Saint-Gobain: Sales for the First Nine Months of 2012

            Saint-Gobain: Sales for the First Nine Months of 2012

PR Newswire

PARIS, October 25, 2012

PARIS, October 25, 2012 /PRNewswire/ --

Sales for the first nine months of 2012:up 2.9% to €32.5 billion

Organic growth: -1.8%, of which -3.8% in Q3


  oSales prices: up 1.9% over 9 months and 1.5% in Q3
  oSales volumes: down 3.7%over 9 months and 5.3% in Q3
  oQ2 business trends confirmed in Q3, but negative impact of fewer trading
    days than in 2011 and of very strong 3Q 2011 comparatives for construction
    in North America
  oSwift implementation of new cost cutting measures

Pierre-André de Chalendar, Chairman and Chief Executive Officer of
Saint-Gobain, commented:

"Saint-Gobain's trading performance in the third quarter confirms the general
economic slowdown observed in Western Europe since May, as well as
difficulties in the Group's main markets in Asia and emerging countries. In
the US, exceptionally strong third-quarter 2011 comparatives (boosted by
severe storms) significantly curtailed the positive impact of the ongoing
improvement in residential construction in the quarter. Against this backdrop,
we maintained ourfocus on sales priceswith the aim of passing on the rise
in raw material and energy costs over the year as a whole.

Given the continuing slowdown in most of its markets in a highly uncertain
macroeconomic environment, the Group continues to firmly roll outitsnew cost
cutting measures and cash management programs. Thanks to the strong commitment
of our teams, we are maintaining our objectives overall, although we expect
the sequential decline in our second-half operating income to be slightly more
significant than anticipated at the end of July."

Saint-Gobain delivered a 2.9% rise in sales over the first nine months of
2012, up to€32,541million versus €31,629 million in the same period one year

The currency impact was a positive 2.0%, mainly reflecting gains in the US
dollar and pound sterling against the euro. Changes in Group structure also
had a positive2.7%impact, resulting mainly from sales contributed by
companies acquired over the last 12 months (Brossette, Build Center and Solar
Gard in particular).

On a like-for-like basis (constant Group structure and exchange rates), sales
retreated1.8%, with volumes down3.7% and pricesup1.9%.

Consolidated sales for the third quarter came in at €10,951 million, up 1.8%
on third-quarter 2011 (€10,754 million). This reflects a positive 2.8% Group
structure impact, a positive 2.8% currency effect, and negative organic growth
of3.8%,witha decline of5.3%in volumes and a rise of1.5%in prices.

Overall, trading in the third quarter confirms the slowdown observed in the
three months to June 30 (negative organic growth of 2.3%, with prices up 1.9%
and volumes down 4.2%). With the exception of Verallia, which delivered
another resilient performance (3.2% organic growth in the third quarter), all
of the Group's Business Sectors and Divisions saw sales volumes decline in the
three months to September 30, reflecting the gradual deterioration in the
global economic environment since May. This situation was exacerbated by fewer
trading days than in 2011 (a loss of one day over the quarter, of which two
days in September, resulting in a negative 8.8% impact on the Group's
September sales), which chiefly affected Building Distribution sales and, to a
lesser extent, sales for Interior Solutions. Based on a constant number of
trading days, the Group's negative organic growthwould have been2.8%rather
than 3.8%for the third quarter.

Among the main geographic areas in which the Group operates, only North
America remained upbeat, spurred by ongoing improvements in the construction
market. This was despite the very tough third-quarter 2011 comparatives for
this market (renovation activity in the prior-year period had been boosted by
severe storms). Against this backdrop, sales prices were up in all of the
Group's Business Sectors and Divisions.

The table below presents sales trends by Business Sector and major geographic

                             Sales  for the
                            for the  first
                             first   nine   % change   % change
                             nine   months    on an      on a
                            months  of 2012  actual   comparable % change on a
                            of 2011         structure structure  like-for-like
                           (EURm)    (EURm)    basis     basis        basis
    BUSINESS SECTOR          7,230   7,182    -0.7%     -2.6%        -4.5%

    Innovative Materials (1) 4,121   3,860    -6.3%     -6.7%        -6.8%
    Flat Glass               3,133   3,340    +6.6%     +2.6%        -1.7%

    Materials                8,703   8,904    +2.3%     +1.0%        -1.7%
    Construction Products(1) 4,122   4,334    +5.1%     +3.0%        +0.6%
    Interior Solutions       4,620   4,609    -0.2%     -0.8%        -3.8%                  
    Exterior Solutions      13,763  14,379    +4.5%     -0.1%        -1.4%
    Building Distribution    2,718   2,855    +5.0%     +6.1%        +3.1%
    Packaging (Verallia)      (785)   (779)  ------    -------     -------
    Internal sales and
    other                   31,629  32,541    +2.9%     +0.2%        -1.8%
    GEOGRAPHIC AREA                                                                               
    France                   8,922   9,024    1.10%    -2.70%       -2.70%
    Other Western Europe    13,497  13,542    0.30%    -2.00%       -4.00%
    North America            4,214   4,782   13.50%    11.40%        1.70%         
    Emerging countries and           
    Asia/Pacific             6,466   6,524    0.90%    -0.90%       -0.30%
    Internal sales          -1,470  -1,331    -----     -----        -----
    GROUP                   31,629  32,541    2.90%     0.20%       -1.80%

1.Including inter-division eliminations.

Like-for-like performance of Group Business Sectors

Innovative Materialssales were down 4.5% over the nine-month period
afterdeclining7.2% in the third quarter. Trading conditions in Flat Glass
remained challenging, while HPM also saw business stall over the third
quarter, prompted by a slowdown in industrial production and capital spending,
especially in Western Europe. On a positive note, sales prices for the
Business Sector continued to climb in the three months to September 30,
despite the strong basis for comparison.

  oIn line with the six months to June 30, Flat Glass saw sales slide 6.8% in
    the first nine months of the year (and 7.0% in the third quarter), hit by
    the contraction in its main markets (automotive and construction in
    Western Europe, solar power) and by sluggish sales volumes in Asia and
    emerging countries. In contrast, after falling in the six months to June
    30, sales prices stabilized in the third quarter but do not yet reflect
    the first float glass price increases implemented after July.
    Consequently, despite the vigorous cost cutting measures taken, the
    Division's nine-month performance continued to be heavily impacted by the
    hike in the cost of raw materials and energy.

  oAfter robust trading in the first six months of 2012, HPM's third-quarter
    performance was dented by the slowdown in the global economic environment.
    This was exacerbated by strong third-quarter 2011 comparatives. HPM sales
    therefore slipped1.7%over the nine months to September 30 (and 7.8%in
    the third quarter), reflecting the decline in volumes in Western Europe
    and emerging countries, as well as in North America to a lesser extent.
    However, the Group's cost cutting measures and upbeat sales prices should
    help limit the impact of this slowdown on the Division's second-half

ConstructionProducts(CP) sales fell1.7%over the nine months to September
30 and 4.3%in the third quarter, owing to a drop in sales volumes in Western
Europe and - in the third quarter - the impact of very tough year-on-year
comparatives (third-quarter 2011 had been boosted by severe storms in the US).
Sales prices remained upbeat for all businesses and geographic areas.

  oInterior Solutions reported timid organic growth in both thefirstnine
    monthsof 2012(up0.6%) and the third quarter(up0.3%), spurred by sales
    price rises, mainly in US plasterboard early in the year. Sales volumes
    retreated in Western Europe, chiefly as a result of fewer trading days
    than in 2011, but continued to recover in the United States on the back of
    the construction market upturn. Sales volumes in Asia and emerging
    countries remained upbeat.

  oExterior Solutions like-for-like sales declined3.8% in thefirstnine
    monthsof 2012and 8.5% in the third quarter, hit by both a sharp fall in
    Pipe sales and by very strong third-quarter 2011 comparatives for Exterior
    Products (severe storms in early-2011 gave a one-off boost to roofing
    repairs in the US). This temporarily offsets the favorable impact of the
    rebound in construction. The Industrial Mortars business delivered further
    robust organic growth in Asia and emerging countries for the third
    quarter, but its performance was hit by the worsening economic crisis in
    Western Europe. For the division as a whole, the benefits of cost cutting
    measures are beginning to filter through and sales price momentum remains
    positive across the Division (particularly Industrial Mortars), although
    these does not fully offset the impact of spiraling raw material and
    energy costs over the first nine months.

Building Distributionlike-for-likesales were down1.4%over the first nine
months of 2012 (and 3.0%in the third quarter). Germany, Scandinavia and the
US continued to grow over the nine-month period but stabilized in the third
quarter, while France held up well and gained market share in a slacker
trading environment. The Business Sector's other countries reported softer
trading over the nine months to September 30 and especially in the third
quarter, due chiefly to fewer trading days than in 2011 (a loss of one day
over the quarter, of which two days in September, resulting in a negative 8.2%
impact on September sales). Based on a constant number of trading days, the
Business Sector would have delivered negative organic growth of 1.8% for the
third quarter. Against this deteriorating economic backdrop, the Business
Sector continues to roll out measures focused on sales momentum, protecting
trading margins thanks to upbeat sales prices, and maintaining a tight rein on

Packaging(Verallia) delivered 3.1%organic growth over the first nine months
of the year(3.2%in the third quarter). This performance was chiefly fuelled
by sales price increases resulting - particularly in the third quarter - from
the mechanisms adopted to pass on energy costs to prices. Sales volumes
remained upbeat in France, the US and Brazil, but were down in most other
countries, and particularly in Southern and Eastern Europe.

Like-for-like analysis by geographic area

In line with first-half 2012 trends, trading in Western Europe and in Asia and
emerging countries slowed further in the third quarter, while North American
operations continued to benefit from the ongoing recovery in the construction

  oIn Franceand otherWestern Europecountries, organic growth came in at a
    negative2.7%and4.0%, respectively, over the nine months to September 30
    (negative organic growth of2.4%and5.7%, respectively, in the third
    quarter). This downturn resulted chiefly from difficulties in Flat Glass
    and Pipe, but also reflects softening industrial and construction markets
    in most European countries, particularly over the past three months.
  oNorth America posted 1.7%organic growth over the nine months to September
    30, following a 4.1% drop in sales in the third quarter. This was
    essentially due to exceptionally strong trading by US Exterior Products in
    the comparative third-quarter 2011 period - boosted by severe storms early
    in 2011 - which offset the benefits of the ongoing improvement in the
    construction market over the three months to September 30. While Verallia
    continued to enjoy robust activity, HPM sales volumes were hit by the
    slowdown in industrial markets.
  oTrading in Asiaand emerging countries continued on a downward trend,
    shrinking 0.3%over the nine months to September 30 and2.8%in the third
    quarter, and is not as yet showing any tangible signs of improvement.

Update on asbestos claims in the United States

Some 3,000 claims were filed against CertainTeed in the first nine months of
2012, in line with the same period one year earlier. Taking into account
around 8,000 claims settled or transferred to inactive dockets in the
nine-month period (versus 7,000 in the first nine months of 2011), the total
number of outstanding claims continued to fall, down to 47,000 at September
30, 2012 versus 52,000 at December 31, 2011.

Outlook and objectives for full-year 2012

After a difficult third quarter hit by the gradual deterioration in the
economic environment - particularly in Europe - since May, the Group expects
the slowdown observed over the past three months to continue into the fourth
quarter, with the global economic climate remaining highly fragile and

  oin WesternEurope, industrial markets (especially automotive) should
    continue to contract. New-build and renovation markets should also
    continue to slow, but with stark contrasts persisting from one country to
    the next;

  oin North America, industrial markets should lose further momentum,
    squeezed by the decline in industrial production and capital spending. In
    contrast, the upturn in residential construction markets should continue;

  oin Asia and emerging countries, trading should stabilize before gradually
    picking up;

  olastly, household consumption markets should hold firm across all regions
    except Southern Europe.

Against this backdrop, trading for the Group in the fourth quarter is expected
to remain subdued, despite more favorable basis for comparison and number of
trading days than in the third quarter.

Consequently, given the considerable uncertainties currently facing the global
economy, the Group will continue to firmly implement its action plan, by:

  omaintaining its priority focus onsales prices with the aim ofachievinga
    moderate price increase over the year as a whole, in an effort to pass on
    the rise in raw material and energy costs;

  ofirmly pursuing new cost cutting measures, with additional savings of €160
    million in the second half, representing total cost savings of €500
    million over the year as a whole and a full-year impact (in 2013) of
    €750million(calculated on the2011cost base). This cost cutting
    program, which aims to curtail the impact of a limited decline in volumes
    over the full year, will remain primarily focused on Europe;

  okeeping a tight rein on operating working capital;

  omaintaining a strict cash management policy in order to maintain a high
    level of free cash flow and a strong balance sheet. Capital expenditure
    and financial investments in the second half will therefore be reduced
    compared to the same year-ago period, by €200 million and €350 million,

Overall, the Group is maintaining its objectives, although the sequential
decline in second-half operating income should be slightly more significant
than anticipated at the end of July.

Forthcoming results announcement

Results for 2012:February 20, 2013, after close of trading on the Paris

Analyst/Investor relations

Florence Triou-Teixeira +33-1-47-62-45-19
Vivien Dardel +33-1-47-62-44-29
Alexandra Baubigeat  +33-1-47-62-30-93

Press relations

Sophie Chevallon +33-1-47-62-30-48
Susanne Trabitzch +33-1-47-62-43-25

SOURCE Saint-Gobain
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