TIDMCOD
RNS Number : 6691N
Compagnie de Saint-Gobain
27 October 2016
PRESS RELEASE
Paris, October 27, 2016
Sales for the first nine months of 2016
Continued good organic growth, at 2.6% for the nine-month
period
-- Further volume growth in Q3 (+1.6%) in all Business Sectors
and all regions despite the slight negative impact of fewer working
days (as opposed to a positive calendar impact in H1); volumes
+2.8% over nine months
-- Improved price effect in Q3, at +0.5%; -0.2% over nine months
-- Negative currency impact of -3.2% over nine months and of -2.6% in Q3
-- Negative -1.1% Group structure impact over nine months
following disposals carried out to optimize the Building
Distribution portfolio
Pierre-André de Chalendar, Chairman and Chief Executive Officer
of Saint-Gobain, said:
"The third quarter confirmed the upturn in volumes in Western
Europe. France benefited from the steady improvement in new-builds;
the UK showed no sign of weakness. Volumes continued to grow in US
construction despite the lack of positive weather impacts for
Roofing in the quarter. Our businesses in Asia and emerging
countries remained strong, delivering further robust growth. The
price effect moved back into positive territory over the quarter,
reflecting Saint-Gobain's strong positioning on its markets.
In line with the 2016 goals, these results allow the Group to
confirm its objective of like-for-like growth in operating income
in the second half versus second-half 2015."
Saint-Gobain's sales for the first nine months of 2016 came in
at EUR29,306 million, compared to EUR29,826 million in the same
period one year earlier.
The negative 1.1% Group structure effect reflects the impact of
disposals carried out in 2015 aimed at optimizing the Building
Distribution portfolio.
The negative 3.2% currency impact results primarily from
decreases in the currencies of Latin American countries and the
pound sterling against the euro. The negative currency impact
narrowed to 2.6% in the third quarter, due mainly to gains in the
Brazilian real.
On a like-for-like basis, sales were up 2.6% over nine months
and 2.1% in the three months to September 30. The third quarter
confirmed the improvement in volumes which rose by 1.6%, and by
2.8% over the nine-month period, buoyed partly by the positive
impact of more working days in the second quarter.
Prices edged up 0.5% in the third quarter, leveling off in
Western Europe but remaining slightly down in the US, albeit in a
less deflationary environment.
Like-for-like performance of Group Business Sectors
Innovative Materials sales climbed 4.3% over the nine-month
period and 4.2% in the third quarter, powered once again by Flat
Glass.
- Flat Glass delivered further good organic growth over the
quarter, at 5.9% (6.3% for the nine-month period), driven by an
improved mix and higher sales prices in construction in Western
Europe. In Asia and emerging countries, construction and automotive
sectors continued to enjoy good momentum.
- High-Performance Materials (HPM) sales continued to rise in
the third quarter, up 2.2% after a 2.0% increase in the first half.
All divisions made gains in the three months to September 30, led
mainly by Ceramics and Textile Solutions.
Construction Products (CP) sales advanced 1.6% over the
nine-month period as in the third quarter.
- Interior Solutions sales climbed 4.3% in the nine-month
period. Sales continued to advance in all regions in the third
quarter (up 2.5%), despite the negative impact of fewer working
days (positive impact in the second quarter, slightly negative in
the three months to September 30). In a still deflationary
environment, prices remained slightly under pressure in developed
economies although less than previously.
- The decline in Exterior Solutions sales narrowed to 1.1% over
nine months thanks to a 0.6% increase in the third quarter. The
downturn in Pipe has now eased somewhat, as third-quarter 2015 had
already been hit by a very tough environment. Exterior Products in
the US reported volume growth in the three months to September 30
although did not benefit from the same positive weather impacts of
the second quarter. Prices remained slightly down but improved
quarter-on-quarter in line with asphalt costs. Mortars performed
well during the quarter, spurred in particular by Asia and emerging
countries; the business managed to stabilize its trading in Brazil
despite challenging economic conditions.
Building Distribution sales rose 2.6% over the nine-month
period. After a first half buoyed by a greater number of working
days, volumes continued to advance in the quarter with sales up
1.6%. Trading in France confirmed the rally in the new-build market
while renovation remained sluggish. Good momentum in volumes
continued, especially in Nordic countries, Spain and the
Netherlands, as well as in Germany and the UK which is showing no
sign of weakness. Pressure on sales prices eased in a less
deflationary cost-of-sales environment. The market downturn
continued to take its toll on Brazil.
Like-for-like analysis by region
- France was lifted by the rally in new-builds, while renovation
remains sluggish for the time being. Organic growth came in at a
negative 0.5% for the quarter, affected by the slight negative
impact of fewer working days and prices that remained down.
- Other Western European countries delivered further good
growth, at 3.2% (3.9% over the nine-month period), reflecting good
market conditions in all of our main countries, including the
UK.
- In North America, construction volumes remained upbeat over
the quarter, even though Roofing no longer benefited from a
favorable weather impact as in the three months to June 30; volumes
retreated slightly in industry. Prices continued to have a negative
impact on sales in a still deflationary environment. Organic growth
was therefore a negative 1.0% for the quarter, but a positive 2.1%
for the nine months to September 30.
- Asia and emerging countries continued to report good growth in
the third quarter, at 6.1%, confirming first-half trends (up 4.9%).
Brazil remained down but China improved.
Outlook for 2016
The Group expects the following trends for the fourth
quarter:
- Trading in France will continue to benefit from the rally in
new-builds, while renovation is not yet showing any signs of
improvement.
- Other Western European countries should deliver further growth.
- In North America, construction should advance while industrial markets remain cautious.
- Asia and emerging countries should continue to see good levels of organic growth.
Saint-Gobain confirms its action plan priorities for the full
year:
- keep its priority focus on sales prices in a still deflationary environment;
- unlock additional cost 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 to support its differentiated, high value-added strategy;
- prioritize high levels of free cash flow generation;
- pursue its plan to acquire a controlling interest in Sika.
The Group confirms its objectives for full-year 2016 and expects
a like-for-like improvement in operating income in the second half
compared to second-half 2015.
Glossary:
Organic growth and like-for-like changes in sales and operating
income reflect the Group's underlying performance excluding the
impact of:
-- changes in Group structure: indicators for the period
concerned are calculated based on the scope of consolidation for
the previous period (Group structure impact);
-- changes in exchange rates: indicators for the period
concerned and those for the previous period are calculated using
exchange rates for the previous period (currency impact);
-- changes in applicable accounting policies.
Operating income: see Note 3 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
Free cash flow: 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.
Capital expenditure: investments in property, plant and
equipment.
Financial calendar
2016 results: February 23, 2017, after close of trading on the
Paris Bourse.
Analyst/Investor relations Press relations
---------------------------------- -------------------------------
+33 1 47 62
32 52
+33 1 47 62
Gaetano Terrasini 44 29
Vivien Dardel +33 1 47 62 +33 1 47
Florent Nouveau 30 93 Susanne Trabitzsch 62 43 25
------------------- ------------- ------------------- ----------
A conference call will be held at 6:30 pm (Paris time) on
October 27, 2016: + 33 1 70 77 09 47
Important disclaimer - forward-looking information:
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
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view the associated PDF document.
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END
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