RA GB 2008

2008 ANNUAL REPORT
2008ANNUALREPORT
SPERIAN PROTECTION
Immeuble Edison - ZI Paris Nord 2
33, rue des Vanesses
BP 55 288 Villepinte
95 958 Roissy CDG Cedex - France
Tel.: +33(0)1 49 90 79 79
www.sperianprotection.com

CONTENTS
OUR MISSION, OUR STRATEGY
MESSAGE FROM THE CHAIRMAN 02
2008: Sperian remains sound in an unsettled economic
climate
The board of directors
MESSAGE FROM THE CEO 04
2009 priorities: adjust costs and differentiate our offer
to customers
The Executive Committee
MAIN STRATEGIC dIRECTIONS 06
Staying close to our customers fosters innovation
Powerful brands for a global market
INNOVATIONS ANd PEOPLE
SPERIAN’S SPIRIT 10
Our organization is about people
INNOVATIVE SOLUTIONS 12
Head protection
Body protection
KEY FIGURES 16
SHAREHOLdER INFORMATION 18
REFERENCE dOCUMENT 20
design & production
Harrison & Wolf
Copyrights
Photographies:
Jack Burlot/Corporate Images
With special thanks to Orcières Merlette resort, France
Steve Murez
Sperian Protection
For additional information:
Corporate communications department
Tel.: 33 (0)1 49 90 79 72
Fax: 33 (0)1 49 90 79 78
Document printed on recycled paper

12008 ANNUAL REPORT
SPERIAN PROTECTION
OUR MISSION
Sperian Protection’s mission is to contribute
to building a safer and therefore more
productive working environment everywhere
in the world. Our aim is to create innovative
products adapted to the needs of each type
of job, and to provide appropriate services
for protecting men and women in their
workplace, whatever risks they are exposed
to; our customers are from various industry
sectors; construction and public works,
public safety, energy, telecommunications
and utilities.
OUR STRATEGY
Close proximity to the end user and the
service rate we offer, the power of the
Group’s brands and the trust they inspire,
and an ambitious policy of innovation form
the basis of our robust differentiation
strategy. This is the way we have forged our
identity, our expertise and our recognized
leadership position in our business lines.
Holding this leading position requires that we
remain the reference in our main markets
and innovate continuously.
SpErian protEction,
protEction you can truSt

Message from the Chairman of the Board
Henri-Dominique Petit
As I announced in the middle of last year,
the functions of Chairman of the Board and
Chief Executive Officer of the Group are
now separated, and a new CEO, Brice de La
Morandière, has been appointed to head
Sperian.
Because he has the trust of our teams and experience in the many
positions he has held in various Group business lines, Brice was
able to take over our operations smoothly, with absolutely no
disruptions. He is now completely responsible for general
management. I am particularly pleased that this evolutionary step
forward in the life of the company was made so seamlessly and
efficiently. Since mid 2008, the entire world economy has been
suffering a completely unprecedented crisis - unprecedented in
scale, unprecedented in its global reach, unprecedented in the
speed of its transition to all economic sectors and businesses.
In this troubled climate, Sperian relied for the whole of 2008 on
the soundness of its business model to support implementation of
our strategic development plan. The Group was able to continue
strategic development, above all through targeted acquisitions,
to strengthen our technical capabilities, our presence in
developing markets and our positions with new customers.
The acquisition at the end of 2008 of Musitani, the leader in fall
protection in Argentina, complements our manufacturing and
distribution facilities already operating in Mexico and Brazil,
and significantly boosts our presence in the rapidly-expanding
Latin-American market. In addition, acquisition of Combisafe,
one of the major developer and suppliers of safety systems for
working at height, complements our fall protection offer, enabling
us to supply globally collective and individual protective solutions,
with a range of products positioned at the high end of the market.
What’s more, this development strategy has helped to strengthen
our positions, especially in the Middle East.
A third acquisition was doseBusters™, one of the pioneers of the
technology for individual noise dosimetry, which means Sperian
can now supply customers with a complete offer of intelligent
hearing protection solutions. So this final acquisition also fulfils
another objective of our long-term strategy to pursue a vigorous
policy of technological innovation.
Throughout 2008 Sperian continued to launch particularly
innovative products in its various market segments, such as the
fall protection system that resists severing on sharp corners, or
high-visibility disposable masks for respiratory protection; these
products match users’ needs perfectly. Finally, the Group has
2008
Sperian remains sound
in an unsettled economic climate
2 2008 ANNUAL REPORT
SPERIAN PROTECTION
MESSAGEFROMTHECHAIRMAN

satisfactory until october, was also affected but remains at a
completely acceptable level of 13.5% of sales. in this context,
our fundamentals are still very healthy, with a diversified
customer base, strong brands recognized for their innovative
qualities, expert customer service teams and a solid financial
structure. i have every confidence in the ability of Brice de
La Morandière and the Sperian teams to continue our
development and to reinforce the Group’s position as a
reference leader in our markets.
continued to capitalize on the Sperian brand, a symbol of
trustworthiness for our workforce and for our customers; we also
continued our worldwide investment in communication.
However, although our business activity was totally in line with
our goals until october, it slowed in the last few months of 2008 –
the earliest sign that the crisis was impacting our Group. Even so,
over the whole year, sales were satisfactory at €751m or total
growth of 3.3%. income of operating activities, which was
With Brice as our new CEO, we can be
confident that respect for our values and
principles of action are well safeguarded.
These values help to make Sperian a
reference leader in our business area.
I have total confidence that Brice can adapt
the Group to the current environment while
still preserving our ability to reinvent
ourselves to differentiate our offer and
to open new channels to meet all our
customers’ needs.
BOARd OF dIRECTORS
Chairman of the Board • Henri-Dominique Petit
Board members • Philippe Alfroid, Philippe Bacou (Co-Executive
officer), patrick Boissier, Ginette dalloz, François de Lisle, patrice
Hoppenot, Gunther Mauerhofer, philippe rollier, andré talmon
Corporate Secretary • Emmanuelle Camus-Nikitine
the nomination of Brice de La Morandière as Board member will
be submitted to the shareholders approval at the annual General
Meeting held on May 6, 2009.
32008 ANNUAL REPORT
SPERIAN PROTECTION
MESSAGEFROMTHECHAIRMAN

the world. And finally, we have given priority to generating a
high cash-flow level, especially through optimization of our
stocks management.
Over and above these internal adjustment measures, our strategy
is based on strengthening our differentiation for our customers
by concentrating on four main strategic directions that involve
the whole company.
At a time of crisis, first, we need to get as close as possible to
our customers. In particular, we have to strengthen our
proximity to our end users, provide them with advanced
expertise, respond instantly both to changes in their needs and
in the environment in which they operate, while making sure
they receive top-quality service; this fosters innovation - our
second strategic direction.
The crisis will generate new needs for products and services.
The Group depends not only on internal resources but also on
external partners to adapt the cutting edge technologies that
exist in other industries to the area of personal protection.
The third part of our strategy is to differentiate our offer through
well-established brands, whose quality and durability is
recognized by customers. Changing our name at the end of 2007
combined with simplifying our brand portfolio has speeded up
recognition of Sperian Protection and of our Uvex, Miller and
Howard-Leight brands.
Sperian’s men and women have made
rigorous efforts for several months to
actively withstand a particularly difficult
economic climate and an unprecedented
crisis.
Since the end of 2008 we have launched adaptation plans which
we shall adjust throughout 2009 to address specific
circumstances in each continent and each industry. We have
also stepped up our relationship with customers to give them
the added value they need; this is how Sperian will differentiate
its offer and win market share.
First of all, our teams are focused on action plans that aim to
preserve the Group’s competitiveness. These plans rest on a
limited number of simple priorities and budgetary objectives,
applicable to our entire organization. These can be adapted to
various possible macroeconomic scenarios. These plans include
four measures for improvement: first, cut our operating costs
significantly for all units, then implement measures for
optimizing purchases through economies of scale and
renegotiation of contracts; Organizing ourselves to get though
the crisis also means adjusting every component of the
organization itself. Sperian has accordingly modified production
capacity and taken steps to reduce the workforce across
Message from the Chief Executive Officer
Brice de La Morandière
2009
priorities: adjust costs and differentiate
our offer to customers
SPERIAN PROTECTION
MessagefromtheCEO

THE ExECUTIvE COMMITTEE
Standing, left to right
Mike Moorefield, Senior Vice President – Americas
Jérôme Ronze, Chief Financial Officer
Philippe Suhas, Senior Vice President – Eye & Face Protection
Marc Beaufils, Senior Vice President – Europe, Middle East, Africa
Brice de La Morandière, Chief Executive Officer
Joe Reimer, Senior Vice President – Fall Protection
Seated, left to right
Francis Allirot, Senior Vice President – Asia Pacific
Mark Hampton, Senior Vice President – Head Protection
Janet dekker, Senior Vice President – Human Resources
Christophe Lamoine, Senior Vice President – Body Protection
Finally, the fourth strategic direction focuses on strengthening
market share in specific developing countries. they represent a
rich pool for future growth owing to their demography and their
growing awareness of personal protection.
i have full confidence in our teams’ ability to implement these
action plans which we will continuously adjust throughout the
year. along with the whole executive committee, we will remain
alert to market changes and will make sure we seize all
development opportunities that arise for Sperian.
We have taken stock of the prevailing
situation and demonstrated reactivity
and adaptability. I am convinced that
with these plans to preserve our
competitiveness and further differentiate
our offer for our customers, Sperian is
in a good position for getting through
this troubled period and for
strengthening our position as the
established leader for our customers,
while preparing for the future.
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MESSAGEFROMTHECEO

the Group is getting into position in segments with the highest
growth potential by allocating its resources, especially to sectors
that will benefit from government stimulus plans such as the
public works, automobile and renewable energy sectors.
Encouraging close proximity to customers
deepens our exact understanding of their
business and environment. Drawing on
this expertise enables Sperian Protection
to design innovative products and also to
offer complete solutions that can meet the
global needs of users.
SOLUTIONS THAT MEET CUSTOMER NEEDS
Understanding customers’ expectations in the safety area is a
key factor for Sperian Protection. The Group’s development is
founded on close proximity to end users and depends on our
efficient sales teams in every world region. With three logistic
platforms located in three continents, we can guarantee a
reliable rate of service to our network of distributor-partners.
Sperian Protection has an adaptable, reactive organization for
responding to the changing needs of our markets.
In 2008 Sperian decided to bring together all our skills in the
public safety protection market as a single organization to
increase our efficiency and highlight our expertise. In addition,
STAYING CLOSE TO OUR CUSTOMERS
FOSTERS INNOVATION
Sperian Fire and Respiratory is being
positioned to become a growth vehicle by
fully integrating our core product offerings
in Respiratory Protection, Fire Products and
Nuclear Protective Apparel into a unified
business unit with a shared sense of
mission of providing our customers with
the best sales, service and expert support
experience possible.
Mark Hampton,
Senior Vice President Head Protection
Main strategic directions
SPERIAN PROTECTION
Mainstrategicdirections

> > FOCUS
Repositioning the gloves business
During 2008 Sperian repositioned its gloves business. First,
with the acquisition of a factory in China that specializes in
dipped gloves manufacture, the Group now has production
capacities in this fast-growing market sector.
Second, Sperian set up a laboratory specially for gloves
development. This is located in France and has already applied
for patents and worked on very innovative gloves concepts that
will differentiate Sperian in our markets.
a personal approach to Hearing
conservation, Howard Leight’s
new Veripro™ field verification
technology makes it easy to get an
accurate, real-world picture
of employees’ attenuation.
overall, the Group aims to increase added value for customers
by offering complete solutions that include complementary
services such as audits, seminars or training. in Hearing
protection, particularly, Sperian has now built up a global offer
in hearing conservation with, besides earplugs and earmuffs,
systems for hearing protection measurement and protection
recommendations.
For a genuinely personalized approach to hearing conservation,
the new Veripro® testing technology from Howard Leight makes
it possible to accurately measure actual noise attenuation.
INNOvATION, THE vITAL ELEMENT IN dIFFERENTIATION
Because trusting your equipment is essential for working
efficiently, the Group innovates day after day to develop better
protection solutions. For Sperian protection, innovation involves
the entire offer and processes. it draws on the Group’s expertise
regarding risk appraisal, conditions for use and in-depth
knowledge of the technical aspects of products. in 2008,
the Group launched innovations in all product ranges: we have
also moved forward in repositioning our gloves business
by emphasizing innovation. Setting up a research laboratory
in France specifically for this business line and acquisition of
a production plant in china enabled us to acquire dipped glove
manufacturing techniques - an essential sector in the glove
market. We also strengthened our competence in noise
dosimetry in 2008 by acquiring doseBusters’ technologies and
patents. Finally, to speed up our innovation program, Sperian
has formed partnerships with universities or research
laboratories in order to pool expertise in highly targeted areas.
72008 ANNUAL REPORT
SPERIAN PROTECTION
MAINSTRATEGICdIRECTIONS

To support our differentiation strategy,
Sperian Protection invests in strengthening
the power of its brands. These are critical
for achieving awareness and loyalty not
only in countries where the Group is already
well established, but also in those where
we aim to develop market share.
STRONG BRANDS FOR A LEADERSHIP POSITION
The Group’s four leading brands represent a promise of
trustworthiness and quality from Sperian to our product users
and to our different publics and partners. The name “Sperian”,
created in 2007, has established a unifying identity for all the
Group’s business arms. The simplification of our brand portfolio
that followed has enabled us to rally around, and concentrate our
efforts on, Sperian and the three leading brands, Uvex*, Miller,
and Howard Leight, which, supported by the endorsement
“By Sperian”, help to expand the Group’s visibility. Now this
new, more coherent and consistent identity is a means of
achieving recognition which places Sperian as the PPE reference
leader. The positioning of the Sperian brand and our values was
explained in a 2008 media campaign in all parts of the world.
The publicity concept was based on images of men and women
with confident facial expressions at work in four different
industrial settings - construction, petrochemicals, work at
height, and manufacturing. The reliability, design and comfort
of our equipment were made clear by a statement from each
worker in support of the central message “Protection you can
trust”, the Group’s brand signature. In addition, to strengthen
recognition and serve as a benchmark in the PPE industry,
Sperian Protection is working on coordinating all its Internet
sites under the same Group banner. This will mean we can
showcase the knowledge, expertise, technologies and solutions
we offer in answer to the safety problems posed by different
customer environments.
Main strategic directions
POWERFULBRANDSFORAGLOBALMARKET
*
* In Americas only
SPERIAN PROTECTION
Mainstrategicdirections

> > FOCUS
Expansion in the Mercosur market
With the acquisition of Musitani in December 2008, Sperian
Protection has strengthened its presence in the Mercosur market. In
fact the Group was already operating in this region through its
manufacturing and distribution business in Mexico and Brazil, but
with Musitani it has secured a foothold in Argentina and boosted its
position in Brazil.
Musitani is one of South America’s leaders in the manufacture and
sales of fall protection products, including harnesses, life lines,
retractable solutions, and access to height systems as well as lifting
equipment.
Besides this, in 2008 the Group strengthened our offer in the
Mercosur market by inaugurating its new Brazilian factory which
produces respiratory masks, protective eyewear and hearing
protection.
TARGETEd dEvELOPMENTS IN EMERGING COUNTRIES
developing countries have a double attraction for groups like
Sperian; their rate of economic growth tends to be higher
than that of oEcd countries by several points. Further, these
are countries that are waking up to safety problems. as their
economies gradually develop, their safety standards get closer
to those practiced in Western Europe and north america. this is
why Sperian is rolling out a targeted investment strategy in the
most attractive countries.
in 2008 Latin america was the focus of this development with
acquisition of Mustani, the argentinian leader in fall protection.
this operation completes a major presence in Mexico and Brazil,
two indispensable countries for tapping into the expansion of the
Latin-american market. on the other hand, the Group continued
to strengthen our presence with end users in china, eastern
Europe and in Middle Eastern countries, where acquisition of
combisafe, the fall protection leader already established in
dubai, enabled us to consolidate our presence with the big
players in this region.
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SPERIAN PROTECTION
MAINSTRATEGICdIRECTIONS

Our recycling policy is one of the priorities in our ecological
commitment and as a general rule, all our industrial waste
is dealt with by accredited recycling specialists. The Group’s
employees at our sales offices also actively contribute to
preserving the environment in many ways, such as paper
recycling and computerised information systems which reduce
The Sperian Protection group’s mission
is to protect people in the workplace.
This supports quite naturally our vision
for development that puts people right
at the centre of our thinking, within our
organization and externally.
Sperian Protection believes that its long term future depends
on our capacity to shoulder our responsibilities towards all our
stakeholders – customers, shareholders, employees, partners
and suppliers and also towards the government bodies and
communities where the Group operates locally.
A RESPONSIBLE ORGANIZATION
As a socially responsible company, Sperian Protection is
committed to growth that respects the ethical principles set out
in our internal guidelines. These apply right across the Group
and provide a code of conduct for all our employees, regardless
of their nationality and culture. Our production processes have
low impact on surrounding ecosystems and consume little
energy. Even so, the Group keeps a watchful eye on minimizing
our environmental footprint and rationalizing our use of water,
energy and raw materials.
OUR ORGANIZATION IS ABOUT PEOPLE
For us, personal protection is more than
just equipment: this is why Sperian
launched an initiative in 2008 to
coordinate and develop all local efforts
in the areas of environmental protection,
participation in local life and personal
development of employees. We are also
working on long-term sustainable
development planning for the entire
Sperian Protection group.
Philippe Suhas,
Senior Vice President Eye & Face Protection
Sperian’s spirit
Sperian first anniversary, Slovakia
SPERIAN PROTECTION
Sperian’sspirit

printing. Finally, Sperian makes a point of being part of the life of
communities where we are active or where we have established
sites; we recruit from local labour pools.
Both the company and workers get involved in local life.
Employees are encouraged to take action to support their
surrounding environment; they often take part in environmental,
solidarity and sponsorship programs, for example. Sperian
Protection also contributes to important national and
international causes and reacted swiftly throughout the year,
by providing personal protection equipment following major
natural disasters such as the earthquake in China, or the raging
fires on the west coast of the US.
SAFETY TRAINING AND AUDITS
Since Sperian’s goal is to help to build a safer workplace,
the health and safety of our workforce are naturally central
concerns. The Group never forgets that safety at work is a major
productivity factor at our sites; for this reason, too, working and
safety conditions at all our production sites are subject to ongoing
improvement measures, specifically In the form of health and
safety audits, and training aimed at raising employee awareness
and identifying ways to improve.
DEVELOPING SPERIAN’S SPIRIT
Our long term development vision is rooted in the belief that the
true worth of a company lies in a relationship of mutual trust with
the men and women who work for it every day.
This is why Sperian’s culture is based on performance, employee
development, ongoing dialogue and free exchange of ideas and
information. Our organization’s four values: respect for people,
team performance, innovation, and customer focus, serve both
as reference points and simple behavioural guidelines which
help Sperian to strengthen our world leadership position and
promote a culture of excellence.
This commitment shapes our human resources management
in the combined interests of our workers and our organization.
It’s working in an environment where they know that individual
competence is recognized, that motivates employees to act in
the interests of collective productivity. To this end tailored
training programs are offered to employees at all levels and in
all positions, within all Sperian Protection’s different sites.
Our concern for industrial relations is ongoing and particularly
strong during these periods when the company is adjusting to
a difficult economic climate. The Group systematically
implements measures to support every worker seeking external
reclassification.
BREAKDOWN OF WORKFORCE BY REGION
Europe
36%
Rest of world
7%Asia Pacific
5%
Americas
52%
Sperian cares about employees’
professional development, especially
during these economically difficult
times. For the Group, it is essential to
support each worker individually by
offering customized assistance,
directional guidance or training
according to their situation and the local
context.
Janet Dekker,
Senior Vice President Human Resources
112008 ANNUAL REPORT
SPERIAN PROTECTION
Sperian’sspirit

head protection
52%of Sperian Protection
sales
HEAD PROTECTION
construction to glassmaking and metallurgy, and uses from
chemicals handling to welding or electrical work. The Group
is also number one in the US for portable emergency eyewash
stations.
CONSERVING HEARING LONG TERM
To make sure that hearing in the workplace is protected, the
group designs, manufactures and sells disposable and reusable
ear plugs to attenuate noise, and passive or communication-
enabled earmuffs under the Howard Leight by Sperian brand
- a benchmark brand in its market. This complete product line
offers different materials, shapes, sizes and noise-attenuation
levels, providing a solution for every user and working
environment. Sperian Protection is also the recognized premier
brand in intelligent hearing protection solutions. World leader in
intelligent earplugs, the Group markets the Quietpro®
, a system
that combines internal electronic hearing protection, adjustable
and passive, with a natural voice and radio communication
process designed for environments with varying noise levels.
In addition, following acquisition of doseBusters, the Group also
offers a complete solution for personal noise dosimetry, which
makes it possible to control, measure and define in real time
a person’s actual exposure to noise in their workplace.
Vision, breathing, hearing: Sperian
protects these vital functions for men and
women at work. Everywhere in the world,
every day, they trust our products and
recognize their superior quality.
Number one in the global eye protection market and number
two in hearing protection, Sperian Protection is also among
the leaders in the manufacture of respiratory protection.
SAFEGUARDING THE APPLE OF YOUR EYE
The fragile and vulnerable human eye is particularly prone to
accidents owing to three main types of hazard found in working
environments: mechanical and chemical threats and those
associated with radiation. Sperian’s huge range of products that
includes glasses, goggles, face screens and welding masks is
specifically designed to protect users against these risks.
Comfort is a key feature of this range: users today are looking
for more comfortable, lighter products. Style is another
determining factor, because someone at work is more willing
to wear/eye protection that’s aesthetically pleasing. The Sperian
range is suitable for a wide range of industries, ranging from
In all the markets where we do business, Sperian Protection aims to increase
safety and productivity through innovative products. The Group works in direct
cooperation with industry experts in order to design and develop innovative
solutions for many sectors.
Innovative solutions
SPERIAN PROTECTION
Innovativesolutions

BREAKdOWN OF 2008 SALES
eye & face
17%
hearing
15%
respiratory
20%
HEAD PROTECTION
BODY
PROTECTION
48%
> > INNOvATIONS
High visibility brings users out of the shadows
“High Visibility” masks are designed to make sure
the user can be seen in poorly lit environments
or foggy weather. they also make it possible to
check quickly that workers are wearing suitable
protective equipment in emergency situations.
duraMaxx: seeing better for longer
the dura-streme technology used for the eyepiece
of the new duraMaxx mask combines two
coatings, with scratch-proofing on the outside and
demisting on the internal surface, so that it’s more
comfortable to wear and lasts three times longer
than standard equipment.
Bilsom 303 for greater inner-ear comfort
the Bilsom 303 earplug is an established leader
in the European hearing protection market. now
developed under the Howard Leight®
by Sperian
brand, the dynamised Bilsom 303 offers improved
user comfort: it slides easily into the auditory
canal and can be worn for long periods.
> > FOCUS
Quietdose, customized noise level dosimetry
In September 2008, Sperian Protection finalized acquisition of
doseBusters™, one of the pioneers of individual noise dosimetry
technology. This company designed and marketed QuietDose, a
complete individual noise dosimetry solution. It links a classic
hearing protection device, either earplugs or earmuffs, with an
individual noise monitoring system. This combination makes it
possible to control, measure and qualify in real time a person’s
actual exposure to noise in the workplace. According to the data
collected, safety managers can make specific decisions designed
to reduce workplace induced hearing loss and select the protective
solution best suited to each person, depending on their type of
workstation.
BREATHING IS LIFE
there are numerous respiratory hazards : dust, poisonous gases
and vapors, breathing in confined spaces... the Sperian
protection group’s offer covers all needs of professions at risk,
particularly the following sectors: petrochemicals,
pharmaceuticals, construction, shipyards, public safety and
fire-fighting. disposable masks, half masks, and full masks
with filters and cartridges, filtering elements, open and closed
circuit apparatus, gas detection and systems for collective
protection. all Sperian’s equipment offers unrivalled levels
of safety, comfort, and lightness in weight.
SPERIAN PROTECTION
INNOvATIvESOLUTIONS

BODY PROTECTION
48%of Sperian Protection
sales
BODY PROTECTION
PROTECTION IN SURE HANDS
Sperian is active in the disposable gloves market, with products
designed to protect against chemical, biological, thermal, and
electrical hazards, abrasion and cuts. Always mindful of user
needs, Sperian’s research and development teams continuously
study possible improvements in order to make gloves even more
suitable for different working conditions in all types of job.
To this end the group has reinforced R&D teams and invested
in additional industrial facilities, especially in dipped glove
technology through acquisition of a factory in Nantong, China.
Body protection is an essential component
of men and women’s safety at work.
Sperian provides solutions for hand
protection, fall arrest and also designs
clothing and shoes.
HIGHER AND HIGHER IN COMPLETE SAFETY
For fifty years Miller®
by Sperian, the world leader in fall
protection, has been perfecting equipment and solutions for
working safety at height. Today Miller’s range of fall arrest
equipment is the most innovative on the market. Comfortable
and pleasant to wear these products can be worn continuously
and make for greater productivity. They are designed and
tested by qualified engineers and technicians; cutting edge
control devices check that the manufactured products do not
merely meet, but exceed current standards. Sperian Protection’s
solutions offer exceptional safety performance.
The acquisition of Combisafe in August 2008 has positioned
Sperian in the segment of collective protection at height.
Combisafe products are benchmarks for the industry and for
the sectors that requiring work at height: they include steel
mesh barriers, safety nets, slab clamps, etc.
BREAKDOWN OF 2008 SALES
footwear
8,5%
clothing
8,5%
gloves
9,5%
HEAD
PROTECTION
52%
BODY PROTECTION
fall protection
21,5%
Innovative solutions
SPERIAN PROTECTION
Innovativesolutions

BODY PROTECTION MEANS PEACE OF MIND
Sperian’s protective clothing, disposable or reusable, combines
ergonomic features, advanced technology and esthetic appeal.
Made to standard or not, these products meet the demands of
the pharmaceutical, nuclear, petrochemical and food processing
industries, and the firefighting services. The Group also makes
image wear for large employee groups, such as in the transport
industry.
SAFETY FOOTWEAR KEEPS FEET ON THE GROUND
In Europe and China, Sperian sells more than two million
pairs of safety shoes every year. Innovation and quality are the
most outstanding attributes of the wide range of supremely
comfortable shoes the Group offers. Completely updated in two
ways over the past few years, it is now segmented by job type
and reflects the latest fashion trends. All the different models
combine improved design with comfort, capitalizing on the latest
R&D findings. Features include ultra-light, antimagnetic toe-
caps, anti-perforation inserts, hardwearing, extremely supple
and tough soles, and top quality leathers and other materials for
uppers and linings.
> > INNOVATIONS
A much-needed new range of safety lines
The risk of safety lines breaking on sharp corners
is very common, but is often not recognized. Now
Miller®
by Sperian has developed and Miller
Manyard Edge Tested, a line using twisted-thread
technology from the textile industry that combines
two strands, one shock absorbent, the other
resistant to cutting.
Polytril™ Air Comfort Gloves
In 2008 Sperian launched the Polytril™ Air Comfort
glove made of a knitted, polyamide-coton-lycra®
material which offers exceptional advantages;
cotton absorbs perspiration for improved comfort,
lycra gives greater elasticity and nitrile induction
provides maximum resistance to abrasions
and oils.
I-Tech safeguards freedom of movement
To provide fire fighters with thermal and anti-
shock protection, Sperian has developed I-Tech,
a system worn on the knee. This product, which
is designed exclusively to fit the patented inner
pocket of Sperian’s protective wear for North
American fire fighters, gives protection while
allowing complete freedom of movement.
Temptation®
Elite: stylish protection
Temptation®
Elite shoes ally design based on the
latest trends with discrete protection to give
women feel-good comfort and fluid, stylish lines,
abrasion resistance, optimal grip and lining that
resists perspiration, bacteria and regulates
temperature.
We were pleased to welcome
Combisafe, which has built a strong
platform based on decades of
experience and product competence.
The addition of Combisafe’s product
offering to Miller by Sperian's existing
fall protection product range has created
the worldwide Safety at Height leader.
Fall arrest, safe access to height, rescue
from height are now offered in both
personal (individual) and collective
(group) systems.
Joe Reimer,
Senior Vice President Fall Protection
SPERIAN PROTECTION
Innovativesolutions

SALES
(in euro million)
2008 751
2007 754
2006 737
NET INCOME
(in euro million)
2008 48
2007 59
2006 41
Leverage
NET dEBT
(in euro million)
2008 303
2007 236
2006 217
A firm stand in 2008: in a difficult global economic climate,
Sperian protection demonstrated the resilience of its economic
model throughout the year. the Group recorded sales growth,
excluding exchange rate impacts, of 3.3% and an operating
margin of 13.5% of sales, giving an operational cash-flow of
69 million euros. the Group also continued with its development
strategy; in particular we went ahead with acquisitions totalling
71 million euros, and investments in technical and industrial
capacities. nonetheless, momentum slowed in the last few
months of 2008, and the first signs of the impact of the crisis on
the Group were visible. this prompted Sperian to implement
restructuring and cost cutting measures from the end of 2008.
KEy FiGurES 2008
NET CASH FROM OPERATING ACTIvITIES*
(in euro million)
2008 69
2007 88
2006 81
* before capital expenditure
INCOME OF OPERATING ACTIvITIES
(in euro million)
2008 101
2007 111
2006 103
Operating margin in % of sales
13.5%
14.7%
14%
2.49%
1.84%
1.79%
SPERIAN PROTECTION
KEYFIGURES2008

Total Sales: 751million euros
Breakdown of sales by geographical areas:
50% EMEA
43% Americas
7% Asia Pacific
29 million euros of capital expenditures
30 production sites on 5 continents
22% innovation rate
SPERIAN PROTECTION
SHAREHOLdERINFORMATION

SHARE PRICE ANd CAC MId100 INdICE PERFORMANCE IN 2008
Listing information
NYSE Euronext (compartiment B)
ISIN Code: FR 0000060899
Ticker: SPR
Indices: SBF120, CAC Mid100,
CAC Mid & Small 190
SHarEHoLdEr inForMation
SPERIAN PROTECTION

Capital
as at 31 december 2008 the capital stood at 7,655,023 shares
with a face value of 2 euros, corresponding to 9,831,301
theoretical voting rights (calculated on the basis of total shares
which carry voting rights, including those shares for which voting
rights are withheld) and 9,716,992 exercisable voting rights
(calculated excluding shares for which voting rights are withheld)
taking into account allocation of double voting rights to shares
Mrs. dalloz
13%
Essilor
15%
Free float
72%
Shareholding
Mrs. dalloz
21%
Essilor
24%
Free float
55%
voting right
held in the registered form for more than two years;
the composition of our shareholder base is relatively stable;
apart from our two keynote shareholders, Essilor and Ms dalloz,
who together hold 28%, corporate French investors hold about
14% of capital, overseas corporate investors 51%, with the rest
held by individual shareholders.
dividends will be paid on 9 july 2009. the record date in terms
of ESES regulations is 8 july and the ex-date is 6 july.
Contacts
• Mail
Sperian Protection - Paris Nord II
Immeuble Edison
33, rue des Vanesses
BP 55288 Villepinte
F-95958 Roissy CDG Cedex
• Internet
www.sperianprotection.com
investorrelations@sperianprotection.com
• Telephone • Fax
+ 33 (0)1 49 90 79 74 + 33 (0)1 49 90 79 78
• Registrar
CACEI Corporate Trust
14, rue Rouget-de-Lisle
F-92862 Issy-les-moulineaux Cedex 9
Tel. + 33 1 57 78 34 44
Fax + 33 1 49 08 05 08
OWNERSHIP STRUCTURE ON 31 dECEMBER 2008
19%
19.4%
17.7%
GENERAL INFORMATION
Sperian makes complete financial information available to
shareholders, which reflects our desire to develop long-term
relationships with them. This information can be found
at www.sperianprotection.com, finance section, which is
a comprehensive data base for financial communication.
The Group also informs financial markets about its strategy
and financial situation at regular meetings throughout the year,
or when annual or half-year results, or quarterly sales figures
are published.
For 2009 dates of main meetings are as follows:
6 May 2009: Annual General Meeting of shareholders
17 July 2009: Sales for the second quarter 2009
26 August 2009: Half-year results 2009
21 October 2009: Sales for the third quarter 2009
dIvIdENd PER SHARE (in e)
2008 1.20*
2007 1.50
2006 1.05
Pay-out
* dividends will be paid on 9 july 2009. the record date in terms of
ESES regulations is 8 july and the ex-date is 6 july.
SPERIAN PROTECTION

2008 reference document
This is a free translation* of the Reference Document (“Document
de Référence”) filed with the French Market Authority (AMF) on
april 15, 2009, in accordance with articles 212-13 of its general
regulations.
*Statutory financial statements are available only in French.
copies of this document are available on request, at no charge, from the investor relations department of Sperian protection
at the following address:
Zi paris nord ii, immeuble Edison, 33 rue des Vanesses, Bp 55288 Villepinte, 95958 roissy cdG cedex, France;
- tel: at +33 (0)1 49 90 79 74;
- fax: +33 (0)1 49 90 79 78;
- email: investorrelations@sperianprotection.com.
20 RAPPORT ANNUEL 2008
SPERIAN PROTECTION

FINANCIAL REPORT 22
1.1. 2008 Management Report 24
1.2. Risk Management 28
1.3. Recent events and outlook 30
1.4. Key figures 31
1.5. Consolidated financial statements 32
BUSINESS REVIEW 76
2.1. History 78
2.2. The Personal Protective Equipment (PPE) Market 78
2.3. Business Segments 81
2.4. Strategy 84
2.5. Development and capital expenditure 86
SOCIAL AND ENVIRONMENTAL REPORT 88
3.1. The Sperian Spirit 90
3.2. Human Resources Policies 90
3.3. Corporate Citizenship 92
3.4. Workforce and Production Plants 93
3.5. Environnemental Policies 94
CORPORATE GOVERNANCE 96
4.1. Board of Directors 98
4.2. Directors’ interests 104
4.3. Directors’ compensation 106
4.4. Other information about the directors 108
4.5. Organization structure 113
4.6. Chairman’s Report 116
INVESTOR INFORMATION 126
5.1. Information about the Company 128
5.2. Information about the Company’s capital 130
5.3. Authorized, unissued capital 133
5.4. Ownership structure 134
5.5. Market for the Company’s shares 137
5.6. Divident policy 139
5.7. Information policy 139
OTHER INFORMATION 140
6.1. Person Responsible for the Reference Document 142
6.2. Statement of Person Responsible
for the Reference Document 142
6.3. Persons Responsible for Auditing
the Financial Statements 142
6.4. Auditors' Fees 143
REFERENCE DOCUMENT
SPERIAN PROTECTION

1-FINANCIALREPORT
SPERIAN PROTECTION

FINANCIAL REPORT 1.1. 2008 Management Report 24
1.1.1. Consolidated revenue 24
1.1.2. Consolidated results 25
1.1.3. Consolidated financial position 26
1.2. Risk Management 28
1.2.1. Financial and market risks 28
1.2.2. Legal risks 28
1.2.3. Insurance 29
1.3. Recent events and outlook 30
1.3.1. Recent events 30
1.3.2. Outlook 30
1.4. Key figures 31
1.4.1. Five-year financial key figures 31
1.4.2. Revenue contribution by business segment 31
1.4.3. Revenue contribution by geographical zone 31
1.4.4. 2008 quarterly revenue 31
1.5. Consolidated financial statements 32
1.5.1. Consolidated balance sheet at December 31 32
1.5.2. Consolidated income statement 33
1.5.3. Consolidated statement of cash flows 34
1.5.4. Consolidated statement of changes in equity 35
1.5.5. Notes to the consolidated financial statements
at December 31, 2008 35
1.5.6. Statutory Auditor’s Report on the consolidated
financial statements 74
1-FINANCIALREPORT
SPERIAN PROTECTION

1.1. 2008 Management Report
Despite the difficult world economic environment, Sperian Protection continued to deploy its expansion strategy throughout 2008,
backed by a solid business model. The Group made several targeted acquisitions to strengthen its technological capabilities, its presence
in developing markets and its positions in new end-user segments.
However, the crisis began to bite in the last few months of 2008, leading to a slowdown in business. This slowdown in sales has worsened
since the beginning of this year. Sperian is therefore expecting the first quarter to be down sharply compared with 2008, when first-
quarter sales were particularly strong.
The measures already initiated in late 2008 or decided in early 2009 will lead to a reduction in headcounts of approximately 760 Group
employees. In addition, the Group is continuing efforts to optimize purchasing costs and to cut costs that will produce savings excluding
inflation of about €23 million on a full year basis.
Because of the uncertain outlook, the Group is not providing any guidance for 2009. However, Sperian is disclosing the following two
simulations: if Group’s organic growth is around -5% for the year, operating margin will be roughly between 11% and 13% of sales and
net debt between 2.5x and 3x EBITDA. If Group’s organic growth is around -15% for the year, operating margin will be between 7% and
9% of sales and net debt between 3x and 4x EBITDA. Changes in the product mix, geographic composition of sales, and exchange rates
will have a significant influence on these simulations.
1.1.1. Consolidated revenue
Consolidated revenue amounted to €750.9 million versus €754.4 million in 2007. Although down on a reported basis, this represents an
increase of 3.3% at constant exchange rates. All geographical and business segments contributed to the growth.
The dollar's depreciation against the euro trimmed revenue by 3.8%.
(in € million) 2008 2007 % change at cst
exchange rate
% organic change
Sales from continuing operations 750.9 754.4 3.3 -0.6
Head protection
Body protection
390.7
360.1
403.2
351.2
1.3
5.7
-3.4
2.5
Americas
Europe, Middle East, Africa
Asia-Pacific
325.2
373.8
51.9
346.2
360.3
47.9
0.2
5.4
10.3
-5.1
2.3
10.3
New acquisitions contributed almost €30 million to full-year revenue, representing 4% of the total. Nacre's first-half revenue bolstered
the head protection segment while Combisafe, acquired in September 2008, was consolidated in the body protection segment for four
months.
The negative organic growth in head protection stemmed mainly from Nacre's low second-half contribution compared with the previous
year. Its business addresses the military market which is extremely cyclical and therefore unpredictable over time. Excluding this effect,
revenue would have been similar to the 2007 level, with growth in hearing and respiratory protection and a slight decline in eye and face
protection.
Body protection posted satisfactory organic growth of 2.5%, after a deliberate policy of reducing sales of low-margin products, mainly
gloves and footwear. Fall protection had a good year, reaping the benefits of a positioning closely geared to the needs of end-users.
Safety footwear, as expected, was stable compared with the previous year, with price increases, particularly in Asia, putting a brake on
sales. The protective gloves business is currently being refocused, which led to a slowdown in sales during the year. Sperian has set up
a new research laboratory devoted specifically to safety gloves and has also invested in a dipped gloves manufacturing facility in China.
Protective clothing posted a broadly positive performance, with a continued recovery in sales of firefighting apparel in North America,
strong sales of the Timberland PRO®
ranges and renewed momentum in image wear.
1-FINANCIALREPORT
SPERIAN PROTECTION

1.1.2. Consolidated results
• Income of operating activities
Income of operating activities amounted to €101.5 million and €105.7 million at constant exchange rates, a decrease of 4.8% compared
with 2007.
(in € million) 2008 2008 at constant
exchange rate
2007 % change at constant
exchange rates
Revenue
Gross profit
in % of sales
Sales marketing expenses
General administrative expenses
RD expenses
750.9
292.3
38.9%
98.5
78.4
13.9
779.6
303.0
38.9%
102.2
80.6
14.5
754.4
297.5
39.4%
93.1
78.7
14.6
3.3
1.9
9.7
2.4
-0.6
Income of operating activities
in % of sales
101.5
13.5%
105.7
13.6%
111.0
14.7%
-4.7
At constant exchange rates, the income statement items can be analyzed as follows:
• Gross margin was 38.9%, down from 39.4% in 2007, but still up on the 2006 level of 38.5%. The contraction in margin stemmed mainly
from under-utilization of some facilities towards the year end and the scale-up of the new Brazilian facility during the year. By contrast,
salary inflation and a rise in some raw material costs were offset by increases in selling prices and purchasing improvement plans.
• The increase in sales marketing expenses was partly due to the Group's strategy of substantially scaling up its Brazilian sales opera-
tions following the inauguration of a new manufacturing facility, and partly to the acquisition of Combisafe.
• The increase in general administrative expenses was in line with revenue growth.
• Research development expenses were similar to the previous-year level, representing 1.86% of revenue versus 1.95% in 2007.
• Net income
Net income came to €48.0 million versus €59.1 million in 2007.
(in € million) 2008 2007 % change
Restructuring costs
Amortization and impairment of revalued intangible assets
Other income
101.5
(2.8)
(4.8)
(4.9)
111.0
1.0
(7.5)
(16.3)
-8.6
Operating income from continuing operations
Net finance costs
Income tax
89.0
(22.6)
(18.3)
88.1
(17.0)
(12.0)
0.9
Net income 48.0 59.1 -18.8
1-FINANCIALREPORT
SPERIAN PROTECTION

The income statement can be analyzed as follows:
• Restructuring costs amounted to €2.8 million including €2.3 million in provisions for a cost-cutting plan initiated by the Group at the
end of 2008 to counter the initial impacts of economic crisis.
• Amortization of revalued intangible assets amounted to €4.8 million, including 2.2 million related to the Nacre acquisition, compared
with €7.5 million in 2007, including €3.3 million related to the Nacre acquisition and €2 million relating to the partial write-down of
certain brands.
• Other income represented a net expense of €4.9 million, mainly comprising the cost of the Group's name change and brand rationaliza-
tion plan (€4.2 million). In 2007, other income represented a net expense of €14.4 million, comprising provision for litigation pending
in the United States involving a respiratory system for firefighters. This sum represents the best estimate of the maximum probable
risk.
• Net finance costs amounted to €22.6 million, including €13.7 million in financial expense, in line with 2007. The increase in average net
debt from €228 million in 2007 to €256 million in 2008 to finance acquisitions was offset by an decrease in interest charges. By contrast,
net foreign exchange losses increased by about €5 million compared to 2007, mainly due to a loss on the Swedish krona.
• Income tax expense amounted to €18.3 million, representing an effective tax rate of 27.6%. This compared with an exceptionally low
rate of 16.9% in 2007, due to the deductibility of some provisions recognized by the Group.
1.1.3. Consolidated financial position
• Summary cash flow statement
(in € million) 2008 2007
Operating cash flow before change in working capital
Change in working capital
85.7
(17.2)
91.2
(3.4)
Net cash from operating activities 68.5 87.8
Capital expenditure
Other acquisitions/disposals
Increase/(decrease) in borrowings
Purchase of treasury shares
Dividends paid
Other
(29.0)
(70.9)
58.1
(8.5)
(11.4)
(6.6)
(21.2)
(86.5)
27.7
(6.9)
(8.2)
6.1
Change in cash and cash equivalents 0.2 (1.2)
Net cash from operating activities amounted to €68.5 million versus €87.8 million in 2007.
Capital expenditure totaled €29.0 million versus €21.2 million in 2007. It mainly comprised the purchase of a dipped gloves manufac-
turing facility in China for €3.4 million, the construction of a new manufacturing facility in Brazil for €2.9 million, the relocation of some
French respiratory protection activities for €2.3 million and the acquisition of doseBusters noise dosimetry technology for €1.5 million.
Other outlays were devoted to innovation, particularly in hearing protection, industrial optimization (San Diego) and IT projects.
1-FINANCIALREPORT
SPERIAN PROTECTION

The Group made two acquisitions in 2008: Combisafe, leader in collective fall protection systems, in September, and Musitani, Argen-
tina's leading fall protection company, in December. These acquisitions led to a €70.9 million increase in average debt for the year.
Lastly, under the share buyback program authorized by the Board of Directors in September 2007, the Group purchased treasury shares
to a value of more than €8 million (including the amount allocated to the liquidity agreement).
• Summary balance sheet
(in € million) 2008 2007
Assets
Intangible assets
Property, plant equipment
Other non-current assets
654
95
40
600
80
35
Total non-current assets 789 715
Current assets 326 299
Total assets 1,115 1,014
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Minority interests
567
1
548
1
569 550
Long-term interest-bearing loans borrowings
Provisions
Other non-current liabilities
253
57
37
147
53
31
Total non-current liabilities 347 230
Short-term loans borrowings
Trade other payables
Provisions
Other current liabilities
75
106
7
11
109
114
8
4
Total current liabilities 199 234
Total equity and liabilities 1,115 1,014
The increase in assets during the year was mainly due to the recognition of goodwill on the Combisafe acquisition, in the amount of €43
million.
Working capital represented 84 days of revenue versus 77 days in 2007.(1)(2)
Net debt stood at €303 million at the year end versus €236 million at end-2007, including €77 million for the Combisafe and Musitani
acquisitions.
The Group's financial structure was solid, with net debt to EBITDA standing at 2.49(3)
versus 1.84 at end-2007 and net debt to equity at
53% versus 43%.
(1) Excluding the receivable from an insurance company under a lawsuit (recognized under trade receivables) and in 2007 excluding the earn-out potentially payable to the
former Nacre shareholders based on future performance (recognized under trade payables).
(2) Excluding Combisafe
(3) Pro forma for Combisafe/Musitani.
1-FINANCIALREPORT
SPERIAN PROTECTION

1.2. Risk Management
1.2.1. Financial and market risks
Market risk is the risk of adverse fluctuations in the value of finan-
cial instruments caused by changes in exchange rates, interest
rates or stock market prices. The Group is exposed to exchange
rate and interest rate risk. The Group does not believe it is exposed
to liquidity risk. Detailed information on the management of these
risks is provided in note 4.14 to the consolidated financial
statements.
1.2.2. Legal risks
The Company exercises the manufacturing and/or distribution of
personal protective equipment throughout the world either
through its subsidiaries or through contractual relationships with
third parties. In that respect, it is subject to a complex regulatory
environment associated with the types of businesses and / or the
business location (see chapter 2 of this document). The risks to
which it is exposed are the typical risks for identical companies
given the domain covered: defective products, product sales
methods, sub-contractor relationships, suppliers and / or distribu-
tion networks and intellectual property.
• Litigation
In the course of normal business, the Company can find itself
confronted with litigation. The Sperian Protection group believes
that it has subscribed to an appropriate level of liability insurance
(except for applicable insurance loss retentions) which provides
coverage against any material financial loss which could result
should its legal responsibility be put in question. With the excep-
tion of the actions described in the paragraph on responsibilities
related to defective products, to the knowledge of the Company, at
this day, no litigation or arbitration exists which could have a
significant impact on the business, financial structure, the Company
value or those of its subsidiaries either in the past or within the
foreseeable future.
• Protection of Sperian Protection Intellectual Property
rights
Sperian Protection policy is to protect its intellectual property
rights through the filing of patents, trademarks and through confi-
dentiality agreements. Nonetheless, there can be no assurance
that this policy will be adequate for the protection of its technology
or the prevention of fraudulent copies or imitations. In addition,
although the Company believes that its products do not infringe
upon the proprietary rights of third parties, there can be no assur-
ance that infringement or invalidity claims will not be asserted
against it in the future. The costs of defending such claims or the
costs and interest associated with any unfavorable judgment
resulting from such litigation could have a material negative
impact upon the Company’s financial position and business.
• Liability for defective products
In general, given the nature of the business, the Group can be
confronted with product liability claims if it is alleged that the use
of its products results in, or such products fail to protect from,
personal injury. As far as PPE products are concerned, legal
actions related to defective products are generally claims based
upon negligence, product design defects or safety requirements,
or inadequate warnings, sometimes without the possibility of
establishing a link between the damages and the cause of the
source event.
Similarly, in the event that any of its products is shown to be defec-
tive, Sperian Protection may be required to recall or redesign such
product. The Company maintains insurance against product
liability claims; however, there can be no assurance that such
coverage will be adequate to cover liabilities which the Company
may incur or that such insurance will continue to be available on
reasonable terms. Certain of the Company’s American subsidiaries
are currently the subject of mass tort suits for respiratory product
liability in several states. The plaintiffs, who claim to have
contracted respiratory illnesses (silicosis, asbestos or other respi-
ratory illnesses) at their workplace, have challenged the quality of
the masks used and the nature of warnings on the masks and,
consequently seek damages against many defendants, including
the manufacturers of respiratory products. In 2003 and 2004, the
number of legal claims increased significantly as a result of
changes in Mississippi and Texas law, which led plaintiffs’ attor-
neys to file proceedings prior to the effective date of those changes.
During 2006 through 2008, the number of such claims declined
significantly. Although, so far, the risk per case has been relatively
small, the legal expense for the American subsidiaries concerned
is significant due to the large number of cases in process. The
1-FINANCIALREPORT
SPERIAN PROTECTION

Group has taken the necessary measures to reduce the risks
related to this litigation, and most notably has created adequate
provisions based upon actuarial estimates (see note 4.10 of the
consolidated financial statements). While insurance is in place and
can be obtained, it is often unavailing because of policy exclusions
and high retention levels. The Group does not expect these legal
proceedings to have a significant impact upon its financial position
and business. In September 2007, as part of a lawsuit related to
the death of a firefighter in 2002, the jury in a St Louis, Missouri,
court decided against the company's US respiratory manufacturing
subsidiary. If the verdict is confirmed, the financial impact for the
Group would be $15 million plus interest. The company believes
that the decision was contrary to the evidence presented and has
filed an appeal. The appeal is expected to be concluded within
12-18 months. There are no other litigation or arbitration claims
outstanding which may have, or may have had, in the recent past,
a significant impact on the Company’s financial statements, its
business or its profitability and as a consequence, on the Group.
1.2.3. Insurance
The Sperian Protection Group has renewed the global insurance
policies for 2009 that provide diverse categories of insurance
coverage for subsidiaries worldwide on either a primary or DIC
(Difference In Conditions) basis. Additionally, various local policies
are still in place in those countries where mandated by local laws.
Civil (general) liability policies are in place to cover all entities for
exposures stemming from the daily operations of its manufac-
turing facilities. Additionally, product liability coverage is in force
to provide protection for the Company for potential claims
emanating from the use of Sperian Protection products. Of partic-
ular relevance, any claims related to exposure in 2009 to asbestos
and silica are excluded from coverage. The global property policy
provides coverage for property damage resulting from the perils of
fire, explosion, lighting, windstorm, vandalism, riot or civil
commotion, and other miscellaneous extensions of coverage iden-
tified in the policy. Coverage for business interruption losses is
provided for all entities in the United States and for Sperian Protec-
tion companies outside the US as well. Limited coverage for earth-
quakes and floods is provided up to certain limits dependent upon
location. Workers compensation coverage is provided for all
Sperian Protection companies in the United States as required by
applicable law. Employer’s liability coverage is provided on a
worldwide basis. This global program provides a level of coverage
deemed to be suitable by the Company. Globalization of the
company’s insurance program provides for consistency of coverage
across all operating companies, efficiencies of administration and
premium savings due to the economies of scale associated with a
worldwide program. For 2009, Sperian Protection has purchased a
global cargo policy.
• Europe Rest of the World
Each Sperian Protection company benefits from, at a minimum, a
liability insurance policy as well as a “property damage” policy on
either a primary or DIC basis. Liability coverage is provided within
the framework of a European program, with local policies meeting
the legal specifications resulting from local legal environments,
and supplemented by additional insurance coverage provided
within the framework of the Group policy subscribed to by the
parent company. The insurance coverage includes “Completed
Operations” and “Product” risks for all operating entities.
With respect to “Property Damage”, an insurance program has
been implemented which provides coverage in line with the
capacity of the insurance market and for coverage amounts which
are sufficient given the property values which are regularly
reassessed.
The retention levels are at levels commensurate with the Compa-
ny’s size and risk exposure and is reflective that recent claims have
been low in frequency as well as in total amounts. In the current
state, insurance has been taken against losses related to business
interruption.
For companies which benefit from coverage outside of the
program, the amount of their coverage corresponds to reported
values existing and should insurance related to losses as a result
of business interruption have been subscribed, that coverage
amount is based upon the gross margin amounts as recorded in
accounting records.
The total amount of the premium in 2008 for the Eastern Hemi-
sphere amounted to USD1.6 million, an amount which is subject to
controlled changes with respect to the generally observed price
demands of insurers.
1-FINANCIALREPORT
SPERIAN PROTECTION

• United States
The American companies benefit from their own insurance programs, which are subscribed locally. These programs cover risks such as:
• liability, most notably product liability with significant coverage provided through the use of several “layers” of which the cumulative
amount is fixed for the financial year at 53 million US dollars;
• property damage claims and losses related to Business Interruption, the combined amount of insurance coverage per incident is a
blanket limit of USD200 million;
• employer liabilities as well as coverage for employees according to the local laws and regulations or local common proactive for
amounts required by those jurisdictions;
• crime, fiduciary, and automotive according to the standards in force.
The total cost of the premiums amounted to USD2.9 million in 2008 and is the subject of regular analysis and control. All insurance
companies with which Sperian Protection has subscribed its policies are rated A or A+ by A.M. Best. In addition, the Company holds a
worldwide insurance policy for Management Liability for a cumulative amount of USD25 million. In 2008, Sperian Protection purchased
A-side DIC coverage for non-indemnifiable claims with a limit of USD5 million.
In 2003, the Company formed a captive insurance company chartered in Vermont, USA. At that time, the Company transferred the self-
insured portion of its product liability related to Respiratory Protection Products to that Captive and, as a result, transferred all of the
related damages. The captive insurer covers the Company for all of the self-insured indemnities with respect to claims covered by this
program including rights, expenses and other related costs. At the end of 2007, the Company added liabilities for the self-insured posi-
tion of its other product liability claims, as well as Workers Compensation claims, to the Captive.
1.3. Recent events and outlook
1.3.1. Recent events
No other events have occurred after the year end.
1.3.2. Outlook
The Group is unable to make forecasts for full year 2009 given the uncertain economic outlook.
1-FINANCIALREPORT
SPERIAN PROTECTION

1.4. Key figures
1.4.1. Five-year financial key figures
(in € million) 2008 2007 2006 2005 2004
Revenue
Net income from continuing operations
Net income attributable to equity holders of the parent
Net debt at December 31
Net cash from operating activities(1)
750.9
101.5
48.0
48.0
302.9
68.5
754.4
111.0
59.1
59.1
235.5
87.8
736.8
103.1
45.0
41.1
217.0
80.8
694.2
94.3
44.7
44.5
272.6
85.3
677.5
90.9
29.8
(13.8)
314.5
47.1
(1) Cash flows from operating activities before capital expenditure.
1.4.2. Revenue contribution by business segment
(in % of revenue) 2008 2007 2006 2005 2004
Eye and face protection
Respiratory protection
Hearing protection
17.0
20.0
15.0
19.0
20.0
14.5
20.0
21.0
12.0
22.0
19.0
12.5
23.0
19.0
12.5
Head protection 52.0 53.5 53.0 53.5 54.5
Fall protection
Protective gloves
Safety footwear
Protective clothing
21.5
9.5
8.5
8.5
19.0
10.5
8.5
8.5
18.0
11.0
8.0
10.0
17.0
12.0
7.5
10.0
16.0
12.0
6.5
11.0
Body protection 48.0 46.5 47.0 46.5 45.5
Total 100.0 100.0 100.0 100.0 100.0
1.4.3. Revenue contribution by geographical zone
(in % of revenue) 2008 2007 2006 2005 2004
Americas
Asia-Pacific
43.0
50.0
7.0
46.0
48.0
6.0
47.0
47.0
6.0
50.0
45.0
5.0
50.5
44.0
5.5
Total 100.0 100.0 100.0 100.0 100.0
1.4.4. 2008 quarterly revenue
(in € million) 2008 Q1 Q2 Q3 Q4
Total 750.9 186.7 191.7 174.8 197.8
Head protection
Body protection
390.7
360.1
100.6
86.1
99.2
92.5
87.5
87.3
103.5
94.3
Americas
Asia-Pacific
325.2
373.8
51.9
87.8
87.8
11.1
81.5
97.0
13.1
80.1
81.6
13.0
75.8
107.4
14.6
1-FINANCIALREPORT
SPERIAN PROTECTION

1.5. Consolidated financial statements
1.5.1. Consolidated balance sheet at December 31
(in thousands of euros) Note December 2008 December 2007
ASSETS
Non-current assets
Goodwill 4.1 554,869 516,570
Other intangible assets 4.2 98,213 83,673
Intangible assets 653,082 600,243
Property, plant equipment 4.4 95,315 79,777
Deferred tax assets 4.21 35,698 29,850
Other financial assets 4.5 4,188 5,155
Total non-current assets 788,283 715,025
Current assets
Inventories and work in progress 4.6 140,047 116,138
Trade receivables 4.7 126,786 133,674
Other operating receivables 4.7 28,843 27,031
Derivative financial instruments 4.15 6,044 2,025
Cash and cash equivalents 4.8 24,629 19,772
Total current assets 326,349 298,640
Total assets 1,114,632 1,013,665
Equity and liabilities
Equity
Share capital 4.9 15,310 15,503
Share premium 436,533 442,138
Treasury shares 4.9 (69,382) (58,206)
Cumulative translation differences 4.9 (1,298) (858)
Net income for the period 47,776 58,833
Reserves and retained earnings 138,511 91,040
Total equity attributable to equity holders of the parent 567,450 548,450
Minority interests 1,289 1,116
Total equity 568,739 549,566
Non-current liabilities
Deferred tax liabilities 4.21 26,204 18,780
Long-term financial liabilities 4.13 252,668 146,573
Retirement benefit obligation 4.11 11,128 11,782
Provisions 4.10 57,481 52,919
Total non-current liabilities 347,481 230,054
Current liabilities
Trade payables 4.12 95,679 108,038
Current tax liabilities 10,462 5,965
Short-term financial liabilities 4.13 74,814 108,741
Derivative financial instruments 4.15 10,172 3,755
Provisions 4.10 7,285 7,546
Total current liabilities 198,412 234,045
Total liabilities 545,893 464,099
Total equity and liabilities 1,114,632 1,013,665
1-FINANCIALREPORT
SPERIAN PROTECTION

1.5.2. Consolidated income statement
(in thousands of euros) Note December 31, 2008 December 31, 2007
Continuing operations
Sales 750,880 754,386
Cost of goods sold (458,568) (456,932)
Gross profit 292,312 297,454
Sales marketing expenses (98,492) (93,145)
General administrative expenses (78,448) (78,732)
RD expenses (13,903) (14,599)
Income of operating activities 101,469 110,978
Restructuring costs 4.16 (2,833) 993
Amortization and impairment of revalued intangible assets 4.18 (4,805) (7,495)
Other income/expenses 4.16 (4,855) (16,342)
Operating income from continuing operations 88,976 88,134
Net finance costs 4.17 (22,580) (17,048)
Income before tax 66,396 71,086
Income tax 4.21 (18,348) (11,986)
Net income 48,048 59,100
Attributable to:
Equity holders of the parent 47,776 58,833
Minority interests 272 267
48,048 59,100
Earnings per share 4.22
Basic earnings per share 6.32 7.65
Diluted earnings per share 6.30 7.59
Weighted average number of shares in issue 7,565,342 7,688,063
Weighted average number of shares, fully diluted 7,577,689 7,751,304
1-FINANCIALREPORT
SPERIAN PROTECTION

1.5.3. Consolidated statement of cash flows
(in thousands of euros) Note December 31, 2008 December 31, 2007
Operating activities
Income before income tax 66,124 70,819
Minority interests 272 267
Non-cash income and expenses
Share-based payment 4.20 2,590 1,614
Depreciation, amortization and impairment 4.18 23,487 25,816
Change in provisions (409) 11,539
Change in financial instruments 4,632 (699)
Other financial transactions 4.17 5,144
Gains or losses on divestment of non-current assets (32) (1,185)
Interest charges 4.17 12,629 12,948
Interest paid (13,019) (12,775)
Income taxes paid (15,708) (17,167)
Operating cash flow before change in working capital 85,710 91,177
(Increase)/decrease in inventory and work in process (15,242) (897)
(Increase)/decrease in trade and other receivables 12,129 (1,308)
Increase/(decrease) in trade and other payables (7,791) 1,737
Change in other operating assets/(liabilities) (6,275) (2,902)
Change in working capital (17,179) (3,370)
Net cash provided by operating activities 68,531 87,807
Investing activities
Acquisitions of property, plant equipment, intangible and financial assets (28,951) (21,160)
Acquisition of investments in consolidated companies, net of cash acquired 2 (71,153) (87,492)
Disposal of investments in consolidated companies, net of cash sold 0 (1,483)
Divestment of property, plant equipment and intangible assets 237 2,463
Net cash provided/(used) by investing activities (99,867) (107,672)
Financing activities
Increase/(decrease) in financial liabilities 90,471
Change in borrowings 58,098 (62,749)
Other financial transactions 4.17 (5,144)
Capital increase 4.9 86 6,711
Capital increase by minority shareholders in subsidiaries 80
Change in treasury shares 4.9 (8,474) (6,924)
Dividends paid to equity holders of the parent 4.23 (11,362) (8,062)
Dividends paid to minority shareholders of consolidated companies (79) (173)
Net cash provided/(used) by financing activities 33,125 19,355
Effect of exchange rate changes on cash and cash equivalents (1,580) (647)
Change in cash and cash equivalents 209 (1,157)
Opening cash and cash equivalents 4.8 (10,740) (9,583)
Closing cash and cash equivalents 4.8 (10,531) (10,740)
Movement in cash and cash equivalents 209 (1,157)
1-FINANCIALREPORT
SPERIAN PROTECTION

1.5.4. Consolidated statement of changes in equity
See Note 4.9 Attributable to equity holders of the parent Total Minority
interests
Equity
(in thousands of euros) Share
capital
Share
premiums
Treasury
shares
Reserves Cumulative
translation
differences
Net income
for
the period
At January 1, 2007 15,330 441,818 (597) 60,084 (16,956) 40,963 540,642 961 541,603
Allocation of 2006 net income 40,963 (40,963) 0 0
Dividends paid (8,062) (8,062) (172) (8,234)
Shares issued on exercise of stock options 173 6,538 6,711 6,711
Capital increases made by subsidiaries 0 78 78
Share-based payment 1,303 1,303 1,303
Purchase of treasury shares (6,924) (6,924) (6,924)
2007 net income 58,833 58,833 267 59,100
Gains/losses on hedging instruments (2,803) (2,803) (2,803)
Change in cumulative translation
differences (41,250) (41,250) (18) (41,268)
At December 31, 2007 15,503 449,659 (7,521) 90,182 (58,206) 58,833 548,450 1,116 549,566
Allocation of 2007 net income 58,833 (58,833) 0 0
Dividends paid (11,362) (11,362) (75) (11,437)
Shares issued on exercise of stock options 2 84 86 86
Share-based payment 2,590 2,590 2,590
Purchase of treasury shares (8,474) (8,474) (8,474)
Cancellation of treasury shares (195) (7,022) 7,217 0 0
2008 net income 47,776 47,776 272 48,048
Gains/losses on hedging instruments (440) (440) (440)
Gains/losses on hedges of net investments (8,729) (8,729) (8,729)
Change in cumulative translation
differences (2,447) (2,447) (24) (2,471)
At December 31, 2008 15,310 445,311 (8,778) 137,213 (69,382) 47,776 567,450 1,289 568,739
1.5.5. Notes to the consolidated financial statements at December 31, 2008
Introduction
On March 3, 2009, the Board of Directors approved the consolidated financial statements for the year ended December 31, 2008 and
authorized their publication. Sperian Protection is a listed société anonyme registered in France.
Note 1: Accounting policies
1.1 Basis of preparation
As required by European Council regulation 1606/2002 of July 19, 2002, the Group's 2008 consolidated financial statements have been
prepared in accordance with International Financial Reporting Standards (IFRS) and their interpretations as endorsed by the European
Union on December 31, 2008.
1-FINANCIALREPORT
SPERIAN PROTECTION

The Group made the following elections on first-time adoption of
the new standards:
- not to restate business combinations prior to January 1, 2004;
- to transfer cumulative translation adjustments at January 1, 2004
to reserves;
- to apply IFRS 2 Share-based Payment to plans granted after
November 7, 2002 that had not vested at January 1, 2005.
The Group elected not to recognize its unrecognized actuarial
gains or losses at December 31, 2003 in equity as permitted by
IFRS 1, as they were not material.
Accounting policies are consistent with those used to prepare the
financial statements for the previous year, with the following
exceptions.
During the year, the Group adopted the following new standards,
amendments or interpretations:
- IFRIC 11: IFRS 2 – Group and Treasury Share Transactions
The adoption of these revised standards and interpretations had
no impact on the Group's performance or financial position.
The Group has elected not to early adopt those standards and
interpretations endorsed by the European Union whose applica-
tion is not mandatory as of January 1, 2008:
- Amendment to IAS 1: Presentation of financial statements
(revised)
- Amendment to IAS 23: Borrowing Costs
- IFRS 8: Operating Segments
- IFRIC 13: Customer Loyalty Programmes
- Amendment to IFRS 2 - Share-based Payment: Vesting Condi-
tions and Cancellations
- IFRIC 14: IAS 19 - The Limit on a Defined Benefit Asset Minimum
Funding Requirements and their Interaction
Sperian Protection is currently analyzing the potential impacts of
applying these new standards to the consolidated financial state-
ments. At this stage, their impacts cannot be determined with
sufficient precision.
The consolidated financial statements have been prepared using
the historical cost convention, except for certain asset and liability
classes which are measured at fair value as required by IFRS. The
assets and liabilities concerned are described in the notes below.
1.2. Accounting policies
1.2.1. Consolidation principles and methods
Entities over which the Sperian Protection group has exclusive
control, either directly or indirectly, are fully consolidated. Control
is defined as the power to govern the financial and operating poli-
cies of the subsidiary in order to derive economic benefits from its
activities.
Entities over which the Sperian Protection group exercises signifi-
cant influence are accounted for using the equity method. Signifi-
cant influence is the power to participate in the financial and
operating policies of the subsidiary but is not control or joint
control over those policies. Significant influence is generally
presumed to exist if the reporting entity holds at least 20% of the
voting rights.
Subsidiaries are included in the financial statements from the date
control commences until the date control ceases.
1.2.2. Elimination of intra-group transactions
Transactions between consolidated companies and any intra-group
profits are eliminated.
1.2.3. Year end
The consolidated financial statements are based on the separate
financial statements of Sperian Protection S.A. and its subsidiaries
as of December 31 each year. All subsidiaries have the same year
end as the parent company and use the same accounting
methods.
1.2.4. Translation of financial statements of foreign entities
The consolidated financial statements are presented in euros,
which is the functional currency of the Sperian Protection group.
Each Group entity determines its own functional currency and the
items included in their separate financial statements are meas-
ured using that currency.
The balance sheets of subsidiaries whose functional currency is
not the euro are translated at the exchange rates ruling on the
reporting date. Their income statements are translated at the
average rate for the year. Any translation differences are recog-
nized in consolidated reserves for the Group share and in minority
interests for the non-Group share. Goodwill and fair value adjust-
ments arising on the acquisition of a foreign entity are treated as
assets and liabilities of the foreign entity. Accordingly, they are
expressed in that entity's functional currency and translated at the
year-end rate.
On disposal of a foreign entity, the cumulative translation differ-
ences recognized in equity in respect of that entity are recycled to
profit or loss.
1-FINANCIALREPORT
SPERIAN PROTECTION

The exchange rates of the main currencies used in consolidation are as follows:
Vs the euro Year-end rate Average rate
2008 2007 2008 2007
Australia AUD 2.0274 1.6757 1.7389 1.6356
Brazil BRL 3.2436 2.6018 2.6731 2.6635
Canada CAD 1.6998 1.4449 1.5570 1.4671
China CNY 9.4956 10.7524 10.2109 10.4186
United States USD 1.3917 1.4721 1.4688 1.3706
Hong Kong HKD 10.7858 11.4800 11.4393 10.6928
Morocco MAD 11.2585 11.3520 11.3466 11.2180
Mexico MXN 19.2333 16.0735 16.2799 14.9769
Norway NOK 9.7500 7.9580 8.2258 7.9004
United Kingdom GBP 0.9525 0.7334 0.7961 0.6913
Slovakia SKK 30.1260 33.5830 31.2602 33.7750
Sweden SEK 10.8700 9.4415 9.6158 9.2521
Switzerland CHF 1.4850 1.6547 1.5886 1.6427
1.2.5. Foreign currency transactions
Foreign currency transactions are translated at the exchange rate ruling on the transaction date. Monetary assets and liabilities denomi-
nated in foreign currencies are translated at the rate ruling on the reporting date. The resulting exchange differences are recognized in
profit or loss.
1.2.6. Hedges of a net investment in a foreign operation
Hedges of a net investment in a foreign operation, including hedges of a monetary asset recognized as part of the net investment, are
accounted for in the same way as cash flow hedges (Note 1.3.7). Gains or losses on the effective portion of the hedge are recognized
directly in equity and gains or losses on the ineffective portion are recognized through profit or loss. When the foreign operation is sold,
or the criteria for recognition as a hedge of a net investment in a foreign operation under IAS 21 are no longer met, the cumulative gains
and losses recognized in equity are recycled to profit or loss.
1.2.7. Use of estimates
In preparing the financial statements in accordance with IFRS, the Group is required to make certain estimates and assumptions that
affect the amounts presented. The balance sheet items whose carrying amount is likely to be significantly affected by changes in esti-
mates made by the Group are non-financial assets (Note 4.3), provisions and contingent liabilities (Note 4.10), pension and other post-
employment benefits (Note 4.11), share-based payments (Note 4.20) and deferred tax assets (Note 4.21.3).
1.3. Significant accounting methods applied to balance sheet and income statement items
1.3.1. Intangible assets
Goodwill
Goodwill is initially measured as the excess of the cost of the business combination over the Group's interest in the fair value of the
identifiable assets, liabilities and contingent liabilities of the acquired entity. On the acquisition date, goodwill is allocated to one or more
cash-generating units (CGUs). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent
of the cash inflows from other assets or groups of assets. Goodwill is not amortized but tested for impairment whenever there is an
indication that it may be impaired and at least once a year on the reporting date. Impairment testing consists of comparing the carrying
amount of a CGU with its value in use, which is the present value of the future cash flows expected to be derived from continuing use of
the CGU and its ultimate disposal. If value in use is less than the carrying amount, an impairment loss is recognized in profit or loss and
deducted to the extent possible from the goodwill allocated to that CGU. Goodwill impairment losses are not reversible.
1-FINANCIALREPORT
SPERIAN PROTECTION

Research development expenses
Research expenditures are recognized as an expense when they
are incurred. Development expenditures are only recognized as an
intangible asset if they will generate individually probable future
economic benefits. Most development costs are incurred before
product certification. They are therefore expensed as incurred as
there is no reasonable assurance before this stage that the prod-
ucts will come to market.
Other intangible assets
Other intangible assets consist mainly of software, patents and
trademarks acquired or created by the Group. At initial recogni-
tion, they are measured at cost or at fair value as deemed cost
where they have been acquired in a business combination. Fair
value is determined by outside experts where necessary.
They are subsequently measured at cost less accumulated amorti-
zation and impairment losses.
The Group determines whether an intangible asset has a finite or
an indefinite life.
Assets with a finite useful life, such as software and patents, are
amortized over a period corresponding to their estimated useful
lives. Leading brands are deemed to have an indefinite useful life.
They are not amortized but reviewed annually to verify that they
can continue to be used indefinitely. Other brands or product
names are deemed to have a finite useful life and are amortized
over their estimated useful lives.
Amortization periods are as follows:
• Patents and similar rights: 5 to 15 years
• Software: 3 to 10 years
• Brands: Not amortized or 10 years
Assets with an indefinite useful life are tested for impairment at
least once a year. Impairment testing consists of comparing their
recoverable amount with their carrying amount. If the recoverable
amount is lower than the carrying amount, an impairment loss is
recognized in profit or loss. Assets with a finite useful life are also
tested for impairment whenever there is objective evidence that
they may be impaired.
The discounted cash flow method is used to assess value in use.
1.3.2. Property, plant equipment
Property, plant equipment are measured at cost, or fair value as
deemed cost where they have been acquired in a business combi-
nation, less accumulated depreciation and impairment losses.
They are not revalued after initial recognition.
Where applicable, the total cost of an asset is allocated to signifi-
cant components that have a different useful life or rate of
consumption of future economic benefits than the asset as a whole.
Maintenance and repair costs are recognized as expenses when
they are incurred, except for expenditures intended to increase the
productivity or extend the estimated useful life of the asset.
The residual value of an asset is deducted from its depreciable
amount if it can be measured reliably. Assets are depreciated over
their estimated useful lives as follows:
Depreciation period
Buildings 20 to 40 years
Installations and fittings 10 years
Manufacturing equipment and materials 5 to 10 years
Tooling 3 to 5 years
Vehicles 3 to 5 years
Office furniture and equipment 3 to 10 years
These depreciation periods are reviewed regularly and any adjust-
ments recognized prospectively. If there is objective evidence of
impairment, the recoverable amount of the asset or the cash-
generating unit to which it belongs is compared to its carrying
amount. If the recoverable amount is lower than the carrying
amount, an impairment loss is recognized in profit or loss.
Finance leases
Assets acquired under finance leases are recognized on the
balance sheet when the lease transfers substantially all the risks
and rewards incidental to ownership to the Group. At inception of
the lease, the leased assets are measured at the lower of their
market value and the net present value of future lease payments.
They are recognized on the balance sheet as property, plant
equipment with a corresponding amount recognized as a financial
liability. Leased assets are depreciated over the shorter of the
lease term and the estimated useful life of the asset.
In the income statement, lease payments are broken down into
interest expense on the finance lease liability and depreciation of
the asset. Lease contracts that do not transfer substantially all the
risks and rewards incidental to ownership to the Group are classi-
fied as operating leases. Lease payments are recognized in profit
or loss on a straight- line basis over the term of the lease.
1.3.3. Inventories and work-in-progress
Inventories comprise raw materials, semi-finished and finished
products and goods purchased for resale. They are measured at
the lower of cost (including indirect production costs) and net
realizable value. Cost is determined using the weighted average
cost method.
1.3.4. Receivables
Receivables are carried at their face value. An impairment charge
is recognized if there is a risk of non-recovery. Receivables denom-
inated in foreign currencies are translated at the year-end rate.
1-FINANCIALREPORT
SPERIAN PROTECTION

1.3.5. Taxes
Deferred taxes are recognized on all temporary differences
between the tax base and carrying amounts of assets and liabili-
ties, and on consolidation adjustments made to align accounting
methods used by various subsidiaries.
Deferred tax assets arising from tax losses are recognized only if
there is convincing evidence that sufficient taxable profit will be
available in the future to offset the losses.
Deferred taxes are calculated using the liability method, using the
tax rates that have been enacted or substantively enacted at the
balance sheet date.
Deferred tax assets and liabilities are not discounted.
1.3.6. Borrowings
Bank debt is measured at amortized cost using the effective
interest method, which includes all directly attributable costs of
arranging the loan.
1.3.7. Derivative financial instruments and hedging
The Group uses derivative financial instruments to hedge its expo-
sure to interest and exchange rate risks. It does not take specula-
tive positions.
These risks are monitored centrally and broad hedging guidelines
have been set which apply throughout the Group.
Hedges are purchased over-the-counter from first-class banks.
Exchange rate risk
As far as possible, Group companies invoice and are invoiced in
their functional currency to minimize exchange rate risk. Other-
wise, risk is hedged on a case by case basis.
Interest rate risk
Exposure to interest rate risk is managed through a Group-wide
policy approved by management. Speculative positions are not
permitted. Hedges are purchased over-the-counter from first-
class banks.
Recognition and measurement
Derivative financial instruments are used to hedge the Group's
current or future exposure to fluctuations in exchange rates or
interest rates. In line with IAS 32 and IAS 39, derivative financial
instruments are recognized on the balance sheet and measured at
their fair value.
Hedge accounting:
- Changes in the fair value of instruments designated as fair value
hedges of assets or liabilities are recognized in profit or loss
symmetrically with the unrealized gains or losses on the hedged
items.
- Changes in the fair value of instruments designated as cash flow
hedges, which protect against variations in future cash flows, are
recognized in equity to the extent of the effective portion of the
gain or loss. Amounts accumulated in equity are reclassified into
the income statement in the period in which the hedged item
affects profit or loss. The ineffective portion is recognized in profit
or loss.
- Instruments that do not qualify for hedge accounting.
- Changes in the fair value of financial instruments that do not
satisfy the criteria for hedge accounting are recognized in profit or
loss.
1.3.8. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand,
together with short-term deposits with a maturity of less than
three months.
In the cash flow statement, net cash and cash equivalents are
equal to cash and cash equivalents as defined above net of any
short-term bank debt.
1.3.9. Provisions
A provision is recognized when the Group has a present obligation
(legal or constructive) and it is probable that an outflow of
resources embodying economic benefits will be required to settle
the obligation. In the case of restructurings, a provision is recog-
nized as soon as the restructuring has been announced and the
Group has drawn up or started to implement a detailed restruc-
turing plan approved by management.
1.3.10. Post-employment benefits
Lump-sum retirement payments, supplementary pensions and
similar commitments (medical expenses for retired employees
and disability insurance) are recognized as and when the
employees' rights vest. The obligation is measured on the reporting
date based on the length of service of each employee and the
probability of their being employed by the Group on retirement, in
accordance with the legislation applicable in countries where the
Group operates. The calculation is based on an actuarial model
using assumptions on mortality rates, staff turnover, salary
increases, long-term return on plan assets and economic condi-
tions in each country. The obligation in respect of lump-sum
retirement payments is determined using the projected unit credit
method over the employee's total working life with the Group.
Provisions recognized in the balance sheet are stated net of any
payments to external organizations designed to fund the benefit
obligation.
1-FINANCIALREPORT
SPERIAN PROTECTION

Defined contribution plans
Under defined contribution plans, the Group's only obligation is
the payment of a contractually agreed contribution to an external
fund, in exchange for services rendered by the employees. The
contributions are recognized in profit or loss as and when the
services are rendered by the employees.
Defined benefit plans
The net obligation under defined benefit pension and healthcare
plans represents the post-employment benefit entitlement that
employees have accumulated in exchange for services rendered
during the current and past years. It is determined separately for
each plan using the projected unit credit method, whereby each
period of service gives rise to an additional unit of benefit entitle-
ment and each unit is accounted for separately to build up the final
obligation.
The benefits are then discounted to determine the present value of
the obligation net of the fair value of the plan assets, using a
discount rate appropriate to each country concerned. Under this
method, the amount in excess of 10% of the higher of the net obli-
gation and the fair value of the plan assets is deferred over the
remaining working lives of the employees participating in the
plan. The obligation is calculated by independent actuaries.
1.3.11. Provisions for litigation
Provisions for litigation are recognized on the reporting date to
cover all known future liabilities and charges on that date.
They are determined using best estimates on the reporting date in
terms of the risks involved and the probability of their occurrence.
Provisions are taken only for specifically identified risks and prin-
cipally those that are not covered by insurance.
The provision represents the total amount that Group companies
may have to pay as a result of legal proceedings, net of any sums
insured. The amount of the provision is measured on an actuarial
basis according to known and potential risks or litigation on the
reporting date.
1.3.12. Earnings per share
Basic earnings per share is determined on the basis of the weighted
average number of shares in issue during the year.
Diluted earnings per share is determined on the basis of the
weighted average number of shares in issue during the year plus
the total number of shares that would be issued if all existing stock
options were exercised.
1.3.13. Revenue recognition
Revenue on the sale of goods is recognized when the significant
risks and rewards of ownership of the goods are transferred to the
buyer (usually on transfer of goods).
Revenue is measured at the fair value of the consideration received
or receivable, after deducting any rebates and discounts. Trans-
portation and other costs billed to customers are included in
revenue. Transportation costs borne by the Group are included in
the cost of goods sold.
1.3.14. Other income
The Group uses income of operating activities as its main perform-
ance indicator. Income of operating activities is defined as consoli-
dated net income before:
- Gains or losses on disposal of assets;
- Restructuring costs;
- Impairment losses (including on goodwill);
- Amortization of revalued intangible assets;
- Litigation costs and other losses, gains and changes in provisions
arising from material events that are exceptional in nature;
- Net finance cost;
- Income tax;
- Share of results of associates.
1.3.15. Net finance cost
Net finance cost comprises:
- The net cost of debt, which corresponds to interest expense on
bank loans and other financial liabilities (including finance leases),
less interest income on cash and cash equivalents;
- Dividends received from non-consolidated entities;
- The impact of discounting provisions (except for retirement
benefit obligations);
- Change in fair value of financial instruments;
- Exchange differences on financial transactions.
1.3.16. Share-based payments
Stock options granted to executive officers and some employees
of the Group are recognized and measured in accordance with
IFRS 2. The fair value of stock options is measured on the date of
grant using the Black Scholes and Monte Carlo methods.
It is based on the expected life of the options, their exercise price,
the current price of the underlying shares and expected volatility
of the share price. The expense is deferred and released to profit
or loss in personnel expenses over the vesting period, i.e. the
period between the date of grant and the initial exercise date.
A corresponding amount is recognized directly in equity (share
premium).
1-FINANCIALREPORT
SPERIAN PROTECTION

Performance shares awarded to executive officers and some
employees of the Group are recognized and measured in accord-
ance with IFRS 2. The fair value of the performance shares is
measured on the date of grant using the Monte Carlo method.
The value depends mainly on the number of shares contingent
upon the probability of achieving the market- related perform-
ance, the lock-up period, the current price of the underlying shares
and expected volatility of the share price. The expense is deferred
and released to profit or loss in personnel expenses over the
vesting period. A corresponding amount is recognized directly in
equity (share premium).
IFRS 2 only applies to plans granted after November 7, 2002 that
had not vested at January 1, 2005.
1.3.17. Non-current assets held for sale and discontinued operations
Non-current assets held for sale and discontinued operations are
measured at the lower of their carrying amount and the estimated
selling price net of costs to sell. These assets or groups of assets
are identified separately in the balance sheet.
Note 2 : Changes in scope of consolidation
In August 2008, the Group announced the acquisition of the
entire share capital of Combisafe International AB, a leading
designer and supplier of height safety and access systems. The
acquisition has made Sperian world leader in fall protection,
providing its customers with a range of both individual and
collective fall protection systems. Combisafe International AB
is a Swedish company with subsidiaries in the United Kingdom,
Denmark, France, Germany, United Arab Emirates, Nether-
lands and Norway.
The transaction was completed on September 16, 2008 and
Combisafe has been consolidated as of September 1, 2008.
During the period September 1 to December 31, 2008,
Combisafe incurred a net loss of €0.6 million. Had the acquisi-
tion taken place on January 1, 2008, it would have contributed
revenue of €34.1 million and a net loss of €1.0 million, including
amortization of intangible assets revalued on the acquisition
date.
Fair value adjustments and goodwill were provisionally allo-
cated on December 31, 2008.
The table below shows a breakdown of the cost of the business
combination at August 31, 2008:
In thousands of euros
Acquisition price, paid in cash 53,186
Direct transaction costs 1,071
Total acquisition cost 54,257
Fair value of the net assets acquired (15,096)
Translation differences 1,368
goodwill (note 4.1) 40,529
The goodwill arising on this acquisition is due to Combisafe's
profitability and the expected synergies.
1-FINANCIALREPORT
SPERIAN PROTECTION

RA GB 2008

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