The chief executive of Belgian glass group
Glaverbel, Luc Willame, has expressed optimism for the current financial year, forecasting a resumption of growth in Europe for the second half. Glaverbel`…
The chief executive of Belgian glass group Glaverbel, Luc Willame, has expressed optimism for the current financial year, forecasting a resumption of growth in Europe for the second half. Glaverbel“s challenge is to achieve growth against the background of an unfavourable economic environment. In order to do so while remaining centred on flat glass, Glaverbel will develop niches with great growth potential. Thus, in the motor sector, it has been involved in the development of the “Swatchmobile” and Renault“s new Megane, while it is developing a new, more efficient type of tinted glass. In the construction sector, Glaverbel is hoping double-glazing with low heat loss will become popular; new capacity is being introduced in the Netherlands. Glaverbel can also count on potential for growth existing in Eastern Europe. On one hand, the Czech unit Glavunion can still substantially improve productivity, while on the other the east European market is in a full growth phase both in terms of construction and the motor industry. Finally, when cash flow from the group“s motor division allows, Glaverbel plans to open a new production unit in a European country with a weak currency but a large motor manufacturing presence. Willame said a decision was likely in late 1997 or early 1998. The investment will not be funded by the exercising of the put option held by Glaverbel on its 42% stake in US glass group AFG. It is not ruled out, however, that the put would be used if a potential purchase emerged, but this would have to produce cash flow as substantial as that of the US group and make an even greater contribution to Glaverbel“s profits. Glaverbel has no lack of advantages despite the poor economic situation. It expects turnover to rise from BFr 38.2 billion at the end of 1995 to BFr 39.2 billion at the end of 1996 and BFr 41.1 billion at the end of 1997. Net profits, excluding minorities, should rise substantially from BFr 621 million at end of 1995 to BFr 1.1 billion a year later and BFr 1.66 billion at the end of 1997. Consolidated turnover rose 9.2% to over BFr 38 billion, while consolidated gross operating cashflow advanced 34% to BFr 7 billion. At 18% of turnover, this approached the ratio of 1992. At the end of 1995, it had been 15%, Willame said. Consolidated operating profits doubled in 1995, to BFr 2.9 billion. Current gross profits totalled BFr 1.2 billion, after 1994“s losses of BFr 879 million. The group“s net financial expenses fell to BFr 2.1 billion (from BFr 2.4 billion) as a result of various factors. Own funds were lifted by BFr 5 billion in July, while December saw the sale of the glass bead operations and the buyback of preference shares by AFG. At the end of the year, the group“s debt ratio was less than 1 for the first time since 1991. For 1996, Glaverbel“s geographical diversification and its large investments mean it retains belief in its growth potential. Willame said it expected much of its activities in the Czech Republic. Growth in the motor sector would have to come mainly from Eastern Europe as three floats in Europe would be under repair in 1996, reducing supply and boosting prices. Construction was in a difficult situation; normally, a fall in interest rates meant greater activity, but it was difficult to predict when this would emerge. Overall, however, the company was optimistic, Willame said.