 |
|
 |
FIRST HALF 1999 NET INCOME EXCLUDING CAPITAL GAINS (ESTIMATED) : 468 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 882 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 468 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 estimated
|
1st half 1998
|
| |
in Euro millions
|
in FF millions
|
in Euro millions
|
in FF 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 and 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 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€84 million (1998 =€57 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€538 million (FF 3,529 million) mainly from the sale on April 30, 1999 of 4.7 million Vivendi shares.
Net income amounts to €882 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€10.14 (FF 66.53) against€5.83 (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 €468 million (FF 3,070 million), 10.6% more than the 1998 first-half figure of €423 million (FF 2,773 million). Based on the total number of issued shares at June 30 (86,955,234 shares), earnings per share amounted to€5.38 (FF 35.30) against€4.69 (FF 30.75) for the first half of 1998 (90,192,205 shares).
Cash flow from operations was €1,121 million (FF 7,353 million), up 13.1%. This represented 10.2% of sales against 11.3% in 1998. Before the tax charge of€124 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 €653 million (FF 4,283 million) against€563 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€552 million (FF 3,621 million).
Investments in securities amounted to €1,878 million (FF 12,319 million), including€510 million (FF 3,345 million) for the acquisition of the balance of Poliet shares and€644 million (FF 4,224 million) for the buy-back of 4,120,000 Compagnie de Saint-Gobain shares.
Net indebtedness amounts to€5.8 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.
APPENDIXE 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 of
Euro |
Millions of
FF |
Millions of
Euro |
Millions 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 and 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)
I. SALES
|
| |
S1 1998 |
S1. 1999
estimated |
Movement on
actual structural
basis |
Movement on a
comparable
structural 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 and Abrasives |
1,453 |
1,384 |
-4,7% |
-5,2% |
| Essilor |
0 |
820 |
n.a. |
n.a . |
| HOUSING PRODUCTS(1) |
3,300 |
3,865 |
+17,1% |
+1,0% |
| Building Materials |
1,071 |
1,229 |
+14,8% |
+9,6% |
| 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
II. OPERATING INCOME
|
| |
S1 1998 |
S1. 1999
estimated |
Movement on
actual structural
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% |
| |
S1 1998 |
S1. 1999
estimated |
Movement on
actual structural
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 |
166 |
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 |
168 |
+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 EXPENDITURE ON PLANT & EQUIPMENT
|
| |
S1 1998 |
S1. 1999
estimated |
Movement on
actual structural
basis |
| GLASS |
368 |
394 |
+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 |
-20,0% |
| OTHER |
0 |
0 |
n.a. |
| GROUP |
563 |
653 |
+16,0% |
|
|
