Research and development expenses rose by 1.5% (4.4% excluding the effect of exchange rates).
Over the first nine months of 2007, the cost adaptation measures initiated in 2006 helped to reduce the ratio of selling and general expenses to net sales to 26.3%, 1.6 points lower than in the comparable period of 2006. Selling and general expenses for the nine-month period were euro 5,558 million, a reduction of 5.3%, with selling expenses and general expenses falling in equal proportions.
Other current operating income (net of expenses) totaled euro 200 million, versus euro 236 million in the comparable period of 2006, and included an expense of euro 61 million (euro 42 million after tax) on the harmonization of welfare and healthcare plans for the Group's retirees.
Operating income -- current rose by 4.1%, and represented 36.2% of net sales compared with 35.0% in the first nine months of 2006.
A restructuring charge of euro 50 million (euro 35 million after tax) has been recognized in connection with the ongoing adaptation plan initiated in France in 2006.
In the comparable period of 2006, the financial statements included gains on disposal of euro 553 million, mainly on the sale of the Exubera(R) rights (euro 460 million, or euro 384 million after tax) and the sale of the residual stake in the Animal Nutrition business (euro 45 million, or euro 31 million after tax).
Net financial expense was euro 111 million, against euro 146 million in
the comparable period of 2006. Interest expense on debt was euro 176
million, compared with euro 250 million in the nine months to end September
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