PARIS, April 29, 2014 /PRNewswire/ --
- Organic growth at 6.8%, driven partly by favorable weather
conditions in Europe
- Sales prices remain upbeat, gaining 1.2%
- Negative currency impact of 3.7%
- Ongoing gradual improvement in our Western European markets
except in France; continued
vigorous momentum in Asia and
emerging countries
- Markets in North America
robust, but affected by harsh winter weather
Pierre-André de Chalendar, Chairman and Chief Executive
Officer of Saint-Gobain, said:
"Good first-quarter trading reflects favorable trends in our
markets as well as the positive weather impact in Europe. In view of this and thanks to the
roll-out of our action plan priorities, we can confirm our
objective of a clear like-for-like improvement in operating
income."
Consolidated sales came in at
€9,874million,
up 2.6%, or 6.8% like-for-like
(constant exchange rates and Group structure).
Exchange rates continued to have a negative impact
(-3.7%), especially in industrial Business Sectors, due to the
depreciation of certain currencies (mainly in Latin America, the US and Scandinavia).
Changes in Group structure had a slightly negative impact
of -0.5%.
Volumes climbed 5.6%, buoyed by upward trends on our
markets and a very favorable basis for comparison in terms of
weather conditions in Europe.
Working days had a slightly positive impact of around 0.7%.
Thanks to the Group's priority focus on sales prices, the
price effect was a positive 1.2%, including 1.8% for
industrial Business Sectors amid low raw material and energy cost
inflation.
Change on
Change on a
Sales an actual comparable Sales
Q1 2013 Sales structure structure Like-for-like Q1 2013
EURm Restated* Q1 2014 basis basis change Published
BUSINESS SECTOR
Innovative
Materials[1] 2,175 2,175 0.0% (0.5%) 4.9% 2,211
Flat Glass 1,163 1,159 (0.3%) (0.3%) 4.5% 1,200
High-Performance
Materials 1,014 1,018 0.4% (0.6%) 5.4% 1,014
Construction
Products[1] 2,736 2,757 0.8% 2.1% 7.4% 2,754
Interior Solutions 1,367 1,452 6.2% 6.2% 10.9% 1,367
Exterior Solutions 1,381 1,318 (4.6%) (2.1%) 3.9% 1,399
Building Distribution 4,110 4,361 6.1% 6.6% 8.1% 4,110
Packaging
(Verallia)[2] 835 822 (1.6%) (1.6%) 2.2% 835
Internal sales and
misc. (234) (241) --- --- --- (236)
GEOGRAPHIC AREA
France 2,790 2,872 2.9% 2.8% 2.8% 2,803
Other Western European
countries 3,798 4,150 9.3% 9.2% 10.2% 3,804
North America 1,552 1,436 (7.5%) (5.4%) (1.4%) 1,556
Emerging countries and
Asia 1,908 1,905 (0.2%) 0.6% 14.5% 1,943
Internal sales (426) (489) --- --- --- (432)
GROUP 9,622 9,874 2.6% 3.1% 6.8% 9,674
* 2013 figures restated to reflect the impacts of the amended
IFRS 11.
[1] Including inter-division
eliminations.
[2] Including Verallia North
America, which will be deconsolidated with effect from April 11, 2014.
Like-for-like performance of Group Business
Sectors
Innovative Materials sales advanced 4.9%.
- Flat Glass confirmed its recovery (up 4.5%), driven by
brisk automotive markets in all regions. The construction market in
Western Europe improved slightly
in volume terms, although sales prices do not yet reflect the
increases currently being implemented. Asia and emerging countries continued to enjoy
very strong momentum.
- High-Performance
Materials (HPM) delivered 5.4%
organic growth powered by Asia and
emerging countries as well as Western
Europe, across all of its businesses. North America was down slightly due to the
decline in Ceramics and the negative impact of harsh winter
weather.
Construction
Products (CP) sales rose 7.4%, buoyed
by Europe and by Asia and emerging countries.
- Interior Solutions reported a 10.9% rise in sales and
had a very good quarter in all of its regions. The US remained on
an upward trend in terms of both prices (particularly for
plasterboard) and volumes, spurred by good momentum in construction
markets. Asia and emerging
countries put in another very good performance. Volumes were up in
all Western European countries, aided by favorable weather
conditions.
- Exterior Solutions posted a 3.9% increase in sales,
bolstered by strong growth in Industrial Mortars in all of its
regions and healthy trading in Pipe. US Exterior Products reported
gains in March, after a very tough start to the year caused by the
harsh winter weather.
Building Distribution sales rallied strongly, up 8.1%,
boosted by much better weather than in first-quarter 2013 and by
the gradual improvement in most construction markets in
Europe. The UK, Germany, Nordic countries and Eastern Europe delivered a strong
first-quarter performance. France
was up only slightly against weak first-quarter 2013 comparatives.
Solid renovation activity offset the sharp contraction in
new-builds. Brazil contributed to
the Business Sector's good growth.
Packaging (Verallia) delivered 2.2% organic
growth, driven mainly by volumes both in Europe and in Latin
America. Sales prices are upbeat in Latin America in a highly inflationary
environment but fell slightly in some European countries due to
competitive pressure. The Group's North American business - whose
sale was finalized on April 11, 2014
and which will be deconsolidated with effect from that date -
performed in line with first-quarter 2013.
Like-for-like analysis by geographic area
In accordance with the scenario described in February:
- In France (up 2.8%),
sales were lifted by improved renovation activity and by the
favorable weather impact, but continued to suffer from a
contraction in the market for new-builds.
- In other Western European
countries, sales climbed 10.2%, with the rise amplified by
better weather conditions. All countries reported gains,
particularly Germany, the UK and
to a lesser extent Scandinavia.
- North America reported
a 1.4% fall in sales. Harsh winter weather hit Exterior Products
and certain industrial businesses particularly hard. Interior
Solutions continued to report vigorous trading in a buoyant
market.
- Asia and
emerging countries posted 14.5% sales growth and continued to
deliver an excellent performance in all regions, despite fears of a
slowdown in certain countries.
Update on asbestos claims in the US and on the automotive
glass fine
Some 1,000 claims were filed against CertainTeed in the first
quarter of 2014, on a par with the same period in 2013. At the same
time, around 1,000 claims were settled, also in line with 2013. As
a result, the total number of outstanding claims is stable compared
with end-2013, at 43,000.
Further to the decision of the General Court of the European
Union to reduce the automotive glass fine from €880 million to €715
million, the Group decided it would pay the fine, leading to a
write-back of the provision for €207 million.
2014 outlook
The first quarter confirms that the uptrends first seen in the
second half of 2013 should continue throughout 2014:
- In Western Europe,
after a first quarter boosted by very favorable weather conditions,
our markets should continue to improve gradually, led by growth in
the UK and Germany.
- In North America, after
a first-quarter performance affected by harsh winter weather, the
Group will benefit from good momentum in the construction market
and improved industrial markets.
- In Asia and
emerging countries, our businesses should deliver solid organic
growth.
- Lastly, household consumption markets, more challenging
in Southern Europe, could continue
to be affected by competitive pressure on prices.
The Group is therefore confirming its action plan
priorities for the year:
- increasing sales prices amid low raw material and energy cost
inflation;
- pursuing cost cutting measures in order to unlock additional
savings of €450 million (calculated on the 2013 cost
base);
- stepping up capital expenditure to around €1,500 million, the
priority being growth capex outside Western Europe (around €550 million) and
businesses with reduced capital intensity;
- maintaining its commitment to invest in R&D in order to
support its strategy of differentiation and the roll-out of high
value-added solutions.
Thanks to the roll-out of these measures and to the better
trends in our various markets observed as from the second half of
2013, we continue to expect a clear
improvement in operating income on a comparable
structure and currency basis.
Financial calendar
First-half 2014 results: July
30, 2014, after close of trading on
the Paris Bourse.
Analyst/Investor relations
Gaetano Terrasini
+33-1-47-62-32-52
Vivien Dardel
+33-1-47-62-44-29
Press relations
Sophie Chevallon
+33-1-47-62-30-48
Susanne Trabitzsch
+33-1-47-62-43-25
SOURCE Saint-Gobain