RESULTS FOR 1998
The Board of Directors of Saint-Gobain met on March 25th, 1999 and approved the consolidated financial statements of the Group for 1998.
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The final key consolidated figures of the Group confirm the estimates published in January and are as follows:

  1998 1997
FF mn € mn FF mn € mn
Sales 116,901 17,821 107,078 16,324
Operating income 11,647 1,776 10,451 1,593
Dividend income 378 58 590 90
Financial charges, net (1,959) (299) (1,887) (288)
Reorganisation and other costs (926) (141) (1,150) (175)
Income before tax and before results of
Disposals of non-current assets		 9,140 1,393 8,004 1,220
Gains on disposals of non-current assets 2,585 394 2,014 307
Income tax (3,868) (589) (3,385) (516)
Amortization of goodwill (668) (102) (600) (91)
Group’s share in net results of associated companies 567 86 332 51
Net income before minority interests 7,756 1,182 6,365 970
Minority interests in consolidated companies (560) (85) (737) (112)
Net income 7,196 1,097 5,628 858
EPS (in FF, in €) 79.69 12.15 63.08 9.60
Net income excluding capital gains 5,184 790 4,300 656
Cash flow from operations 12,540 1,912 11,100 1,692
Capital expenditure on plant and equipment 8,450 1,288 8,875 1,353
Acquisition of investments 13,608 2,073 7,175 1,094
Net indebtedness 25.489 3.886 17,501 2,668

Group’s sales are up by 9.2% in real terms. On a comparable structure basis, sales show an increase of 3.1% in French Francs and of 3.6% in local currencies.
Sales are split: France 37.7%, other European countries 29.7%, America and Asia 32.6%.

Operating income is up 11.4% and represents 10% of sales, compared to 9.8% in 1997.
Profitability increased in all major geographical areas especially in Europe thanks to good activity in most of the Group’s markets as well as productivity gains.

Income before tax and before results of sales of non-current assets is up 14.2% due to the improvement of operating income and the reduction of reorganisation costs (926 million French Francs against 1,150 in 1997, € 141 million against 175 in 1997), despite the reduction in dividend income, which amounted to 378 million French Francs against 590 million French Francs in 1997 (€ 58 million against 90 in 1997). Dividend income was indeed particularly high in 1997 because of the payment by Compagnie de Suez of an exceptional dividend of 253 million French Francs (38.6 million €).
Financial charges amount to 1,959 million French Francs (€ 299 million) and are stable compared to 1997.

Gains on disposals of non-current assets amount to 2,585 million French Francs (394 million €), mainly due to the disposals of 1.2 million Vivendi shares and the remaining holdings in Suez-Lyonnaise des Eaux and AXA.

Net income amounts to 7,196 million French Francs (€ 1,097 million), an increase of 27.9% compared to 1997. Earnings per share based on the total number of shares issued at December 31, 1998 (90,295,788 shares) are 79.69 French Francs (€ 12.14 ) against 63.08 French Francs (€ 9.60) at December 31, 1997 (89,226,813 shares).

Excluding capital gains, net income amounts to 5,184 million French Francs (€ 790 million) against 4,300 million French Francs (€ 656 million ) in 1997, an increase of 20.6%. Earnings per share, excluding capital gains, based on the total number of shares issued at December 31, 1998 (90,295,788 shares), are 57.41 French Francs (€ 8.73), against 48.19 French Francs (€ 7.35) per share in 1997 (89,226,813 shares).

Cash flow amounts to 12,540 million French Francs (€ 1,912 million), an increase of 13%. It represents 10.7% of sales against 10.4% in 1997. Before the tax charge on profits on disposals which amounts to 558 million French Francs (€ 85 million), cash flow amounts to 13,098 million French Francs (€ 1,997 million).

Capital expenditure amounts to 8,450 million French Francs (€ 1,288 million) against 8,875 million French Francs (€ 1,353 million) in 1997 and represents 7.2% of sales against 8.3% in 1997.

Acquisition of investments amounts to 13,6 billion French Francs (2.1 billion €), including 2.3 billion French Francs (€ 351 million), for the acquisition of 2.3 million SaintGobain shares and 2.5 billion French Francs (€ 381 million) for the acquisition of 17% of Poliet’s equity in July 1998.

Net indebtedness is 25.5 billion French Francs (€ 3.9 billion) at December 31, 1998, giving a gearing of 37.7%, including nonvoting participating securities.

GENERAL MEETING
The Board of Directors has approved the statutory accounts of Compagnie de SaintGobain, parent company (holding) of the Group.
It recorded a profit of 3,896 million French Francs (€ 594 million) in 1998 against 2,949 million French Francs (€ 449,6 million in 1997.

The Board of Directors will propose to the Annual General Meeting of the Shareholders of Compagnie de SaintGobain, which has been convened for June 24th, 1999, to distribute dividends of 282 million € (1,847 million French Francs) against € 252 million (1,650 million French Francs) last year. The dividend per share would be € 3.20 (20.99 French Francs), an increase of 13.5% compared to last year. A tax credit of € 1.60 (10.5 French Francs) per share should be added, giving a total of € 4.80 (31.49 French Francs) per share.
The dividend will be paid fully in cash from June 28th, 1999, on.


OUTLOOK
The situation of the Group during the first two months of 1999 is satisfactory, notably due to good markets in North America.
As a result, the Group maintains its 15 % growth target in net earnings per share, excluding capital gains and after the 5% reduction of the share capital, which will be proposed to the next Annual General Meeting.