TIDMCOD
RNS Number : 5879F
Compagnie de Saint-Gobain
28 July 2016
PRESS RELEASE
Paris, July 28, 2016
First-half 2016 results
Organic growth in all three business sectors and in all
regions
Significant improvement in results across the board
-- Organic growth at 2.9% with a sharp 3.5% improvement in
volumes buoyed partly by the positive impact of a greater number of
working days
-- Negative 0.6% price impact in a still deflationary
environment in terms of prices and raw material and energy
costs
-- Negative 3.5% currency impact on sales and negative 1.0% Group structure impact
-- Operating income up 7.3% on a reported basis and up 10.2% like-for-like
-- Significant 13.0% rise in recurring net income and free cash flow
-- Buyback and cancellation of around 11 million shares in the first half
-- Recurring EPS(1) up 16.5%
-- Objectives for full-year 2016 confirmed; like-for-like
improvement in operating income expected in the second half versus
second-half 2015
(EURm) H1 2015 H1 2016 Change Change
like-for-like
Sales 19,860 19,549 -1.6% +2.9%
EBITDA 1,886 1,957 +3.8%
Operating income 1,275 1,368 +7.3% +10.2%
Recurring net income(2) 552 624 +13.0%
Free cash flow(3) 728 823 +13.0%
Pierre-André de Chalendar, Chairman and Chief Executive Officer
of Saint-Gobain, commented:
"Saint-Gobain's sales for first-half 2016 confirm our February
forecasts, with France stabilizing and all regions making a strong
contribution to growth. Our strategy of investing in emerging
markets provides us with a diversified platform for profitable
growth. Our first-half results also benefited from efforts to
optimize our operations, particularly in Western Europe, and from
upbeat trading in the US. The results are in line with our
objectives and we expect a like-for-like improvement in operating
income for second-half 2016 versus second-half 2015. While the June
23 Brexit vote in the UK has created a climate of uncertainty, it
does not affect our objectives."
1. Recurring earnings per share from continuing operations.
2. Recurring net income from continuing operations excluding
capital gains and losses on disposals, asset write-downs and
material non-recurring provisions.
3. Cash flow from continuing operations excluding the tax impact
of capital gains and losses on disposals, asset write-downs and
material non-recurring provisions less capital expenditure
Operating performance
First-half sales came in at EUR19,549 million, including a
significant 3.5% negative currency impact resulting namely from the
depreciation of Latin American currencies - and to a lesser extent
the pound sterling - against the euro.
The negative 1.0% Group structure impact is a result of the
disposals carried out in 2015 aimed at optimizing the Building
Distribution portfolio.
On a like-for-like basis, sales were up 2.9% on the back of 3.5%
volume growth driven partly by the positive impact of a greater
number of working days in the second quarter (estimated impact of
just over +1% in the first half). All Business Sectors and regions
delivered volume growth. In a still deflationary environment in
terms of raw material and energy costs, prices remained slightly
down, losing 0.6% over the six months to June 30.
The Group's operating income climbed 7.3% on a reported basis
and 10.2% like-for-like. The Group's operating margin(1) rallied to
7.0%, gaining 0.6 percentage points compared to first-half 2015.
All Business Sectors reported margin growth, particularly in
industry and to a lesser extent Building Distribution, which was
hit by the deflationary environment.
Performance of Group Business Sectors
Innovative Materials like-for-like sales moved up 4.4%, powered
by Flat Glass. There was a further significant improvement in the
Business Sector's operating margin, which came in at 11.2% versus
10.2% one year earlier.
-- The second quarter confirmed the upbeat trends seen early in
the year in Flat Glass, which posted 6.5% organic growth over the
first half. Automotive glass continued to enjoy good momentum in
all regions except Brazil. Construction markets remained upbeat in
Asia and emerging countries and benefited from the upturn in
volumes in Western Europe and a rise in float glass prices. The
operating margin continued to recover, at 8.8% versus 7.4% in
first-half 2015, buoyed by additional volumes and improved
operating leverage.
-- High-Performance Materials (HPM) like-for-like sales rose
2.0% over the first six months of 2016. Plastics and Textile
Solutions performed well; Abrasives delivered organic growth led by
prices. Ceramics contracted in the three months to June 30 after a
first quarter boosted by high levels in refractories. The operating
margin widened to 14.0% from 13.5% in first-half 2015.
Construction Products (CP) like-for-like sales advanced 1.6%
over the first half lifted by Interior Solutions, which drove a
significant improvement in the Business Sector's operating margin,
up to 9.4% compared to 8.7% for the same period in 2015.
-- Interior Solutions posted 5.2% organic growth in the first
half on the back of strong market positions, which allowed it to
benefit from good trading in all regions. In a still deflationary
environment, volumes proved upbeat in Western Europe (partly helped
by the positive impact of a greater number of working days) and in
North America. Asia and emerging countries confirmed their good
performance as well as the merits of the growth operations carried
out in this region over the past few years. The operating margin
climbed to 10.2% from 9.0% in first-half 2015.
1. Operating margin = operating income expressed as a percentage of sales.
-- Exterior Solutions like-for-like sales retreated 2.0% over
the first half, due solely to the expected decline in Pipe, which
was hit by contracting markets in its main regions. However,
Exterior Solutions stabilized in the second quarter, helped by an
acceleration in volumes for Roofing in the US. Mortars reported
organic growth led by Asia and emerging countries and by the
improvement in Western Europe, which offset tougher conditions in
Brazil. Overall, the operating margin steadied at 8.3%.
Building Distribution like-for-like sales rose 3.1%, with the
second-quarter performance buoyed by the positive impact of a
greater number of working days. Trading in France benefited from
the first signs of an upturn in new-builds, while the renovation
market remains sluggish. Germany, the UK and especially Nordic
countries continued to report good volume trends. Amid a fall in
the cost of goods sold in Europe, prices were down - particularly
in France and the UK. The sharp economic slowdown in Brazil
continued to take its toll on trading.
The operating margin came in at 2.8% versus 2.6% in first-half
2015, benefiting from an upturn in volumes in Europe but affected
by a deflationary environment.
Analysis by region
The Group delivered organic growth in all of its regions in the
first half, as trends observed earlier in the first quarter
continued in the three months to June 30.
-- France saw confirmation of stabilizing business over the
first half, posting organic growth of 0.6% buoyed by the positive
impact of a greater number of working days in the second quarter.
New-build activity showed the first signs of improvement, while the
renovation market remains sluggish for the time being. The decline
in Pipe weighed on first-half results. The operating margin
narrowed slightly to 2.4%, hit by the deterioration in Pipe.
-- Other Western European countries advanced 4.3% over the six
months to June 30, with organic growth picking up pace in the
second quarter. Besides the positive impact of a greater number of
working days, this advance reflects good market conditions in all
of the Group's main countries. The region's operating margin
continued to rally, at 5.9% versus 5.4% in first-half 2015.
-- North America reported a 3.6% rise in like-for-like sales in
the first half, in line with the three months to March 31. Activity
in the construction market again proved upbeat, while industrial
markets remained uncertain. The operating margin rallied sharply,
up to 11.6% versus 9.5% in first-half 2015, powered by the strong
advance in Roofing.
-- Asia and emerging countries reported further good organic
growth, at 4.9% for the first half, led by Eastern Europe and Latin
America, despite the slowdown in Brazil. Asia was up, with trading
bullish in India, despite a downturn in China. The operating margin
continued to improve, at 10.6% of sales versus 10.0% one year
earlier.
Analysis of the consolidated financial statements for first-half
2016
The unaudited interim consolidated financial statements for
first-half 2016 were subject to a limited review by the statutory
auditors and were approved and adopted by the Board of Directors on
July 28, 2016.
H1 H1 %
2015 2016 change
EURm (A) (B) (B)/(A)
------- ------- --------
Sales and ancillary revenue 19,860 19,549 -1.6%
Operating income 1,275 1,368 7.3%
Operating depreciation and
amortization 611 589 -3.6%
EBITDA (op. inc. + operating
depr./amort.) 1,886 1,957 3.8%
Non-operating costs (154) (180) 16.9%
Capital gains and losses on
disposals, asset write-downs,
corporate acquisition fees
and earn-out payments (41) (32) -22.0%
Business income 1,080 1,156 7.0%
Net financial expense (328) (287) -12.5%
Income tax (236) (261) 10.6%
Share in net income of associates 0 2 n.s.
Net income from continuing
operations 516 610 18.2%
Net income from discontinued
operations 69 0 n.s.
Net income before minority
interests 585 610 4.3%
Minority interests 27 14 -48.1%
Net attributable income 558 596 6.8%
Earnings per share(2) (in
EUR) 0.98 1.08 10.2%
Net attributable income from
continuing operations 493 596 20.9%
Recurring net income from
continuing operations(1) 552 624 13.0%
Recurring earnings per share(2)
from continuing operations(1)
(in EUR) 0.97 1.13 16.5%
Cash flow from operations(3) 1,195 1,260 5.4%
Cash flow from operations
(excluding capital gains tax)(4) 1,185 1,251 5.6%
Capital expenditure 457 428 -6.3%
Free cash flow(5) 728 823 13.0%
Investments in securities 92 68 -26.1%
Net debt 7,995 6,624 -17.1%
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 June
30 (552,574,120 in 2016, versus 569,364,905 in 2015).
3. Cash flow from operations = operating cash flow from
continuing operations excluding material non-recurring
provisions.
4. Cash flow from operations excluding capital gains tax = (3) -
tax impact of capital gains and losses on disposals, asset
write-downs and material non-recurring provisions.
5. Free cash flow = (4) - capital expenditure of continuing operations.
Consolidated sales advanced 2.9% like-for-like, buoyed by volume
growth and despite a negative 0.6% price effect in a deflationary
environment. On a reported basis, sales were down 1.6%, with a
negative 3.5% currency impact chiefly resulting from the
depreciation of Latin America currencies - and to a lesser extent
the pound sterling - against the euro. The negative 1.0% Group
structure impact essentially reflected disposals carried out in the
Building Distribution business in 2015.
Operating income climbed 7.3% based on reported figures, despite
a negative currency impact. The operating margin improved to 7.0%
of sales versus 6.4% in first-half 2015, buoyed by margin gains in
all Business Sectors.
EBITDA (operating income + operating depreciation and
amortization) was up 3.8% to EUR1,957 million, and the EBITDA
margin came in at 10.0% of sales versus 9.5% in first-half
2015.
Non-operating costs totaled EUR180 million, with a rise in
restructuring costs compared to the same period in 2015 owing to
the roll-out of certain projects earlier than planned. The Group
maintains its forecast of a slight decrease in restructuring costs
for the year as a whole. The EUR45 million accrual to the provision
for asbestos-related litigation involving CertainTeed in the US is
unchanged from the last few half-year periods.
The net balance of capital gains and losses on disposals, asset
write-downs and corporate acquisition fees was an expense of just
EUR32 million versus an expense of EUR41 million in first-half
2015. In line with the increase in operating income, business
income climbed 7.0% to EUR1,156 million.
Net financial expense improved significantly, down 12.5% to
EUR287 million from EUR328 million, mainly reflecting the decrease
in net debt; the cost of gross debt remained at 3.9% at June 30,
2016, in line with end-2015.
The income tax rate on recurring net income remained stable at
30%. Income tax expense totaled EUR261 million (EUR236 million in
first-half 2015).
Recurring net income (excluding capital gains and losses on
disposals, asset write-downs and material non-recurring provisions)
jumped 13.0% to EUR624 million.
Net attributable income was up 6.8% to EUR596 million but jumped
20.9% excluding net income relating to Verallia in 2015.
Capital expenditure fell to EUR428 million including a negative
currency impact (EUR457 million for the same period in 2015). Capex
represented 2.2% of sales compared to 2.3% in the same period one
year earlier.
Cash flow from operations rose 5.4% to EUR1,260 million; before
the tax impact of capital gains and losses on disposals, asset
write-downs and material non-recurring provisions, cash flow from
operations advanced 5.6% to EUR1,251 million and free cash flow
rose 13.0% to EUR823 million (4.2% of sales versus 3.7% in
first-half 2015).
The difference between EBITDA and capital expenditure improved,
up 7.0% to EUR1,529 million (EUR1,429 million in first-half 2015),
representing 7.8% of sales (7.2% in first-half 2015).
Operating working capital requirements (operating WCR) totaled
EUR4,244 million (EUR4,448 million at June 30, 2015) and
represented 39.1 days' sales, an improvement of 1.7 days
year-on-year, owing chiefly to the decrease in inventories.
Investments in securities were limited, at EUR68 million (EUR92
million in first-half 2015) and correspond to small-scale
acquisitions in the three business sectors.
Net debt fell 17.1% from EUR8.0 billion at June 30, 2015 to
EUR6.6 billion at June 30, 2016, reflecting the favorable impact of
the Verallia disposal in second-half 2015, partly offset by the
dividend paid out in June 2016 compared to the payment in July
2015, and by the EUR857 million in share buybacks over the last two
half-year periods. Net debt represents 36% of consolidated equity,
compared to 40% at end-June 2015.
The net debt to EBITDA ratio on a rolling 12-month basis came in
at 1.7, compared to 2.1 one year earlier.
Update on asbestos claims in the US
Some 1,700 claims were filed against CertainTeed in the first
half of 2016 (versus 2,000 claims in first-half 2015).
At the same time, around 2,100 claims were settled (versus 2,000
in first-half 2015), bringing the total number of outstanding
claims at June 30, 2016 to around 35,200, down slightly on December
31, 2015 (35,600 claims).
A total of USD 89 million in indemnity payments were made in the
US in the 12 months to June 30, 2016, versus USD 65 million in the
year to December 31, 2015, reflecting the catch-up in payments in
respect of settlements still to be documented.
2016 outlook and action priorities
After a first half in line with our forecasts, our outlook for
the second half is as follows:
- France should gradually benefit from the recovery in
new-builds after stabilizing over the six months to June 30.
- Other Western European countries should continue to deliver
growth, even though the UK could be hit by uncertainties following
the June 23 Brexit vote.
- North America should advance despite uncertainty in industrial
markets.
- Asia and emerging countries should continue to see good
organic growth for our businesses, despite the contraction in
Brazil.
The Group confirms its action priorities for the year as a
whole:
- keep its priority focus on sales prices in a deflationary
environment;
- unlock additional savings of around EUR250 million (calculated
on the 2015 cost base), including EUR150 million in the first
half;
- pursue a capital expenditure program of around EUR1,400
million;
- renew its commitment to invest in R&D in order to support
its strategy of differentiated, high value-added solutions;
- keep its priority focus on high free cash flow generation;
- pursue its plan to acquire a controlling interest in Sika.
In line with its long-term objectives, the Group bought back
10.9 million shares and canceled 11 million shares in the first six
months of 2016.
The Group confirms its objectives for 2016 and expects a
like-for-like improvement in operating income in the second half
versus second-half 2015.
Financial calendar
- An information meeting will be held at 8:30am (GMT + 1) on
July 29, 2016 and will be broadcast live on
www.saint-gobain.com
- Sales for the first nine months of 2016: October 27, 2016,
after close of trading on the Paris Bourse.
Analyst/Investor relations Press relations
----------------------------------- ------------------------------------------------------------
+33 1 47
62 32 52
+33 1 47 +33 1 47 62
Gaetano Terrasini 62 44 29 30 10
Vivien Dardel +33 1 47 Charles Hufnagel +33 1 47 62
Florent Nouveau 62 30 93 Susanne Trabitzsch 43 25
--------------------- ------------ -------------------------------------------- --------------
All indicators contained in this press release (not defined in
the footnotes) are explained in the notes to the financial
statements in the interim financial report, available by clicking
here:
https://www.saint-gobain.com/en/finance/regulated-information/half-yearly-financial-report
The glossary below shows the note of the interim financial
statements in which you can find an explanation of each
indicator.
Glossary:
Cash flow from operations Note 3
Net debt Note 7
EBITDA Note 3
Non-operating costs Note 3
Operating income Note 3
Net financial expense Note 7
Recurring net income Note 3
Business income Note 3
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
(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
www.saint-gobain.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QVLFLQDFEBBL
(END) Dow Jones Newswires
July 28, 2016 12:57 ET (16:57 GMT)
Compagnie De Saint-gobain (LSE:COD)
Historical Stock Chart
From Oct 2024 to Nov 2024
Compagnie De Saint-gobain (LSE:COD)
Historical Stock Chart
From Nov 2023 to Nov 2024
