TIDMCOD
RNS Number : 5712W
Compagnie de Saint-Gobain
27 April 2016
Paris, April 27, 2016
First-quarter 2016 sales*
EUR9,136 million; 1.8% organic growth
-- Volumes up 2.3%, improving in all our Business Sectors and major countries except Brazil
-- Negative 0.5% price impact amid a more deflationary
environment in terms of prices and raw material and energy costs,
particularly in construction markets in Europe and the US
-- Significant 3.0% negative currency impact, due chiefly to the
strong depreciation in Latin American currencies
-- Negative 0.7% Group structure impact of disposals carried out
to optimize the Building Distribution portfolio
Pierre-André de Chalendar, Chairman and Chief Executive Officer
of Saint-Gobain, commented:
"Volumes improved in all regions in the first quarter. Trading
in France advanced with the exception of Pipe. Other Western
European countries reported further growth. Trading in North
America bounced back despite lackluster industrial markets.
Emerging markets continued to perform well. Prices dipped slightly
as expected, particularly in Western Europe and the US. In this
setting, we are continuing to pursue our operational excellence
program and confirm our objective of a further like-for-like
improvement in operating income."
* Following the sale of the Packaging business (Verallia) and in
accordance with IFRS 5, the business was reclassified within "Net
income from discontinued operations" in the 2015 income
statement.
Like-for-like (constant Group structure and exchange rates),
consolidated sales rose 1.8%, lifted by improved volumes (up 2.3%)
in all Business Sectors and regions, despite the slight dip in
prices (down 0.5%) in a more deflationary environment. This price
effect concerned Building Distribution in particular, especially in
France, reflecting a lower cost of goods sold. It also concerned
Interior Solutions in France and Germany along with construction in
the US, which benefited from the drop in certain raw material and
energy prices.
On a reported basis, sales came in at EUR9,136 million, with a
significant 3.0% negative currency impact due mainly to the sharp
depreciation in Latin American currencies against the euro, and to
a lesser extent in pound sterling and Norwegian krone.
Changes in Group structure had a negative 0.7% impact,
essentially reflecting disposals carried out to optimize the
Building Distribution portfolio that were not offset by small
acquisitions within the Group.
(1) Including inter-division eliminations.
Like-for-like performance of Group Business Sectors
Innovative Materials sales climbed 4.3%.
- Flat Glass continued to report brisk growth, at 4.9%.
Automotive glass enjoyed strong gains in all regions despite
Brazil. Construction activity returned to positive volumes in
Western Europe and also benefited from a rise in float prices; it
remained bullish in Asia and emerging countries excluding
Brazil.
- High-Performance Materials (HPM) returned to a good level of
growth, at 3.6%, in the absence of the strong negative impact of
proppants that had affected the whole of 2015. All HPM businesses
advanced.
Construction Products (CP) sales edged up 0.9%, hampered as
expected by the ongoing sharp decline in Pipe.
- Interior Solutions advanced 5.8% on the back of strong volume
growth in all regions. Trading in Western Europe was lifted by a
recovery in volumes, including in France and Germany, amid a more
deflationary economic environment. In North America, bullish
construction markets drove volume growth, while prices remained
under pressure. Asia and emerging countries confirmed their very
strong performance.
- Exterior Solutions sales fell 4.4%, hard hit by the
contraction in Pipe in line with fourth-quarter 2015. The business
was down in all regions, particularly due to the lack of major
export contracts. Exterior Product volumes in the US advanced
despite the absence of a winter promotional campaign as in 2015,
while prices for the business were down with asphalt prices
declining sharply. Mortars reported good growth led by Asia and
emerging countries and by an improved performance in France.
Building Distribution was up 1.4%, lifted as expected by the
volume upturn in France and ongoing positive trends in Nordic
countries, the UK and Germany. The price effect was less, due to a
fall in the costs of goods sold. The wider economic slowdown in
Brazil continued to take its toll on trading.
Like-for-like analysis by region
Business in France stabilized (down 0.2%), hampered by the sharp
decline in Pipe. Our sales performance reflects the recovery in
construction market indicators despite the pressure on prices in a
more deflationary environment.
In line with 2015 trends, other Western European countries
confirmed their good growth levels
(up 2.0%) in all of the Group's major markets including
Germany.
North America moved up 3.2%, powered mainly by construction, as
industrial markets remained uncertain.
Asia and emerging countries delivered further sales growth, at
4.5%, despite the expected deterioration in Brazil and a downturn
in business in China.
2016 outlook
The first quarter was in line with our expectations at the
beginning of the year and confirms our outlook for 2016 as a
whole:
- Western Europe should be more vibrant with France stabilizing
and despite pressure on sales prices.
- North America should deliver gains led by volumes in
construction markets and despite declining prices, while industrial
market activity should hold firm in a climate that nevertheless
remains uncertain.
- Asia and emerging countries should deliver satisfactory
organic growth overall, albeit dampened by the slowdown in
Brazil.
The Group reiterates the action priorities it defined in
February:
- keep a priority focus on sales prices in a still deflationary environment;
- unlock additional savings of around EUR250 million (calculated
on the 2015 cost base) thanks to its ongoing cost-cutting
program;
- pursue a capital expenditure program (around EUR1,400 million)
focused primarily on growth capex outside Western Europe;
- renew its commitment to investment 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 our February guidance, we are targeting a further
like-for-like improvement in operating income in 2016.
Financial calendar
First-half 2016 results: July 28, 2016, after close of trading
on the Paris Bourse.
Analyst/Investor relations Press relations
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+33 1 47 62
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Gaetano Terrasini 44 29 30 10
Vivien Dardel +33 1 47 62 Charles Hufnagel +33 1 47 62
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A conference call will be held at 6:30 pm (Paris time) on April
27, 2016.
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
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