First half 2000 net income
SAINT-GOBAIN
FIRST HALF 2000 NET INCOME EXCLUDING CAPITAL GAINS (ESTIMATED): UP 15.6% TO є 542 MILLION
(FF 3,555 MILLION)
Excluding profit on sales of non-current assets, net income of the Saint-Gobain Group for the first half of 2000 is estimated at €є 542 million (FF 3,555 million), up 15.6% compared with the same period of 1999.
Consolidated net income is estimated at € є 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
in € millions є
in FF millions
in € millions є
in FF millions
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 euros 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 є 60 million from €є 85 million in the first half of 1999. Net interest expense climbed to є€ 275 million from €є 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 є 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 є 873 million (FF 5,727 million), slightly below the first half 1999 figure of є 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 є 10.41 (FF 68.29) versus є 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 є 542 million (FF 3,555 million), an increase of 15.6% compared with €є 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 €є 6.46 (FF 42.37), up 19.85% on the first-half 1999 figure of є 5.39 (FF 35.36), based on 86,955,234 shares.
Cash flow from operations was є 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 є 88 million (FF 577 million) tax charge on profit from sales of non-current assets, cash flow from operations stood at є 1,405 million (FF 9,216 million) compared with €є 1,251 million (FF 8,206 million) for the same period of the previous year.
Capital expenditure totalled €є 760 million (FF 4,985 million) compared with є 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 є 2,167 million (FF 14,215 million), including є 204 million (FF 1,338 million) for the buy-back of 1,330,200 Compagnie de Saint Gobain shares.
Net indebtedness stood at є 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.
July 27, 2000.
Investor Relations Department
Tel. : Florence TRIOU-TEIXEIRA +33 1 47 62 45 19 – mailto : [email protected]
Tel. : Lounis BEKKAT +33 1 47 62 32 36 – mailto : [email protected]
Fax : +33 1 47 62 50 62
APPENDIX 1: RESULTS BY OPERATIONAL SECTOR, DIVISION and GEOGRAPHIC AREA
(in millions of euros)
I. SALES Change on an Change on a comparable
H1 1999 H1 2000 actual structure structure and
estimated basis currency basis
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 -72-799.7%n.a.
GROUP 10,957 13,780 25.8% 7.6%
MAIN GEOGRAPHIC AREAS
France 3,7674,31414.5% 10.6%
Other European Countries 3,5534,70632.5% 6.1%
North America 2,4943,35634.6% 3.9%
Rest of the world 68695639.4% 17.8%
ESSILOR 82297618.7% 7.5%
INTERNAL SALES -365-52844.7%n.a.
GROUP 10,95713,78025.8%7.6%
(1) Including inter-divisions eliminations
II. OPERATING INCOME Change on an
H1 1999 H1. 2000actual structure
estimated basis
GLASS 51058915.5%
Flat Glass 15219327.0%
Insulation & Reinforcements 16019924.4%
Containers 198197-0.5%
HIGH-PERFORMANCE MATERIALS & PLASTICS 27839943.5%
Ceramics & High Performance Plastics and Abrasives 17026958.2%
Essilor 10813020.4%
HOUSING PRODUCTS 33040823.6%
Building Materials 1491522.0%
Building Distribution 11719264.1%
Pipe 64640.0%
INTERNAL SALES -36n.a.
GROUP 1,1151,40225.7%
MAIN GEOGRAPHIC AREAS
France 34042424.7%
Other European Countries 29036124.5%
North America 30139029.6%
Rest of the world 769727.6%
ESSILOR 10813020.4%
GROUP 1,1151,40225.7%
III. CASH FLOW Change on an
H1 1999 H1 2000actual structure
estimated basis
GLASS 61768811.5%
Flat Glass 19322918.7%
Insulation & Reinforcements 18021620.0%
Containers 244243-0.4%
HIGH-PERFORMANCE MATERIALS & PLASTICS 27033624.4%
Ceramics & High Performance Plastics and Abrasives 15922239.6%
Essilor 1111142.7%
HOUSING PRODUCTS 366348-4.9%
Building Materials 168149-11.3%
Building Distribution 11513214.8%
Pipe 8367-19.3%
INTERNAL SALES -128-55n.a.
GROUP 1,1251,31717.1%
MAIN GEOGRAPHIC AREAS
France 21031349.0%
Other European Countries 38841672.0%
North America 28033921.1%
Rest of the world 136135-0.7%
ESSILOR 1111142.7%
GROUP 1,1251,31717.1%
IV. CAPITAL EXPENDITURE ON PLANT & EQUIPMENT
Change on an
H1 1999 H1 2000actual structure
estimated basis
GLASS 4104335.6%
Flat Glass 16618913.9%
Insulation & Reinforcements 1271399.4%
Containers 117105-10.3%
HIGH-PERFORMANCE MATERIALS & PLASTICS 10215955.9%
Ceramics & High Performance Plastics and Abrasives 488781.3%
Essilor 547233.3%
HOUSING PRODUCTS 1601663.8%
Building Materials 7066-5.7%
Building Distribution 627419.4%
Pipe 2826-7.1%
INTERNAL SALES 12n.a.
GROUP 67376012.9%
MAIN GEOGRAPHIC AREAS
France 13216625.8%
Other European Countries 279220-21.1%
North America 1521573.3%
Rest of the world 56145158.9%
ESSILOR 547233.3%
GROUP 67376012.9%
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 (%)
M. Euros
M. Francs
M. Euros
M. Francs
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&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 euro 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%
FIRST HALF 2000 NET INCOME EXCLUDING CAPITAL GAINS (ESTIMATED): UP 15.6% TO є 542 MILLION
(FF 3,555 MILLION)
Excluding profit on sales of non-current assets, net income of the Saint-Gobain Group for the first half of 2000 is estimated at €є 542 million (FF 3,555 million), up 15.6% compared with the same period of 1999.
Consolidated net income is estimated at € є 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
in € millions є
in FF millions
in € millions є
in FF millions
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 euros 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 є 60 million from €є 85 million in the first half of 1999. Net interest expense climbed to є€ 275 million from €є 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 є 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 є 873 million (FF 5,727 million), slightly below the first half 1999 figure of є 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 є 10.41 (FF 68.29) versus є 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 є 542 million (FF 3,555 million), an increase of 15.6% compared with €є 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 €є 6.46 (FF 42.37), up 19.85% on the first-half 1999 figure of є 5.39 (FF 35.36), based on 86,955,234 shares.
Cash flow from operations was є 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 є 88 million (FF 577 million) tax charge on profit from sales of non-current assets, cash flow from operations stood at є 1,405 million (FF 9,216 million) compared with €є 1,251 million (FF 8,206 million) for the same period of the previous year.
Capital expenditure totalled €є 760 million (FF 4,985 million) compared with є 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 є 2,167 million (FF 14,215 million), including є 204 million (FF 1,338 million) for the buy-back of 1,330,200 Compagnie de Saint Gobain shares.
Net indebtedness stood at є 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.
July 27, 2000.
Investor Relations Department
Tel. : Florence TRIOU-TEIXEIRA +33 1 47 62 45 19 – mailto : [email protected]
Tel. : Lounis BEKKAT +33 1 47 62 32 36 – mailto : [email protected]
Fax : +33 1 47 62 50 62
APPENDIX 1: RESULTS BY OPERATIONAL SECTOR, DIVISION and GEOGRAPHIC AREA
(in millions of euros)
I. SALES Change on an Change on a comparable
H1 1999 H1 2000 actual structure structure and
estimated basis currency basis
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 -72-799.7%n.a.
GROUP 10,957 13,780 25.8% 7.6%
MAIN GEOGRAPHIC AREAS
France 3,7674,31414.5% 10.6%
Other European Countries 3,5534,70632.5% 6.1%
North America 2,4943,35634.6% 3.9%
Rest of the world 68695639.4% 17.8%
ESSILOR 82297618.7% 7.5%
INTERNAL SALES -365-52844.7%n.a.
GROUP 10,95713,78025.8%7.6%
(1) Including inter-divisions eliminations
II. OPERATING INCOME Change on an
H1 1999 H1. 2000actual structure
estimated basis
GLASS 51058915.5%
Flat Glass 15219327.0%
Insulation & Reinforcements 16019924.4%
Containers 198197-0.5%
HIGH-PERFORMANCE MATERIALS & PLASTICS 27839943.5%
Ceramics & High Performance Plastics and Abrasives 17026958.2%
Essilor 10813020.4%
HOUSING PRODUCTS 33040823.6%
Building Materials 1491522.0%
Building Distribution 11719264.1%
Pipe 64640.0%
INTERNAL SALES -36n.a.
GROUP 1,1151,40225.7%
MAIN GEOGRAPHIC AREAS
France 34042424.7%
Other European Countries 29036124.5%
North America 30139029.6%
Rest of the world 769727.6%
ESSILOR 10813020.4%
GROUP 1,1151,40225.7%
III. CASH FLOW Change on an
H1 1999 H1 2000actual structure
estimated basis
GLASS 61768811.5%
Flat Glass 19322918.7%
Insulation & Reinforcements 18021620.0%
Containers 244243-0.4%
HIGH-PERFORMANCE MATERIALS & PLASTICS 27033624.4%
Ceramics & High Performance Plastics and Abrasives 15922239.6%
Essilor 1111142.7%
HOUSING PRODUCTS 366348-4.9%
Building Materials 168149-11.3%
Building Distribution 11513214.8%
Pipe 8367-19.3%
INTERNAL SALES -128-55n.a.
GROUP 1,1251,31717.1%
MAIN GEOGRAPHIC AREAS
France 21031349.0%
Other European Countries 38841672.0%
North America 28033921.1%
Rest of the world 136135-0.7%
ESSILOR 1111142.7%
GROUP 1,1251,31717.1%
IV. CAPITAL EXPENDITURE ON PLANT & EQUIPMENT
Change on an
H1 1999 H1 2000actual structure
estimated basis
GLASS 4104335.6%
Flat Glass 16618913.9%
Insulation & Reinforcements 1271399.4%
Containers 117105-10.3%
HIGH-PERFORMANCE MATERIALS & PLASTICS 10215955.9%
Ceramics & High Performance Plastics and Abrasives 488781.3%
Essilor 547233.3%
HOUSING PRODUCTS 1601663.8%
Building Materials 7066-5.7%
Building Distribution 627419.4%
Pipe 2826-7.1%
INTERNAL SALES 12n.a.
GROUP 67376012.9%
MAIN GEOGRAPHIC AREAS
France 13216625.8%
Other European Countries 279220-21.1%
North America 1521573.3%
Rest of the world 56145158.9%
ESSILOR 547233.3%
GROUP 67376012.9%
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 (%)
M. Euros
M. Francs
M. Euros
M. Francs
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&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 euro 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%