TIDMCOD
RNS Number : 7676J
Compagnie de Saint-Gobain
28 April 2022
The worldwide leader
in light & sustainable construction
Sales at a new record high
in first-quarter 2022
-- Very strong 16.4% organic growth on supportive underlying markets
-- Acceleration in prices, enabling the generation of a positive
price-cost spread in the first quarter
-- Deployment of our solutions for energy efficiency and
decarbonization ramped up in all geographies
-- 2022 outlook confirmed
Sales Sales Change Change on Like-for-like
Q1 Q1 on an a comparable change
actual structure
structure basis
basis
2021 2022
(in (in
EURm) EURm)
-------- -------- ----------- -------------- --------------
Northern Europe 3,387 4,014 +18.5% +20.9% +19.2%
Southern Europe - ME
& Africa 3,526 3,725 +5.6% +14.9% +15.9%
Americas 1,512 1,920 +27.0% +26.1% +16.8%
Asia-Pacific 417 479 +14.9% +30.6% +24.6%
High Performance Solutions 1,811 2,191 +21.0% +14.8% +10.2%
Internal sales and
misc. -274 -322 --- --- ---
Group Total 10,379 12,007 +15.7% +19.0% +16.4%
----------- --------------
Like-for-like sales rose sharply, up 16.4% on first-quarter
2021. This strong performance reflects the Group's positioning as
the worldwide leader in light and sustainable construction thanks
to its unique range of innovative solutions offering sustainability
and performance to maximize the positive impact for its customers.
It also reflects good momentum across all our segments, which each
reported double-digit organic growth, in acceleration from
second-half 2021, driven in particular by renovation in Europe and
by construction in the Americas and in Asia. The Group's volumes
progressed by 1.9% over the quarter and by 8.3% compared to
first-quarter 2019 (pre-Covid comparison basis), continuing their
good trends despite a difficult geopolitical environment. Price
increases continued to accelerate - up to 14.5% in a far more
inflationary raw material and energy cost environment - enabling
the Group to generate a positive price-cost spread in the first
quarter.
On a reported basis, sales came in at a new record high of
EUR12,007 million, with a positive 2.6% currency effect due mainly
to the appreciation of the US dollar, pound sterling, Brazilian
real and other emerging country currencies. Changes in Group
structure reduced sales by 3.3% and resulted from the ongoing
optimization of the Group's profile, in terms of both divestments -
mainly Lapeyre in France, distribution in the Netherlands and
Spain, specialist distribution in the United Kingdom, Glassolutions
in Germany and Denmark, and pipe in China - and acquisitions,
mainly Chryso in construction chemicals and Panofrance, a French
specialist in modular timber solutions.
The acquisition of GCP Applied Technologies in construction
chemicals is expected to be finalized by year-end 2022 as planned.
GCP shareholders approved the transaction in March and the
procedure for obtaining clearance from the competition authorities
is proceeding as planned.
The optimization of the portfolio continues country-by-country,
now being part of the Group's profitable growth model within the
scope of its "Grow & Impact" plan .
Update on inflation and the geopolitical situation
Amid accelerating inflation, Saint-Gobain now expects its energy
and raw material costs to increase by around EUR2.5 billion in 2022
compared to 2021. This inflation concerns in particular energy
costs, especially in Europe where the Group has hedged around 80%
of its natural gas and electricity purchases for 2022 as a whole.
Saint-Gobain's total energy bill amounted to EUR1.5 billion in
2021, representing 3% of Group sales.
In light of its proactive energy cost hedging policy, the
positive price-cost spread in the first quarter, the acceleration
in the positive price effect to 14.5% in the first quarter, and the
new price increases being announced, Saint-Gobain is confident that
it will be able to offset the estimated inflation in raw material
and energy costs for 2022 as a whole.
Note that Saint-Gobain has no industrial operations in Ukraine
and that Russia represented around 0.5% of its consolidated sales
in 2021. All our solutions are manufactured and sold on local
construction markets. Since the start of the conflict, all
investment projects have been cancelled. Local activities are now
operating at a minimum and on a standalone basis.
The countries currently most sensitive to Russian gas supplies
for Saint-Gobain are Germany, Poland and the Czech Republic. The
Group has drawn up various plans for continuing its operations in
these countries enabling it to significantly mitigate the impact of
a scenario in which all supplies of Russian gas were terminated.
Various levers can be used by the Group such as the classification
of priority industries, using alternative energy sources already
prepared at certain sites, and increasing the flexibility of its
production capacities.
Segment performance (like-for-like sales)
Northern Europe: strong sales growth driven by renovation
Sales in the Northern Europe Region were up by 19.2% in the
quarter, an acceleration from second-half 2021, with volumes up
3.1% on structurally supportive renovation markets.
Nordic countries reported further robust growth thanks to their
successful presence across the entire trade professional value
chain; an omnichannel digital offering; the recent launch of new
lightweight and resource-efficient plasterboard solutions; and a
renovation market buoyed by energy efficiency projects. The United
Kingdom - which has been very active recently in optimizing its
portfolio - reported good growth driven by façade and interior
solutions in a dynamic renovation market. Germany also saw growth
accelerate on the back of its solid market positions in energy
efficiency renovation, with enhanced stimulus measures. Eastern
Europe reported excellent momentum with market share gains in its
main countries, particularly Poland, the Czech Republic and
Romania.
Southern Europe - Middle East & Africa: strong sales
momentum driven by
renovation
Sales for the Southern Europe - Middle East & Africa Region
enjoyed good momentum, with sales up 15.9%, an acceleration from
second-half 2021, driven by prices in the context of a high
comparison basis in March. All countries in the Region reported
double-digit organic growth driven by an outperformance on the
renovation market, successfully targeted by our comprehensive
solutions. Compared to first-quarter 2019 (pre-Covid), volumes were
up 7.3%.
France enjoyed further good momentum, driven by structurally
supportive renovation markets. MaPrimeRenov' - France's household
stimulus package encouraging home renovations - remains a success
and trade professionals continue to see full order books. The
Group's unrivalled presence across the entire value chain - from
manufacturing to merchanting and in-store advice - has driven its
outperformance, thanks to an optimized service in close alignment
with customers' needs and a comprehensive range of sustainable and
innovative solutions. For example, Weber Flex Col Eco, our patented
low-carbon cement-free mortars, has seen a sharp increase in sales
with market share gains. Saint-Gobain also launched a EUR120
million capital expenditure program for insulation in France, aimed
at expanding its production capacities, of which EUR20 million is
earmarked specifically for efforts to decarbonize activities and
develop the circular economy. Spain and Benelux progressed,
particularly in light and sustainable construction solutions, along
with Italy, where the Group has fully leveraged its commercial
synergies to meet the strong demand for energy efficient renovation
supported by tax credits. In addition, the Group continues to
invest to improve its energy mix, for example by installing solar
panels in Italy at its Vidalengo insulation plant. Middle East and
Africa delivered further robust growth, benefiting from the opening
of new plants and upbeat markets, particularly in Turkey and
Egypt.
Americas: strong sales growth driven by comprehensive light
construction solutions
The Americas Region delivered 16.8% organic growth over the
quarter, an acceleration from second-half 2021 on the back of a
further improvement in prices and despite a high comparison basis
for volumes. Compared to first-quarter 2019 (pre-Covid), volumes
were up by 15.7%, buoyed by strong demand and market share
gains.
- North America progressed by 16.3%, driven by the development
of a comprehensive range of solutions and by good momentum in light
construction - from roofing and siding for the building envelope to
interior performance solutions for user comfort and energy
efficiency. Our local organization close to customers once again
helped us mitigate supply chain tensions along with labor shortages
at the start of the year in the context of the coronavirus
pandemic. Saint-Gobain has also launched its investments to
increase production capacities in plasterboard, roofing and
insulation as part of its capital expenditure program of more than
USD 400 million over the next two years.
- Latin America reported robust 17.9% growth, on a par with
second-half 2021, despite a higher comparison basis and a less
dynamic macroeconomic environment in Brazil. Growth in all
countries of the Region continues to be driven by increased sales
prices, an improved mix, newly opened production facilities, and an
enhanced geographical footprint and product range thanks to
targeted acquisitions country-by-country.
Asia-Pacific: strong sales growth
The Asia-Pacific Region reported 24.6% organic growth over the
quarter, representing an acceleration from second-half 2021, with
volumes up 7.3%.
India delivered another excellent performance thanks to market
share gains and an integrated and innovative range of solutions,
particularly for energy- and resource-efficient buildings. The
integration of Rockwool India in stone wool insulation was
completed as planned in early February, and rounds out the Group's
leading positions in façade and interior solutions. Despite a
deteriorating health situation as from March, China also reported
further growth, driven by market share gains in the supportive
light construction sector, where recent low-carbon building
directives will help accelerate growth. South-East Asia had a very
good quarter and continues to diversify its offering - particularly
in construction chemicals - after a second-half 2021 performance
hard hit by the restrictions imposed in light of the coronavirus
pandemic.
High Performance Solutions (HPS): clear growth in sales despite
a slow recovery in the mobility market
HPS sales were up by 10.2% over the quarter, including a
positive 4.7% volume effect, benefiting from the broad market
recovery excluding European automotive.
- Businesses serving global construction customers reported
record sales and outperformed the market with 22.2% growth. They
continue to benefit from upbeat trends in textile solutions for
external thermal insulation systems (ETICS) thanks to good momentum
in sustainable construction. The very strong trends in Chryso sales
continued - driven by decarbonization in the construction sector -
as integration efforts ramped up.
- The Mobility business advanced slightly, up 1.9% on the back
of a progression in sales to the Americas and China, particularly
in electric vehicles which represent an increasing proportion of
sales. The downturn in Europe continued, becoming more pronounced
at the end of the period as the geopolitical context and health
restrictions in China weighed on value chains and procurement
capacities. However, thanks to its very strong positioning in
electric vehicles and high value-added products, the Mobility
business continued to significantly outperform the automotive
market.
- Businesses serving Industry progressed by 14.3%, supported by
activities relating to investment cycles such as ceramic
refractories, which are now trading above 2019 levels and which
benefit from innovation in specialty materials and decarbonization
technologies for our customers. Against this backdrop, Valoref, a
pioneer in ceramic recycling in Europe, now plans to expand
operations into North America, China and India.
Outlook and strategic priorities
2022 outlook
Despite a difficult geopolitical environment along with ongoing
disruptions to global supply chains, in 2022 the Group should
continue to fully leverage the good momentum in its main markets -
especially renovation in Europe as well as construction in the
Americas and in Asia - and reaffirm its excellent operating
performance thanks to a solid and well-aligned organization. In
this environment, and provided there is no new major impact related
to the coronavirus pandemic and the geopolitical situation,
Saint-Gobain expects the following trends for its segments :
- Europe : supportive renovation market requiring comprehensive
solutions that increase efficiency and save time for customers
within each country, albeit with a high comparison basis in the
first half;
- Americas : upbeat market trends, particularly in residential
construction in North America and in Latin America overall, despite
a less dynamic environment in Brazil ;
- Asia-Pacific : market growth with continued good momentum in
India and a gradual recovery in South-East Asia ; short-term
uncertainties in China owing to Covid-related restrictions;
- High Performance Solutions : market growth with supportive
long-term trends in sustainable construction and a demand for
innovation and new materials for industry decarbonization and green
mobility, despite uncertainties regarding the automotive market in
Europe.
Strategic priorities
Our strategic priorities for 2022 are fully aligned with the
medium and long-term structural growth scenario in the "Grow &
Impact" plan:
1) Accelerate the Group's growth and impact
- Outperformance versus our markets , thanks notably to our
comprehensive range of integrated, differentiated and innovative
solutions offering sustainability and performance for our
customers, developed within the scope of an organization as close
to the ground as possible in each country or market ;
- Strengthen our key role in building a carbon-neutral economy
thanks to our positive-impact solutions ;
- Ongoing optimization of the Group's profile , with the full
effect of the Chryso integration and preparation for the GCP
acquisition, as part of a vigorous dynamic of targeted and
value-creating acquisitions and divestments .
2) Continue our initiatives focused on profitability and
performance: maintain a robust margin and strong free cash flow
generation
- Constant focus on the price-cost spread , with strong pricing
proactivity as in 2021 ;
- Disciplined continuation of our operational excellence program
;
- Maintaining the structural improvement in operating working
capital requirement while rebuilding a good level of inventories to
best serve customers ;
- Capital expenditure of around EUR1.8 billion, in line with the
Group's objective of between 3.5% and 4.5% of sales, with strict
allocation to high-growth markets and digital transformation .
Financial calendar
A conference call will be held at 6:30pm (Paris time) on April
28, 2022: +33 1 72 72 74 03 or +44 20 7194 3759, dial-in code:
23231855#
- First-half 2022 results: Wednesday July 27, 2022, after close
of trading on the Paris Bourse.
- Third-quarter 2022 sales: Thursday October 27, 2022, after
close of trading on the Paris Bourse.
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 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 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 : see Note 5 to the 2021 consolidated financial
statements, available by clicking here :
https://www.saint-gobain.com/en/news/full-year-2021-results
EBITDA = operating income plus operating depreciation and
amortization less non-operating costs.
Free cash flow = EBITDA less depreciation of right-of-use
assets, plus net financial expense, plus income tax, less capital
expenditure excluding additional capacity investments, plus change
in working capital requirement over the past 12 months.
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
the "Risk Factors" section of Saint-Gobain's Universal 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, except as required by
applicable laws and regulations .
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 further information, please visit www.saint-gobain.com .
Appendix 1: Contribution of prices and volumes to organic sales
growth by Segment
Q1 2022 Like-for-like Prices Volumes
change
Northern Europe +19.2% +16.1% +3.1%
Southern Europe - ME
& Africa +15.9% +15.8% +0.1%
Americas +16.8% +17.7% -0.9%
Asia-Pacific +24.6% +17.3% +7.3%
High Performance Solutions +10.2% +5.5% +4.7%
-------------- ------- --------
Group Total +16.4% +14.5% +1.9%
-------------- ------- --------
Appendix 2: Breakdown of organic sales growth and external
sales
Q1 2022 Like-for-like % Group
change
Northern Europe +19.2% 32.4%
Nordics +17.5% 13.1%
United Kingdom - Ireland +18.4% 9.8%
Germany - Austria +16.9% 3.3%
Southern Europe - ME
& Africa +15.9% 30.1%
France +13.4% 23.7%
Spain - Italy +20.4% 3.4%
Americas +16.8% 15.7%
North America +16.3% 11.2%
Latin America +17.9% 4.5%
Asia-Pacific +24.6% 3.8%
High Performance Solutions +10.2% 18.0%
Construction and industry +15.6% 11.8%
Mobility +1.9% 6.2%
Group Total +16.4% 100.0%
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END
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