Saint-Gobain: Sales for the First Nine Months of 2010
COURBEVOIE, France, October 21, 2010 /PRNewswire-FirstCall/ --
- +5.5% on a Reported Basis; +1.4% Like-for-Like
- Sales for Third-Quarter 2010:
- +7.8% on a Reported Basis; +2.3% Like-for-Like
Saint-Gobain's consolidated sales for the first nine months of 2010 came in at EUR30,007 million, versus EUR28,435 million for the same year-ago period, representing a rise of 5.5% on an actual structure basis.
Currency fluctuations contributed significantly (3.8%) to sales growth, owing to the appreciation of Scandinavian currencies and the currencies of the Group's main emerging markets - especially the Brazilian real - against the euro. On a constant exchange rate basis*, sales therefore rose 1.7%.
Changes in Group structure had a slightly positive impact, representing 0.3% of sales growth over the period.
On a like-for-like basis (constant Group structure and exchange rates), consolidated sales climbed 1.4% over the nine months to September 30, 2010, including a positive 0.8% volume impact and a positive 0.6% price effect.
In the third quarter alone, consolidated sales surged 7.8% to EUR10,478 million from EUR9,720 million in the three months to September 30, 2009. Organic growth was 2.3% (reflecting a positive 0.7% volume impact and a positive 1.6% price effect). This followed organic growth of 3.9% in the second quarter, including a positive 3.1% volume impact (1.4% of which was attributable to a higher number of working days) and a positive 0.8% price effect, and negative organic growth of 2.4% in the first three months of the year (reflecting a negative 1.7% volume impact and a negative 0.7% price effect).
Based on a constant number of working days, this third-quarter trading performance confirms the upturn in sales volumes observed in the three months to June 30, 2010, despite a much tougher basis for comparison (sales volumes fell 12.9% in third-quarter 2009, versus a decline of 17.1% in the second quarter of that year).
The upward trend in sales prices - which also began in the second quarter - intensified in the three months to September 30, 2010, reflecting the price increases implemented in all of the Group's Business Sectors and divisions over the past few months.
* Exchange rates for the first nine months of 2009.
Along the lines of the second quarter, the Group's organic growth in the three months to September 30, 2010 continued to be driven by the emerging countries and Asia region and by the Innovative Materials Sector, which both reported double-digit growth. The second-quarter recovery of Group businesses linked to European construction gathered pace, despite a tougher basis for comparison. In contrast, businesses related to North American construction markets were hit by the repercussions of over-optimistic expectations from distributors, whose restocking had inflated first-half figures. Household consumption remained stable over the period.
The table below presents sales trends by Business Sector and major geographic area over the first nine months of 2010. Figures for the same period in 2009 are provided for comparison purposes:
Sales Sales % change on % change % change on a
for the for the an actual on a like-for-like
first first structure comparable basis
nine nine basis structure
months months basis
of 2009 of 2010
(EURm) (EURm)
BY BUSINESS
SECTOR
Innovative
Materials (1) 5,755 6,918 +20.2% +19.8% +13.5%
Flat Glass 3,358 3,854 +14.8% +14.9% +8.9%
High-Performance
Materials 2,412 3,078 +27.6% +26.4% +19.8%
Construction
Products (1) 7,987 8,269 +3.5% +2.9% -1.1%
Interior
Solutions 3,809 3,872 +1.7% +0.7% -2.9%
Exterior
Solutions 4,204 4,424 +5.2% +4.8% +0.5%
Building
Distribution 12,816 12,892 +0.6% +0.3% -2.2%
Packaging 2,620 2,683 +2.4% +2.4% -0.1%
Internal sales
and other (743) (755) --------- --------- ---------
GROUP 28,435 30,007 +5.5% +5.2% +1.4%
BY GEOGRAPHIC
AREA
France 8,622 8,520 -1.2% -1.2% -1.2%
Other Western
European
countries 12,446 12,724 +2.2% +2.1% -0.5%
North America 3,808 4,287 +12.6% +11.6% +6.8%
Emerging
countries and
Asia/Pacific 4,672 5,831 +24.8% +23.4% +10.7%
Internal sales (1,113) (1,355) -------- -------- --------
GROUP 28,435 30,007 +5.5% +5.2% +1.4%
(1) Including inter-division eliminations.
Like-for-like performance of Business Sectors
- Innovative Materials once again delivered the Group's best organic
growth, over both the nine months to September 30, 2010 (13.5%) and the
third quarter (12.8%). However, the pace of growth slowed compared to
the 17.0% recorded in the second quarter, due to a tougher basis for
comparison. Overall, the Innovative Materials Sector continued to
benefit from a bullish economic climate in emerging countries and
Asia (which accounted for 37% of the Sector's sales over the first
nine months of 2010), as well as from vigorous industrial markets in
both North America and Western Europe.
- Flat Glass sales rose 8.9% over the nine months to September 30, 2010
and 6.5% over the third quarter. Volume growth over the last three months
continued to be powered by Asia and emerging countries and to a lesser
extent - due chiefly to the tough basis for comparison - by Automotive
Glass in Europe. For the first time in six quarters, sales prices for the
Flat Glass Sector as a whole increased, up 2.2% in the three months to
September 30. This primarily reflected an increase in commodity prices
(float glass), and the initial impacts of passing on this increase to
processed products. The Construction Glass business in Western Europe
reported a noticeable improvement in France and Germany, but remained
sluggish in most other countries.
- High-Performance Materials (HPM) continued to deliver stellar growth,
with sales surging 19.8% over the first nine months of 2010 and 21.0% in
the third quarter. Trading remained upbeat in all regions, particularly
North America and Asia (both reporting organic growth of around 30% in
the third quarter), buoyed by vigorous industrial output combined with a
recovery in the corporate spending cycle.
- Sales for the Construction Products (CP) Sector edged down 1.1% over
the nine months to September 30, 2010 and 3.1% over the third quarter.
This results from the strong contrasting trends in the third quarter
between Western Europe, emerging countries and Asia, which continued to
improve and/or grow sharply, and North America, hit by the repercussions
of over-optimistic expectations from distributors, whose restocking had
inflated first-half figures. In contrast, sales prices for both Interior
and Exterior Solutions were up across all regions in the third quarter.
- Like-for-like sales for the Interior Solutions business slipped 2.9%
over the first nine months of the year and 1.4% over the third quarter.
The relative improvement in market conditions across Western and Eastern
Europe begun in the second quarter continued in the three months to
September 30, 2010. However, this was more than offset by renewed
weakness in North American construction markets.
- Sales for the Exterior Solutions business edged up 0.5% over the nine
months to September 30, 2010, but were down 4.5% over the third quarter
on the back of a sharp drop in sales volumes for Exterior Products
(roofing products in the US) during the summer. Industrial Mortars
benefited over the last three months from the gradual improvement in
market conditions across Western Europe, while Pipe continued to trade
well in its export business.
- Building Distribution posted a 2.2% drop in sales over the first nine
months, but returned to growth in the third quarter (up 1.4%). This
positive trend stems primarily from the gradual recovery observed in
Germany, the UK and Scandinavia as from March, and to a lesser extent,
from the more recent rebound in Eastern Europe. Sales for France
remained virtually stable in the third quarter after a slight increase
in September. Southern Europe remained in the doldrums.
- Packaging continued to report robust trading conditions, with sales
virtually stable year-on-year for the nine months to September 30, 2010
(down 0.1%) as well as for the third quarter (up 0.2%). Both volumes
and sales prices remained in line with the healthy levels of 2009.
Like-for-like analysis by geographic area
Barring North America, all geographic areas delivered organic growth in the third quarter, confirming the trends observed in the three months to June 30, 2010. Emerging countries and Asia once again delivered double-digit growth, while France and other Western European countries continued to recover, with sales inching up slightly in the third quarter.
Like-for-like trends for the third quarter show:
- confirmation of the return to growth in France, with a timid increase
in sales (up 0.2%, after a rise of 1.1% in the second quarter, including
a positive 2% impact due to the higher number of working days), driven
chiefly by a robust trading performance from Innovative Materials;
- stronger growth in other Western European countries (up 1.8%, following
a rise of 1.7% in the second quarter including a positive 1.1% impact due
to the higher number of working days). This growth momentum based on a
comparable number of working days was powered chiefly by the UK,
Scandinavia and Germany (together representing 74% of sales in the
"Other Western Europe" region). In these countries, business was
especially brisk in Innovative Materials and, to a lesser extent, in
Building Distribution;
- a slowdown in trading in North America (sales down 1.5% after a rise of
16.3% in the second quarter). Strong growth in Innovative Materials and
vigorous trading in Packaging were more than offset by the decline in
Construction Products sales;
- increasing momentum across emerging countries and Asia (sales up 12.5%
after a rise of 10.4% in the second quarter), reflecting a return to
robust growth in Central and Eastern Europe, and particularly Poland,
which delivered double-digit growth over the third quarter. Asia and Latin
America continued to post vigorous growth figures in line with
second-quarter trends, despite a higher comparison basis.
Update on asbestos claims in the United States
Some 4,000 claims were filed against CertainTeed in the first nine months of 2010, compared with 3,000 claims in the same year-ago period. Taking into account around 13,000 claims settled or transferred to inactive dockets in the nine-month period (versus 5,000 in the first nine months of 2009), the total number of outstanding claims fell sharply, to around 55,000 at September 30, 2010 compared with 64,000 at June 30, 2010.
Outlook and objectives for full-year 2010
Overall, the third quarter confirms the gradual improvement in the Group's main businesses observed in the three months to June 30, 2010, particularly in European Construction.
In the fourth quarter, despite a significantly tougher basis for comparison (especially for Innovative Materials), the Group should keep a positive momentum:
- ongoing vigorous growth in Asia and emerging countries, with Eastern
European markets confirming their return to growth;
- consolidation of the relative improvement in Group businesses linked to
construction markets across Western Europe. However, trends will continue
to vary widely from one country to the next (robust growth in the UK,
Scandinavia and Germany; further decline in Southern Europe; start of a
recovery in France). Industrial markets and household consumption should
remain buoyant;
- ongoing upbeat trading conditions in North America for Group businesses
exposed to industrial output and household consumption. Conditions in the
construction market should remain challenging.
The Group will continue to pursue its action plan priorities in the fourth quarter, amid a broadly improving but still fragile economic climate with persistently strong disparities from one country to the next.
In particular:
- along the lines of the last six months, and following the 0.8% and 1.6%
increases in the second and third quarters, respectively, the Group will
continue to give priority to sales prices, particularly in order to pass
on the higher costs of raw materials and energy;
- it will complete its additional EUR200 million cost cutting program,
resulting in EUR600 million more cost savings than in 2009;
- it will maintain strict financial discipline.
Accordingly, for full-year 2010, the Group is confirming the objectives that it raised in July:
- strong growth in operating income at constant exchange rates (2009
exchange rates), with operating income for second-half 2010 slightly
above the first half;
- free cash flow of EUR1.4 billion, despite an increase in capital
expenditure in the second half.
The Group will also seek to maintain a robust financial structure.
Forthcoming results announcement
- Results for 2010: February 24, 2011, after close of trading on the
Paris Bourse.
Appendix: 3Q 2010 sales by Business Sector and major geographic area
Q3 Q3 Change on Change on
2009 2010 an actual a comparable
(EURm) (EURm) structure structure
basis basis
By Business Sector and division:
Innovative Materials (1) 1,953 2,383 +22.0% +21.5%
Flat Glass 1,160 1,317 +13.5% +13.3%
High-Performance Materials 801 1,068 +33.3% +32.4%
Construction Products (1) 2,754 2,847 +3.4% +2.5%
Interior Solutions 1,270 1,337 +5.3% +3.5%
Exterior Solutions 1,494 1,521 +1.8% +1.8%
Building Distribution 4,371 4,570 +4.6% +4.4%
Packaging 876 923 +5.4% +5.3%
Internal sales and misc. -234 -245 n.m. n.m.
Group total 9,720 10,478 +7.8% +7.4%
(1) Including inter-division eliminations
(continued)
Change on
a comparable
structure and
currency basis
By Business Sector and division:
Innovative Materials (1) +12.8%
Flat Glass +6.5%
High-Performance Materials +21.0%
Construction Products (1) -3.1%
Interior Solutions -1.4%
Exterior Solutions -4.5%
Building Distribution +1.4%
Packaging +0.2%
Internal sales and misc. n.m.
Group total +2.3%
(1) Including inter-division eliminations
Q3 Q3 Change on Change on
2009 2010 an actual a comparable
(EURm) (EURm) structure structure
basis basis
By major geographic area:
France 2,727 2,734 +0.3% +0.2%
Other Western European countries 4,347 4,563 +5.0% +4.8%
North America 1,307 1,441 +10.3% +9.5%
Emerging countries and Asia 1,724 2,200 +27.6% +26.2%
Internal sales -385 -460 n.m. n.m.
Group total 9,720 10,478 +7.8% +7.4%
(continued)
Change on
a comparable
structure and
currency basis
By major geographic area:
France +0.2%
Other Western European countries +1.8%
North America -1.5%
Emerging countries and Asia +12.5%
Internal sales n.m.
Group total +2.3%
Analyst/Investor relations
Florence Triou-Teixeira +33-1-47-62-45-19
Etienne Humbert +33-1-47-62-30-49
Vivien Dardel +33-1-47-62-44-29
Press relations
Sophie Chevallon +33-1-47-62-30-48
SOURCE Saint-Gobain
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