Final Results

Compagnie de Saint-Gobain 31 March 2000 SAINT-GOBAIN 1999 NET INCOME Earnings per share up 15.64% At its meeting of March 30, 2000, the Board of Directors of Saint-Gobain reviewed the Group's consolidated financial statements for 1999. The Group's consolidated financial statements for the year ended December 31, 1999 reflect the full 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 1999 are also presented in Appendix 1 excluding the consolidation of Essilor and Flat Glass processing subsidiaries. The key consolidated figures, which confirm the estimates published in January, are as follows: Year ended Year ended Dec. 31, 1999 Dec. 31, 1998 In millions FF EUR FF EUR Sales 150,555 22,952 116,901 17,821 Operating income 15,179 2,314 11,647 1,776 Dividend income 171 26 378 58 Interest and other financial Charges, net (2,152) (328) (1,959) (300) Non-operating costs (1,253) (191) (926) (141) Income before tax and before results of sales of non-current assets 11,945 1,821 9,140 1,393 Results of sales of non-current assets 2,998 457 2,585 394 Income taxes (5,084) (775) (3,868) (589) Amortization of goodwill (932) (142) (668) (102) Share in net results of associated companies 184 28 567 86 Net income before minority interests 9,111 1,389 7,756 1,182 Minority interests (1,069) (163) (560) (85) Net income 8,042 1,226 7,196 1,097 Earnings per share (in French Francs And euros) 92.16 14.05 76.69 12.15 Net income excluding capital gains 5,792 883 5,184 790 Resources from operations (cash flow) 15,481 2,360 12,540 1,912 Capital expenditure on plant and Equipment 11,230 1,712 8,450 1,288 Acquisition of investments 16,274 2,481 13,608 2,075 Net indebtedness 41,365 6,306 25,489 3,886 These satisfactory performances, which are slightly higher than the Group's 1999 objectives, stem from the strategy of development and improved profitability 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 as a result of these factors as well as cost-reduction programs 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 full consolidation of Essilor and, to a lesser extent, to the acquisition of Furon. On a comparable structure basis, however, this sector is slightly behind 1998, as a result of the slowdown in the Industrial Ceramics Division. In the Housing Products Sector, the Group's successful development policy and the buoyant building 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 28.8% on an actual structure basis. On a comparable structure basis, sales were up 1.5% in euro and 2.4% in local currencies. Excluding the consolidation of Essilor and Flat Glass processing subsidiaries, sales rose 11.5%. Selling prices rose slightly, driven by the recovery in the Flat Glass, Insulation and Building Materials Divisions throughout the year. Sales volumes, however, expanded only modestly on average in relation to 1998. In Europe, the fall-off in activity in Industrial Ceramics and Pipes had a negative impact on first-half sales, but the second half brought a recovery. The United States, on the other hand, led the Group's growth in the first half but volume dropped at the end of the year. The breakdown of sales is as follows: France 33.5%; other European countries 33.7%; North America 25.5%; rest of the world 7.3%. Operating income increased 30.3% and represented 10.1% of sales, against 10% in 1998. Excluding the consolidation of Essilor and Flat Glass processing subsidiaries, operating income rose 12.3% and represented 10% of sales. Profitability improved in France and in the Americas and Asia, but declined slightly in other European countries. Income before tax and before profit on sales of non-current assets rose 30.7%, due to the improvement in operating income. Dividend income fell 55% as a result of the disposal of cross-shareholdings, while net interest charges and non-operating costs both increased. Profit on sales of non-current assets amounted to EUR 457 million (FF 2,998 million), mainly from the sale on April 30, 1999 of 4.7 million Vivendi shares. Net income amounts to EUR1,226 million (FF 8,042 million), up 11.8% relative to 1998. Based on the total number of shares outstanding at December 31, 1999 (87,236,750 shares), earnings per share amounted to EUR 14.05 (FF 92.16) against EUR 12.15 (FF 79.69) for 1998 (90,295,788 shares). Excluding net profit on sales of non-current assets, net income totaled EUR 883 million (FF 5,792 million), against EUR 790 million (FF 5,184 million) in 1998, an increase of 11.8%. Based on the total number of shares outstanding at December 31, 1999 (87,236,750 shares), earnings per share amounted to EUR 10.12 (FF 66.38) against EUR 8.75 (FF 57.40) for 1998 (90,295,788 shares), an increase of 15.66%. Cash flow from operations was EUR 2,360 million (FF 15,481 million), up 23.4%. This represents 10.3% of sales against 10.7% in 1998. Before the tax charge of EUR 122 million (FF 800 million) on profit from sales of non-current assets, cash flow from operations amounts to EUR 2,482 million (FF 16,281 million). Capital expenditure totaled EUR 1,712 million (FF 11,230 million) against EUR 1,288 million (FF 8,450 million) for 1998. It represented 7.5% of sales against 7.2% in 1998. Investments in securities amounts to EUR 2,481 million (FF 16.3 billion). Net indebtedness amounts to EUR 6.3 billion (FF 41.3 billion) at December 31, 1999, representing 54.6% of shareholders' equity, including non-voting participating securities. General Meeting The Board of Directors also reviewed the accounts of Compagnie de Saint-Gobain, the parent (holding) company. Net income amounts to EUR 574 million (FF 3,764 million) for the year ended December 31, 1999, against EUR 594 million (FF 3,896 million) for 1998. At the General Meeting of the Company's shareholders, called for June 29, 2000, the Board will recommend the distribution of EUR 304.8 million, against EUR 268.4 million last year. The dividend per share would therefore amount to EUR 3.6, an 12.5% increase over last year. To this would be added a tax credit of EUR 1.80 per share, giving a total of EUR 5.4 per share. The dividend will be paid entirely in cash as from July 3, 2000. In addition, the Board has decided to recommend that Shareholders appoint Daniel Bernard, Chairman and Chief Executive Officer of Carrefour, as Director. Outlook: The Board has noted a satisfactory success of the Public Offer on Meyer International. The Group has observed a satisfactory trend since the beginning of the year in all of its businesses. The Group therefore confirms its objective for the year 2000 of an increase of 15% of its net income per share, excluding capital gains. March 30, 2000 Investor Relations Department Tel: Florence TRIOU +33 (0)1 47 62 45 19 Tel: Lounis BEKKAT +33 (0)1 47 62 32 36 Fax: +33 (0)1 47 62 50 62 APPENDIX 1: KEY CONSOLIDATED FIGURES FOR THE YEAR 1999 BEFORE THE CONSOLIDATION OF ESSILOR AND THE FLAT GLASS PROCESSING SUBSIDIARIES 1999 1998 Evolution M.EUROS M.FRANCS M.EUROS M.FRANCS % Net Sales 19,878 130,391 17,821 116,901 11.5% Operating Income 1,995 13,086 1,776 11,647 12.3% Dividend Income 38 249 58 378 -34.5% Interest and other financial charges, net -280 -1,836 -300 -1,959 -6.7% Non-operating costs -180 -1,181 -141 -926 27.7% Income before tax and before capital gains 1,573 10,318 1,393 9,140 12.9% Capital gains 458 3,004 394 2,585 16.2% Income taxes -694 -4,552 -589 -3,868 17.8% Amortization of goodwill -114 -747 -102 -668 11.8% Group's share in net results of associated companies 95 623 86 567 10.5% Net income before minority interests 1,318 8,646 1,182 7,756 11.5% Minority interests in consolidated companies -76 -499 -85 -560 -10.6% Net Income 1,242 8,147 1,097 7,196 13.2% Earnings per share (in E.& FF) 14.24 93.41 12.15 79.69 17.2% Net Income excluding capital gains 900 5,904 790 5,184 13.9% Earnings per share excluding capital gains (in E. and FF) 10.32 67.69 8.75 57.40 17.9% Cash flow from operations 2,052 13,460 1,912 12,540 7.3% Capital expenditure on plant and equipment 1,472 9,656 1,288 8,450 14.3% Investment in securities 2,481 16,274 2,075 13,608 19.6% Net indebtedness 5,789 37,973 3,886 25,489 49.0% APPENDIX 2: RESULTS BY BUSINESS SECTOR, DIVISION AND MAIN GEOGRAPHIC AREA (In millions of euros) Evolution Evolution on a I. SALES 1999 1998 on a real com. structure structure & currency basis basis GLASS(1) 10,217 8,171 25.0% + 2,90% Flat Glass 3,718 2,270 63.8% + 0,70% Insulation & Reinforcements 2,864 2,488 15.1% + 6,80% Containers 3,640 3,416 6.6% + 1,30% HIGH PERFORMANCE MATERIALS (1) 4,726 2,762 71.1% - 1,70% Ceramics & High Performance Plastics & Abrasives 3,006 2,762 11.0% - 1,70% Essilor 1,662 - HOUSING PRODUCTS (1) 8,157 7,001 16.5% + 1,30% Building Materials 2,625 2,233 17.6% + 4,80% Building Distribution 4,078 3,325 22.6% + 8,40% Pipe 1,605 1,573 2.1% -19,90% INTERNAL SALES -148 -113 31.0% GROUP 22,952 17,821 28.6% + 1,50% MAIN GEOGRAPHIC AREAS France 7,966 6,953 14.6% - 1,10% Other European countries 8,021 5,494 46.0% + 4,20% North America 6,058 4,512 34.3% + 8,10% Rest of the world 1,729 1,547 11.8% -19,50% INTERNAL SALES -822 -685 20.0% GROUP 22,952 17,821 28.8% + 1,50% (1) Y including inter-division sales (2) excluding currency effect on a comparative basis = +3,9%) Evolution II. OPERATING INCOME 1999 1998 on a real structure basis GLASS 1,053 809 30.2% Flat Glass 328 204 60.8% Insulation & Reinforcements 358 273 31.1% Containers 367 332 10.5% HIGH PERFORMANCE MATERIALS 594 325 82.8% Ceramics & High Performance Plastics & Abrasives 365 325 12.3% Essilor 229 - HOUSING PRODUCTS 664 640 3.8% Building Materials 283 250 13.2% Building Distribution 252 193 30.8% Pipe 129 197 -34.5% OTHER 3 2 50.0% GROUP 2,314 1,776 30.3% MAIN GEOGRAPHIC AREAS France 767 614 24.9% Other European countries 668 512 30.5% North America 686 459 49.5% Rest of the world 193 191 1.0% GROUP 2,314 1,776 30.3% Evolution III. CASH FLOW 1999 1998 on a real structure basis GLASS 1,273 1,029 23.7% Flat Glass 408 279 46.2% Insulation & Reinforcements 389 323 20.4% Containers 476 427 11.5% HIGH PERFORMANCE MATERIALS 554 288 92.4% Ceramics & High Performance Plastics & Abrasives 315 288 9.4% Essilor 239 - HOUSING PRODUCTS 690 668 3.3% Building Materials 306 267 14.6% Building Distribution 241 202 19.3% Pipe 143 199 -28.1% OTHER 157 -73 115.1% GROUP 2,360 1,912 23.4% MAIN GEOGRAPHIC AREAS France 598 563 6.2% Other European countries 819 649 26.2% North America 644 447 44.1% Rest of the world 299 253 18.2% GROUP 2,360 1,912 23.4% Evolution IV. CAPITAL EXPENDITURE 1999 1998 on a real structure basis GLASS 997 837 18.9% Flat Glass 389 203 91.6% Insulation & Reinforcements 345 264 30.7% Containers 261 370 -29.5% HIGH PERFORMANCE MATERIALS 266 131 103.1% Ceramics & High Performance Plastics & Abrasives 137 131 4.6% Essilor 129 - HOUSING PRODUCTS 393 318 23.6% Building Materials 159 135 17.8% Building Distribution 145 107 35.5% Pipe 89 76 17.1% OTHER 58 2 GROUP 1,712 1,288 32.9% MAIN GEOGRAPHIC AREAS France 439 316 38.9% Other European countries 667 453 47.2% North America 378 366 3.3% Rest of the world 226 153 49.0% GROUP 1,712 1,288 32.9%
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