3rd Quarter Results
October 25 2005 - 1:24PM
UK Regulatory
RNS Number:1602T
Compagnie de Saint-Gobain
25 October 2005
October 25 2005
Press release
SALES FOR THE FIRST NINE MONTHS OF 2005: UP 6.9% UP 6.8% AT CONSTANT EXCHANGE
RATES
Consolidated sales for the Saint-Gobain Group reached Euro25,743 million for the
first nine months of 2005, representing an increase of 6.9%. At constant
exchange rates (based on average rates for the first nine months of 2004), sales
were up 6.8% on an actual structure basis and 1.9% on a comparable structure
basis. Prices edged up 1.7%, while volumes expanded by 0.2%.
Following the upturn in the second quarter, the Group's organic growth slowed
down in the third quarter, due, on the one hand, to the high comparison basis of
the third-quarter 2004 (4.0% like-for-like growth) and, on the other hand, to
the more difficult economic climate due to the strong rise in energy costs.
In line with the trends observed in the second quarter, the businesses exposed
to the new residential construction and renovation markets continued to drive
the Group's overall growth up in the third quarter and during the first nine
months of 2005. Insulation, in particular, recorded the Group's strongest
organic growth rate over the first nine months, at 5.6%.
Sales trends by business sector, division and geographic area are as follows:
2005 sales 2004 sales 9 Change based Change based Change based on
9 months (in month (in Euro on actual on comparable
Euro millions) millions) structure comparable structure and
structure exchange rate
SECTORS & DIVISIONS
Building Distribution Sector 11,353 10,073 +12.7% +2.4% +2.3%
High-Performance Materials Sector (1) 3,605 3,573 +0.9% +0.4% +0.6%
Ceramics & Plastics and Abrasives 2,657 2,628 +1.1% +1.6% +2.2%
Reinforcements 962 962 +0.0% -3.1% -3.8%
Flat Glass Sector 3,432 3,276 +4.8% +2.5% +0.7%
Packaging Sector 2,898 2,895 +0.1% +0.3% +0.8%
Construction Products Sector (1) 4,708* 4,532 +3.9% +3.3% +3.7%
Building Materials 2,075* 2,015 +3.0% +3.5% +4.4%
Insulation 1,601 1,486 +7.7% +5.2% +5.6%
Pipe 1,047 1,046 +0.1% +0.1% -0.3%
INTERNAL SALES AND MISC. -253 -269 ------ ------ -----
GROUP 25,743** 24,080** +6.9% +2.0% +1.9%
GEOGRAPHIC AREAS
France 8,45 8,023 +5.3% +3.6% +3.6%
Other western European countries 10,943 10,18 +7.5% -1.3% -0.9%
North America 4,414 4,393 +0.5% +0.6% +3.5%
Emerging countries and Asia-Pacific 3,139 2,596 +20.9% +14.2% +6.7%
INTERNAL SALES AND MISC. -1,203 -1,112 ----- ----- -----
GROUP 25,743** 24,080** +6.9% +2.0% +1.9%
* including the sale of Stradal on August 1, 2005 (negative impact of Euro25
million on sales)
**including ancillary revenue of Euro181 million for the first nine months of 2005,
compared with Euro139 million for the same period in 2004
(1)Including inter-division eliminations.
Each of the Group's five business sectors reported an overall increase in
like-for-like sales for the first nine months of the year. The Construction
Products (notably Insulation) and Building Distribution Sectors in particular
continued to show sustained growth in the third-quarter, on the back of vigorous
construction markets in Europe and in the US. However, businesses exposed to the
consumer spending and industrial production markets experienced a fall-off in
sales, linked to the current economic slowdown.
The Building Distribution Sector reported a sharp 12.7% increase in sales on an
actual structure basis, thanks to the contribution of its recent acquisitions to
the nine-month figures, particularly Dahl, Sanitas-Troesch, and Optimera, which
were consolidated as from May 1, 2004, March 1, 2005, and August 1, 2005,
respectively. Sales increased by 2.3% on a comparable structure and exchange
rate basis. Strong French and Scandinavian markets continue to spearhead the
sector's growth, whilst Germany, and to a lesser extent the UK, remain on a
downward trend.
The High-Performance Materials Sector generated like-for-like sales growth of
0.6%. The increase witnessed in Ceramics & Plastics and Abrasives, in terms of
both volumes and prices, was offset by a fall in Reinforcements sales.
Sales in the Flat Glass Sector were up slightly on a comparable structure and
exchange rate basis. Business continued to be buoyed by the building market in
Europe and emerging countries, while the automotive market remained stable.
Sales prices remained firm over the entire sector.
Packaging Sector sales edged up slightly on a like-for-like basis, with the
price increases implemented across the sector offsetting the slight drop in
sales volumes in Europe (particularly in Germany). However, rising sales prices
still fail to offset the impact, on the Group's operating income, of the
considerable hike in natural gas costs in the US.
The Construction Products Sector posted the Group's strongest organic growth, at
3.7%. Building Materials and particularly Insulation reported excellent growth
figures, at 4.4% and 5.6% respectively, propelled by the robust construction
markets in the US and Europe (with the exception of Germany) and by the increase
in sales prices at the start of the year. Pipe sales evened out over the first
nine months of 2005, due to a recent turnaround in sales volumes and further
price increases in the third quarter.
By geographic area, like-for-like sales remained healthy in France and the US.
Business was relatively stable for the rest of Western Europe, with the dynamism
of Spain, Portugal and Northern Europe compensating for sluggish markets in
Germany and to a lesser extent the UK. In terms of emerging countries, sales
remained robust, especially in Asia and Latin America.
**************
Asbestos claims in the United States: some 2,000 new claims were filed against
Certain Teed during third-quarter 2005, significantly below the number filed in
the first two quarters of the year. The number of new claims filed during the
first nine months of 2005 amounted to 12,000, as against 14,000 in 2004.
Over the same period, some 16,000 claims were resolved - of which approximately
3, 000 during third-quarter -, as against 17,000 in the comparable period of
2004.
The number of outstanding claims at September 30, 2005 was therefore slightly
lower than at end-June 2005, at approximately 99,000 claims.
The average cost of claims settled over the last 12 months was approximately
$2,500 per claim, unchanged from end-June 2005.
On the legislative front, discussions among the advocates and opponents of the
proposed Asbestos Trust Fund bill have continued since the US Senate Judiciary
Committee approved the bill by a bipartisan vote on May 26, 2005. It seems,
however, unlikely that the bill will be put before the full Senate by the end of
this year.
**************
Outlook and targets: In a more difficult current economic climate, the upturn in
business observed in the second quarter was not carried over to the third
quarter with as much vigor as expected, and this trend is likely to continue
through the end of the year. In addition, the profitability of some of the
Group's businesses, notably Packaging, has been dented by the sharp rise in
energy (natural gas, fuel) and transportation costs occurred during the summer,
especially in the United States, and which could not be passed through sales
prices right away. Owing to both of these factors, the target for the full year
increase in operating income at constant exchange rates (average exchange rates
for 2004) has now been adjusted to be slightly under the rate of growth
delivered for the first-half of 2005 (+4.9%)
**************
Next results announcement:
>> Estimated 2005 results: Thursday, January 26, 2006, after close of trading on
the Paris Bourse.
Investor Relations Department
Florence Triou-Teixeira Tel: +33 1 47 62 45 19
Alexandre Etuy Tel: +33 1 47 62 37 15
Fax: +33 1 47 62 50 62
This information is provided by RNS
The company news service from the London Stock Exchange
END
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