TIDMCOD
RNS Number : 2850D
Compagnie de Saint-Gobain
25 April 2013
First-quarter 2013 sales down 4.8% to EUR9.7 billion.
Organic growth: -5.4%
Paris, April 25, 2013.
* Sales prices prove resilient: up 0.9%.
* Significant impact of harsh winter weather and fewer
working days (-3.7%) on sales volumes: down 6.3%.
* Robust organic growth in the US, driven by businesses
related to residential construction (CP Sector).
* Return to growth in Asia and emerging countries: up
1.5% like-for-like.
* Continued slowdown in Western Europe, exacerbated by
harsh weather conditions.
* 2013 targets confirmed.
-------------------------------------------------------------
Pierre-André de Chalendar, Chairman and Chief Executive Officer
of Saint-Gobain, commented:
"Amid a further general slowdown in economies across Europe, the Group's
first-quarter trading was severely affected by fewer working days compared
to first-quarter 2012 (2.4 days less, accounting for a negative impact
of around 3.7% on consolidated sales in the first three months of the
year) and by very harsh winter weather, particularly in Western Europe.
Faced with these tough market conditions - which brisk trading in North
America and a return to growth in Asia and emerging countries did not
fully offset - we continue to firmly implement our action plan. In particular,
we continue to raise our prices in order to broadly counter the rising
cost of raw materials and energy over the year as a whole, while vigorously
pursuing our cost cutting program.
We anticipate a gradual recovery in the Group's trading over the next
few quarters and confirm our target of a recovery in operating income
in the second half, after having bottomed out between mid-2012 and mid-2013".
Saint-Gobain posted EUR9,674 million in sales for the first
quarter of 2013, down 4.8% on the same year-ago period
(EUR10,162million).
Exchange rates had a negative 1.3% impact on sales, mainly
attributable to the depreciation against the euro of the currencies
of the main emerging countries where the Group operates
(particularly the Brazilian real) and, to a lesser extent, the
weaker British pound. Changes in Group structure had a positive
1.9% impact, resulting mainly from the acquisition of Brossette as
of April 1, 2012. Like-for-like (constant Group structure and
exchange rates), sales fell 5.4%, with volumes declining 6.3% while
sales prices advanced 0.9%.
These figures reflect the impact on Group trading of fewer
working days than in first-quarter 2012 (2.4 days less,accounting
for a negative impact of around 3.7% on consolidated first-quarter
sales) and the particularly harsh weather conditions in January and
March, namely in Europe. They also point to the continued economic
slowdown in most European countries, which could not be fully
offset by brisk trading in North America and a return to growth in
Asia and emerging countries.
In line with the economic scenario announced in February:
- in North America, the Group benefited from robust momentum in
US residential construction (helping Construction Products to
deliver double-digit organic growth in the country) and from
resilient industrial output and household consumption;
- in Asia and emerging countries, trading got back into positive
territory, driven mainly by a recovery in Latin America;
- in Western Europe, the Group's markets contracted - severely
affected by a long harsh winter - amid a general slowdown in
economies across the region;
- lastly,businesses related to household consumption (Packaging, Verallia) held up well.
Sales prices remained a key priority for the Group: after a rise
of 1.7% over 2012, they moved up 0.9% in the first quarter of 2013
in a lower inflationary environment overall, particularly as
regards raw materials and energy.
The table below presents sales trends by Business Sector and
major geographic area:
Q1 2012 Q1 2013 % change % change % change
sales sales on an actual on a comparable like-for-like
(EURm) (EURm) structure structure
basis basis
----------------------------- ---------- ---------- --------------- ------------------ ----------------
BY BUSINESS SECTOR
Innovative Materials
(1)
Flat Glass
High-Performance Materials
2,381 2,211 -7.2% -7.3% -5.2%
Construction Products 1,290 1,200 -7.0% -6.8% -4.9%
(1) 1,104 1,014 -8.1% -8.5% -6.4%
Interior Solutions
Exterior Solutions 2,817 2,754 -2.2% -3.7% -1.9%
1,408 1,367 -2.9% -5.8% -4.4%
Building Distribution 1,420 1,399 -1.5% -1.6% +0.7%
Packaging (Verallia) 4,343 4,110 -5.4% -9.0% -8.6%
Internal sales and misc. 880 835 -5.1% -3.7% -2.6%
GROUP (259) (236) ------ ------- -------
10,162 9,674 -4.8% -6.7% -5.4%
GEOGRAPHIC AREA
France
Other Western European
countries 2,896 2,803 -3.2% -8.8% -8.8%
North America 4,180 3,804 -9.0% -9.4% -9.5%
Emerging countries and 1,519 1,556 +2.5% +2.4% +3.1%
Asia/Pacific 2,027 1,943 -4.2% -4.4% +1.5%
Internal sales (460) (432) ----- ----- -----
GROUP 10,162 9,674 -4.8% -6.7% -5.4%
----------------------------- ---------- ---------- --------------- ------------------ ----------------
(1) After eliminating inter-division sales.
Like-for-like performance of Group Business Sectors
The deteriorating economic environment in Western Europe,
coupled with harsh winter weather and fewer working days than in
first-quarter 2012 (2.4 days less, accounting for a negative impact
of around 3.7% on consolidated sales), led to all of the Group's
Business Sectors reporting negative organic growth in the first
quarter.
Innovative Materials sales fell 5.2%, hit by declining sales
volumes, while sales prices remained broadly stable over the
quarter.
-- Flat Glass sales were down 4.9%. Conditions on the Division's
main markets (construction, automotive and solar) in Western Europe
remained very tough (double-digit declines), and are not as yet
conducive to an increase in sales prices - particularly float glass
- despite significant capacity reductions. In contrast, business in
Asia and emerging countries (particularly Latin America) rallied,
both in construction and automotive markets.
-- High-Performance Materials (HPM) sales retreated 6.4%,
reflecting the decline in businesses related to capital spending
(Ceramics) in both mature and fast-growing markets. However, HPM's
other activities (Abrasives, Plastics, Textile Solutions) held up
well, particularly in the US and in Asia and emerging
countries.
Construction Products (CP)sales fell 1.9%, owing to the downturn
in sales volumes in Western Europe. Sales prices remained upbeat
across the Business Sector.
-- Interior Solutions reported a 4.4% drop in sales, chiefly due
to the drop in volumes in Western Europe that was not fully offset
by the sharp 8.8% rebound in Asia and emerging countries. Sales
prices remained upbeat, buoyed by the significant increases
implemented in the US early in the year, particularly in
Gypsum.
-- Exterior Solutions reported a very slight 0.7% rise in sales,
which conceals a very mixed performance from its different
businesses. Exterior Products delivered double-digit growth fuelled
by the ongoing recovery in US residential construction. Pipe sales
declined further, albeit at a slower pace than in first-quarter
2012, hit by the impact of austerity measures in Europe which the
start of an upturn in exports (the first deliveries under the US$
200 million contract with Kuwait will only be made at the end of
the second quarter) could not offset. Industrial Mortars continued
to enjoy strong growth in Asia and emerging countries, but were hit
in Europe by the economic slowdown and harsh weather conditions.
Sales prices for the Division remained upbeat.
Building Distribution reported an 8.6% drop in sales, hit by
very harsh weather conditions in the first three months of 2013 and
by fewer working days than in the same year-ago period (2.6 days
less over the quarter, accounting for a negative 3.9% impact on
volumes for the Business Sector). Volumes were down in all of the
countries where the Group operates, while sales prices went up.
Trading in France proved fairly resilient, as a result of further
market share gains in a tough economic environment.
Packaging (Verallia) saw sales fall 2.6% over the quarter,
despite a rise in its sales prices in all of the countries where it
operates (up 2.5% on average). Volumes were down in the US and in
most European countries, but advanced in Russia and Latin
America.
Like-for-like analysis by geographic area
In line with the economic scenario announced by the Group in
February, an analysis of trading by geographic area reveals a sharp
contrast between Western Europe - which continued on a downward
trend - and other regions (North America and Asia and emerging
countries) - which either reported further gains or returned to
growth.
- In France and other Western European countries, sales declined
by 8.8% and 9.5%, respectively, affected not only by the general
slowdown in economies across Europe, but also, in most countries,
by harsh winter weather (in January and March) and fewer working
days than in first-quarter 2012. These factors adversely impacted
all of the Group's Business Sectors and Divisions (particularly
Building Distribution), which all reported volume declines over the
three months to March 31 as a result. In contrast, sales prices
held up well.
- North America delivered 3.1% organic growth, buoyed by the
ongoing recovery in businesses related to residential construction
(CP Sector) and despite a tough basis for comparison. Moreover,
amid resilient industrial markets and household consumption, all of
the Group's businesses enjoyed positive trends in sales prices.
- Asia and emerging countries got back on the growth track, with
sales up 1.5%, driven by the sharp 5.4% upturn in Latin American
markets which offset the contraction in Asia (particularly China
and South Korea). Sales for Eastern Europe were broadly stable,
with difficulties in Poland and the Czech Republic offset by a very
bullish performance from Russia and the Baltics.
Update on asbestos claims in the US
Some 1,000 claims were filed against CertainTeed in the first
three months of 2013, on a par with the same period in 2012. Taking
into account around 1,000 claims settled in the period (versus
2,000 in first-quarter 2012), the total number of outstanding
claims remained stable compared to end-December 2012, at
43,000.
Outlook and objectives for 2013
After a particularly tough first quarter affected by
significantly fewer working days than in first-quarter 2012 and by
very harsh winter weather - namely in Europe - the Group expects
trading to gradually improve over the next few quarters,
particularly in North America and in Asia and emerging countries
(regions which together represented 44% of consolidated operating
income and 46% of the Group's fixed assets in 2012):
- in North America, the gradual upturn in residential new-build
and renovation markets should continue, while industrial output
should remain at a good level;
- in Asia and emerging countries, trading should continue to
improve steadily, but stark contrasts will persist from one country
to the next, with robust growth in Mexico, Argentina and Russia,
moderate growth in Brazil and China, a slowdown in India, and
stability in Eastern Europe;
- in Western Europe, industrial markets (particularly
automotive) should continue to contract, while construction market
trends should remain challenging. Regulatory measures promoting
energy efficiency in new-builds and existing homes should support
demand, however, and allow the Group to outperform its underlying
markets;
- lastly, household consumption should hold firm overall.
Against this backdrop, Saint-Gobain will continue to implement
its action plan over the next few quarters, focusing in particular
on:
- increasing sales prices, with the aim of passing on the rise
in raw material and energy costs over the year as a whole;
- pursuing its cost cutting program in order to achieve savings
of EUR1,100 million in 2013 (calculated on the 2011 cost base). As
announced in February, we have rolled out new vigorous measures
since the beginning of the year that will enable us to achieve in
2013 additional cost savings of EUR580 million compared to
2012;
- keeping a close watch on cash management and financial strength;
Saint-Gobain will also continue to pursue its strategic goals
(development in high-growth countries, energy efficiency and energy
markets, and consolidation in Building Distribution and
Construction Products). Profitability will remain a constant focus,
underpinned by strict financial discipline.
The Group is therefore confirming its targets for full-year
2013:
- a recovery in operating income in the second half, after
having bottomed out between mid-2012 and mid-2013;
- a high level of free cash flow, namely as a result of a EUR200
million reduction in capital expenditure;
- a robust balance sheet, strengthened by the disposal of
Verallia North America.
Forthcoming results announcement:
First-half 2013 earnings: July 24, 2013, after close of trading
on the Paris Bourse.
Analyst/Investor relations Press relations
------------------------------------------------ --------------------------------------------------------------
+33 1 47 62 45
19
+33 1 47 62 44 +33 1 47 62 30
Florence Triou-Teixeira 29 48
Vivien Dardel +33 1 47 62 30 Sophie Chevallon +33 1 47 62 43
Alexandra Baubigeat 93 Susanne Trabitzch 25
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This information is provided by RNS
The company news service from the London Stock Exchange
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