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POLYGRAM NET INCOME UP 13 PERCENT IN 1992

 NEW YORK, March 2 /PRNewswire/ -- PolyGram (NYSE: PLG) today announced the following results:
 POLYGRAM
 Netherlands Guilders Summary (NLG millions) Percent
 Years ended Dec. 31 1992 1991 Change
 Net Sales NLG 6,617 NLG 6,326 +5
 Income From Operations 789 735 +7
 Net Income 506 446 +13
 Net Income/Share 2.98 2.62 +13
 U.S. Dollars Summary (US $ millions) Percent
 Years ended Dec. 31 1992 1991 Change
 Net Sales $3,656 $3,495 +5
 Income From Operations 436 406 +7
 Net Income 280 246 +13
 Net Income/Share 1.65 1.45 +13
 Note: For the convenience of the reader, Netherlands Guilder amounts have been converted to US $ at the exchange rate at December 31, 1992, of $1 equals 1.81 NLG.
 Highlights:
 -- 1992 net sales worldwide were up 5 percent over 1991 to 6.6 billion NLG or US $3.65 billion.
 -- Net sales in North America increased by 26 percent over 1991, and now represent 22 percent of PolyGram's worldwide sales versus 18 percent in 1991
 -- Net income and net income per share increased by 13 percent to NLG 506m or US $280 million and NLG 2.98 or US $1.65 respectively
 -- PolyGram is proposing a full year 1992 gross dividend of NLG 0.65 per share, representing an 8 percent increase from its 1991 payout of NLG 0.60 per share
 -- PolyGram had a total of 24 albums selling over one million copies each. The company's hit of the year came from the Mercury label's Billy Ray Cyrus, whose debut album "Some Gave All" sold over 7 million copies worldwide.
 Global record and entertainment group, PolyGram, achieved record results in 1992 -- including a 13 percent increase in profits and its eighth consecutive year of sales growth -- despite severe recession in a number of European markets and the expansion of its start-up film business.
 In the year ended December 31, 1992, PolyGram's net sales were up 5 percent to Netherlands guilders (NLG) 6,617 million from NLG 6,326 million in 1991. Excluding the negative impact of currency fluctuations -- notably the weakening of the US dollar, UK sterling and the Italian lira in the second half of the year -- sales growth was 9 percent during 1992. Income from operations increased by 7 percent to NLG 789 million, reflecting improved operating efficiency particularly in North America where profits grew from NLG 13 million
to NLG 52 million. Net income and net income per share increased by 13 percent to NLG 506 million and NLG 2.98 respectively versus NLG 446 million and NLG 2.62 in 1991.
 PolyGram is proposing to pay a full year 1992 gross dividend of NLG 0.65 per share, representing an 8 percent increase from its 1991 payout of NLG 0.60. The dividend, which is subject to shareholder approval, is payable in May.
 Alain Levy, PolyGram's president and chief executive officer, said: "During 1992, we made significant progress with the implementation of our strategy for future growth. Given the substantial investments we made in music, manufacturing and filmed entertainment during continued recession, last year's performance is particularly creditable. Our North American revenues increased by 26 percent and several of our Far Eastern subsidiaries performed well, but the effects were mitigated by economic decline throughout most of Europe and in Japan and Brazil."
 In 1992, PolyGram's sales of recordings on compact disc (CD) increased by 13 percent in volume terms. However, its unit sales of music on cassette dropped by 11 percent and on vinyl by 60 percent, indicating consumers' increasing preference for the digital format.
 During 1992, PolyGram's pop sales increased by 3 percent, with a total of 24 albums selling over one million copies each. The company's hit of the year came from the Mercury label's Billy Ray Cyrus, whose debut album Some Gave All' sold over 7 million copies worldwide and who gave PolyGram its two best-selling videos in 1992. Under PolyGram's distribution and license agreements with Motown, Lionel Richie sold nearly 5 million copies of his greatest hits compilation Back to Front'. Other best-selling albums included Def Leppard's Adrenalize' which sold over 5 million units in 1992; Abba Gold' which generated sales of over 3.5 million units; and Bon Jovi's Keep the Faith' which sold more than 3 million units in less than two months of release. Pop artists who illustrate PolyGram's frequently stated strategy of creative development include: Billy Ray Cyrus, Extreme, PM Dawn, Shakespear's Sister, Soundgarden, Ugly Kid Joe and Vanessa Williams.
 Total 1992 sales from PolyGram's three classical labels could not match an exceptionally strong performance in 1991, but Decca/London, Deutsche Grammophon and Philips Classics maintained their combined lead of the global classics market which declined during the year due to recession and a lack of major crossover albums. PolyGram's best-sellers included The Essential Kiri'; the Hollywood Bowl Orchestra's recording of The King and I' featuring Julie Andrews and Ben Kingsley; Pavarotti in Hyde Park'; and The Sir Georg Solti Edition'.
 Said Levy: "PolyGram has been very active in pursuing the strategies which we feel are key to our growth. One of these is to expand our worldwide presence."
 In Japan, PolyGram made a further total investment of NLG 45 million to acquire the outstanding 35 percent stake in Nippon Phonogram and to increase its holding in Polydor from 74.6 percent to 89.6 percent. It also acquired a 60 percent stake in Taiwan's second largest record company, Linfair, to complement its existing operations there. For Latin America, where PolyGram is implementing an aggressive review of its business, the company established a regional management office based in Miami.
 "We also want to secure our in-house manufacturing in order to access the associated profits when volume warrants it," said Levy.
 With effect from January 1992, PolyGram acquired an American CD factory from Philips for NLG 57 million. This and PolyGram's existing CD plants in France and Germany together manufactured approximately 70 percent of the group's CDs in 1992 and made a significant contribution to its gross margin, which improved to 47.1 percent from 46.4 percent in 1991. The company also established the world's first digital compact cassette (DCC) plant in the Netherlands, which supplied the record industry's initial launch catalogue of 500 DCC titles to seven launch territories in the last quarter of 1992.
 "Our third area of growth," said Levy, "is the film business, in which we have significantly increased our production capabilities and in which we are expanding in a controlled and creative manner." With effect from July 1992, Los Angeles-based PolyGram Filmed Entertainment (PFE) invested $35 million in the acquisition of a 51 percent stake in Interscope, one of Hollywood's leading independent movie producers. It also entered into a three-year agreement with Oscar-winning Jodie Foster's new company, Egg Pictures, under which PolyGram will fund certain Egg Productions starting in 1993. In the film distribution area, PFE has joined forces with Universal Pictures to form Gramercy Pictures which handles the North American marketing and distribution of certain movies supplied by both partners and which announced its first release slate of nine films in early 1993.
 Overall, the first year of operation of PFE progressed according to plan, with the division creating moderate after-tax losses.
 Commenting on PolyGram's prospects for the current year, Levy said: "We have an exciting release schedule on the music side. We also feel our movie slate for 1993 is extremely promising and keeps us on track with our film plans. Furthermore, we still have sizeable room to grow in our North American business. We feel that the creativity and the steady improvement we are making in our way of operating will carry further benefits into 1993."
 PolyGram NV is approximately 80 percent-owned by Philips Electronics NV; approximately 20 percent of its stock is listed on the Amsterdam and New York stock exchanges.
 POLYGRAM
 CONSOLIDATED INCOME STATEMENT
 (In millions of Netherlands guilders
 except per share data and share amounts)
 Percent
 Years ended Dec. 31 1992 1991 Increase
 Net sales 6,617 6,326 +5
 Direct costs of sales (3,502) (3,391)
 n?come 3,115 2,935 +6
 Selling expenses (1,788) (1,712) +4
 General & admin. expenses (538) (488) +10
 Income from operations 789 735 +7
 Financial income and
 expenses (9) 18 --
 Income before taxes 780 753 +4
 Income taxes (226) (238) --
 Income after taxes 554 515 +8
 Equity in net income of
 non-consolidated companies (18) (28) --
 Group income 536 487 +10
 Minority interests (30) (41) --
 Net income 506 446 +13
 Average no. of shares outstanding: 170,000,000
 Net income per share 2.98 2.62 +13
 POLYGRAM
 BALANCE SHEET HIGHLIGHTS
 (In millions of Netherlands guilders)
 As at December 31 1992 1991
 Total assets 5,298 4,975
 Total group equity 1,281 1,131
 Liquid assets 327 328
 POLYGRAM
 CONSOLIDATED INCOME STATEMENT
 (In millions of US dollars
 except per share data and share amounts)
 Percent
 Years ended Dec. 31 1992 1991 Increase
 Net sales 3,656 3,495 +5
 Direct costs of sales (1,935) (1,873) +3
 Gross income 1,721 1,622 +6
 Selling expenses (988) (946) +4
 General & admin. expenses (297) (270) +10
 Income from operations 436 406 +7
 Financial income and
 expenses (5) (10) --
 Income before taxes 431 416 +4
 Income taxes (125) (131) --
 Income after taxes 306 285 +8
 Equity in net income of
 non-consolidated companies (10) (16) --
 Group income 296 269 +10
 Minority interests (16) (23) --
 Net income 280 246 +13
 Average no. of shares outstanding: 170,000,000
 Net income per share 1.65 1.45 +13
 Note: For the convenience of the reader, Netherlands Guilder amounts have been converted to US $ at the exchange rate at December 31, 1992, of $1 equals 1.81 NLG.
 -0- 3/2/93
 /CONTACT: Dawn Bridges or Patricia Kiel or PolyGram Holding, 212-333-8357 or 212-333-8576/
 (PLG)


CO: PolyGram Holding ST: New York IN: ENT SU: ERN

SM -- NY040 -- 1868 03/02/93 10:33 EST
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