I - SUSTAINED, PROFITABLE GROWTH IN CORE BUSINESSES: +14%

The increase in the revenues of the Group reflects robust organic growth together with on-going external development and accelerating international expansion. Consolidated revenues totaled EUR 14.8 billion (FRF 97 billion).

Revenues of core businesses rose 14.2% to EUR 11.3 billion (FRF 74 billion). This figure accounts for 76% of the Group total, as compared with 65% at the end of June 1998 and 58% at the end of June 1997. Revenues were up 6% in Energy, 12% in Water, 37% in Waste Services, and 16% in Communications.

For the first half of 1999, core businesses expanded vigorously outside the Group's domestic markets (France and Belgium), with revenues in other countries rising 41% to EUR 4.6 billion (FRF 30.1 billion). International revenues now account for 41% of total core business sales, up from 33% for the corresponding period in 1998 and 27% in 1997. This increase reflects the Group's expansion in the power industry with the acquisition of Gerasul in Brazil, and in waste services with the acquisition of BFI's non-American assets. Water-sector developments announced or carried out in June 1999 — among them Nalco, Calgon and Santiago de Chile — are not included in these figures.

Core business earnings before interest, tax, depreciation and amortization (EBITDA) amounted to EUR 2.6 billion (FRF 17.3 billion) of a Group total of EUR 3 billion (FRF19.7 billion). Core business accounted for 88% of the total (versus 77% in 1998), showing a rise of 13.4%.

Core business cash flow from operations came to EUR 2.1 billion (FRF 13.6 billion) and accounted for more than 96% of the Group total, showing a rise of 13.6%.

II - NET CURRENT INCOME GROUP SHARE UP 33 PERCENT

Net current income (group share) rose by 33% to EUR 466.5 million (FRF 3.1 billion).

Core businesses advanced by more than 24% to EUR 261 million (FRF 1.7 billion).

The Energy sector contributed EUR 148.5 million (FRF 974 million) to earnings, a rise of 58.4%. This reflects the Group's increased interest in Société Générale de Belgique and, through it, in Tractebel, with equity in earnings up from 31% in the first half of 1998 to 48%. Moreover, EGI, Tractebel's international energy and gas division, doubled its contribution from the first half of 1998, due primarily to the first consolidation of Gerasul (Brazil).

Water contributed EUR 102.4 million (FRF 672 million), an increase of 4.5%, with income from international projects up 8.5%; as anticipated, major international contracts signed in Manila, Jakarta and Casablanca in 1997 and 1998 continued to do well. In France, water business increased its contribution by 3.7%, driven by sales growth and productivity gains.

Waste Services contributed EUR 29 million (FRF 190 million), a rise of 7.3%, due in particular to the increased contribution of WATCO/Tractebel.

The contribution of the Communications sector was again negative due to start-ups in cable and TPS, while M6 made a significantly higher contribution (+30% excluding equity in the earnings of TPS).

In other activities, Construction business continued its turnaround, with income up a steep 200% to EUR 15.1million (FRF 99 million). Financial Services generated EUR 174.7 million (FRF 1.1 billion), up from EUR 138.7 million (FRF 910 million) in the first half of 1998, driven by earnings growth at Fortis B (+30%) and the Group's increased stake in Société Générale de Belgique. However, a decline in the Group's interest in Sofinco had a negative impact on group income.

III - NET INCOME (GROUP SHARE) DOUBLES

Exceptional items (net of tax, group share) amounted to EUR 453.4 million (FRF 3 billion), versus EUR 115.5 million (FRF 758 million) in first-half 1998. Net capital gains on disposals (group share) of EUR 864 million / FRF 5.7 billion stem mainly from partial sales of shareholdings in Sofinco and Fortis B — respectively EUR 475 million (FRF 3 billion) and EUR 100 million (FRF 656million). Tractebel registered a capital gain of EUR 194 million (FRF 1.3 billion) on the tender of its Petrofina shares in response to the Total Group's share exchange offer.

These capital gains were partly offset by amortization, provisions and other exceptional charges (EUR 411 million / FRF 2.7 billion), chiefly consisting of amortization of goodwill (EUR 209 million / FRF 1.4 billion), and provisions for emerging country risks (EUR 105million / FRF 689 million).

Including exceptional items, net income (group share) amounted to EUR 920 million (FRF 6 billion), up 97.3% from the first half of 1998.

IV - A STRONG BALANCE SHEET

First-half cash flow (EUR 2.16 billion / FRF 14.2 billion) represents 1.5 times the Group's investments in physical and intangible assets (EUR 1.4 billion / FRF 9.3 billion). Asset disposals (EUR 1.7 billion / FRF 11 billion) represent 112% of financial investments for the year (EUR 1.5 billion / FRF 10 billion).

The Group's financial structure is sound, allowing it to press ahead with the international development of its core businesses. Its consolidated net debt of EUR 11.39 billion (FRF 74.7 billion) at June 30, 1999 compares with total shareholders' equity of EUR 18.51 billion (FRF 121.4 billion). Its debt/equity ratio thus stands at 61.5%, compared with 59% at December 31, 1998. EBITDA for the first half of the year covers net interest expense 8.5 times.

V - OUTLOOK