Final Results

Compagnie de Saint-Gobain 29 March 2001 SAINT-GOBAIN GROUP FINAL RESULTS FOR 2000: ANOTHER YEAR OF VIGOROUS GROWTH * Net sales up 25.6% to EUR 28.8 billion (FRF 189 billion) * Consolidated net income up 23.7% to EUR 1.5 billion (nearly FRF 10 billion) * Net income excluding capital gains up 16.2% to EUR 1 billion (FRF 6.7 billion) * EARNINGS PER SHARE EXCLUDING CAPITAL GAINS UP 19% TO EUR 12.04 DIVIDEND (RECOMMENDED TO THE GENERAL MEETING) EUR 4.30 PER SHARE, UP 19.4%% TARGET FOR 2001: 10% GROWTH IN NET INCOME EXCLUDING CAPITAL GAINS At its meeting of Thursday March 29, 2001, the Board of Directors of Saint-Gobain approved the Group's consolidated financial statements for 2000. The Group's consolidated financial statements for the year ended December 31, 2000 reflect the full consolidation of Essilor from January 1, 2000 until June 30, 2000; the company was then accounted for by the equity method from July 1, 2000 to November 15, 2000, at which time the Group disposed of its entire interest in Essilor. Key consolidated figures for 1999 and 2000 are also presented in Appendix 1 with Essilor accounted for by the equity method up to November 15, 2000. The key consolidated figures, which confirm the estimates published at the end of January, are as follows: 2000 1999 % change in EUR in EUR millions millions Net sales 28,815 22,952 25.5% Operating income 2,693 2,314 16.4% Dividend income 24 26 -7.69% Interest and other financial charges, net (612) (328) 86.6% Non-operating costs (158) (191) -17.3% Income before tax and before profit on sale of non-current assets and taxes 1,947 1,821 6.9% Profit on sale of non-current assets 584 457 27.8% Provision for income taxes (791) (775) 2.1% Amortization of goodwill (182) (142) 28.2% Share in net results of equity investees 84 28 200.0% Net income before minority interests 1,642 1,389 18.2% Minority interests (125) (163) -23.3% Net income 1,517 1,226 23.7% EPS (in EUR) 17.80 14.05 26.7% Net income before profit on sale of non- current assets 1,026 883 16.2% EPS before profit on sale of non-current assets (in EUR) 12.04 10.12 19.0% Cash flow from operations 2,643 2,360 12.0% Capital expenditure on plant and equipment 1,722 1,712 0.6% Expenditure on securities 3,347 2,481 34.9% Net debt 8,217 6,306 30.3% These results are slightly above the target set by the Group for 2000, despite less favorable economic conditions in the second half. They represent the pay-off from the transformation of the business portfolio and the Group's strategy to boost the profitability of its three core businesses, Glass, High-Performance Materials and Housing Products (see Appendix 2). Glass Sector sales and earnings were boosted by sustained demand across most of its business lines and higher Flat Glass and Reinforcements prices. The High-Performance Materials Sector reported only modest growth on an actual structure basis, due to the use of the equity method to account for Essilor in the second half. Excluding Essilor, the Sector turned in a very satisfactory performance on both a published and like-for-like basis, thanks to strong gains by the Ceramics and Plastics division. The Housing Products Sector experienced a sharp dip in its profitability, despite robust sales growth, especially in distribution. Significant increases in raw materials and energy costs eroded margins, particularly in the Building Materials and Pipe divisions. Building Materials Distribution operating margin was diluted by the Raab-Karcher acquisition, masking a modest improvement in underlying profitability. Excluding Essilor, consolidated net sales expanded by 30.8% (25.5% including Essilor). Based on a comparable structure, the growth rates were 11% in euros and 5.5% in local currencies. Sales prices rose 2.1%, reflecting increases in Flat Glass, Reinforcements and Building Materials prices throughout the year 2000. Sales volumes rose sharply in the first half, especially in Europe, but flattened in the second half, due mainly to slacker demand in the United States and Germany. Out of total sales (excluding Essilor), France contributed 29.6%, the rest of Europe 38.8%, North America 24.2% and the rest of the world 7.4%. Excluding Essilor, operating income expanded 22.9% (16.4 including Essilor). Operating margin stood at 9.2% (9.3% including Essilor) versus 9.8% in 1999. Excluding both Essilor and the Building Materials Distribution division, operating margin came to 10.6% compared with 10.5% in 1999. Margins improved in France and the rest of Europe - excluding Building Materials Distribution - as well as in emerging markets, but they contracted in North America due to slower economic growth in the United States in the second half of the year. Excluding Essilor, income before or profit on sale of non-current assets and taxes expanded by 12.8% (6.9% including Essilor). Growth in operating income offset the increase in net interest and other financial charges triggered by the financing of acquisitions made during the year. Excluding Essilor, non-operating costs contracted sharply to EUR 157 million from EUR 185 million in 1999. Profit on sale of non-current assets, in an amount of EUR 584 million, mainly concerned the sale of 4 million Vivendi shares and the Group's entire interest in Essilor. Net income reached EUR 1,517 million, up 23.7%. Earnings per share rose 26.7% to EUR 17.80 from EUR 14.05 in 1999, based on the 85,213,263 shares outstanding at December 31, 2000 following the cancellation of 5% of capital stock. Excluding profit on sale of non-current assets, net income came to EUR 1,026 million versus EUR 883 million in 1999, representing an increase of 16.2%. Based on the number of shares outstanding at December 31, 2000, earnings per share before profit on sale of non-current assets stood at EUR 12.04, up 19% compared with EUR 10.12 in 1999. Excluding Essilor, cash flow from operations expanded by 18.7% to EUR 2,530 million (12% increase with Essilor). Excluding the EUR 104 million in tax on profit on sale of non-current assets, cash flow from operations stood at EUR 2,634 million, an increase of 16.9% (10.7% including Essilor). Excluding Essilor, capital expenditure on plant and equipment totalled EUR 1,638 million, representing 5.9% of sales against 7.4% in 1999. Including Essilor, capital expenditure came to EUR 1,722 million, representing 6% of sales. Excluding Essilor expenditure on securities amounted to EUR 3,275 million (EUR 3,347 million with Essilor), including EUR 1,978 million for the Meyer and Raab Karcher acquisitions and EUR 376 million for the buyback of 2.5 million Saint-Gobain shares. Net debt at December 31, 2000 stood at EUR 8.2 billion, representing approximately 68% of shareholders' equity. General Meeting The Board of Directors also reviewed the accounts of Compagnie de Saint-Gobain, the parent (holding) company. Net income amounted to EUR 1,015 million for the year ended December 31, 2000, against EUR 574 million for 1999. At the General Meeting of the Company's shareholders, called for June 28, 2001, the Board will recommend the distribution of EUR 357.3 million, against EUR 300.9 million last year. The dividend per share would therefore amount to EUR 4.30, a 19.4% increase over last year. To this would be added a tax credit of EUR 2.15 per share, giving a total of EUR 6.45 per share. The dividend will be paid entirely in cash as from July 2, 2001. In addition, the Board of Directors will recommend that the General Meeting confirm the appointment of Jean-Martin Folz, Chairman of the Management Board of Peugeot S.A., appointed as a Director on March 29, 2001, to replace Pierre Faurre following the latter's death. The Board of Directors will also recommend that the General Meeting elect Paul A. David, Professor at the universities of Stanford and Oxford, as a Director. Outlook: the Saint-Gobain Group confirms its target for 2001 a 10% increase in net income before profit on sale of non-current assets, provided there is no new and significant deterioration in the economic environment. Investor Relations Department Tel.: Florence TRIOU-TEIXEIRA +33 1 47 62 45 19 - mailto: florence.triou@saint-gobain.com Tel.: Lounis BEKKAT +33 1 47 62 32 36 - mailto: lounis.bekkat@saint-gobain.com Fax: +33 1 47 62 50 62 Appendix 1: Key proforma consolidated figures for the years 1999 and 2000 with Essilor accounted for by the equity method (until Nov. 15,2000) (in millions of euros) 1999 2000 est. change Net Sales 21,290 27,837 +30.8% Operating Income 2,085 2,563 +22.9% Dividend Income 26 24 -7.7% Interest and other financial charges, net -298 -594 +99.3% Non-operating costs -185 -157 -15.1% Income before tax and before capital gains 1,628 1,836 +12.8% Capital gains 457 584 +27.8% Provision for Income taxes -725 -758 +4.6% Amortization of goodwill -122 -171 +40.2% Share in net results of equity investees 67 103 +53.7% Net Income before minority interests 1,305 1,594 +22.1% Minority interests -79 -77 -2.5% Net income 1,226 1,517 +23.7% Earnings per share (in euros) 14.05 17.8 +26.7% Net income excluding capital gains 883 1,026 +16.2% Earnings per share excluding capital gains (in euros) 10.12 12.04 +19.0% Cash flow from operations 2,131 2.530 +18.7% Capital expenditure on plant and equipment 1,583 1,638 +3.5% Expenditure on securities 2,436 3,275 +34.4% Net debt 6,142 8,217 +33.8% Results by Business Sector, Division and Geographic Area (in millions of euros) change on change on change on an actual a comparable a comparable I. SALES 1999 2000 structure structure structure basis and currency basis by sector and division: Glass (1) 10,217 11,317 +10.8% +10.0% +4.3% Flat Glass 3,718 4,167 +12.1% +11.8% +7.8% Insulation and Reinforcements 2,864 3,254 +13.6% +11.4% +4.7% Containers 3,640 3,906 +7.3% +7.2% +0.4% High Performance Materials & Plastics (1) 4,726 5,073 +7.3% +16.3% +6.9% Ceramics and H.P. Plastics & Abrasives 3,066 4,095 +33.6% +16.3% +6.9% Essilor 1,662 978 -41.1% Housing Products (1) 8,157 12,596 +54.4% +10.4% +6.6% Building Materials 2,625 3,067 +16.8% +14.3% +3.8% Building Distribution 4,078 7,930 +94.5% +10.1% +10.0% Pipe 1,605 1,778 +10.8% +5.6% +3.2% internal sales -306 -360 Group 22,952 28,815 +25.5% +11.0% +5.5% by geographic area: France 7,631 8,541 +11.9% +8.7% +8.7% Other European Countries 7,561 11,204 +48.2% +6.1% +4.7% North America 5,306 7,002 +32.0% +17.3% +1.2% Rest of the world 1,614 2,148 +33.1% +31.9% +14.7% Essilor 1,662 978 -41.1% internal sales -822 -1,058 Group 22,952 28,815 +25.5% +11.0% +5.5% (1) including inter-divisions eliminations II. OPERATING INCOME 1999 2000 change by sector and division: Glass 1,053 1,227 +16.5% Flat Glass 328 430 +31.1% Insulation and Reinforcements 358 423 +18.2% Containers 367 374 +1.9% High Performance Materials & Plastics 594 668 +12.5% Ceramics and H.P. Plastics & Abrasives 365 538 +47.4% Essilor 229 130 -43.2% Housing Products 664 780 +17.5% Building Materials 283 252 -11.0% Building Distribution 252 422 +67.5% Pipe 129 106 -17.8% misc. 3 18 Group 2,314 2,693 +16.4% by geographic area: France 701 797 +13.7% Other European Countries 602 791 +31.4% North America 607 739 +21.7% Rest of the world 175 236 +34.9% Essilor 229 130 -43.2% Group 2,314 2 693 +16.4% III. CASH FLOW 1999 2000 change by sector and division: Glass 1,273 1,421 +11.6% Flat Glass 408 489 +19.9% Insulation and Reinforcements 389 452 +16.2% Containers 476 480 +0.8% High Performance Materials & Plastics 554 582 +5.1% Ceramics and H.P. Plastics & Abrasives 315 458 +45.4% Essilor 239 124 -48.1% Housing Products 690 702 +1.7% Building Materials 306 273 -10.8% Building Distribution 241 309 +28.2% Pipe 143 120 -16.1% misc. -157 -62 Group 2,360 2,643 +12.0% by geographic area: France 526 598 +13.7% Other European Countries 761 926 +21.7% North America 566 673 +18.9% Rest of the world 268 322 +20.1% Essilor 239 124 -48.1% Group 2,360 2,643 +12.0% IV. CAPITAL EXPENDITURE 1999 2000 change ON PLANT AND EQUIPMENT by sector and division. Glass 995 961 -3.4% Flat Glass 389 425 +9.3% Insulation and Reinforcements 345 258 -25.2% Containers 261 278 +6.5% High Performance Materials & Plastics 266 289 +8.6% Ceramics and H.P. Plastics & Abrasives 137 205 +49.6% Essilor 129 84 -34.9% Housing Products 393 468 +19.1% Building Materials 159 172 +8.2% Building Distribution 145 229 +57.9% Pipe 89 67 -24.7% misc. 58 4 Group 1,712 1,722 +0.6% by geographic area: France 398 433 +8.8% Other European Countries 653 572 -12.4% North America 320 362 +13.1% Rest of the world 212 271 +27.8% Essilor 129 84 -34.9% Group 1,712 1,722 +0.6%
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