TIDMCOD
RNS Number : 8420B
Compagnie de Saint-Gobain
24 February 2011
Sharp upswing in 2010 results
Paris, February 24, 2011 - Publication of sales for the fourth
quarter
of 2010 and of results for the year ended December 31, 2010.
KEY FIGURES Change
(EURm) 2009 2010 2010/2009
---------------- ------- -------- -----------
Sales 37,786 40,119 +6.2%
---------------- ------- -------- -----------
Operating
income 2,216 3,117 +41%
---------------- ------- -------- -----------
Recurring net
income(1) 617 1,335 +116%
---------------- ------- -------- -----------
Net income 202 1,129 +459%
---------------- ------- -------- -----------
2010 dividend: EUR1.15 (up 15%), paid entirely in cash
Results of 2010 action plan:
-- Sales prices: up 0.8% over the year; up 1.4% over the second
half
-- Cost savings: EUR600m over the year; EUR2.1bn between 2007 and
2010
-- Strong growth in operating income (at constant exchange
rates*): up
33.7%, with second-half operating income significantly
outperforming
(up 15.7%) the first-half figure
-- Free cash flow(2): up 51% to EUR1.5bn, despite the rise in
capex
-- Ongoing fall in net debt: EUR1.4bn of net debt paid down over
12 months;
gearing ratio cut to 39% of equity
Pierre-Andre de Chalendar, Chairman and Chief Executive Officer of
Saint-Gobain,
commented:
"In 2010, in a global economy still recovering from the crisis,
our sales
volumes got back on an upward trend and our priority focus on
sales prices
paid off. We delivered a sharp upswing in our results, driven in
particular
by the significant cost savings achieved over the past few years.
Overall in 2011, we expect to see more upbeat trading conditions
in our
key markets (particularly new-build and renovation markets in
Europe).
Nevertheless, we will see a sharp rise in raw material and energy
costs
that we will endeavor to limit by pursuing our priority focus on
raising
sales prices. Against this backdrop, Saint-Gobain is targeting
robust
organic growth and double-digit growth in operating income** for
2011.
Leveraging its financial strength, the Group will resolutely adopt
a
tempered development policy to boost this return to growth. It
will step
up its capital expenditure and financial investments, targeting
emerging
countries and high value-added Habitat solutions. Given an
increase in
its capital expenditure of EUR500 million in 2011, Saint-Gobain is
targeting
free cash flow of EUR1.3 billion."
* Exchange rates for 2009.
** Exchange rates for 2010.
1. Excluding capital gains and losses on disposals, asset
write-downs
and material non-recurring provisions.
2. Excluding the tax effect of capital gains and losses on
disposals,
asset write-downs and material non-recurring
provisions.
Operating performance
Against the backdrop of a global economy still recovering from
the crisis, the Group returned to growth in 2010, reporting a 1.9%
increase in like-for-like sales (comparable Group structure and
exchange rates). This performance was driven by robust momentum in
emerging countries and Asia and by vigorous trading in industrial
markets. Construction markets remained rather sluggish on the whole
in North America, but improved steadily over the year in both
Western and Eastern Europe, and particularly in the UK, Germany and
Scandinavia (which represent almost half of the Group's
construction sales in Western Europe). Household consumption
remained relatively stable over the year.
Overall, the Group reported 1.9% organic growth for 2010,
breaking down as1.0% growth in the first half (positive volume and
price impacts of 0.9% and 0.1%, respectively), and 2.8% growth in
the second half (with both volumes and prices up 1.4%). Despite
severe weather conditions in Europe at the end of the year, organic
growth accelerated between the third and fourth quarters, from 2.3%
to 3.3%. Sales prices held firm over the year in all Business
Sectors, offsetting the rise in the cost of raw materials and
energy at Group level.
Against this backdrop, Saint-Gobain resolutely implemented all
of its action plan priorities and outperformed each of its
targets:
- sales prices were increased by 1.4% in the second half and by
0.8% over the year;
- costs were slashed by EUR600 million, driving a sharp 40.7%
increase in operating income, which came in 15.7% higher in the
second half than in the six months to June 30, 2010. The Group's
operating margin widened sharply, up to 7.8% of sales from 5.9% in
2009. In the second half, the operating margin came in at 8.1%,
outperforming its second-half 2008 level (7.6%), even though sales
volumes remained 9.4% below their level in the second half of
2008;
- the Group generated EUR1.5 billion in free cash flow and
further reduced net debt by EUR1.4 billion, thereby reinforcing its
cash resources and strong financial structure.
1) Performance of Group BusinessSectors
Innovative Materialsdelivered the Group's best organic growth
performance, at 12.3%. The Business Sector reported double-digit
growth in both the first and second halves of 2010, despite a much
tougher basis for comparison over the six months to December 31.
Markets related to industrial output confirmed their recovery
throughout the year, both in North America and Western Europe. The
Sector was also buoyed by very strong 21.6% organic growth over the
year in Asia and emerging countries, which represent 37.6% of its
sales. Togetherwith the impact of the Group's cost savings
programs, this helped drive a steep rise in the Sector'soperating
margin, which came in at 11.0% compared with 4.7% in 2009. The
operating margin for the second half was 11.6% (6.7% in second-half
2009), ahead of the 11.5% achieved in second-half 2008.
-- Flat Glass reported an 8.4% rise in like-for-like sales over
the year, spurred by vigorous growth in Asia and emerging countries
(41.5% of Flat Glass sales), as well as the strong rebound in
worldwide automotive output. Sales of Flat Glass for the building
industry in Western Europe picked up gradually as from the second
quarter in Germany, France and Italy, but remained slack in other
countries. Sales prices for the Flat Glass Sector as a whole got
back on an upward trend in the second half, thanks largely to the
increase in commodity prices (float glass) in Europe. All of these
factors, together with the cost savings achieved, pushed the
operating margin up to 8.4% of sales (9.0% in the second half and
7.8% in the first), far more than double the figure for 2009 (3.4%
of sales).
-- High-Performance Materials (HPM) like-for-like sales surged
17.9% over the year and 16.8% in the second half. Overall,
industrial output and capital expenditure remained upbeat
throughout the year, significantly picking up pace in both Western
and Eastern Europe during the second half. Consequently, although
HPM like-for-like sales remained below their pre-crisis level,
upbeat sales prices and fixed cost savings provided the operating
margin with very strong operating leverage, putting it back on a
par with previous record levels, at 14.3% of sales in 2010
(compared with 6.6% of sales in 2009), and 15.1% of sales in the
second half.
Like-for-like sales for the Construction Products (CP) Business
Sector remained stable over the year as a whole and in the second
half, with improved second-half trading conditions in Western and
Eastern Europe offset by the fall in sales in the United States
(due to inventory run-downs by distributors in the third quarter).
However, Construction Products sales improved further in the fourth
quarter (up 3.7%) across all regions, and particularly Eastern
Europe. The Business Sector's operating margin continued to rise,
up to 9.7% from 9.5% in 2009, bolstered by the cost savings
achieved and upbeat sales prices - particularly in the six months
to December 31.
-- Like-for-like Interior Solutions sales slipped 1.8% over
2010, despite an 0.1% advance in the second half of the year driven
by the fledgling recovery in Western and Eastern Europe and healthy
sales prices. Markets in Asia andLatin America continued to enjoy
robust growth throughout the year, while US construction markets
remained in the doldrums. The operating margin continued to
improve, up to 7.3% in 2010(7.7% in the second half) versus 6.8% in
2009.
-- Like-for-Like Exterior Solutions sales edged up 1.7% over the
year, bolstered by a further rise in sales prices for all of its
components (Industrial Mortars, Exterior Products and Pipe). Sales
volumes were broadly stable for 2010 as a whole, with vibrant
trading in Asia and Latin America offset by a slowdown in business
in both Western and Eastern Europe. Trading conditions in North
America remained sluggish. However, fourth-quarter volumes were up
sharply across the business, particularly in Eastern Europe. The
operating margin repeated its good 2009 performance, coming in at
11.8% of sales despite the hike in raw material costs - especially
in the second half.
Building Distribution saw a slight 1.5% decline in year-on-year
trading, due to ongoing tough conditions in the first half. The
Business Sector got back on the growth track in the second half of
2010 (up 1.0%), despite severe weather conditions at the end of the
year. This uptrend was chiefly fueled by a gradual recovery in
Germany, the UK and Scandinavia as from March (each of these
countries delivering robust growth in the second half of the year).
Trading in France was slightly down over the year as a whole,
despite picking up in the six months to December 31. The downturn
continued across Southern Europe and the United States, in spite of
more favorable comparative figures. The operating margin for the
Business Sector improved, up to 3.3% of sales (4.2% in the second
half) from 2.4% of sales in the year-earlier period, mainly
reflecting the impacts of streamlining measures, cost savings and a
higher gross margin.
Packaging (Verallia) continued to report robust trading
conditions and earnings, which remained virtually stable
year-on-year. Nevertheless, the Business Sector's operating margin
narrowed slightly to 12.2% of sales (12.7% of sales in 2009), with
the sharper rise in sales prices in the second half failing to
fully offset, over the year as a whole, the slowdown in volumes
across Europe and to a lesser extent, the rise in energy costs.
2) Analysis by geographic area
In 2010 as well as the six months to December 31, 2010, the
Group's organic growth performance continued to be led by Asia and
emerging countries, which delivered double-digit organic growth
over both periods. However, business in North America and Western
Europe began to improve overall, with trading picking up pace in
Western Europe in the second half of the year.
Profitability improved sharply across all regions.
- In France, trading was close to 2009 levels, in spite of a
particularly weak performance in the first quarter due to very cold
winter weather. Despite a gradual improvement over the year,
construction markets remained relatively tough. In contrast,
industrial markets proved fairly upbeat. The operating margin for
France improved sharply, up to 6.3% from 5.5% in 2009.
- Like-for-likesales in other Western European countries
remained stable over the year, with modest 2.1% growth in the
second half more than offsetting the 1.7% contraction in the six
months to June 30. Construction markets confirmed their gradual
recovery throughout the second half, led by a stronger growth
momentum in Germany and Scandinavia and a relative improvement in
Spain. Thanks to the cost savings achieved since the onset of the
crisis, the operating margin for the region surged to 5.9% (6.7% in
the second half),compared to 4.4% in 2009 (5.6% in the six months
to December 31, 2009).
- Trading inemerging countries and Asia (18.7% of Group sales)
remained vigorous, with organic growth picking up pace in the
second half (up to 13.0% from 9.6% in the six months to June 30).
This performance came on the back of a return to growth in Central
and Eastern Europe, and particularly Poland. Asia and Latin America
continued to deliver a strong organic growth performance (up 17.3%)
throughout the year. The operating margin rose sharply, up to 10.1%
of sales (10.9% in the second half) from 6.7% one year earlier
(8.5% in second-half 2009).
- North America posted organic growth of 6.5% for the year (1.7%
in the second half and 5.2% in the fourth quarter), bolstered by a
sharp rebound in businesses related to industrial output and a good
performance from all otherbusinesses except InteriorSolutions,
which suffered from continuingweakness in construction markets. The
region's operating margin - also boosted by the restructuring
measures implemented - continued to improve, up to 10.7% of sales
(8.9%of sales in 2009), despite inventory run-downs by distributors
in the third quarter and the rise in the cost of raw materials in
the second half.
2010 consolidated financial statements
The Group's 2010 consolidated financial statements and the
financial statements of the Group's parent company, Compagnie de
Saint-Gobain, were approved and adopted by Saint-Gobain's Board of
Directors at its meeting of February 24, 2011. These financial
statements have been audited by the Statutory Auditors. Key
consolidated data are summarized below:
2009 2010 %
EURm EURm change
Sales and ancillary revenue 37,786 40,119 +6.2%
Operating income 2,216 3,117 +40.7%
Operating depreciation and amortization 1,514 1,535 +1.4%
EBITDA (op. inc. + operating
depreciation/amortization) 3,730 4,652 +24.7%
Non-operating costs (596) (446) -25.2%
Capital gains and losses on disposals,
asset write-downs,
corporate acquisition fees and earn-out
payments (380) (147) -61.3%
Business income 1,240 2,524 +103.5%
Net financial expense (805) (739) -8.2%
Income tax (196) (577) +194.4%
Share in net income of associates 2 5 +150.0%
Income before minority interests 241 1,213 +403.3%
Minority interests (39) (84) +115.4%
Recurring net income(1) 617 1,335 +116.4%
Recurring(1) earnings per share(2) (in
EUR) 1.20 2.51 +109.2%
Net income 202 1,129 +458.9%
Earnings per share(2) (in EUR) 0.39 2.13 +446.1%
Cash flow from operations(3) 2,303 3,004 +30.4%
Cash flow from operations excluding capital
gains tax(4) 2,268 2,987 +31.7%
Capital expenditure 1,249 1,450 +16.1%
Free cash flow (excluding capital gains
tax)(4) 1,019 1,537 +50.8%
Investments in securities 204 129 -36.8%
Net debt 8,554 7,168 -16.2%
-------------------------------------------------- ------- ------- --------
( )
1 Excluding capital gains and losses on disposals, asset
write-downs and material non-recurring provisions.
2 Calculated based on the number of shares outstanding at
December 31 (530,836,441 shares in 2010 versus 512,931,016 shares
in 2009). Based on the weighted average number of shares
outstanding (517,954,691 shares in 2010 versus 473,244,410 in
2009), recurring earnings per share comes out at EUR2.58 (versus
EUR1.30 in 2009), and earnings per share comes out at EUR2.18
(versus EUR0.43 in 2009).
3 Excluding material non-recurring provisions.
4 Excluding the tax effect of capital gains and losses on
disposals, asset write-downs and material non-recurring
provisions.
Sales advanced 6.2%, powered by a strong 3.9% positive currency
impact. This reflects the appreciation against the euro of most
currencies of the other monetary areas where the Group trades,
namely Scandinavian and emerging country currencies (especially the
Brazilian real). On a constant exchange rate basis*, sales
therefore climbed 2.3%. Changes in Group structure had a mild +0.4%
impact on sales. Like-for-like, Group sales moved up 1.9%
(including a positive 1.1% volume impact and a positive 0.8% price
effect), reflecting the acceleration in organic growth over the
second half of the year, up to 2.8% (of which 3.3% in the fourth
quarter), after 1.0% in the six months to June 30.
In line with targets, the Group's operating income rose sharply,
up 40.7% (33.7% at constant exchange rates), powered mainly by the
cost savings achieved. As a result, the operating margin improved
significantly, up to 7.8% of sales (10.7% excluding Building
Distribution), versus 5.9% (8.4% excluding Building Distribution)
in 2009.
The Group outperformed its target in the second half of 2010
("operating income for second-half 2010 slightly above the first
half"), with a rise of 15.7% in operating income compared to
first-half 2010 and of 30.0% compared to second-half 2009.
The Group's second-half operating margin rose steeply, up to
8.1% of sales (10.8% excluding Building Distribution), versus 6.7%
of sales (9.1% excluding Building Distribution) in second-half
2009. It also came in higher than in second-half 2008 (7.6%, or
9.8% excluding Building Distribution), even though sales volumes
remained 9.4% below the volumes recorded in that period.
EBITDA (operating income + operating depreciation and
amortization) surged 24.7%. The consolidated EBITDA margin came in
at 11.6% of sales (16.1% excluding Building Distribution), versus
9.9% (14.1% excluding Building Distribution) in 2009.
The consolidated EBITDA margin in the six months to December 31,
2010 exceeded its second-half 2008 level, at 11.8% versus
11.1%.
Non-operating costs fell 25.2% to EUR446 million (EUR596 million
in 2009), thanks to lower restructuring costs. This amount includes
a EUR97 million accrual to the provision for asbestos-related
litigation involving CertainTeed in the US, the increase compared
to 2009 reflecting the rise in indemnities paid over the last 12
months (see "Update on asbestos claims in the US" on page 7).
The net balance of capital gains and losses on disposals, asset
write-downs and corporate acquisition fees was a negative EUR147
million. This amount comprises EUR87.1 million in capital gains
(including the capital gain on the disposal of Advanced Ceramics)
and EUR232.2 million in asset write-downs. These write-downs result
primarily from restructuring plans and site closures initiated
during the period. They include a EUR72 million write-down taken
against part of the goodwill relating to certain Building
Distribution businesses in the US and the Netherlands following
restructuring measures launched in these companies in 2010.
Business income totaled EUR2,524 million in 2010, twice the
figure for 2009 after taking into account the items mentioned above
(non-operating costs,capital gains/losses on disposals and asset
write-downs).
Net financial expense improved slightly, at EUR739 million
versus EUR805 million in 2009. This chiefly reflects the reduction
in net debt. The average cost of net debt came out at 5.6% in 2010,
versus 5.5% in 2009.
Income tax rose sharply, up from EUR196 million to EUR577
million, chiefly due to the rise in pre-tax income and, to a lesser
extent, the business tax reform introduced in France as of January
1, 2010, which led the Group to reclassify the new CVAE
("Cotisation sur la Valeur Ajoutee des Entreprises") tax as income
tax.
Recurring net income (excluding capital gains and losses, asset
write-downs and material non-recurring provisions) jumped 116.4%
year-on-year, to EUR1,335 million. Based on the number of shares
outstanding at December 31, 2010 (530,836,441 shares versus
512,931,016 shares at end-2009), recurring earnings per share came
out at EUR2.51, up 109.2% on 2009 (EUR1.20).
Net income came in at EUR1,129 million, more than five times
higher than the 2009 figure (EUR202 million). Based on the number
of shares outstanding at December 31, 2010 (530,836,441 shares
versus 512,931,016 shares at December 31, 2009), earnings per share
came out at EUR2.13, more than five times higher than in 2009
(EUR0.39).
* Based on average exchange rates for 2009.
Capital expenditure climbed 16.1% to EUR1,450 million (versus
EUR1,249 million in 2009), and accounted for 3.6% of sales (3.3% in
2009). This increase was mainly attributable to the upturn
(especially in the second half) in growth capex focused on
activities related to energy efficiency (Flat Glass - including
solar power - and Construction Products) and on Asia and emerging
countries. Overall, these markets accounted for almost 80% of the
Group's total growth capex in 2010.
Cash flow from operations totaled EUR3,004 million in 2010, up
30.4% on the same period in 2009.Before the tax impact of capital
gains and losses on disposals and asset write-downs, cash flow from
operations climbed 31.7% to EUR2,987 million, up from EUR2,268
million one year earlier.
Free cash flow (cash flow from operations less capital
expenditure) jumped 47.4% to EUR1,554 million, despite the rise in
capital expenditure. Before the tax impact of capital gains and
losses on disposals and asset write-downs, free cash flow surged
50.8% to EUR1,537 million, or 3.8% of sales (2.7%of sales in 2009).
The Group therefore outperformed its target for full-year 2010
(initially EUR1 billion in free cash flow, subsequently raised to
EUR1.4 billion in July).
In second-half 2010, despite the robust 38.5% increase in
capital expenditure, free cash flow totaled EUR550 million (before
the tax impact of capital gains and losses on disposals and asset
write-downs). It advanced 17.2% compared to second-half 2009
(EUR469 million), which already stood as the Group's best
second-half level of free cash flow over the last five years. This
reflects the ongoing focus on cash flow management, including in a
more upbeat growth environment.
The difference between EBITDA and capital expenditure increased
29% to EUR3,202 million in 2010, versus EUR2,481 million in 2009,
representing 8.0% of sales (6.6% one year earlier).
After seven years of continuous improvements, operating working
capital requirements (WCR) stabilized at a very good 31 days' sales
at December 31, 2010, despite the trading upturn and the negative
impact of the LME ("Loi de Modernisation de l'Economie") law in
France.
Investments in securities totaled EUR129 million and primarily
related to acquisitions focused on energy efficiency, solar power
and emerging countries. In the second half of 2010, the Building
Distribution Sector resumed its policy of bolt-on acquisitions in
Europe, especially in Scandinavia.
Net debt stood at EUR7.2 billion at December 31, 2010. After an
already sharp EUR3.1 billion reduction in 2009, net debt was
reduced by a further EUR1.4 billion (16.2%) compared to December
31, 2009 (EUR8.6 billion), spurred essentially by the increase in
free cash flow. Net debt came out at 39% of shareholders' equity,
compared with 53% at December 31, 2009. The net debt to EBITDA
ratio came out at 1.5, a significant improvement on a year earlier
(2.3).
Update on asbestos claims in the US
Some 5,000 claims were filed against CertainTeed in 2010,
compared with 4,000 in 2009. Over the year, 13,000 claims were
settled (versus 8,000 in 2009), bringing the total number of
outstanding claims to 56,000 at December 31, 2010, versus 64,000 at
December 31, 2009.
Confirming the trends observed at the end of June 2010, a total
of USD 103 million in indemnity payments were made in the 12 months
to December 31, 2010, up from USD 77 million in the year-earlier
period.
In light of these trends, and particularly the rise in indemnity
payments, an additional provision of EUR97 million was accrued in
2010 (EUR75 million in 2009), bringing the total coverage for
CertainTeed's asbestos-related claims to around USD 501 million at
December 31, 2010, virtually stable compared to December 31, 2009
(USD 500 million).
2010 action plan:results ahead of targets
The Group resolutely implemented its action plan priorities
during the year and outperformed its 2010 targets.
In 2010, Saint-Gobain:
-- Continued to give clear operating priority to sales prices,
which rose 0.8% over the year (1.4% in the second half). The spread
between sales prices and raw material and energy costs therefore
had a positive impact on the year;
-- Implemented and extended the cost cutting program:
- EUR600 million in additional cost savings were unlocked in
2010 compared with 2009, including EUR150 million in the second
half, bringing the total cost savings realized between 2007 and
2010 to EUR2.1 billion.
-- Continued to optimize free cash flow, by:
- generating EUR1.5 billion in free cash flow(1) , ahead of the
target set in July (EUR1.4 billion, raised from an initial target
of EUR1.0 billion), despite the increase in capital
expenditure,
- maintaining a tight rein on operating working capital
requirements (WCR), which remained at 31 days' sales despite the
negative impact of the LME law and the increase in sales.
-- Thanks to these measures, the Group paid down net debt by a
further EUR1.4 billion, and again strengthened its balance sheet:
the gearing ratio has been slashed to 39% from 53% at end-December
2009, while the net debt to EBITDA ratio fell to 1.5.
-- At the same time, the Group resumed its selective
acquisitions and development policy, focusing on fast-growing
businesses and/or regions. It:
- increased its capital expenditure by 16% to EUR1,450 million
(including a rise of 38.5%, or EUR1,018 million in the second
half), with most growth capex earmarked for emerging countries and
for energy efficiency and solar power markets;
- gradually resumed its policy of bolt-on acquisitions, with
selective transactions also focused on energy efficiency, solar
power and emerging countries.
1. Excluding the tax impact of capital gains and losses on
disposals, asset write-downs and material non-recurring
provisions.
2011-2015 Strategy
Leveraging its very robust financial structure and significantly
leaner cost base, the Group intends to pursue a profitable growth
and expansion strategy over the next few years, with the aim of
becoming the reference in sustainable Habitat. This strategy will
chiefly involve:
- the gradual divestment of Packaging (Verallia), with the
process for minority flotation as from second-quarter 2011 launched
on October 13;
- bolstering the Group's positioning in high value-added
solutions for the Habitat market, so that high value-added
solutions represent 60% of the Group's sales by 2015 (compared to
51% currently);
- accelerating the Group's expansion in Asia and emerging
countries, with the aim of these regions accounting for 26% of the
Group's sales by 2015 (versus 19% currently).
This strategy will be underpinned by a constant focus on
profitability and strong financial discipline, in order to achieve
the Group's ambitious targets by 2015, namely:
Sales EUR55bn
=================================== ===============
EUR5.5bn
Operating income (10% of sales)
=================================== ===============
Recurring net income EUR3bn
=================================== ===============
ROI* (Return on investment) 25%
=================================== ===============
ROCE* (Return on capital employed) 14-15%
=================================== ===============
* Before tax
Outlook and objectives for 2011
2010 saw the Group emerge from the crisis and gradually return
to growth. Overall in 2011, the Group expects more upbeat trading
conditions in its main markets. However, trends will continue to
vary widely from one region to the next:
- Asia and emerging countries should see ongoing vigorous
growth, with the recovery in Eastern Europe (especially Poland)
picking up pace.
- In North America, industrial markets should continue to enjoy
strong momentum. In contrast, construction markets are likely to
remain sluggish, although some signs of recovery could emerge
during the year.
- In Western Europe, trading on industrial markets should remain
brisk, while construction markets should continue to recover,
particularly new-build and renovation segments. This overall
improvement should nevertheless conceal continuing stark contrasts
from one country to the next: the Group's key markets (France,
Germany, UK, Scandinavia) should continue to recover, while
Southern Europe will remain challenging.
- Lastly, household consumption markets should hold firm across
all regions.
Against this backdrop, all of the Group's Business Sectors
should benefit from a favorable growth momentum.
To support the return to growth on its main markets, the Group
will resolutely adopt a tempered development policy in 2011,
underpinned by a constant focus on profitability and strict
financial discipline. Saint-Gobain will:
- resume a dynamic but selective and tempered investment policy
(capex and financial investments) anchored around the Group's main
growth drivers (emerging countries, energy efficiency, solar
power), supported by a strong financial structure. Along the lines
of 2010, these markets should account for more than 80% of the
Group's growth capex in 2011;
- continue to give priority to sales prices and endeavor to pass
on the rising cost of raw materials and energy to sales prices,
amid rising inflation;
- continue to maintain a tight rein on costs;
- continue to keep a close watch on cash management and
financial strength;
- maintain its R&D efforts.
For 2011, the Group is therefore targeting:
- robust organic growth, with a bullish first quarter thanks
chiefly to very weak comparative figures;
- double-digit growth in operating income (at constant exchange
rates*), despite the rise in energy and raw material costs;
- free cash flow of EUR1.3 billion, after the EUR500 million
increase in capex;
- a persistently robust financial structure.
* Average exchange rates for 2010.
In terms of dividend policy, at its meeting of February 24,
Compagnie de Saint-Gobain's Board of Directors decided to recommend
to the June 9, 2011 Shareholders' Meeting a dividend payout of
EUR605 million**, representing 45% of recurring net income and 54%
of net income, i.e. a dividend of EUR1.15 per share, up 15% on the
2009 dividend. Based on the closing share price at December 31,
2010 (EUR38.50), this represents a dividend yield of 3.0%. The
dividends will be paid entirely in cash on June 16, 2011, with the
ex-coupon date scheduled for June 13, 2011.
* The dividend amount is based on the number of shares carrying
dividend rights on January 31, 2011.
Forthcoming results announcement
- Sales for the first quarter of 2011: April 28, 2011, after
close of trading on the Paris Bourse.
* * *
Analyst/Investor relations Press relations
----------------------------------- --------------------------------------
Florence Triou-Teixeira +33 1 47 Sophie Chevallon +33 1 47 62
62 45 19 30 48
Etienne Humbert +33 1 47 62 30 49
Vivien Dardel +33 1 47 62 44 29
----------------------------------- --------------------------------------
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view the associated PDF document:
http://www.rns-pdf.londonstockexchange.com/rns/8420B_-2011-2-24.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
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