1st Quarter Results
April 27 2006 - 1:14PM
UK Regulatory
RNS Number:1436C
Compagnie de Saint-Gobain
27 April 2006
April 27, 2006
Press
release
FIRST QUARTER 2006 SALES:
* UP 27.7% ON A REPORTED BASIS
* UP 9.1% LIKE-FOR-LIKE
Consolidated sales for the Saint-Gobain Group in the first quarter of 2006 came
in at Euro9,745 million, compared with Euro7,633 million for the same period in 2005,
representing a rise of 27.7% on an actual structure basis, and 24.1% at constant
exchange rates(*).
The contribution of the Group's acquisitions, net of disposals, accounts for a
rise of 15.2% in Group sales. British Plaster Board (BPB), which has been
included in the Group's scope of consolidation since December 1, 2005, recorded
sales of Euro956 million over the first quarter.
Like-for-like sales advanced by Euro754 million, i.e. 9.1%, including BPB's organic
growth of 13.7%. Excluding BPB, the Group's organic growth stood at 8.6%. Sales
volumes rose by 6.5%, and sales prices by 2.6%.
Overall, all of the Group's sectors and businesses saw significant advances in
sales on a like-for-like basis. Growth is particularly strong in
construction-related businesses (especially the Construction Products and
Building Distribution sectors), which continued to reap the rewards of buoyant
demand in the United States and Europe (except Germany). The Gypsum (BPB) and
Insulation divisions posted organic growth of 13.7% and 14.6%, respectively,
whilst sales in the Pipe Sector advanced 23.6% like-for-like, on the back of a
significant upturn in export sales volumes.
The Group also benefited from its continued expansion in emerging countries,
with a further 12.4% increase in like-for-like sales. In addition, most of its
industrial end-user markets remained relatively robust.
These sales figures also confirm the Group's ability to step up its price
increases, against a background of higher cost of energy and certain raw
materials. Prices are up significantly in most of the Group's divisions, thanks
to the increases pushed through during the second half of 2005 and the first
quarter of 2006.
Finally, first quarter 2006 sales were favored by a higher number of working
days than in the same period in 2005. The benefit of this will be fully offset
at the end of the first half 2006.
(*) based on average exchange rates for the first quarter of 2005.
Sales trends by Business sector and major geographic area are as follows:
Q1 2006 Q1 2005 sales % change on % change on a % change
sales (in Euro (in Euro an actual comparable like-for-like
millions) millions) structure structure (comparable
basis basis structure and
currency)
BY BUSINESS SECTOR & DIVISION
Building Distribution 3,810 3,227 +18.1% +9.1% +8.3%
High-Performance Materials (1) 1,301 1,166 +11.6% +12.5% +6.0%
Ceramics & Plastics and Abrasives 948 867 +9.3% +11.6% +5.0%
Reinforcements 356 305 +16.7% +13.8% +7.7%
Flat Glass 1,218 1,081 +12.7% +10.8% +6.6%
Packaging 1,011 901 +12.2% +10.5% +6.0%
Construction Products (1) 2,630 1,394 +88.7% +18.8% +14.2%
Building Materials 635 581 +9.3% +18.0% +9.2%
Insulation 600 496 +21% +17.9% +14.6%
Gypsum 956 0 n.m. +17.3% +13.7%
Pipe 446 322 +38.5% +25.8% +23.6%
Internal sales and other -225 -136 -------- ------ -----
GROUP TOTAL 9,745** 7,633** +27.7% +12.5% +9.1%
BY GEOGRAPHICAL AREA
France 3,024 2,679 +12.9% +8.5% +8.5%
Other Western European countries 4,113 3,179 +29.4% +9.0% +8.8%
North America 1,819 1,358 +33.9% +18.8% +8.8%
Emerging countries and Asia-Pacific 1,307 870 +50.2% +26.6% +12.4%
Internal sales -519 -454 ----- ----- -----
GROUP SALES 9,745** 7,633** +27.7% +12.5% +9.1%
** including Euro63 million of side income (Euro52 million in first quarter 2005)
(1) Including inter-division eliminations.
Performances of Group business sectors
Building Distribution experienced an 18.1% surge in sales, which, in addition to
the favorable impact of the higher number of working days, is a result of the
contribution of recent acquisitions to first quarter revenues, in particular
Optimera and Sanitas-Troesch, and the strong organic growth posted by the
sector's main banners, namely in France and Scandinavia. Our British banners
achieved moderate growth, whereas the German market has still not shown any sign
of recovery.
High-Performance Materials reported sustained like-for-like growth of 6.0%,
thanks to the substantial increase in sales volumes for Ceramics & Abrasives -
which are still enjoying vigorous market conditions in manufacturing and capital
spending in the US - and Reinforcements. However, the Reinforcements business is
still suffering from the impact of low sales prices.
Flat Glass posted 6.6% like-for-like sales growth, thanks to a sharp increase in
volumes, in particular on the construction market in both Europe and emerging
countries. Due to the energy surcharge, sales prices for flat glass used in the
building industry rose slightly on average compared with first quarter 2005.
Like-for-like sales of automotive glass edged up slightly, thanks namely to
solid growth in emerging countries.
Packaging experienced organic growth of 6.0%, thanks to a strong price effect
(+5.3%), which reflects the successive increases implemented in the US and
Europe during the second half 2005 and the first quarter 2006.
The Construction Products Sector, which now includes the Gypsum Division (BPB)
over the full period, posted the Group's highest growth, on both a reported
basis (+88.7%) and a like-for-like basis (+14.2%, of which 5.5% from prices and
8.7% from volumes). All the sector's businesses contributed to this performance,
in particular interior building solutions - Gypsum and Insulation -, which both
posted organic growth in line with the sector average, with very significant
price increases. In addition to upbeat construction markets in the US and Europe
(except Germany), these businesses have benefited from tax incentives and
regulatory measures that favor the improvement of thermal insulation in homes
(in the UK and France, for example). Pipe sales continued to feel the effects of
the sharp turnaround that kicked off in fourth quarter 2005, in particular as
regards export sales.
* * *
Sales analysis by geographical area
The breakdown of sales by geographic area reveals, on a like-for-like basis, a
very strong growth in France (+8.5%) and in the United States (8.8%). Other
Western European countries also experienced an upswing (8.8% growth on average),
with double-digit growth in Scandinavia and Southern Europe and moderate growth
in Germany, which remains Europe's worst performer. Emerging countries -
particularly Asia and Latin America - remained buoyant, with organic growth of
12.4%, higher than the Group average.
* * *
Update on asbestos claims in the United States
Some 2,000 new claims were filed against CertainTeed during the first quarter
2006 (against 6,000 in the first quarter 2005). Approximately 4,000 claims were
resolved (against 7,000 in the first quarter 2005). Therefore, the number of
outstanding claims at March 31, 2006 continued on a downward trend, standing at
around 98,000, compared with 100,000 at December 31, 2005. The average cost of
claims settled fell to approximately US$ 2,400 per claim over the last 12 months
(against US$ 2,800 per claim for the twelve months ending December 31, 2005),
due to a more favorable claim settlement mix.
Regarding the legislative effort to create a Federal asbestos trust fund, a
Senate vote held in mid-February to waive a technical budgetary requirement
failed to obtain the 60 votes needed to proceed to a debate and ultimate vote on
the merits of the Bill. Although there are some continuing efforts to revive
the Bill, the probability of success seems to be remote.
In the meantime, the publicity surrounding the broken asbestos tort system in
the U.S. continues to prompt a number of States to consider and adopt medical
criteria requirements and tort reform measures designed to reduce abuses of the
system.
* * *
Outlook
Although helped by a low comparison basis, the high growth experienced in the
first quarter shows that the Group is well placed to achieve its objectives for
2006. These include operating income growth of between 23% and 25% at constant
exchange rates (based on average exchange rates for 2005), as well as an 18% to
20% increase in net income excluding gains and losses on sales of non-current
assets. The Group also aims to maintain strong free cash flow levels.
* * *
Forthcoming results announcement:
- First half 2006 results: July 27, 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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