Company History - 2000 to date
Pilkington and the German glass processor Interpane International Glas announced in January that they were forming a joint venture in France to construct the world's first integrated float glass manufacturing, laminating and coating plant. The new plant will be built in Freyming-Merlebach in Lorraine.
In March Pilkington plc acquired the Polish Government's 18.6% shareholding in Pilkington Sandoglass for PLN 54.8 million (£8.4 million) in cash. Pilkington Sandoglass owns and operates the first float glass plant to be constructed in Poland, which began production in June 1995. As a result of the acquisition, Pilkington's shareholding in Pilkington Sandoglass has rose to 75%.
Following the statement made at the Group's interim results, on 28 October 1999, Pilkington announced on 13 March that it had completed its fundamental review of Pilkington Libbey-Owens-Ford, its principal US operating company, and was already well into the implementation phase of a step change programme expected to deliver cost reductions and efficiency improvements of £80 million per annum within the following three years. The cost of delivering this enhanced programme had been increased from the previously announced £48 million to £68 million, of which £41 million will be cash costs and £27 million asset write downs.
Later in the month Pilkington and Glaverbel Group started up their new Spanish float glass plant ahead of schedule at Sagunto, near Valencia. The plant, financed by Glaverbel, was built by Pilkington in 16 months, using the company's float glass technology. Under an agreement between the two companies, production will be shared, with 60 per cent going to Glaverbel and 40 per cent to Pilkington. In return, Pilkington also undertook to supply Glaverbel with equivalent quantities in the north of Europe, where Glaverbel has no float plant.
Pilkington announced the sale of the largest part of its Technical Glass Products business to a management consortium backed by financial institutions. The consideration of DM159 million (£50 million) was equivalent to the book value of the net assets sold.
In April Pilkington said it was to expand its production of advanced energy-saving glass in Sweden to meet fast-growing market demand. The company announced it would invest £16m to replace existing glass coating facilities with both a new and an upgraded plant, alongside its float glass plant at Halmstad. The operation will primarily serve Nordic markets with low-emissivity and solar control products. At the end of the month the company announced plans to consolidate its Midlands automotive glass processing into one manufacturing site at Kings Norton, with the closure of its assembly operation at Coventry.
Pilkington announced in May that it was to cooperate with the Belgian Glaverbel group in the construction of a £16m glass coating line in the Czech Republic to meet the growing demand for energy-saving glass in the Czech and Polish building products market. The production line, which will have a capacity of over 5 million m2 a year, was due on stream in the last quarter of 2000.
The Board of Pilkington plc announced the appointment of Stuart Chambers as an Executive Director of the company with effect from Monday, 22 January 2001.
In February, Pilkington announced the development of Pilkington Activ™ - glass with a self-cleaning action heralding a major innovation in the largest sector of the glass industry.
On March 20th Pilkington announced that it had reached agreement to construct a 180,000 tonnes per annum float glass plant on behalf of Ghazvin Glass Company, the largest glass producer in Iran. Pilkington would take a major equity interest in Ghazvin Glass Company such that, with the current majority shareholder, Pilkington would jointly control the business. On the same day the Group issued a trading ahead of its announcement of the preliminary results for the year ended 31 March 2001, which is scheduled for 30 May 2001.
On 9 April the company announced the closure of its Micronics operation in Deeside, North Wales which processed thin float glass for electronic applications. It was announced that Pilkington Micronics Ltd would stop processing glass by 31st May 2001 and that the Deeside factory would close shortly afterwards.
On 30 May Pilkington announced Group results for the year to 31 March 2001. The company was able to reveal a third consecutive year of profit growth – profit before exceptional items and taxation Ј216 million, up 23 per cent.
In July Kevin Sanderson, the Pilkington research scientist who led the team which pioneered the development of Pilkington Activ™ self-cleaning glass, won the prestigious Worshipful Company of Glass Sellers' 'Award of Excellence' for 2001. Addressing the Pilkington AGM on 24 July, the Chairman, reported to shareholders that the Group's first quarter had been the best first quarter for several years.
On 10 September Pilkington plc and the German glass processor Interpane International Glas started up their new French float glass plant at Freyming-Merlebach, in Lorraine near the German border.
It was announced on 4th October that the Nippon Sheet Glass Co. Ltd. ("NSG") that it had completed the purchase of 130 million shares in Pilkington plc, bringing its total shareholding to 20.6% of Pilkington's issued share capital. The Group's Interim Results, released on 25 October, included the best first half year performance for a decade, with turnover at £1.47 billion, up 8%, and profit before goodwill amortisation, exceptional items and taxation at Ј120 million, up 14%. One the same day, the company announced the appointment of Iain Lough to the Board as Group Finance Director with effect from 1 January 2002 to succeed Andrew Robb in this role.
In November 2001, Pilkington announced that it was to close one of it three automotive glass production lines at its Eccleston plant in St Helens, Merseyside.
Early in the year, Pilkington announced that its revolutionary new dual-action self-cleaning glass, Pilkington Activ™, was available in Austria, Benelux, Germany, Ireland and Switzerland. In early March it went on to be named as one of just two "Best of Show" products featured in the popular US TV programme, "Home & Garden", about the 2002 International Builders' Show.
Also in March the Pilkington Group's website, www.pilkington.com took on a new look with added functionality. For this first time the home page linked users to over 70 countries in 25 languages - and direct online ordering was made available in selected markets.
In April, Paolo Scaroni, chief executive, announced that for the fifth year in a row, Pilkington would report improved annual results for the year to 31 March 2002. This performance was despite the deterioration that had been experienced in Pilkington's major markets in the second half of the financial year, where trading conditions were as bad as the Group has faced for several years.
It was announced on 17 April that Pilkington Aerospace, a wholly owned subsidiary of Pilkington plc, has been selected by Saab of Sweden to supply the advanced transparency system for the cockpit of the new Saab Gripen JAS 39 jet fighter.
In late April, the new revised Pilkington plc website received a major industry award for "best practice" in investor relations. Pilkington won the 'Most Improved IR Website' category at the 2002 Annual Investor Relations Website Awards held in London. The Award, sponsored by the Department of Trade and Industry (DTI) attracted more than 300 entries from leading UK firms and the presentation was made by the DTI Minister of State, Alan Johnson MP, to Pilkington Head of Corporate Affairs, David Roycroft.
On 13 May the Italian Treasury Ministry announced that it is proposing to appoint Paolo Scaroni to the Board of Enel, Italy's largest integrated electricity group. The following day the Pilkington board announced its intention to appoint Stuart Chambers, Pilkington executive director and president of the worldwide Building Products business line, as group chief executive. It also announced Pilkington's intention to appoint Paolo Scaroni as non-executive deputy chairman of Pilkington plc.
On 2 August Pilkington North America announced the release of an exciting new translucent float glass product: Pilkington Satin™ Translucent Float Glass. Pilkington Satin™ Translucent Float Glass has a unique translucent, frosted appearance that allows for privacy without sacrificing light transmittance.
On 20 September Pilkington announced the appointment of Oscar Boronat as managing director of its European Primary Products division, the largest operating unit within the Group. Oscar, who until then had run the Group's businesses in Brazil, succeeded Stuart Chambers, after his appointment as group chief executive in May.
On 31 October the overall winner of the European Glasshouse competition, created by Pilkington in association with 'Architecture Today' was announced during a presentation ceremony held in Düsseldorf. Architectural students Garcia Píriz and Javier Moreno Del Ojo from Spain were presented with a trophy and prize of Euro 10,000 by Pilkington chief executive, Stuart Chambers, with Julie Houlberg Michaelsen based in Finland being commended in second place.
It was announced on the 4 November that Pilkington had acquired the Finnish glass process and merchanting company, KP-Lasi. The final purchase of 100 per cent of the shares of the company was completed in a transaction agreed by both parties in Helsinki. KP Lasi was quickly incorporated into Pilkington's existing European P&M (Processing and Merchanting) business operations with the new name Pilkington Nivala.
On 10 December the Pilkington board announced that Paolo Scaroni would be stepping down as non-executive deputy chairman. Following his appointment to the board of Alliance UniChem Plc on 10 December 2002. Mr Scaroni had told the board that due to increased time commitments he would no longer be able to fulfil the role. Paying tribute to Mr. Scaroni, Pilkington chairman, Sir Nigel Rudd, said: "Paolo has made a significant contribution to the turn-around of Pilkington over the last six years. Pilkington today is a stronger, leaner, fitter business better able to compete as a world leader in glass."
Pilkington Architectural, and its structural glazing system, Pilkington Planar™, helping with the impressive £55m transformation of Manchester's Piccadilly Station which went through a major refurbishment at the beginning of January.
Although Pilkington did not have its own stand at the 2003 Glassex exhibition held at the National Exhibition Centre in March, visitors nevertheless enjoyed a chance to see Pilkington Activ™, the world's first dual action self-cleaning glass and the company's latest major innovation. It was displayed on the stand of conservatory roof systems manufacturer Wendland during the exhibition.
On the 27th March Pilkington issued its usual trading statement ahead of the final results for the year ending 31 March 2003. Group Chief Executive, Stuart Chambers, said that trading conditions remained challenging in most of the company's major markets. Nevertheless, Pilkington was now as robust as any of its competitors and was much more resilient to its changing markets. Trading had been in line with expectations and headline profitability was set to remain at consistent level.
On the 30th April, Pilkington Automotive announced that, after a number of years of difficult trading conditions, its Taita, New Zealand automotive glass plant would close in September.
The Board of Pilkington plc announced on 29th May the appointment of Mme. Christine Morin-Postel as a Non-Executive Director with effect from 1st August 2003.
On the 31st May the Group published it full year results for 2002/2003 with Operating Profits of £217 million (2002 Ј238 million). Cash inflow before dividends was £138 million (2002 £5 million outflow) and was the strongest cash performance at Pilkington for a decade. Commenting on the results, Chairman, Sir Nigel Rudd, said "These results, achieved in some of the toughest trading conditions for many years, demonstrate the Group's resilience and provide further evidence of the transformation of Pilkington into one of the most efficient, as well as the most innovative, glass producers in the world".
During the year Pilkington introduced a new version of its high performance mirror that protects people as well as the environment. In addition to the environmentally friendly process by which the mirror is produced, Pilkington Optimirror™ Protect has a special safety film backing that guards against possible injury resulting from accidental breakage. This makes it the ideal choice for all kinds of applications anywhere in the home.
By June 2003, Pilkington Activ™, the world's first dual-action self-cleaning glass, had been successfully rolled-out to consumers throughout Europe in the largest new product launch programme ever staged by Pilkington. The launch of the new product was backed in each country with a huge advertising campaign and intensive public relations activity.
Later in June the UK's leading independent consumer magazine Which? tested the claims made for Pilkington Activ™ and it passed with flying colours. It tested the product against a standard pane of glass over a period of two months, during which time it was exposed to the elements and subjected to sprays of dirty water. At the end of the period, Pilkington Activ™ was found to be noticeably cleaner than the standard pane.
In the same month Pilkington's corporate web site, www.pilkington.com was judged 'Highly Commended' in the category 'Best Investor Relations Web Site' for a non-FTSE 100 company, at the IR Magazine 2003 Awards, held in London.
In July Pilkington announced that it had entered into an agreement for the sale of its Pilkington Aerospace subsidiary to GKN plc for £42 million.
In early September the UK window, door and conservatory giant, Everest Ltd, used the massive Ideal Home Exhibition at Earl's Court, London to feature what it described as perhaps the most ingenious concept product to reach the UK in decades: Pilkington Activ™ self-cleaning glass.
On the 4th September, as part of its constant drive to improve its comprehensive range of products and services for its customers, Pilkington Processing and Merchanting UK invested £3 million into relocating its Bristol branch to a brand new manufacturing and distributing centre at Imperial Park, Hartcliffe, Bristol.
On the 12th September Pilkington made another major announcement when it announced that the Pilkington Group and the Emerging Markets Partnership (EMP), principal adviser to the AIG Emerging Europe Infrastructure Fund, had formed a 50:50 joint venture. It was to construct and operate a float glass plant in the Moscow region of Russia. It was to be financed by £21 million of equity each from Pilkington and EMP, and from project loans.
On the 5th November Pilkington announced its Interim Results for the six months to 30th September 2003. The key features were:
- Robust results despite tough trading conditions
- Operating profit including joint ventures and associates £114 million – up 4 per cent on the first half of last year
- Profit before goodwill amortisation, exceptional items and taxation £84 million – up 11 per cent
- Earnings per share excluding exceptional items up from 2.7 pence to 3.8 pence, basic earnings per share up from 2.8 pence to 3.1 pence
- Interim dividend maintained at 1.75 pence per share
- Free cash flow, before the benefit of disposals improved from £47 million to £89 million
- Borrowings reduced by 10 per cent in six months to £775 million
Commenting on the results, Pilkington Chairman, Sir Nigel Rudd, said:
"The Group's results in the first six months of the year confirm the expectations we set out in our previous statements, reflecting continued difficult trading conditions in most of our markets. Despite the market background and a reduction in operating profits of our joint ventures and associates, Group profit before amortisation of goodwill, exceptional items and taxation was up 11 per cent on the first half of 2002, underpinned by the efficiency improvements resulting from the extensive restructuring of recent years. In addition, our recent emphasis on free cash flow generation has enabled management to deliver a strong cash performance, enabling Pilkington to pay down debt by 10 per cent, in line with our stated objective of strengthening the financial position of the Group."
In January, with growing concern over terrorist activity on high-profile buildings within the major cities of the world, Pilkington Architectural announced that it had extended the flexibility of its well-established structural glazing system Pilkington Planar™ with the introduction of a new Blast Resistant Pilkington Planar™. The new product offers designers a solution to the problems associated with high velocity glass particles and it attracted wide attention from the architectural press.
Also in January, due to continued difficult trading conditions in the building markets, Pilkington Deutschland AG adjusted its coating activities at its Gelsenkirchen plant to avoid further losses. As a result, the old coating line, the production of toughened glass and the coating lab were all closed down. Talks were held with the members of the works council to find ways to reduce the impact of the closures on employees.
As part of the Group's undertaking to develop products suited to the changing demands of building design and performance, Pilkington announced in February that it had developed a new 23mm Pilkington Pyrostop™ fire resistant glass. Successfully tested up to 60 minutes integrity and insulation, the new product allowed far larger panels of glass to be constructed whilst still retaining the fire resistant properties of the well-established Pilkington Pyrostop™ brand.
In March, Pilkington announced its firm support for the prestigious G 04 Awards for the Glass & Glazing Industry (GGI) by announcing its sponsorship of the major event, which took place in June. It was the first such industry scheme the company had sponsored for several years, and backed the event with Pilkington Activ™ self cleaning glass, the new product which most clearly defines the Group's commitment to innovation and continued product quality.
In accordance with its established policy, at the end of March Pilkington issued a trading up-date ahead of its Annual Results for the period to 31 March 2004. As the company had indicated beforehand, trading conditions had been challenging in most major markets but in spite of this, the transformation in manufacturing and operational efficiency accomplished over recent years meant that results for the 2003/04 financial year were going to be line with expectations.
Also at the end of March, Pilkington announced that it had re-organised in British building products operations into a company called Pilkington Building Products – UK. The new organisation was designed to build on two highly successful businesses; volume glass manufacturing through Pilkington Primary Products and downstream branches, previously known as Pilkington Processing and Merchanting UK.
In April, the company announced that a new gallery at the Fitzwilliam Museum, the renowned art collection at the University of Cambridge, was to feature Pilkington glass units fitted with integral blinds. Supplied by Pilkington Plyglass, the new gallery was part of an extensive expansion programme to improve facilities at the renowned museum.
In early May Pilkington Automotive, together with other leading glazing manufacturers, launched an industry 'hallmark' scheme to tell motorists what is in their car glass. The scheme was the first of its kind for vehicle glazing, telling consumers what is special about their vehicle's glass. The features include solar control, acoustic (noise reducing) and heated glazing as well glass that contains integrated antennae for radio and mobile phones. The recent development of laminated side glazing, which offer significantly higher intruder resistance than regular toughened glass, gives increased protection to motorists from road rage or theft as well as helping to keep them safe in an accident.
In May the company published a strong set of annual results with operating profit up from £175 million to £179 million. The chairman, Sir Nigel Rudd, said it showed Pilkington was achieving it management's objectives and that its focus on keeping down costs had enabled the company to report substantially maintained profits despite challenging conditions in some of its biggest markets.
The scientific team that developed Pilkington Activ™, the world's first, dual action, self-cleaning glass, in June attended a top engineering awards dinner hosted by HRH The Duke of Edinburgh, after being selected as one of four finalists in the prestigious MacRobert Awards. Presented each year by the Royal Academy of Engineering, the awards are designed to recognise the successful development of innovative ideas in engineering and seek to demonstrate the importance of engineering and the role of engineers and scientists in contributing to national prosperity and international prestige.
In early July, Pilkington, and its joint venture partners AIG Emerging Europe Infrastructure Fund L.P., held a special signing ceremony in the Ramenskoye District of the Moscow Region to mark the laying of the foundation stone of what will be Russia's most modern float glass plant. As part of the ceremony, a memorial 'time capsule' was buried in the foundations of the glass plant. The plant is scheduled to start production in 2005.
During the summer, a beautiful octagonal garden pavilion, the centrepiece of a stunning exhibit created by bespoke conservatory specialists Marston & Langinger Ltd and featuring Pilkington Activ™ self-cleaning glass, so enchanted the judges at the Royal Horticultural Society Chelsea Flower Show that the display was awarded the special Sundries Trophy for Excellence of Presentation. The award is the highest accolade granted for trade exhibits at the show and has been won by Marston & Langinger for the third year running.
At the end of July the UK Government's Consultation Document on changes to Building Regulations Part L were issued. It confirmed that the incredibly popular Pilkington K Glass™ would continue to be the ideal method to meet existing and future environmental legislation, whilst at the same time retaining its status as the nation's favourite glass.
In August, Pilkington won another award when the Group's Automotive business line became one of the first companies in the automotive industry to achieve a corporate certificate for environmental management. Rather than recognising individual facilities, the single DIN EN ISO 14001 certificate covered 29 of Pilkington's sites worldwide. It followed a co-ordinated global initiative by the Group to implement a single environmental management strategy across all its facilities in Europe, North and South America.
In August and September Pilkington launched two additions to the Pilkington Activ™ family. First, a high performance solar control version of Pilkington Activ™, the world's first self-cleaning glass. Pilkington Activ Suncool™ HP 70/40 has a wide range of commercial glazing applications, such as glazed roofs and covered walkways. It offers exceptional performance that combines self-cleaning with the benefits of solar control – ideal for hot climates.
In September the partial re-glazing of a Pilkington employee training centre at Pilkington Plyglass in Derbyshire became the perfect opportunity to demonstrate the benefits of another new product - Pilkington Activ Optilam™ Brown self-cleaning glass. Pilkington Activ Optilam™ Brown is a safety glass product with a tinted interlayer and is designed primarily for commercial applications. The glazed areas of the training centre were fitted with the new glass, providing improved safety and security measures as well as reducing its cleaning and maintenance costs.
Also in September the Group was proud to launch the latest addition to its Pilkington Planar™ structural glazing range – Pilkington Planar™ Triple. Pilkington Planar™ Triple signified a significant move forward in terms of improved thermal insulation and design flexibility and was warmly greeted by the architectural press.
The entire east wall of the William J Clinton Presidential Centre at Little Rock, Arkansas, USA, which was opened by the former US president in November, features Pilkington Planar™. Supplied through W&W Glass Systems of New York, the Planar façade measured 18,000 sq ft and was made up of two plies of Pilkington Optiwhite™ 10mm, treated with a special laminate and a printed film.
At the end of September a group of 20 city analysts toured the Pilkington Sandomierz plant in Poland. The visit was arranged by Pilkington to underline the potential of the developing markets in Eastern Europe and to demonstrate the Group's ability to identify the opportunities and to establish successful and cost-effective operations in developing regions.
Towards the end of the year Pilkington announced that its Building Products division was to introduce an energy surcharge on its glass products sold in Europe. The surcharge was as a result of increasing energy costs and came into effect on 1 November 2004. The surcharge level was not set by Pilkington but was directly linked to the price of a barrel of Brent crude oil sold at London's International Petroleum Exchange (IPE).
At the end of the year Pilkington scooped the 'Communication of Corporate Strategy' award at the 2004 PricewaterhouseCoopers 'Building Public Trust' Awards. The awards covered all UK FTSE 100 and 250 companies and Pilkington beat off stiff competition from BP plc and WPP plc, who were also shortlisted for the accolade.
In January, Pilkington announced that a specialist glazing firm from Nottingham had become the only company in Nottinghamshire and Derbyshire to receive a special endorsement from Pilkington. Fred Wilde Glass Co Ltd was the seventh UK Company to be awarded Pilkington Team Partner status, a Europe-wide initiative which aims to select the glazing trade's top performers and work in partnership with these firms to improve performance and service.
In February, Pilkington was able to confirm that both the British Standards Institute (BSI) and the Office of the Deputy Prime Minister (ODPM), which holds the responsibility for Building Regulations in England and Wales, were now acknowledging the growing popularity of self-cleaning glass. The relevant British Standard - BS 8213 Part 1 - was revised in October 2004 to include guidelines on the use of self-cleaning glass. The revisions make it even simpler for architects, specifiers and building control officers to see the benefits of choosing Pilkington Activ™ in accordance with these recommendations. The revised paper now included the wording: 'If it is not possible to provide windows that can be safely cleaned on both sides from within the building, self-cleaning glass should be used in situations where satisfactory cleaning is likely to result.'
On 16 February, Pilkington held a briefing for analysts and investors on its implementation and adoption of International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) and made available financial information on the policies Pilkington will follow, including the impact on the half year results to 30th September 2004 and the opening balance sheet as at 1st April 2004. Later in the month, Pilkington confirmed that European Commission officials had visited a number of Pilkington company locations in Europe on 22 and 23 February, with authorisation to inspect documents, under Article 20(4) of Council Regulation 1/2003, in connection with alleged infringements within the European glass industry of Article 81 of the Treaty of Rome.
On 23 March, in accordance with its established policy, Pilkington issued a trading up-date ahead of the announcement of its results for the period to 31 March 2005, which was scheduled for Thursday, 26 May 2005. Stuart Chambers, Group Chief Executive commented: "Overall, trading remains in line with our expectations, with a good performance in Automotive and Building Products holding up. Together with lower interest costs and an improved profit contribution from joint ventures and associates, this should lead to an increase in pre-tax profits of around 15 per cent. Pilkington remains on track to transition into the third phase of its strategy over the course of the next financial year, when we will begin to invest surplus cash generated into profitable growth opportunities."
On 16 May, Pilkington announced that a proposed sale of Pilkington Special Glass to Phoenix Optical Glass would not proceed, due to the withdrawal of the main funder to Phoenix. Pilkington said it would, therefore, now retain ownership of the company and implement its plans for the business. This meant that notice of redundancy would be issued to 31 employees as a result of the already announced exit from Optical glass manufacture and the lost opportunities Phoenix would have brought.
On 26 May Pilkington announced its results for the year to 31 March 2005. Chairman, Sir Nigel Rudd, commented: "This is another strong set of results from Pilkington. The Group continues to benefit from improvements in operational efficiency and continuous cost reduction programmes. Our continuing focus on cash generation enables us to report a further significant reduction in net debt. Adoption of a progressive dividend policy is an indication of the Board's growing confidence in the capability of the business to generate cash sustainably. Over the course of the next financial year, we expect to begin the transition into "Stage 3" of our "Cash for Growth" strategy, with targeted investments into profitable growth opportunities".
In June, the Board of Pilkington plc announced that Norman Lyle OBE had accepted its invitation to become a Non-Executive Director of the Company and would take up his appointment on 1st August 2005. It also announced that William Harrison would retire as a Non-Executive Director at the conclusion of the Annual General Meeting on 28th July 2005. Mr Harrison had been a Non-Executive director since September 1998.
On 11th July the Gaillefontaine branch of Pilkington France re-opened after a seven-month shutdown caused by a fire in January 2005, which cause extensive damage to the premises. This was followed the next day by an announcement that Pilkington was closing its Rhône-Alpes processing plant based in Saint-Priest.
On 15 July, Pilkington announced that it had entered into an agreement to acquire the US assets of Autostock Distribution, with an asset value of around $US 18 million. Autostock Distribution was a glass distributor with 21 locations in the United States. In addition to distributing automotive replacement glass for all makes and models of domestic and foreign vehicles, it supplied a wide range of automotive aftermarket accessory products. The acquisition completed on 18th July 2005.
At the company's 2005 Annual General Meeting held on 25 July, the Chairman, Sir Nigel Rudd, said that 'Pilkington continues to benefit from improvements in operational efficiency and unremitting cost reduction programmes. Our continuing focus on cash generation enabled the Group to report a further significant reduction in net debt by 31 March. The adoption of a progressive dividend policy is an indication of the Board's growing confidence in the capability of the business to generate cash sustainably. Over the course of this financial year, our priorities are to maintain momentum on our cost reduction programme, started in Stage 1 of our three-stage "Cash for Growth" strategy, to complete the rebuilding of our financial strength, begun in Stage 2, and to begin the transition into Stage 3, with targeted investments into profitable growth opportunities. The Pilkington-constructed fourth float line in Brazil for our South American joint venture was now in full production, following an excellent start-up. A sound base has been established in China as a platform for future growth, with the three Automotive plants now fully integrated into the global Pilkington Automotive business".
In September, Pilkington held a second briefing for analysts and investors on its implementation and adoption of International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS). Later in the month Pilkington issued a routine trading update ahead of its interim results announcement for the period to 30 September 2005. The company announced that profit before tax was expected to be more than 20 per cent above the first half of last year, taking into account the timing of strong first half licensing and engineering receipts. The market background remained challenging, made more so with rising energy costs, however solid progress was being made in Automotive and the Group expected to meet market expectations for the full year.
On 29 September, Pilkington hosted a site visit for analysts and investors at its European Technical Centre at Lathom, Lancashire. The visit entailed presentations by management, with particular reference to the Group's Automotive Products business and a guided tour of relevant parts of the Lathom site.
On 31 October 2005, Pilkington announced that a preliminary approach had been made which might or might not lead to an offer being made for the Company. Nippon Sheet Glass Co., Ltd. ("NSG") subsequently confirmed that it had made the approach. The conditional proposal by NSG was for an offer in cash at 150p per ordinary share inclusive of the interim dividend.
On 3 November, the Board informed NSG that its proposed offer fell materially short of a price which the Board was prepared to recommend. On the same date, Pilkington announced interim results for the six months to 30 September 2005. Chairman, Sir Nigel Rudd, commented that "The Group's results in the first six months of the year are in line with our previous indications, with Group profit before taxation up 22 per cent, despite challenging market conditions and increases in energy costs. Our continued drive for manufacturing efficiencies and cost reductions, together with our emphasis on generating cash from our businesses, combined to produce another improved performance. The Group was well positioned to move forward with its transition to the third phase of its strategy over the course of this financial year, and has already begun to target investments into profitable growth opportunities."
On 16 November Pilkington announced that it had acquired the automotive glazing assets of the Syracuse Glass Company, based in Syracuse, New York on 14th November, 2005. Pilkington said it believed the acquisition would further enhance its ability to serve the automotive glass and accessory needs of its customers in the North American wholesale aftermarket. It said it intended to use the acquisition to enhance its ability to service the industry and grow profitable partnerships with its retail customers.
On 24 November Pilkington announced that it been informed that the Bavarian Supreme Court has issued its decision in the appeal brought by both Pilkington Holding GmbH and certain minority shareholders in that company relating to the valuation of the minority shareholdings.
On 15 December Pilkington said that, following its announcement on 3rd November 2005, that it had received and rejected a preliminary approach from Nippon Sheet Glass Co., Ltd. ("NSG") in relation to a possible offer for the Company in cash at 150p per ordinary share inclusive of the interim dividend, it had subsequently received a verbal proposal from NSG at a level of 155p in cash per share followed by a written proposal at 158p in cash per share (the "Revised Proposal"). The Revised Proposal had been subject to a number of pre-conditions including the completion of financing. The Board of Pilkington had considered the Revised Proposal and had informed NSG that the pre-conditions were unacceptable and the price still fell short of a level which it would be prepared to recommend.
In January Pilkington Building Products – UK updated its popular Specifire CD-ROM. The Specifire CD-ROM is an authoritative source of information detailing the entire Pilkington range of fire-resistant glass and its extensive testing portfolio.
On 1 March it was announced that products from Pilkington had been instrumental in creating an industry first. With the industry adopting Window Energy Ratings (WERs), the British Fenestration Rating Council (BFRC) passed the first ever ‘A’ rated window, an achievement that had not been expected for several years. It was created by Piper Double Glazing using Pilkington K Glass™ and Pilkington Optiwhite™.
On 14 March it was announced that the new Part F of the Building Regulations for Northern Ireland would come into effect in June 2006. It would mean that for the first time low-e glass would effectively be mandatory for all new and replacement windows.
On 20 March, in accordance with its established policy, Pilkington issued a trading up-date ahead of the announcement of its results for the year to 31 March 2006. Stuart Chambers, Group Chief Executive commented: “Trading in Group companies remains in line with our expectations, with a good performance in Automotive and Building Products holding up. Finance costs have reduced, despite rising interest rates, though the post-tax contribution from joint ventures and associates will be substantially lower than the previous year. The Group has continued to generate strong free cash flow through close control of costs and capital expenditure.”
On 31 March Pilkington announced that its customers in Scotland and the North East of England would benefit from a £2.8million investment at Pilkington Cumbernauld with the opening of a purpose-built manufacturing facility at Wardpark Industrial Estate, Cumbernauld. Covering 76,600 sq ft in total, the new plant would be more than twice the size of the old facility and would process and supply the entire range of Pilkington products, including Pilkington Activ™, Pilkington T glass and Pilkington Insulight™ units.
On 19 April the boards of Pilkington plc (“Pilkington”) and Nippon Sheet Glass Co., Ltd (“NSG”) announced that at a Court Meeting and an Extraordinary General Meeting held earlier that day Pilkington Shareholders voted to approve the Scheme to implement the recommended cash Acquisition of Pilkington by NSG UK Enterprises Limited (“NSG UK”), a wholly-owned subsidiary of NSG.
On 16 June the boards of Pilkington plc ("Pilkington") and Nippon Sheet Glass Co., Ltd. ("NSG") announced that the Scheme of Arrangement had been implemented and that, accordingly, Pilkington was now a member of the NSG Group.
Commenting on the Acquisition, Yozo Izuhara, Chairman and CEO of NSG, said: “NSG with Pilkington produces a world leader of scale in the global Flat Glass industry. Employing 36,000 people, the enlarged company will have annual sales of around £4 billion, manufacturing operations in 26 countries and sales in over 130, with ownership or interests in 50 float glass manufacturing lines worldwide and a widened Automotive customer base”.
Stuart Chambers, Group Chief Executive of Pilkington said: “I am excited about Pilkington's future as part of the NSG Group. The new combined company is a global leader in glass. Our joint technological strength, innovation and global reach mean we are well placed to grow profitably and to service and develop our customer base in all major markets worldwide”.
On 4 July Pilkington Building Products - UK, welcomed the UK Government’s announcement that Energy Performance Certificates would be included in Home Information Packs, to give home buyers, movers and sellers “reliable information on the condition and energy efficiency of homes”.
On 7 July Pilkington informed employees and union officials at its Liverpool branch of the Company’s intention to close the site in September 2006, resulting in the loss of 19 jobs. The Company said it would be taking all reasonable steps possible to mitigate the effect of the closure, including seeking alternative employment opportunities and out-placement support.
On 19 September Pilkington Building Products UK announced that the national advertising and promotional campaign that resulted in sales of Pilkington Activ™ multiplying ten-fold in just a year and boosting sales for thousands of installers, had been voted ‘Promotional Campaign of the Year 2006’ in the G06 Awards that had taken place that month. The £2 million ‘Keep up World’ spring campaign had involved extensive TV, newspaper and magazine advertising, coupled with intensive public relations through key consumer media, and use of the Internet with a special web site.
On 2 November Pilkington Group Limited, a member of NSG Group, and Al Hamed Enterprises LLC (Group of Companies), announced the formation of a joint venture company; Pilkington Emirates LLC. The new Company will order a float glass manufacturing line, to be built and operated by Pilkington, with a 550 tonnes per day capacity. A site in the Abu Dhabi Industrial Development Zone has been earmarked with the help of the local authorities. The latest technology will be used in the largely automated plant, which is due to come on stream in late 2008.
On 10 November the Board of Pilkington Group Limited announced the appointment of Mike Powell as Group Finance Director for Pilkington Group Limited, in succession to Iain Lough, who would retire on 31 January 2007. Mike took up the appointment with effect from 1 January 2007.
On 21 November, in conjunction with the Victorian Premier Bracks and Minister Brumby, Pilkington (Australia) Limited, Australia’s largest glass manufacturer, announced a $130 million investment in its Dandenong plant. The upgrade would be the biggest in Pilkington’s 127-year history in Australia, and well over double the investment of more traditional upgrades. It would also be the largest ever investment by Pilkington in a plant upgrade.