TIDMCOD
RNS Number : 1310X
Compagnie de Saint-Gobain
29 April 2021
PRESS RELEASE
Paris, April 29, 2021 5:45pm
Record organic growth in Q1 2021:
up 14.3% on Q1 2020 and up 9.0% on Q1 2019
-- Strong volume growth, up 11.7% versus Q1 2020 and up 5.8%
versus Q1 2019, reflecting good momentum on underlying markets and
market share gains
-- Acceleration in the price increase to 2.6% on Q1 2020 in a more inflationary cost environment
-- Negative currency impact of 3.8% and positive Group structure impact of 0.4% versus Q1 2020
Q1 Q1 2021-2020
2020 2021
(in (in
EURm) EURm) 2021-2019
Change Change on Like-for-like Like-for-like
on an actual a comparable change change
structure structure
basis basis
-------------- -------------- -------------- --------------
High Performance Solutions 1,712 1,811 +5.8% +5.5% +11.8% +2.7%
Northern Europe 3,219 3,387 +5.2% +4.9% +5.1% +4.8%
Southern Europe -
ME & Africa 2,983 3,526 +18.2% +18.9% +19.7% +9.5%
Americas 1,370 1,512 +10.4% +7.3% +22.3% +23.9%
Asia-Pacific 337 417 +23.7% +23.9% +31.8% +15.4%
Internal sales and
misc. -258 -274 --- --- --- ---
Group Total 9,363 10,379 +10.9% +10.5% +14.3% +9.0%
-------------- --------------
Sales rose sharply like-for-like, up 14.3% against a
first-quarter 2020 comparison basis that was already affected by
the coronavirus (down 4.9% versus first-quarter 2019) and up 9.0%
versus first-quarter 2019. This acceleration in organic growth was
supported by the Group's comprehensive solutions for sustainability
and performance. It reflects market share gains and the good
dynamic across all of our segments, particularly renovation in
Europe, and construction in the Americas and in Asia-Pacific.
Overall, industrial markets continued their sequential improvement.
Group volumes were up by 11.7% over the quarter and by 5.8% on
first-quarter 2019, continuing the supportive trends of
fourth-quarter 2020 (up 4.6%). The first quarter also benefited
from a volume anticipation effect in March in light of price
increase announcements. The price increase accelerated to 2.6% amid
increased energy and raw material cost inflation.
On a reported basis, sales totaled EUR10,379 million, with a
negative currency effect of 3.8%, related mainly to the
depreciation of the US dollar, Brazilian real and other emerging
country currencies. Changes in Group structure added 0.4% to sales,
primarily reflecting the integration of Continental Building
Products in North America as from February 2020. The portfolio
optimization continues apace, with the announcement of the sale of
a majority stake in the Pipe business in China in mid-April. A
total of more than EUR4.8 billion in sales has now been sold or
signed since the launch of "Transform & Grow". Note that in
light of the hyperinflationary environment in Argentina, this
country which represents less than 1% of the Group's sales, is
excluded from the like-for-like analysis.
Segment performance (like-for-like sales)
High Performance Solutions (HPS): continued sequential
improvement
HPS sales rose 11.8% in the quarter and 2.7% versus
first-quarter 2019, buoyed by an overall improvement in industrial
markets.
- Mobility reported double-digit growth against a comparison
basis which had been affected in March 2020 by a sharp downturn in
sales following the gradual shutdown of automotive manufacturing
plants around the world. Current supply chain tensions related to
the scarcity of semi-conductors had only a limited impact on the
quarter. Compared to the first quarter of 2019, trading was down
only slightly, solely due to Europe, while sales for the Chinese
and Americas markets were up sharply. Mobility continued to
outperform the automotive market in this period, thanks mainly to
its increasing exposure to products intended for electric vehicles
and to high value-added products.
- Industry also rebounded with double-digit growth against a
weak 2020 comparison basis, and was up slightly compared to the
first quarter of 2019. Activities linked to consumable goods were
notably led by Do-It-Yourself (DIY) markets, whereas industrial
markets reported only a gradual improvement in Europe and the US.
Activities related to our customers' investment cycles continued
their sequential improvement, but are still down on first-quarter
2019.
- Activities serving the Construction Industry, which reported
growth in first-quarter 2020, continued to perform well, delivering
double-digit growth compared to first-quarter 2019. They benefited
from further gains in market share and upbeat trends in external
thermal insulation solutions (ETICS).
- Life Sciences , also up in first-quarter 2020, continued to
enjoy good momentum with double-digit growth in the pharmaceutical
and medical sector, buoyed by its recent capacity investments.
Northern Europe: sales growth driven by renovation
Northern Europe progressed 5.1% in the quarter and 4.8% compared
to first-quarter 2019 in a Region only slightly impacted overall by
the coronavirus pandemic in the same period in 2020. First-quarter
2021 benefited from a volume anticipation effect in March in light
of price increase announcements, and more generally, from a
reallocation of household savings towards renovation spending.
Nordic countries, Germany and Eastern Europe, which progressed
in first-quarter 2020, continued to deliver a solid performance and
sales growth. In Nordic countries, Distribution in particular
enjoyed ongoing good momentum thanks to the success of its
omnichannel digital strategy in a supportive renovation market,
despite a decline in new construction. The acquisition of
Brüggemann in Germany - offering innovative modular turnkey timber
construction solutions - fuels the Group's growth in light and
sustainable construction. The UK rallied strongly over the quarter,
after a sharp downturn right at the end of first-quarter 2020, and
was stable versus first-quarter 2019, with slight growth in
Distribution despite the impact of store closures related to the
optimization of the network.
Southern Europe - Middle East & Africa: strong sales
momentum in the renovation market
The Southern Europe - Middle East & Africa Region enjoyed
strong trading momentum, with sales rebounding 19.7% against a
first-quarter 2020 comparison basis affected in March by lockdown
measures across most of the Region. Sales increased by 9.5%
compared to the first quarter of 2019, reflecting the Group's
outperformance on bullish renovation markets. The quarter benefited
from a volume anticipation effect in March in light of price
increase announcements, and more generally, from a reallocation of
household savings towards renovation spending.
France contributed strongly to the Region's growth, reporting
market share gains and a double-digit rise compared to the
pre-Covid period of first-quarter 2019, owing to strong demand for
renovation work which benefited the Group's energy-efficient
solutions, both manufactured and sold through the Group's
Distribution network or via its digital intermediation solutions.
The success of the household stimulus package MaPrimeRenov for home
renovation is starting to be felt. Spain and Italy delivered
significant growth overall, particularly Italy which also benefited
from support for energy-efficient renovation in the form of tax
credits. Only Benelux posted more moderate growth, in light of the
growth recorded in the same period in 2020 and the lockdown
measures in the Netherlands. The acquisition of Strikolith in this
country has enhanced the Group's offering in the fast-growing
exterior insulation systems market. The Middle East and Africa
progressed strongly, but with a different pace of recovery from one
country to the next.
Americas: significant sales growth on supportive markets
The Americas posted organic growth of 22.3% over the quarter and
of 23.9% compared to first-quarter 2019 in very dynamic markets.
The quarter also benefited from a volume anticipation effect in
light of the price increase announcements.
- North America rose by 17.5% and 19.5%, respectively, over the
two periods, driven by particularly strong demand and an
acceleration in prices in a more inflationary environment. Offering
the Group's full range of solutions for customers through its local
organization is paying off and accelerating the growth in sales.
This extremely agile local organization enabled us to overcome
strong tensions on supply chains and on production in an
environment still affected by the coronavirus pandemic, leading all
of our main businesses to report significant sales growth. Interior
solutions delivered another very strong performance thanks to the
successful integration of Continental Building Products, which
enhances the Group's positions in construction businesses in North
America.
- Latin America continued to enjoy the vigorous momentum seen at
the end of 2020 attributable to both volumes and prices which kept
pace with inflation. Despite a challenging health situation at the
end of the period, particularly in Brazil, it delivered impressive
sales growth of 34.8% over the quarter and of 33.0% versus
first-quarter 2019. Thanks to the local organization and an
approach in which the Group's full range of solutions can be
offered to customers, the region continues to see sales synergies
and market share gains.
Asia-Pacific: return to strong structural sales growth
The Asia-Pacific Region saw sales growth of 31.8% over the
quarter and of 15.4% versus first-quarter 2019.
China, which was the first country to be affected by the
coronavirus and the first to have fully recovered, doubled its
sales against a weak comparison basis. It reported vigorous growth
compared to first-quarter 2019 thanks to an upbeat market and to
market share gains in construction solutions. The recovery is
picking up pace in India where, thanks to market share gains,
Saint-Gobain delivered double-digit growth compared to pre-Covid
levels, driven by both volumes and prices, despite a deteriorating
health situation at the end of the first quarter. South-East Asia
reported a mixed picture in terms of recovery, buoyed by growth in
Vietnam which continued to capture market share, but with most
other countries not yet back to 2019 levels.
2021 outlook
The Group confirms its outlook for full-year 2021:
In a macroeconomic and health environment which remains affected
by uncertainties, the dynamic in our main markets proved upbeat at
the start of 2021 - especially renovation in Europe as well as
construction in the Americas and in Asia-Pacific - and the Group's
operating performance is robust. In this environment , and provided
there is no new impact relating to the coronavirus pandemic,
Saint-Gobain expects the following trends for its segments:
- High Performance Solutions : continued sequential improvement
in industrial markets. Businesses related to customer investment
should rally steadily during the year, although are expected to
remain down on the good level recorded in 2018;
- Northern Europe : continued outperformance in construction and
support from stimulus programs; Nordic countries and Germany should
benefit from good momentum in renovation; the UK should bounce back
though the environment remains uncertain;
- Southern Europe - Middle East & Africa: continued
outperformance in construction thanks to strong residential
renovation markets and support from national and European stimulus
plans which should particularly benefit the Group's
energy-efficient renovation solutions, notably in France, although
certain markets such as new construction remain down;
- Americas : market growth, particularly residential
construction, in both North America - as expected - and Latin
America;
- Asia-Pacific : market growth, with continued good momentum in
China and a sharp rebound expected in India.
The Group recalls its priorities:
1) Improvement in the Group's profitable growth profile , driven by:
- the continuation of its portfolio optimization (divestments
and acquisitions) and growth in interior solutions in North America
fueled by Continental Building Products;
- outperformance versus the market thanks to its range of
integrated solutions for customers in each country and end market,
meeting the full breadth of needs of the construction world and
industry;
- strategy of differentiation and innovation to develop
solutions for sustainability and performance;
- ongoing solid achievements in ESG (Environment, Social,
Governance), particularly with the deployment of the 2030 roadmap
towards carbon neutrality in 2050.
2) Rise of more than 100 basis points in the operating margin
compared to the 2018 margin of 7.7%, and ongoing strong discipline
in terms of free cash flow generation :
- constant focus on the price-cost spread , thanks to strong
pricing discipline, amid strong inflation in raw material and
energy costs;
- reduction in costs as part of additional post-coronavirus
adaptation measures , which should generate EUR150 million in cost
savings in 2021, following EUR50 million in second-half 2020;
- continuation of the operational excellence program aimed at
offsetting inflation (excluding raw material and energy costs);
- maintaining the structural drivers for improvement in operating working capital requirement ;
- capital expenditure of around EUR1.5 billion, with investments
in additional capacity focused on high-growth markets; ongoing
digital transformation;
- continued reduction in non-operating costs.
For 2021, the Group is targeting a significant like-for-like
increase in operating income, with an improvement of more than 100
basis points in the operating margin compared to the 7.7% margin in
2018 (assuming that volumes return to their 2018 levels),
confirming the success of "Transform & Grow".
The Group's extensive exposure to the renovation market means it
is ideally placed to benefit from stimulus plans focused on the
energy transition across the globe, which in turn should drive
Saint-Gobain's structural growth.
Saint-Gobain's medium and long-term outlook are robust thanks to
its successful strategic and organizational choices and its
development of a range of integrated solutions for each country and
end market. The strategy of differentiation and innovation means
that Saint-Gobain is well placed to provide its customers with
solutions for sustainability and performance. This strategy is
perfectly in step with the Group's purpose of "Making the World a
better Home ".
Financial calendar
- First-half 2021 results: July 29, 2021, after close of trading
on the Paris Bourse.
- Investor Day: October 6, 2021.
Analyst/Investor relations Press relations
+33 1 88 54 29 +33 1 88 54
77 26 83
+33 1 88 54 19 Patricia Marie +33 1 88 54
Vivien Dardel 09 Bénédicte 14 75
Floriana Michalowska +33 1 88 54 15 Debusschere +33 1 88 54
Christelle Gannage 49 Susanne Trabitzsch 27 96
----------------------- ----------------- --------------------- --------------
A conference call will be held at 6:30pm (Paris time) on April
29, 2021: +33 1 72 72 74 03, dial-in code: 87891343#.
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 4 to the 2020 consolidated financial
statements, available by clicking here:
https://www.saint-gobain.com/en/full-year-2020-results
EBITDA = operating income + operating depreciation and
amortization - non-operating costs.
Free cash flow = EBITDA - depreciation of right-of-use assets +
net financial expense + income tax - capital expenditure excluding
additional capacity investments + change in working capital
requirement.
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 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.
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 2021 Like-for-like Prices Volumes
change
High Performance Solutions +11.8% +0.4% +11.4%
Northern Europe +5.1% +2.3% +2.8%
Southern Europe - ME
& Africa +19.7% +1.9% +17.8%
Americas +22.3% +7.0% +15.3%
Asia-Pacific +31.8% +2.6% +29.2%
-------------- ------- --------
Group Total +14.3% +2.6% +11.7%
-------------- ------- --------
Appendix 2: Breakdown of organic sales growth and external
sales
Q1 2021 Like-for-like Like-for-like % Group
change change
2021-2020 2021-2019
High Performance Solutions +11.8% +2.7% 17.2%
Mobility +10.3% -1.2% 6.8%
Other industries +12.6% +5.2% 10.4%
Northern Europe +5.1% +4.8% 31.6%
Nordics +2.0% +6.4% 12.8%
United Kingdom - Ireland +9.2% -0.3% 10.0%
Germany - Austria +3.5% +4.5% 3.3%
Southern Europe - ME
& Africa +19.7% +9.5% 33.1%
France +21.8% +10.7% 25.5%
Spain - Italy +13.5% +2.2% 3.5%
Americas +22.3% +23.9% 14.3%
North America +17.5% +19.5% 10.3%
Latin America +34.8% +33.0% 4.0%
Asia-Pacific +31.8% +15.4% 3.8%
Group Total +14.3% +9.0% 100%
--------------
Appendix 3: Industry and Distribution Europe
Sales Sales 2021-2020
Q1 Q1
2020 2021
(in EURm) (in EURm) 2021-2019
-------------------------------------------
Change on Change on Like-for-like Like-for-like
an actual a comparable change change
structure structure
basis basis
----------- -------------- -------------- --------------
Industry Europe 2,360 2,608 +10.5% +7.0% +8.6% +3.5%
Distribution
Europe 3,926 4,416 +12.5% +14.2% +13.8% +9.0%
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