RNS No 8796a
COMPAGNIE DE SAINT-GOBAIN
22 July 1999
FIRST HALF 1999 NET INCOME
EXCLUDING CAPITAL GAINS (ESTIMATED)
E468 million, or FF 3,070 million (+10.6%)
The Group's consolidated financial statements for the first half of 1999
reflect the consolidation of Essilor and processing companies in the Flat Glass
Division from January 1, 1999 for the first time.
For added clarity, key consolidated figures for the first half of 1999 are
also presented in Appendix 1 excluding the consolidation of Essilor and
Flat Glass processing subsidiaries.
Consolidated net income of the Saint-Gobain Group for the first half of 1999 is
estimated at E882 million (FF 5,786 million), a 67.7% increase relative to the
first half of 1998. This includes the capital gains resulting from the partial
unwinding of cross-shareholdings with the Vivendi Group.
Excluding capital gains from disposals, net income amounts to E468 million (FF
3,070 million), up 10.6% compared with the first half of 1998.
The estimated first half consolidated financial statements were reviewed by the
Board of Directors at its meeting of July 22, 1999 and include the following:
1st half 1999 1st half 1998
estimated
in Euro in FF in Euro in FF
millions millions millions millions
Net sales 10,960 71,893 8,795 57,691
Operating income 1,115 7,314 879 5,766
Dividend income 31 203 49 321
Interest & other financial charges net (131) (859) (142) (932)
Non-operating costs (84) (551) (57) (374)
Income before tax and before profit
on sale of non-current assets 931 6,107 729 4,783
Profit on sale of non-current assets 538 3,529 137 899
Income taxes (454) (2,979) (287) (1,885)
Amortization of goodwill (65) (426) (50) (326)
Group's share in net results of
associated companies 17 112 43 282
Net income before minority interests 967 6,343 572 3,752
Minority interests in consolidated
companies (85) (557) (46) (304)
Net income 882 5,786 526 3,448
Earnings Per share (in E and in FF) 10.14 66.53 5.83 38.23
Net income excluding net results of
sales of non-current assets 468 3,070 423 2,773
Cash flow from operations 1,121 7,353 991 6,499
Capital expenditure on plant and
equipment 653 4,283 563 3,695
Investments in securities 1,878 12,319 577 3,786
Net indebtedness 5,826 38,216 3,299 21,641
These satisfactory performances, in line with the Group's 1999 objectives, stem
from the development and improved profitability strategy implemented by the
Group in its three operating sectors: Glass, High-Performance Materials
and Housing Products (see appendix 2).
The Glass Sector felt the benefits of both sustained demand in all its
business lines and price increases in the Flat Glass and Insulation Divisions.
Profitability shows a good improvement due to the above and cost-reduction
programmes implemented in recent years.
The,High-Performance Materials and Plastics Sector recorded a strong increase
in sales and operating income on an actual structure basis, due to the
consolidation of Essilor. On a comparable structure basis, however, this
sector's operating income declined slightly relative to the first half of
1998, as a result of a slowdown in the Industrial Ceramics division.
In the Housing Products Sector the Group's successful development policy and
the buoyant construction market in France and the United States more than
offset the sharp drop in activity in the Pipe Division, leading to a
significant rise in both sales and operating income.
Group Sales increased by 24.6% on an actual structure basis. On a comparable
structure basis and excluding the consolidation of Essilor and Flat Glass
processing subsidiaries, sales slid back 2.3% in euro but were up 0.3% in
local currencies. Selling prices (unadjusted) rose slightly over the entire
half-year, driven by the recovery in the Flat Glass, Insulation and Building
Materials Divisions since the beginning of 1999. Sales volumes were up in the
United States but dipped slightly in Europe due to the fall-off in activity in
Industrial Ceramics and Pipes.
The breakdown of sales is as follows:France (including total sales for Essilor)
40.6%; other European countries: 31.4%; Americas and Asia: 28%.
Operating Income increased 26.8% and represented 10.2% of sales, against 10%
in the first half of 1998. Excluding the consolidation of Essilor and Flat
Glass processing subsidiaries, operating income rose 10.6% and represented
10.3% of sales.
Profitability improved in France and in the Americas and Asia, but declined
slightly in other European countries, mainly as a result of a slow-down in the
United Kingdom.
Income before tax and before profit on sales of non-current assets rose 27.7%,
due to higher operating income. The lower net interest charges compensated
the drop in dividend income (resulting from the unwinding of cross-shareholdings
and the consolidation of Flat Glass processing subsidiaries) and a rise in
non-operating costs to E84 million (1998 = E57 million) or FF 551 million
(1998 = FF 374 million), stemming from the restructuring or termination of
operations in certain business units.
Profit on sales of non-current assets amounted to E538 million (FF 3,529
million) mainly from the sale on April 30,1999 of 4.7 million Vivendi shares.
Net income amounts to E882 million (FF 5,786 million), up 67.7% relative to
the first half of 1998. Based on the total number of issued shares at June
30, 1999 (86,955,234 shares) following the cancellation of 5% of share capital
on June 24, 1999, earnings per share amount to E10.14 (FF 66.53) against
E5.83 (FF 38.23) for the first half of 1998 (90,192,205 shares).
Excluding net profit on sales of non-current assets, net income totalled
E468 million (FF3,070 million), 10.6% more than the 1998 first-half figure of
E423 million (FF2,773 million) Based on the total number of issued shares at
June 30 (86,955,234 shares), earnings per share amounted to E5.38 (FF 35.30)
against E4.69 (FF 30.75) for the first half of 1998 (90,192,205 shares).
Cash flow from operations was E1,121 million (FF 7,353 million), up 13.1%.
This represented 10.2% of sales against 11.3% in 1998. Before the tax charge
of E124 million (FF 813 million) on profit from sales of non-current assets,
cash flow from operations amounted to 1,245 million (FF 8,167 million).
Capital expenditure totalled E653 million (FF 4,283 million) against E563
million (FF 3,695 million for the first half of 1998. It represents 6% of
sales against 6.4% in 1998. Excluding the consolidation of Essilor and Flat
Glass processing subsidiaries, capital expenditure was unchanged compared with
the first half of 1998, at E552 million (FF 3,621 million).
Investments in Securities amounted to E1,878 million (FF 12,319 million),
including E510 million (FF 3,345 million) for the acquisition of the balance
of Poliet shares and E644 million (FF 4,224 million) for the buy-back of
4,120,000 Compagnie de Saint-Gobain shares.
Net indebtedness amounts to E5.8 billion (FF 38.2 billion) at June 30,1999.
The analysis by geographical area shows continuing good performance in North
and South America, as well as an improvement in results in most European
countries, with the exception of the United Kingdom.
Outlook: Based on the sustained good levels of activity in its various
business lines, the Saint Gobain Group confirms its objective for the full 1999
year of at least 15% growth in net earnings per share.
Investor Relations Department
Tel: Florence TRIOU +(33) 1 47 62 45 19
Tel: Lounis BEKKAT +(33) 1 47 62 32 36
Fax: +(33) 1 47 62 50 62
APPENDIX 1: KEY CONSOLIDATED FIGURES FOR THE FIRST HALF YEAR 1999
BEFORE THE CONSOLIDATEION OF ESSILOR AND THE FLAT GLASS
PROCESSING SUBSIDIARIES
S1 1999 estimated S1 1998
Movement
Millions Millions Millions Millions
of Euro of FF of Euro of FF %
Sales 9,472 62,132 8,795 57,691 7,7%
Operating Income 972 6,376 879 5,766 10,6%
Dividend Income 36 236 49 323 -26,5%
Interest & other financial
charges, net -106 -695 -142 -932 -25,4%
Non-operating costs -79 -518 -57 -374 38,6%
Income before tax, before
profit on sale of non-current
assets 823 5,399 729 4,783 12,9%
Profit on sale of non-current
assets 538 3,529 137 899 292,7%
Income taxes -416 -2,729 -287 -1,885 44,9%
Amortization of goodwill -51 -335 -50 -326 2,0%
Group's share in net results
of associated companies 45 295 43 281 4,7%
Net Income from consolidated
subsidiaries 939 6,159 572 3,752 64,2%
Minority Interests -46 -301 -46 -304 0,0%
Net Income 893 5,858 526 3,448 69,8%
Earnings per share
(in euro and FF) 10,270 67,370 5,830 38,230 76,2%
Net Income excluding
capital gains 479 3,142 423 2,773 13,2%
Cash flow from operations 986 6,468 991 6,499 -0,5%
Capital expenditure on
plant and equipment 552 3,621 563 3,695 -2,0%
Investments in securities 1,878 12,319 577 3,786 -99,7%
Net Indebtedness 5,240 34,372 3,299 21,641 58,8%
APPENDIX 2: RESULTS BY ACTIVITY SECTOR AND DIVISION
(In Millions of Euro)
1 SALES Movement on Movement on a
S1 1998 S1 1999 actual comparable
structural structural
estimated basis basis
GLASS(1) 4,095 4,962 +21,2% +2,0%
Flat Glass 1,158 1,808 +56,1% +3,4%
Insulation &
Reinforcements 1,209 1,347 +11,4% +4,5%
Containers 1,729 1,808 +4,6% -0,9%
HIGH-PERFORMANCE MATERIALS(1) 1,453 2,204 +51,7% -5,2%
Industrial Ceramics &
Abrasives 1,453 1,384 -4,7% -5,2%
Essilor 0 820 n.a. n.a.
HOUSING PRODUCTS(1) 3,300 3,885 +17,1% +1,0%
Building Materials 1,071 1,229 +14,8% +9,8%
Building Distribution 1,525 1,970 +29,2% +7,5%
Pipe 772 744 -3,6% -24,0%
INTERNAL SALES 0 -71 n.a.
GROUP 8,795 10,960 +24,6% 0,3%
(1) Including Inter-division eliminations
11. OPERATING INCOME Movement on
S1 1998 S1 1999 actual strucural
basis
GLASS 387 510 +31,8%
Flat Glass 104 154 +48,1%
Insulation & Reinforcements 116 159 +37,1%
Containers 167 197 +18,0%
HIGH-PERFORMANCE MATERIALS 187 278 +48,7%
Industrial Ceramics and Abrasives 187 170 -9,1%
Essilor 0 108 n.a.
HOUSING PRODUCTS 305 330 +8,2%
Building Materials 116 148 +27,6%
Building Distribution 75 118 +57,3%
Pipe 114 64 -43,9%/
OTHER 0 -3 n.a.
GROUP 879 1,115 -99.9%
111. CASH FLOW Movement on
S1 1998 S1 1999 actual strucural
basis
GLASS 513 622 +21,2%
Flat Glass 141 198 +40.4%
Insulation & Reinforcements 151 181 +19,9%
Containers 221 243 +10,0%
HIGH-PERFORMANCE MATERIALS 186 262 +57,8%
Industrial Ceramics and Abrasives 166 157 -5,4%
Essilor 0 105 n.a.
HOUSING PRODUCTS 316 367 +16,1%
Building Materials 122 188 +37,7%
Building Distribution 85 115 +35,3%
Pipe 109 84 -22,9%
OTHER -4 -130 n.a.
GROUP 991 1,121 -99.9%
IV. CAPITAL EXEPENDITURE ON PLANT & EQUIPMENT
S1 1998 S1 1999 Movement on actual
estimated structural basis
GLASS 368 384 +7.1%
Flat Glass 78 152 +94,9%
Insulation & Reinforcements 133 127 -4,5%
Containers 157 115 -26,8%
HIGH-PERFORMANCE MATERIALS 59 101 +71,2%
Industrial Ceramics and
Abrasives 59 48 -18,6%
Essilor 0 53 n.a.
HOUSING PRODUCTS 136 158 +16,2%
Building Materials 57 70 +22,8%
Building Distribution 44 60 +36,4%
Pipe 35 28 -20,01%
OTHER 0 0 n.a.
GROUP 583 653 +16,0%
END
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