Saint-Gobain: Sales for the First Nine Months of 2013
PARIS, October 24, 2013
PARIS, October 24, 2013 /PRNewswire/ --
Trading upswing in the third quarter with 3.1% organic growth,
giving 1.1% negative organic growth for the nine-month period
•Organic growth reported by all businesses in Q3
•Sales prices remain upbeat: up 0.9% in Q3 and over nine months
•Sales volumes recover: up 2.2% in Q3 (including one additional working day),
down 2.0% over nine months
•Acceleration in organic growth in Asia and emerging countries in Q3, rebound
in North America, and fledgling improvement in Western Europe
•Strong negative currency impact of 4.3% in Q3; negative impact of 2.3% since
the beginning of the year
•2013 objectives confirmed
"The Group's trading performance in the third quarter confirms the recovery
that began in the three months to June 30, with ongoing robust organic growth
in Asia and emerging countries, confirmation of the upturn in residential
construction in the US and gradually more stable trading in Western Europe. We
maintained our focus on increasing prices amid a slower rise in raw material
and energy costs, and also continued to roll out our cost cutting program. In
a still unsettled macroeconomic environment and despite a significant currency
impact, we are confirming our objective of a recovery in operating income in
the second half of the year."
The table below presents third-quarter sales trends by Business Sector and
major geographic area:
Sales Sales % change on a
for Q3 for Q3 on an comparable % change on a
2012 2013 actual structure like-for-like
(EURm) structure basis basis
Innovative Materials 2,329 2,242 -3.7% -3.7% +2.2%
Flat Glass 1,263 1,234 -2.3% -2.2% +3.1%
Materials 1,068 1,010 -5.4% -5.5% +1.3%
1. ConstructionProducts(1)3,0012,993-0.3% -0.3%+5.4%
Interior Solutions1,4881,515+1.8% +0.6%+6.3%
2. Building Distribution4,9234,878-0.9%-0.5%+2.2%
3. Packaging (Verallia)947927-2.1% -2.1% +1.8%
4. Internal Sales and other(249)(238)----- ----- -----
5. GROUP10,95110,802-1.4% -1.2%+3.1%
7. Internal Sales(417)(439)----- ----------
8. GROUP10,95110,802-1.4% -1.2%+3.1%
(1) Including inter-division eliminations.
Consolidated sales for the third quarter came in at €10,802 million, down 1.4%
on third-quarter 2012 (€10,951 million). This reflects a strong negative
currency impact (-4.3%), a slightly negative Group structure impact (-0.2%)
and organic growth of 3.1%, with volumes up 2.2% and prices gaining 0.9%. The
additional working day had a positive impact of around 1.5%. Volumes for the
third quarter were therefore back on an upward trend, including at a constant
number of working days.
Overall, third-quarter trends confirm the improvement across all Group
businesses, which delivered organic growth. Construction Products (CP) sales
rallied sharply (up 5.4%) after having been hit by destocking in the US
Exterior Products business in the previous quarter. Innovative Materials and
Building Distribution enjoyed an uptick in trading, with sales advancing 2.2%
for both Business Sectors.
All of the Group's geographic areas contributed to this upturn in organic
The table below presents nine-month sales trends by Business Sector and major
Sales for the
for the first
first nine % change % change
nine months on an on a
months of 2013 actual comparable % change on a
of 2012 structure structure like-for-like
(EURm) basis basis basis
Innovative Materials (1) 7,182 6,865 -4.4% -4.5% -1.2%
Flat Glass 3,860 3,753 -2.8% -2.7% +0.2%
Materials 3,340 3,121 -6.6% -6.8% -3.1%
Construction Products (1)8,904 8,717 -2.1% -2.6% +0.7%
Interior Solutions 4,334 4,385 +1.2% -0.4% +2.7%
Exterior Solutions 4,609 4,376 -5.1% -4.5% -1.2%
Building Distribution 14,379 13,977 -2.8% -3.6% -2.3%
Packaging (Verallia) 2,855 2,740 -4.0% -3.5% -1.4%
Internal sales and other (779) (726) ------ ------- -------
GEOGRAPHIC AREA 32,541 31,573 -3.0% -3.4% -1.1%
France 9,024 8,750 -3.0% -4.8% -4.8%
Other Western Europe 13,542 13,136 -3.0% -3.3% -2.2%
North America 4,782 4,609 -3.6% -3.1% -0.3%
Emerging countries and
Asia 6,524 6,402 -1.9% -1.3% +6.1%
Internal sales (1,331) (1,324) ----- ----- -----
GROUP 32,541 31,573 -3.0% -3.4% -1.1%
(1) Including inter-division eliminations.
Saint-Gobain's sales for the first nine months of 2013 came in at
€31,573million, down 3.0% from €32,541 million in the first nine months of
The currency impact was a negative 2.3%, mainly reflecting the fall against
the euro of the key emerging market currencies (chiefly the Brazilian real)
along with the pound sterling and US dollar.
Changes in Group structure had a slightly positive impact (+0.4%), mainly
owing to sales resulting from the Brossette acquisition in April 2012.
Like-for-like (comparable Group structure and exchange rates), sales retreated
1.1%. Volumes were down 2.0%, while sales prices remained on an upward trend,
Like-for-like performance of Group Business Sectors
Innovative Materials sales stemmed their decline to 1.2% over the nine months
to September 30 thanks to 2.2% growth in the third quarter, with both of its
businesses reporting gains.
oFlat Glass sales stabilized over the first nine months of the year (up
0.2%). The third quarter (up 3.1%) confirmed price increases in Europe,
with float glass prices remaining on the uptrend that emerged in the
second quarter.Construction markets are gradually stabilizing in Western
Europe and are picking up pace in Asia and emerging countries. The
automotive market enjoyed further vigorous organic growth along the lines
of the second quarter, powered by a strong performance from Asia and
emerging countries and ongoing stability in Europe.
oHigh-Performance Materials (HPM) reported 1.3% organic growth in the third
quarter, after negative organic growth of 5.1% in the six months to June
30. Prices for the HPM business held up well in a deflationary
environment. Organic growth remained in the doldrums for Ceramics, despite
a weaker basis for comparison. Abrasives and Plastics both recorded gains,
particularly in Asia and in emerging countries.
Construction Products (CP) sales leveled off, gaining 0.7% over the first nine
months of 2013, thanks to 5.4% growth in the third quarter driven by upbeat
volumes in North America and in Asia and emerging countries.
oThe momentum enjoyed by Interior Solutions in the second quarter
continued, with organic growth at 2.7% over the nine-month period and 6.3%
for the three months to September 30. The US played its part in this
performance, in terms of both prices (particularly plasterboard at the
start of the year) and volumes, thanks to the rebound in residential
construction. Volumes are close to stabilizing in Western Europe, and
continued to rally sharply in Asia and emerging countries.
oAfter a worse-than-expected second quarter due to temporary destocking in
Exterior Products in the US, Exterior Solutions reported a significant
4.7% rise in like-for-like third-quarter sales, stemming the nine-month
decline to 1.2%. Pipe saw a recovery in the third quarter thanks to the
export business. Industrial Mortars enjoyed further buoyant organic growth
in Asia and emerging countries, but continued to feel the pinch of the
economic crisis in Western Europe.
Building Distribution sales dropped 2.3% on a like-for-like basis over the
first nine months of 2013, but resumed their advance in the third quarter (up
2.2%). The Business Sector's performance during the third quarter saw a clear
improvement, as the recovery took hold in the UK, Germany got back on the
growth track and stability reigned in Scandinavia thanks to Norway and Sweden.
Although organic growth in France is still slightly negative, it continued to
improve and confirmed market share gains. In emerging countries, Brazil
enjoyed strong momentum, but Eastern Europe continued to see negative growth.
Conditions in Southern Europe remained challenging.
Packaging (Verallia) posted negative organic growth (-1.4%) over the first
nine months of the year but delivered 1.8% organic growth in the third
quarter. Sales prices for the Business Sector remained upbeat, with volumes
stabilizing in Western Europe and the US. After a tough first half, Latin
America once again saw solid trading during the quarter in terms of both
prices and volumes.
Like-for-like analysis by geographic area
In line with second-quarter trends, trading continued to improve across all
regions, and particularly Asia and emerging countries:
oIn France, organic growth remained slightly negative (-1.5% over the
quarter and -4.8% over the nine months to September 30). Other Western
European countries reported 2.8% growth over the quarter and negative
growth (-2.2%) over the first nine months of the year. This upturn
reflects solid trading in the UK which began in the second quarter, as
well as a good performance from Germany.
oIn North America, organic growth came in at a negative 0.3% for the first
nine months of the year, lifted by 3.2% growth in the third quarter. This
quarterly improvement is chiefly attributable to Exterior Products, which
- despite September figures being down - was bolstered by a weaker basis
for comparison (third-quarter 2012) as well as by the end of the
destocking that had affected its second-quarter performance. The ongoing
rally in the construction market in the US continued to benefit Interior
Solutions, where prices remained upbeat.
oIn Asia and emerging countries, trading continued to pick up pace (up 6.1%
over the nine months to September 30 and 10.5% in the third quarter)
across all regions. Latin America (and especially Brazil) continued to
drive this growth momentum, while our businesses in Eastern Europe and
Asia saw organic growth improve.
Update on asbestos claims in the United States
Some 3,000 claims were filed against CertainTeed in the first nine months of
2013, in line with the same period in 2012. Taking into account around 3,000
claims settled in the period (versus 8,000 in the first nine months of 2012),
the number of outstanding claims remained stable compared to December 31,
2012, at around 43,000.
Outlook and objectives for full-year 2013
In the fourth quarter, the Group expects confirmation of the trends observed
in the three months to September 30:
oin Western Europe, industrial markets (particularly automotive) and
residential construction (new-build and renovation) should further
stabilize. Construction should continue to rally in the UK and Germany;
oin North America, residential construction should remain on a steady
upward trend, while industrial output should continue at a good level;
oin Asia and emerging countries, our businesses should continue to deliver
robust organic growth;
olastly, household consumption should remain satisfactory overall.
Against this backdrop, Saint-Gobain will press ahead with its action plan in
the fourth quarter, focusing particularly on:
oincreasing its sales prices, in a context of a slower rise in raw material
and energy costs;
opursuing its cost cutting program, in order to achieve additional cost
savings of €160 million in the second half compared to the first six
months of the year (or €280 million compared to second-half 2012). This
will represent €580 million in cost savings in 2013 as a whole compared to
2012 and €1,100 million in cumulative cost savings calculated on the 2011
okeeping a close watch on cash management and financial strength.
Despite the strong currency impact, the Group is therefore confirming its
objectives for full-year 2013:
- a recovery in operating income in the second half, after having bottomed
out in first-half 2013; we therefore expect operating income in this period to
be above second-half 2012;
- a high level of free cash flow, thanks mainly to a €200million
reduction in capital expenditure;
- a robust balance sheet, further strengthened by the disposal of Verallia
As mentioned in February, a meeting to discuss the Group's strategy and
businesses will be held on November 27, 2013.
Dates for your diary
Investor meeting: November 27, 2013.
Results for 2013: February 19, 2014, after close of trading on the Paris
Gaetano Terrasini, +33-1-47-62-32-52
Vivien Dardel, +33-1-47-62-44-29
Alexandra Baubigeat, +33-1-47-62-30-93
Sophie Chevallon, +33-1-47-62-30-48
Susanne Trabitzsch, +33-1-47-62-43-25
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