Pilkington plc - Trading Statement

In accordance with its established policy, Pilkington yesterday issued the following trading up-date ahead of the announcement of its preliminary results for the year ended 31 March 2002, which is scheduled for 29 May 2002.

Summary
Paolo Scaroni, Chief Executive, commented:
'For the fifth year in a row, Pilkington will report improved results for the year to 31 March 2002. This performance is despite the deterioration we have experienced in our major markets in the second half of the financial year, where trading conditions were as bad as the Group has faced for several years. The new competitiveness which Pilkington now enjoys has underpinned our results.'

Trading Environment
The slowdown in economic conditions worldwide affected demand in the automotive and construction sectors, with requirements for glass easing as the year progressed. North America slowed throughout 2001, while the construction sector in continental Europe has been weak for some time.

In addition, confidence in South American markets has been dented by the financial crisis in Argentina. By contrast, the market in Australia has been recovering well.

Building Products
Efficiency and productivity improvements secured over the last few years were again the drivers behind the performance of our Building Products business. Despite lower demand and weaker selling prices, results for the business line will be ahead of last year.

In Europe, the economic slowdown affected demand for our Building Products business, which represents over 60% of Building Products sales. The UK was an exception to this trend where the market for Processed Products in particular has been strong.

In January 2002, at a time of low demand, one of the two floats at Gladbeck in Germany was taken down for cold repair. Restart was originally planned for May this year, but will now be postponed until market conditions improve. In the spring of this year our float plant at Porto Marghera (Venice) will also be taken down for repair.

Building Products North America, which accounts for approximately 20% of Building Products sales, was also affected by weak market conditions. However, the initial benefits from the North American Step Change programme, and the absence this year of cold repairs, have combined to provide an improved trading result.

Our 35% owned Mexican associate, VVP, increased its sales overall, largely due to growth in its foreign subsidiaries, particularly following the acquisition of Cristal Glass in Spain. Domestic Mexican sales were stable despite pressure from Asian imports. Profits were adversely affected by the strong peso, since a significant proportion of sales are in foreign currencies.

Our Building Products business in Brazil was affected by currency devaluations at the beginning of 2001. Droughts affecting the generation of hydro electricity then led to limitations on electricity usage. The business in Argentina has been disrupted by the economic crisis. Chile also suffered from devaluations and increased imports of glass. Despite the external pressures, ongoing efforts on cost reduction and excellent production performance on the float plants produced satisfactory returns from South America overall. In the final quarter, the float plant at Cacapava was taken down for its first repair after twelve years in operation.

The Australian housing market began the year at very low levels, but improved sharply in the second half year. Commercial building activity is now improving as well. The float plant at Ingleburn (Sydney) was shut down for a mini repair in the summer of 2001 and is now back in full production. Reorganisation and cost reduction efforts showed through strongly in improved results.
Our 19% owned associate company in China, SYP, had another good year, with both sales and profits ahead.

Automotive
The Automotive business experienced a mixed year. The OE business was adversely affected by the fall off in car production worldwide, though the auto glass replacement business held up well.
The European Automotive glass business accounts for approximately half the Group's automotive sales. OE sales declined, due to slowing demand and model changes at major manufacturers, which failed to materialise as quickly as planned. While results will be adversely affected this year, the ongoing programme of productivity and quality improvements will ensure that the impact is muted. The position is expected to recover once the model changes are worked through.

The Automotive Glass Replacement business in Europe consists essentially of two businesses; specialised OE (for buses, coaches and trucks), and autoglass replacement. Specialist OE had a difficult year, as a consequence of the fall off in demand for leisure travel, and for trucks. However, demand for replacement glass was strong, supported by growing requirements for more complex windscreens. Results overall matched last year's strong performance.

In North America our OE sales fell 10%. Completion of a short term contract to supply Ford, which was anticipated for some time, was a contributory factor. In difficult market conditions, GM, our major customer, fared the best of America's 'Big Three'.

Two fabrication plants - one in Sherman, Texas and one in Lathrop, California - were closed towards the end of the year, with business successfully re-sourced to other facilities. This brings to an end the 'infrastructure' phase of the North American Step Change programme, as a result of which automotive OE fabrication in North America has been concentrated in three major facilities. The aim now is to bring productivity and quality levels up to the levels already achieved elsewhere in Pilkington.

The Automotive Glass Replacement business in North America is now producing very good returns, following a complete reworking of the business model. The turnround was facilitated by the innovative use of e-commerce.

In Mexico, VVP's automotive glass division experienced a reduction in demand and produced lower profits.

In South America, automotive production in Argentina has virtually ground to a halt, while Brazil was affected by uncertainties following the devaluation in 2001. Continued productivity improvements mitigated the impact on results, which will be modestly lower for the year.

Results of the Australian automotive business improved on last year, as a result of good work to improve productivity.

Pilkington continues to grow its position as number one supplier to the Chinese automotive market, outside the domestic producers. Though still relatively small, the business is profitable and is growing rapidly.

Aerospace
Our aerospace business was adversely affected by the sharp contraction experienced by the commercial aviation industry in the second half year. Nevertheless considerable progress was made on the military side, where a long term contract was secured to provide canopies for the Joint Strike Fighter, itself one of the largest military contracts ever awarded. Other contracts obtained, both civil and military, point to a good future for this business.

Growth
The new integrated float and laminating line at Freyming-Merlebach, France, operated with our joint venture partner, Interpane, started up in November 2001 and is operating well. The float plant has sales capacity of approximately 250,000 tonnes/year of which Pilkington's share is half.

Construction of the fourth float line in Brazil to be operated by Cebrace, Pilkington's joint venture with Saint Gobain, began in February, in the south of the country. The float plant, to be built by Pilkington Engineering, will have a sales capacity of approximately 200,000 tonnes/year and will commence production in spring 2003.

Demand for Pilkington's products continues to be driven by an increasing requirement for sophisticated and added-value glass in both the automotive and building products sectors.
The European production plant for Pilkington Activ™, the world's first self-cleaning glass, started up at Weiherhammer, Germany, in December 2001. Availability of production quantities of this exciting new product led to the full product launch in March 2002 starting with the Fensterbau trade fair in Germany. Pilkington Activ™ is now on sale in Austria, Benelux, France, Germany, Ireland and Switzerland. Other European countries, including the UK, will follow later in the year. Interest in North America, where Activ™ was first manufactured, has been strong. Several projects featuring Activ™ have now been completed, while a major customer in Canada has already committed to convert 100% of its double glazing output to Pilkington Activ™.

Contact: Philip Webb
Tel: 01744 692184
Email: mailto:contact@pilkington.com
Web: http://www.pilkington.com

Registrations Flood in from Europe for Pilkington Glasshouse Young Architects' Design Competition

After just six months of its launch and with three months still to go before the closing date, over 1,200 registrations have been received for Glasshouse, the pan-European building design competition organised by Pilkington and architectural journal Architecture Today to encourage student and young architects to use more glass in buildings.

The support of the event by selected architectural journals throughout Europe has also encouraged a broad spread of interest from 40 countries, including those in Central and Eastern Europe from where the number of entries has been particularly positive.

Prizes totalling E35,000 (around £22,000), with the overall winner receiving a total of E10,000 (over £6,000), have provided considerable stimulus for the competition. However, the main driver is believed to be the nature of the event itself, in which entrants are asked to design a house for the 21st century utilising the general and specialised structural and performance elements of glass.

Entrants are asked to address the key issues of energy-saving and ecological impact, both in the design of the structure and in the relationship between the house and the theoretical setting, a site in Lathom, Lancashire in North-West England. Students are not restricted to Pilkington products.

The deadline for submission is 31st May 2002, after which nine regional winners will be selected from which an overall winner will be chosen by a distinguished panel of international judges, with Pilkington providing technical guidance. The winning regional entries will be displayed on the Pilkington stand at the Glasstec exhibition in Dusseldorf in October 2002, with visitors to the stand encouraged to vote for the entry of their choice in a supporting competition. The ultimate winner of Glasshouse will be announced at a gala dinner held during the week of the exhibition, which a number of leading figures from the world of architecture are expected to attend.

Stephen Lipscombe, European Marketing Communications Manager for Pilkington, says that the response is very encouraging: 'In embarking upon such a project there was no way of knowing how it would be received. But the number of registrations has been superb, in particular from areas of Europe that have experienced considerable upheaval in recent years. The judges will have a real task on their hands, and we can expect the regional and overall winners to be ofthe highest quality.'

Full details of the Glasshouse competition are available through a special website at http://www.pilkington.com/glasshouse

HT Bucks the Trend in the Construction Sector

HT's '4-brand strategy' starts to pay off with growth opportunities in eastern Europe

Gross sales of the HT Group worldwide rose from 676 million euros in 2000 to 848 million euros in financial 2001 - an increase of more than 25%. At 29.7 million euros, profits were also up (28.3 million euros in the previous year). The international plastics processor HT Troplast AG (HT) stood its ground successfully in the face of the continued downward trend in the German construction sector, which is one of the Group's most important markets.

The growth in sales relative to the previous year owed much to the contribution of the first full financial year's figures of Kömmerling Kunststoff GmbH, Pirmasens (Germany), and the inclusion of more foreign production companies in the consolidated HT Group. Major contributions to HT's overall result came from the Group brands Kömmerling and KBE plastic window profiles, Trosifol sheets for laminated safety glass and Dynos vulcanised fibres for flexible grinding disks and technical applications. The number of employees at the end of 2001 was 5,245 worldwide (an increase of around 250).

The first results of the action programs 'Fit For Future' (F3) and 'Die starke KO' (The strong KO) at Kömmerling, which were started in 2001 to increase efficiency, are already discernible, although their full effects will first be seen this year. The outstanding commitment of many employees deserves a special mention.

The Plastic Window Profiles Business Unit has gained a leading position in all European markets with the HT brands KBE, Knipping, Kömmerling and Trocal. Although the continued negative trend in the volume of business in the German profiles market resulted in a drop in sales and results, HT was able to compensate for these losses by consistently taking advantage of the continued growth in western Europe and the above-average growth in eastern and south-eastern Europe. This trend is expected to continue this year. Prices of raw materials stabilised during the year, compensating to some extent for the drop in prices caused by destructive competition.

Kömmerling
Outside Europe, Kömmerling acquired a leading position in South and Central America. The offer to switch the complete window profile range to lead-free stabilisers reinforced the brand's position and was rated by customers as a confirmation of strength. The company succeeded in entering the inline profile wrapping sector. This is a rational type of surface finishing for window profiles. The decision to continue with the PVC panel business stabilised total business and personnel levels. By focusing more intensively on core competences in high-price sectors, the company reinforced its position and stabilised its USA business.

KBE/Knipping/Trocal
The expansion in extrusion capacity for plastic window profiles in Moscow strengthened the market position of the HT brands in Russia and consolidated the market leadership of KBE in eastern Europe. Trocal's window profiles made from the alternative material polypropylene (PP), which were launched in 2000, booked their first successes. This year Trocal started its own profile wrapping operations in 'offline mode'. Despite the difficult business climate, it was able to acquire new customers in the highly competitive German and Spanish markets. All four brands intensified their employee training activities.

Trosifol
With polyvinyl butyral (PVB) sheets for laminated safety glass, Trosifol remains the market leader in the European architectural glass sector. Although market growth was down on previous years, while competition was fiercer and the full impact of higher prices of raw materials could not be passed on to customers, increased sales and turnover were nevertheless achieved. A new production line came on line in Troisdorf ahead of schedule which resulted in a significant improvement in production flexibility. A sheet with superior noise insulation properties, which was launched in 2000, is now also being used in the automotive industry. Trosifol aims to realise strong growth in strategic target markets such as the automotive industry and in overseas markets. The construction of a new production facility in Russia is viewed as a clear sign of the continued strategic development of the product. The first Trosifol production outside the Troisdorf site will yield saleable product for the Russian market in the first quarter of 2003.

lnvestment
lnvestment was focused on expanding the production capacity for Trosifol sheets and Trocellen and Trolit foams at the Troisdorf site. Total investment at Troisdorf alone amounted to more than 30 million euros. The investment in a new raw materials mixing plant for KBE in Berlin had an immediate impact when the plant came on line in the first half of 2001. The new logistics centre in the direct vicinity of KBE in Berlin, which was completed in late 2001, has opened up new opportunities. The mixing plant and logistics centre together represent an investment of more than 15 million euros.

Occupational Safety and Environmental Protection
There were significant improvements in occupational safety within the HT Group. The introduction of more effective safety programs at the Group companies resulted in a drop in the number of days of accident-related absence from work in all areas. HT plastic profiles contributed significantly to European environmental policy, especially in terms of reducing the use of solvent-based substances, e.g. in paints and plastics. By switching from the former wet coating process to the new profile wrapping method for the production of coloured PVC profiles, considerable reductions were achieved in the use of solvent-based substances and so in the emission of solvents in the workplace. This trend was reinforced by the introduction of environmentally friendly, lead-free stabiliser systems for all Kömmerling window profiles and panels.

Web: http://www.ht-troplast.com

Technal Opens Office in Ireland

Technal, the Leeds-based architectural aluminium systems company, has opened its first office in Ireland. The new business, Technal Ireland, will offer its range of door, window and curtain walling products direct to fabricators, architects and contractors.

'We have seen a significant increase in sales in Ireland over recent years as awareness of our systems has continued to grow', said Dennis Mitchell, General Manager of Technal Ireland. 'Our investment in an independent base for Technal in Ireland will enable us to build on this success and further expand our market share by offering products and services of the highest standards to both new and existing customers.'

Technal's award-winning façade systems have been distributed in Ireland for the past 10 years and a wide variety of commercial, retail and leisure applications have been completed. Current projects include a 300,000 sqft office development at Beacon Court in Dublin, a luxury five star hotel and residential scheme at the Druid's Glen Golf Resort in Newtownmountkennedy and the prestigious new Belfast Courts - the UK's first PFI crown and county court building.

In addition to its portfolio of high performance commercial glazing systems, Technal offers a comprehensive range of support services to architects and contractors, which includes the provision of its systems on CD-ROM for the creation of fast and accurate drawings, and a technical team to work with specifiers from the design stage through to project completion.

Part of Hydro Building Systems, Technal has operations located across Western Europe, including France, Spain, Portugal and the UK, as well as export teams and licensees as far afield as the Middle East and South America.

For further information on Technal's products and services, visit their new website, http://www.technal.co.uk
Tel: 0113 296 1400

Pilkington Activ™ Launched in Germany, France, Switzerland and Benelux

Pilkington Activ™, the dual action self cleaning glass, has been launched to consumers in Germany, France, Switzerland and the Benelux countries, following highly successful 12 month test marketing exercises in Ireland and Austria, and widespread acceptance of the product in the United States. Pilkington Activ™ will now also become fully available in the test markets.

Phase II of the launch programme, scheduled for later this year, will see the introduction of the product in Scandinavia, Poland and Italy and, crucially, the United Kingdom, where the product received huge interest in the British media when the product was announced early last year. Britain, with the largest home improvement industry in Europe, is expected to quickly become the strongest market for Pilkington Activ™ outside of the United States.

Demand for Pilkington Activ™ has been immediately high wherever the product has become available, perhaps not surprisingly as Pilkington Activ™ banishes the chore of window cleaning by breaking down deposits of organic dirt, then allowing rain to wash them away.

Pilkington has backed the launch of the product in each country with one of the largest media campaigns the company has ever undertaken, including advertising on television and in national newspapers and special interest magazines, together with intensive public relations activity. 'We are first with Pilkington Activ™, and we want consumers to know it,' says Stephen Lipscombe, Pilkington's Marketing Communications manager for Europe.

Initially Pilkington Activ™ will be launched into each market through selected partners, but is expected to become more widely available as each market becomes familiar with the product, and as production volumes increase. Garry Millar, Co-ordinator for the European launch of Pilkington Activ™ commented: 'Pilkington Activ™ has extraordinary properties that, quite literally, revolutionises the use of glass in buildings. We need to ensure that supply copes with the demand in each market. In Ireland, for example, Pilkington Activ™ quickly accounted for almost 20% of our launch partner's sales.'

Information on Pilkington Activ™ is available on a special web site at http://www.activglass.com.
Tel: 01744 692184
Email: mailto:contact@pilkington.com

BMT Group Sells Glass Tempering and Metallurgical Furnace Business

As of 2nd April 2002, the BMT Group has sold its EFCO glass tempering and metallurgical business to Solent Steel Engineering Ltd.

The assets within the deal comprise: fixed assets, stocks, key personnel and some existing contracts. Solent Steel Engineering has formed a new company called EFCO Furnaces Ltd., which will continue to design and manufacture metallurgical and glass tempering furnaces into the international market.

The deal represents a significant opportunity for Solent to extend its presence in the electrical furnace industry, complementing its present activities in manufacturing fumaces for the micro-electronics industry.

The BMT Group will continue to market its proprietary float roof furnaces and heat
balancing systems through its existing EFCO Float Systems Division.

Tel: 01932 350534
Fax: 01932 350543
Web: http://www.efco-uk.com

Building and construction groups show promise

Bellway is forecasting record full-year results on the back of a booming housing market. The housebuilder's interim pre-tax profits are £39.1 million. This is an increase of 11% from £35.1 million last time. The Newcastle-based company says it has already sold a record number of homes for 2002-3.

Wilson Connolly has reported an encouraging start to its financial year, offering hope that its troubles could be over. The Northampton-based housebuilder has told shareholders that early benefits are being delivered from a strategic review designed to improve fortunes. Wilson Connolly has overhauled its business in recent months after seeing bottom-line pre-tax profits almost halve to £35.1 million last year.

Wolseley says it stands to benefit from its presence in the US after revealing a 17% rise in interim profits. Wolseley relies on the US for 70% of its business. Full-year sales in the company's North American plumbing and heating distribution business rose by £331 million to £1.75 billion following the acquisition of Canadian group Westburne. Operating profits for the division were 32.9% higher at £89.9 million.The European distribution division experienced mixed fortunes as the strong UK market was offset by weakness in Wolseley's continental business.

Taylor Woodrow says the successful integration of Bryant Homes is behind a sharp rise in annual profits. Turnover exceeded £2 billion for the first time and underlying operating profits rose 35% to £224.2 million following the takeover. Woodrow says Bryant, which it bought last March, is now fully merged with its own housebuilding operation and the tie-up has produced £15 million of annual savings

Barratt's half-year profits are set to be boosted by the housing boom. Analysts will be looking to see how second half sales are going and whether the new homes market is seeing any signs of a slowdown, particularly in the South East. Barratt is expected to report pre-tax profits of between £70 million and £75 million when it announces its interim results on Wednesday.This compares to £63.1 million for the corresponding period last year.

Source: http://www.ananova.com

Yale - Simply the Best

'From its roots in the West Midlands, Yale has become renowned worldwide as the brand leader in home security solutions with its innovative, high security products. Given its prime position within the market Yale is continuously developing new ranges to ensure that consumers have the most effective security products available to protect their homes and family.' says the company.

An important element of Yale's success is the strong and dedicated team of multi-disciplined personnel based at Willenhall, who take a great deal of pride in making sure that every product is produced to the highest standard. This unique team effort is an ethos that runs throughout Yale and its parent company Assa Abloy, which was reflected in the recent success of the Assa Abloy Yacht in Leg 5 of the Volvo Ocean Race - a round the world Yacht race covering 32700 nautical miles, 10 ports, 9 months and 4 seas! '

picture: Thierry Martinez

Against an extremely tough set of rivals, the Assa Abloy Racing Team triumphed over their competitors in one of the most nail biting finishes in the history of the race. This leg was possibly the most glamorous starting in Rio de Janeiro, Brazil and finishing in Miami, USA. This win narrows the gap between Assa Abloy and Illbruck, the current overall leaders, and places them in overall second. There are four legs to go so there is everything to play for. In the final leg the 9 Yachts will be racing to Kiel, Germany, which is expected to be at the beginning of June.For further information about the full range of Yale security products visit the Yale website: http://www.yale.co.uk. Alternatively, contact the Yale Marketing Department Tel: 01902 366911 or e-mail: mailto:info@yaleuk.com

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