TIDMCOD
RNS Number : 7088C
Compagnie de Saint-Gobain
03 May 2012
First-quarter 2012 sales up 3.7% to EUR10.2 billion.
Organic growth: 0.9%.
Paris, May 3, 2012.
* Sales prices: up 2.4%, with a positive contribution
from all Business Sectors.
* Sales volumes: down 1.5% (very tough basis for
comparison).
* Double-digit organic growth in the United States,
driven by businesses linked to residential
construction.
* Upbeat momentum confirmed in construction markets in
Northern Europe; continuing difficulties in Southern
Europe.
* Solid performance in France.
* Continued brisk trading on industrial markets
(excluding automotive in Europe).
* Slowdown in organic growth in Asia and emerging
countries: +0.6%.
* 2012 targets confirmed.
------------------------------------------------------------
Pierre-Andre de Chalendar, Chairman and Chief Executive Officer of Saint-Gobain,
commented:
"Amid an uncertain economic climate and despite a particularly tough
basis for comparison, Saint-Gobain delivered further organic growth in
the first quarter of 2012. We continued to raise our sales prices in
order to broadly offset the rise in raw material and energy costs over
the year. Trading volumes remained satisfactory but varied widely from
one region to the next. The rebound in US housing starts helped counter
slacker activity in Europe (due partly to harsh weather conditions in
February) and the slowdown in Asia. Thanks to our strategic positioning
in high value-added habitat solutions, we continue to deliver growth
ahead of our markets and to benefit from stricter energy efficiency standards
in the habitat segment.
For 2012 as a whole, we are therefore confirming our targets of moderate
organic growth, while operating income and profitability should prove
resilient".
Saint-Gobain posted moderate growth in sales for first-quarter
2012, up 3.7% to EUR10,162 million from EUR9,799million in
first-quarter 2011.
Exchange rates accounted for a 1.0% increase in sales, mainly
attributable to gains in the US dollar and British pound against
the euro. Changes in Group structure had a positive 1.8% impact,
resulting equally from the acquisition of Build Center on November
1, 2011 and from acquisitions carried out over the past 12 months
in energy efficiency businesses and emerging countries.
Like-for-like sales (comparable Group structure and exchange
rates) edged up 0.9%. Volumes retreated 1.5%, while sales prices
climbed 2.4%.
Overall, despite a particularly tough basis for comparison (9.6%
organic growth in first-quarter 2011) and a more uncertain economic
climate, the Group continued to deliver a satisfactory trading
performance in the three months to March 31, 2012.
In line with the scenario announced in February:
- the Group benefited from upbeat industrial markets in North
America, and especially the start of a recovery in residential
construction in the US, which pushed the CP and Building
Distribution Sectors into double-digit organic growth;
- as expected, despite ongoing brisk growth in Latin America,
momentum in emerging countries and Asia slowed significantly, due
chiefly to the downturn in our Asian operations;
- trading was slightly weaker in Western Europe (compared to a
strong 10.2% rise in first-quarter 2011), chiefly reflecting the
downturn in the automotive market and to a lesser extent, the
impact of harsh weather conditions in February on the construction
sector. However, trading in other industrial sectors (excluding
automotive) remained satisfactory. Residential construction proved
resilient overall, despite continuing stark contrasts between
Northern Europe (Scandinavia and Germany) - which continued to
perform very well - and Southern Europe, where conditions remained
extremely tough. France continued to enjoy upbeat trading
conditions in the quarter;
- businesses related to household consumption (Packaging,
Verallia) remained upbeat across all geographic areas.
In this still unsettled economic environment, sales prices were
once again among the Group's top priorities as energy and raw
material costs continued their upward spiral. After a 2.7% rise in
2011, sales prices moved up a further 2.4% over the three months to
March 31, 2012, led by Construction Products and High-Performance
Materials in particular. Only Flat Glass saw a fall in its sales
prices amid a downturn in its main markets, despite the hike in
energy and raw material costs.
Sales trends by Business Sector and major geographic area are as
follows:
Q1 2011 Q1 2012 % change % change % change
sales sales on an actual on a comparable like-for-like
(EURm) (EURm) structure structure
basis basis
(en %) (en %)
----------------------------- --------- --------- -------------- ----------------- ---------------
BY BUSINESS SECTOR
Innovative Materials
(1)
Flat Glass
High-Performance Materials
2,386 2,381 -0.2% -2.3% -3.1%
Construction Products 1,359 1,290 -5.1% -5.8% -5.6%
(1) 1,040 1,104 +6.2% +2.4% +0.3%
Interior Solutions
Exterior Solutions 2,658 2,817 +6.0% +5.1% +3.7%
1,346 1,408 +4.6% +4.0% +3.1%
Building Distribution 1,323 1,420 +7.3% +6.2% +4.3%
Packaging (Verallia) 4,151 4,343 +4.6% +2.2% +1.6%
Internal sales and misc. 852 880 +3.3% +3.1% +1.7%
GROUP (248) (259) ------ ------- -------
9,799 10,162 +3.7% +1.9% +0.9%
BY GEOGRAPHIC AREA
France
Other Western European
countries 2,910 2,896 -0.5% -0.7% -0.7%
North America 4,096 4,180 +2.0% -0.4% -1.5%
Emerging countries and 1,301 1,519 +16.7% +14.7% +10.1%
Asia/Pacific 1,979 2,027 +2.4% +0.2% +0.6%
Internal sales (487) (460) ----- ----- -----
GROUP 9,799 10,162 +3.7% +1.9% +0.9%
----------------------------- --------- --------- -------------- ----------------- ---------------
(1) including inter-division eliminations.
Performance of Group Business Sectors (like-for-like)
All of the Group's Business Sectors except Innovative Materials
- hit by the downturn in Flat Glass - delivered small organic
growth gains over the quarter, spurred chiefly by the continuing
uptrend in sales prices.
Innovative Materials sales dropped 3.1% due to the decline in
Flat Glass. High-Performance Materials remained stable.
-- Sales ofFlat Glass fell 5.6%, reflecting the slowdown in Asia
and emerging countries, the contraction in solar markets and the
European automotive industry, and faltering construction activity
in Western Europe. Against this backdrop, despite soaring energy
and raw material costs, sales prices - especially for commodity
products (float glass) - were down on first-quarter 2011.
-- High-Performance Materials (HPM) reported a slight 0.3%
advance in sales on the back of a significant increase in sales
prices. Volumes remained robust in the US, powered by healthy
trading on industrial markets, but slowed in Western Europe and in
Asia and emerging countries owing chiefly to the contraction in the
automotive market.
Construction Products (CP) salesmoved up 3.7%. Sales growth for
the Business Sector reflects upbeat price momentum across all
divisions except Pipe, as well as the sharp rally in sales volumes
in the US as residential construction activity began to pick
up.
-- Interior Solutions reported moderate 3.1% organic growth, due
mainly to good sales price increases over the period (up 2.9%).
Sales volumes remained virtually stable, as the recovery in the US
was offset by slacker trading in Western Europe. Sales in Asia and
emerging countries advanced slightly over the period, thanks mainly
to bullish Latin American economies.
-- Exterior Solutions also posted moderate organic growth, at
4.3%, reflecting a very mixed performance from its various
activities. Exterior Products delivered double-digit growth spurred
by the upturn in US housing starts, while Pipe saw a further sharp
fall in sales, hit by both the austerity measures implemented in
Europe and sluggish exports. Industrial Mortars continued to be
powered by Asia and emerging countries, which posted vigorous
growth over the quarter. Sales prices remained upbeat across the
entire Business (except Pipe), but failed to fully offset the rise
in raw material costs.
Despite a very tough comparison basis (10.8% organic growth in
first-quarter 2011) and adverse weather conditions in February,
Building Distribution saw sales advance 1.6%, driven once again by
Germany and Scandinavia. Trading for the Business Sector in
Southern and Eastern European countries and to a lesser extent in
the UK remained challenging, while trading in France held firm.
After a consecutive five-year decline, US Building Distribution
rallied sharply, posting double-digit organic growth for the
quarter. Sales prices remain upbeat across the Business Sector, in
line with the Group average.
Packaging (Verallia) reported 1.7% organic growth in the
quarter, fuelled chiefly by favorable trends in sales prices, which
gained 2.2%. This organic growth was driven by North America (up
4.3%), while Europe remained stable, with strong sales volumes in
France and Germany offsetting the decline in other European
countries. Sales in Latin America slipped 1.0% on a like-for-like
basis, due mainly to a tough comparison basis.
Analysis by geographic area (like-for-like)
Based on our analysis of trading by geographic area, stark
contrasts emerged between Western Europe - where sales fell
slightly - and North America, which reported double-digit growth
over the quarter. Trading in Asia and emerging countries stabilized
at the high levels reported in first-quarter 2011.
- Sales in France and other Western European countries slipped
0.7% and 1.5%, respectively, hit by a very tough basis for
comparison and harsh weather conditions in February. Sales for
Building Distribution and Packaging (Verallia) as well as
Insulation held firm, but failed to fully offset the sharp downturn
in Pipe and the decline in Flat Glass. On a country-by-country
basis, trading was again buoyant in Scandinavia, powered by Norway
in particular, while business across Southern Europe remained in
the doldrums. Germany, France and the UK delivered a solid
performance, although they were hit during the quarter by the harsh
weather conditions in February.
- North America posted 10.1% organic growth on the back of a
sharp upturn in sales volumes across businesses linked to
construction (CP and Building Distribution). All Group businesses
in the region enjoyed favorable sales price trends amid upbeat
industrial markets and household consumption.
- Growth wasvery weak in Asia and emerging countries (0.6%), as
the contraction in our Asian operations (particularly in China and
South Korea) offset ongoing bullish conditions in Latin America and
small growth gains in Eastern Europe.
Update on asbestos claims in the US
Some 1,000 claims were filed against CertainTeed in the first
three months of 2012, on a par with the same period in 2011. Taking
into account the number of claims settled in the period (around
2,000, versus 3,000 in first-quarter 2011), the total number of
outstanding claims continued to fall, down to 51,000 at March 31,
2012 from 52,000 at end-December 2011.
Outlook and objectives for 2012
After a broadly satisfactory first-quarter performance despite a
tough comparison basis and harsh weather conditions across Europe
in February, the Group expects the underlying trends presented in
February to continue over the next few quarters. In particular:
- in Asia and emerging countries, growth should remain modest in
the second quarter before picking up in the second half of the
year;
- in North America, industrial markets should continue to
perform well and construction markets should confirm their gradual
recovery;
- in Western Europe, the automotive market is expected to remain
difficult, while trading in other industrial markets should remain
upbeat. Residential construction markets should continue to prove
resilient overall, particularly in the second quarter. However, the
situation should continue to vary widely from one country to the
next, with further gains expected in Germany and Scandinavia and
continued healthy trading in France, but persistent difficulties in
Southern Europe and to a lesser extent the UK;
- lastly, household consumption markets should hold firm across all geographic areas.
Against this backdrop,providing the economic and financial
crisis does not escalate, trading for the Group should remain
satisfactory overall, helped by weaker comparison bases over the
next few months.
Consequently, the Group is confirming its targets for full-year
2012:
- moderate organic growth, driven chiefly by sales prices;
- operating income and profitability to prove resilient;
- high levels of free cash flow and capex to stabilize at its
2011 level (around EUR2 billion);
- a persistently robust balance sheet.
Forthcoming results announcement:
First-half 2012 earnings: July 26, 2012, after close of trading
on the Paris Bourse.
Analyst/Investor relations Press relations
------------------------------------------- ----------------------------------------------------------------
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-------------------------- --------------- ------------------------------------------- -------------------
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