ASSA ABLOY 2001 Results

Highlights:
* Sales increased by 56% to SEK 22,510 M (14,394)
* Organic growth for comparable units was 3%
* Income before tax increased by 17% to SEK 1,642 M (1,402)
* Earnings per share (EPS) increased by 9% to SEK 2.98 (2.73)
* Earnings per share before goodwill amortization increased by 39% to SEK 5.39 (3.88)
* Operating cash flow amounted to SEK 2,338 M (1,756)Successful integration of 30 new companies with 12 000 employees) excluding provision for the Merrimac dispute, USD 12.5 M plus interest (SEK 166 M)

SALES AND EARNINGS JANUARY - DECEMBER 2001
Sales for the year 2001 amounted to SEK 22,510 M (14,394) which represents an increase of 56%. In local currencies the increase amounted to 43%, of which organic growth for comparable units contributed 3%. The Yale companies, showing zero growth, are not included in the organic growth calculation. Acquired units accounted for 40%. Exchange-rate effects affected sales positively by SEK 1,297 M.

The Group’s income before tax increased by 17% to SEK 1,642 M (1,402). Translation of the foreign subsidiaries’ results affected this figure positively by SEK 42 M due to exchange-rate variations.

Earnings per share after tax and full conversion increased by 9% to SEK 2.98 (2.73). The tax burden increased due to non-deductible goodwill and to a higher proportion of earnings in countries with high tax rates. Earnings per share before goodwill amortization increased by 39% to SEK 5.39 (3.88).

Operating cash flow before tax and acquisitions amounted to SEK 2,338 M (1,756).

For the full report click HERE

PPG to Appeal shock Marvin Verdict

Officials with PPG Industries said they would appeal a federal jury's decision to award Marvin Windows and Doors $136 million in a breach-of-warranty suit against the coatings manufacturer.

Marvin, of Warroad, Minn., alleged PILT wood preservative from PPG failed to prevent rot in its wood windows manufactured during the late 1980s.

The company, which said the verdict was unexpected, continues to maintain that PILT preservative is not defective, citing the fact that the product has been in use 20 years.

The original suit was filed in April 1994. A district judge threw out the case in 1999, a decision that Marvin appealed. The Eighth Circuit U.S. Court of Appeals dismissed 12 of 13 claims, including fraud. The appeal court, however, allowed Marvin to move forward with a jury trial on a breach-of-warranty claim. The trial began Oct. 22.

Pittsburgh-based PPG is a global supplier of coatings, glass, fiber glass and chemicals. Sales in 2001 were $8.2 billion.

Glasstech Files for Bankruptcy

Glasstech Inc. of Ohio, USA, has filed for bankruptcy for the second time in 10 years. While still claiming to be the world’s leading maker of glass tempering and bending furnaces for the automotive industry, a slowdown in the North American auto industry and the national recession are probable factors in the company’s current situation*(see note below).

‘The company was forced to lay off 28 employees back in October, leading some to believe that Glasstech was experiencing problems’ says a report in US Glass Magazine.

Glasstech and its parent company, Glasstech Holding Co., filed for Chapter 11 financial reorganization in U.S. Bankruptcy Court in Wilmington, Del. Less than $100 million was listed by each of the companies in assets and debts. According to a company statement, negotiations are ongoing with its creditors who may end up with ownership interest in the firm, helping to pay off what is owed. President and chief executive Mark Christman said: 'The note holders know the company is sound and that it is a good business with good management. Glasstech expects to promptly emerge from these proceedings a much stronger company financially.'

(From USGlass magazine, a Key Communications Publication)

*John Baxter writes:
Re. your news item on Glasstech, please note that Glass Magazine has agreed to amend the news item in two respects:
1) Glasstech is still the leading supplier of glass bending and tempering systems and is conducting business as usual.
2) Glasstech has not collapsed; it is in a controlled financial reorganization process which will enable it to emerge financially stronger than before.
Please amend your news item consistent with the above.
If you need to contact me, please mailto:jbaxter@glasstech.com
Sincerely,
John S. Baxter, Snr. V.P. Marketing & Sales

51 jobs lost as Unit Two Glass crashes with £1m losses

The manufacturing industry in Corby suffered a body blow, when Unit Two Glass Ltd (a company that has traded since 1974) was forced to cease trading on 17 January, resulting in the loss of 51 jobs.

Insolvency Practitioners, Gary Pettit and Peter Windatt of BRI Business Recovery & Insolvency were appointed Joint Liquidators on 23 January by the Shareholders. A creditors meeting was held on 6th February when a report on their affairs was placed before creditors who subsequently confirmed the appointment.

Liabilities of the crashed company are in excess of £1m. The company itself was profitable up until 2000, although a 9% reduction in volume in 2001 led to the company making a £9,000 loss in that year. It is hoped that the company will be sold in its entirety and BRI reports several serious bids. Assets include the building and some state of the art machinery including a Lisec line and a Tamglass furnace.

Contact Gary Pettit at BRI in Northampton (01604 754352).

• Unit Two fell foul of Pikington earlier this year over trademark infringement and passing off. Pilkington was awarded damages and costs in a recent action taken under the UK Trade Mark Act 1994. In the order Unit Two undertook not to infringe the Registered UK Trade Mark number 2,113,173 Cotswold, nor to sell patterned glass under registered trade marks Cotswold, Stippolyte, Arctic and Sycamore, unless that glass is manufactured by Pilkington. Unit Two also consented not to pass off any non-Pilkington glass as being from Pilkington. Further, Unit Two agreed to disclose details of the suppliers of certain non-Pilkington copied glass.

Double Vision at Colorzone

Colorzone, the Status Systems fabricator specialising in colour laminated flat pack and ready made windows and doors, is starting the year with an £80,000 expansion plan that will effectively double production rates in line with the company's two year growth projections.

The investment includes new machinery, additional manufacturing and warehousing, and an increase in the variety of stock available to give customers more choice and flexibility. Colorzone, who supplies coloured products to both Status and nonStatus fabricators, is looking to bring into stock olive green on white, rosewood on white, and Jacobean brown and cream on white.

Dave Fox, Colorzone director

'Traditionally the coloured market has been highly specialised. Growing awareness however of the variety of colours and finishes available is putting pressure on demand not just for the commercial installers, but also in the retail market,' said Colorzone director Dave Fox. 'We are experiencing a growing dependence on our company as a key supplier for many specialised items, and this is giving us the necessary solid grounding and commercial impetus to put these expansion plans into place.'

Colorzone already stocks a good range of classic colours which can be made available to fabricators and installers either as bar lengths or in flat packs in as little as ten days, or pre-fabricated in three weeks. These colours include Forest Green, Cherry Red, Burgundy, French Blue, Navy Blue, Black, Olive Green and Tudor Oak.

'Ultimately we want to quell the notion that colours are difficult to obtain,' continued Dave Fox. 'It comes down to availability of stock - the market demands a faster turnaround and more choice. It is vital for us as a specialist supplier to provide this. More warehousing, including 25 extra stillage space, means that our customer base should have spot on access to a range of colours in any format they need, within reasonable lead times.'

Contact: Status Systems
Tel: 01457 875731
Fax: 01457 875651
Email: info@status-systems.co.uk
Web: www.status-systems.co.uk

DOE Adjusts ENERGY STAR Criteria

The US Department of Energy (DOE) has announced that the solar heat gain coefficient (SHGC) criteria for all ENERGY STAR® windows sold in the central region of the United States would be lowered from 0.55 to 0.40, effective January 1, 2002. However, upon further review, the DOE delayed the change until April 1, 2002, after which all new ENERGY STAR products must conform to the revised criteria. This is further evidence of a worldwide shift towards higher energy ratings for windows following the Kyoto Agreement

The DOE cited the following as the reasons for the delay:

To allow more time for partners to incorporate the necessary changes into their manufacturing, marketing and sales activities;

To review additional information about the energy savings implications of the new criteria; and

To re-evaluate the energy analysis in support of the new criteria, which was found to have a mathematical error.

The DOE issued the announcement on December 21, 2001, via a letter sent by Richard H. Karney, P.E., acting manager of the ENERGY STAR program.

Officials at Toledo, Ohio-based Pilkington North America say they are pleased with the DOE’s decision to delay the implementation of the new ENERGY STAR criteria for windows in order to further review the changes that are being made in this program. 'Pilkington was just one of many in the fenestration industry who requested that the Department of Energy re-evaluate its decision to lower the SHGC for ENERGY STAR windows in the central region of the United States,' said Paul Gore, business segment leader for building products. 'Upon review and additional information, we’re confident that the DOE will recognize the need to raise the SHGC criteria in the central region to at least 0.55.'

Pilkington says it believes a high SHGC is favorable for homeowners in the northern and central regions of the United States, and for that reason, hopes the DOE might reconsider its decision to lower the SHGC requirement. 'Windows with a relatively high SHGC allow the sun’s free solar heat to enter the home, reducing both heating needs and utility costs,'Gore added.

REGENCY GLASS INTRODUCES HANIC SOFTWARE

Lancashire based Regency Glass is introducing the full range of software products from German software specialist HANIC. According to Horst K Mertes, Export Director, this proves how powerful and state-of-the art the products are and how they conform to the UK's glass market requirements. 'We are very proud to have Regency Glass as a new customer in our portfolio', Horst states , 'the company is very successful and well known for their future and technology oriented mind'.

The installation has started and some modules are already in live operation. Regency Glass will implement a complete integrated ORACLE database oriented solution covering OPTIPLUS complete management system, OPTIFER production scheduling and control, OPTICAP capacity planning, optimisation, CAD/CAM, monitoring systems and complete integrated bar-coding.

John Hannaford, IT Manager for Regency Glass comments:
'HANIC Software for Glass was chosen by Regency Glass because of its demonstrated flexibility and functionality. Installation of the software has been made easier by the fact that we do not have to change our current manufacturing methods to accommodate it. We believe that the flexibility of the software will allow us to adapt our manufacturing methods for the production of soft coats, gas filled units etc. for compliance with Document L due to its various manufacturing strategies'.

Click here for more on Hanic.

The British Group at EuroShop 2002

Over 40 British manufacturers will attend next week’s EuroShop 2002 in Düsseldorf for the world’s largest shopfitting, display and exhibition systems event under the umbrella of the Shop and Display Equipment Association and with the support of Trade Partners UK.

The Group will be spread throughout 10 halls with 20 companies showing at this event for the first time.

Commenting on the response to his association’s initiative in organising the British Group, SDEA Director, Lawrence Cutler, said 'The British shopfitting and display market continues to thrive, driven on by a buoyant home market and a well developed flair for design and innovation, but we must not forget there is a huge market beyond our shores. These companies are determined to develop their businesses overseas and EuroShop is the natural focus for their efforts, where the leading players from around the world show the latest developments in their field.'

SDEA is officially launching its new logo at EuroShop to celebrate 55 years promoting retail display in the UK. It is the first completely new design for over 25 years and marks recent developments which have seen the organisation double in size in the last five years.

EuroShop is open for five days from Saturday 23rd until Wednesday 27th February 2002 at the Düsseldorf Fair Grounds in Germany. Further information on EuroShop 2002 is available from the organisers, Messe Düsseldorf at www.euroshop.de or 0049 211 45 60 01

Airtightness in commercial buildings – new regulations

New regulations (Approved Document L2 of the Building Regulations) that come into effect in April 2002 set out airtightness standards for commercial and industrial buildings.

On completion, buildings with a gross floor area of 1,000 square metres or more must be tested. Those failing to meet the new standards will have to undergo remedial treatment and further testing until they achieve compliance.

Building designers and contractors, and facilities managers and building owners need to know what is required under the new regulations.

A free guide Achieving airtightness provides this information in a form designed to provide a quick understanding of what is required, when and by whom. Sections include:

* a brief explanation of what air leakage is
* essential steps to achieving airtightness
* best practice air leakage standards by building type
* airtightness terminology
* sources of additional information.

The guide is available free of charge from BRE, 01923 664300, e-mail cowlinf@bre.co.uk

Iran to become a major glass producer?

Managing Director of a glass industries production union Mohammad-Reza Rajabi has stated that Iran can emerge as major exporter of glass in the Middle East. Rajabi said that glass production in Iran is not currency intensive and given the abundant raw materials for its production, cheap labor and energy resources and low prices of the final product, export of the commodity should be supported.

He said Iran exported about 9.8 million square meters of glass, worth dlrs 9.5 million in the year ending March 2001, indicating 438 percent growth compared to the figure for the same period the year before. The official said Iraq, Jordan, Afghanistan and Kazakhstan are the markets to which Iran's glass products can be exported. He said presently there are four major glass making units
operating in the country. He put the domestic demand for unprocessed glass at 330,000 tons a year and said the four glass production plants together produced 430,000 tons of glass.

Rajabi said a major glass production plant with the capacity of producing 120,000 tons will become operatonal next year. He said over the past five years about $200 million has been invested in the glass industry.

AFG Introduces Self-cleaning Glass

AFG Industries, Inc. has introduced a 'self-cleaning' glass. Radiance Ti, the latest addition to the company’s Comfort Ti family of products, uses ultraviolet energy to break down dirt and other particles, and sheeting properties to rinse the glass clean.

‘Introduction of this product gives our customers the self-cleaning features they want in a product that’s also energy efficient and good for their bottom line,’ states D. Roger Kennedy, president and chief executive officer of AFG Industries.

‘Radiance Ti allows our customers to maintain their Energy Star programs while adding self-cleaning features to their windows,’ he adds. Available for sale in the first quarter, for both the commercial and residential markets, the product is expected to begin being installed by early spring, according to the company.

Saint-Gobain announces 2001 results

Excluding capital gains, net income of the Saint-Gobain Group for 2001 is estimated at EUR 1,057 million, up 3% compared with 2000. Earnings per share (EPS) rose 3% to EUR 12.40 from EUR 12.04 in 2000, based on the 85,258,628 shares outstanding at December 31, 2001.

This growth is on a par with what was achieved in the first half and in line with the objective set by the Group on October 30, 2001 (growth of 1 to 5% in net income excluding capital gains). It reflects the ability of the Group as a whole to continue to develop despite a more difficult environment, especially in the last four months of the year, following the events of September 11th.

Consolidated net income is estimated at EUR 1,137 million. This is 25% below the figure for 2000, due to lower capital gains in 2001. Earnings per share (EPS) amounted to EUR 13.34, down 25.1% from EUR 17.80 in 2000, based on the 85,258,628 shares outstanding at December 31, 2001.
The Group's consolidated financial statements for 2000 included the results of Essilor, which was fully consolidated up to June 30, 2000, then accounted for by the equity method up to November 15, 2000, when the Group sold its entire interest in this company. For purposes of comparability, the Group’s consolidated financial statements for 2000 are also presented with Essilor accounted for by the equity method, and the comments that follow are based on this presentation.

The Group's performance in 2001, compared to a year of strong growth in 2000, reflects the Saint-Gobain Group's resilience in a markedly more difficult economic environment, particularly in the United States. It is attributable to the Group’s more balanced operations mix, added to the ongoing profitability-boosting efforts pursued in each of the business sectors.

The Glass Sector posted the strongest performance within the Group in 2001. Its sales and earnings were again bolstered by higher prices across all business lines and sustained demand in Flat Glass and Containers.

The High-Performance Materials Sector, which had already seen a dip in sales and profitability in the first half due to the downturn in the global electronics market, was further affected in the second half due to the gradual slowdown in industrial activity and investment in both the United States and Europe, particularly after the events of September 11, without any recovery in electronics.

The Housing Products Sector posted higher operating income in all three divisions. Building Materials Distribution continued to develop through both organic growth and bolt-on acquisitions, and it began to benefit from synergies. Its operating income rose strongly, bringing operating margin to 4.9%, against 4.5% in 2000 (pro forma accounts including Raab Karcher and Meyer for the full year). The Pipe Division achieved profitability gains thanks to the cost-reduction drive undertaken in the final months of 2000. Following a dip in sales in the first half, the performance of the Building Materials Division was boosted in the second half by the industrial rationalization efforts it had carried out and by a healthy U.S. construction market.

Group sales were up 9.2%. Based on a comparable Group structure, sales rose 1.1% in euros and 1.6% in local currencies. This slight rise was mainly attributable to higher sales prices (up 3.1% overall) in all Group divisions. Sales volumes however, which had already declined in the first half, contracted further in the second, essentially due to the general economic slowdown in both North America and Europe following the events of September 11th.

Sales in France accounted for 28.9% of the total, with other European countries contributing 41.1%, North America 22.8% and other countries 7.2%.

Operating income rose by 4.4%, and 3.8% on a comparable structure and exchange rate basis. Operating margin was 8.8%, compared to 9.2% in 2000. The change was wholly due to the increased weight of the Distribution Division. Excluding Building Materials Distribution, operating margin was unchanged at 10.6%.

In line with first-half trends and despite a much more challenging economic environment in the second half, margins grew in France and other European countries, but contracted in North America due to the slowdown in markets tied to capital expenditure and industrial equipment. Margins held firm in Latin America and Asia, despite the devaluation of the Brazilian real (-19.7% on average compared to 2000).

Income before profit on sale of non-current assets and taxes rose 8.1%, driven by higher operating income and a reduction in non-operating expenses that fell to EUR 123 million from EUR 157 million in 2000.

Net interest and other financial charges remained almost unchanged from 2000, as gains from disposals and lower interest rates offset, over the full year, the impact of the acquisitions carried out in 2000.

Profit on sales of non-current assets amounted to EUR 89 million. This mainly concerned capital gains on the disposal of the Group’s entire stake in BNP Paribas, less capital losses of EUR 87 million recorded by the Lapeyre Group in 2001, mainly as a result of its refocusing on sales to private individuals and craftsmen. Capital gains were considerably lower than in 2000, when the Group had sold 4 million Vivendi shares and its entire stake in Essilor.

The Group’s share in net results of equity investees amounted to EUR 7 million, against EUR 103 million in 2000. This sharp decrease was mainly due to the sale in November 2000 of the Group’s interest in Essilor and, on the other hand, to the full consolidation of certain subsidiaries.
Minority interests decreased significantly compared to 2000, to EUR 40 million from EUR 77 million, as a result of the purchase by Compagnie de Saint-Gobain of the minority interests in Saint-Gobain Cristalería and certain Brazilian subsidiaries, at the end of first-half 2001.

Net income amounted to EUR 1,137 million, down 25% in relation to 2000. Earnings per share (EPS) amounted to EUR 13.34, down 25.1% from EUR 17.80 in 2000, based on the 85,258,628 shares outstanding at December 31, 2001. In line with the commitments made by the Group, new shares issued in the course of the year (in particular those issued under the Group Savings Plan) were offset at the end of the year by the cancellation of an equivalent number of shares. Total capital stock at December 31, 2001 was therefore practically unchanged in relation to December 31, 2000 (85,213,263 shares).

Excluding profit on sales of non-current assets, net income came to EUR 1,057 million, 3% higher than the EUR 1,026 million recorded in 2000. Earnings per share (EPS) rose 3% to EUR 12.40 from EUR 12.04 in 2000, based on the 85,258,628 shares outstanding at December 31, 2001.

Cash flow from operations expanded by 7.7% to EUR 2,725 million. Excluding the EUR 33 million in tax on profit on sales of non-current assets, cash flow from operations stood at EUR 2,758 million, an increase of 4.7% over the EUR 2,634 million for 2000.

Capital expenditure on plant and equipment came to EUR 1,430 million, down 12.7% from the EUR 1,638 million invested in 2000, and representing 4.7% of sales versus 5.9% of sales in 2000.

Free cash flow (cash flow minus capital expenditure on plant and equipment) amounted to EUR 1,295 million, up from EUR 892 million in 2000. Excluding the EUR 33 million in tax on profit on sales of non-current assets, cash flow from operations stood at EUR 1,328 million, up 33.3% on the EUR 996 million recorded in 2000.

Expenditure on securities amounted to _EUR 848 million, including EUR_ 343 million for the buyback of minority interests in Saint-Gobain Cristalería and in the Group’s Brazilian subsidiaries.

Net debt at December 31, 2001 stood at EUR 7.8 billion, down 5.1% compared with the amount at December 31, 2000 and representing approximately 61% of shareholders’ equity, down from 67% at June 30, 2001.Outlook: The economic outlook for 2002 is particularly uncertain at this time and economists’ forecasts vary widely. Based on a scenario of recovery, including in particular a turnaround of the U.S. economy beginning at the end of the first half of 2002, the Saint-Gobain Group has set as its objective growth of 0 to 4% in net income excluding capital gains.