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GLAVERBEL 2001 RESULTS - FULL
STORY
The
Building division owes its good performance mainly to:
- new production capacity in the Czech Republic (superinsulating coated
glass and laminated glass);
- expanding sales of products with high added value, such as the revolutionary
new Sunergy hard-coated glass for insulation against heat and cold, and
Top N superinsulating glass, which now sets the standard on the market;
- favourable prices for raw glass, despite a slight dip in the second
half of the year;
- and maintenance of a relatively satisfying balance between supply and
demand for glass, thanks to the measures taken to reduce production (decreasing
the output of the furnaces, and postponing the startup of Moustier 4).
The Automotive division more than doubled its operating result, thanks
to an increase in sales, and due also to a higher proportion of sales
being made up of products with high added value (the Iris windshield with
solar control coating). On top of this there are the gains in productivity
obtained as a result of the operational recovery plan introduced in 2000.
This plan has achieved its first tangible results on the way to restoring
profitability for the division as a whole, with the aim of achieving an
EBIT/OCE ratio of 12% as of 2004. It has already risen from 2.6% in 2000
to 5.6% in 2001.
The Industries division continued to improve its overall performance,
with its mirrors activity holding up well and with the beginnings of a
recovery in the domestic appliance sector (Schott-Glaverbel joint venture).
However, this division suffered from the effects of technical problems,
and from the four-week strike in its Seneffe (BE) plant. Other significant
developments were the change in the shareholder structure, and the proportionate
consolidation of the Fosbel joint venture (previously consolidated by
the equity method).
The gross operating cash-flow has risen to EUR 385.4 million, an increase
of 19%, and now represents 21% of sales.
The gross current income amounts to EUR 186.4 million, up by 35%, with
net financial charges in line with the 2000 level. The Group's debt/equity
ratio has greatly improved, from 0.79 at the end of 2000 to 0.66 at the
end of 2001, thus bringing it back to the level before the acquisition
of PPG Glass Europe in 1998.
The net financial charges represent 2.7% of sales.
The net result (Group's share) comes to EUR 131.1 million, 31% higher
than in 2000, after deducting the minority interests' share of EUR 7.8
million. This follows a 42% increase at the end of the first half year
compared with the same period in 2000.
This amount includes net extraordinary charges that are more than double
the 2000 level, at EUR 33.2 million. These mainly represent restructuring
costs and the costs of measures planned or already taken for restoring
profitability in the automotive sector.
The net consolidated result further includes the results of companies
accounted for by the equity method, amounting to EUR 9.5 million compared
with EUR 4.4 million in 2000. This increase is due to the growing contribution
by Bor Glassworks (RU), up from EUR 5.6 million in 2000 to EUR 9.2 million
in 2001, thanks to investments in float glass production and the expansion
of the local construction market.
Capital expenditure amounts to EUR 222.5 million, up from EUR 144 million
in 2000.
Finally, as regards employment, the Group's workforce (excluding Bor Glassworks)
totalled 12,709 people at the end of 2001, compared with 12,547 in 2000.
Apart from these figures, the past year saw several improvements in our
processes thanks to R&D, in particular for automotive and fire-resistant
glass. At the same time, we expanded our production capacity, both for
raw glass (with the start-up of a new float plant and the repair of another,
at Moustier and Mol respectively), and for processed glass (with the installation
of new plants in the Czech Republic). As a result, we have been able to
consolidate our position on the European market. Finally, a number of
important projects made decisive progress and are bearing fruit in 2002.
These include the online publication of information for construction products
in a complete, integrated module, and the remodelling of the Group's purchasing
policy.
On the way to becoming a global glassmaking group
The year closed with the announcement by our majority shareholder, Asahi
Glass, that it was going to reorganise its activities so as to create
a global glassmaking group. This was accompanied by a public tender offer
for the Glaverbel shares not already held by Asahi Glass. At the close
of the offer, Asahi had acquired 92.11% of the shares, instead of the
desired 100%. However, this in no way affects its plans for worldwide
reorganisation. This reorganisation has been forced on us by pressures
in the economic world, in which the players themselves are increasingly
becoming global in scale, especially our automotive customers. The reorganisation
involves combining all the glassmaking activities of Asahi Glass into
two global in-house companies, namely a Flat Glass Company and an Automotive
Glass Company.
The Flat Glass Company, headed by myself, will be based in Brussels and
will cover all the glass production and processing activities for the
building sector and industries sector in America, Asia and Europe. It
will also centralise the worldwide R&D activities (two R&D centres
in Japan, one in North America and one in Europe), together with Information
Technology, Strategic Business Development and Financial Reporting.
The Automotive Glass Company for its part will be based in Tokyo, and
will cover all the automotive glass activities in America, Asia and Europe.
An executive committee chaired by Shinya Ishizu (President of Asahi Glass)
and co-chaired by myself will lead the process of globalisation and oversee
the development of the new glass group. This type of globalisation, with
decision-making decentralised outside Japan and open to foreign management,
will be unique for a Japanese group.
The new organisation, effective as of April 2002, will make our group
the world leader both in raw glass, with a world market share of around
20%, and in automotive glass, where its share should reach 30%. With its
experience of leadership and combining multicultural teams gained in the
course of its expansion, the Glaverbel Group is now called on to act as
a driving force within what has become the world's leading glass group.
This change opens up the way to optimising both our know-how and our human
and material resources, in developing the market and reinforcing our capacity
for innovation. By opening itself up to different cultures, management
styles and industrial methods, Glaverbel will be able to benefit from
the best practices available within the new, global group.
A new organisation
In parallel with this worldwide reorganisation of Asahi Glass, as of May
this year Glaverbel has reconfigured its own activities into two operational
areas, namely Raw Glass and Processed Glass. It has also reformed its
management team, which is now headed by Arthur Ulens, formerly Vice-President,
Building division.
Raw Glass covers glass produced in large dimensions and sold as such (float
glass, patterned glass, laminated glass, superinsulating glass and mirror
glass). The marketing management will be in the hands of Christian Dauby,
and industrial management in the hands of Jacques Rysman.Processed glass
covers architectural and fire-resistant glass, glass and mirrors for furnishings,
glass for the transport industry (trains and ships), glass for domestic
appliances (with the Schott-Glaverbel joint venture), rear-view mirrors
for the automotive industry, and cosmetic mirrors. The general manager
will be Jean Luc Batkin.
Michel Grandjean takes over the position of Chief Financial Officer from
Yves Schoonejans, who is resigning. Michèle Gillot and André
Hecq will remain in charge of Human Resources/Communication and R&D
respectively. Michel Charles for his part is appointed secretary to the
Board of Directors and the new Executive Committee. As for myself, I have
decided that I will no longer be involved with day-to-day management;
the Board of Directors will meet this afternoon to note this decision,
and to confer the position of CEO on Arthur Ulens. I will remain Vice-Chairman
of the Board of Directors.
Year 2002 and prospects
The first months of 2002 were a continuation of the second half of 2001,
with contraction in the construction and furnishings industries leading
to a fall in volumes and prices. Unfortunately, the growth in sales of
products with high added value was not sufficient to offset this fall.
Nevertheless, there are encouraging signs of an upturn, especially in
Germany, and the Group's programme of controlled reduction of its production
capacity will also help to alleviate the situation. On this basis, the
Group is able to confirm its forecast for a net result in 2002 that is
slightly down on the previous year's figure.
http://www.glaverbel.com
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