9 April 1998: Saint-Gobain chairman Jean-Louis Beffa, recently announced he was in favour of an “exchange of shares” with his former allies, rather than pure and simple disposals, as reports say that …
9 April 1998: Saint-Gobain chairman Jean-Louis Beffa, recently announced he was in favour of an “exchange of shares” with his former allies, rather than pure and simple disposals, as reports say that Beffa is eager to get rid of his crossholdings. “It is a method that would suit our holdings with Generale des Eaux and Suez-Lyonnaise,” said Beffa. However, the policy can only be implemented once legislation allowing companies to buy back their own shares is introduced. Saint-Gobain has continued to trim its portfolio of shares, since the beginning of the year, at FFr 1.8 billion with net capital gains of FFr 600 million. The group sold the remainder of its stake in Axa-UAP, representing 0.23% of the capital, as well as 0.89% of Compagnie Generale des Eaux (CGE) and 0.48% of Suez-Lyonnaise des Eaux. Saint-Gobain still holds 7.56% of CGE, 3.35% of Suez-Lyonnaise des Eaux and 1.6% of BNP. French glassmaker Saint-Gobain is reportedly targeting a two-digit pre-exceptional rise in 1998 profits, an 8% rise in turnover and a FFr 1 billion (US$ 165 million) increase in cashflow. Chairman Beffa also said that he believed growth in Europe and the United States was strong enough to absorb shocks from the Asian financial crisis. “I don“t share the concerns of those who fear an increase in the impact of the Asian crisis in the second half (of 1998), which Japan and China, the two most important countries, have to a certain extent avoided,” he said. “Economic growth in Europe and the United States seems to me solid enough to absorb these shocks.” He also said that after investment, available cashflow should reach FFr 4 billion, which will allow them to pay the dividend in cash, make some acquisitions and to “repay some of our debt.” As far as the company“s sales forecasts for 1998 are concerned, Beffa said, “Taking into account recent acquisitions, the increase in turnover should reach 8%, of which 2-3% is due changes in company structure, the rest coming essentially from the increase in sales volumes.” 1997 net income was FFr 5.628 billion. After new tax measures, it amounted to FFr 4.3 billion This is, however, a 3.1% improvement on 1996. Group sales were up by 17.2% on a comparable structure basis, mainly due to the consolidation for the whole year of Poliet, consolidated since 1 July 1996. On a comparable structure basis, sales increased by 8.9% in French Francs and 3.2% in local currency. Sales were split as the following: France 38%; Other European countries: 29.1%; America and Asia 32.9%.