Read the Registration Document - Guerbet

What is your industrial strategy today and are new investments planned?Between 2005 and 2012, Guerbet invested €186 million to strengthen its industrial base to prepare forgrowth in worldwide demand for contrast products and accelerate export sales. Today, most of theseproduction capacity investments have now been completed. As a result, the level for capital expenditures inFrance should return to an annual level of around €15 million. France continues to remain our primarymanufacturing base, assuring 100% of our production for chemicals and 70% for pharmaceuticals. TheGroup has thus succeeded in preserving a model for production and job creation in France while developinga strategy for top-range products. In terms of manufacturing strategy, we are accordingly focussed oninnovation to invent products both greener and safer, while reducing costs for synthesising our activeingredients. With this objective, Guerbet has developed solutions for recycling iodine, new processes forsynthesis using lower amounts of solvents and new technologies to improve the treatment of effluents.Guerbet in this way combines innovation, competitiveness and sustainable development.What is the outlook for 2013 and beyond?For 2013, Group momentum for the period is expected to level off. On that basis, we expect sales growth ofaround 3% or significantly lower than in 2012. This slowdown takes into account the 2012 comparison basereflecting exceptional year-end sales combined with lower growth expected for Europe where the Groupretains a strong presence. In contrast, our gross margin is expected to improve in 2013. At the same time,the entry of Dotarem® in the US market will generate costs associated with the commercial launch whereasit will only start to generate significant sales in the following year. However, despite these additional costs,current operating income is expected to remain steady in relation to 2012.Over the 2014-2016 period, Guerbet will accelerate its revenue growth and improve its margin. This positivemomentum will be bolstered by the American and Asian markets as well as the benefits of measuresimplemented to reduce production costs.By 2016, we foresee growth in sales of 20% with a target for the operating margin greater than or equal to12% or significantly higher than the current level of 7.9%"Become a world leader in diagnostic and interventional radiology to improve patientoutcome and quality of life."Will the strategy initiated last year be pursued?Because we have the chance of operating in a segment sustained by natural growth of around 3% year, ourstrategy, with the full agreement of our majority family shareholder, is focused on building competitiveadvantages over the long-term. We have identified four value drivers for the Group. First, we are pursuing astrategy of high-end positioning for our MRI and x-ray products. This is followed by acceleratingdiversification by the creation of an Interventional Radiology and Theranostics (IRT) division and exploringalliances in other segments (nuclear medicine, ultrasound, optical imaging). Our third priority is reducingproduction and operating costs. Finally, we are building a more streamlined and agile "Best in Class"organisation to meet our ambitious goals and maintain our customer-centric focus.What is Guerbet's position in the worldwide market of medical imaging?The worldwide market for contrast agents and radiopharmaceuticals in 2012 was estimated at €6.5 billion.In this market, Guerbet has made a noteworthy advance last year by moving up to fourth place worldwidefor the combined segments of x-rays and MRI where it previously ranked fifth.Will you pursue your policy with respect to the distribution of earnings?Earnings must continue to be allocated among staff as the key contributors to the improvements made bythe Group, and the shareholders, while continuing to invest in future projects and gradually reducing debt.The Board of Directors will submit a proposal to the General Meeting of 24 May for the distribution of adividend of €2 per share representing an 11% increase from the prior year.5