D’Ieteren Drops as Earnings Seen Declining 25%: Brussels Mover

D’Ieteren SA (DIE), the Belgian owner of the world’s largest vehicle-glass replacement company, fell the most in nine years on Euronext Brussels after forecasting 2012 earnings that missed analysts’ estimates.

D’Ieteren plunged 4.42 euros, or 11 percent, to 36.22 euros at the 5:40 p.m. close of trading, the biggest decline since June 2002. Pretax profit excluding one-time items will decline about 25 percent from 305.8 million euros ($411.7 million) last year, the Brussels-based company said yesterday in a statement.

“The main disappointment came from the weak 2012 guidance,” Emmanuel Carlier, an analyst at ING Groep NV in Brussels, wrote in an investor note. He projected a 13 percent drop in earnings this year. “Management guidance is extremely prudent, as usual.”

D’Ieteren’s forecast assumes sales of new cars in Belgium will drop more than 13 percent after buyers rushed to register cars in December before government incentives for low-emission models expired and a change in tax rules on company-fleet cars. Chief Executive Officer Jean-Pierre Bizet also forecast profit will decline at the Belron windshield business.

Sales at Belron excluding acquisitions and currency effects dropped 0.9 percent last year, led by a 4.6 percent decline in Europe that worsened in the final quarter, in a market that faced a 7 percent contraction, according to D’Ieteren. Bizet said Belron, which has operations in 33 countries, may have no so-called organic growth this year following a “pretty poor” first quarter because of milder-than-usual winter weather at the end of last year.

‘Extraordinary Years’

“The majority of the decline is due to the automobile distribution, a minority to Belron,” Bizet told analysts and reporters in Brussels today. “Our guidance is prudent, but we haven’t made changes to our level of prudency. I hope you’ll recognize we had extraordinary years in both 2010 and 2011.”

The forecast also takes into account a 2 percent decline that’s due to the creation of a joint venture with Volkswagen AG’s financial-services unit for the leasing operations in Belgium. D’Ieteren’s earnings this year will reflect its 50 percent ownership in the combined leasing business.

Bizet also said D’Ieteren has made little progress so far with the reinvestment of the proceeds it got from selling its majority holding in Avis Europe Plc.

“We haven’t found a business we’re jumping up and down to buy,” he said, adding that D’Ieteren hasn’t set a deadline for spending the 409 million euros it got from the disposal.

To contact the reporter on this story: John Martens in Brussels at jmartens1@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net

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