PPR 2005 Halfyearreport

2 0 0 5 H a l f- Ye a r R e p o r t
P P R – 2 0 0 5 H a l f - Ye a r R e p o r t
10, avenue Hoche – 75381 Paris Cedex 08

Tel.: +33 (0)1 45 64 61 00 – Fax: +33 (0)1 45 64 60 00
www.pprgroup.com
PPR
Société anonyme with a capital of €481,752,920
Head office: 10, avenue Hoche – 75381 Paris Cedex 08
Tel.: +33 (0)1 45 64 61 00 – Fax: +33 (0)1 45 64 60 00
552 075 020 RCS Paris
Design and production TERRE DE SIENNE PARIS

Message from the Chairman
PPR’s strong results underscore the relevance of our strategy and business development model. In the first half,
the key financial indicators increased significantly: revenues rose 3.1%; gross profit increased by 4.4% and recur-
ring operating income climbed 11.3%. Lastly, free cash flow from operations improved by nearly b70 million.
Luxury Goods improved tremendously with a 76.4% increase in recurring operating income. I would like to
underline the excellent performance of the Gucci brand, whose sales substantially climbed. Bottega
Venetta also stood out with an improved positive result. We continued to expand our retail network with
the opening of 13 stores, bringing the total to 411 at 30 June 2005. I would like to remind you that these
excellent performances are thanks to a creative and innovative product offering, backed up by stronger
communications policies and an increase in the range of our up-market products. These figures de-
monstrate the relevance of our choices in terms of organisation and the quality of our collections.
In Retail, despite a general slowdown in consumer spending, the Group’s brands maintained their leading
positions in France and continued their international growth. Fnac opened a store in Spain and another
in Portugal, Conforama strengthened its positions in Switzerland, with its tenth store opening, and in Spain
with the opening of two new stores, and La Redoute began operations in two new countries, Greece and
Norway. Sales outside of France thereby increased by nearly 3%. Recurring operating income declined by
4.2%, mainly due to the lacklustre performance of Conforama, which experienced commercial difficulties,
particularly in the furniture segment. Excluding Conforama, income from the Retail division increased by
4.5%, notably thanks to Fnac and Redcats, whose results rose by 10% and 8%, respectively. Internet sales
continued their strong growth and rose by more than 30% to b607 million in the first half of 2005.
The percentage of international sales rose by nearly one point during the first half to reach more than
52% of total Group revenues. Our goal is to generate 60% of our sales outside of France within the next
three years. Reaching this objective requires a geographical deployment in countries with the most growth
potential. In the Luxury Goods division, 60% of store openings will take place in Asia. In the Retail division, PPR
brands are pursuing two paths to growth: the deployment of retail networks in economically mature countries,
such as Spain, which is a priority market for Conforama and Fnac, and the entry into new markets with strong
growth potential.
These sound figures underline the relevance of our strategy which is based on three priorities: development by
internal growth; the strengthening of our positions abroad, in growth markets and diversified geographical areas;
and the complementary nature of our two core businesses, with our global brands in Luxury Goods giving us
access to fast-growing markets, and our Retail business, which offers leading positions in more stable, mass
markets.
I am confident in the Group’s future and believe that PPR is particularly well positioned to improve its
performances.
François-Henri Pinault
Table of contents
PPR in the first half of 2005
4 KEY FIGURES
5 GROUP ORGANISATIONAL CHART
6 STORES WORLDWIDE
8 FIRST-HALF 2005 HIGHLIGHTS
13 STOCK MARKET INFORMATION
Financial information for the period ended 30 June 2005
14 ACTIVITY REPORT
14 Foreword
15 Highlights of the first half of 2005
PPR
15 Activity and results for the first half of 2005
24 Financial structure and cash flow statement
27 Additional information for the first-half
27 Subsequent events
28 CONSOLIDATED FINANCIAL STATEMENTS

28 Consolidated income statement
29 Consolidated balance sheet
30 Consolidated cash flow statement
31 Consolidated statement of changes in shareholders’ equity
32 Notes to the condensed consolidated financial statements
82 Statutory auditors’ report

(1)
Key figures
(in € millions) Half-year ended Half-year ended Change

30 June 2004 30 June 2005 (%)
Revenue 7,850.8 8,094.4 3.1 %
of which revenue generated outside of France 4,015.9 4,213.7 4.9 %
Gross profit 3,432.0 3,584.1 4.4 %
Recurring operating income 313.3 348.6 11.3 %
Changes in the breakdown of revenue Changes in the breakdown of revenue

by activity by geographical area
1.3% 1.0%
5.0% 5.7%
Retail 8.9% 9.4% Australasia
Luxury Goods Asia
15.5% 16.7% Africa
Americas
48.8% 12.3% 47.9% 12.1%
Europe
84.5% 83.3% (excluding France)
23.7% France
23.9%
First half of 2004 First half of 2005 First half of 2004 First half of 2005
Changes in the breakdown of recurring Changes in the breakdown of the average

operating income by activity (2) number of employees by activity
0.3% 0.3%
Retail Retail
Luxury Goods Luxury Goods
15.5% 15.7%
17.8% Holding companies
and other
28.5%
82.2% 71.5%
84.2% 84.0%
First half of 2004 First half of 2005 First half of 2004 First half of 2005
(1)
2004: adjusted for the impact of IFRS and the change in the Gucci Group financial calendar.
(2)
Excluding Holding companies and other.
Group organisational chart

99.45%
Luxury Goods: Gucci Group Retail
100% 99.95%
Gucci Conforama
78.46% 100%
Bottega Veneta Fnac
100% 99.96%
Yves Saint Laurent Printemps
100% 100%
YSL Beauté Redcats
99.93%
Other brands: CFAO
• Sergio Rossi (100%)
• Boucheron (100%) Other activities:
• BEDAT & CO (100%) • Kadéos (99.99%)
• Balenciaga (91%) • Orcanta (100%)
• Alexander McQueen (51%)
• Stella McCartney (50%)
% stake at 30 June 2005.

Stores worldwide
PPR’s diversity of activities gives the Group strong market
In number of stores
positions in most of the high-potential areas of the world.
excluding subsidiaries
The Group’s increased international activity is underpin-
ning this profitable growth, with 52.1% of first-half revenue
France 67 Belgium 6
generated outside of France. The goal is to increase this to
60% within the next three years, through a combination of Spain 11 Brazil 6
the buoyant economy of these countries and an investment Portugal 8 Italy 5
policy mainly focusing on international operations. Taiwan (1) 7 Switzerland 4
(1)
Joint-venture stores.
In number of stores
Japan 135 China 7

Americas 74 Spain 7
Italy 51 Singapore 5
France (1) 31 Belgium 4
South Korea 20 Australia 4
United Kingdom 17 Guam 4
Hong Kong 14 Malaysia 4
Taiwan 12 Austria 1
Germany 11 Netherlands 1
Switzerland 9
(1)
Including Monaco.
In number of catalogues
France 14 Norway 3 Switzerland 2

United States 11 Finland 3 Denmark 1
England 5 Germany 2 Spain 1
Belgium 5 Austria 2 Japan 1
Sweden 5 Portugal 2
PPR
In number of stores
PRINTEMPS In number of stores

excluding subsidiaries
France (1) 189 Portugal 5 France (1) 24
Italy 19 Poland 3 Japan (1) 1
(1)
Spain 15 Croatia 3 Saudi Arabia 1
Switzerland 10 Luxembourg 1 (1)
Including 8 affiliates.
(1)
Including 47 affiliates.
First-half 2005 highlights
Change in corporate name and legal structure for Pinault-Printemps-Redoute
The Annual General Meeting of 19 May 2005 approved the amendment of the Group’s by-laws to change the Ma-
nagement and Supervisory Boards to a Board of Directors. The meeting also officially adopted the change in the
company’s name from Pinault-Printemps-Redoute to PPR, a simpler and more international designation reflecting
the Group’s new profile.
Following the meeting, the Board of Directors appointed François-Henri Pinault as Chairman and Chief Executive Of-
ficer of PPR. Patricia Barbizet was appointed Vice Chairman of the Board of Directors and François Pinault Honorary
Chairman. Five of the new directors appointed are independent with respect to the criteria of the “Bouton Report” on
corporate governance. In addition, one-third of the Board is represented by international members. The three special
committees of the Supervisory Board (Audit, Remuneration and Appointments Committees) were maintained within
the Board of Directors, while a Strategy and Development Committee was created to identify, analyse and support
the strategic development initiatives of PPR.
Appointed Executice Vice President Finance of PPR, Ross McInnes is responsible for financial functions (financial
control, finance and treasury, tax, financial communications, strategy, planning and corporate development). He is
a member of the Group Executive Committee and acts as an advisor (censeur) at Board meetings. Ross McInnes
joined PPR after serving as Senior Vice President Finance of the Thales group.
Strengthening of the financial structure
PPR carried out two disposals under very favourable conditions during the first half of 2005. In April, MobilePlanet,
a company specialising in the sale of mobile technology products over the Internet, was sold to eXpansys Holdings
Limited for €2.1 million. On 30 June, PPR announced the conclusion of an agreement with Cetelem, a subsidiary of
BNP Paribas, concerning the sale of its remaining 10% stake in the share capital of Facet (Conforama cards busi-
ness) for €90 million, of which 9.69% was sold in the first half.
In a context of particularly favourable interest rates, PPR continued to streghten its capital structure by extending its
debt maturity and diversifying its sources of funding through the placement of a €300 million bond issue in June.
The bonds have a 4% coupon and mature in January 2013.
Lastly, the Group sold 2,883,132 treasury shares for €237.4 million. This disposal follows the 30 March cancellation
of 2 million treasury shares. Following these transactions, at 30 June PPR held 5,000 treasury shares to cover to its
liquidity contract.
Further developments in Retail
Conforama
In 2005, Conforama reaffirmed its positioning as a discounter through a new advertising slogan to accompany a
campaign initiated at the beginning of the year: “Why wait for comfort?” (Le bien-être ça n’attend pas) has become
“Comfort at home at an affordable price” (Bien chez soi, bien moins cher).
PPR
At the same time, Conforama is continuing to develop its store network. With five store openings in the first half, there
were 245 directly operated stores (including affiliates) at 30 June 2005, including 56 stores outside of France.
In France, at 7,100 sq.m., the new Vitry-sur-Seine store in Val-de-Marne represents Conforama’s third largest selling
area. Conforama also inaugurated at Saint Brice in the Val d’Oise the twentieth Ile-de-France store (4,200 sq.m.).
Promoting a wide range of kitchen and ready-to-install products, which are priority markets for Conforama, this store
has a dedicated service division for grey goods (micro-computing, telephony, etc.), as part of the company policy
to make shopping more pleasant. Lastly, Conforama rebuilt over a 3,000 sq.m. selling area its Morsbach store in
Moselle, following a fire at the start of 2004.
Outside of France, Conforama has consolidated its positions in its traditional market locations. With the opening
of two stores in German-speaking Switzerland in Emmen and Saint Gall, Conforama has become a major player
in furniture in Switzerland with a total of 11 stores at the end of August. Pursuing its growth in Spain, Conforama
has inaugurated two new stores, bringing to 15 the number of Spanish locations. For the first time at Confora-
ma Spain, the Malaga store in Andalusia devoted space to decoration covering more than 15% of the total area
(4,000 sq.m.), which will increase the frequency of visits and impulse buying. The new store in Barakaldo near
Bilbao has a surface area of 3,700 sq.m. in the country’s largest shopping centre. Spain is a priority market for
Conforama with a potential estimated at 60 stores. In Italy, Conforama was established under the Emmezeta brand
until the end of 2004. The number two worldwide in home furnishings and appliances is now moving forward by
taking the best elements of its two brands, Conforama and Emmezeta. Thus, for the first time, an Emmezeta store
has been successfully converted into a Conforama store, at Sassari in Sardinia. The product offering is displayed
over more than 6,000 sq.m., and the general goods, DYI and leisure sectors, – specialties of the Emmezeta stores
that are much appreciated by Italian customers –, complete the traditional Conforama offering.
Fnac
In the first half, Fnac continued to deploy new ticketing and home cinema concepts in France. In ticketing, the concert
and show areas have been renovated with the creation of three areas - information, events, and sales – thereby
improving the customer traffic and product visibility, and promoting the on-site sale of books and magazines related
to concerts and shows. This new concept will be deployed in 15 new sites in 2005, with the objective of converting
the entire Fnac network by the end of 2007. As for home cinema, open space, sober furnishings and appropriate
lighting accentuate flat screens. The Fnac plasma development technology policy has been a given a second wind,
so that customers can assess the offering’s true scope and compare the product range, while optimising their
comfort. The new home cinema concept will be installed in 10 stores in 2005, in addition to the 39 stores that were
refurbished in 2004.
Outside of France, Fnac continues to make progress. The fiscal year 2005 make the acceleration of Fnac’s develop-
ment in strong-growth countries where it has been traditionally located. Three Fnac stores will open in Spain in 2005:
a third Madrid store (2,350 sq.m.) in the ParqueSur shopping centre in May, a September opening for a store in San
Sebastian in the Basque Country and a November store opening in Palma de Mallorca. Spain represents a market
in full expansion for Fnac, which now has 11 stores in seven cities, i.e. one-third of the company’s potential market.
Fnac aims to double its store network and sales in Spain by 2008. Fnac also bolstered its presence in Portugal in the
first half, with the opening in June of an eighth Portuguese store in Albufeira, in the southern half of the country.
In the Children’s division, Fnac Eveil & Jeux stood out among the retail giants through a product offering encouraging
child development. In 2005, the brand stepped up its development with the opening of three new stores. As of May,
a Fnac Eveil & Jeux department on the seventh floor of Printemps Haussmann, is providing an exclusive toy offering
for the department store. Other store openings involved the city centres of Nice in June and Marseilles in July. With 27
stores in France at the end of July, Fnac Eveil & Jeux has set a revenue target of €150 million by 2007.
Lastly, Fnac continues to implement its sustainable development policy, which was initiated in 2004. It includes con-
crete initiatives, such as the recovery of batteries and ink cartridges for the benefit of the association Emmaüs. Five
focal points have been defined for 2005. An annual inventory of energy consumption, transport and waste generation
has been launched, and a Code of Business Practices has been given to all employees. Fnac is also committed to
electric and electronic waste collection and recycling, which has been mandatory since August, to alternative solutions
to store carrier bags (first test at the opening of the Limoges store at the end of October), and to the recovery and
recycling of computers (testing at Nantes and Dijon during the summer).
Printemps
At the beginning of 2005, significant work was carried out at Printemps de la Mode, on Boulevard Haussmann.
The Children’s toy department was moved from level -1 to the 7th floor. Expanded by nearly 300 sq.m., the department
offers new luxury brands (Bonpoint, Lacroix, and Dolce & Gabanna) and a play area. The newborn section will also be
renovated in the coming months and baby wear will be organised according to three themes: the “in” baby, the “designer”
baby and the “sweet” baby. A jeans section for 8-16 year-olds is also planned. Lastly, Printemps Haussmann is
organising Wednesday and Saturday afternoon birthday parties for children in a specially decorated room on the
sixth floor. Level -1 is now dedicated to a new lingerie department, which has been expanded by 2,700 sq.m. and
opened its doors on 22 September. The ground floor men’s department of Printemps Haussmann and five stores of
the chain (the Nation and Place d’Italie Parisian stores and the Nancy, Rennes and Deauville stores) have also been
refurbished.
At the same time, Printemps has continued to develop its non-apparel activities. Since the start of the year, a new
“Wedding-Travel-Internet” division has been created, enabling Printemps Voyages to play a bigger role in the sector.
Centrally located in the stores, the Travel activity is directly related to complementary activities such as wedding plan-
ning for an “all-in-one service.” At 30 June, there were 11 travel agencies, including a new one opened in Rennes in
January 2005.
In the Sports division, the Citadium megastore has reaffirmed its sports-fashion positioning and reorganised its
departments for better visibility. The third floor is now exclusively devoted to urban sports and the seasonal offering,
thus meeting the expectations of customers looking for performance and technicality.
Redcats
With respect to home shopping catalogues, the Group continued its quest for innovation in the first half of 2005.
In the United States, three new catalogues were launched at the beginning of the year: two for overstocked
items (“Brylane Catalog Outlet” and “Chadwick’s Catalog Outlet”) and an outsize lingerie catalogue by Roaman’s
(“Intimate Promise”). Daxon updated its Spring-Summer 2005 catalogue for seniors with two very feminine lines
designed by Ralph Kemp. La Redoute continued to strengthen its positioning as a fashion player by offering the La
Redoute by Gaultier clothing line, featuring the designer’s trademark nautical stripes, in its Spring-Summer cata-
logue. At the same time, in partnership with the Max Havelaar association, La Redoute initiated a new phase in its
social responsibility strategy by marketing over 200,000 fair-trade cotton T-shirts from Western and Central Africa in
its Autumn-Winter 2005-2006 catalogue. The Somewhere brand also entered the ethical fashion market with 100%
organic cotton apparel, certified by an independent organisation.
PPR
In the first half of 2005, Redcats continued to develop its retail network. La Redoute reinforced its presence in new
high-potential markets by establishing operations in Norway and Greece. In France, Somewhere broadened its retail
concepts with the launch of a test boutique dedicated solely to menswear in the Marché Saint-Germain shopping
arcade of Paris. It is also testing a franchise store in the city of Saint-Etienne.
CFAO
In the Automobile sector, CFAO signed an agreement with the Libyan company NA Energy Group to create a high-
level automobile maintenance centre, prior to initiating the import and retailing of new cars in Libya.
With respect to New Technologies, in February CFAO Technologies purchased Intelec Communications, which
distributes the EADS (formerly Matra), Motorola and Sagem brands in the Ivory Coast.
Lastly, the CFAO Healthcare division reinforced its logistics capacities in the first half. At the beginning of the year,
Eurapharma inaugurated its very first automated pharmaceutical distribution company in Martinique. Unique in the
Caribbean, this facility makes it possible to optimise the processing of orders and deliveries. Eurapharma launched
near Rouen a new logistics platform extending over 12,500 sq.m., including a 5,500 sq.m. warehouse for storage and
a second 7,000 sq.m. warehouse for the preparation of exports. This platform has state-of-the-art equipment with,
in particular, a refrigeration and air treatment facilities for the preservation of medecines. Eurapharma’s proximity to
Parisian airports and the port of Rouen will enable it to optimise the logistical solutions offered to its customers.
Kadéos
Kadéos, the leading gift voucher company in Europe, expanded its product offering in the first half of 2005.
In March, Kadéos launched a new gift-card on the French market in the Group’s stores. Sold through self-service
facilities and usable in stores, by telephone or by Internet, the Kadéos gift-card has boosted the Kadéos’s sales
potential by 30% and optimised Group’s productivity.
Since April, Kadéos has also been offering to employee works councils a new voucher for cultural products, such
as books, audio CDs, musical media, CD-ROMs, DVDs, and tickets for the cinema, theatre, museums, concerts,
exhibitions, etc.
Internet, an additional sales channel
In the first half of 2005, PPR confirmed its positioning of major e-commerce player. In addition to the com-
mercial appeal and logistical performances of its brands, Fnac is betting on two growth factors in 2005: the
strengthening of client marketing and the intensification of synergies between the Internet and stores. Fnac.
com ranks as the best BtoC merchant website in France, with nearly 4 million single visitors per month (1).
The creation of cross-services between the Internet and stores now allows customers to pick up a product ordered
via Internet in the store. Several promotional events have been launched, including the buyback of old audio, video
and computer equipment, the publication on-line of a digital television guide and the organisation of “flash” sales.
Fnac Eveil & Jeux has renewed the visual identity and ergonomics of its website, adding new features such as “find-
ing the ideal gift for a child under the age of three”. As for Surcouf, it has launched a portal for downloading video
games in partnership with Metaboli, the sector’s European leader.
(1)
Top 30 Médiamétrie/Netratings April 2005.
In the Sports division, Citadium has unveiled www.citadium.com, a showcase for the megastore and its current
events, and another means for discovering the retailer’s offering. The “e-shopping” section provides access to a
selection of brand-name products that are symbolic of Citadium (50 brands and 500 items).
In home shopping, Millena, the new Internet platform shared by all of Redcats’ US and French brands, was launched
in April 2005. A timely and more rapid commercial response to customer expectations, competitor positions or the
economic environment can now be initiated by the teams in less than one day. At the same time, Enjoy has launched
a new web platform in Scandinavia to create a sales channel that is independent of the catalogue. The new site
features several improvements, such as the possibility of memorising favorite or already-ordered items. Lastly, Ellos
extended its on-line product offering with the launch of Ellos Travel for on-line travel sales.
In Luxury Goods, the Alexander McQueen Internet site, which presents the designer’s latest collections and a video
of the Spring-Summer 2005 women’s collection, received the award for best fashion website at the ninth edition of
the “Webby Awards.”
Luxury Goods: on the cutting edge of Fashion
During the first half, the Luxury Goods business continued to develop its retail network with the opening of 13 stores,
bringing the number of stores to 411 as at 30 June 2005, compared to 398 at the end of 2004.
At the same time, PPR’s Luxury brands demonstrated a renewed vitality, the result of a creative and innovative offering.
At Gucci, the Autumn-Winter 2005 collection, which arrived in stores in June, was very well received while the Pelle
Guccissima project, launched in the same period, continues to generate enthusiasm.
At Yves Saint Laurent, the success of certain accessories and shoes lines has translated into waiting lists, particu-
larly for the Bow handbag and the high-heeled Jeanne slip-on.
Among the new YSL Beauté products in the first half, the latest Yves Saint Laurent lipstick, Rouge Pure Shine, is
the number one seller in several countries, while the launch of Alexander McQueen’s My Queen perfume is already
generating positive results.
In the other Gucci Group brands, the designer brands developed new partnerships enabling them to boost their
visibility worldwide. For the H&M Autumn 2005 collection, Stella McCartney created an apparel line, compris-
ing some 40 items for women. In September, Alexander McQueen presented a men’s and women’s sports shoe
collection in partnership with Puma. Meanwhile, the designer launched a new handbag, the Novak, inspired by the
actress Kim Novak and her role in the famous Hitchcock film Vertigo, with the objective of creating a timeless and
unmistakeable “McQueen classic”.
Lastly, in April, Boucheron made its first foray into the Chinese market with the opening of a boutique in Shanghai.
This opening, following a tradition of prestigious locations, underscores Boucheron’s desire to accelerate develop-
ment on the Chinese market, where the economic boom has given rise to a consumer elite. In Paris, the historical
Place Vendôme boutique has been entirely renovated and reopens its doors in early October.
PPR
Stock market information

Performance of the PPR share compared
with the CAC 40 index
from 1 January 2005
In euros
91
86
81
76
71 PPR
CAC40
66 Sept. 05
Aug. 05
June 05
May 05
Apr. 05
March 05
Feb. 05
Jan. 05
July 05
Source: Fininfo.
In 2005, PPR outperformed, overall, the reference index, with the PPR share reporting a 19.5% increase since the
beginning of the year, i.e. 3 points more than the CAC 40.
The PPR share benefited from renewed interest after publication of the Group’s revenue and income figures for the
first half ended 30 June. The financial markets have used the accelerated growth in Luxury Goods as an important
leverage, both in terms of profitability and stock market strategy. Accordingly, on 9 September, the share recorded its
high of the year at €88.6.
Stock market statistics

31/12/2004 30/06/2004 30/06/2005
High (€) 90.7 90.7 85.6
Low (€) 67.5 75.8 73.1
Closing prices (€) 73.7 84.5 85.3
Market capitalisation (in € millions) 9,017 10,338 10,273
Average daily trading volume 552,669 529,698 626,253
Number of shares 122,434,480 122,414,063 120,438,230
Source: Euronext Paris SA.
Financial information for the period ended 30 June 2005 • Activity report
Activity
Activityreport
report au premier sem
Foreword
IFRS transition
Pursuant to European regulation 1606/2002 of 19 July 2002 on International Accounting Standards, the PPR consolidated financial state-
ments for the year ending 31 December 2005 will be prepared in accordance with the applicable International Accounting Standards and
International Financial Reporting Standards (IAS/IFRS) adopted by the European Union as of that date.
The interim financial statements for the period ended 30 June 2005 are presented in accordance with French GAAP, but they have been
prepared based on the IAS/IFRS recognition and measurement principles applicable as of 30 June 2005.
The comparative financial information for fiscal year 2004 was prepared in accordance with the IFRS effective on the date the 2005 interim
financial statements were prepared and IFRS 1 governing the first-time adoption of IFRS. The impacts of the change in accounting basis
are disclosed in reconciliation tables presented in Note 17 to the consolidated financial statements.
Pro forma accounting data – Change in closing dates for the Gucci Group
(Luxury Goods division)
On 31 December 2004, the Group aligned the fiscal period-ends for all the subsidiaries. Accordingly, the Group consolidated financial
statements include, for the Luxury Goods division, different consolidation periods for the first half of 2005 (period from 1 January to
30 June) and the first half of 2004 (period from 1 November to 30 April), making it difficult to analyse the operating performance given the
seasonality impacts in particular.
In order to provide a better comparison of the interim balances for the periods ended 30 June 2005 and 30 June 2004, pro forma ac-
counting data comprising an income statement, a consolidated balance sheet and a cash flow statement were prepared by consolidating
the Luxury Goods division over six months in 2004, from 1 January to 30 June. This pro forma accounting data is presented in Note 2.3
to the consolidated financial statements.
Definition of the concept of “actual” and “comparable” figures
The Group’s actual revenue corresponds to the reported revenue.
The Group also uses the concept of “comparable” figures, which enables it to assess its organic growth. The concept of “comparable”
revenue figures consists in restating 2004 revenue, taking account of:
• the impact of changes in Group structure in 2004 or 2005;
• translation differences relating to foreign subsidiaries’ 2004 revenue;
• calendar impacts for 2004 and 2005.
Given the alignment of the fiscal period-ends for the Luxury Goods division on 31 December 2004, the 2004 comparable revenue
corresponds to revenue over the six-month period from 1 January to 30 June.
Definition of Group consolidated net indebtedness
The concept of net indebtedness used by the Group is based on gross net indebtedness less net cash, as defined by recommenda-
tion 2004-R.02 of the Conseil National de la Comptabilité (French National Accounting Council) of 27 October 2004. The financing of
customer loans is presented under borrowings for fully consolidated consumer credit companies. The Group’s net indebtedness excludes
the financing of customer loans in the consumer credit business.
PPR
mestre 2005
Definition of EBITDA
The Group uses EBITDA, the management reporting heading, to monitor its operating performance. This financial indicator corresponds
to recurring operating income and depreciation, amortisation and provisions for non-current operating assets recognised in recurring
operating income.
Highlights of the half-year

Treasury share transactions
On 30 March 2005, in accordance with the authorisations granted by the Annual General Meeting, the Group’s Management Board
decided to cancel 2 million treasury shares, thus bringing PPR share capital to 120,438,230 shares with a nominal value of €4 each.
Over the first half of 2005, the Group proceeded with the net disposal of 2,883,132 shares according to the following procedures:
Activity report
• 1,108,132 shares were sold by blocks between 18 May and 10 June 2005 through market brokers acting independently, at an average
price of €81.058 per share;
• 1,560,000 shares were sold on 27 June 2005 in the form of an over-the-counter transaction at a price of €83.70 per share;
• 215,000 shares were sold under the liquidity contract.
Finally, the Group purchased 3 million PPR stock purchase options maturing in 2008 in order to partially hedge the 2008 OCEANE bonds.
Sale of the Group’s remaining interest in Facet
The Group sold its remaining 9.69% interest in Facet to BNP Paribas for €87.2 million. A put option, exercisable in the first quarter of
2007, was granted by the purchaser on the balance of the interest. At the same time, the two Groups (PPR and BNP Paribas) announced
a reinforcement of their commercial agreements to ensure the continuity of relations between Facet and Conforama.
Activity and results for the first half-year of 2005

Revenue (income from ordinary activities)
Consolidated revenue from continuing operations for the first half of 2005 stood at €8,094.4 million, up by 3.1% over the first half of 2004.
The change in revenue is broken down by division as follows:
(in € millions) Half-year ended Half-year ended Change

30 June 2005 30 June 2004 (%)
Luxury Goods (1) 1,350.8 1,215.2 11.2%
Retail 6,755.5 6,648.9 1.6%
Eliminations (11.9) (13.3) NS
PPR - Continuing operations 8,094.4 7,850.8 3.1%
(1)
Luxury Goods consolidated over 6 months from 1 January 2004 to 30 June 2004.
The revenue increase includes the positive impact of changes in Group structure in the amount of €15.6 million, primarily related to the
acquisition of Jotex by Redcats during the second half of 2004, and a negative impact arising from changes in foreign exchange rates in
the amount of €89.9 million, of which €60.3 million related to the depreciation of the US dollar against the euro and €15.0 million related
to the depreciation of the yen against the euro. The remaining balance of the negative foreign exchange impacts is primarily the result of
depreciation in the pound sterling and certain African currencies against the euro.
The calendar effect, adjusted for calculation of comparable revenue growth, is valued at €7.1 million in the first half of 2005 and reflects
an increased number of trading days over 2004.
On the basis of comparable Group structure, exchange rates and number of trading days, the breakdown of revenue by division is as
follows:
(in € millions) Comparable Change Actual half- Change

half-year ended year ended (%)
30 June 2004 (1) 30 June 2005
Luxury Goods (2) 1,165.4 185.4 1,350.8 15.9%
Retail 6,631.5 124.0 6,755.5 1.9%
Eliminations (13.3) 1.4 (11.9) NS
PPR – Continuing operations 7,783.6 310.8 8,094.4 4.0%
(1)
2005 Group structure, exchange rate and trading days.
(2)
Group revenue from continuing operations increased by 4.0% on the basis of comparable Group structure, exchange rates and number
of trading days, with a strong growth dynamic in Luxury Goods and a satisfactory performance from Retail, in an environment marked by
a slowdown in household consumption, particularly in France.
Luxury Goods division
Actual and comparable revenue of the Luxury Goods division increased by 11.2% and 15.9% respectively (over the period 1 January to
30 June). Revenue by division breaks down as follows:
(in € millions) Half-year ended Half-year ended Change (%)

30 June 2005 30 June 2004 Actual Comparable
Gucci Division 808.5 711.7 13.6% 19.2%
Bottega Veneta 65.2 44.2 47.6% 55.0%
Yves Saint Laurent 72.1 75.8 -4.8% -0.6%
YSL Beauté 270.7 275.0 -1.5% 2.0%
Other brands 134.3 108.5 23.8% 25.5%
Luxury Goods (1) 1,350.8 1,215.2 11.2% 15.9%
(1)
The sales growth in Luxury Goods, already recognised in the last quarter of 2004, accelerated in the first half of 2005 with comparable
growth of 17.6% over the second quarter, after a 14.4% increase in sales recorded over the first quarter.
All geographical areas contributed to this performance, with sustained comparable growth in the division’s main locations (13.4% in
Japan, 17.9% in North America and 10.7% in Europe) and spectacular growth in areas of expansion such as Asia-Pacific, which posted
growth of 29.5% over the half-year.
PPR
The division particularly benefited from successful lines of leather goods (40.4% of the division’s sales), which posted a 34.4% increase in
comparable revenue over the half-year, the sound performance of shoe lines (+9.4%) and the vitality of jewellery and exclusive jewellery
products.
Gucci Division
Gucci division sales amounted to €808.5 million, up by 19.2% on a comparable basis. Growth was primarily driven by leather goods
(+31.9%), in step with the success of the Hasler, Pelham, Punch and Creole handbag lines and the carry-over lines such as Abbey and
Eclipse.
The brand’s pricing policy was maintained via the quality of products, their high-end positioning and improved communication.
Over the half-year and on a comparable basis, the Gucci brand posted a growth rate of over 10% in all geographical areas, with
accelerated growth in North America and Asia-Pacific.
Three stores were opened during the half-year in Japan, Malaysia and Canada.
Bottega Veneta
Bottega Veneta revenue was up 55.0% on a comparable basis over the half-year, confirming and accentuating the trends observed over
Activity report
fiscal year 2004. This growth also holds true for retail sales (87.8% of the division’s revenue), which rose 57.6%, and sales to third parties,
which rose 37.6%.
Virtually all the product categories posted two-figure growth due to the success of the recent collections, particularly over the second
quarter.
All the geographical areas posted growth on a comparable basis: 49.9% in Europe, 44.3% in North America, 52.8% in Japan and 82.5%
in Asia-Pacific.
Eleven stores were opened over the period (three in Europe, two in Japan and six in Asia-Pacific), bringing the total number of stores to
76 as at 30 June 2005.
Yves Saint Laurent

Yves Saint Laurent activity was slightly down by 0.6% on a comparable basis over the half-year. The subsidiary was affected by disap-
pointing performances from leather goods over the second quarter. On the other hand, men’s and women’s ready-to-wear sales improved
over the second quarter with respective increases of 5.2% and 6.0% on a comparable basis.
The new operational structure implemented early in the half-year, with the appointment of a new accessory designer in particular, should
boost the brand’s performances beginning with the next collections.
The Yves Saint Laurent brand is operated through a network of 62 worldwide stores as at 30 June 2005.
YSL Beauté
YSL Beauté sales increased by 2.0% on a comparable basis over the half-year. Activity for Perfumes decreased slightly by 1.0% on a
comparable basis with trends that were mixed. Perfumes marketed under the Yves Saint Laurent brand posted solid performances with
the successful launch of Cinéma in Europe, whereas performances for the other brands were more varied.
Cosmetic product sales rose by 12.8% on a comparable basis over the half-year, driven in large part by the success of the lipstick mar-
keted under the Yves Saint Laurent brand, Rouge Pure Shine.
Other brands
The other brands of the Luxury Goods division posted excellent performances over the half-year. Sales stood at €134.3 million, up by
25.5% on a comparable basis, driven by the steady growth of the Boucheron, Balenciaga and Alexander McQueen brands.
Retail division activity
Retail revenue increased by 1.6% on an actual basis and 1.9% on a comparable basis. The change in revenue by brand breaks down as
follows:
(in € millions) Half-year ended Half-year ended Change (%)

30 June 2005 30 June 2004 Actual Comparable
Conforama 1,370.4 1,371.4 -0.1% -0.2%
Fnac 1,855.4 1,769.5 4.9% 4.2%
Printemps 355.5 370.9 -4.2% -4.6%
Redcats 2,171.6 2,176.9 -0.2% 0.8%
CFAO 967.0 919.9 5.1% 5.8%
Other activities 35.6 40.3 -11.7% -4.6%
Retail 6,755.5 6,648.9 1.6% 1.9%
Retail had a solid performance over the half-year, with sales increasing by 1.9% on a comparable basis. There was a slowdown in the
second quarter however, with growth of 0.2%, following 3.6% in the first quarter.
In an environment characterised by lacklustre household consumption, particularly in the second quarter, division sales in France rose
moderately by 0.4% over the half-year. Excluding France, division sales rose significantly by 3.8% on a comparable basis over the half-
year, reflecting the success of the Group’s internationalisation policy via the export of new concepts and know-how.
Conforama
Conforama sales declined slightly over the half-year, with a 0.2% decrease on a comparable basis. In a difficult economic context affected
by lower average sales and taking into account the refurbishment of the store network, Conforama sales in France rose slightly by 0.6%
on a comparable basis, despite a difficult second quarter that saw a 4.4% drop in activity.
Excluding France, revenue for the brand decreased by 1.7% on a comparable basis over the half-year, primarily due to significant deflation
in the countries where Conforama is present. Excluding Italy, where sales decreased by 3.6% on a comparable basis over the half-year,
international sales increased nonetheless by 0.5% driven by solid performances in Spain, which rose by 16.1%.
The brand opened five new stores during the half-year (one in Switzerland, two in Spain and two in France, including the reopening of the
Morsbach store) and pursued an active store renovation programme in France.
Fnac
Fnac half-year revenue stood at €1,855.4 million, up by 4.2% on a comparable basis.
In France, the Fnac stores recorded limited growth of 0.9% on a comparable basis, primarily due to the decrease in average sale prices
for technical products and the delayed arrival of new editorial products over the second half-year. The French subsidiaries pursued their
development: Fnac Eveil & Jeux sales increased by 10.9% over the half-year, while Fnac.com confirmed its top audience rating in terms
of Business-to-Consumer merchant sites, with a 45.2% sales increase over the half-year.
At the international level, a priority growth driver for Fnac, the 9.3% increase in sales on a comparable basis confirms the brand’s potential
and the market share gains in most countries. Revenue on a comparable basis is up by 14.5% in Switzerland, 8.2% in Italy, 12.3% in Spain
and 9.3% in Portugal. Only Belgium had a drop in activity due to fierce competition and internal restructuring.
The brand pursued its international development over the first half by opening its eleventh store in Spain and its eighth store in Portugal.
PPR
Printemps
Half-year revenue for Printemps amounted to €355.5 million, down by 4.6% on a comparable basis. This figure does not take into account
concession sales, which rose by 9.2% over the half-year and now represent 29.5% of sales for the Department Stores division.
Activity of the Department Stores division, including concession sales, is slightly down by 1.6% over the half-year, primarily due to the
unfavourable scheduling of June sales. Printemps Haussmann sales resisted the trend over the first half with a decrease limited to 0.7%
on a comparable basis, driven by the dynamism of Women’s Fashion and Luxury Goods, whereas sales decreased by 2.3% for the Chain
stores, particularly for the Household Furnishings sector.
Activity for the Sports division decreased by 10.4% on a comparable basis over the half-year due to a significant decline in the shoe
market, primarily due to the delayed arrival of collections over the second half-year and the absence of major sporting events.
Redcats
Redcats revenue amounted to €2,171.6 million over the half-year, up by 0.8% on a comparable basis and 1.2% when the impact of the
Sears catalogue shutdown in the US is excluded.
In France, sales declined moderately by 0.6% on a comparable basis, reflecting market share gains in a sluggish economy. The activity is
driven by the excellent performance of the Children and Family division, up by 6.5% on a comparable basis over the half-year, the steady
Activity report
performance of La Redoute, down by 1.3%, and the mixed performance of the Senior division, with a 5.6% decline in sales but a second
quarter turnaround that posted an increase of 3.1%.
In Europe excluding France, sales were down by 0.7% on a comparable basis in the midst of a significant slowdown in demand in
Scandinavia and Great Britain.
In the United States, Redcats confirmed the promising performances observed in the last quarter of 2004, with half-year growth on a
comparable basis of 5.2% and 7.4%, if the shutdown of the Sears catalogue activity is excluded.
The strong Internet sales were confirmed over the first half with an increase of 36.0% on a comparable basis to reach €513.8 million.
E-commerce now represents one quarter of the Redcats activity.
CFAO
Sales of the CFAO brand amounted to €967.0 million over the first half of 2005, with a clear increase of 5.8% on a comparable basis and
an accelerated second quarter that posted revenue growth of 8.1%.
All the CFAO activities recorded improved performances during the half-year: Automobile activity was up 5.3% on a comparable basis,
driven by development in North Africa; Pharmaceuticals activity accelerated constantly over the half-year, with an increase of 7.3%; and the
new Technology businesses posted sustained growth of 12.0%, despite the difficulties encountered in the Ivory Coast and Cameroon.
Other activities
Revenue from other activities primarily represents the Orcanta and Kadeos brands.
The Orcanta lingerie brand generated revenue of €24.2 million over the half-year, a decline of 5.5% on a comparable basis. Activity for
June was hampered by the early timing of the sales period.
Kadeos revenue, which corresponds to commissions received when gift vouchers are issued, amounted to €7.2 million over the half-
year, an 18% increase reflecting the accelerated volume of gift voucher issues and the initial successes of the gift-card launched at the
beginning of the second quarter.
Gross profit
The Group gross profit stood at €3,584.1 million over the first half of 2005, compared to €3,432.0 million in the 2004 pro forma figures,
up by 4.4%.
The actual and pro forma gross profit rates for the divisions are as follows:
(as % of income from ordinary activities) Actual Pro forma (1)

Half-year Half-year Half-year Half-year
ended ended ended ended
30 June 2005 30 June 2004 30 June 2005 30 June 2004
Luxury Goods 66.4% 67.2% 66.4% 66.7%
Retail 39.9% 39.5% 39.9% 39.5%
PPR - Continuing operations 44.3% 44.1% 44.3% 43.7%
(1)
Luxury Goods consolidated over 6 months in 2005 and 2004 from 1 January to 30 June.
The Group’s pro forma gross profit rate increased by 0.6 basis points to 44.3%, mainly due to the following factors:
• an increase in the contribution of the Luxury Goods division to the gross profit, reflecting the division’s accelerated growth within the
Group;
• an increase of 0.4 basis points for the Retail division bringing it to 39.9%, mainly attributable to the higher gross profit rate of Redcats,
an increase of 1.7 basis points to 57.5%, and the improved Conforama gross profit rate, an increase of 0.9 basis points to 34.7%,
reflecting the favourable impacts of the international sourcing policy.
The slight decline of the Luxury Goods gross profit rate to 66.4% (0.3 basis points) reflects, despite unfavourable exchange parities, the
division’s ability to maintain high margin rates, largely due to the success of its collections.
Payroll expenses and other recurring operating income and expenses
Group payroll expenses amounted to €1,314.5 million in 2005, compared to a pro forma figure of €1,265.6 million in 2004. The 3.9%
increase falls below the 4.4% gross profit increase over the same period.
Productivity, which measures payroll expenses compared to the gross profit, improved by 0.2 basis points over 2004 to stand at 36.7%.
This improved productivity reflects control over Luxury Goods operating expenses in a period of strong activity growth.
The average number of employees totalled 74,605, up 1.5% compared to the pro forma figures of the first half of 2004. Retail accounted
for 1.2% of the increase, while Luxury Goods accounted for 3.1%.
Other recurring operating income and expenses include marketing and advertising investments and various operating expenses (transport,
real estate, IT, etc.). On a pro forma basis, the item rose 3.7%, representing 23.7% of income from ordinary activities, compared to 23.6%
in 2004.
The 3.7% increase should be compared with a 4.4% increase in the gross profit rate, primarily attributable, for Retail, to increased costs for
premises in connection with the expansion, refurbishment and reorganisation of selling areas at most brands, and the decision to control
communication and network expansion expenses.
Net charges to depreciation, amortisation and provisions for non-current operating assets amounted to €194.5 million in 2005, steady in
comparison with the pro forma figure for the first half of 2004.
PPR
EBITDA
Earnings before interest, tax, depreciation and amortisation and provisions on non-current operating assets (EBITDA) amounted to
€543.1 million in 2005, a pro forma increase of 6.8% in relation to 2004.
Actual and pro forma EBITDA by division breaks down as follows:
Actual Pro forma (1)

(in € millions) Half-year Half-year Change Half-year Half-year Change
ended ended (%) ended ended (%)
Luxury Goods 172.6 210.1 -17.8% 172.6 124.9 38.2%
Retail 397.2 411.1 -3.4% 397.2 411.1 -3.4%
Holding companies and other (26.7) (27.3) 2.2% (26.7) (27.3) 2.2%
PPR - Continuing operations 543.1 593.9 -8.6% 543.1 508.7 6.8%
Activity report
(1)
EBITDA for the Luxury Goods division posted exceptional growth of 38.2%, due to the remarkable performances of Gucci and a reduction
in recurring operating losses for most of the other brands, particularly Yves Saint Laurent and Boucheron. EBITDA for Retail is down by
3.4% over the period, attributable to the negative performance of Conforama over the half-year, primarily due to higher operating expenses
in France following the expansion and refurbishment policy of its store network, and a weak Italian market affecting the performances of
its Emmezeta subsidiary.
Recurring operating income
Group recurring operating income amounted to €348.6 million in 2005. On a pro forma basis it was up 11.3%, compared to the previous
half-year.
Actual and pro forma recurring operating income by division breaks down as follows:
Actual Pro forma (1)

(in € millions) Half-year Half-year Change Half-year Half-year Change
ended ended (%) ended ended (%)
Luxury Goods 107.4 143.3 -25.1% 107.4 60.9 76.4%
Retail 268.8 280.6 -4.2% 268.8 280.6 -4.2%
Holding companies and other (27.6) (28.2) 2.1% (27.6) (28.2) 2.1%
PPR - Continuing operations 348.6 395.7 -11.9% 348.6 313.3 11.3%
(1)
The item’s significant increase in the first half reflects the solid performance of Luxury Goods and the satisfactory results of Retail brands,
with the exception of Conforama, which was hampered by disappointing commercial performances in France and Italy, and whose repo-
sitioning affected operating costs for the half-year.
For Luxury Goods, the item increased by 76.4%, or €46.5 million, on a pro forma basis, despite negative foreign exchange impacts and the
appreciation of the euro against the US dollar in particular. On a constant exchange rate basis, the item’s increase amounts to €85.4 million,
thus demonstrating the strong operating leverage of the division’s brands. All the brands posted improved operating performances, with the
exception of YSL Beauté, which had to increase communications expenditure for €7.2 million, thus affecting half-year results.
For Retail, the item declined by 4.2% over the half-year due to the negative performance of the Conforama brand. Recurring operating
income for Conforama stood at €56.9 million, down by 27.0%, affected by declining operating performances in France and in Italy. The
other division brands recorded satisfactory results in a less than favourable economic cycle. This followed the trend set by Redcats, which
posted a significant 8.0% rise in recurring operating income to reach €110.9 million, and Fnac, with a 10.3% increase in the line item to
reach €21.5 million.
The Group recurring operating margin increased over the first half of 2005, standing at 4.3%, compared to 4.0% in the pro forma figures
for the first half of 2004.
The actual and pro forma recurring operating margin by division breaks down as follows:
(as % of revenue) Actual Pro forma (1)

Half-year Half-year Half-year Half-year
ended ended ended ended
Luxury Goods 8.0% 10.8% 8.0% 5.0%
Retail 4.0% 4.2% 4.0% 4.2%
Holding companies and other n/a n/a n/a n/a
PPR – Continuing operations 4.3% 5.0% 4.3% 4.0%
(1)
The pro forma increase in the recurring operating margin is driven by the Luxury Goods performance, with an 8.0% margin, compared to
5.0% for the first half of 2004. The increase arises from a higher margin in the Gucci division, standing at 23.5% compared to 22.9% in
2004, and a significant improvement in the item for all the other brands.
The slight drop in the Retail recurring operating margin to 4.0% is primarily attributable to the 1.5 basis point decrease in the Conforama
margin to 4.2% and the 0.4 basis point decline in the CFAO margin to 8.5%, due to the intensification of activities in Mediterranean Africa
and difficulties encountered in the Ivory Coast.
Other operating income and expenses
Other Group operating income and expenses, which include the non-recurring items likely to affect the monitoring of each division’s eco-
nomic performance, amounted to €38.2 million over the first half of 2005. The item mainly includes the capital gain before tax realised on
the sale of the interest in Facet for €70.3 million, restructuring costs for €19.9 million, and other non-recurring items for €12.2 million.
Operating income
Group operating income stood at €386.8 million for the first half of 2005, compared to an actual figure of €410.9 million in the first half of
2004, and a pro forma figure of €327.3 million. The item rose substantially by 18.2% in relation to the first half of 2004.
Finance costs
Group finance costs rose 19.8%, to stand at €151.9 million for the first half of 2005, compared to €125.9 million on an actual basis for
the first half of 2004 and €126.8 million on a pro forma basis.
The €25.1 million increase in the item in relation to the first half of 2004 primarily stems from the Group’s prospective application of IAS
32 and IAS 39 as of 1 January 2005. Application of the standards had a €17.5 million impact on the half-year’s finance cost given the
recognition of Group financing at amortised cost using the effective interest rate and in particular the OCEANE convertible bonds.
PPR
Adjusted for this impact, the Group finance cost increased by €7.6 million due to the higher average interest rate of the net debt, which
amounted to 3.6% over the first half of 2005 compared to 3.3% over the first half of 2004 on a constant Group structure basis.
The increase in the average interest rate of the Group’s net debt follows the refinancing carried out over the last twelve months to extend
the maturity of financial resources.
Corporate tax
The Group’s tax charge amounted to €69.1 million for the first half of 2005, compared to €145.1 million on an actual basis for the first half
of 2004 and €141.4 million on a pro forma basis.
The item includes a tax charge of €8.6 million related to other operating income and expenses over the period. The tax charge for the first
half of 2004, on a pro forma basis, includes a €91.3 million charge related to other operating income and expenses of the period, of which
a deferred tax charge of €63.8 million as part of the Rexel classification according to IFRS 5 and Group investments in associates, as well
as a current tax charge of €40.5 million on the capital gain realised on the disposal of consumer credit activities.
Activity report
The effective tax rate, which measures the relationship between the tax charge for the period and pre-tax income, stood at 29.4% over
the first half. Excluding net other operating income and expenses, the effective tax rate stood at 30.8%, compared to 26.9% for the first
half of 2004.
The significant increase in the effective tax rate on recurring income is mainly attributable to the higher rate for Luxury Goods, as a result
of the division’s development in geographical areas with higher tax rates and, to a lesser degree, the slight increase in the Retail effective
tax rate given the division’s favourable results at the international level.
Net income from continuing operations

On an actual basis, net income from continuing operations stood at €169.6 million over the first half of 2005, compared to €151.6 million
over the first half of 2004. Excluding non-current items, the item stood at €140.0 million for the first half of 2005, compared to €224.0 million
for the first half of 2004.
On a pro forma basis, net income from continuing operations stood at €169.6 million over the first half of 2005, up by €98.8 million,
primarily because of the increase in non-current items, which contributed to the change for €106.9 million, net of tax.
On a pro forma basis and excluding non-current items, net income from continuing operations stood at €140.0 million, compared to
€148.0 million in the first half of 2004. The slight decline, excluding non-current items, is mainly attributable to the prospective application
of IAS 32 and IAS 39 to net financial income and higher tax rates, despite an increase in recurring operating income.
Net income from discontinued operations

This item includes assets or disposal groups recognised according to IFRS 5 - Non-current Assets (or Disposal Groups) Held for Sale
and Discontinued Operations. The standard applies to non-current assets that are defined as assets (or disposal groups) whose sale is
highly probable.
No assets held for sale were recognised during the first half of 2005. During the first half of 2004, net income from discontinued operations
amounted to €80.0 million, representing the net income of Rexel before depreciation and amortisation and minority interests.
Minority interests
On an actual basis, minority interests totalled €15.7 million over the first half of 2005, compared to €71.6 million over the first half of 2004.
On a pro forma basis, minority interests totalled €15.7 million over the first half of 2005, compared to €47.7 million in 2004. This trend
essentially reflects the considerable increase in the Group’s stake in Gucci, following the successful takeover bid in April 2004 and the sale
of Rexel in December 2004.
Net income attributable to equity holders of the parent – Continuing operations
On an actual basis, this item amounted to €153.9 million in the first half of 2005, compared to €101.1 million in the first half of 2004.
On a pro forma basis, the item stood at €153.9 million in the first half of 2005, compared to €44.2 million in 2004. Excluding non-current
items, it amounted to €124.3 million in 2005, a 2.3% increase over the first half of 2004.
Net earnings per share
The weighted average number of PPR ordinary shares used to calculate earnings per share totalled 117.9 million for the first half of 2005,
compared to 118.8 million for the first half of 2004. The weighted average number of fully diluted shares amounted to 118.0 million, com-
pared to 119.9 million in the first half of 2004.
Net earnings per share from continuing operations for the first half of 2005 amounted to €1.31, compared to €0.85 on an actual basis
in 2004, and €0.37 on a pro forma basis.
Excluding non-recurring items, net earnings per share from continuing operations stood at €1.05 over the first half of 2005, compared to
€1.44 on an actual basis in 2004, and €1.02 on a pro forma basis.
Financial structure and cash flow

Non-current assets
Total Group non-current assets as at 30 June 2005 amounted to €15,426.7 million, up slightly by 0.2% over 30 June 2004 (Luxury Goods
consolidated over the period 1 January – 30 June) and 1.0% over 31 December 2004. The item breaks down as follows:
(in € millions) 30 June 2005 30 June 2004 (1) 30 June 2004 01 January 2005
Goodwill 5,452.7 5,334.0 5,353.4 5,382.8
Intangible assets 6,619.4 6,551.2 6,564.9 6,628.4
Property, plant and equipment 2,617.8 2,653.3 2,662.1 2,624.8
Investments in associated companies 50.0 45.5 45.5 46.9
Investments 61.3 152.9 153.9 92.0
Other non-current financial assets 171.2 157.8 159.5 167.1
Deferred tax assets 443.6 478.0 489.4 435.5
Other non-current assets 10.7 28.9 29.4 14.4
Total non-current assets 15,426.7 15,401.6 15,458.1 15,391.9
(1)
Luxury Goods consolidated over the period from 1 January to 30 June.
PPR
We have no particular comment on the change in Group non-current assets, which reflects the Group structure’s stability since fiscal year
2004.
Working capital requirement
The operating working capital requirement stood at €378.4 million as at 30 June 2004, down sharply by 38.1% on a pro forma basis in
relation to 30 June 2005 and up in relation to 1 January 2005, given the seasonality of the Retail activities.
Change in the Group working capital requirement by category is as follows:
(in € millions) 30 June 2005 30 June 2004 (1) 30 June 2004 01 January 2005
Operating working capital requirement 656.0 681.8 617.3 222.9
Other net non-current assets (277.6) (70.5) (29.8) (334.1)
WCR related to operating activities 378.4 611.3 587.5 (111.2)
Customer loans 412.7 433.0 433.0 419.1
Activity report
Working capital requirement 791.1 1,044.3 1,020.5 307.9
(1)
The significant operating working capital requirement as at 30 June reflects the seasonality of the Retail activity, which is concentrated in
the second half of the calendar year.
The 3.8% decline, i.e. €25.8 million, in the operating working capital requirement compared to 30 June 2004 (Luxury Goods consolidated
over the period 1 January – 30 June) reflects the ongoing measures to control capital employed in the two divisions, specifically through
an improved inventory turnover.
The change in other net current assets over the first half of 2005 primarily stems from changes in tax receivables and liabilities.
The moderate decrease in customer loans reflects the tightening of loan terms offered by Redcats through its financing subsidiaries in the
UK and Scandinavia.
Shareholders’ equity
As at 30 June 2005, consolidated shareholders’ equity amounted to €7,758.9 million, including €7,594.9 million for shareholders’ equity
attributable to equity owners of the parent. The item has increased by 2.0% in relation to 1 January 2005.
The change is essentially the result of higher net income for the period, the net disposal of 2,883,132 treasury shares for €237.4 million, and
the change in translation adjustments less dividends paid.
Provisions
Provisions for retirement and similar commitments increased by €13.6 million compared to 1 January 2005 to reach €242.5 million,
largely due to the recognition of the cost of services rendered by employees over the period.
Other provisions amounted to €253.5 million as at 30 June 2005, a decline of 7.4% compared to 1 January 2005.
Net indebtedness
Group net indebtedness stood at €5,577.2 million as at 30 June 2005, an increase of 18.0% compared to 31 December 2004.
The increase in the item, in relation to 31 December 2004, is mainly due to the prospective application of IAS 32 and 39 as at 1 January
2005 in the amount of €458.5 million.
Subsequent to the application of IAS 32 and 39, Group net indebtedness increased by 7.6%, primarily because of seasonality impacts of
the Retail working capital requirement and the payment of dividends over the half-year for €310.0 million.
Financing of customer loans amounted to €412.7 million as at 30 June 2005, a decrease of 1.5% compared to 31 December 2004.
Cash flows for the fiscal year
(in € millions) Half-year ended Half-year Half-year Half-year

30 June 2005 ended ended ended
30 June 2004 (1) 30 June 2004 31 Dec. 2004
Cash flows from operating activities 325.9 360.7 450.4 1,016.1
Interest paid/received 129.0 119.9 119.4 267.3
Dividends received (14.2) (17.6) (17.6) (26.7)
Net income tax payable 54.2 29.7 25.9 150.6
Cash flows before tax, dividends and interest 494.9 492.7 578.1 1,407.3
Change in working capital requirement (398.1) (458.6) (392.5) (5.2)
Change in customer loans 16.9 21.7 21.7 28.6
Income tax paid (53.4) (60.1) (85.6) (204.7)
Net cash from/(used in) operating activities 60.3 (4.3) 121.7 1,226.0
Purchases of property, plant and equipment and intangible assets (173.4) (183.0) (178.3) (401.1)
Proceeds of sale from property, plant and equipment
and intangible assets 8.7 14.0 14.0 26.4
Acquisitions of subsidiaries, net of cash acquired (42.5) (2,758.0) (2,757.1) (2,688.0)
Proceeds from disposal of subsidiaries, net of cash transferred 7.4 160.6 153.4 2,338.7
Purchases of other financial assets (17.5) (102.3) (192.4) (234.8)
Proceeds from sale of other financial assets 6.3 148.5 152.9 158.5
Interest and dividends received 25.3 23.3 22.9 61.0
Net cash used in investing activities (185.7) (2,696.9) (2,784.6) (739.3)
Share capital increase (decrease) 1.2 2.4 2.4 (0.2)
Treasury stock transactions 203.5 139.9 139.9 100.4
Dividends paid to parent company shareholders (299.3) (278.9) (278.9) (278.9)
Dividends paid to minority interests (10.7) (4.6) (4.6) (19.9)
Increase (decrease) in borrowings (1,976.0) 2,355.1 2,948.5 1,302.1
Interest paid (84.4) (95.5) (94.6) (324.2)
Net cash from/(used in) financing activities (2,165.7) 2,118.4 2,712.7 779.3
Net cash flows with assets held for sale 17.1 17.1 17.1
Impact of exchange rate variations 13.3 (34.4) (15.5) 38.7
Net increase/(decrease) in cash and cash equivalents (2,277.8) (600.1) 51.4 1,321.8
Cash and cash equivalents at beginning of the period 3,607.4 2,624.2 2,722.9 2,722.9
Cash and cash equivalents at end of the period 1,329.6 2,024.1 2,774.3 4,044.7
(1)
Net cash from operating activities is positive in the amount of €60.3 million, a substantial improvement over the first half of 2004 on a pro
forma basis. The increase is due to better control over the working capital requirement.
PPR
Net cash used in investing activities corresponds to an outflow of €185.7 million over the first half of 2005, including €173.4 million for
gross operating investments over the period.
Net cash used in investing activities for the first half of 2004 primarily included the acquisition cost of the Gucci Group shares as part of
the takeover bid launched by the Group in April 2004.
Free cash flow from operations, which measures net operating cash flow less net operating investments for the period, is negative in
the amount of €104.4 million over the first half of 2005. It has increased substantially by €68.9 million compared to the first half of 2004
(Luxury Goods consolidated over the period 1 January – 30 June).
Additional information on the half-year

• On 20 January 2005, Pinault-Printemps-Redoute announced its decision to adopt the name PPR, as well as a new visual identity. The
change symbolises the Group’s new image, in response to the strategic repositioning of Pinault-Printemps-Redoute in Retail and Luxury
Activity report
Goods. Shareholders approved the change in corporate name during the Annual General Meeting of 19 May 2005.
• On 2 February 2005, the Pinault-Printemps-Redoute Supervisory Board unanimously approved the appointment of François-Henri Pinault
as Chairman of the Management Board, effective 21 March 2005. The Combined Ordinary and Extraordinary General Shareholders
Meeting of 19 May 2005 approved the adoption of new articles of association reflecting the legal change in corporate governance from
a Management Board and Supervisory Board to a Board of Directors. Accordingly, the new Board of Directors elected François-Henri
Pinault as Chairman and CEO of PPR effective the same date.
• On 16 February 2005, Gucci Group announced the payment to its shareholders of €4.24 per outstanding share in the form of a return on
capital with effect as of 28 February 2005. The return on capital was proposed to the Gucci Group shareholders by the Supervisory Board
on 22 October 2004, and approved by an Extraordinary General Meeting held in Amsterdam on 9 December 2004.
• On 22 March 2005, Pinault-Printemps-Redoute secured a new €2.75 billion syndicated revolving credit facility. The facility is for general
corporate purposes, including the refinancing of a €2.5 billion syndicated revolving credit facility set up on 30 October 2002 and a
€715 million syndicated revolving credit facility set up on 26 May 2004. This new facility, which has a maturity of five years, provides two
one-year extension options at the end of the first and second years and is subject to a single financial covenant (net borrowings/EBITDA
below or equal to 3.75)
• On 29 June 2005, PPR carried out a €300 million bond issue, with a 29 January 2013 maturity and a 4% coupon. This transaction was
initiated as part of the EMTN (Euro Medium Term Note) programme of PPR.
Subsequent events
No significant event has occurred since the date the Group interim financial statements were approved and the date of the Board of
Directors’ meeting.
Financial information for the period ended 30 June 2005 • Consolidated financial statements
Consolidated financial
The 2004 comparative information presented in this document was restated to comply with the IFRS in effect on the date the half-year
financial statements were prepared.
Consolidated income statement

For the periods ended 30 June 2005 and 30 June 2004 and the year ended 31 December 2004
(in € millions) Notes Half-year ended Half-year ended Year ended

30 June 2005 30 June 2004 (1) 31 December 2004 (1)
CONTINUING OPERATIONS
Revenue 8,094.4 7,968.7 17,531.4
Cost of sales (4,510.3) (4,451.7) (9,795.8)
Gross profit 3,584.1 3,517.0 7,735.6
Payroll expenses (1,314.5) (1,237.4) (2,603.8)
Other recurring operating income and expenses (1,921.0) (1,883.9) (4,047.1)
Recurring operating income 5 348.6 395.7 1,084.7
Other operating income and expenses 5 38.2 20.2 627.1
Impairment of goodwill 5 (5.0) (50.3)
Operating income 5 386.8 410.9 1,661.5
Finance costs 6 (151.9) (125.9) (298.9)
Income before taxes 234.9 285.0 1,362.6
Income taxes 7 (69.1) (145.1) (331.3)
Share in earnings of associates 3.8 11.7 14.4
Net income from continuing operations 169.6 151.6 1,045.7
o/w attributable to equity holders of the parent 153.9 101.1 986.7
o/w attributable to minority interests 15.7 50.5 59.0
DISCONTINUED OPERATIONS
Net income from discontinued operations 8 80.0 197.3
o/w attributable to equity holders of the parent 58.9 144.9
o/w attributable to minority interests 21.1 52.4
Net income of consolidated companies 169.6 231.6 1,243.0

o/w attributable to equity holders of the parent 153.9 160.0 1,131.6
o/w attributable to minority interests 15.7 71.6 111.4
Net income attributable to equity holders of the parent 153.9 160.0 1,131.6
Earnings per share (in €) 9 1.31 1.35 9.47
Fully diluted earnings per share (in €) 9 1.30 1.34 8.68
attributable to equity holders of the parent 153.9 101.1 986.7
Net income from continuing operations excluding non-current items
attributable to equity holders of the parent 124.3 170.6 550.8
(1)
Figures restated according to IFRS.
PPR
statements
Consolidated balance sheet
As at 30 June 2005, 30 June 2004 and 31 December 2004
ASSETS
(in € millions) Notes 30.06.2005 30.06.2004 (1) 31.12.2004 (1)
Goodwill 5,452.7 5,353.4 5,294.0
Other intangible assets 6,619.4 6,564.9 6,628.4
Property, plant and equipment 2,617.8 2,662.1 2,624.8
Investments in associates 50.0 45.5 46.9
Non-consolidated investments 61.3 153.9 73.6
Other non-current financial assets 171.2 159.5 167.6
Deferred tax assets 443.6 489.4 417.9
Other non-current assets 10.7 29.4 14.4
Non-current assets 15,426.7 15,458.1 15,267.6
Inventories 2,717.7 2,563.9 2,632.6
Trade receivables 1,011.8 991.8 1,052.5
Customer loans 412.7 433.0 419.1
Current tax receivables 76.4 69.4 46.2
Other current assets 1,171.5 1,288.5 1,447.1
Cash and cash equivalents 10 1,565.9 3,035.4 4,288.1
Current assets 6,956.0 8,382.0 9,885.6
Assets classified as held for sale 4,048.4
Total assets 22,382.7 27,888.5 25,153.2
LIABILITIES AND SHAREHOLDERS’ EQUITY

(in € millions) Notes 30.06.2005 30.06.2004 (1) 31.12.2004 (1)
Shareholders’ equity
Consolidated financial statements

Share capital 481.7 489.7 489.7
Capital reserves 2,011.4 2,165.3 2,165.6
Treasury shares (0.5) (51.6) (51.6)
Cumulative translation adjustments 43.3 24.0 (81.0)
Remeasurement of financial instruments (31.0)
Other reserves 5,090.0 4,269.0 5,244.2
Shareholders’ equity attributable to equity holders of the parent 7,594.9 6,896.4 7,766.9
Shareholders’ equity attributable to minority interests 164.0 649.2 238.9
Shareholders’ equity 7,758.9 7,545.6 8,005.8
Long-term borrowings 11 4,791.2 7,560.3 6,103.2
Provisions for retirement and other benefits 228.4 209.5 214.7
Provisions 142.3 132.4 164.8
Deferred tax liabilities 1,900.7 2,006.3 1,876.6
Other non-current liabilities
Non-current liabilities 7,062.6 9,908.5 8,359.3
Short-term borrowings 11 2,424.2 3,102.6 2,910.2
Financing of customer loans 11 412.7 433.0 419.1
Trade payables 2,117.4 2,162.9 2,643.8
Provisions for retirement and other benefits 14.1 18.0 14.2
Provisions 111.2 195.1 183.5
Current tax liabilities 290.6 165.1 266.6
Other current liabilities 2,191.0 1,998.1 2,350.7
Current liabilities 7,561.2 8,074.8 8,788.1
Liabilities associated with assets classified as held for sale 2,359.6
Total liabilities and shareholders’ equity 22,382.7 27,888.5 25,153.2
(1)
Consolidated cash flow statement

For the periods ended 30 June 2005 and 30 June 2004 and the year ended 31 December 2004
(in € millions) Notes Half-year ended Half-year ended Year ended

30 June 2005 30 June 2004 (1) 31 December 2004 (1)
Net income from continuing operations 169.6 151.6 1,045.7
Net charges to depreciation, amortisation and provisions 205.5 410.4 563.1
Unrealised gains and losses relating to changes in fair value 13.3
Charges relating to stock options and similar plans 1.9 3.5 7.1
Proceeds on disposal of assets, net of tax payable (64.0) (149.3) (622.1)
Income from treasury shares (31.0) 8.5
Share in earnings of associates (3.8) (11.7) (14.4)
Dividends received from associates 1.6 1.2 4.6
Other income and expenses 1.8 75.7 23.6
Cash flow from operating activities 14.1 325.9 450.4 1,016.1
Interest paid/received 129.0 119.4 267.3
Dividends received (14.2) (17.6) (26.7)
Net income tax payable 54.2 25.9 150.6
Cash flow from operating activities before tax,
dividends and interest 494.9 578.1 1,407.3
Change in working capital requirement (398.1) (392.5) (5.2)
Change in customer loans 16.9 21.7 28.6
Income tax paid (53.4) (85.6) (204.7)
Net cash from operating activities 60.3 121.7 1,226.0
Purchases of property, plant and equipment and intangible assets 14.2 (173.4) (178.3) (401.1)
and intangible assets 14.2 8.7 14.0 26.4
Acquisitions of subsidiaries, net of cash acquired 14.3 (42.5) (2,757.1) (2,688.0)
Proceeds from disposal of subsidiaries, net of cash transferred 14.3 7.4 153.4 2,338.7
Purchases of other financial assets (17.5) (192.4) (234.8)
Proceeds from sale of other financial assets 6.3 152.9 158.5
Interest and dividends received 25.3 22.9 61.0
Net cash used in investing activities (185.7) (2,784.6) (739.3)
Share capital increase (decrease) 1.2 2.4 (0.2)
Treasury stock transactions 14.4 203.5 139.9 100.4
Dividends paid to parent company shareholders (299.3) (278.9) (278.9)
Dividends paid to minority interests (10.7) (4.6) (19.9)
Bond issues 661.2 1,008.7 1,343.5
Bond redemptions (482.1) (605.1) (1,507.9)
Increase (decrease) in other borrowings (2,155.1) 2,544.9 1,466.5
Interest paid (84.4) (94.6) (324.2)
Net cash from (used in) financing activities (2,165.7) 2,712.7 779.3
Net cash flow from assets classified as held for sale 17.1 17.1
Impact of exchange rate variations 13.3 (15.5) 38.7
Net increase (decrease) in cash and cash equivalents (2,277.8) 51.4 1,321.8
Cash and cash equivalents at beginning of the period (2) 3,607.4 2,722.9 2,722.9
Cash and cash equivalents at end of the period 14 1,329.6 2,774.3 4,044.7
(1)
(2)
Cash and cash equivalents at the opening of fiscal year 2005 amounting to €3,607.4 million corresponds to cash and cash equivalents at the close of fiscal year
2004 adjusted for the impact of the application of IAS 32 and 39 as at 1 January 2005 in the amount of €437.3 million.
PPR
Consolidated statement of change in shareholders’ equity
(Before income appropriation) Number of Share Capital Treasury Translation Remeasure- Other Shareholders’ equity
shares capital reserves shares reserves ment reserves and Group Minority Total
outstanding (1) of financial net income share interests
(in € millions) instruments Group share
As at 1 January 2004 120,802,365 489.6 2,164.3 (273.5) 4,497.4 6,877.8 2,937.0 9,814.8
Currency translation differences 24.0 24.0 7.5 31.5
Gains and losses
recognised directly in
shareholders’ equity 24.0 24.0 7.5 31.5
Net income for the
first half of 2004 160.0 160.0 71.6 231.6
Total gains and losses
shareholders’ equity 24.0 160.0 184.0 79.1 263.1
Share capital
increase/decrease 17,500 0.1 1.0 1.1 1.1
Treasury stock 1,300,000 221.9 (113.0) 108.9 108.9
Valuation of stock
option programmes 3.5 3.5 3.5
Dividends paid (278.9) (278.9) (25.0) (303.9)
Changes in consolidation scope (2,341.9) (2,341.9)
Other adjustments
As at 30 June 2004 122,119,865 489.7 2,165.3 (51.6) 24.0 4,269.0 6,896.4 649.2 7,545.6
Currency translation differences (105.0) (105.0) (7.7) (112.7)
Gains and losses
shareholders’ equity (105.0) (105.0) (7.7) (112.7)
Net income for the
second half of 2004 971.6 971.6 39.8 1,011.4
shareholders’ equity (105.0) 971.6 866.6 32.1 898.7

Share capital
increase/decrease 10,000 0.3 0.3 0.3
Valuation of stock
Dividends paid (4.9) (4.9)
Changes in consolidation scope (437.5) (437.5)
As at 31 December 2004 122,129,865 489.7 2,165.6 (51.6) (81.0) 5,244.2 7,766.9 238.9 8,005.8
Application of IAS 32/39 (4,583,517) (509.4) 26.7 149.9 (332.8) (67.3) (400.1)
As at 1 January 2005 117,546,348 489.7 2,165.6 (561.0) (81.0) 26.7 5,394.1 7,434.1 171.6 7,605.7
Cash flow hedges (2) (35.6) (35.6) (35.6)
Currency translation differences 124.3 124.3 1.0 125.3
Other financial instruments (2) (22.1) (22.1) (22.1)
Gains and losses
shareholders’ equity 124.3 (57.7) 66.6 1.0 67.6
Net income for the
first half of 2005 153.9 153.9 15.7 169.6
shareholders’ equity 124.3 (57.7) 153.9 220.5 16.7 237.2
Share capital
increase/decrease (1,996,250) (8.0) (154.2) (162.2) (162.2)
Treasury stock 4,883,132 560.5 (160.6) 399.9 399.9
Valuation of stock
Dividends paid (299.3) (299.3) (19.8) (319.1)
Changes in consolidation scope (4.5) (4.5)
As at 30 June 2005 (3) 120,433,230 481.7 2,011.4 (0.5) 43.3 (31.0) 5,090.0 7,594.9 164.0 7,758.9
(1)
Par value of shares set at €4 pursuant to the Management Board Decision of 30 August 2001.
(2)
Net of deferred tax.
(3)
Number of shares outstanding as at 30 June 2005: 120,438,230.
Notes to the condensed financial

1. Accounting policies and methods
1.1 General principles

Pursuant to European regulation 1606/2002 of 19 July 2002, the PPR consolidated financial statements for the year ending 31 December
2005 will be prepared in accordance with the applicable international accounting standards adopted by the European Union as of that
date. The international standards comprise the International Financial Reporting Standards (IFRS), the International Accounting Standards
(IAS), and the interpretations of the Standing Interpretations Committee (SIC) and the International Financial Reporting Interpretations
Committee (IFRIC).
The interim financial statements for the period ended 30 June 2005 are presented in accordance with French GAAP, but they have been
prepared based on the recognition and IAS/IFRS measurement principles applicable as of 30 June 2005.
This represents a departure from IAS 34 – Interim financial reporting, but it does comply with the recommendations of the Autorité des
Marchés Financiers, the French Securities Regulator, issued in January 2005 and the Committee of European Securities Regulator (CESR)
issued on 30 December 2003 with respect to financial reporting for the publication of the 2005 interim financial statements.
The financial statements do not take into account amendments to standards not yet approved by the European Accounting Regulation
Committee, or draft standards that are still at the exposure draft stage in terms of the International Accounting Standards Board (IASB).
Certain standards are subject to change or interpretation, and the potential retrospective application could modify the 2004 consolidated
statements restated according to IFRS and the half-year consolidated financial statements for the period ended 30 June 2005.
IAS 32 – Financial instruments: disclosure and presentation and IAS 39 – Financial instruments: recognition and measurement have
been applied on a prospective basis by the Group effective 1 January 2005. The impact of this change in method was recognised in
shareholders’ equity as at 1 January 2005 and is described in Note 17.4. Insofar as the application of these standards is prospective, the
information provided for fiscal year 2004 is not comparable.
The Group has also opted for the early adoption of the following standards as at 1 January 2004:
• IFRS 5 – Non-current assets held for sale and discontinued operations, which will be mandatory as at 1 January 2005;
• IFRS 2 – Share-based payment for stock option plans issued subsequent to 7 November 2002.
The 2004 comparative financial information has been prepared in accordance with the IFRS applicable on the date the 2005 interim finan-
cial statements were drawn up and in compliance with IFRS 1 on first-time adoption of IFRS. The impacts of the change in accounting
basis are reported in the reconciliation tables presented in Note 17. Specifically:
• at 1 January 2004: a reconciliation note to the opening balance sheet and shareholders’ equity;
• at 30 June 2004: a reconciliation note to the balance sheet, shareholders’ equity, and the income and cash flow statements, for the
comparison of the half-year financial statements;
• at 31 December 2004: a reconciliation note to the balance sheet, shareholders’ equity, and the income and cash flow statements, for
the comparison of the annual financial statements.
The 2004 consolidated financial statements restated according to IFRS, as published in this report, may present non-material differences
from preceding publications. The accounting basis used could change between the date of this report and 31 December 2005. The
opening balance sheet as at 1 January 2004 and the financial statements for the period ended 30 June 2004, 31 December 2004 and
30 June 2005 presented below could be modified during fiscal year 2005.
1.2 Use of estimates

The preparation of consolidated financial statements implies the consideration of estimates and assumptions by Group management that
can affect the book values of certain assets and liabilities, income and expenses, and the information disclosed in the notes to the finan-
cial statements. Group management reviews these estimates and assumptions on a regular basis to ensure their pertinence with respect
to past experience and the current economic situation. Items in future financial statements could differ from current estimates based on
changes in these assumptions.
PPR
1.3 Consolidation principles
The half-year consolidation is based on the financial statements (or interim financial statements) for the period ended 30 June for all com-
panies, with the exception of companies in the Luxury Goods division for which:
• up to fiscal year 2004 inclusively, the consolidation is based on the interim financial statements for the six months from 1 November to
30 April;
• as of fiscal year 2005, the consolidation is based on the interim financial statements for the six months ended 30 June.
The consolidated financial statements include the financial statements of companies acquired as of the date of acquisition and companies
sold up until the date of disposal.
Subsidiaries
The subsidiaries are all entities (including special-purpose entities) in which the Group governs the financial and operating policies and
generally holds, directly or indirectly, more than half of the voting rights. The existence and impact of potential voting rights that are exer-
cisable or convertible are taken into account in the assessment of control.
Subsidiaries are fully consolidated from the effective date of control.
Material intra-Group assets and liabilities and transactions between fully consolidated companies are eliminated. Gains and losses on
internal transactions with controlled companies are fully eliminated.
The accounting principles and methods are modified where necessary to ensure consistency of treatments retained at Group level.
Business combinations
Business combinations, where the Group acquires control of one or more other activities, are recognised using the purchase method.
The purchase cost is measured at the fair value, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity
instruments issued plus any costs directly attributable to the acquisition. The identifiable assets, liabilities and contingent liabilities of the

acquired entity are measured at their fair value on the date of acquisition, including the minority interest share.
The excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities of the acquired entity is recognised as goodwill. If the purchase cost is less than the Group’s interest in the net assets of the
subsidiary acquired measured at fair value, the difference is recognised directly in net income for the period.
Associates
Associates are all entities over which the Group exercises a significant influence in the management of the financial policy, without exerci-
sing control, and generally holds 20 to 50% of the voting rights.
Associates are recognised using the equity method and initially measured at cost. Subsequently, the profits or losses of the associate
attributable to equity holders of the parent is recognised in net income and the changes in equity attributable to equity holders of the parent
is recognised in equity. Should the Group share in the losses of an associate equal or exceed the Group’s investment in the associate, the
Group shall cease to recognise its share of losses, unless it has incurred legal or constructive obligations or made payments on behalf of
the associate.
Goodwill related to an associate is included in the carrying amount of the investment.
Gains or losses on intra-Group transactions with equity accounted investments are eliminated in the amount of the Group’s investment
in these companies.
The accounting policies and methods of associates have been modified where needed in order to ensure the consistency of accounting
treatments adopted at Group level.
Joint ventures
Join control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic, financial and ope-
rating decisions relating to the activity require the unanimous consent of the parties sharing control.
The Group interests in jointly controlled entities are recognised using the equity method.
Consolidation of consumer credit businesses
Exclusively controlled consumer credit companies are fully consolidated. These companies essentially finance the sales of consumer goods
within Retail. Sales financing revenue is presented in revenue, while sales financing costs are considered as operating items classified in
recurring operating income. The asset and liability headings of these businesses have been allocated according to their nature to special
headings of the Group consolidated balance sheet, with a distinction as to the asset and liability side of consumer loan financing.
The consumer credit business contribution is included in Retail in the table presenting information by division.
1.4 Foreign currency translation

Functional and presentation currency
Items included in the financial statements of each Group entity are valued using the currency of the primary economic environment in
which the entity operates (functional currency). The Group consolidated financial statements are presented in euros, which serves as both
the functional and presentation currency.
Foreign currency transactions

Transactions denominated in foreign currencies are recognised in the entity’s functional currency at the exchange rate prevailing on the
transaction date.
Monetary items in foreign currencies are translated at each balance sheet date using the closing rate. Translation adjustments arising from
the settlement of the items are recognised in income or expenses of the period.
Non-monetary items in foreign currency valued at historical cost are translated at the rate prevailing on the transaction date, and non-
monetary items in foreign currency valued at fair value are translated at the rate prevailing on the date the fair value was determined.
When a gain or loss on a non-monetary item is recognised directly in equity, the foreign exchange component is also recognised in equity.
Otherwise, the component is recognised in income or expenses of the period.
Translation of the financial statements of foreign subsidiaries

The results and financial statements of Group entities with a functional currency that differs from the presentation currency are translated
into euros as follows:
• balance sheet items other than equity are translated at the period-end exchange rate;
• income and cash flow statement items are translated at the average rate for the year;
• differences are recognised in consolidated shareholders’ equity under translation adjustments, which also includes foreign currency
borrowings used to hedge foreign currency investments for permanent advances to foreign subsidiaries.
Foreign exchange gains or losses that are an integral part of the net investment in a foreign subsidiary are recognised in the consolidated
financial statements as a separate component of shareholders’ equity and in income on disposal of the net investment.
The goodwill and fair value adjustments arising from a business combination with a foreign activity are recognised in the functional cur-
rency of the entity acquired. They are then translated at the closing exchange rate in the Group’s presentation currency, the resulting
differences being transferred to consolidated shareholders’ equity.
PPR
1.5 Goodwill and intangible assets
Goodwill
Goodwill represents the excess of the cost of a business combination over the acquirer’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities on the date of acquisition. Goodwill is allocated as of the acquisition date to cash generating units
(CGU) defined by the Group based on the characteristics of the core business, market or geographical segment of each brand. The CGU
are subject to annual impairment tests over the second half of the fiscal year or when events or circumstances indicate an impairment loss
is likely. Such events or circumstances are related to material unfavourable changes of a permanent nature affecting either the economic
environment or the assumptions or objectives used on the acquisition date.
Any impairment losses are allocated in priority to goodwill and recorded under “Impairment of goodwill” included in the income statement’s
operating income.
Intangible assets
Software acquired as part of recurring operations is usually amortised over a period not exceeding 12 months.
Software developed by the Group and meeting all the criteria of IAS 38 is capitalised and amortised over the useful life, which is generally
between 3 and 10 years.
Intangible assets acquired as part of a business combination, which are controlled by the Group and can be measured reliably, and which
are separable or arise from contractual or other legal rights, are recognised separately from goodwill. These assets, in the same way as
intangible assets acquired separately, are amortised over their useful life if it is finite and written down if their value in use is less than the
net carrying amount. Intangible assets with an indefinite useful life are not amortised but systematically subject to annual impairment tests
when there is an indication of potential impairment.
Brands representing a preponderant category of the Group’s intangible assets are recognised separately from goodwill when they meet
the criteria imposed by IAS 38. Recognition and durability criteria are then taken into account to assess the useful life of the brand.
A brand representing an intangible asset with an indefinite useful life is not amortised but systematically subject to annual impairment tests

when there is an indication of potential impairment.
A brand representing an intangible asset with a finite useful life is amortised on a straight-line basis over its useful life, not exceeding 20 years.
The amortisation of these brands and any impairment losses recognised at the time of impairment tests is recorded in the income state-
ment under “Other operating income and expenses” as part of Group operating income.
1.6 Property, plant and equipment

Property, plant and equipment are recognised at cost less accumulated depreciation and impairment losses with the exception of land,
which is presented at cost less impairment losses. The various components of property, plant and equipment are recognised separately
when their estimated useful life and therefore their depreciation periods are significantly different. The cost of an asset includes the expen-
ses that are directly attributable to its acquisition.
Subsequent costs are included in the carrying amount of the asset or recognised as a separate component, where necessary, if it is
probable that future economic benefits will flow to the Group and the cost of the asset can be reliably measured. All other repair and
maintenance costs are expensed in the year they are incurred except for expenses incurred for an increase in productivity or the extension
of an asset’s useful life, which are capitalised.
Depreciation is calculated using the straight-line method, based on the purchase or production cost, less any residual value, over a period
corresponding to the useful life of each asset category, i.e. 10 to 40 years for buildings and improvements to land and buildings, and 3 to
10 years for equipment.
Property, plant and equipment are tested for impairment when an impairment loss indicator is identified. When the asset’s recoverable
value is less than its net carrying amount, an impairment loss is recognised.
Finance leases
Assets acquired under finance leases and which transfer substantially all the risks and benefits of ownership to the Group are recognised
in property, plant and equipment.
Contracts that qualify as finance leases are recognised in assets and liabilities at the lower of the fair value of the asset leased or the present
value of the minimum payments. The corresponding assets are amortised over a useful life identical to that of property, plant and equipment
acquired outright. The corresponding liabilities are recorded in borrowings on the liabilities side of the consolidated balance sheet.
Finance leases that do not confer substantially all the risks and benefits inherent to ownership are classified as operating leases. Payments
made under these operating leases are recognised in current operating expenses on a straight-line basis over the term of the contract.
Capital gains on the sale and leaseback of assets are fully recognised in income at the time of the disposal when the lease qualifies as an
operating lease or insofar as the transaction was carried out at fair value.
Borrowing costs
Borrowing costs are expensed as incurred in accordance with IAS 23 – Borrowing costs.
1.7 Financial assets and liabilities

The Group has recognised and measured its financial assets and liabilities in accordance with IAS 39 since 1 January 2005, date of the
first-time adoption of the international standards governing financial instruments.
Derivative instruments to be presented henceforth on the balance sheet may be financial assets or liabilities depending on their nature.
Financial assets
Financial assets, excluding cash and derivative assets, are classified according to one of the following four categories:
• assets held for trading;

• loans and receivables;
• held-to-maturity investments;
• available-for-sale financial assets.
The classification is determined by the Group on the initial recognition date, based on the objective behind the assets’ purchase. Pur-
chases and sales of financial assets are recognised on the trade date, which is the date the Group is committed to the purchase or sale
of the asset. A financial asset is derecognised if the contractual rights to the cash flows from the financial asset expire or the asset is
transferred.
1. Assets held for trading

These are financial assets traded to be resold in the near term, or held by the Group for short-term profit, or assets voluntarily classified
in this category.
Only financial assets with a verifiable fair value can be recognised in this category. These assets are measured at fair value with changes
in fair value recognised in income.
Classified as current assets under cash, these financial instruments primarily comprise mutual or similar funds.
PPR
2. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
These assets are recognised at amortised cost using the effective interest rate method. Short-term receivables without a stated interest
rate are valued at the amount of the original invoice unless the effective interest rate has a material impact.
These assets are subject to impairment tests when there is an indication of impairment loss. An impairment loss is recognised if the
carrying amount exceeds the estimated recoverable amount.
Loans to participating interests, other loans and receivables and trade receivables are included in this category and are presented in
long-term investments and other current or non-current assets.
3. Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets, other than loans or receivables with fixed or determinable payments
and fixed maturity that an entity has the positive intention and ability to hold to maturity. The assets are recognised at amortised cost
using the effective interest rate method.
These assets are subject to impairment tests when there is an indication of impairment loss. An impairment loss is recognised if the
carrying amount exceeds the estimated recoverable amount.
Held-to-maturity investments are classified in long-term investments.
4. Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are not included in the aforementioned categories. Unrealised
capital gains or losses are recognised in shareholders’ equity until their disposal, with the exception of provisions for impairment which
are recorded in income upon their determination.
Foreign exchange gains or losses on foreign currency assets are recorded in income for monetary assets and in shareholders’ equity
for non-monetary assets.

For quoted securities, fair value corresponds to a market price and, for unquoted securities, to recent transactions or a technical valua-
tion based on reliable and objective indicators with estimates used by other market players. However, when the fair value of a security
cannot be reasonably estimated it is recorded at historical cost. These assets are subject to impairment tests in order to assess whether
they are recoverable.
The category mainly comprises non-consolidated investments and marketable securities that do not meet other financial asset defini-
tions. They are classified in other current and non-current assets and in cash.
Financial liabilities
The classification of financial liabilities depends on their valuation method. All financial liabilities and particularly borrowings and sundry
borrowings are recognised at amortised cost, using the effective interest rate method with the exception of financial liabilities valued at
their fair value such as trading liabilities.
The effective interest rate is determined for each transaction and corresponds to the rate that would provide the net carrying amount of a
financial liability by discounting its estimated future cash flows until maturity or until the nearest date the price is reset to the market rate.
The calculation includes the transaction costs of the operation and any premiums and or discounts. Transaction costs correspond to the
costs directly attributable to the acquisition or issue of a financial liability.
Financial liabilities that qualify as hedged items as part of fair value hedging relationships and initially valued at amortised cost are subject
to an adjustment of their net carrying amount with respect to hedged risk.
Hedging relationships are described in the paragraph covering derivative instruments.

Put options granted to minority interest shareholders

The Group has committed to repurchase the minority interests of shareholders with respect to certain fully consolidated subsidiaries.
These Group repurchase commitments correspond to optional commitments (written put options). The exercise price of these options may
be set or prepared according to a predefined calculation formula, and the options may be exercised at any time or on a specific date.
Pending a decision from the IASB on the subject, the following accounting treatment has been adopted:
• in accordance with IAS 32, the Group will record a financial liability with respect to put options granted to the minority shareholders of
the entities concerned;
• the liability is initially recognised at the present value of the exercise price and at subsequent balance sheet dates on the basis of the fair
value of the shares to be potentially purchased if the exercise price is based on the fair value;
• the corresponding entry for this liability is deducted from minority interests and the balance from goodwill. The obligation to record a
liability even though the put option is not exercised means, for purposes of consistency, that the same treatment applied to increases in
percentages of interest in controlled companies must initially be used for these transactions;
• the subsequent change in the value of the commitment is recognised through an adjustment of the amount of goodwill (excluding the
discounting impact).
The accounting principles described above may be reviewed based on the conclusions of the IASB’s current deliberations on instruments
repayable at fair value, including the accounting treatment of written put options at fair value on minority interests.
Hybrid instruments
Certain financial instruments have both a standard debt component and an equity component.
For the Group, this primarily involves OCEANE bonds (bonds convertible and exchangeable into new or existing shares).
Under IAS 32, convertible bonds are considered as hybrid instruments insofar as the conversion option provides for the repayment of the
instrument against a fixed number of equity instruments. There are several components:
• a financial liability (corresponding to the contractual commitment to pay cash), representing the bond component;
• the conversion option into a fixed number of ordinary shares, offered by the subscriber, similar to a call option written by the issuer,
representing the equity instrument;
• one or more embedded derivatives as is the case.
The accounting principles applicable on the issue date of each of these components are as follows:
• debt component: the amount initially recorded as a debt corresponds to the present value of future flows of interest payments and
capital at the market rate applicable to a similar bond without the conversion option. Should the convertible bond contain embedded
derivatives closely related to the borrowing within the meaning of IAS 39, the value of these components is allocated to the debt, in order
to determine the value of the equity component. The debt is recognised at amortised cost;
• embedded derivatives not closely related to the debt are recognised at fair value with changes in fair value recognised in income;
• the value of the conversion option is determined by deduction between the amount of the issue less the carrying amount of the debt
component and the potential value of the embedded derivatives. The conversion option continues to be recorded in equity for its initial
value. Changes in value of the conversion option are not recorded;
• transaction costs are prorated over each component.
Derivative instruments
The Group uses various financial instruments to reduce its exposure to foreign exchange, interest rate and equity risk. These instruments
are quoted on organised markets or traded over the counter with leading counterparties.
PPR
All derivatives are recognised in the balance sheet under “Other current assets and liabilities” and valued at fair value as of the trade date.
Changes in the fair value of derivatives are always recorded in income except in the case of cash flow hedging relationships.
Derivatives designated as hedging instruments are classified by category of hedge based on the nature of the risks being hedged:
• the cash flow hedge is used to hedge the risk of cash flow changes with respect to assets or liabilities recognised or a highly probable
transaction that would impact consolidated net income;
• the fair value hedge is used to hedge the risk of fair value changes with respect to assets or liabilities recognised or a firm commitment
not yet recognised that would impact consolidated net income;
• the net investment hedge is used to hedge the foreign exchange risk of foreign activities.
Hedge accounting can only be applied if all the following conditions are met:
• there exists a clearly identified, formalised and documented hedging relationship as at the date of inception;
• the effectiveness of the hedging relationship can be demonstrated on a prospective and retrospective basis. The results thus obtained
must reach a confidence level of between 80 and 125%.
The accounting treatment of financial instruments qualified as hedging instruments, and their impact on the income statement and the
balance sheet, is distinguished based on the type of hedging relationship:
• for cash flow and net investment hedges:

- the effective portion of the change in fair value of the hedging instrument is offset directly in equity. The amounts recorded in equity are
transferred to the income statement in parallel to the method of recognition used for hedged items;
- the ineffective portion of the hedge is recognised in the income statement.
• for fair value hedges, the hedged component of these items is measured on the balance sheet at its fair value. The change in this fair
value is recorded in the income statement and is offset, at the nearest level of ineffectiveness, by recognising in the income statement
the symmetrical changes in fair value of the financial instruments used as hedges.
Cash and cash equivalents

The “Cash and cash equivalents” line item recorded on the asset side of the consolidated balance sheet comprises cash, short-term
investments and other liquid and easily convertible instruments with a negligible risk of change in value and a maximum maturity of three
months as of the purchase date.
Investments with a maturity exceeding three months, and blocked or pledged bank accounts are excluded from cash. Bank overdrafts are
presented in borrowings on the liability side of the balance sheet.
In the cash flow statement, “Cash and cash equivalents” includes accrued interest receivable on assets presented in cash and cash
equivalents and bank overdrafts. A reconciliation table breaking down cash in the cash flow statement and balance sheet is presented in
Note 14.
1.8 Treasury shares

Treasury shares, whether specifically granted to employees or intended to stabilise the share price or in any other case, as well as the
directly related transaction costs, are deducted from consolidated shareholders’ equity. At the time of their disposal, the consideration
received for these shares, net of transaction costs and related tax impacts, is recognised in shareholders’ equity.
1.9 Stock purchase and subscription plans

Stock purchase and subscription plans are attributed by the Group and settled in PPR shares. In accordance with IFRS 2 – Share-based
payment, the fair value of these plans, corresponding to the fair value of the services rendered by the option holders, is valued definitively on
the attribution date using a mathematical model with a trinomial algorithm such as the Black & Scholes model, taking into account the number
of options potentially exercisable at the end of the rights vesting period.
During the four-year rights vesting period, the fair value of options thus determined is amortised in proportion to the vesting of rights. This
expense is recorded in payroll expenses with an offsetting increase in shareholders’ equity. When the options are exercised, the strike price
received is recorded in cash with an offsetting entry in shareholders’ equity.
In accordance with the provisional measures of IFRS 2, the Group has opted to apply the standard solely to those plans issued subse-
quent to 7 November 2002 and for which the rights are not vested as at 1 January 2005.
1.10 Treasury share options

Treasury share options are treated according to their characteristics as derivative instruments, equity instruments or financial liabilities.
Options qualified as derivatives are recorded at fair value through the income statement. Options qualified as equity instruments are
recorded in equity for their initial amount. Changes in value are not recognised. The accounting treatment of financial liabilities is described
in Note 1.7.
1.11 Inventories
Inventories are valued at the lower of cost and net realisable value. The net realisable value is the estimated sale price in the normal course
of operations, net of costs to be incurred to complete the sale.
1.12 Taxes
A deferred tax is calculated for all temporary differences between the accounting value recorded in the consolidated balance sheet and
the tax value of assets and liabilities. The tax rate used is the one the Group expects to pay or recover from the tax authorities, and which
has been adopted or virtually adopted at the balance sheet date.
Deferred tax assets and liabilities are not discounted and are classified in the balance sheet under non-current assets and liabilities.
A deferred tax asset is recognised on the deductible temporary differences and for the tax loss carry-forwards and tax credits insofar as
their future realisation appears probable.
A deferred tax liability is recognised on taxable temporary differences relating to investments in subsidiaries, associates and joint ventures
unless the Group is able to control the timing of the reversal of the temporary difference, and it is probable that the temporary difference
will not reverse in the foreseeable future.
1.13 Provisions
Restructuring measures
A restructuring provision is recognised when there exists a formal and detailed restructuring plan and implementation has begun or the
main features have been announced. The restructuring costs provided for essentially represent employee costs (severance pay, early
retirement plan, payment in lieu of notice, etc.), closures and penalties for breach of contract with third parties.
Other provisions
Provisions for litigation and disputes, and various contingencies and losses are recognised as soon as there exists a present obligation
arising from past events, which will probably result in an outflow of resources, the amount of which can be reliably estimated.
Provisions are valued at the discounted amount representing the best estimate of the expense necessary to extinguish the current obliga-
tion at the balance sheet date. The discount rate used reflects current assessments of the time value of money and specific risks related
to this liability.
PPR
1.14 Employee benefits
Based on the laws and practices of each country, the Group recognises various types of employee benefits:
Short-term benefits
The Group short-term benefits, primarily comprising social security payments, compensated absences, profit-sharing and bonuses paya-
ble within twelve months, are expensed in the corresponding period.
Post-employment benefits, other long-term benefits and termination benefits

With respect to defined contribution plans, the Group is not obliged to make additional payments over and above contributions already
made to a fund, if the latter does not have sufficient assets to cover the benefits corresponding to services rendered by personnel during
the current period and prior periods. With respect to these plans, contributions are expensed as incurred.
In terms of defined benefit plans, obligations are valued using the projected unit credit method based on agreements in effect in each
company. Under this method, each period of service gives rise to an additional unit of benefit entitlement and each unit is measured sepa-
rately to build up the final obligation. The obligation is then discounted. The actuarial assumptions used to determine the obligations vary
according to the economic conditions of the country where the plan is established. These plans and the terminations benefits are valued
by independent actuaries on an annual basis for the most significant plans and at regular intervals for the other plans. These valuations
take into account the level of future compensation, the probable active life of employees, life expectancy and staff turnover.
Actuarial gains and losses are primarily the result of changes to assumptions and the difference between results estimated according to
actuarial assumptions and the actual results. The differences are spread over the average remaining active life of members of the plan in
question, for the portion that exceeds the greater of 10% of the present value of the defined benefit obligation and 10% of the fair value
of any plan assets.
Past service cost designating the increase of an obligation following the introduction of, or changes to, an existing plan is recognised on
a straight-line basis over the average period until the benefits become vested or expensed immediately if the benefit rights are already
vested.
The expense relating to this type of plan is recognised in recurring operating income and net financial income according to the nature of
the underlying. The provision recognised in the balance sheet corresponds to the present value of the obligations thus valued, less the fair

value of plan assets and unamortised actuarial gains or losses.
1.15 Revenue recognition

Revenue represents the fair value of sales of goods and services, royalties, licences and operating subsidies, excluding taxes, net of re-
bates and discounts and after elimination of intra-Group sales.
In the event of a payment deferred beyond the usual credit terms that is not supported by a financing institution, the revenue from the sale
is equal to the discounted price, the difference between the discounted price and the cash payment being recognised in financial income
over the life of the deferred payment should the transaction be material.
Sales of goods are recognised when a Group entity has transferred the risks and rewards of the good’s ownership to the buyer, generally
when the good has been delivered to a client who has accepted it and for which recovery is probable.
Services are recognised based on the stage of completion of the transaction, during the period in which the services are rendered.
1.16 Earnings per share

Diluted net earnings per share is calculated by adjusting net income attributable to equity owners of the parent and the number of
outstanding shares for all instruments that are convertible, redeemable, exchangeable or otherwise exercisable for PPR shares whether
issued by PPR or one of its subsidiaries.
Dilution is determined separately for each instrument based on the following conditions:
• when the proceeds corresponding to potential future share issues are received at the time dilutive securities (the case for convertible
bonds) are issued, the numerator is equal to net income before dilution plus the savings in interest expense that would be realised in the
event of conversion, net of tax;
• when the proceeds are received at the time the rights are exercised (the case for stock options), the dilution attached to the options is
determined using the share purchase method (theoretical number of shares purchased at market price (average over the period) based
on the proceeds received at the time the rights are exercised)).
In the case of material non-current items likely to affect the clarity of earnings per share and diluted earnings per share, a net earnings per
share excluding non-current items is calculated by adjusting net income attributable to equity holders of the parent for non-current items
net of taxes and minority interests. Non-current items taken into account for this calculation then correspond to all the items included
under the headings “Other operating income and expenses” and “Impairment of goodwill” in the income statement.
1.17 Assets (or disposal groups) held for sale

As of 1 January 2004, the Group has applied IFRS 5, which requires a specific recognition and presentation of assets (or disposal groups)
held for sale. Non-current assets to which this standard applies are defined as assets (or disposal groups), the sale of which is considered
highly probable.
Non-current assets (or disposal groups) held for sale are measured and recognised at the lower of their net carrying amount and their fair
value less the costs of disposal as soon as the sale of these assets is considered highly probable. The assets are no longer depreciated
from the time they qualify as assets (or disposal groups) held for sale.
1.18 Presentation of principles for financial information

Operating income and recurring operating income
Operating income includes all revenues and expenses directly related to Group activities, whether these revenues and expenses are
recurrent or arise from non-recurring decisions or transactions.
Recurring operating income, as defined within the meaning of the French National Accounting Council recommendation of 27 October
2004, is an analytical balance that should facilitate the understanding of the entity’s operating performance. It corresponds to the operating
income before impairment and amortisation of goodwill and other operating income and expenses defined as follows:
• gains or losses on disposals of property, plant and equipment and intangible assets, assets, or operating investments;
• restructuring costs and costs relating to worker retraining measures;
• non-recurring items corresponding to revenue and expenses that are unusual due to their frequency, nature or amount.
Consolidated balance sheet

Assets and liabilities are classified according to their nature in current or non-current items, depending on whether they will be recovered
or settled within twelve months of the balance sheet date.
Cash flow statement

The Group cash flow statement is prepared in accordance with IAS 7 – Cash flow statements and the French National Accounting Council
recommendation of 27 October 2004. The Group prepares its cash flow statement using the indirect method.
Definition of Group consolidated net indebtedness

The concept of net indebtedness used by the Group comprises gross indebtedness less net cash, as defined by French National
Accounting Council recommendation 2004-R.02 of 27 October 2004. For fully consolidated consumer credit companies, the financing
of customer loans is presented in borrowings. Group net indebtedness excludes the financing of customer loans in the consumer credit
activities.
PPR
Interim financial statements
Seasonality of the activity
The activity, operating income and all the operating indicators (including the working capital requirement) are marked by significant seaso-
nality factors related to a high level of activity over the last quarter of the calendar year and particularly December. The amplitude of this
phenomenon varies according to the Group’s activity sectors. In accordance with IFRS, the Group uses the same measurement rules for
the interim and annual period-ends.
Income taxes
The current and deferred tax charge recognised in the interim financial statements is calculated based on the estimated effective tax rate
over the entire fiscal period for each entity or tax sub-grouping, adjusted for transactions specific to the first half.
2. Highlights
2.1 Changes in consolidation scope

a. Sale of the Group’s remaining interest in Facet
During the half-year, the Group sold its remaining 9.69% interest in Facet to BNP Paribas for a sale price of €87.2 million. The transaction
generated a capital gain before tax of €70.3 million and €56.8 million after tax.
b. Sale of MobilePlanet
On 26 April 2005, the Group sold its subsidiary Mobile Planet to eXpansys Holdings Limited for €2.1 million. The transaction generated a
net capital gain of €3.2 million.
c. Other changes in consolidation scope

Other changes in consolidation scope had no material impact on the half-year financial statements.

2.2 Treasury stock transactions
On 30 March 2005, in accordance with the authorisations granted by the Annual General Meeting, the Group’s Management Board deci-
ded to cancel 2 million treasury shares, thus bringing PPR share capital to 120,438,230 shares with a nominal value of €4 each.
Over the first half of 2005, the Group proceeded with the net disposal of 2,883,132 shares according to the following procedures:
• 1,108,132 shares were sold by blocks between 18 May and 10 June 2005 through market brokers acting independently, at an average
price of €81.058 per share;
• 1,560,000 shares were sold on 27 June 2005 in the form of an over-the-counter transaction at a price of €83.70 per share;
• 215,000 shares were sold under the liquidity contract.
Finally, the Group purchased 3 million PPR stock purchase options maturing in 2008 in order to partially hedge the 2008 OCEANE bonds.
2.3 Pro forma figures

The comparative financial statements for the first half of 2004 published in this document include the consolidation of the Luxury Goods
companies over the six-month period from 1 November 2003 to 30 April 2004.
Given the Group’s decision to harmonise the period-ends for all its subsidiaries in fiscal year 2004, the pro forma figures, including an
income statement, balance sheet and cash flow statement, take into account the consolidation of the Luxury Goods companies over the
six-month period from 1 January to 30 June in 2004 and 2005.
a. Consolidated income statement

(in € millions) Reported Luxury Pro forma
30.06.2004 Goods (1) 30.06.2004
CONTINUING OPERATIONS
Revenue 7,968.7 (117.9) 7,850.8
Cost of sales (4,451.7) 32.9 (4,418.8)
Gross profit 3,517.0 (85.0) 3,432.0
Payroll expenses (1,237.4) (28.2) (1,265.6)
Other recurring operating income and expenses (1,883.9) 30.8 (1,853.1)
Recurring operating income 395.7 (82.4) 313.3
Other operating income and expenses 20.2 (6.2) 14.0
Impairment of goodwill (5.0) 5.0
Operating income (loss) 410.9 (83.6) 327.3
Finance costs (125.9) (0.9) (126.8)
Income before taxes 285.0 (84.5) 200.5
Income taxes (145.1) 3.7 (141.4)
Share in earnings of associates 11.7 11.7
Net income (loss) from continuing operations 151.6 (80.8) 70.8
o/w attributable to equity holders of the parent 101.1 (56.9) 44.2
o/w attributable to minority interests 50.5 (23.9) 26.6
DISCONTINUED OPERATIONS
Net income from discontinued operations 80.0 80.0
Net income (loss) of consolidated companies 231.6 (80.8) 150.8

o/w attributable to equity holders of the parent 160.0 (56.9) 103.1
o/w attributable to minority interests 71.6 (23.9) 47.7
Net income attributable to equity holders of the parent 160.0 103.1

Earnings per share (in €) 1.35 0.87
Fully diluted earnings per share (in €) 1.34 0.87
attributable to equity holders of the parent 101.1 44.2
Net income from continuing operations excluding non-current items
attributable to equity holders of the parent 170.6 121.5
(1)
Impact of the change in consolidation period for Luxury Goods.
PPR
b. Consolidated balance sheet
ASSETS
30.06.2004 Goods (1) 30.06.2004
Goodwill 5,353.4 (19.4) 5,334.0
Other intangible assets 6,564.9 (13.7) 6,551.2
Property, plant and equipment 2,662.1 (8.8) 2,653.3
Investments in associates 45.5 45.5
Non-consolidated investments 153.9 (1.0) 152.9
Other investments 159.5 (1.7) 157.8
Deferred tax assets 489.4 (11.4) 478.0
Other non-current assets 29.4 (0.5) 28.9
Non-current assets 15,458.1 (56.5) 15,401.6
Inventories and work-in-progress 2,563.9 45.3 2,609.2
Trade receivables 991.8 (33.7) 958.1
Customer loans 433.0 433.0
Current tax receivables 69.4 1.6 71.0
Other current assets 1,288.5 12.4 1,300.9
Cash and cash equivalents 3,035.4 (516.6) 2,518.8
Current assets 8,382.0 (491.0) 7,891.0
Assets classified as held for sale 4,048.4 4,048.4
Total assets 27,888.5 (547.5) 27,341.0
LIABILITIES AND SHAREHOLDERS’ EQUITY

30.06.2004 Goods (1) 30.06.2004
Shareholders’ equity attributable to equity holders of the parent 6,896.4 24.1 6,920.5
Shareholders’ equity attributable to minority interests 649.2 10.3 659.5
Shareholders’ equity 7,545.6 34.4 7,580.0
Long-term borrowings 7,560.3 (429.5) 7,130.8
Provisions for retirement and other benefits 209.5 (1.3) 208.2
Provisions 132.4 (2.5) 129.9
Deferred income tax liabilities 2,006.3 9.0 2,015.3
Non-current liabilities 9,908.5 (424.3) 9,484.2
Short-term borrowings 3,102.6 (159.4) 2,943.2
Financing of customer loans 433.0 433.0
Trade payables 2,162.9 6.8 2,169.7
Provisions for retirement and other benefits 18.0 18.0
Provisions 195.1 195.1
Current income tax liabilities 165.1 20.7 185.8
Other current liabilities 1,998.1 (25.7) 1,972.4
Current liabilities 8,074.8 (157.6) 7,917.2
Liabilities associated with assets classified as held for sale 2,359.6 2,359.6
Total liabilities and shareholders’ equity 27,888.5 (547.5) 27,341.0
(1)
c. Cash flow statement

30.06.2004 Goods (1) 30.06.2004
Cash flow from operating activities 450.4 (89.7) 360.7
Interest paid/received 119.4 0.5 119.9
Dividends received (17.6) (17.6)
Net income tax payable 25.9 3.8 29.7
Cash flow from operating activities before tax, dividends and interest 578.1 (85.4) 492.7
Change in working capital requirements (392.5) (66.1) (458.6)
Change in customer loans 21.7 21.7
Income tax paid (85.6) 25.5 (60.1)
Net cash from (used in) operating activities 121.7 (126.0) (4.3)
Purchases of property, plant and equipment and intangible assets (178.3) (4.7) (183.0)
and intangible assets 14.0 14.0
Acquisitions of subsidiaries, net of cash acquired (2,757.1) (0.9) (2,758.0)
Proceeds from disposal of subsidiaries, net of cash transferred 153.4 7.2 160.6
Purchases of other financial assets (192.4) 90.1 (102.3)
Proceeds from sale of other financial assets 152.9 (4.4) 148.5
Interest and dividends received 22.9 0.4 23.3
Net cash from (used) in investing activities (2,784.6) 87.7 (2,696.9)
Share capital increase (decrease) 2.4 2.4
Treasury stock transactions 139.9 139.9
Dividends paid to parent company shareholders (278.9) (278.9)
Dividends paid to minority interests (4.6) (4.6)
Increase (decrease) in other financial liabilties 2,948.5 (593.4) 2,355.1
Interest paid (94.6) (0.9) (95.5)
Net cash from (used in) financing activities 2,712.7 (594.3) 2,118.4
Net cash flow from assets classified as held for sale 17.1 17.1
Impact of exchange rate variations (15.5) (18.9) (34.4)
Net increase (decrease) in cash and cash equivalents 51.4 (651.5) (600.1)
Cash and cash equivalents at beginning of the period 2,722.9 (98.7) 2,624.2
Cash and cash equivalents at end of the period 2,774.3 (750.2) 2,024.1
(1)
PPR
3. Segment reporting
The information in this note complies with the definition of segments adopted in the financial statements prepared according to French
GAAP.
Non-current operating assets correspond to goodwill, and property, plant and equipment and intangible assets.
Net current operating assets correspond to inventories, trade receivables and trade payables, as well as other current receivables and
payables of an operational nature.
3.1 Information by division

The following information is presented after eliminations and restatements.
(in € millions) Luxury Retail (1) Holding Consolidated

Goods companies Total
and other (2)
30 June 2005
Revenue 1,349.0 6,745.4 8,094.4
Recurring operating income (loss) 107.4 268.8 (27.6) 348.6
Cash flow from operating activities before tax, dividends and interest 167.3 341.3 (13.7) 494.9
Purchases of PPE and intangible assets (36.5) (124.4) (3.8) (164.7)
Non-current operating assets 9,370.7 5,309.2 10.0 14,689.9
Net current operating assets 402.5 272.4 (18.9) 656.0
Customer loans, net of deposits 412.7 412.7
Average number of employees 11,733 62,666 206 74.605

30 June 2004
Revenue 1,331.4 6,637.3 7,968.7
Recurring operating income (loss) 143.3 280.6 (28.2) 395.7
Cash flow from operating activities before tax, dividends and interest 202.9 391.8 (16.6) 578.1
Purchases of PPE and intangible assets (59.9) (102.3) (2.1) (164.3)
Non-current operating assets 9,331.0 5,242.3 7.1 14,580.4
Net current operating assets 499.7 143.3 (25.7) 617.3
Customer loans, net of deposits 433.0 433.0
Average number of employees 11,375 61,942 213 73,530
(1)
The Retail division includes Conforama, Fnac, Mobile Planet, Printemps, Redcats, Orcanta, Kadéos, CFAO and Redcats consumer credit activities
in the UK and Scandinavia.
(2)
Includes expenses relating to the application of IFRS 2 in connection with the valuation of stock options.
3.2 Information by geographical area

The following information presents the geographical and business segments of the Group companies, which are not materially different.
(in € millions) France Europe Americas Africa Australasia Asia Consolidated

excl. France Total
30 June 2005
Revenue 3,880.7 1,931.8 979.6 757.4 85.5 459.4 8,094.4
Recurring operating income 85.3 59.3 48.0 50.4 5.6 100.0 348.6
Non-current operating assets 5,077.0 8,359.4 894.5 182.0 19.3 157.7 14,689.9
Average number of employees 38,372 17,145 6,351 9,234 443 3,060 74.605
30 June 2004
Revenue 3,852.8 1,870.6 999.4 704.3 96.5 445.1 7,968.7
Recurring operating income 101.7 76.9 66.3 45.1 11.9 93.8 395.7
Non-current operating assets 4,963.5 8,357.0 929.8 167.4 19.2 143.5 14,580.4
Average number of employees 38,507 16,751 6,090 9,143 423 2,616 73,530
4. Share-based payment
During the first half of 2005, the Group granted three stock option plans to senior executives, amounting to 25,530 shares at €75.29 per
share, 333,750 shares at €78.01 per share and 39,960 shares at a price of €78.97 per share.
These three plans have a term of ten years and must be held for four years. Beneficiaries of these plans who leave the Group before
exercising their options may lose their option rights depending on their period of employment in the Group since the options were granted
and the reasons for their departure.
The expense recognised for plans issued subsequent to 7 November 2002 (2003, 2004 and 2005 plans) amounts to €1.9 million over
the first half of 2005.
5. Operating income
5.1 Recurring operating income

Recurring operating income is the primary indicator of the Group’s operating performance. It breaks down by division as follows:
(in € millions) Half-year ended Half-year ended

30 June 2005 30 June 2004
Luxury Goods division 107.4 143.3
Retail division 268.8 280.6
Holding companies and other (27.6) (28.2)
Total 348.6 395.7
PPR
Group recurring operating income amounts to €348.6 million over the first half of 2005, compared to €395.7 million over the first half
of 2004. Recurring operating income for the first half of 2004 corresponds to Luxury Goods for the six-month period from 1 November
2003 to 30 April 2004. Based on the pro forma figures, Group recurring operating income stood at €313.3 million for the first half of 2004,
including €60.9 million for Luxury Goods.
“Holding companies and other” in recurring operating income includes a charge related to application of IFRS 2 in the amount of €3.5
million in 2004 and €1.9 million in 2005.
5.2 Other operating income and expenses / impairment of goodwill

“Other operating income and expenses” amounted to €38.2 million over the first half of 2005 and included the following items:
• net income from disposals of operating and financial assets of €78.3 million, including the €70.3 capital gain before tax on the sale
of Facet;
• restructuring costs amounting to €19.9 million;
• non-recurring items for €20.2 million, of which €14.5 million for Retail asset write-downs.
The line item, which amounted to €20.2 million over the first half of 2004, included the capital gain on the sale of 14.5% of consumer
credit activities, as well as restructuring costs and asset write-downs recorded for Luxury Goods as part of the reorganisation of certain
divisions.
No goodwill impairment was recorded in the first half of 2005. The item included a €5 million write-down over the first half of 2004 for
Luxury Goods.
6. Finance costs
Finance costs break down as follows:

30 June 2005 30 June 2004
Cost of net financial indebtedness (144.3) (128.3)
Income from cash and cash equivalents 6.5 20.0
Cost of gross financial indebtedness (150.8) (148.3)
Other financial income and finance costs (7.6) 2.4
Dividends received 14.1 17.5
Translation gains and losses (4.8) 1.5
Gains and losses on derivative instruments not qualified for hedge accounting
(exchange and interest rate) (1.5) (1.5)
Impact of discounting assets and liabilities (2.2) (3.2)
Other finance costs (13.2) (11.9)
Total (151.9) (125.9)
Following the prospective application of IAS 32 and IAS 39 as of 1 January 2005, the cost of net financial indebtedness over the first half
of 2005 takes into account the recognition at amortised cost of borrowings and the results generated by derivative transactions used to
hedge bond issues or bank loans and which qualified for hedge accounting.
7. Corporate income tax
7.1 Analysis of the corporate income tax charge

The corporate income tax charge breaks down as follows:

30 June 2005 30 June 2004
Income before tax 234.9 285.0
Current tax charge (63.2) (65.2)
Tax on distributed income (4.1) (3.9)
Deferred tax income (expense) (1.8) (76.0)
Total tax charge (69.1) (145.1)
Effective tax rate 29.42% 50.91%
7.2 Tax on recurring income

The recurring income tax charge breaks down as follows:

30 June 2005 30 June 2004
Income before tax 234.9 285.0
Restated non-current items 38.2 15.2
Recurring income before tax 196.7 269.8
Total tax charge (69.1) (145.1)
Tax on non-current items (8.6) (87.7)
Recurring income tax expense (60.5) (57.4)
Recurring income tax rate 30.76% 21.28%
PPR
8. Assets held for sale
Assets held for sale during fiscal year 2004 concern the sale of the Group interest in Rexel.
The accounting treatment for the Rexel group, the control of which was transferred on 10 December 2004, meets the IFRS 5 eligibility
criteria as at 1 January 2004.
This disposal group represents a Group cash generating unit that was tested for impairment in accordance with IAS 36. Pursuant to
IFRS 5, the Group no longer depreciates this disposal group and its assets as of 1 January 2004.
Income statement
(in € millions) Half-year ended Half-year ended Year ended
30 June 2005 30 June 2004 31 December 2004
Net income from discontinued operations 80.0 197.3
Balance sheet
30 June 2005 30 June 2004 31 December 2004 (1)
Assets classified as held for sale 4,048.4
Liabilities associated with assets classified as held for sale 2,359.6
Income statement
Revenue 3,307.8 6,485.5
Cost of sales (2,472.2) (4,845.6)

Gross profit 835.6 1,639.9
Employee benefits expense (421.8) (799.3)
Other recurring operating income and expenses (260.2) (510.1)
Recurring operating income 153.7 330.5
Other operating income and expenses (23.0) (22.2)
Impairment of goodwill
Operating income 130.7 308.3
Finance costs (29.0) (53.3)
Income before taxes 101.7 255.0
Income taxes (21.7) (57.7)
Share in earnings of associates
Net income 80.0 197.3
The change in cash with respect to assets classified as held for sale breaks down as follows:

Net cash from operating activities 140.3 76.5
Net cash used in investing activities (7.2) (31.8)
Net cash used in financing activities (192.4) (160.8)
Impact of exchange rate variations (2.7) (0.4)
Net increase (decrease) in cash and cash equivalents (62.0) (116.5)
9. Earnings per share
9.1 Earnings per share
Earnings per share as at 30 June 2005

(in € millions) Consolidated Continuing Discontinued
group operations operations
Net income attributable to ordinary shareholders 153.9 153.9
Weighted average number of ordinary shares issued 120,436,096 120,436,096 120,436,096
Weighted average number of treasury shares (2,550,413) (2,550,413) (2,550,413)
Weighted average number of ordinary shares 117,885,683 117,885,683 117,885,683
Net income attributable to ordinary shareholders 153.9 153.9

Share subscription options
Diluted net income attributable to equity holders of the parent 153.9 153.9
Share subscription options 83,912 83,912 83,912
Weighted average number of diluted ordinary shares 117,969,595 117,969,595 117,969,595
Diluted earnings per share (in €) 1.30 1.30
Other instruments likely to dilute earnings per share, i.e. the OCEANE bonds issued on 8 November 2001 and 21 May 2003 and the
long-term loan issued on 6 February 2004, were not taken into account in the weighted average number of diluted shares given their anti-
dilutive impact on net earnings per share as at 30 June 2005.
Earnings per share as at 30 June 2004

Net income attributable to ordinary shareholders 160.0 101.1 58.9
Weighted average number of treasury shares (1,588,739) (1,588,739) (1,588,739)
Earnings per share (in €) 1.35 0.85 0.50

Convertible instruments 0.8 0.8
Diluted net income attributable to equity holders of the parent 160.8 101.9 58.9
Convertible instruments 1,004,828 1,004,828 1,004,828
Weighted average number of dilued ordinary shares 119,923,769 119,923,769 119,923,769
Diluted earnings per share (in €) 1.34 0.85 0.49
Other instruments likely to dilute earnings per share, i.e. the OCEANE bonds issued on 21 May 2003 and the long-term loan issued on
6 February 2004, were not taken into account in the weighted average number of diluted shares given their anti-dilutive impact on net
earnings per share as at 30 June 2004.
PPR
Earnings per share as at 31 December 2004 (1)
Net income attributable to ordinary shareholders 1,131.6 986.7 144.9
Weighted average number of treasury shares (943,168) (943,168) (943,168)
Earnings per share (in €) 9.47 8.26 1.21
Net income attributable to ordinary shareholders 1,131.6 986.7 144.9

Diluted net income attributable to the equity holders of the parent 1,163.6 1,018.7 144.9
Convertible instruments 14,541,730 14,541,730 14,541,730
(1)
Gucci consolidated over 14 months from November 2003 to December 2004.
9.2 Earnings per share from continuing operations excluding non-current items
Non-current items include the income statement line items “Other operating income and expenses” and “Impairment of goodwill,” net of
tax and minority interests.

(in € millions) As at As at As at
30 June 2005 30 June 2004 31 December 2004 (1)
Non-current operating items 38.2 15.2 576.8
Income tax on non-current operating items (8.6) (87.7) (146.0)
Minority interests on non-current items 0.0 3.0 5.1
Net income excluding non-current items 124.3 170.6 550.8
Weighted average number of treasury shares (2,550,413) (1,588,739) (943,168)
Earnings per share excluding non-current items (in €) 1.05 1.44 4.61
Net income excluding non-current items 124.3 170.6 550.8

Diluted net income attributable to the equity holders of the parent 124.3 185.6 582.8
Convertible instruments 13,504,828 14,541,730
(1)
Gucci consolidated over 14 months from November 2003 to December 2004.
As at 30 June 2005, other instruments likely to dilute earnings per share, i.e. the OCEANE bonds issued on 8 November 2001 and 21 May
2003 and the long-term loan issued on 6 February 2004, were not taken into account in the weighted average number of diluted shares
given their anti-dilutive impact on net earnings per share as at 30 June 2005.
As at 30 June 2004, the long-term loan issued on 6 February 2004, likely to dilute earnings per share, was not taken into account in the
weighted average number of diluted shares given its anti-dilutive impact on net earnings per share as at 30 June 2004.
10. Cash and cash equivalents

Short-term receivables on disposals of assets 2,181.8
Cash and cash equivalents 732.4 670.9 684.3
Negotiable debt instruments 818.2 20.0 975.3
Open-ended investments funds (SICAV), mutual funds (FCP),
shares and similar funds 15.3 1,959.7 101.0
PPR own shares 535.4 509.4
Provision for impairment (150.6) (163.7)
Cash and cash equivalents 1,565.9 3,035.4 4,288.1
Following the prospective application of IAS 32 as at 1 January 2005, treasury shares are deducted from consolidated shareholders’
equity (impact on “Cash and cash equivalents” of €345.8 million on this date).
11. Gross borrowings

Long-term borrowings 4,791.2 7,560.3 6,103.2
Convertible bonds 1,179.2 1,228.3 1,228.7
Other bonds 2,295.6 1,838.6 1,955.5
Confirmed lines of credit 42.2 3,576.6 1,877.6
Other bank borrowings 932.7 644.5 815.3
Obligations under finance leases 166.3 201.4 168.6
Employee profit-sharing 41.0 54.2 32.7
Other borrowings 134.2 16.7 24.8
Short-term borrowings 2,836.9 3,535.6 3,329.3
Convertible bonds 14.5
Other bonds 427.0 714.9 837.1
Confirmed lines of credit 203.7 490.2 324.3
Draw-downs on unconfirmed lines of credit 241.4 67.0 136.2
Other bank borrowings 239.1 981.6 60.7
Obligations under finance leases 29.0 28.8 28.1
Employee profit-sharing 7.0 9.6 6.5
Bank overdrafts 236.3 261.1 243.4
Commercial paper 1,171.4 854.1 1,310.3
Other borrowings 282.0 113.8 382.7
Total gross borrowings 7,628.1 11,095.9 9,432.5
PPR
The change in gross borrowings over the first half of 2005 primarily stems from the significant decrease in credit line draw-downs (3.2% of
gross borrowings as at 30 June 2005, compared to 36.7% as at 30 June 2004 and 42.6% as at 31 December 2004).
As at 30 June 2005, convertible bond issues and other bond issues represent 51.2% of gross borrowings, compared to 34.2% as at
30 June 2004 and 42.6% as at 31 December 2004.
In addition, prospective application of IAS 39 as at 1 January 2005 resulted in the recognition of the OCEANE bonds issued on
8 November 2001 and 21 May 2003 based on their effective interest rate, valued at 5.72% and 6.26 % respectively after allocation of the
conversion options component to shareholders’ equity.
As at 30 June 2005, borrowings mainly in the form of bond issues that were partially or fully hedged with respect to a fair value hedging
relationship were subject to a fair value adjustment.
The financing of customer loans contributed €412.7 million to gross borrowings as at 30 June 2005.
12. Derivative instruments at market value
The Group uses various firm or optional financial instruments that qualify as derivatives in connection with the application of IFRS to hedge
its exposure to interest rate and foreign exchange risk.
As at 30 June 2005, these derivatives were presented at market value on the balance sheet under other current assets and other current
liabilities.
Derivatives eligible for fair value hedge accounting, largely for the long-term debt issued in the form of bonds, are presented in the balance
sheet assets for €72.3 million as at 30 June 2005.
(in € millions) 30.06.2005 Interest rate Exchange rate Other 01.01.2005

Derivative assets 134.2 82.1 51.7 0.4 200.4
At fair value through the income statement 15.7 9.8 5.5 0.4 50.6

Cash flow hedges 34.7 34.7 58.9
Fair value hedges 83.8 72.3 11.5 90.9
Derivative liabilities 68.8 14.4 53.9 0.5 90.9

At fair value through the income statement 22.8 14.1 8.2 0.5 41.4
Cash flow hedges 38.2 0.3 37.9 44.7
Fair value hedges 7.8 7.8 4.8
Total 65.4 67.7 (2.2) (0.1) 109.5
13. Net financial indebtedness
Group net financial indebtedness breaks down as follows:

Gross borrowings excluding the financing of customer loans 7,215.4 10,662.9 9,013.4
Fair value hedging derivative instruments (interest rate) (72.3)
Cash and cash equivalents (1,565.9) (3,035.4) (4,288.1)
Net financial indebtedness 5,577.2 7,627.5 4,725.3
14. Cash flow statement
Net cash from bank overdrafts stood at €1,329.6 million as at 30 June 2005 and corresponds to the amount of cash and cash equivalents
presented in the cash flow statement.

Cash and cash equivalents from the balance sheet 1,565.9 3,035.4 4,288.1
Bank overdrafts (236.3) (261.1) (243.4)
Cash and cash equivalents from the cash flow statement 1,329.6 2,774.3 4,044.7
14.1 Cash from operating activities

Cash from operating activities breaks down as follows:

Cash flow from operating activities 507.6 585.0 1,423.3
Cash flow used in financing activities (127.5) (108.7) (256.6)
Cash flow used in operating activities – tax (54.2) (25.9) (150.6)
Cash flow from operating activities 325.9 450.4 1,016.1
14.2 Purchases and sales of property, plant and equipment and intangible assets
Net investments for property, plant and equipment and intangible assets break down as follows:

30 June 2005 30 June 2004
Luxury Goods (36.5) (59.9)
Conforama (38.5) (29.6)
Fnac (28.0) (31.9)
MobilePlanet 0.1 (0.1)
Printemps (15.6) (14.4)
Redcats (26.4) (13.3)
Orcanta (0.1) (0.3)
Kadéos (0.1) (0.1)
Cfao (15.8) (12.6)
Retail (124.4) (102.3)
Holding companies and other (3.8) (2.1)
Total (164.7) (164.3)
Investments in property, plant and equipment carried out through finance leases amounted to €1.1 million over the first half of 2005 and
€11.1 million over the first half of 2004.
14.3 Acquisitions or disposals of subsidiaries

30 June 2005 30 June 2004
Acquisitions of subsidiaries, net of cash acquired (42.5) (2,757.1)
Disposals of subsidiaries net of cash transferred 7.4 153.4
Total (35.1) (2,603.7)
PPR
During the first half of 2005, acquisitions of subsidiaries primarily concern minority interests in certain Group companies. Subsidiary dispo-
sals essentially involve the Group’s remaining interest in Facet for €87.2 million, the sale of Mobile Planet for €2.1 million, the tax payment
on capital gains and the expenses related to the 2004 disposals.
During the first half of 2004, the main movements concerned the tender offer for the Gucci Group shares, the sale of 14.5% of the con-
sumer credit activities, and the tax payment on 2003 capital gains.
14.4 Acquisitions or disposals of treasury shares

During the first half of 2005, the impact of acquisitions or disposals of treasury shares broke down as follows:
• the sale of 2,883,132 PPR treasury shares in the amount of €237.4 million;
• the acquisition of 3 million PPR share purchase options maturing in 2008 in the amount of €33.9 million.
During the first half of 2004, and given that the Group will only apply IAS 32 prospectively as of 1 January 2005, the impact of acquisitions
or disposals of treasury shares primarily represents:
• the disposal of 1,300,000 PPR treasury shares recognised in Group consolidated shareholders’ equity for €108.9 million;
• the market value adjustment of PPR treasury shares intended for employees or to stabilise the share price for €29.1 million. These
shares were recognised in marketable securities in the Group financial statements.
On 26 May 2004, PPR signed an agreement with a financial broker in order to improve the liquidity of transactions and the stability of
share prices.
This agreement complies with the ethics charter defined by the AFEI (the French association of investment companies).
The agreement was initially contracted for €40 million, equally divided between cash and PPR shares. On 3 September 2004, an addi-
tional €20 million in cash was added.
Acquisitions and disposals of PPR shares carried out in the first half of 2005 as part of this agreement amounted to 953,631 shares and
1,168 631 shares, respectively.

15. Change in risks and off-balance sheet commitments
15.1 Mandatory withdrawal of Gucci shares

Following the delisting of Gucci shares from the New York Stock Exchange on 14 June 2004 and on 1 July 2004 from the Euronext,
the Group has initiated, with the competent Dutch courts, a mandatory withdrawal process for the ordinary shares that it did not hold
following the April 2004 takeover bid. The process is now being finalised. Accordingly, as at 30 June 2005, the Group valued its maximum
commitment at US$46.6 million.
15.2 Change in other commitments during the half-year

15.2.1 Change in commitments given and received as part of asset disposals
During the first half of 2005, the change in commitments given and received following disposals primarily concerned the following items:
• the standard net asset warranties given as part of the sale of 61% of the share capital and voting rights of Finaref and Finaref Nordic to
Crédit Agricole SA in December 2002 expired in April 2005;
• the standard liability warranty given to Office Depot as part of the sale of the Guilbert “Contract” activity expired in March 2005;
• the general vendor warranties granted to Wolseley as part of the sale of Pinault Bois & Matériaux expired in June 2005.
To the Group’s knowledge, there was no significant change in commitments given and received following disposals during the first half
of 2005.
15.2.2 Change in other commitments given and received

To the Group’s knowledge, there was no significant change in other commitments given and received following disposals during the first half.
16. Subsequent events
Subsequent events are presented in the Group’s activity report.
PPR
17. Transition to IFRS
17.1 Group choices for the first-time adoption of international standards

Because of the fact that 1 January 2004 was selected as the transition date, the financial statements drawn up for the first time under
IFRS standards were prepared as of that date as if the IAS/IFRS standards had always been applied, with the exception of certain
optional exemptions described under IFRS 1. After an analysis of each of these exemptions, the Group considered the following accoun-
ting treatments:
• Business combinations: in accordance with IFRS 3, the Group has elected to restate business combinations retroactively to 1 January
1999. The 1 January 1999 date was chosen by the Group because of the 1999 acquisition of Gucci Group, which is a major division
of PPR.
• Revaluation of property, plant and equipment at fair value and use of this fair value as a presumed cost: the Group has decided to
apply this optional exemption in a targeted manner to some components of property, plant and equipment as of the transition date. On
a day-to-day basis, the Group will use the amortised cost method to value all its property, plant and equipment.
• Employee benefits: the Group has adopted the IFRS 1 option of booking all actuarial gains and losses as of the transition date, to be
offset against opening shareholders’ equity.
• Total amount of currency translation differences: the Group has decided to use the optional exemption allowing the elimination of
accumulated translation differences as of the transition date through an offsetting entry in consolidated reserves.
• Assets and liabilities of subsidiaries, affiliates and joint venture partners: paragraph 25 of IFRS 1 states that if the parent company
of a group adopts IFRS for the first time in its consolidated financial statements after a subsidiary, the parent company must, in its opening
IFRS consolidated balance sheet, value the assets and liabilities at the same carrying amount as that appearing in the subsidiary’s financial
statements, taking into account any consolidation adjustments. Since Gucci Group was already preparing its financial statements in IFRS
format before the first-time adoption date, the Group complied with this treatment when preparing its opening balance sheet.
• Share-based payments: in accordance with the option allowed by IFRS 2 for plans involving share-based payments, the Group has

decided to apply this standard solely to plans issued after 7 November 2002, the rights of which are not vested as at 1 January 2005.
In addition, following the option offered by the regulator on the application date of IAS 32 and IAS 39 relating to financial instruments, the
Group elected to apply these standards as of 1 January 2005.
17.2 Reconciliation of French GAAP and IFRS financial statements

In accordance with what was indicated in the 2004 Reference Document under “Transition to IAS/IFRS standards,” the 2004 IFRS financial
data presented below has been marginally adjusted in relation to the data previously published.
These adjustments are mainly explained by:

• the finalisation of impact analyses regarding the application of IFRS 3;
• the finalised validation of certain restatements, particularly those related to retirement provisions;
• the consideration of the most recent available information in terms of the interpretation of existing standards.
17.2.1 Reconciliation as at 1 January 2004
Balance sheet
(in € millions) Published Business Remeasurement Employee Intangible Application

under French combinations of Printemps benefits assets of IFRS 5
GAAP (IFRS 3) land (IAS 19) (IAS 38) to Rexel
(IAS 16)
French GAAP format
a b c d e
Goodwill 3,356.0 1,612.3 1,235.5 (1,266.8)
Other intangible assets 7,104.5 1,280.8 (1,246.4) (446.7)
Property, plant and equipment 2,668.2 (0.2) 381.0 (13.4) (182.3)
Investments in equity affiliates 171.6
Non-consolidated investments 83.9 (9.6)
Other investments 180.5 (36.8)
15.6 23.5 6.6
0.3
FIXED ASSETS 13,564.7 2,908.5 381.0 23.8 (17.7) (1,942.2)
Inventories and work-in-progress 3,417.5 0.5 (812.9)
Operating receivables 3,168.6 1.6 (847.0)
Customer loans 439.9
Non-operating receivables 979.3 0.2 (32.6) (183.9)

Cash 3,069.4 (167.5)
CURRENT ASSETS 11,074.7 0.7 (31.0) (2,011.3)
3,983.6
TOTAL ASSETS 24,639.4 2,909.2 381.0 23.8 (48.7) 30.1
Shareholders’ equity – Group share 6,899.2 3.4 245.7 (49.7) (39.9) (70.8)
Minority interests 1,731.5 1,233.8 0.3 (0.7) (25.2)
SHAREHOLDERS’ EQUITY 8,630.7 1,237.2 246.0 (50.4) (39.9) (96.0)
Net borrowings excluding customer loans 8,101.2 (592.4)
Financing of customer loans 439.9
Reserves for retirement and related commitments 166.0 87.1 (31.5)
Other provisions for contingencies and losses 392.8 (18.4) (99.1)
1,698.7 135.0 2.0 (6.7)
1,680.3 135.0 89.1 (6.7) (723.0)
1.3
Operating payables 5,980.3 (1,386.7)
Non-operating payables 928.5 (8.3) (16.2) (2.1) (123.8)

(8.3) (14.9) (2.1) (1,510.5)
2,359.6
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 24,639.4 2,909.2 381.0 23.8 (48.7) 30.1
PPR
Deferred Revenue Special Reclassifica- Other Total Published
tax on (IAS 18) purpose tions restatements impact under IFRS
associates entities
(IAS 12) (SIC 12)
IFRS format
g h i j k
(48.0) (0.7) 1,532.3 4,888.3 Goodwill
0.6 (411.7) 6,692.8 Other intangible assets
(30.2) 8.5 163.4 2,831.6 Property, plant and equipment
48.0 48.0 219.6 Investments in associates
(9.6) 74.3 Non-consolidated investments
(2.1) (38.9) 141.6 Other non-current financial assets
107.5 12.3 493.1 24.8 683.4 683.4 Deferred tax assets
29.2 0.1 29.6 29.6 Other non-current assets
107.5 12.3 492.7 30.6 1,996.5 15,561.2 NON-CURRENT ASSETS
(13.3) (825.7) 2,591.8 Inventories
52.2 (1,278.1) (12.0) (2,083.3) 1,085.3 Trade receivables
439.9 Customer loans
61.7 61.7 61.7 Current tax receivables
742.3 (5.4) 520.6 1,499.9 Other current assets
(167.5) 2,901.9 Cash and cash equivalents
52.2 (474.1) (30.7) (2,494.2) 8,580.5 CURRENT ASSETS
3,983.6 3,983.6 ASSETS HELD FOR SALE

107.5 12.3 52.2 18.6 (0.1) 3,485.9 28,125.3 TOTAL ASSETS
(26.3) (73.5) (10.3) (21.4) 6,877.8 Shareholders’ equity attributable to equity owners of the parent
(0.2) (1.1) (1.4) 1,205.5 2,937.0 Shareholders’ equity attributable to minority interests
(26.5) (74.6) (11.7) 1,184.1 9,814.8 SHAREHOLDERS’ EQUITY
(3,029.1) 15.8 (3,605.7) 4,495.5 Long-term borrowings
(439.9) (439.9)
(16.6) 39.0 205.0 Provisions for retirement and similar benefits
(59.6) (177.1) 215.7 Provisions
134.0 (28.7) 97.8 (2.8) 2,029.3 2,029.3 Deferred tax liabilities
134.0 (28.7) (3,447.4) 13.0 6,945.5 NON-CURRENT LIABILITIES
52.2 3,090.0 (0.1) 3,142.1 3,142.1 Short-term borrowings
439.9 439.9 439.9 Financing of customer loans
16.6 17.9 17.9 Provisions for retirement and similar benefits
43.8 43.8 43.8 Provisions
(1,883.0) 0.6 (3,269.1) 2,711.2 Trade payables
410.7 0.1 410.8 410.8 Income tax expense
115.6 1,348.0 (2.0) 1,311.2 2,239.7 Other current liabilities
115.6 52.2 3,466.0 (1.4) 9,005.4 CURRENT LIABILITIES
2,359.6 2,359.6 LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE
107.5 12.3 52.2 18.6 (0.1) 3,485.9 28,125.3 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
Shareholders’ equity as at 1 January 2004

(in € millions) Shareholders’ Group Minority interests
equity share share
Under French GAAP 8,630.7 6,899.2 1,731.5
Impact of transition to IFRS 1,184.1 (21.4) 1,205.5
a - Restatements relating to business combinations (IFRS 3) 1,237.2 3.4 1,233.8
b - Remeasurement of Printemps land (IAS 16) 246.0 245.7 0.3
c - Employee benefits (IAS 19) (50.4) (49.7) (0.7)
d - Intangible assets (IAS 38) (39.9) (39.9)
e - Application of IFRS 5 to Rexel (96.0) (70.8) (25.2)
g - Deferred tax on associates (IAS 12) (26.5) (26.3) (0.2)
h - Revenue (IAS 18) (74.6) (73.5) (1.1)
Other restatements (11.7) (10.3) (1.4)
Under IFRS 9,814.8 6,877.8 2,937.0
17.2.2 Reconciliation as at 30 June 2004
Income statement as at 30 June 2004
(in € millions) Published Business Employee Intangible Application Share-based

under French combinations benefits assets of IFRS 5 payment
GAAP (IFRS 3) (IAS 19) (IAS 38) to Rexel (IFRS 2)
French GAAP format

a c d e f
Net sales 11,370.5 (3,307.8)

Cost of sales (6,990.3) (0.2) 2,475.2
Gross margin 4,380.2 (0.2) (832.6)
Payroll expenses (1,653.3) (3.3) (0.9) 423.3 (3.5)
Other operating income and expenses (2,157.7) (2.5) 6.0 275.0
Operating income (loss) 569.2 (2.7) (3.3) 5.1 (134.3) (3.5)
(9.9)
(5.0)
Operating income (loss) 569.2 (17.6) (3.3) 5.1 (134.3) (3.5)
Net financial expenses (153.2) (0.4) (3.0) 28.8
Non-recurring items (12.7) 24.7
Income (loss) from ordinary activities before taxes 403.3 (18.0) (6.3) 5.1 (80.8) (3.5)
Income taxes (117.3) 0.3 2.1 (0.5) 26.5
Share in earnings of equity affiliates 11.7
Amortisation of goodwill (52.7) 34.0 18.7
Net income (loss) of consolidated companies 245.0 16.3 (4.2) 4.6 (35.6) (3.5)
80.0
Net income (loss) before minority interests 245.0 16.3 (4.2) 4.6 44.4 (3.5)
Minority interests 53.9 6.4 11.1
Attributable net income (loss) 191.1 9.9 (4.2) 4.6 33.3 (3.5)
PPR
Deferred Revenue Reclassifications Other Total Published
tax on (IAS 18) restatements impact under IFRS
associates
(IAS 12)
IFRS format
g h j k
(91.9) (2.1) (3,401.8) 7,968.7 Revenue

83.4 (17.0) (2.8) 2,538.6 (4,451.7) Cost of sales
(8.5) (17.0) (4.9) (863.2) 3,517.0 Gross profit
1.6 (1.3) 415.9 (1,237.4) Employee benefits expense
5.1 (7.3) (2.5) 273.8 (1,883.9) Other current operating income and expenses
(3.4) (22.7) (8.7) (173.5) 395.7 Recurring operating income (loss)
31.9 (1.8) 20.2 20.2 Other operating income and expenses
(5.0) (5.0) Impairment of goodwill
(3.4) 9.2 (10.5) (158.3) 410.9 Operating income (loss)
1.2 0.3 0.4 27.3 (125.9) Finance costs
(12.0) 12.7
(2.2) (2.5) (10.1) (118.3) 285.0 Income before taxes
(63.8) 0.4 2.5 4.7 (27.8) (145.1) Income taxes
11.7 Share in earnings of associates
52.7
(63.8) (1.8) (0.0) (5.4) (93.4) 151.6 Net income (loss) – Continuing operations
80.0 80.0 Discontinued operations
(63.8) (1.8) (0.0) (5.4) (13.4) 231.6 Net income (loss) for the period
(0.1) 0.3 17.7 71.6 Net income (loss) attributable to minority interests
(63.8) (1.7) (0.0) (5.7) (31.1) 160.0 Net income (loss) attributable to equity holders of the parent
Balance sheet as at 30 June 2004
(in € millions) Published Business Remeasurement Employee Intangible Application

under French combinations of Printemps benefits assets of IFRS 5
GAAP (IFRS 3) land (IAS 19) (IAS 38) to Rexel
(IAS 16)
French GAAP format
a b c d e
Goodwill 3,259.8 2,114.3 1,236.5 (1,256.3)
Other intangible assets 8,597.6 (377.2) (1,245.2) (428.6)
Property, plant and equipment 2,510.5 (0.3) 381.0 (13.4) (204.8)
Non-consolidated investments 154.2 (0.3)
Other investments 196.3 (34.7)
15.7 26.2 8.0
0.3
FIXED ASSETS 14,763.9 1,752.5 381.0 26.5 (14.1) (1,924.7)
Inventories and work-in-progress 3,404.7 0.3 (836.0)
Operating receivables 2,821.1 1.6 (837.0)
Non-operating receivables 869.1 0.7 (29.0) (174.1)

Cash 3,152.9 (118.0)
CURRENT ASSETS 10,680.8 1.0 (27.4) (1,965.1)
4,048.4
TOTAL ASSETS 25,444.7 1,753.5 381.0 26.5 (41.5) 158.6
Minority interests 591.7 74.3 0.2 (0.6) (14.2)
SHAREHOLDERS’ EQUITY 7,540.9 87.1 247.9 (56.0) (33.4) (51.8)
Net borrowings excluding customer loans 11,038.3 (503.7)
Reserves for retirement and related commitments 165.4 93.1 (32.3)
Reserves for other contingencies 393.0 (18.4) (77.9)
1,698.3 133.1 2.0 (6.7)
1,679.9 133.1 95.1 (6.7) (613.9)
1.3
Operating payables 5,274.4 (1,416.5)
Non-operating payables 599.7 (13.5) (13.9) (1.4) (118.8)

(13.5) (12.6) (1.4) (1,535.3)
2,359.6
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 25,444.7 1,753.5 381.0 26.5 (41.5) 158.6
PPR
Deferred Revenue Special Reclassifica- Other Total Published
tax on (IAS 18) purpose tions restatements impact under IFRS
associates entities
(IAS 12) (SIC 12)
IFRS format
g h i j k
(0.9) 2,093.6 5,353.4 Goodwill
18.3 (2,032.7) 6,564.9 Other intangible assets
(12.6) 1.7 151.6 2,662.1 Property, plant and equipment
45.5 Investments in associates
(0.3) 153.9 Non-consolidated investments
57.6 11.1 343.4 27.4 489.4 489.4 Deferred tax assets
29.1 29.4 29.4 Other non-current assets
57.6 11.1 378.2 26.1 694.2 15,458.1 NON-CURRENT ASSETS
9.3 (14.4) (840.8) 2,563.9 Inventories
52.7 (1,031.0) (15.6) (1,829.3) 991.8 Trade receivables
0.5 (117.5) 3,035.4 Cash and cash equivalents
52.7 (327.5) (32.5) (2,298.8) 8,382.0 CURRENT ASSETS
4,048.4 4,048.4 ASSETS HELD FOR SALE

57.6 11.1 52.7 50.7 (6.4) 2,443.8 27,888.5 TOTAL ASSETS
(91.3) (77.1) (18.5) (52.8) 6,896.4 Shareholders’ equity attributable to equity owners of the parent
(1.1) (1.1) 57.5 649.2 Shareholders’ equity attributable to minority interests
(91.3) (78.2) (19.6) 4.7 7,545.6 SHAREHOLDERS’ EQUITY
(433.0) (433.0)
(165.1) 0.8 (260.6) 132.4 Provisions
148.9 (28.6) 61.3 (2.0) 2,006.3 2,006.3 Deferred tax liabilities
148.9 (28.6) (3,543.7) 14.7 9,908.5 NON-CURRENT LIABILITIES
52.7 3,050.3 (0.4) 3,102.6 3,102.6 Short-term borrowings
195.9 (0.8) 195.1 195.1 Provisions
(1,695.9) 0.9 (3,111.5) 2,162.9 Trade payables
165.1 165.1 165.1 Income tax expense
117.9 1,429.3 (1.2) 1,398.4 1,998.1 Other current liabilities
117.9 52.7 3,594.4 (1.5) 8,074.8 CURRENT LIABILITIES
2,359.6 2,359.6 LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE
57.6 11.1 52.7 50.7 (6.4) 2,443.8 27,888.5 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
Cash flow statement as at 30 June 2004
(in € millions) Published Business Intangible assets Application

under French combinations (IAS 38) of IFRS 5
GAAP (IFRS 3) to Rexel
French GAAP format

a d e
Net cash from operating activities before changes in working
531.3 5.4 (5.2) (90.2)
capital requirement
Changes in working capital requirement (383.2) (5.8) (21.2)

Changes in customer loans 21.7
Net cash from operating activities 169.8 (0.4) (5.2) (111.4)

Acquisitions of tangible and intangible assets (206.5) 5.2 23.9
Disposals of tangible and intangible assets 19.1 (5.6)
Net operating investments (187.4) 5.2 18.3
Acquisitions of subsidiaries and affiliates (2,757.1)
Divestment of subsidiaries and affiliates 375.9 0.3
Acquisitions of other investments net of disposals (42.3) 0.8
0.4 (3.5)
Net cash difference (223.1)
Net financial investments (2,646.6) 0.4 (2.4)

Net cash from (used in) investing activities (2,834.0) 0.4 5.2 15.9
Share capital increase 2.4
Dividends paid (293.2) 9.7

Changes in borrowings 2,916.8 115.5
Net cash from (used in) financing activities 2,626.0 125.2

Impact of treasury stock 139.9
17.1
Impact of changes in exchange rates (18.2) 2.7
Net increase (decrease) in cash and cash equivalents 83.5 0.0 49.5
Cash and cash equivalents at beginning of the period 3,069.4 (167.5)

Cash and cash equivalents at end of the period 3,152.9 (118.0)
PPR
Revenue Other reclassifications Total Published
(IAS 18) & restatements impact under IFRS
IFRS format
h j&k
(3.4) 12.5 (80.9) 450.4 Cash flow from operating activities
119.4 119.4 119.4 Interest paid/received

(17.6) (17.6) (17.6) Dividends received
25.9 25.9 25.9 Net income tax payable
578.1 Cash flows before tax, dividends and interest
3.4 14.3 (9.3) (392.5) Change in working capital requirement
21.7 Change in customer loans
(85.6) (85.6) (85.6) Income tax paid
68.9 (48.1) 121.7 Net cash from (used in) operating activities
(0.9) 28.2 (178.3) Purchases of property, plant and equipment and intangible assets
0.5 (5.1) 14.0 Proceeds of sale from property, plant and equipment and intangible assets
(0.4) 23.1 (164.3) Net operating investments
(2,757.1) Acquisitions of subsidiaries, net of cash acquired
(222.8) (222.5) 153.4 Proceeds from disposal of subsidiaries, net of cash transferred
(150.9) (150.1) (192.4) Purchases of other financial assets
156.0 152.9 152.9 Proceeds from sale of other financial assets

223.1 223.1
22.9 22.9 22.9 Interest and dividends received
28.3 26.3 (2,620.3) Net financial investments
27.9 49.4 (2,784.6) Net cash from (used in) investing activities
2.4 Share capital increase (decrease)
139.9 139.9 139.9 Treasury stock transactions
9.7 (283.5) Dividends paid to minority interests
(83.8) 31.7 2,948.5 Increase (decrease) in borrowings
(94.6) (94.6) (94.6) Interest paid
(38.5) 86.7 2,712.7 Net cash from (used in) financing activities
(139.9) (139.9)
17.1 17.1 Net cash flow from assets classified as held for sale
2.7 (15.5) Impact of exchange rate variations
(81.6) (32.1) 51.4 Net increase (decrease) in cash and cash equivalents
(179.0) (346.5) 2,722.9 Cash and cash equivalents at beginning of the period
(260.6) (378.6) 2,774.3 Cash and cash equivalents at end of the period
Shareholders’ equity as at 30 June 2004

equity share share
Under French GAAP 7,540.9 6,949.2 591.7
Impact of transition to IFRS 4.7 (52.8) 57.5
a - Restatements relating to business combinations (IFRS 3) 87.1 12.8 74.3
e - Application of IFRS 5 to Rexel (51.8) (37.6) (14.2)
g - Deferred tax on associates (IAS 12) (91.3) (91.3)
h - Revenue (IAS 18) (78.2) (77.1) (1.1)
Under IFRS 7,545.6 6,896.4 649.2
17.2.3 Reconciliation as at 31 December 2004
Income statement as at 31 December 2004
(in € millions) Published Business Employee Intangible Application Share-based

under French combinations benefits assets of IFRS 5 payment
GAAP (IFRS 3) (IAS 19) (IAS 38) to Rexel (IFRS 2)
French GAAP format

a c d e f
Net sales 24,212.7 (6,485.5)

Cost of sales (14,782.0) (0.5) 4,850.8
Gross margin 9,430.7 (0.5) (1,634.7)
Payroll expenses (3,417.1) (0.9) (0.6) (3.9) 802.4 (7.1)
Other operating income and expenses (4,546.9) (12.2) 0.2 7.9 538.4
Operating income (loss) 1,466.7 (13.6) (0.4) 4.0 (293.9) (7.1)
29.2 107.7
(50.3)
Operating income (loss) 1,466.7 (34.7) (0.4) 4.0 (186.2) (7.1)
Net financial expenses (348.8) (0.4) (7.6) 52.9
Non-recurring items 418.2 25.8
Income (loss) from ordinary activities before taxes 1,536.1 (35.1) (8.0) 4.0 (107.5) (7.1)
Income taxes (414.7) 20.7 2.3 (0.7) 67.4
Share in earnings of equity affiliates 14.4
Amortisation of goodwill (106.6) 71.0 35.6
Net income (loss) of consolidated companies 1,029.2 56.6 (5.7) 3.3 (4.5) (7.1)
197.3
Net income (loss) before minority interests 1,029.2 56.6 (5.7) 3.3 192.8 (7.1)
Minority interests 88.6 1.8 (0.2) 21.3
Attributable net income (loss) 940.6 54.8 (5.5) 3.3 171.5 (7.1)
PPR
Deferred Revenue Reclassifications Other Total Published
tax on (IAS 18) restatements impact under IFRS
associates
(IAS 12)
IFRS format
g h j k
(202.3) 6.5 (6,681.3) 17,531.4 Revenue

174.0 (33.0) (5.1) 4,986.2 (9,795.8) Cost of sales
(28.3) (33.0) 1.4 (1,695.1) 7,735.6 Gross profit
23.4 813.3 (2,603.8) Employee benefits expense
14.7 (41.9) (7.3) 499.8 (4,047.1) Other current operating income and expenses
(13.6) (51.5) (5.9) (382.0) 1,084.7 Recurring operating income (loss)
488.2 2.0 627.1 627.1 Other operating income and expenses
(50.3) (50.3) Impairment of goodwill
(13.6) 436.7 (3.9) 194.8 1,661.5 Operating income (loss)
2.7 2.3 49.9 (298.9) Finance costs
(444.0) (418.2)
(10.9) (5.0) (3.9) (173.5) 1,362.6 Income before taxes
19.0 3.8 5.0 (34.1) 83.4 (331.3) Income taxes
14.4 Share in earnings of associates
106.6
19.0 (7.1) 0.0 (38.0) 16.5 1,045.7 Net income (loss) – Continuing operations
197.3 197.3 Discontinued operations
19.0 (7.1) 0.0 (38.0) 213.8 1,243.0 Net income (loss) for the period
(0.1) 22.8 111.4 Net income (loss) attributable to minority interests
19.0 (7.0) 0.0 (38.0) 191.0 1,131.6 Net income (loss) attributable to equity holders of the parent
Balance sheet as at 31 December 2004
(in € millions) Published Business Remeasurement Employee Intangible Deferred

under French combinations of Printemps benefits assets tax on
GAAP (IFRS 3) land (IAS 19) (IAS 38) associates
(IAS 16) (IAS 12)
French GAAP format
a b c d g
Goodwill 1,932.0 2,126.8 1,236.0
Other intangible assets 8,224.4 (348.4) (1,246.7)
Property, plant and equipment 2,272.6 (0.2) 381.0 (12.1)
Non-consolidated investments 73.6
Other investments 170.0
18.7 14.4 8.4
0.3
FIXED ASSETS 12,719.3 1,796.9 381.0 14.7 (14.4)
Inventories and work-in-progress 2,640.8
Operating receivables 2,227.9 1.6
Non-operating receivables 655.6 0.3 (30.1)

Cash 4,288.1
CURRENT ASSETS 10,231.5 0.3 (28.5)
TOTAL ASSETS 22,950.8 1,797.2 381.0 14.7 (42.9)
Minority interests 171.4 70.4 0.3 (0.7)
SHAREHOLDERS’ EQUITY 7,864.7 125.0 247.9 (55.4) (34.1) (7.4)
Net borrowings excluding customer loans 8,820.8
Reserves for retirement and related commitments 133.8 93.6
Reserves for other contingencies 383.6 (17.1)
1,689.0 133.1 (11.2) (6.3) 7.4
1,671.9 133.1 82.4 (6.3) 7.4
1.6
Operating payables 4,560.0
Non-operating payables 768.8 0.3 (13.9) (2.5)

0.3 (12.3) (2.5)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 22,950.8 1,797.2 381.0 14.7 (42.9)
PPR
Revenue Special Reclassifica- Other Total Published
(IAS 18) purpose tions restatements impact under IFRS
entities
(SIC 12)
IFRS format
h i j k
(0.8) 3,362.0 5,294.0 Goodwill
(0.9) (1,596.0) 6,628.4 Other intangible assets
(14.5) (2.0) 352.2 2,624.8 Property, plant and equipment
0.2 0.2 46.9 Investments in associates
73.6 Non-consolidated investments
12.9 375.3 (11.8) 417.9 417.9 Deferred tax assets
14.1 14.4 14.4 Other non-current assets
12.9 374.2 (17.0) 2,548.3 15,267.6 NON-CURRENT ASSETS
(8.2) (8.2) 2,632.6 Inventories
57.0 (1,218.5) (15.5) (1,175.4) 1,052.5 Trade receivables
4,288.1 Cash and cash equivalents
57.0 (349.7) (25.0) (345.9) 9,885.6 CURRENT ASSETS
ASSETS HELD FOR SALE
12.9 57.0 24.5 (42.0) 2,202.4 25,153.2 TOTAL ASSETS

(82.3) (50.1) 73.6 7,766.9 Shareholders’ equity attributable to equity owners of the parent
(1.2) (1.3) 67.5 238.9 Shareholders’ equity attributable to minority interests
(83.5) (51.4) 141.1 8,005.8 SHAREHOLDERS’ EQUITY
(419.1) (419.1)
(201.7) (218.8) 164.8 Provisions
(30.0) 97.6 (3.0) 1,876.6 1,876.6 Deferred tax liabilities
(30.0) (3,263.7) 7.2 8,359.3 NON-CURRENT LIABILITIES
57.0 2,853.2 2,910.2 2,910.2 Short-term borrowings
183.5 183.5 183.5 Provisions
(1,917.9) 1.7 (1,916.2) 2,643.8 Trade payables
266.6 266.6 266.6 Income tax expense
126.4 1,471.1 0.5 1,581.9 2,350.7 Other current liabilities
126.4 57.0 3,288.2 2.2 8,788.1 CURRENT LIABILITIES
LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE
12.9 57.0 24.5 (42.0) 2,202.4 25,153.2 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
Cash flow statement as at 31 December 2004
(in € millions) Published Business Intangible assets Application

under French combinations (IAS 38) of IFRS 5
GAAP (IFRS 3) to Rexel
French GAAP format

a d e
Net cash from operating activities before changes in working
1,257.8 (16.6) (18.7) (199.6)
capital requirement
Changes in working capital requirement (211.9) 19.5 175.0

Changes in customer loans 28.6
Net cash from operating activities 1,074.5 2.9 (18.7) (24.6)

Acquisitions of tangible and intangible assets (462.0) 18.7 43.1
Disposals of tangible and intangible assets 33.6 (7.8)
Net operating investments (428.4) 18.7 35.3
Acquisitions of subsidiaries and affiliates (2,691.3) (5.4) 8.8
Divestment of subsidiaries and affiliates 3,057.5 (493.1)
Acquisitions of other investments net of disposals (80.8) 1.2
2.5 (4.6)
Net cash difference (225.7)
Net financial investments 59.7 (2.9) (487.7)

Net cash from (used in) investing activities (368.7) (2.9) 18.7 (452.4)
Share capital increase 0.9 (0.6)
Dividends paid (308.3) 9.5

Changes in borrowings 697.4 618.5
Net cash from (used in) financing activities 390.0 627.4

Impact of treasury stock 100.4
17.1
Impact of changes in exchange rates 22.5
Net increase (decrease) in cash and cash equivalents 1,218.7 (0.0) 167.5
Cash and cash equivalents at beginning of the period 3,069.4 (167.5)

Cash and cash equivalents at end of the period 4,288.1
PPR
Revenue Other reclassifications Total Published
(IAS 18) & restatements impact under IFRS
IFRS format
h j&k
(5.2) (1.6) (241.7) 1,016.1 Cash flow from operating activities
267.3 267.3 267.3 Interest paid/received

(26.7) (26.7) (26.7) Dividends received
150.6 150.6 150.6 Net income tax payable
1,407.3 Cash flows before tax, dividends and interest
5.2 7.0 206.7 (5.2) Change in working capital requirement
28.6 Change in customer loans
(204.7) (204.7) (204.7) Income tax paid
191.9 151.5 1,226.0 Net cash from (used in) operating activities
(0.9) 60.9 (401.1) Purchases of property, plant and equipment and intangible assets
0.6 (7.2) 26.4 Proceeds of sale from property, plant and equipment and intangible assets
(0.3) 53.7 (374.7) Net operating investments
(0.1) 3.3 (2,688.0) Acquisitions of subsidiaries, net of cash acquired
(225.7) (718.8) 2,338.7 Proceeds from disposal of subsidiaries, net of cash transferred
(155.2) (154.0) (234.8) Purchases of other financial assets
160.6 158.5 158.5 Proceeds from sale of other financial assets

225.7 225.7
61.0 61.0 61.0 Interest and dividends received
66.3 (424.3) (364.6) Net financial investments
66.0 (370.6) (739.3) Net cash from (used in) investing activities
(0.5) (1.1) (0.2) Share capital increase (decrease)
100.4 100.4 100.4 Treasury stock transactions
9.5 (298.8) Dividends paid to minority interests
(13.8) 604.7 1,302.1 Increase (decrease) in borrowings
(324.2) (324.2) (324.2) Interest paid
(238.1) 389.3 779.3 Net cash from (used in) financing activities
(100.4) (100.4)
17.1 17.1 Net cash flow from assets classified as held for sale
16.2 16.2 38.7 Impact of exchange rate variations
(64.4) 103.1 1,321.8 Net increase (decrease) in cash and cash equivalents
(179.0) (346.5) 2,722.9 Cash and cash equivalents at beginning of the period
(243.4) (243.4) 4,044.7 Cash and cash equivalents at end of the period
Shareholders’ equity as at 31 December 2004

equity share share
Under French GAAP 7,864.7 7,693.3 171.4
Impact of transition to IFRS 141.1 73.6 67.5
a - Restatements relating to business combinations (IFRS 3) 125.0 54.6 70.4
g - Deferred tax on associates (IAS 12) (7.4) (7.4)
h - Revenue (IAS 18) (83.5) (82.3) (1.2)
Under IFRS 8,005.8 7,766.9 238.9
17.3 Nature of IFRS restatements and reclassifications

a) Restatements related to business combinations (IFRS 3)
The application of IFRS 3 beginning 1 January 1999 has resulted in a restatement of the financial statements as at this date and,
specifically, application of the total revaluation method for all business combinations since 1 January 1999. The restatements
mainly covered:
• the recognition at fair value of identifiable assets and liabilities for all subsidiaries acquired by the Group on or after 1 January 1999.
The impact of this divergence is an €1,180 million increase in consolidated shareholders’ equity as at 1 January 2004, of which
a decrease of €54 million in shareholders’ equity attributable to equity holders of the parent and an increase of €1,234 million
in minority interests. The impact primarily represents the recognition, as part of the takeover of the Gucci Group in 1999, of
the minority interests share in the fair value of the assets and liabilities of this subsidiary. The Group’s purchase of virtually all of
the Gucci Group NV outstanding shares during the first half of 2004 reduces this accounting principle’s impact to a €2 million
decrease in consolidated shareholders’ equity as at 31 December 2004. The impact on 2004 net income of all the restatements
related to the recognition of assets and liabilities meeting the IFRS 3 criteria is negative in the amount of €14 million;
• the cancellation of goodwill amortisation recognised for all acquisitions subsequent to 1 January 1999.
The impact of this divergence is a €69 million increase in consolidated shareholders’ equity as at 1 January 2004. The diver-
gence, which extends to all goodwill amortisation of the Group beginning 1 January 2004, also results in a €71 million increase
in net income for 2004;
• the translation of goodwill relating to the acquisition of foreign companies into euros based on historical exchange rates in the
consolidated financial statements drawn up under French GAAP.
Pursuant to IAS 21 – The effects of changes in foreign exchange rates, goodwill is translated into euros based on period-end
exchange rates. The impact of this divergence is a €12 million decrease in consolidated shareholders’ equity and goodwill as
at 1 January 2004;
• the recognition of a deferred tax liability for all the brands acquired by the Group since 1 January 1999 to offset goodwill in
connection with the application of IFRS 3 as at this date.
This divergence in treatment, which has no impact on consolidated shareholders’ equity on the transition date, results in the
recording of a deferred tax liability for the Luxury Goods brands in the amount of €1,699 million.
PPR
b) Revaluation of property, plant and equipment (IAS 16)
Use of the fair value revaluation option for property, plant and equipment as part of the preparation of the opening balance sheet was limi-
ted to the land of the Printemps brand. This revaluation had a favourable impact of €246 million on shareholders’ equity on the transition
date. This impact corresponds, in the amount of €381 million, to the difference between the net carrying amount of the land before reva-
luation (i.e. €25 million) and its fair value (i.e. €406 million) on the transition date less a deferred tax liability of €135 million. The revaluation
of the Printemps land (non-depreciable) has no impact on 2004 net income.
c) Employee benefits (IAS 19)

As at 1 January 2004, actuarial gains and losses deferred in accordance with the corridor method are recognised in provisions for retire-
ment and other employee benefits, which gives rise to a €50 million decrease in shareholders’ equity after recognition of net deferred tax
for €22 million.
The other restatements covering provisions for retirement and other employee benefits as at 1 January 2004 primarily concern the re-
classification of employee benefits in the Conforama Italian group structure for €16 million. These benefits were previously recognised in
non-operating employee-related liabilities.
In addition, as at 1 January 2004, the financial component of expenses (or income) for employee benefits is presented in net financial
income under IFRS, whereas it was presented in operating expenses (or income) under French GAAP.
d) Intangible assets (IAS 38)

IAS 38 and the IFRS conceptual framework define asset recognition criteria which differ from French GAAP. Specifically, the IFRS do not
allow the capitalisation of deferred charges. Accordingly, the Group has restated deferred charges capitalised under French GAAP with
respect to store opening costs and IT project start-up costs. The impact of this divergence is a €40 million reduction in shareholders’
equity after taxes as at 1 January 2004, mainly related to the cancellation of pre-opening expenses for Fnac, Conforama and Gucci, which
were previously classified in property, plant and equipment and non-operating payables. Given the frequency of store openings for the
brands concerned, application of this standard had a favourable impact of €3 million on net income.
In accordance with IFRS 3 – Business combinations, intangible assets acquired as part of business combinations are only recognised

separately from goodwill if they arise from contractual or legal rights or are separable from the acquired entity. Purchased goodwill, brands
and market shares previously recognised in intangible assets under French GAAP were therefore be reclassified as goodwill if they did not
meet the criteria of international standards. The amount reclassified in goodwill totals €1,236 million as at 1 January 2004.
e) Recognition of Rexel non-currants assets held for sale (IFRS 5)

The application of IFRS 5 – Non-current assets held for sale and discontinued operations to the Rexel subgroup as at 1 January 2004
involves the valuation of the net carrying amount of the Rexel assets and liabilities as at this date, in accordance with the IFRS framework
applied by the Group. The impact of this valuation is a €96 million decrease in consolidated shareholders’ equity as at 1 January 2004, of
which €71 million for shareholders’ equity attributable to equity holders of the parent and €25 million for the minority interests. Applica-
tion of IFRS 5 also requires a separate balance sheet presentation without the offsetting of assets and liabilities that are part of a disposal
group held for sale. This presentation method results in a net increase to assets of €30 million, a net increase to liabilities excluding sha-
reholders’ equity of €126 million, and a decrease in Group net financial indebtedness of €425 million on the transition date.
The Rexel net income before depreciation and amortisation was restated according to IFRS and reclassified on a separate line “Disconti-
nued operations” in the income statement for €197 million as at 31 December 2004.
The impact of the Rexel treatment according to IFRS 5 results in a €193 million increase in net income as at 31 December 2004, repre-
senting the impact of restatements for the calculation of the proceeds from the Rexel sale on 10 December 2004.
f) Share-based payment (IFRS 2)

Application of IFRS 2 – Share-based payment modifies the method of recognising compensation plans in equity instruments. The Group
has opted to apply this standard solely to those plans issued subsequent to 7 November 2002, the rights of which are not vested as at
1 January 2005. The commitment is expensed over the rights vesting period and adjusted to reflect the best estimate of the number of
equity instruments actually exercised.
The fair values of eligible options, determined on their attribution date, does not impact opening shareholders’ equity but does result in a
net charge of €7 million for fiscal year 2004 with respect to PPR stock subscription option plans issued in 2003 and 2004 and prorated
to the vested rights of employees.
g) Deferred tax for associates (IAS 12)

In addition to the recognition of a tax impact for all the preceding divergences, the Group recorded the following restatements pursuant
to IAS 12:
• the recognition of a deferred tax liability with respect to the difference between the tax value and the consolidated net carrying amount
of the Rexel subgroup (the sale of which is highly probable on the transition date) as at 1 January 2004. This divergence gives rise to the
recognition of a deferred tax liability to offset a €73 million reduction in consolidated shareholders’ equity as at 1 January 2004 and an
increase in 2004 net income for the same amount following the Rexel sale;
• the recognition of deferred tax on the temporary differences relating to the associates. Application of this principle had a positive impact
on consolidated shareholders’ equity in the amount of €46 million as at 1 January 2004 and decreased 2004 net income by €54 million,
specifically in conjunction with the disposal of 24.5% of the consumer credit activities during the year.
h) Revenue (IAS 18)

Application of IAS 18 modifies the revenue recognition frequency for sales with warranty extension contracts. Under French GAAP, the
income relating to the warranty extension is recorded at the time of the sale; under IFRS, it is now deferred over the period of the warranty
extension. This divergence decreased consolidated shareholders’ equity by €75 million as at 1 January 2004, representing the cancellation
of income recognised in advance less provisions previously intended to cover the warranty extension and the corresponding deferred tax.
Given the pace at which sales with warranty extension contracts are growing, application of this principle reduced net income by
€7 million in fiscal year 2004.
In addition, the method used to recognise Printemps concession contracts decreased revenue by €174 million in fiscal year 2004, with
no impact on net income.
PPR
Consolidation of special purpose entities (SIC 12)
SIC Interpretation 12 requires that the Group’s securitised debt funds and similar entities, in connection with programmes for the
assignment of receivables, be recognised in the consolidated financial statements, provided the Group retains the majority of the risks
and rewards related to these programmes. The consolidation of all of these programmes under the new IFRS framework increased net
financial debt and trade receivables by €52 million as at 1 January 2004.
j) Reclassifications
The balance sheet accounts were reclassified in order to align their presentation with IFRS, particularly in terms of IAS 1 – Presentation
of financial statements. The standard modifies the presentation of balance sheet financial information, particularly through the distinction
made between current and non-current items.
Pursuant to this standard, the Group reclassified the interest accrued on borrowings in short-term borrowings. Previously, the interest had
been recognised in non-operating payables.
In accordance with IAS 28 – Investments in associates, the Group reclassified goodwill related to associates in the carrying amount of the
investment. This reclassification, in the amount of 48 million as at 1 January 2004, primarily concerns consumer credit activities.
In the income statement, application of IAS 1 will eliminate exceptional income, which will be reclassified in operating income according
to the nature of the transactions.
Cash flow statement
The impact of restatements with respect to the application of international standards to cash flows mainly concerns accrued interest
receivable in “Cash and cash equivalents,” recognised in non-operating receivables under French GAAP, and bank overdrafts, recognised
in short-term borrowings under French GAAP. This classification was reiterated in the recommendation issued by the French National
Accounting Council on 27 October 2004. This divergence decreased cash and cash equivalents by €243 million for the year ended
31 December 2004.

17.4. Impact of IAS 32/39 as at 1 January 2005
IAS 32 – Financial instruments: disclosure and presentation and IAS 39 – Financial instruments: recognition and measurement were ap-
plied prospectively by the Group as at 1 January 2005.
The following reconciliation table summarises the impacts arising from the application of these standards on the main balance sheet items as at 1 January 2005:
(in € millions) Treasury shares Hybrid Minority

31/12/2004 Published
instruments options
under IFRS
IFRS format excluding IAS 32/39 a b c
Goodwill 5,294.0 88.8
Other intangible assets 6,628.4
Property, plant and equipment 2,624.8
Investments in associates 46.9
Non-consolidated investments 73.6
Other non-current financial assets 167.6
Deferred tax assets 417.9
Other non-current assets 14.4
NON-CURRENT ASSETS 15,267.6 88.8
Inventories 2,632.6
Trade receivables 1,052.5
Current tax receivables 46.2
Other current assets 1,447.1 (1.7)
Cash and cash equivalents 4,288.1 (345.8)
CURRENT ASSETS 9,885.6 (345.8) (1.7)
ASSETS HELD FOR SALE
TOTAL ASSETS 25,153.2 (345.8) (1.7) 88.8
Shareholders’ equity attributable to equity owners of the parent 7,766.9 (345.8) 77.6
Shareholders’ equity attributable to minority interests 238.9 (67.3)
SHAREHOLDERS’ EQUITY 8,005.8 (345.8) 77.6 (67.3)
Long-term borrowings 6,103.2 (120.9) 110.7
Provisions for retirement and similar benefits 214.7
Provisions 164.8
Deferred tax liabilities 1,876.6 41.6
NON-CURRENT LIABILITIES 8,359.3 (79.3) 110.7
Short-term borrowings 2,910.2 45.4
Provisions for retirement and similar benefits 14.2
Provisions 183.5
Trade payables 2,643.8
Income tax expense 266.6
Other current liabilities 2,350.7
CURRENT LIABILITIES 8,788.1 45.4
LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 25,153.2 (345.8) (1.7) 88.8
PPR
Effective Hedging Derivatives not qualified Other Total
01/01/2005 Published
interest rate derivatives for hedge accounting impact
under IFRS
d e f g including IAS 32/39
88.8 5,382.8
6,628.4
2,624.8
46.9
18.4 18.4 92.0
(0.5) (0.5) 167.1
14.6 2.9 0.1 17.6 435.5
14.4
14.6 2.9 18.0 124.3 15,391.9
2,632.6
(3.1) 12.9 9.8 1,062.3
419.1
46.2
36.5 15.9 (16.6) 34.1 1,481.2
(0.2) (79.3) (425.3) 3,862.8
33.4 15.7 (83.0) (381.4) 9,504.2
48.0 18.6 (65.0) (257.1) 24,896.1

(30.5) (28.2) (5.4) (0.5) (332.8) 7,434.1
(67.3) 171.6
(30.5) (28.2) (5.4) (0.5) (400.1) 7,605.7
49.8 21.8 (3.6) (1.4) 56.4 6,159.6
214.7
(13.7) (13.7) 151.1
(16.4) 0.2 (0.1) (0.1) 25.2 1,901.8
33.4 22.0 (3.7) (15.2) 67.9 8,427.2

(2.9) 8.2 1.0 11.9 63.6 2,973.8
419.1
14.2
(60.9) (60.9) 122.6
(2.9) (1.4) (4.3) 2,639.5
266.6
48.9 26.7 1.1 76.7 2,427.4
(2.9) 54.2 27.7 (49.3) 75.1 8,863.2
(0.0) 48.0 18.6 (65.0) (257.1) 24,896.1

a) Treasury shares
IAS 32 requires that treasury shares be deducted from consolidated shareholders’ equity, regardless of the reason for which they are
acquired. As at 1 January 2005, the Group held treasury shares classified in marketable securities under French GAAP in the amount of
€345.8 million, which were deducted from consolidated shareholders’ equity in accordance with IFRS.
b) Hybrid instruments
The Group has financial instruments with both a debt component and an equity component, specifically convertible bonds issued in the
form of OCEANEs in 2001 and 2003. Under French GAAP, these bonds were presented in the 31 December 2004 balance sheet for
€149.2 million and €1,079.5 million, respectively.
As at 1 January 2005, the equity component of convertible bonds amounts to €120.9 million. The recognition of this equity component
decreases borrowings by €120.9 million and increases shareholders’ equity by €77.6 million after taking into account the related deferred
taxes.
c) Minority interest options

The Group has committed to repurchase the minority interests of shareholders of certain fully consolidated subsidiaries. These Group re-
purchase commitments correspond to optional commitments (written put options). Under French GAAP, the commitments were recorded
under “Off-balance sheet commitments” in the notes to the consolidated financial statements.
Pending a decision from the IASB with respect to the definitive treatment to be adopted, the Group recognised a financial liability for the
put options granted to the minority shareholders of the entities concerned in the amount of €156.1 million, with a reduction of minority
interests and an increase in goodwill as a corresponding entry.
d) Effective interest rate

Under IFRS, identified transaction costs and issue or redemption premiums directly related to the issue of a financial liability are deducted
from the financial liability as part of the recognition at amortised cost using the effective interest rate.
At 1 January 2005, the impact of this restatement increased borrowings by €46.9 million, of which €48.2 million with respect to the
OCEANE bonds, and decreased consolidated shareholders’ equity by €30.5 million after taking into account the related deferred tax.
e/f) Hedging derivatives / non-qualification for hedge accounting

To reduce its exposure to foreign exchange and interest rate risk, the Group uses derivative instruments which, pursuant to IAS 39, must
be recognised at their fair value on the balance sheet.
These instruments may be eligible for hedge accounting with respect to IAS 39, provided they meet the documentation and effectiveness
criteria described in Note 1.7 and are recognised using specific methods based on the designated type of hedge.
• Foreign exchange risk:
The Group uses foreign exchange derivative instruments mainly to cover commercial commitments. The foreign exchange risk manage-
ment policy covers highly probable budget exposure and/or firm commitments for Retail and Luxury Goods.
These instruments are usually eligible for cash flow hedge accounting particularly when their purpose is to hedge highly probable future
cash flows or fair value accounting when their purpose is to hedge contractual firm commitments or foreign currency receivables and
payables.
PPR
At 1 January 2005, opening shareholders’ equity was decreased or increased according to the fair value revaluation of:
- foreign exchange derivative instruments eligible for hedge accounting under IFRS (particularly with respect to cash flow hedging rela-
tionships);
- foreign exchange derivative instruments not eligible for hedge accounting.
• Interest rate risk:
The Group uses interest rate derivatives to hedge a portion of its long or medium-term borrowings. These instruments are generally
eligible for fair value hedge accounting since they are matched to an underlying issued or contracted at a fixed rate. The change in the
value of the derivatives recorded in financial income is then symmetrically offset by the change in value of the underlying debt, which is
also recognised in financial income.
At 1 January 2005, the impact of these restatements on the consolidated balance sheet concerns the fair value revaluation of:
- all interest rate derivatives;
- the portion of borrowings, mainly bonds, hedged by interest rate swaps with respect to the fair value relationship.
The recognition of derivatives eligible for hedge accounting (exchange and interest rate) decreased consolidated shareholders’ equity by
€28.2 million, net of deferred tax.
The recognition of derivatives not eligible for hedge accounting (exchange and interest rate) decreased consolidated shareholders’ equity
by €5.4 million, net of deferred tax.
g) Other items
Other items, without a material impact on consolidated shareholders’ equity as at 1 January 2005, primarily concern the reclassification
of non-consolidated investments in line with IFRS.

Statutory auditors’ report on the consolidated financial

statements for the half-year ended 30 June 2005
Period from 1 January to 30 June 2005
To the Shareholders,
In our capacity as statutory auditors and in accordance with Article L.232-7 of the French Company Act (Code de commerce), we have
performed the following procedures:
• a limited review of the accompanying summary of operations and income statement presented as they appear in the consolidated
financial statements of PPR S.A. for the half-year ended 30 June 2005;
• an examination of the information contained in the half-year report.
The half-year consolidated financial statements are the responsibility of the Board of Directors. Our role is to report on these financial
statements based on our limited review.
These half-year consolidated financial statements have been drawn up in preparation for the transition to IFRS as adopted in the European
Union for the 2005 consolidated financial statements, using for the first time the valuation and recognition methods under IFRS as adopted
in the European Union, in the form of interim financial statements as defined in the General Regulations of the AMF (Autorité des Marchés
Financiers, the French Financial Markets Authority). They include, for comparative purposes, information related to fiscal year 2004 and
the first half of 2004 restated using the same methods.
We conducted our limited review in accordance with professional standards applicable in France. Those standards require the perfor-
mance of limited procedures to provide assurance, of a lesser degree than in the case of an audit, that the half-year consolidated financial
statements are free of material misstatement. A review of this nature does not include all controls required by an audit, but is limited to
performing analytical procedures and obtaining information deemed necessary from management and other appropriate sources.
Based on our limited review, nothing has come to our attention that causes us to believe that the accompanying half-year consolidated
financial statements are not presented, in all material respects, in accordance with the rules governing presentation and disclosure applicable
in France and with the recognition and measurement principles under IFRS as adopted in the European Union, as described in the notes to
the half-year consolidated financial statements.
Without qualifying our conclusion, we draw your attention to:

• note 1.1 which describes the options adopted for the presentation of the half-year consolidated financial statements, which do not
include all the disclosure requirements under IFRS as adopted in the European Union enabling a true and fair view of the assets, financial
position and results of the companies included in the consolidation under IFRS;
• note 1.1 which states the reasons why the comparative information which will be presented in the consolidated financial statements for
the year ended 31 December 2005 and the consolidated financial statements for the half-year ended 30 June 2006 may differ from the
financial statements accompanying this report.
In accordance with professional standards applicable in France, we have also verified the information contained in the half-year manage-
ment report on the half-year consolidated financial statements that were the subject of our limited review.
We have nothing to report with respect to the fairness of such information and its consistency with the half-year consolidated financial
statements.
Neuilly-Sur-Seine and Paris La Défense, 7 September 2005

The Statutory Auditors
Deloitte & Associés KPMG Audit

Department of KPMG SA
Antoine de Riedmatten Jean-Paul Picard Patrick-Hubert Petit
Partner Partner Partner
This is a free translation into English of the statutory auditors’ review report issued in the French language and is provided solely for the
convenience of English speaking readers.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable
in France.
PPR
Fr an çoi s -Hen r i Pi n au l t, C h a i r ma n a n d C E O , PPR
L au ren t Cl aqu i n, Vic e -Pr e si d e n t, C ommu n i c a ti on s, PPR
Ch r i s toph e Cu v i l l i er, C h a i r ma n a n d C E O , C on f or a ma H ol d i n g
L au ren ce Dan on, Ch a i r ma n of th e Ma n a ge me n t Boa r d , F r a n c e -Pr i n te mp s
Th i er r y Fal qu e-Pi er ro t i n, C h a i r ma n a n d C E O , Re d c a ts
Al ai n L u ch ez, Vic e - Pr e si d e n t, H u ma n Re sou r c e s, PPR
Patr i ce Mar teau, Ch ief C or p or a te O f f i c e r, PPR
Ros s McIn n es, E xe c uti v e V i c e -Pr e si d e n t, F i n a n c e , PPR
Den i s Ol i v en n es, Ch a i r ma n a n d C E O , Fn a c
Rober t Pol et, Ch airm a n a n d C E O , G u c c i G r ou p N V
Al ai n V ir y , Ch airm an a n d C E O , C FAO
PPR
Société anonyme with a capital of €481,752,920
Head office: 10, avenue Hoche – 75381 Paris Cedex 08
Tel.: +33 (0)1 45 64 61 00 – Fax: +33 (0)1 45 64 60 00
552 075 020 RCS Paris
Design and production TERRE DE SIENNE PARIS

2 0 0 5 H a l f- Ye a r R e p o r t
P P R – 2 0 0 5 H a l f - Ye a r R e p o r t
10, avenue Hoche – 75381 Paris Cedex 08

Tel.: +33 (0)1 45 64 61 00 – Fax: +33 (0)1 45 64 60 00
www.pprgroup.com

PPR 2005 Halfyearreport

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2 0 0 5 H a l f- Ye a r R e p o r t

10, avenue Hoche – 75381 Paris Cedex 08

Design and production TERRE DE SIENNE PARIS

5 GROUP ORGANISATIONAL CHART

8 FIRST-HALF 2005 HIGHLIGHTS

13 STOCK MARKET INFORMATION

Financial information for the period ended 30 June 2005

15 Highlights of the first half of 2005

28 CONSOLIDATED FINANCIAL STATEMENTS

29 Consolidated balance sheet

30 Consolidated cash flow statement

31 Consolidated statement of changes in shareholders’ equity

32 Notes to the condensed consolidated financial statements

82 Statutory auditors’ report

(in € millions) Half-year ended Half-year ended Change

Changes in the breakdown of revenue Changes in the breakdown of revenue

Changes in the breakdown of recurring Changes in the breakdown of the average

PPR in the first half of 2005

Luxury Goods: Gucci Group Retail

% stake at 30 June 2005.

Japan 135 China 7

France 14 Norway 3 Switzerland 2

PRINTEMPS In number of stores

First-half 2005 highlights

Change in corporate name and legal structure for Pinault-Printemps-Redoute

Strengthening of the financial structure

Further developments in Retail

Internet, an additional sales channel

Luxury Goods: on the cutting edge of Fashion

PPR in the first half of 2005

Stock market statistics

Definition of the concept of “actual” and “comparable” figures

The Group’s actual revenue corresponds to the reported revenue.

Definition of Group consolidated net indebtedness

Highlights of the half-year

Sale of the Group’s remaining interest in Facet

Activity and results for the first half-year of 2005

(in € millions) Half-year ended Half-year ended Change

(in € millions) Comparable Change Actual half- Change

Luxury Goods division

(in € millions) Half-year ended Half-year ended Change (%)

Yves Saint Laurent

Retail division activity

(in € millions) Half-year ended Half-year ended Change (%)

(as % of income from ordinary activities) Actual Pro forma (1)

Payroll expenses and other recurring operating income and expenses

Actual and pro forma EBITDA by division breaks down as follows:

Actual Pro forma (1)

Recurring operating income

Actual Pro forma (1)

(as % of revenue) Actual Pro forma (1)

Other operating income and expenses

Net income from continuing operations

Net income from discontinued operations

Net income attributable to equity holders of the parent – Continuing operations

Net earnings per share

Financial structure and cash flow

Working capital requirement

Change in the Group working capital requirement by category is as follows:

Cash flows for the fiscal year

(in € millions) Half-year ended Half-year Half-year Half-year

Additional information on the half-year

Consolidated income statement