Results highlights

Strong growth in EBITDA and EBIT during the year, guidance achieved:

EBITDA increased by 12.3% to EUR110.1 million, which represents 18.1 % of sales;

EBIT increased by 14.9% to EUR80.8 million, which represents 13.2% of 2008 sales;

Net income increased to EUR35.1 million from EUR26.9 millionin 2007 (+30.5%) despite further non-cash “mark to market” losses on bank debt;

Earnings Per Share in 2008 was EUR1.90, compared with EUR1.46 in 2007;

Strong cash generation during 2008 despite increased capital investment and

funding for Johnson Controls-Saft;

An unchanged dividend of EUR0.68 per share will be proposed to the Annual

General Meeting.

John Searle, chairman of the management board, commented: “I am very pleased to announce today that Saft achieved strong growth in profitability during the year 2008. The 12.3% increase in EBITDA is on target with our increased guidance given in August 2008. The improved profitability was achieved despite unfavourable exchange rates but did benefit from pricing adjustments implemented in 2007 which resulted in a strong growth in profits in our Industrial Battery Group.

This is a good achievement, but Saft is fully aware of the continuous need to remain competitive and has announced today a set of measures aimed at ensuring that the operations in our traditional business continue to reduce costs. These include a plan to merge our Industrial Battery Group and Rechargeable Battery Systems Divisions to create one Division which will represent about 60% of the activity of Saft.

The merger which will be implemented during first half of 2009 will enable further synergies to be achieved in the areas of operations, product development, purchasing, sales and marketing.

It is estimated that, when fully implemented at the end of 2010, these measures will reduce Saft’s operating costs by EUR10m per year.

These changes will enable Saft to strengthen its resources supporting emerging applications, notably renewable energy storage.

The strong cash generation achieved in 2008 has enabled Saft to strengthen its balance sheet whilst increasing R&D expenditure capital investment and funding for our joint venture Johnson Controls-Saft.

This year, Johnson Controls-Saft has announced further production contract wins with Azure, a first success in the commercial vehicle segment, and with Ford for their first PHEV vehicle. We continue to see important opportunities for our venture, supplying batteries for “clean vehicles” to the automotive industry.

Finally, Saft will be proposing a dividend of EUR0.68 per share to our Annual General Meeting in June and is considering offering a scrip-issue alternative to our shareholders”.

Results by product line

The sales growth during 2008 was 6.8% at constant exchange rates. The Division saw stronger growth during first half, but a slowdown in the telecom and the aviation markets later in the year. The profitability recovered strongly with a full year EBITDA margin of 20.1%. A key driver of this profit growth was pricing, where the price adjustments implemented in 2007, lead to a strong recovery in profit in first half. The unfavourable effects of currencies on profitability were offset by tight control of costs during the year.

Speciality Battery Group (SBG)

The Division saw strong sales growth in second half leading to full year growth of 6.7% at constant exchange rates. There was a good performance in the civil market throughout the year, whilst the military activities had a strong YoY sales performance during second half.

The profitability of the Division remained stable with a full year EBITDA margin of 21.4%. The benefits of increased volumes were offset by the negative effect of currencies.

Rechargeable Battery Systems (RBS)

In contrast with 2007, when the nickel price surcharge increased sales, in 2008 a falling nickel price throughout the year had a negative impact on the sales growth. Overall, the Division reported a 6.8% fall in sales in 2008, with an estimated 80% of this reduction due to the nickel surcharge. The market for emergency lighting batteries was challenging but the market share loss in 2008 was limited.

Again the profitability of the Division remained in line with 2007 with an EBITDA margin of 3.1% of sales. Continual cost reduction efforts enabled the Division to maintain its profit despite falling sales.

Raw material costs

The average LME cost of nickel during 2008 was $21k/t, having fallen sharply during the second half of the year. This reduction had little impact on the 2008 result due to:

Nickel surcharge implemented by the RBS Division;

The hedging strategy implemented by IBG effective from July 2007. IBG had hedged 60-70% of its forecasted needs for second half before the end of first half and so only marginally benefitted from the nickel cost reduction seen in second half.

During Q3 2008, the hedging period was extended and the IBG Division now has 70% of the needs for 2009 hedged. Due to this and the surcharge in the RBS Division, Saft is much less sensitive to the cost of nickel in 2009 compared with recent years.

Cost reduction and organisation

Saft has undertaken a review of its operations and cost base in the search of increased efficiencies and greater cost synergies. A number of savings have been identified and are in the process of being implemented including:

More raw material sourcing from lower cost suppliers;

The transfer by SBG of part of the final battery assembly of certain products to low cost countries;

A plan to merge the IBG and RBS Divisions leading to a number of synergies in manufacturing, technical and commercial functions. This merger should be effective by the end of H1 2009, with the synergies being fully delivered from the end of 2010.

It is estimated that the cumulative annual effect of the above savings will be EUR10m with initial savings being realised in 2009 and the full benefit from FY 2011.

Saft will take advantage of this reorganisation to re-allocate some key technical and commercial resource to supporting emerging applications for high technology batteries.

Emerging markets

Johnson Controls – Saft (JC-S)

The venture continued to make good progress during 2008 with the announcement of a number of important developments:

Confirmation of the contract with BMW for the seven series hybrid to be launched in

2010;

Decision by Mercedes to add a diesel hybrid option to the S Class range in

2010;

Signature of a production contract with Azure, a producer of hybrid drive trains for medium duty trucks, to supply lithium-ion (Li-ion) HEV batteries from 2010;

Signing a production contract with Ford (North America) in February 2009 for the supply of a minimum of 5000 Li-ion batteries per year from 2012. This is the first production contract won by Johnson Controls-Saft for large PHEV/EV type batteries.

Finally, both partners in the venture are following closely the growing political support for electric and plug-in hybrid vehicle in both Europe and the US.

Clean Energy Storage

Saft has announced during 2008 the initial development contracts associated with an additional exciting opportunity: the storage of renewable energy. The developments cover two complementary potential markets:

Storage of Photovoltaic energy in residential sized installations with the SOLION project announced in August 2008;

Large scale grid stabilisation batteries in association with ABB as announced in November 2008 with a new high-voltage Li-ion battery system to improve network stability. This demonstrator will be installed by EDF Energy in the UK.

Saft believes this market can offer very significant potential for growth in the coming years.

Saft is a France-based designer, developer and manufacturer of batteries for industrial use.