PARIS, October 23, 2014 /PRNewswire/ --
Organic growth at 2.7%; stable in the third
quarter
- Volumes up +1.7% over the first nine months of the year but
slipping -0.5% in Q3, hit by construction markets in France and Germany. Confirmation of the positive trends
in the UK as well as in the US new-build and industrial
markets.
- Sales prices up +1.0% over the nine-month period. More moderate
price impact in Q3 (+0.5%) owing to a decrease in prices for
Exterior Products in the US and lower inflation in Western Europe.
- Currency impact still significant over the nine-month period
(-2.2%) but limited in Q3 (-0.3%).
- Group structure impact of -2.3% over the nine-month period and
-3.0% in Q3, resulting chiefly from the disposal of Verallia North
America.
- Buyback of around 3.8 million shares over the past three
months.
Pierre-André de Chalendar, Chairman and Chief Executive
Officer of Saint-Gobain, commented:
"The Group's organic growth in the third quarter reflects the
contraction in certain economies in Western Europe, milder growth in Asia and emerging countries, and a downturn in
the Roofing business in the US. The positive trends in the UK and
Scandinavia, and in US new-build and industrial
markets, continued apace.
The Group has stepped up measures to address this uncertain
macroeconomic environment, including the planned 2015 cost cutting
program.
For full-year 2014, the Group continues to
target a clear improvement in its operating income
expected between 5% and 10% based on comparable
Group structure and exchange rates and excluding
Verallia North America, as well as a high level of free cash
flow."
The table below presents nine-month sales trends by Business
Sector and major geographic area:
Change on
9 months 9 Change on a 9 months
2013 months an actual comparable 2013
Sales 2014 structure structure Like-for-like Sales
EURm Restated* Sales basis basis change Published
BUSINESS SECTOR
Innovative
Materials[1] 6,738 6,770 0.5% 0.4% 3.6% 6,865
Flat Glass 3,625 3,621 -0.1% 0.7% 3.0% 3,753
High-Performance
Materials 3,121 3,156 1.1% 0.1% 4.2% 3,121
Construction
Products[1] 8,641 8,543 -1.1% -0.1% 3.5% 8,717
Interior Solutions 4,385 4,505 2.7% 2.7% 5.8% 4,385
Exterior Solutions 4,300 4,085 -5.0% -2.9% 1.1% 4,376
Building Distribution 13,977 14,084 0.8% 1.1% 1.7% 13,977
Packaging
(Verallia)[2] 2,740 2,116 -22.8% -1.4% 2.4% 2,740
Including VNA 920 314 --- --- --- 920
Internal sales and
misc. (717) (697) --- --- --- (726)
GEOGRAPHIC AREA
France 8,708 8,672 -0.4% -0.5% -0.5% 8,750
Other Western European
countries 13,097 13,508 3.1% 3.3% 3.4% 13,136
North America[2] 4,594 3,875 -15.7% -0.8% 2.6% 4,609
Emerging countries and
Asia 6,285 6,241 -0.7% -0.2% 8.5% 6,402
Internal sales (1,305) (1,480) --- --- --- (1,324)
GROUP 31,379 30,816 -1.8% 0.5% 2.7% 31,573
* 2013 figures restated to reflect the impacts of the amended
IFRS 11.
[1] Including inter-division
eliminations.
[2] Including Verallia North
America (VNA) which was deconsolidated with effect from
April 11, 2014.
Saint-Gobain's sales for the first nine months of 2014
came in at €30,816 million,
down 1.8% from €31,379
million in the same period one year earlier.
The currency impact was a negative 2.2%, due to the
depreciation against the euro of Latin American and Scandinavian
currencies as well as the US dollar - chiefly in the first
half.
The Group structure impact was a negative 2.3%,
essentially reflecting the disposal of Verallia North America (VNA)
with effect from April 11, as well as
the sale of certain non-core Exterior Solutions and Building
Distribution businesses.
Like-for-like (comparable structure and exchange rates), sales
were up 2.7%. Volumes grew 1.7%, despite a negative
third quarter. Sales prices gained 1.0% over the nine months
to September 30, following a 1.2%
rise in the first half.
The table below presents third-quarter sales trends by Business
Sector and major geographic area:
Change on
Q3 2013 Q3 2014 Change on a Q3 2013
an actual comparable
Sales Sales structure structure Like-for-like Sales
EURm Restated* basis basis change Published
BUSINESS SECTOR
Innovative
Materials[1] 2,194 2,286 4.2% 3.4% 3.4% 2,242
Flat Glass 1,187 1,223 3.0% 2.9% 2.2% 1,234
High-Performance
Materials 1,010 1,065 5.4% 3.8% 4.8% 1,010
Construction
Products[1] 2,964 2,900 -2.2% -1.4% -0.4% 2,993
Interior Solutions 1,515 1,551 2.4% 2.3% 3.3% 1,515
Exterior Solutions 1,465 1,366 -6.8% -5.2% -4.1% 1,494
Building Distribution 4,878 4,797 -1.7% -1.3% -1.8% 4,878
Packaging
(Verallia)[2] 927 616 -33.5% 0.6% 4.0% 927
Including VNA 315 0 --- --- --- 315
Internal sales and
misc. (235) (229) --- --- --- (238)
GEOGRAPHIC AREA
France 2,816 2,724 -3.3% -3.3% -3.3% 2,831
Other Western European
countries 4,641 4,673 0.7% 0.9% 0.0% 4,659
North America[2] 1,526 1,234 -19.1% 3.2% 3.6% 1,531
Emerging countries and
Asia 2,178 2,217 1.8% 1.6% 4.6% 2,220
Internal sales (433) (478) --- --- --- (439)
GROUP 10,728 10,370 -3.3% -0.3% 0.0% 10,802
* 2013 figures restated to reflect the impacts of the amended
IFRS 11.
[1] Including inter-division
eliminations.
[2] Including Verallia North
America (VNA) which was deconsolidated with effect from
April 11, 2014.
Consolidated sales for the third quarter came in at
€10,370million, down 3.3%
on the same period one year earlier (€10,728 million). This
reflects a negative Group structure impact of
3.0% and a milder negative currency
impact of 0.3% thanks to the appreciation
of the Group's main currencies against the euro over the past few
months.
On a like-for-like basis, sales remained stable over the
quarter.
Volumes slipped 0.5%,
hit by the downturn in construction markets in France and Germany, the decline in Exterior Solutions,
and softer growth in Asia and
emerging countries.
Prices had a slight 0.5%
positive impact, with a decline in prices for US Exterior Products
and lower inflation in Western
Europe.
Like-for-like performance of Group Business
Sectors
Innovative Materials sales climbed 3.6% over the
nine-month period, including 3.4% in the third quarter powered by
High-Performance Materials.
- Flat Glass reported 3.0% organic growth over the first
nine months of the year. In the third quarter (+2.2%), trading
remained upbeat in Asia and
emerging countries, with the exception of Brazil and particularly the automotive sector.
In Europe, the construction
markets remained under pressure. Prices continued to progress
slightly overall in Flat Glass, amid stable prices for commodity
products (float glass) in Europe.
- High-Performance Materials sales were up 4.2% over the
nine months to September 30.
Third-quarter trading (up 4.8%) continued along the lines of the
first half, but with a smaller price impact. As the upswing in
North American industrial markets took hold, Plastics sales picked
up pace, Abrasives continued to grow and Ceramics improved
gradually, thanks to a favorable basis for comparison.
Construction Products (CP)
sales advanced 3.5% over the nine months despite slipping 0.4% in
the third quarter due to Exterior Solutions.
- Interior Solutions delivered 5.8% growth over the
nine-month period, helped by mild winter weather in the first
quarter. Third-quarter trading (up 3.3%) continued along the lines
of the three months to June 30,
spurred by upbeat construction markets in the US. In Western Europe prices decreased, while volumes
continued to grow, buoyed by our businesses' positioning in the
energy efficiency market. Sales growth in Asia and emerging countries slowed on the back
of the downturn in trading in Japan and Latin
America.
- Exterior Solutions retreated 4.1%, with both volumes and
prices down in the third quarter, reducing organic growth over the
nine-month period to 1.1%. The decline stems chiefly from the
impact of prices for Exterior Products in the US, which continued
to struggle from the lack of additional weather-related demand.
Pipe posted good organic growth for the first nine months of the
year driven by the ramp-up in export contracts, despite
third-quarter trading being hit by a reduction in cast iron
production capacity in China. The
economic situation in Western
Europe continued to take its toll on Industrial Mortars,
although the business reported further good organic growth in
Asia and emerging countries
despite the decrease in volumes in Latin
America.
Building Distribution posted 1.7% organic growth over the
nine-month period, with sales losing 1.8% in the three months to
September 30 after slipping 0.2% in
the second quarter.
The downturn in France
worsened, due to the sharp contraction in the new-build market.
After a first quarter buoyed by mild winter weather, Germany has been declining fairly
significantly since the second quarter. However, the upbeat
momentum was confirmed in the UK and Scandinavia posted slight
growth over the third quarter. Brazil saw small growth gains, despite the
cyclical downturn.
Packaging (Verallia) sales moved up 2.4% over
the nine months to September 30,
powered by a 4.0% rise in the third quarter.
Sales prices for the Business Sector remained under pressure in
Western Europe, while volumes
increased slightly. Latin America
once again reported good growth, driven by inflation-related price
trends.
Like-for-like analysis by geographic area
Organic growth slowed in the third quarter:
- In France, the trading
downturn gained ground (down 3.3% over the quarter and 0.5% over
the nine-month period), hit by the contraction in the new-build
market.
- Trading in other Western European countries, which
remained stable over the quarter, was still up over the first nine
months of the year, at +3.4%. The slowdown in trading reflects the
decline in Germany. The UK
continued to grow and Nordic countries advanced slightly.
- Organic growth in North
America came in at 2.6% for the first nine months of the
year, including 3.6% in the third quarter. Interior Solutions
continued to benefit from good momentum in US construction in terms
of both volumes and prices, despite Exterior Products taking some
shine off the region's performance. Industrial markets continued to
improve.
- Asia and emerging
countries posted 8.5% growth over the nine-month period and
4.6% in the third quarter. Trading slowed across all regions
compared to the first half of the year.
Update on asbestos claims in the
United States
Some 3,000 new claims were filed against CertainTeed in the
first nine months of 2014, in line with the same period in 2013.
Taking into account around 4,000 claims settled in the period
(versus 3,000 in the first nine months of 2013), and around 4,000
claims transferred to inactive dockets, some 38,000 claims were
outstanding at September 30, 2014,
compared with 43,000 at end- 2013.
Update on the share buyback
Over the past three months Saint-Gobain has bought back
3,786,095 of its own shares at an average price of €35.35.
Outlook and objectives for full-year 2014
The Group expects the following trends for the fourth
quarter:
- In Western Europe, the upturn in our markets should
continue in the UK and to a lesser extent in Scandinavia. The
decline in the new-build market in France will continue to affect performance.
The outlook in Germany remains
uncertain.
- In North America,
construction should remain buoyant with the exception of Exterior
Products markets. Industry should continue to advance.
- In Asia and emerging countries, our businesses
should maintain a satisfactory level of growth.
- Lastly, household consumption should prove upbeat in
volume terms but could continue to be affected by competitive
pressure on prices.
The Group is rolling out specific measures to address this
uncertain macroeconomic environment:
- keeping a priority focus on increasing sales prices in
order to maintain a positive spread versus raw material and energy
costs;
-
implementing the cost-cutting program,
with the aim of unlocking €210 million in additional cost savings
in the second half compared to the same period in 2013
(representing total cost savings of €450 million in 2014 versus
2013);
- stepping up the cost cutting
program already in
place for 2015 in response to weaker
markets;
- maintaining a close watch on cash management and
financial strength, including adjusting capital expenditure
to below the €1.5 billion initially planned;
- pursuing a selective acquisitions and divestments
policy.
For full-year 2014, Saint-Gobain continues to target:
- a clear improvement in its operating income expected between 5%
and 10% based on comparable structure and exchange rates and
excluding Verallia North America;
- a high level of free cash flow.
Financial calendar
Results for 2014: February
25, 2015, after close of trading on
the Paris Bourse.
Important disclaimer - forward-looking
statements:
This press release contains forward-looking statements with
respect to Saint-Gobain's financial condition, results, business,
strategy, plans and outlook. Forward-looking statements are
generally identified by the use of the words "expect",
"anticipate", "believe", "intend", "estimate", "plan" and similar
expressions. Although Saint-Gobain believes that the expectations
reflected in such forward-looking statements are based on
reasonable assumptions as at the time of publishing this document,
investors are cautioned that these statements are not guarantees of
its future performance. Actual results may differ materially from
the forward-looking statements as a result of a number of known and
unknown risks, uncertainties and other factors, many of which are
difficult to predict and are generally beyond the control of
Saint-Gobain, including but not limited to the risks described in
Saint-Gobain's registration document available on its website
(http://www.saint-gobain.com). Accordingly, readers of this
document are cautioned against relying on these forward-looking
statements. These forward-looking statements are made as of the
date of this document. Saint-Gobain disclaims any intention or
obligation to complete, update or revise these forward-looking
statements, whether as a result of new information, future events
or otherwise.
This press release does not constitute any offer to purchase
or exchange, nor any solicitation of an offer to sell or exchange
securities of Saint-Gobain.
For any further information, please visit
http://www.saint-gobain.com.
Analyst/Investor relations
Gaetano Terrasini +33-1-47-62-32-52
Vivien Dardel
+33-1-47-62-44-29
Marine Huet +33-1-47-62-30-93
Press relations
Sophie Chevallon+33-1-47-62-30-48
Susanne Trabitzsch +33-1-47-62-43-25
SOURCE Saint-Gobain