TIDMCOD
RNS Number : 3588R
Compagnie de Saint-Gobain
24 October 2013
Paris, October 24, 2013
Sales for the first nine months of 2013
Trading upswing in the third quarter with 3.1% organic growth,
giving 1.1% negative organic growth for the nine-month period
* Organic growth reported by all businesses in Q3
* Sales prices remain upbeat: up 0.9% in Q3 and over
nine months
* Sales volumes recover: up 2.2% in Q3 (including one
additional working day), down 2.0% over nine months
* Acceleration in organic growth in Asia and emerging
countries in Q3, rebound in North America, and
fledgling improvement in Western Europe
* Strong negative currency impact of 4.3% in Q3;
negative impact of 2.3% since the beginning of the
year
* 2013 objectives confirmed
----------------------------------------------------------------------
Pierre-André de Chalendar, Chairman and Chief Executive Officer
of Saint-Gobain, said:
"The Group's trading performance in the third quarter confirms the recovery
that began in the three months to June 30, with ongoing robust organic
growth in Asia and emerging countries, confirmation of the upturn in
residential construction in the US and gradually more stable trading
in Western Europe. We maintained our focus on increasing prices amid
a slower rise in raw material and energy costs, and also continued to
roll out our cost cutting program. In a still unsettled macroeconomic
environment and despite a significant currency impact, we are confirming
our objective of a recovery in operating income in the second half of
the year."
The table below presents third-quarter sales trends by Business
Sector and major geographic area:
Sales for Sales for % change % change % change
Q3 2012 Q3 2013 on an actual on a comparable on a like-for-like
(EURm) structure structure basis
basis basis
(EURm)
----------------------------- ---------- ---------- -------------- ----------------- --------------------
BUSINESS SECTOR
Innovative Materials
(1)
Flat Glass
High-Performance Materials 2,329 2,242 -3.7% -3.7% +2.2%
1,263 1,234 -2.3% -2.2% +3.1%
Construction Products 1,068 1,010 -5.4% -5.5% +1.3%
(1)
Interior Solutions 3,001 2,993 -0.3% -0.3% +5.4%
Exterior Solutions 1,488 1,515 +1.8% +0.6% +6.3%
1,526 1,494 -2.1% -1.0% +4.7%
Building Distribution
4,923 4,878 -0.9% -0.5% +2.2%
Packaging (Verallia)
947 927 -2.1% -2.1% +1.8%
Internal sales and other
(249) (238) ------ ------- -------
GROUP
10,951 10,802 -1.4% -1.2% +3.1%
GEOGRAPHIC AREA
France
Other Western Europe 2,876 2,831 -1.6% -1.5% -1.5%
North America 4,641 4,659 +0.4% +0.1% +2.8%
Emerging countries and 1,590 1,531 -3.7% -2.7% +3.2%
Asia 2,261 2,220 -1.8% -1.2% +10.5%
Internal sales (417) (439) ----- ----- -----
GROUP 10,951 10,802 -1.4% -1.2% +3.1%
----------------------------- ---------- ---------- -------------- ----------------- --------------------
(1) Including inter-division eliminations.
Consolidated sales for the third quarter came in at EUR10,802
million, down 1.4% on third-quarter 2012 (EUR10,951 million). This
reflects a strong negative currency impact (-4.3%), a slightly
negative Group structure impact (-0.2%) and organic growth of 3.1%,
with volumes up 2.2% and prices gaining 0.9%. The additional
working day had a positive impact of around 1.5%. Volumes for the
third quarter were therefore back on an upward trend, including at
a constant number of working days.
Overall, third-quarter trends confirm the improvement across all
Group businesses, which delivered organic growth. Construction
Products (CP) sales rallied sharply (up 5.4%) after having been hit
by destocking in the US Exterior Products business in the previous
quarter. Innovative Materials and Building Distribution enjoyed an
uptick in trading, with sales advancing 2.2% for both Business
Sectors.
All of the Group's geographic areas contributed to this upturn
in organic growth.
The table below presents nine-month sales trends by Business
Sector and major geographic area:
Sales for Sales for % change % change % change
the first the first on an actual on a comparable on a like-for-like
nine months nine months structure structure basis
of 2012 of 2013 basis basis
(EURm) (EURm)
----------------------------- ------------- ------------- -------------- ----------------- --------------------
BUSINESS SECTOR
Innovative Materials
(1)
Flat Glass
High-Performance Materials 7,182 6,865 -4.4% -4.5% -1.2%
3,860 3,753 -2.8% -2.7% +0.2%
Construction Products 3,340 3,121 -6.6% -6.8% -3.1%
(1)
Interior Solutions 8,904 8,717 -2.1% -2.6% +0.7%
Exterior Solutions 4,334 4,385 +1.2% -0.4% +2.7%
4,609 4,376 -5.1% -4.5% -1.2%
Building Distribution
14,379 13,977 -2.8% -3.6% -2.3%
Packaging (Verallia)
2,855 2,740 -4.0% -3.5% -1.4%
Internal sales and other
(779) (726) ------ ------- -------
GROUP
32,541 31,573 -3.0% -3.4% -1.1%
GEOGRAPHIC AREA
France
Other Western Europe 9,024 8,750 -3.0% -4.8% -4.8%
North America 13,542 13,136 -3.0% -3.3% -2.2%
Emerging countries and 4,782 4,609 -3.6% -3.1% -0.3%
Asia 6,524 6,402 -1.9% -1.3% +6.1%
Internal sales (1,331) (1,324) ----- ----- -----
GROUP 32,541 31,573 -3.0% -3.4% -1.1%
----------------------------- ------------- ------------- -------------- ----------------- --------------------
(1) Including inter-division eliminations.
Saint-Gobain's sales for the first nine months of 2013 came in
at EUR31,573 million, down 3.0% from EUR32,541 million in the first
nine months of 2012.
The currency impact was a negative 2.3%, mainly reflecting the
fall against the euro of the key emerging market currencies
(chiefly the Brazilian real) along with the pound sterling and US
dollar.
Changes in Group structure had a slightly positive impact
(+0.4%), mainly owing to sales resulting from the Brossette
acquisition in April 2012.
Like-for-like (comparable Group structure and exchange rates),
sales retreated 1.1%. Volumes were down 2.0%, while sales prices
remained on an upward trend, gaining 0.9%.
Like-for-like performance of Group Business Sectors
Innovative Materials sales stemmed their decline to 1.2% over
the nine months to September 30 thanks to 2.2% growth in the third
quarter, with both of its businesses reporting gains.
- Flat Glass sales stabilized over the first nine months of the
year (up 0.2%). The third quarter (up 3.1%) confirmed price
increases in Europe, with float glass prices remaining on the
uptrend that emerged in the second quarter. Construction markets
are gradually stabilizing in Western Europe and are picking up pace
in Asia and emerging countries. The automotive market enjoyed
further vigorous organic growth along the lines of the second
quarter, powered by a strong performance from Asia and emerging
countries and ongoing stability in Europe.
- High-Performance Materials(HPM) reported 1.3% organic growth
in the third quarter, after negative organic growth of 5.1% in the
six months to June 30. Prices for the HPM business held up well in
a deflationary environment. Organic growth remained in the doldrums
for Ceramics, despite a weaker basis for comparison. Abrasives and
Plastics both recorded gains, particularly in Asia and in emerging
countries.
Construction Products (CP)sales leveled off, gaining 0.7% over
the first nine months of 2013, thanks to 5.4% growth in the third
quarter driven by upbeat volumes in North America and in Asia and
emerging countries.
- The momentum enjoyed by Interior Solutions in the second
quarter continued, with organic growth at 2.7% over the nine-month
period and 6.3% for the three months to September 30. The US played
its part in this performance, in terms of both prices (particularly
plasterboard at the start of the year) and volumes, thanks to the
rebound in residential construction. Volumes are close to
stabilizing in Western Europe, and continued to rally sharply in
Asia and emerging countries.
- After a worse-than-expected second quarter due to temporary
destocking in Exterior Products in the US, Exterior Solutions
reported a significant 4.7% rise in like-for-like third-quarter
sales, stemming the nine-month decline to 1.2%. Pipe saw a recovery
in the third quarter thanks to the export business. Industrial
Mortars enjoyed further buoyant organic growth in Asia and emerging
countries, but continued to feel the pinch of the economic crisis
in Western Europe.
Building Distribution sales dropped 2.3% on a like-for-like
basis over the first nine months of 2013, but resumed their advance
in the third quarter (up 2.2%). The Business Sector's performance
during the third quarter saw a clear improvement, as the recovery
took hold in the UK, Germany got back on the growth track and
stability reigned in Scandinavia thanks to Norway and Sweden.
Although organic growth in France is still slightly negative, it
continued to improve and confirmed market share gains. In emerging
countries, Brazil enjoyed strong momentum, but Eastern Europe
continued to see negative growth. Conditions in Southern Europe
remained challenging.
Packaging (Verallia) posted negative organic growth (-1.4%) over
the first nine months of the year but delivered 1.8% organic growth
in the third quarter. Sales prices for the Business Sector remained
upbeat, with volumes stabilizing in Western Europe and the US.
After a tough first half, Latin America once again saw solid
trading during the quarter in terms of both prices and volumes.
Like-for-like analysis by geographic area
In line with second-quarter trends, trading continued to improve
across all regions, and particularly Asia and emerging
countries:
- InFrance, organic growth remained slightly negative (-1.5%
over the quarter and -4.8% over the nine months to September 30).
Other Western European countries reported 2.8% growth over the
quarter and negative growth (-2.2%) over the first nine months of
the year. This upturn reflects solid trading in the UK which began
in the second quarter, as well as a good performance from
Germany.
- In North America, organic growth came in at a negative 0.3%
for the first nine months of the year, lifted by 3.2% growth in the
third quarter. This quarterly improvement is chiefly attributable
to Exterior Products, which - despite September figures being down
- was bolstered by a weaker basis for comparison (third-quarter
2012) as well as by the end of the destocking that had affected its
second-quarter performance. The ongoing rally in the construction
market in the US continued to benefit Interior Solutions, where
prices remained upbeat.
- In Asia and emerging countries, trading continued to pick up
pace (up 6.1% over the nine months to September 30 and 10.5% in the
third quarter) across all regions. Latin America (and especially
Brazil) continued to drive this growth momentum, while our
businesses in Eastern Europe and Asia saw organic growth
improve.
Update on asbestos claims in the United States
Some 3,000 claims were filed against CertainTeed in the first
nine months of 2013, in line with the same period in 2012. Taking
into account around 3,000 claims settled in the period (versus
8,000 in the first nine months of 2012), the number of outstanding
claims remained stable compared to December 31, 2012, at around
43,000.
Outlook and objectives for full-year 2013
In the fourth quarter, the Group expects confirmation of the
trends observed in the three months to September 30:
- in Western Europe, industrial markets (particularly
automotive) and residential construction (new-build and renovation)
should further stabilize. Construction should continue to rally in
the UK and Germany;
- in North America, residential construction should remain on a
steady upward trend, while industrial output should continue at a
good level;
- in Asia and emerging countries, our businesses should continue
to deliver robust organic growth;
- lastly, household consumption should remain satisfactory overall.
Against this backdrop, Saint-Gobain will press ahead with its
action plan in the fourth quarter, focusing particularly on:
- increasing its sales prices, in a context of a slower rise in raw material and energy costs;
- pursuing its cost cutting program, in order to achieve
additional cost savings of EUR160 million in the second half
compared to the first six months of the year (or EUR280 million
compared to second-half 2012). This will represent EUR580 million
in cost savings in 2013 as a whole compared to 2012 and EUR1,100
million in cumulative cost savings calculated on the 2011 cost
base;
- keeping a close watch on cash management and financial strength.
Despite the strong currency impact, the Group is therefore
confirming its objectives for full-year 2013:
- a recovery in operating income in the second half, after
having bottomed out in first-half 2013; we therefore expect
operating income in this period to be above second-half 2012;
- a high level of free cash flow, thanks mainly to a EUR200
million reduction in capital expenditure;
- a robust balance sheet, further strengthened by the disposal
of Verallia North America.
As mentioned in February, a meeting to discuss the Group's
strategy and businesses will be held on November 27, 2013.
Dates for your diary
Investor meeting: November 27, 2013.
Results for 2013: February 19, 2014, after close of trading on
the Paris Bourse.
Analyst/Investor relations Press relations
----------------------------------------- ---------------------------------------------------------------
+33 1 47 62
32 52
+33 1 47 62 +33 1 47 62 30
Gaetano Terrasini 44 29 48
Vivien Dardel +33 1 47 62 Sophie Chevallon +33 1 47 62 43
Alexandra Baubigeat 30 93 Susanne Trabitzsch 25
----------------------- ---------------- -------------------------------------------- -----------------
This information is provided by RNS
The company news service from the London Stock Exchange
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