Saint-Gobain said on 26 January 2007 that it expected operating profit for the year to increase by 5 to 6% excluding acquisitions or divestments as it confirmed it could sell its packaging activities …
Saint-Gobain said on 26 January 2007 that it expected operating profit for the year to increase by 5 to 6% excluding acquisitions or divestments as it confirmed it could sell its packaging activities to refocus its business. Details on the group“s outlook for profits and dividends, and long-awaited plans to restructure its vast portfolio of activities, boosted shares of the world“s biggest building materials group to an all-time record high of EUR 73.50. “We are ready to sell our packaging activities… We will do it as quickly as possible, but without locking ourselves up in a timeframe… without acting hastily”, Chief Executive Jean-Louis Beffa told analysts at his final annual earnings report. Mr. Beffa, 65, will hand over to Pierre-Andre Chalendar, currently the group“s chief financial officer, in June 2007. Mr. Beffa“s 21-year CEO tenure saw Saint-Gobain divest around 900 companies, make some 1,200 acquisitions and more than treble its sales. The group unveiled forecast-beating 2006 results late on 25 January 2007, showing a net profit excluding capital gains or losses up 32.6% at EUR 1.7 billion and a 29.9% rise in operating income at EUR 3.7 billion. Expecting residential and commercial construction and renovation to remain strong thanks to robust economic growth and low interest rates, Saint-Gobain forecast a “marked” rise in operating profit and double-digit net profit growth in 2007. “Saint-Gobain has reported impressive full-year results, ahead of its guidance… and the group is resolutely optimistic in its guidance”, said analyst Charles-Edouard Boissy at French broker OddoSecurities. “Saint-Gobain posted some good resuts and encouraging trading trends. It also hinted that there is going to be more restructuing in the business going forward, but this is certainly not a total surprise for the market”, a London-based analyst said. Saint-Gobain management gave more detail on plans to divest its packaging division to refocus its business on housing-related activity, a move which analysts have long said would help the company increase its profitability. Mr. Beffa told analysts Saint-Gobain would sell its Desjonqueres perfume and pharmaceuticals bottle business in the next few weeks, at an enterprise value of around EUR 690 million . A Saint-Gobain spokesman declined to comment on a report, published after the analysts meeting on the website of French newspaper La Tribune, that Desjonqueres had been sold to private equity groups Sagard and Cognetas. Mr. Beffa also said Saint-Gobain was likely to increase its payout on 2006 earnings to shareholders by around 25%.