TIDMCOD
RNS Number : 6427Q
Compagnie de Saint-Gobain
28 October 2021
PRESS RELEASE
Paris, October 28, 2021, 5:45pm
Continued dynamic organic growth
in the third quarter
-- Sequential acceleration in organic growth: up 13.3% in Q3
2021 versus Q3 2019 , confirming the good momentum in underlying
markets, with volumes up 3.6%
-- The Group is confident that it will be able to offset raw
material and energy cost inflation over full-year 2021 given the
sharp 8.7% acceleration in prices in Q3 2021 versus Q3 2020
-- Ongoing optimization of the Group's growth and profitability profile(1) :
o Acquisitions signed contributing around EUR850m to full-year
sales (including Chryso)
o Divestments representing around EUR1,850m in full-year
sales
-- Annual targets confirmed: a very strong increase in operating
income over full-year 2021 to a new all-time high , with
like-for-like operating income in second-half 2021 close to the
previous record of second-half 2020
-- Launch of the "Grow & Impact" plan at the Capital Markets
Day on October 6, 2021: strong commitment from teams to accelerate
profitable growth and maximize the Group's positive impact in the
fight against climate change
Q3 2020 Q3 2021 2021-2020 2021-2019
sales sales
(in (in
EURm) EURm)
-------- -------- -------------------------------------------
Change Change on Like-for-like Like-for-like
on actual a comparable change change
structure structure
basis basis
----------- -------------- -------------- --------------
High Performance Solutions 1,678 1,815 +8.2% +8.1% +7.0% +2.5%
Northern Europe 3,403 3,816 +12.1% +13.2% +10.7% +11.5%
Southern Europe - ME
& Africa 3,318 3,150 -5.1% +4.6% +4.7% +12.7%
Americas 1,553 1,808 +16.4% +15.3% +14.9% +28.2%
Asia-Pacific 404 447 +10.6% +20.9% +19.8% +15.9%
Internal sales and
misc. -229 -234 --- --- --- ---
Group Total 10,127 10,802 +6.7% +10.5% +9.4% +13.3%
-------- ----------- --------------
1. Since the beginning of 2021
9m 2020 9m 2021 2021-2020 2021-2019
sales sales
(in (in
EURm) EURm)
-------- -------- -------------------------------------------
Change Change on Like-for-like Like-for-like
on actual a comparable change change
structure structure
basis basis
----------- -------------- -------------- --------------
High Performance Solutions 4,780 5,494 +14.9% +14.8% +17.8% +2.2%
Northern Europe 9,493 11,234 +18.3% +18.4% +16.6% +10.4%
Southern Europe - ME
& Africa 8,986 10,607 +18.0% +23.7% +24.2% +13.0%
Americas 4,223 5,068 +20.0% +18.0% +25.7% +26.2%
Asia-Pacific 1,059 1,322 +24.8% +29.0% +32.9% +16.1%
Internal sales and
misc. -650 -792 --- --- --- ---
Group Total 27,891 32,933 +18.1% +19.7% +21.0% +12.4%
----------- --------------
Like-for-like sales were up by 9.4% in the third quarter
compared to third-quarter 2020 (up 13.3% on third-quarter 2019,
following a rise of 11.9% in the first half versus first-half
2019), driven by an acceleration in prices which increased 8.7%
(after a 3.9% increase in the first half) in a far more
inflationary raw material and energy cost environment. As expected,
there was a more modest rise in volumes, which progressed 0.7% over
the quarter given the high comparison basis in third-quarter 2020,
when trade professionals had taken few holidays during the summer
period in Europe on account of the coronavirus pandemic. Compared
to the third quarter of 2019, volumes were up by 3.6% - with a
stronger increase in the Americas and in Asia-Pacific - despite a
contraction in the automotive market. The calendar effect compared
to third-quarter 2020 and third-quarter 2019 was negative at around
0.5%, with the impact being more significant in Southern
Europe.
On a reported basis, sales came in at EUR32,933 million for the
nine-month period. The currency impact reduced sales by 1.3% over
the nine-month period and added 1.1% to sales in the third quarter,
mainly reflecting less depreciation of the US dollar along with the
appreciation of the British pound and Nordic krona.
The Group structure impact reduced sales by 1.6% over the
nine-month period and by 3.8% in the third quarter, reflecting the
ongoing optimization of the Group's profile, with divestments
mainly in Southern Europe (Lapeyre in France, Distribution in the
Netherlands and in Spain), Northern Europe (Graham in the UK,
Glassolutions in Germany), and Asia-Pacific (Pipe in China). Total
divestitures since the end of 2018 represent EUR5.3 billion in
sales. The acquisitions of Chryso - a leading global player in
construction chemicals - and of Panofrance - a specialist
distributor of timber and panels - will be consolidated as from
fourth-quarter 2021. Note that in light of the hyperinflationary
environment in Argentina, this country which represents less than
1% of the Group's consolidated sales, is excluded from the
like-for-like analysis.
Update on raw material and energy cost inflation
Amid the current context of accelerating inflation in energy
costs, Saint-Gobain is now expecting energy and raw material cost
inflation of around EUR1.5 billion in 2021 compared to 2020 (in
line with the estimate given during the Capital Markets Day on
October 6, 2021 and compared to its previous estimation for the
full-year of EUR1.1 billion made at the end of July), of which
EUR1.1 billion in second-half 2021 alone.
Thanks to the priority given to sales prices, in third-quarter
2021 the Group achieved a positive price impact of 8.7% overall and
of 8.1% for its industrial businesses alone.
In the current energy price context and given the new price
increase announcements in most countries in Europe and in the US,
Saint-Gobain is confident that it will be able to offset raw
material and energy cost inflation over full-year 2021.
Segment performance (like-for-like sales)
High Performance Solutions (HPS): sales growth in the third
quarter
Sales were up 7.0% on third-quarter 2020 (up 2.5% on
third-quarter 2019) in broadly recovering industrial markets, with
the exception of the automotive market in Europe.
- Mobility sales were down over these two periods, with a
stronger 7.2% contraction versus third-quarter 2019 owing to the
sharper decline on the European market, while sales to the Americas
and China rose sharply. Supply chain tensions related to the
shortage of semi-conductors are weighing on the production capacity
of automotive manufacturers. However, our Mobility business
continued to significantly outperform the automotive market in the
period, thanks to its increasing exposure to electric vehicles and
to high value-added products.
- Businesses serving Industry were supported by decarbonization
solutions for our customers and posted a further sequential
improvement in surface finishing solutions and activities related
to investment cycles, even though the latter remained slightly down
on third-quarter 2019.
- Businesses serving the Construction Industry delivered further
growth and continued to benefit from upbeat trends in textile
solutions for external thermal insulation systems (ETICS), thanks
to good momentum in sustainable construction.
Northern Europe: sharp acceleration in price increases
Sales in Northern Europe were up by 10.7% in the third quarter
(up 11.5% versus third-quarter 2019), with a slight increase in
volumes and a strong increase in prices aimed at offsetting raw
material and energy cost inflation.
Sales in Nordic countries continued to see robust growth,
particularly light construction solutions on the supportive
renovation market. The pace of growth in Germany slowed as the
impact of the automotive market contraction affected demand for
glass; the markets for light and sustainable construction such as
modular construction remained upbeat. Growth accelerated in the UK,
driven solely by prices in a market affected by certain supply
chain disruptions and in the context of an optimized distribution
network post restructuring. Eastern Europe enjoyed strong growth in
both prices and volumes.
Southern Europe - Middle East & Africa: sales growth against
a high comparison basis
Sales for the Southern Europe - Middle East & Africa Region
were up 4.7% in the third quarter against a high comparison basis
in third-quarter 2020, when trade professionals took few holidays
during the summer period in Europe owing to the coronavirus
pandemic. Compared to the third quarter of 2019, the Region
reported strong sales growth of 12.7%, driven by prices as well as
good volume momentum for light and sustainable construction
solutions.
France reported further good momentum, driven by renovation
markets and energy efficiency solutions. The full impact of
France's household stimulus package MaPrimeRenov' contributed to
the successful overall performance, with almost 400,000 projects
submitted since the start of the year. In terms of renovation of
public buildings, the first effects of the stimulus plan should
begin to be felt in 2022. Spain advanced, particularly in light
construction solutions, despite the closure of a flat glass
manufacturing plant in 2020 as part of the optimization of the
Group's industrial footprint. Italy continued to benefit from
support for energy-efficient renovation in the form of tax credits,
which helped accelerate growth. Benelux was also up, as were Middle
East and African countries, led by robust growth in Turkey and
Egypt.
Americas: strong sales growth in the third quarter
The Americas Region reported organic growth of 14.9% in the
third quarter - with a continued acceleration in prices against a
high comparison basis for volumes - and of 28.2% versus the third
quarter of 2019, with volumes up by almost 10%.
- North America progressed by 13.6% and 18.3%, respectively,
over the two periods, driven by an acceleration in prices and good
momentum in volumes for light construction solutions thanks to the
successful acquisition of Continental Building Products, which has
reinforced the Group's positions in construction. Our local
organization enabled us to limit the impact of the strong supply
chain tensions - particularly for raw materials - which slightly
disrupted production in the third quarter.
- Latin America achieved further substantial growth in terms of
both prices - to offset inflation - and volumes. Sales increased by
18.3% in the quarter and by 50.5% compared to third-quarter 2019,
thanks to an approach in which the Group's full range of solutions
can be offered to customers.
Asia-Pacific: strong sales growth in the third quarter
The Asia-Pacific Region saw organic growth of 19.8% in the third
quarter and of 15.9% versus third-quarter 2019.
China continued to report robust growth over the two periods
thanks to an upbeat market for construction solutions. India's
recovery gathered pace - against a third-quarter 2020 comparison
basis affected by the health situation - given the very robust
growth compared to pre-Covid levels, driven both by volumes and
prices. South-East Asia was down, hit by the restrictions in place
to combat the coronavirus pandemic.
2021 outlook and strategic priorities
In fourth-quarter 2021 , against a high comparison basis and in
a macroeconomic and health environment which remains affected by
uncertainties, the Group should continue to benefit from strong
momentum in its main markets - especially renovation in Europe, as
well as construction in the Americas and in Asia-Pacific - and from
a solid operating performance. In this environment and provided
there is no new major impact related to the coronavirus pandemic,
Saint-Gobain expects the following trends for its segments:
- High Performance Solutions: supportive industrial markets,
excluding the contraction of the automotive market in Europe in
particular; businesses related to customer investment should rally
steadily, although they are expected to remain down on the good
level recorded in 2018;
- Europe : continued sales outperformance on a dynamic
renovation market, albeit with a high comparison basis for
December, with trade professionals having worked over the 2020
Christmas and New Year period;
- Americas : market growth, particularly residential
construction, in both North and Latin America;
- Asia-Pacific : market growth with continued good momentum in
China and India, but with the situation still affected by
health-related disruptions in South-East Asia.
Strategic priorities
Sustainable construction is essential to achieving carbon
neutrality. Saint-Gobain's comprehensive solutions offer makes it a
leading player in light and sustainable construction. Together with
a performance-driven local operating model, this positioning will
enable the Group to accelerate its growth and outperform its
markets, and disciplined capital allocation will also ensure a
step-up in value creation for our shareholders.
In this supportive environment, our strategic priorities, which
are based around the "Grow & Impact" plan, were presented
during our Capital Markets Day on October 6, 2021.
1) Accelerate the Group's growth and impact:
- Outperformance versus the market thanks to an agile
organization focused on its customers in each country and end
market;
- A range of integrated, differentiated and innovative solutions to decarbonize construction;
- Acceleration of ESG initiatives , with the deployment of our
2030 roadmap towards carbon neutrality in 2050;
- Continued optimization of the Group's profile (divestments and
acquisitions) and integration of Chryso, a leading global player in
construction chemicals.
2) Continue its initiatives focused on profitability and
performance: maintain robust margins and strong 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 post-coronavirus adaptation
measures to lower the break-even point of certain businesses, which
should generate EUR150 million in cost savings in 2021 versus
2020;
- Reinforcement of the operational excellence program aimed at
offsetting inflation (excluding raw material and energy costs);
- Maintaining the structural improvement in operating working
capital requirement and rebuilding adequate inventories in order to
best serve customers;
- Capital expenditure of around EUR1.5 billion, focused strictly
on high-growth markets, and ongoing digital transformation;
- Continued reduction in non-operating costs.
For full-year 2021, the Group is targeting a very strong
increase in operating income to a new all-time high, with
like-for-like operating income in second-half 2021 close to the
previous record of second-half 2020.
Financial calendar
- 2021 results: February 24, 2022, after close of trading on the
Paris Bourse
Analyst/Investor relations Press relations
+33 1 88 54 +33 1 88 54 23
29 77 45
+33 1 88 54 +33 1 88 54 26
Vivien Dardel 19 09 Laurence Pernot 83
Floriana Michalowska +33 1 88 54 Patricia Marie +33 1 88 54 27
Christelle Gannage 15 49 Susanne Trabitzsch 96
----------------------- ------------- -------------------- ----------------
A conference call will be held at 6:30pm (Paris time) on October
28, 2021: dial
+33 1 72 72 74 03 followed by the code 36430350#
Glossary :
Indicators of organic growth and like-for-like changes in
sales/operating income reflect the 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 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 : see Note 4 to the financial statements in the
interim financial report, available by clicking here:
https://www.saint-gobain.com/en/finance/information-reglementee/half-yearly-financial-report
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
investments in property, plant and equipment and intangible assets
excluding additional capacity investments, plus changes in working
capital requirement
ESG = Environment, Social, Governance
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.
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 price and volumes to organic sales
growth by Segment
2021-2020 2021-2019
---------------------------------
Q3 2021 Like-for-like Prices Volumes Like-for-like Prices Volumes
change change
------- -------- -------------- ------- --------
High Performance Solutions +7.0% +0.6% +6.4% +2.5% +0.9% +1.6%
Northern Europe +10.7% +9.5% +1.2% +11.5% +10.0% +1.5%
Southern Europe -
ME & Africa +4.7% +8.4% -3.7% +12.7% +9.5% +3.2%
Americas +14.9% +15.0% -0.1% +28.2% +18.6% +9.6%
Asia-Pacific +19.8% +8.0% +11.8% +15.9% +6.6% +9.3%
-------------- ------- -------- -------------- ------- --------
Group Total +9.4% +8.7% +0.7% +13.3% +9.7% +3.6%
-------------- ------- -------- -------------- ------- --------
2021-2020 2021-2019
---------------------------------
9-month 2021 Like-for-like Prices Volumes Like-for-like Prices Volumes
change change
------- -------- -------------- ------- --------
High Performance Solutions +17.8% +0.0% +17.8% +2.2% +0.4% +1.8%
Northern Europe +16.6% +5.7% +10.9% +10.4% +5.8% +4.6%
Southern Europe -
ME & Africa +24.2% +4.6% +19.6% +13.0% +5.6% +7.4%
Americas +25.7% +12.1% +13.6% +26.2% +13.1% +13.1%
Asia-Pacific +32.9% +5.1% +27.8% +16.1% +3.7% +12.4%
-------------- ------- -------- -------------- ------- --------
Group Total +21.0% +5.5% +15.5% +12.4% +6.1% +6.3%
-------------- ------- -------- -------------- ------- --------
Appendix 2: Breakdown of organic sales growth and external
sales
Q3 2021, in % of total Like-for-like Like-for-like % Group
change change
2021-2020 2021-2019
High Performance Solutions +7.0% +2.5% 16.7%
Mobility -5.0% -7.2% 6.1%
Other industries +15.2% +8.9% 10.6%
Northern Europe +10.7% +11.5% 34.5%
Nordics +10.5% +10.8% 13.5%
United Kingdom - Ireland +11.7% +12.5% 11.0%
Germany - Austria +6.1% +5.3% 3.4%
Southern Europe - ME
& Africa +4.7% +12.7% 28.4%
France +3.2% +11.7% 22.0%
Spain - Italy +5.5% +11.3% 3.3%
Americas +14.9% +28.2% 16.4%
North America +13.6% +18.3% 11.4%
Latin America +18.3% +50.5% 5.0%
Asia-Pacific +19.8% +15.9% 4.0%
--------------
Group Total +9.4% +13.3% 100%
--------------
9-month 2021, in % of Like-for-like Like-for-like % Group
total change 2021-2020 change
2021-2019
High Performance Solutions +17.8% +2.2% 16.5%
Mobility +17.4% -4.6% 6.3%
Other industries +18.0% +6.6% 10.2%
Northern Europe +16.6% +10.4% 33.2%
Nordics +8.6% +11.5% 13.4%
United Kingdom - Ireland +32.9% +8.2% 10.5%
Germany - Austria +11.4% +6.3% 3.3%
Southern Europe - ME
& Africa +24.2% +13.0% 31.4%
France +24.9% +13.6% 24.3%
Spain - Italy +21.3% +7.2% 3.4%
Americas +25.7% +26.2% 15.1%
North America +21.7% +19.3% 10.8%
Latin America +37.6% +41.7% 4.3%
Asia-Pacific +32.9% +16.1% 3.8%
------------------
Group Total +21.0% +12.4% 100%
------------------
Appendix 3: Distribution Europe
9m 2020 9m 2021 2021-2020 2021-2019
sales sales
(in (in
EURm) EURm)
-------- -------- ----------------------------------------------
Change Change Like-for-like Like-for-like
on actual on a comparable change change
structure structure
basis basis
----------- ----------------- -------------- --------------
Distribution
(Europe) 11,919 13,905 +16.7% +22.3% +20.8% +13.5%
-------- -------- ----------- ----------------- -------------- --------------
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