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RESULTS FOR THE FIRST HALF 2000
Excluding profit on sales of non-current assets, net income of the Saint-Gobain Group for the first half of 2000 is estimated at € 542 million (FF 3,555 million), up 15.6% compared with the same period of 1999.
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Consolidated net income is estimated at € 873 million (FF 5,727 million). This is very slightly below the first-half 1999 figure, due to lower capital gains.
The estimated interim consolidated financial statements were reviewed by the Board of Directors at its meeting of July 27, 2000. Key figures for the period are as follows:
 |
1st half 2000 (estimated) |
1st half 1999 |
| € mn |
FF mn |
€ mn |
FF mn |
| Net sales |
13 780 |
90 391 |
10 957 |
71 873 |
| Operating income |
1 402 |
9 197 |
1 115 |
7 314 |
| Dividend income |
22 |
144 |
31 |
204 |
| Interest and other financial charges net |
(275) |
(1 804) |
(132) |
(866) |
| Non-operating costs |
(60) |
(394) |
(85) |
(558) |
| Income before profit on sale of non-current assets and taxes |
1 089 |
7 143 |
929 |
6 094 |
| Profit on sale of non-current assets |
417 |
2 735 |
537 |
3 522 |
| Provision for income taxes |
(484) |
(3 175) |
(452) |
(2 965) |
| Amortization of goodwill |
(94) |
(616) |
(65) |
(426) |
| Group's share in net results of equity investees |
32 |
210 |
16 |
105 |
| Net income before minority interests |
960 |
6 297 |
965 |
6 330 |
| Minority interests in consolidated companies |
(87) |
(570) |
(83) |
(544) |
| Net income |
873 |
5 727 |
882 |
5 786 |
| Earnings per share (in € and in FF) |
10,41 |
68,29 |
10,14 |
66,53 |
| Net income excluding profit on sale of non-current assets |
542 |
3 555 |
469 |
3 076 |
| Cash flow from operations |
1 317 |
8 639 |
1 126 |
7 386 |
| Capital expenditure |
760 |
4 985 |
673 |
4 415 |
| Investments in securities |
2 167 |
14 215 |
1 845 |
12 102 |
| Net indebtedness |
8 365 |
54 871 |
5 873 |
38 524 |
These satisfactory performances, in line with the Group's objectives for 2000, stem from the strategy of development and improving profitability implemented by the Group in its three operating sectors, Glass, High-Performance Materials and Plastics and Housing (see Appendix 1).
The Glass Sector benefited from sustained demand in all of its business lines, especially in Europe. Ongoing cost-reduction programmes, particularly in downstream Flat Glass operations and at Ball Foster, generated further improvements in profitability.
The High-Performance Materials and Plastics Sector recorded substantial growth in both sales and operating income, mainly thanks to healthy demand in the United States, particularly for semiconductors.
In the Housing Sector, sales rose significantly on both actual and comparable structure bases, due to the Group's successful development policy and the buoyant construction market, particularly in France. However, operating margin eased back slightly as a percentage of net sales, due to higher raw materials prices in the Building Materials division in the United States and competitive pressures on sales prices in the Pipe division. The Building Distribution division, for its part, raised its profitability on both actual and comparable structure bases.
Group sales increased by 25.8%, including organic growth of 12.2% in € and 7.6% in local currencies. Volumes rose sharply across all business sectors, with the exception of Containers. Sales prices were slightly higher, reflecting improved prices in the Reinforcements and Building Materials divisions. Sales in France accounted for 31.5% of the total, with other European countries contributing 34.6%, North America 26.6% and other countries 7.3%.
Operating income increased 25.7%. Operating margin held firm compared with the first half of 1999, at 10.2% of sales. Excluding Building Distribution, operating income represented 11.1% of sales versus 11% in the same period last year.
Income before profit on sales of non-current assets and taxes rose 17.2%. Growth was driven mainly by higher operating income but it also reflected a decline in non-operating costs to € 60 million from € 85 million in the first half of 1999. Net interest expense climbed to € 275 million from € 132 million for the first half of 1999, mainly as a result of the significant acquisitions made in the first six months of 2000. Dividend income declined due to the reduction in the Group's interest in Vivendi.
Profit on sales of non-current assets amounted to € 417 million (FF 2,735 million), for the most part from the sale on February 11, 2000 of 4 million Vivendi shares.
Net income amounted to € 873 million (FF 5,727 million), slightly below the first half 1999 figure of € 882 million (FRF 5,786 million). Based on the 83,877,309 shares issued and outstanding at June 30, 2000 – following the cancellation of shares representing 3.85% of capital on June 29, 2000 – earnings per share amounted to € 10.41 (FF 68.29) versus € 10.14 (FF 66.53) for the first half of 1999 (based on 86,955,234 shares).
Excluding net profit on sales of non-current assets, net income totalled € 542 million (FF 3,555 million), an increase of 15.6% compared with € 469 million (FF 3,076 million) in the first half of 1999. Based on the 83,877,309 shares issued and outstanding at June 30, 2000 , earnings per share excluding net profit on sales of non-current assets amounted to € 6.46 (FF 42.37), up 19.85% on the first-half 1999 figure of € 5.39 (FF 35.36), based on 86,955,234 shares.
Cash flow from operations was € 1,317 million (FF 8,639 million), up 17%. This represented 9.6% of net sales, versus 10.3% in the first half of 1999. Before the € 88 million (FF 577 million) tax charge on profit from sales of non-current assets, cash flow from operations stood at € 1,405 million (FF 9,216 million) compared with € 1,251 million (FF 8,206 million) for the same period of the previous year.
Capital expenditure totalled € 760 million (FF 4,985 million) compared with € 673 million (FF 4,415 million) for the first half of 1999, representing 5.5% of net sales versus 6.1% in 1999.
Investments in securities amounted to € 2,167 million (FF 14,215 million), including € 204 million (FF 1,338 million) for the buy-back of 1,330,200 Compagnie de Saint Gobain shares.
Net indebtedness stood at € 8.4 billion (FF 54.9 billion) at June 30, 2000.
The analysis by geographical area shows continuing good performances in North and South America, coupled with sharply improved results in France and most other European countries (excluding Building Distribution), particularly the United Kingdom.
OUTLOOK
In view of the good level of activity across all business lines, the Saint-Gobain Group confirms its target of 15% growth in earnings per share over the full year, to which will be added the accretive impact of the 5% reduction in its share capital.
Essilor has been accounted for by the equity method as from June 30, 2000, following a reduction in the Group's share of voting rights to below 40%. To permit meaningful comparisons between first and second-half 2000 figures, pro forma first-half consolidated figures have been prepared using the equity method for Essilor. These pro forma statements are presented in Appendix 2.
APPENDIX 1
Results by operational sector, division and geographic area
(in millions of euros)
| I. SALES |
H1 1999 |
H1 2000 estimated |
Change on an actual structure basis |
Change on a comp. structure and currency basis |
| DIVISIONS AND SECTORS |
| GLASS(1) |
4,959 |
5,523 |
11.4% |
5.2% |
| Flat Glass |
1,808 |
2,058 |
13.8% |
9.7% |
| Insulation & Reinforcements |
1,347 |
1,548 |
14.9% |
6.2% |
| Containers |
1,808 |
1,921 |
6.3% |
-0.1% |
| HIGH-PERFORMANCE MATERIALS & PLASTICS(1) |
2,205 |
2,993 |
35.7% |
7.9% |
| Ceramics & High Performance Plastics and Abrasives |
1,383 |
2,018 |
45.9% |
8.1% |
| Essilor |
822 |
976 |
18.7% |
7.5% |
| HOUSING PRODUCTS(1) |
3,865 |
5,343 |
38.2% |
10.5% |
| Building Materials |
1,229 |
1,527 |
24.2% |
9.1% |
| Building Distribution |
1,970 |
3,028 |
53.7% |
12.0% |
| Pipe |
744 |
882 |
18.5% |
9.8% |
| INTERNAL SALES |
-72 |
-79 |
9.7% |
n.a. |
| GROUP |
10,957 |
13,780 |
25.8% |
7.6% |
| MAIN GEOGRAPHIC AREAS |
|
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|
|
| France |
3,767 |
4,314 |
14.5% |
10.6% |
| Other European Countries |
3,553 |
4,706 |
32.5% |
6.1% |
| North America |
2,494 |
3,356 |
34.6% |
3.9% |
| Rest of the world |
686 |
956 |
39.4% |
17.8% |
| ESSILOR |
822 |
976 |
18.7% |
7.5% |
| INTERNAL SALES |
-365 |
-528 |
44.7% |
n.a. |
| GROUP |
10,957 |
13,780 |
25.8% |
7.6% |
(1) Including inter-divisions eliminations
| II. OPERATING INCOME |
H1 1999 |
H1. 2000 estimated |
Change on an actual structure basis |
| DIVISIONS AND SECTORS |
| GLASS |
510 |
589 |
15.5% |
| Flat Glass |
152 |
193 |
27.0% |
| Insulation & Reinforcements |
160 |
199 |
24.4% |
| Containers |
198 |
197 |
-0.5% |
| HIGH-PERFORMANCE MATERIALS & PLASTICS |
278 |
399 |
43.5% |
| Ceramics & High Performance Plastics and Abrasives |
170 |
269 |
58.2% |
| Essilor |
108 |
130 |
20.4% |
| HOUSING PRODUCTS |
330 |
408 |
23.6% |
| Building Materials |
149 |
152 |
2.0% |
| Building Distribution |
117 |
192 |
64.1% |
| Pipe |
64 |
64 |
0.0% |
| INTERNAL SALES |
-3 |
6 |
n.a. |
| GROUP |
1,115 |
1,402 |
25.7% |
| MAIN GEOGRAPHIC AREAS |
| France |
340 |
424 |
24.7% |
| Other European Countries |
290 |
361 |
24.5% |
| North America |
301 |
390 |
29.6% |
| Rest of the world |
76 |
97 |
27.6% |
| ESSILOR |
108 |
130 |
20.4% |
| GROUP |
1,115 |
1,402 |
25.7% |
| III. CASH FLOW |
H1 1999 |
H1 2000 estimated |
Change on an actual structure basis |
| DIVISIONS AND SECTORS |
| GLASS |
617 |
688 |
11.5% |
| Flat Glass |
193 |
229 |
18.7% |
| Insulation & Reinforcements |
180 |
216 |
20.0% |
| Containers |
244 |
243 |
-0.4% |
| HIGH-PERFORMANCE MATERIALS & PLASTICS |
270 |
336 |
24.4% |
| Ceramics & High Performance Plastics and Abrasives |
159 |
222 |
39.6% |
| Essilor |
111 |
114 |
2.7% |
| HOUSING PRODUCTS |
366 |
348 |
-4.9% |
| Building Materials |
168 |
149 |
-11.3% |
| Building Distribution |
115 |
132 |
14.8% |
| Pipe |
83 |
67 |
-19.3% |
| INTERNAL SALES |
-128 |
-55 |
n.a. |
| GROUP |
1,125 |
1,317 |
17.1% |
| MAIN GEOGRAPHIC AREAS |
| France |
210 |
313 |
49.0% |
| Other European Countries |
388 |
416 |
72.0% |
| North America |
280 |
339 |
21.1% |
| Rest of the world |
136 |
135 |
-0.7% |
| ESSILOR |
111 |
114 |
2.7% |
| GROUP |
1,125 |
1,317 |
17.1% |
| IV. CAPITAL EXPENDITURE ON PLANT & EQUIPMENT |
H1 1999 |
H1 2000 estimated |
Change on an actual structure basis |
| DIVISIONS AND SECTORS |
| GLASS |
410 |
433 |
5.6% |
| Flat Glass |
166 |
189 |
13.9% |
| Insulation & Reinforcements |
127 |
139 |
9.4% |
| Containers |
117 |
105 |
-10.3% |
| HIGH-PERFORMANCE MATERIALS & PLASTICS |
102 |
159 |
55.9% |
| Ceramics & High Performance Plastics and Abrasives |
48 |
87 |
81.3% |
| Essilor |
54 |
72 |
33.3% |
| HOUSING PRODUCTS |
160 |
166 |
3.8% |
| Building Materials |
70 |
66 |
-5.7% |
| Building Distribution |
62 |
74 |
19.4% |
| Pipe |
28 |
26 |
-7.1% |
| INTERNAL SALES |
1 |
2 |
n.a. |
| GROUP |
673 |
760 |
12.9% |
| MAIN GEOGRAPHIC AREAS |
|
|
|
| France |
132 |
166 |
25.8% |
| Other European Countries |
279 |
220 |
-21.1% |
| North America |
152 |
157 |
3.3% |
| Rest of the world |
56 |
145 |
158.9% |
| ESSILOR |
54 |
72 |
33.3% |
| GROUP |
673 |
760 |
12.9% |
APPENDIX 2
Pro forma key consolidated figures
for the first halfs 1999 and 2000 with
Essilor accounted for by the equity method.
| |
H1 2000 (estimated) |
H1 1999 |
Change |
| € mn |
FF mn |
€ mn |
FF mn |
(%) |
| Sales |
12,805 |
83,995 |
10,135 |
66,481 |
26.3% |
| Operating Income |
1,271 |
8,337 |
1,007 |
6,605 |
26.2% |
| Dividend income |
22 |
144 |
31 |
203 |
-29.0% |
| Interest and other financial charges, net |
-256 |
-1,679 |
-118 |
-774 |
116.9% |
| Non-operating costs |
-59 |
-387 |
-83 |
-544 |
-28.9% |
| Income before tax and before profit on sale of non-current assets |
978 |
6,415 |
837 |
5,490 |
16.8% |
| Profit on sale of non-current assets |
417 |
2,735 |
538 |
3,529 |
-22.5% |
| Income taxes |
-450 |
-2,952 |
-427 |
-2,801 |
5.4% |
| Amortization of goodwill |
-83 |
-544 |
-57 |
-374 |
45.6% |
| Group's share in net results of associated companies |
51 |
334 |
34 |
223 |
50.0% |
| Net income from consolidated subsidiaries |
913 |
5,989 |
926 |
6,074 |
-1.4% |
| Minority interests |
-39 |
-255 |
-45 |
-295 |
-13.3% |
| Net income |
873 |
5,726 |
882 |
5,786 |
-1.0% |
| Earnings per share (in € and FF) |
10.41 |
68.29 |
10.14 |
66.51 |
2.7% |
| Net income excluding capital gains |
542 |
3,555 |
469 |
3,076 |
15.6% |
| Cash flow from operations |
1,214 |
7,963 |
1,025 |
6,724 |
18.4% |
| Capital expenditure on plant and equipment |
688 |
4,513 |
619 |
4,06 |
11.1% |
| Investments in securities |
2,072 |
13,591 |
1,808 |
11,860 |
14.6% |
| Net indebtedness |
8,365 |
54,871 |
5,649 |
37,055 |
48.1% |
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