24th Mar 2006 09:25
Compagnie de Saint-Gobain24 March 2006 March 23, 2006 press release FINAL RESULTS FOR 2005: Confirmation of the figures published at theend of January 2006 2005: ANOTHER YEAR OF GROWTH Excluding the impact of British Plaster Board (BPB), consolidated at December 1, 2005: O SALES +8.4% (to EUR 34,873 million) O OPERATING INCOME +4.6% (to EUR 2,868 million) O BUSINESS INCOME +8.0% (to EUR 2,611 million) O NET INCOME +6.4% (to EUR 1,318 million) Including the impact of the consolidation, at December 1, 2005, of British Plaster Board (BPB), together with theone-off items associated with this acquisition O SALES +9.1% (to EUR 35,110 million) O OPERATING INCOME +4.3% (to EUR 2,860 million) O BUSINESS INCOME +5.6% (to EUR 2,554 million) O NET INCOME +2.0% (to EUR 1,264 million) DIVIDEND FOR 2005 (recommended for approval by the AGM): EUR 1.36 per share, up 6.3%. 2006: OBJECTIVES CONFIRMED O Between 23% and 25% growth in operating income at constant exchange rates* O Between 18% and 20% growth in net income excluding profit (loss) on sales of non-current assets O Continuing strong free cash flow levels (*) based on average 2005 exchange rates At its meeting of Thursday March 23, 2006, the Board of Directors ofSaint-Gobain adopted the Group's consolidated financial statements for 2005. - Analysis of the 2005 key consolidated data: The key consolidated data for the Group, as well as the results by businesssector and geographical area set out in the appendix, are (with the exception ofnet debt diminishing by €3M), the same as the estimated figures published at theend of January(**). These figures are as follows: 2004 2005 % Change 2005 (IFRS) (excl. BPB) (incl. BPB) In EUR In EUR In EUR millions millions millions (1) (2) (2)/(1) (3) Net sales* 32,172 (a) 34,873 (a) +8.4% 35,110 (a)Operating income 2,743 2,868 +4.6% 2,860Non-operating costs (271) (252) -7.0% (288)Other business income and expenses (54) (5) n.m. (18)Business income 2,418 2,611 +8.0% 2,554Net financial income (expense) (535) (550) +2.8% (569)Income taxes (616) (721) +17.0% (701)Share in net income of equity investees 8 8 n.m. 10Income before minority interests 1,275 1,348 +5.7% 1,294Minority interests (36) (30) -16.7% (30)Net income 1,239 1,318 +6.4% 1,264Earnings per share (in EUR) 3.63 3.82 +5.2% 3.66Net income excluding profit (loss) on sales of 1,289 1,328 +3.0% 1,284non-current assetsEarnings per share excluding profit (loss) on 3.78 3.85 +1.9% 3.72sales of non-current assets (in EUR)Cash flow from operations 2,639 2,767 +4.9% 2,735Cash flow from operations excluding capital gains 2,635 2,767 +5.0% 2,730taxCapital expenditure 1,540 (b) 1,705 (b) +10.7% 1,756 (b)Investments in securities 899 (c) 1,208 (c) +34.4% 7,137 (c)Depreciation and amortization 1,374 1,396 +1.6% 1,420Net debt 6,218 6,571 +5,7% 12,850 (a) including ancillary revenue of EUR 250 million in 2005, up from EUR 190 million in 2004. (b) excluding capital leases of EUR 21 million in 2005, down from EUR 28 million in 2004 (c) including share buy-backs of EUR 146 million in 2005 vs. EUR 241 million in 2004. All of the comments made at the end of January (**) about the Group'sconsolidated financial statements therefore apply to the final figures. * * * (**) The press release relating to the Group's estimated 2005 results -published at the end of January 2006 - is available on the Saint-Gobain websiteat www.saint-gobain.com. Asbestos claims against CertainTeed in the United States: The Group confirms the figures and comments relating to 2005, published at theend of January (**) concerning this issue. Regarding the legislative effort to create a Federal asbestos trust fund, aSenate vote held in mid-February to waive a technical budgetary requirementfailed to obtain the 60 votes needed to proceed to a debate and ultimate vote onthe merits of the Bill. Although there are some continuing efforts to revivethe Bill, the probability of success seems to be remote. In the meantime, the publicity surrounding the broken asbestos tort system inthe U.S. has prompted a number of States to consider and adopt medical criteriarequirements and tort reform measures designed to reduce abuses of the system. * * * - Annual General Meeting: The Board of Directors also adopted the accounts of Compagnie de Saint-Gobain,the parent company. Net income amounted to EUR 525 million for the year endedDecember 31, 2005, compared with EUR 766 million for 2004 which beneficiatedfrom the dividend received because of the profit on sales of Terreal divested in2003. At the General Meeting of the Company's shareholders, called for June 8, 2006,the Board will recommend the distribution of EUR 460 million (representing 35.8%of net income excluding capital gains). The dividend per share would thereforeamount to EUR 1.36, an increase of 6.3% over last year. Based on the closingshare price on December 30th 2005 (€50.25), this dividend would represent agross yield of 2.71%. The dividend will be paid entirely in cash as from June22, 2006. - 2006 outlook and objectives: the Group confirms that in 2006 itwill aim to achieve between 23 and 25% growth in operating income at constantexchange rates (average 2005 exchange rates), and between 18 and 20% growth innet income, excluding profit (loss) on sales of non-current assets. The groupalso aims to maintain strong free cash flow levels. (**) The press release relating to the Group's estimated 2005 results -published at the end of January 2006 - is available on the Saint-Gobain websiteat www.saint-gobain.com. Forthcoming results announcement: - Sales for the first quarter of 2006 : April 27, 2006, after close of tradingon the Paris stock-exchange. Investor Relations Department Mrs. Florence Trious-Teixeira Tel.: +33 1 47 62 45 19 Mr. Alexandre ETUY Tel.: +33 1 47 62 37 15 Fax: +33 1 47 62 50 62 Appendix 1: Results by Business Sector andGeographic Area Change on Change on Change on a a an actual comparable comparableI. SALES 2004 2005 structure structure structure and (in (in basis basis currency EUR m) EUR m) basisby Sector and Division:Building Distribution 13,653 15,451 +13.2% +3.0% +2.7%High-Performance 4,732 4,880 +3.1% +2.9% +1.4%Materials (1)Ceramics and Plastics & 3,482 3,591 +3.1% +3.9% +2.6%AbrasivesReinforcements 1,271 1,306 +2.8% -0.2% -2.2%Flat Glass 4,429 4,680 +5.7% +2.8% +0.4%Packaging 3,880 4,008 +3.3% +2.6% +1.9%Construction Products 6,019 6,694 +11.2% +6.8% +6.0%(1)Building Materials 2,620 2,733 +4.3% +6.4% +5.2%Insulation 2,030 2,244 +10.5% +7.6% +7.1%Gypsum 263 nsPipe 1,388 1,474 +6.2% +6.5% +5.6% Internal sales and misc. -541 -603 n.s. n.s. n.s.Group Total 32,172 35,110 +9.1% +3.6% +2.7%excluding Gypsum :Construction Products 6,019 6,431 +6.8% +6.8% +6.0%(1)Group Total 32,172 34,873 +8.4% +3.6% +2.7% by geographic area:France 10,772 11,438 +6.2% +4.7% +4.7%Other Western European 13,801 15,193 +10.1% -0.2% +0.0%Countries (2)North America 5,739 5,956 +3.8% +4.1% +4.0%Emerging countries and 3,577 4,443 +24.2% +16,2% +6,8%AsiaInternal sales -1,717 -1,920 n.s. n.s. n.s.Group Total 32,172 35,110 +9.1% +3.6% +2.7%Excluding Gypsum :Other Western European 13,801 14,939 +8.2% -0.2% +0.0%CountriesGroup Total 32,172 34,873 +8.4% +3.6% +2.7%(1) including intra-sectoreliminations(2) BPB is included in Other WesternEuropean Countries Change onII. OPERATING INCOME 2004 2005 an actual 2004 2005E (in (in structure (in % of (in % of EUR m) EUR m) sales) sales) basisby Sector and Division:Building Distribution 762 888 +16.5% 5.6% 5.7%High-Performance 503 511 +1.6% 10.6% 10.5%MaterialsCeramics and Plastics & 419 462 +10.3% 12.0% 12.9%AbrasivesReinforcements 84 49 -41.7% 6.6% 3.8%Flat Glass 461 453 -1.7% 10.4% 9.7%Packaging 459 385 -16.1% 11.8% 9.6%Construction Products 542 614 +13.3% 9.0% 9.2%Building Materials 202 223 +10.4% 7.7% 8.2%Insulation 257 292 +13.6% 12.7% 13.0%Gypsum -8 nsPipe 83 107 +28.9% 6.0% 7.3%Miscellaneous 16 9 n.s.Group Total 2,743 2,860 +4.3% 8.5% 8.1%excluding Gypsum :Construction Products 542 622 +14.8% 9.0% 9.7%Group Total 2,743 2,868 +4.6% 8.5% 8.2% by geographic area:France 831 889 +7.0% 7,7% 7.8%Other Western European 961 1,090 +13.4% 7.0% 7.2%CountriesNorth America 522 487 -6.7% 9.1% 8.2%Emerging countries and 429 394 -8.2% 12.0% 8.9%AsiaGroup Total 2,743 2,860 +4.3% 8.5% 8.1%Excluding Gypsum :Other Western European 961 1,098 +14.3% 7.0% 7.3%CountriesGroup Total 2,743 2,868 +4.6% 8.5% 8.2% Change onIII. BUSINESS INCOME 2004 2005 an actual 2004 2005E (in (in structure (in % of (in % of EUR m) EUR m) sales) sales) basisby Sector and Division:Building Distribution 759 874 +15.2% 5.6% 5.7%High-Performance 409 411 +0.5% 8.6% 8.4%MaterialsCeramics and Plastics & 347 378 +8.9% 10.0% 10.5%AbrasivesReinforcements 62 33 -46.8% 4.9% 2.5%Flat Glass 411 443 +7.8% 9.3% 9.5%Packaging 422 375 -11.1% 10.9% 9.4%Construction Products 468 559 +19.4% 7.8% 8.4%Building Materials 187 247 +32.1% 7.1% 9.0%Insulation 238 278 +16.8% 11.7% 12.4%Gypsum -57 nsPipe 43 91 +111.6% 3.1% 6.2%Miscellaneous* -51 -108 n.s.Group Total 2,418 2,554 +5.6% 7.5% 7.3%excluding Gypsum :Construction Products 468 616 +31.6% 7.8% 9.6%Group Total 2,418 2,611 +8.0% 7.5% 7.5% by geographic area:France 838 856 +2.1% 7.8% 7.5%Other Western European 839 1,012 +20.6% 6.1% 6.7%CountriesNorth America 329 302 -7.9% 5.7% 5.1%Emerging countries and 412 384 -7.0% 11.5% 8.6%AsiaGroup Total 2,418 2,554 +5.6% 7.5% 7.3%Excluding Gypsum :Other Western European 839 1,069 +27.4% 6.1% 7.2%CountriesGroup Total 2,418 2,611 +8.0% 7.5% 7.5% * after asbestos-related charge (before tax) of EUR100m in 2005E andEUR108m in 2004 Change onIV. CASH FLOW 2004 2005 an actual 2004 2005E (in (in structure (in % of (in % of EUR m) EUR m) sales) sales) basisby Sector and Division:Building Distribution 524 667 +27.3% 3.8% 4.3%High-Performance 488 446 -8.6% 10.3% 9.1%MaterialsCeramics and Plastics & 354 342 -3.4% 10.2% 9.5%AbrasivesReinforcements 134 104 -22.4% 10.5% 8.0%Flat Glass 511 528 +3.3% 11.5% 11.3%Packaging 492 432 -12.2% 12.7% 10.8%Construction Products 540 559 +3.5% 9.0% 8.4%Building Materials 203 212 +4.4% 7.7% 7.8%Insulation 266 287 +7.9% 13.1% 12.8%Gypsum -31 nsPipe 71 91 +28.2% 5.1% 6.2%Miscellaneous* 84 103 n.s.Group Total 2,639 2,735 +3.6% 8.2% 7.8%excluding Gypsum :Construction Products 540 585 +8.3% 9.0% 9.1%Group Total 2,639 2,767 +4.9% 8.2% 7.9% by geographic area:France 841 903 +7.4% 7.8% 7.9%Other Western European 893 969 +8,5% 6.5% 6.4%CountriesNorth America 446 410 -8.1% 7.8% 6.9%Emerging countries and 459 453 -1.3% 12.8% 10.2%AsiaGroup Total 2,639 2,735 +3.6% 8.2% 7.8%excluding Gypsum :Construction Products 893 1,001 +12.1% 6.5% 6.7%Group Total 2,639 2,767 +4.9% 8.2% 7.9% * after asbestos-related charge (after tax) of EUR68m in 2005E andEUR72m in 2004 Change onV. CAPITAL EXPENDITURE 2004 2005 an actual 2004 2005E (in (in structure (in % of (in % of EUR m) EUR m) sales) sales) basisby Sector and Division:Building Distribution 249 327 +31.3% 1.8% 2.1%High-Performance 240 271 +12.9% 5.1% 5.6%MaterialsCeramics and Plastics & 132 187 +41.7% 3.8% 5.2%AbrasivesReinforcements 108 84 -22.2% 8.5% 6.4%Flat Glass 448 485 +8.3% 10.1% 10.4%Packaging 302 305 +1.0% 7.8% 7.6%Construction Products 296 355 +19.6% 4.9% 5.3%Building Materials 101 102 +1.0% 3.9% 3.7%Insulation 144 145 +0.7% 7.1% 6.5%Gypsum 52 19.8%Pipe 51 56 +9.8% 3.7% 3.8%Miscellaneous* 5 13 n.s.Group Total 1,540 1,756 +14.0% 4.8% 5.0%excluding Gypsum :Construction Products 296 303 +2.0% 4.9% 4.7%Group Total 1,540 1,705 +10.7% 4.8% 4.9% by geographic area:France 363 391 +7.7% 3.4% 3.4%Other Western European 483 574 +18.8% 3.5% 3.8%CountriesNorth America 273 256 -6.2% 4.8% 4.3%Emerging countries and 421 535 +27.1% 11.8% 12.0%AsiaGroup Total 1,540 1,756 +14.0% 4.8% 5.0%excluding Gypsum :Construction Products 483 523 +8.3% 3.5% 3.5%Group Total 1,540 1,705 +10.7% 4.8% 4.9% Appendix 2: Balance sheet at 12/31/05 (with BPB)(in EUR millions) December December Impact of 31, 2005 31,2004 BPB acquisition Goodwill 10,541 5,203 4, 882Other intangible assets, net 2,346 1,804 15Property, plant and equipment 12,508 9,367 1,864Investments in associates 137 64 49Available for sale and other securities 161 92 1Deferred Tax assets 352 0Other non-current assets 282 321 17 Non-current assets 26,327 16,851 6,828 Inventories 5,543 4,817 237 (2)Trade accounts receivable 5,848 4,789 471Current tax receivable 68 155 7Other accounts receivable 932 915 63Cash and cash equivalents 2,080 2,898 239 Current assets 14,471 13,574 1,017 Total assets 40,798 30,425 7,845 Shareholders' equity 12,265 10,673 (55)Minority interests 328 237 15 Shareholders' equity and 12,593 10,910 (40) minority interestsNon-voting participating securitiesPensions and other post-retirement benefits 3,029 2,750 358Deferred tax liability 819 238 61Non-current provisions for contingencies and 704 548 82expensesLong-term debt 11,315 5,629 6,304Long-term payables on investments 130 0 0 Non-current liabilities 15,997 9,165 6,805 Current provisions for contingencies and expenses 411 353 36Short-term payables on investments 922 1,338 94Short-term payables on investments 263 0 243 (3)Trade accounts payable 4,785 3,954 174Current tax payable 275 249 108Other payables and accrued expenses 2,859 2,307 305Short-term debt 2,693 2,149 120 Current liabilities 12,208 10,350 1,080 Total liabilities and shareholder's equity 40,798 30,425 7,845 Net Debt 12,850 6,218 6,279 (1) Main impacts related to the acquisition of BPB (1) of which net debt related to BPB: EUR 6,279 million, including EUR 5,609 millionrelated to the acquisition of shares and EUR 670 million related to net debt reported inthe books of BPB (2) All BPB inventories revalued at fair value at November 30 had been sold at December 31,2005 (3) Amounts payable on investments relate to the cost of shares not cashed out at December31, 2005 Appendix 3: BPB consolidated income statement (beforeand after data restatements by Saint-Gobain)(in • millions) December 2005 BPB before BPB after Main restatements restatements restatementsSales and 263 237 Elimination ofancillary internal salesrevenue between BPB and Saint-Gobain Group companies: EUR (26)m Operating 24 (8) Impact ofincome revaluation of inventories at fair value in the opening balance sheet and cancellation of margins generated in December: EUR (32)mDividends fromnon-consolidated companies Non-operating 0 (36) Restructuringcosts costs (implementation of synergies), of which EUR (13) million relating to the termination of BPB's Savings Plan Profit (loss) 0 (13) Write-down ofon disposals BPB's ERPand assetwrite-downsGoodwillamortization Business 24 (57)income Net financial (2) (18) Finance costsincome relating to the(expense) acquisition (December 15 to 31): EUR (11) million; Exceptional items: EUR (5) million Income taxes (6) 20 Taxes related to the foregoing adjustments Share in net 1 1income ofequityinvestees Net income 17 (54)beforeminorityinterestsMinorityinterests Net 17 (54)income Net income 17 (45)excludingcapital gains(losses) Saint-Gobain's acquisitions in 2005, excluding BPB 61 acquisitions Financial investment of €1,062 million for estimated additional sales of €1,733 million The purpose of this press release is to provide an update on the acquisitionscarried out by the Group in 2005 (not including share buybacks by Compagnie deSaint-Gobain) and particularly those which were not specifically announced atthe time. Therefore, the acquisition of BPB (Financial investment of €5.9billion for estimated additional sales of €3.6 billion) is not covered in thispress release. In 2005, excluding BPB, the Saint-Gobain Group mainly made bolt-on acquisitionsin Building Distribution (Optimera, Sanitas Troesch and 35 bolt-on acquisitions)and acquisitions in emerging countries. * * * Overview of 2005 acquisitions Acquisitions 2005 Number of Value of Securities Debt Estimated 2005(en millions d'euros) acquisitions acquired acquired full year sales Distribution 37 628 64 1,245High Performance Materials 8 48 13 62Flat Glass 2 161 (10) 143Packaging 5 98 22 120Construction Products 9 127 9 163 TOTAL acquisitions 61 1,062 98 1,733 Of which acquisitions in emerging 22 408 3 482 countries Debt acquired: • 98 million * * * • Building Distribution: Financial investment of €628 million foradditional full year estimated sales of €1,245 million. 228 new sales outlets were added to the Distribution sector network through the2005 acquisitions in addition to the 140 new sales outlets created throughorganic growth. The two largest acquisitions were: the Norwegian company Optimera (€575 millionsales and 83 sales outlets) and the Swiss distributor of bathroomsSanitas-Troesch €306 million sales and 27 sales outlets). Excluding those 2 operations, the Building Distribution sector made a further 35bolt-acquisitions: in France (19), in the UK (8), in Scandinavia (3), in theNetherlands and in the Czech Republic, adding €364m sales and 118 sales outlets. France - 19 companies acquired (48 sales outlets), representing total full yearsales of €131 million - 8 specialised distributors, including the DPO group (distributor of airconditioning products), the FIMAT group (public works specialist), PBA (producerof ready-to-use concrete), Ardosa (roofing specialist). - 11 general distributors, including Debourdeau-Lemonnier in the Marne andHaute-Marne regions, Somail Materiaux in the Herault region and Mat Cagnes inthe Provence, Alpes and Cote d'Azur regions. United Kingdom - 8 companies acquired (30 sales outlets), representing totalfull year sales of €136 million 8 specialised distributors, of which 6 are sanitary, plumbing and heating,including Ideal Bathrooms in England and Falcon Plumbing and Heating in Essex.Chadwicks and Blackpool Power Tools, a wood and tool distributor, and CPInsulations, an insulation distributor, were also acquired. Other Countries - 8 companies acquired (40 sales outlets), representing totalfull year sales of • 97 million Acquisitions of note are : Scandinavia - 3 Swedish companies acquired: Luftmijogruppen, Halab and EO-Plat,specialising in ventilation and heating products (5 sales outlets) Czech Republic and Slovakia - WAW Keramika, a distributor of tiles andsanitary-ware throughout the Czech Republic and Slovakia, with 26 sales outlets. The Netherlands - 2 companies, one of which was De Jager Tolhoek, a generaldistributor specialising in wood and panelling. Brazil - 1 distributor of tiles and sanitary-ware with 5 sales outlets. • High Performance Materials (HPM) : Financial Investment of €48 millionfor estimated additional full year sales of €62 million There were 8 acquisitions in 2005. Those of note are: Reinforcements : estimated acquired sales of €33 million Hornstein Glastextil AG - Austrian woven glass fabric and wallpaper producer forthe residential construction sector. Hangzhou Vetrotex Plastique - iChinese company producing glass fibre. Ceramics, Plastics and Abrasives estimated acquired sales of €29 million Danfeng Abrasives Group - Ceramic grains and powders manufacturer in NorthernChina. Linyi Refractories - Chinese manufacturer of refractories for the glassindustry. • Flat Glass : Financial investment of €161 million for additional fullyear sales of approximately €143 million Takeover of Hankuk Glass Industries in Korea (announcement of 6 April 2005),providing an additional €134 million full year sales, (previouslyproportionately consolidated and now fully consolidated) The acquisition of the remaining 60% stake in the Slovakian company Nitrasklo. • Packaging : Financial investment of €98 million for additional fullyear sales of approximately €120 million Acquisitions of note are: Eastern Countries - acquisition of Sitall and Kavminsteklo in Russia and Zoryain the Ukraine. The combined full-year sales of these three bottle producers areestimated at €93 million. Microspray Delta - Italian producer of pumps for the perfume and cosmeticssector (annual sales of €17 million). • Construction Products (CP): Financial investment of €127 million foradditional full year sales of approximately €163 million Pipelines - 2 acquisitions, including the cast iron producer Xugang. Thisacquisition will secure the supply of our Chinese centrifugation plants. Insulation - 2 acquisitions, one in China, with the takeover of the glass woolproducer Yi Xing, 170km from Shanghai, and the other in Rumania, with thepurchase of DWB, producer of stone wool, 60km from Bucharest. Construction Products - 5 acquisitions, of which 4 in emerging countries in theMortars business unit: Brazil, Bulgaria, India and a company called Customs inthe Czech Republic. * * * Investor Relations Department Florence TRIOU-TEIXEIRA Tel : +33 (0) 1 47 62 45 19Alexandre ETUY Tel : +33 (0) 1 47 62 37 15 Fax : + 33 (0) 1 47 62 50 62 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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