Mersen — Interim / Quarterly Report 2009

Aug 31, 2009

Carbone Lorraine's Supervisory Board met on August 28, 2009 and examined the 2009 first-half financial statements.

Ernest Totino, Chairman of the Management Board, made the following comments on the Group's first-half results:

"The economic environment was very tough in the first half of 2009, and this affected our traditional markets. However, our new markets remained buoyant. This was particularly the case for renewable energies, which now account for 14% of our sales.

We have made major adjustments, reducing costs, adopting a more selective approach to investment and cutting our working capital requirement. These changes limited the decline in operating margin, and will lead to stronger earnings growth when activity picks up."

Simplified income statement

in millions of euros	H1 2009	H1 2008
Sales	303.1	321.8
EBITDA	44.7	54.4
% of sales	14.7%	16.9%
Operating income before non-recurring	28.9	42.6
items	9.5%	13.2%
% of sales
Net income	13.8	33.6

Consolidated sales totaled €303 million. This represents a decrease of 6%, or 13% like-for-like (at constant scope and exchange rates).

EBITDA came to €44.7 million, equal to 14.7% of sales as opposed to 16.9% in the first half of 2008. The decline in EBITDA margin was limited to just over 2 points through very rapid cost reductions. In addition to restructuring efforts in the last few years, this cost-cutting has made the Group more resilient to the current tough operating environment.

Operating income before non-recurring items was €28.9 million, equal to 9.5% of sales. Operating income was dragged down by depreciation charges on the Group's recent large-scale investments, which have been aimed at supporting development in the renewable energies market and in Asia.

IFRS operating income was €27.6 million, after €1.3 million of non-recurring charges.

Net income was €13.8 million. This compares with €33.6 million in the year-earlier period, which included a €10 million net capital gain from the disposal of the brakes business.

Paris, August 31, 2009

Advanced Materials and Technologies

Advanced Materials and Technologies posted interim 2009 sales of €134 million, down 7% like-for-like compared with the year-earlier period. The decline in sales was limited by buoyant demand for polysilicon in the photovoltaic industry, and by demand from the fine chemicals industry, which resulted in some major orders in Asia. Unadjusted sales rose by 3% due to exchange-rate effects and the acquisitions of Calcarb in the UK and Xianda in China.

EBITDA totaled €28.3 million, equal to 21% of sales.

Operating income before non-recurring items was €17.6 million, equal to 13% of sales. This represents a year-on-year margin decline of around 4 points. The decline was partly due to higher depreciation, arising from recent investments aimed at taking full advantage of growth in the solar energy market, which is a large buyer of graphite equipment.

Electrical Systems and Components

Electrical Systems and Components generated sales of €169 million in the first half, down 12% or 17% likefor-like. Sales fell in all traditional markets, such as electricity supply components and electrical protection equipment. The decline in these markets was made worse by inventory reductions carried out by the leading electrical equipment distributors. The wind turbine market remained strong in Asia and North America.

EBITDA came in at €22.9 million, giving EBITDA margin of 13.6%.

Operating income before non-recurring items was €17.9 million, equal to 10.6% of sales, down 3 points relative to the first half of 2008.

Financing and debt

Cash from operating activities totaled €45.9 million, up from €6.6 million in the year-earlier period. The figure includes €13.5 million from the introduction of factoring program, which has resulted in faster collection of accounts receivable.

Cash flow from investments totaled €29 million. Given the weak economic situation, the Group has taken a more selective approach to investment since the start of the year.

In order to pursue development despite the tough operating environment, the Group sought to strengthen its financial position. A €22.3 million capital increase was therefore carried out by using the PACEO equity facility set up in late 2008.

At end-of June 2009, net debt was €276 million, down from €306 million at end-2008. The net debt/EBITDA ratio was 3.06x versus 2.73x at end-2008. The net debt-to-equity ratio was 76%, down from 93% at end-2008.

Dividend

In July, a 0,62 euro per share dividend has been paid. The option proposed for a payment in new shares has been preferred by shareholders representing 73% of the capital of the company. Consequently, 355,484 new shares have been issued.

Paris, August 31, 2009

Outlook

Despite the global recession, the strategy set out in the "Expansion 2011" plan, presented in 2008, remains valid. However, the plan's targets will now take longer to achieve. The powerful growth drivers on which the plan is based still exist, ensuring a very bright medium-term outlook for Carbone Lorraine.

Although some initial signs of an economic upturn have appeared, they are unlikely to have much of an impact in the second half of 2009. As a result, the Group intends to continue efforts to cut costs, limit investment and achieve structural reductions in the working capital requirement. The aim of these initiatives is to make Carbone Lorraine even more resilient to the current economic environment, while strengthening positions so that the Group derives greater benefit from the upturn when it arrives.

________________________________________

Appendices: consolidated financial statements

Income statement

(in millions of euros)	H1 2009	H1 2008
Sales	303.1	321.8
EBITDA*	44.7	54.4
% of sales	14.7%	16.9%
Operating income before non-recurring	28.9	42.6
items
% of sales	9.5%	13.2%
Non-recurring income and expenses	-1.3	12.6
Operating income	27.6	55.2
Finance costs, net	(5.7)	(6.0)
Current and deferred tax	(6.2)	(14.4)
Net income from continuing operations	15.7	34.8
Net income from divested operations	-1.9	-1.2
Net income	13.8	33.6

* Operating income before non-recurring items + depreciation and amortization

Segment performance

In millions of euros		Advanced Materials and Technologies		Electrical Systems and Components
	H1 09	H1 08	H1 09	H1 08
Sales	134	131	169	191
EBITDA*	28.3	30.2	22.9	31.7
% of sales	21.1%	23.0%	13.6%	16.6%
Operating income before non	17.6	22.7	17.9	27.5
recurring items % of sales	13.0%	17.4%	10.6%	14.4%

* Operating income before non-recurring items and holding-company costs + depreciation and amortization

Financing

(in millions of euros)	H1 2009	H1 2008
Operating activities
Cash flow	44.1	54.1
Change in WCR	14.9	(34.7)
Tax	(3.3)	(7.8)
Cash flow from discontinued activities	(9.8)	(5.0)
Operating cash flow	45.9	6.6

Investing activities

Cash flow from investments	(27.9)	(0.5)
Change in scope	1.9	25.8
Capital expenditure	(28.9)	(26.3)

Cash flow before financing activities	18.0	6.1

Simplified balance sheet

(in millions of euros)	30/06/2009	31/12/2008
Assets
Non-current assets	568	530
Inventory and accounts receivables	265	316
Other assets	19	46
Total	852	892

Liabilities and equity
Shareholders' equity	359	325
Provisions	46	46
Employee benefits	36	35
Accounts payable and other operating payables	98	136
Other liabilities	37	44
Net debt	276	306
Total	852	892

0.76	0.93
3.06	2.73

* 2009 EBITDA calculated as 2x first-half EBITDA

The interim financial report is available online at the Carbone Lorraine and AMF websites.

Paris, August 31, 2009

About Carbone Lorraine

World leader of graphite solutions and electrical components, Carbone Lorraine specializes in the implementing of high technology materials in demanding industrial environments and in the development of systems, which are fundamental to the smooth operation of the motor and the protection of electrical equipment. With over 85% of its sales carried out internationally, the Group holds leadership positions in all of its occupations.

Advanced Materials and Technologies:	N°1 worldwide in anti-corrosion equipment in graphite
	N°2 worldwide in high temperature applications of isostatic graphite
Electrical components and Technologies:
Electrical Applications:	N°1 worldwide in brushes for electrical motors
Electrical Protection:	N°1 worldwide in fuses for powerful semi-conductors
	N°2 worldwide in industrial fuses

The Group is listed at Premier Marché de la Bourse de Paris and is a part of the following indices CAC Mid100, SBF120 et Next 150. Find Carbone Lorraine on Bloomberg: CRL FP and on Reuters: CBLP.PA

Visit our Internet website www.carbonelorraine.com

Analyst and Investor Contact

Sébastien Desarbres VP Investor Relations Carbone Lorraine

Tel.: +33 (0)1 46 91 54 49 dri@carbonelorraine.com Press Contact

Publicis Consultants Vilizara Lazarova

Tel.: +33 (0)1 57 32 86 46 vilizara.lazarova@consultants.publicis.fr