TIDMCOD
RNS Number : 1562X
Compagnie de Saint-Gobain
25 April 2019
PRESS RELEASE
Paris, April 25, 2019
First-quarter 2019 sales
EUR10,378 million
Organic growth of 5.7%
-- Positive pricing dynamic of 2.6%
-- Strong volume growth of 3.1%
-- Positive 0.6% currency impact and positive 0.1% Group
structure impact, with acquisitions offset by the disposal
program
On a like-for-like basis, sales grew by 5.7%, driven by both
prices and volumes against a weak comparison basis, with Europe
affected by harsh weather conditions in first-quarter 2018. Prices
continued to progress along the lines of last year's upbeat trends
in a slightly lower inflationary environment.
On a reported basis, sales totaled EUR10,378 million, with a
positive 0.6% currency impact notably due to the appreciation of
the US dollar against the euro, despite the depreciation of the
Brazilian real, Nordic krona and other Asian and emerging country
currencies.
The Group structure impact was virtually stable at a positive
0.1%, with acquisitions offset by the disposal program, in
particular the Pipe business in Xuzhou, China. Acquisitions reflect
the integration of companies in new niche technologies and services
(Kaimann), in Asia and emerging countries (Join Leader), and the
consolidation of our strong positions (Hunter Douglas). It should
be noted that in light of the now hyperinflationary environment in
Argentina, this country which represents less than 1% of the
Group's consolidated sales, has been excluded from the
like-for-like analysis since July 1, 2018.
EUR million Sales Sales Change Change on Like-for-like
Q1 2018 Q1 2019 on an actual a comparable change
structure structure
basis basis
---------------------------- --------- --------- -------------- --------------
High Performance Solutions 1,784 1,893 +6.1% +4.4% +2.4%
Northern Europe 3,396 3,660 +7.8% +7.3% +7.8%
Southern Europe - ME
& Africa 3,223 3,386 +5.1% +4.8% +5.0%
Americas 1,210 1,307 +8.0% +7.9% +4.6%
Asia-Pacific 442 426 -3.6% +10.2% +7.7%
Internal sales and misc -300 -294 --- --- ---
Group Total 9,755 10,378 +6.4% +6.3% +5.7%
--------- --------- -------------- --------------
Segment like-for-like sales performance
High Performance Solutions (HPS) sales rose 2.4% on the back of
supportive industrial markets, despite weakness in the automotive
market.
- Mobility proved resilient amid a difficult automotive market
environment. Despite the ongoing contraction in Europe and China,
trading was supported in particular by market share gains thanks to
the differentiating strategy focused on high value-added
products.
- Industry stabilized. The level of activity in Ceramics is in
line with second-half 2018. As a result, North America was slightly
down, while Asia and emerging countries continued to grow.
- Activities serving the construction industry progressed
sharply in the main regions of Europe and the Americas.
- Life Sciences continued to enjoy strong growth momentum.
Northern Europe rose 7.8% against a weak comparison basis in
2018, benefiting from good market conditions in the main countries
of the region. Distribution had a very good start to the year and
Industrial businesses advanced, particularly Gypsum and Mortars,
with a more modest increase in Building Glass.
Sales in Nordic countries were strong at the start of the year
in all businesses and major countries, particularly in Distribution
which posted a double-digit increase; the construction market
maintained good momentum. The UK continued to grow in an economic
environment that remains uncertain. Sales in Germany progressed
sharply, continuing the upward trend reported since the second half
of 2018. Eastern Europe continues to advance in all of its main
businesses and countries.
Southern Europe - Middle East & Africa was up 5.0% against a
weak prior-year comparison basis in Europe. Growth was led by
Distribution; Industrial businesses progressed, particularly
Gypsum, Insulation and Mortars. Pipe reported a slight increase in
sales and continued its efforts to improve its competitiveness.
France maintained its growth momentum with a very good start to
the year, still supported by the two drivers of the construction
market: renovation and new construction; Insulation continued to
benefit from strong demand for energy-efficiency renovation. Among
other countries, Spain posted robust growth, Benelux and Italy
progressed. The Middle East and Africa were down in the first
quarter, particularly in Turkey.
The Americas reported 4.6% growth. North America benefited from
a good price effect at the expense of volumes, in a context of
continued raw material cost inflation. Despite a high comparison
basis, Exterior Products stabilized thanks to a strong price
effect. Latin America enjoyed continued strong growth momentum,
particularly in Building Glass and Mortars; the rally in Brazil
gathered pace.
Asia-Pacific posted 7.7% organic growth, spurred by robust
momentum in Building Glass and Gypsum. India was boosted by
additional sales following the start-up of its fifth float line,
and Gypsum continued to deliver strong growth. Among other Asian
countries, China was up.
2019 outlook
The Group confirms its outlook for full-year 2019:
- High Performance Solutions: industrial markets should remain
supportive, particularly in the US, despite uncertainties on the
automotive market in Europe and China;
- Northern Europe: should progress despite an uncertain environment in the UK;
- Southern Europe - Middle East & Africa: overall growth
expected for the region, with a construction market in France which
should be supported by renovation while new construction could be
down from the second half;
- Americas: market growth in both North and Latin America;
- Asia-Pacific: further growth.
The Group's action priorities as defined in February remain:
- its focus on sales prices amid continued inflationary pressure on costs;
- its cost savings program with the aim of unlocking additional
savings of around EUR300 million (calculated on the 2018 cost
base), as well as more than EUR50 million in 2019 as part of the
"Transform & Grow" program;
- its capital expenditure program close to the 2018 level, with
a focus on growth capex outside Western Europe and also on
productivity and continued digital transformation;
- its commitment to invest in R&D to support its differentiated, high value-added strategy;
- its focus on high levels of free cash flow generation.
In line with our objective as announced in February, the Group
is targeting a further like-for-like increase in operating income
in 2019.
Glossary:
Indicators of organic growth and like-for-like changes in
sales/operating income reflect the Group's underlying performance
excluding the impact of:
-- changes in Group structure, by calculating the indicators for
the year under review based on the scope of consolidation of the
previous year (Group structure impact);
-- changes in foreign exchange rates, by calculating the
indicators for the year under review and those for the previous
year based on identical foreign exchange rates for the previous
year (currency impact);
-- changes in applicable accounting policies.
Operating income: details are given in Note 4 to the financial
statements in the 2018 Registration Document, available on:
https://www.saint-gobain.com/sites/sgcom.master/files/ddr2018_va.pdf
Free cash flow: cash flow 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
- First-half 2019 results: July 25, 2019, after close of trading
on the Paris Bourse.
Analyst/Investor relations Press relations
+33 1 47 62 30
+33 1 47 62 44 10
29 +33 1 47 62 51
Vivien Dardel +33 1 47 62 35 Laurence Pernot 37
Floriana Michalowska 98 +33 1 47 62 Patricia Marie +33 1 47 62 43
Christelle Gannage 30 93 Susanne Trabitzsch 25
------------------------ ------------------ -------------------------------------------- -----------------
A conference call will be held at 6:30pm (Paris time) on April
25, 2019: +33 1 72 72 74 03, dial-in code: 48629596#
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 of 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.
Appendix 1: Price and volume effect on organic sales growth by
Segment
First-quarter 2019 Like-for-like Price effect Volume effect
change
Segments:
High Performance Solutions +2.4% +2.3% +0.1%
Northern Europe +7.8% +1.9% +5.9%
Southern Europe - ME
& Africa +5.0% +2.2% +2.8%
Americas +4.6% +6.7% -2.1%
Asia-Pacific +7.7% +0.7% +7.0%
Group Total +5.7% +2.6% +3.1%
Appendix 2: Sales by geography
EUR million Sales Sales Change Change Like-for-like
Q1 2018 Q1 2019 on an actual on a comparable change
structure structure
basis basis
------------------------ --------- --------- -------------- -------------------
Geographic areas:
France 2,673 2,797 +4.6% +4.5% +4.5%
Other Western European
countries 4,166 4,471 +7.3% +6.4% +6.6%
North America 1,275 1,420 +11.4% +9.9% +1.9%
Emerging countries and
Asia 2,184 2,236 +2.4% +5.2% +6.6%
Internal sales -543 -546 --- --- ---
Group Total 9,755 10,378 +6.4% +6.3% +5.7%
------------------------ --------- -------------- -------------
Industry Europe 2,409 2,520 +4.6% +5.0% +5.6%
Distribution Europe 4,305 4,640 +7.8% +7.1% +7.3%
--------- --------- -------------- ------------- --------------------
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END
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