyImages-Corbis-DR.

Groupe SEB

les 4 M chemin du Petit Bois – BP 172

69134 Écully Cedex France

www.groupeseb.com

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