SAINT-GOBAIN (EPA:SGO) - First-quarter 2019 Sales
Directive transparence : information réglementée Information financière du premier trimestre
25/04/2019 17:49
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PRESS RELEASE
Paris, April 25, 2019
First-quarter 2019 sales
EUR10,378 million
Organic growth of 5.7%
* Positive pricing dynamic of 2.6%
* Strong volume growth of 3.1%
* Positive 0.6% currency impact and positive 0.1% Group structure impact, with
acquisitions offset by the disposal program
On a like-for-like basis, sales grew by 5.7%, driven by both prices and volumes
against a weak comparison basis, with Europe affected by harsh weather
conditions in first-quarter 2018. Prices continued to progress along the lines
of last year's upbeat trends in a slightly lower inflationary environment.
On a reported basis, sales totaled EUR10,378 million, with a positive 0.6%
currency impact notably due to the appreciation of the US dollar against the
euro, despite the depreciation of the Brazilian real, Nordic krona and other
Asian and emerging country currencies.
The Group structure impact was virtually stable at a positive 0.1%, with
acquisitions offset by the disposal program, in particular the Pipe business in
Xuzhou, China. Acquisitions reflect the integration of companies in new niche
technologies and services (Kaimann), in Asia and emerging countries (Join
Leader), and the consolidation of our strong positions (Hunter Douglas). It
should be noted that in light of the now hyperinflationary environment in
Argentina, this country which represents less than 1% of the Group's
consolidated sales, has been excluded from the like-for-like analysis since
July 1, 2018.
Change on Change on
an actual a comparable
Sales Sales structure structure Like-for-like
EUR million Q1 2018 Q1 2019 basis basis change
High Performance
Solutions 1,784 1,893 +6.1% +4.4% +2.4%
Northern Europe 3,396 3,660 +7.8% +7.3% +7.8%
Southern Europe -
ME & Africa 3,223 3,386 +5.1% +4.8% +5.0%
Americas 1,210 1,307 +8.0% +7.9% +4.6%
Asia-Pacific 442 426 -3.6% +10.2% +7.7%
Internal sales and misc -300 -294 --- --- ---
Group Total 9,755 10,378 +6.4% +6.3% +5.7%
Segment like-for-like sales performance
High Performance Solutions (HPS) sales rose 2.4% on the back of supportive
industrial markets, despite weakness in the automotive market.
- Mobility proved resilient amid a difficult automotive market environment.
Despite the ongoing contraction in Europe and China, trading was supported
in particular by market share gains thanks to the differentiating strategy
focused on high value-added products.
- Industry stabilized. The level of activity in Ceramics is in line with
second-half 2018. As a result, North America was slightly down, while Asia
and emerging countries continued to grow.
- Activities serving the construction industry progressed sharply in the main
regions of Europe and the Americas.
- Life Sciences continued to enjoy strong growth momentum.
Northern Europe rose 7.8% against a weak comparison basis in 2018, benefiting
from good market conditions in the main countries of the region. Distribution
had a very good start to the year and Industrial businesses advanced,
particularly Gypsum and Mortars, with a more modest increase in Building
Glass.
Sales in Nordic countries were strong at the start of the year in all
businesses and major countries, particularly in Distribution which posted a
double-digit increase; the construction market maintained good momentum. The UK
continued to grow in an economic environment that remains uncertain. Sales in
Germany progressed sharply, continuing the upward trend reported since the
second half of 2018. Eastern Europe continues to advance in all of its main
businesses and countries.
Southern Europe - Middle East & Africa was up 5.0% against a weak prior-year
comparison basis in Europe. Growth was led by Distribution; Industrial
businesses progressed, particularly Gypsum, Insulation and Mortars. Pipe
reported a slight increase in sales and continued its efforts to improve its
competitiveness.
France maintained its growth momentum with a very good start to the year, still
supported by the two drivers of the construction market: renovation and new
construction; Insulation continued to benefit from strong demand for
energy-efficiency renovation. Among other countries, Spain posted robust
growth, Benelux and Italy progressed. The Middle East and Africa were down in
the first quarter, particularly in Turkey.
The Americas reported 4.6% growth. North America benefited from a good price
effect at the expense of volumes, in a context of continued raw material cost
inflation. Despite a high comparison basis, Exterior Products stabilized thanks
to a strong price effect. Latin America enjoyed continued strong growth
momentum, particularly in Building Glass and Mortars; the rally in Brazil
gathered pace.
Asia-Pacific posted 7.7% organic growth, spurred by robust momentum in Building
Glass and Gypsum. India was boosted by additional sales following the start-up
of its fifth float line, and Gypsum continued to deliver strong growth. Among
other Asian countries, China was up.
2019 outlook
The Group confirms its outlook for full-year 2019:
- High Performance Solutions: industrial markets should remain supportive,
particularly in the US, despite uncertainties on the automotive market in
Europe and China;
- Northern Europe: should progress despite an uncertain environment in the UK;
- Southern Europe - Middle East & Africa: overall growth expected for the
region, with a construction market in France which should be supported by
renovation while new construction could be down from the second half;
- Americas: market growth in both North and Latin America;
- Asia-Pacific: further growth.
The Group's action priorities as defined in February remain:
- its focus on sales prices amid continued inflationary pressure on costs;
- its cost savings program with the aim of unlocking additional savings of
around EUR300 million (calculated on the 2018 cost base), as well as more
than EUR50 million in 2019 as part of the "Transform & Grow" program;
- its capital expenditure program close to the 2018 level, with a focus on
growth capex outside Western Europe and also on productivity and continued
digital transformation;
- its commitment to invest in R&D to support its differentiated, high
value-added strategy;
- its focus on high levels of free cash flow generation.
In line with our objective as announced in February, the Group is targeting a
further like-for-like increase in operating income in 2019.
Glossary:
Indicators of organic growth and like-for-like changes in sales/operating
income reflect the Group's underlying performance excluding the impact of:
* changes in Group structure, by calculating the 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: details are given in Note 4 to the financial statements in
the 2018 Registration Document, available on:
https://www.saint-gobain.com/sites/sgcom.master/files/ddr2018_va.pdf
Free cash flow: cash flow excluding the tax impact of capital gains and losses
on disposals, asset write-downs and material non-recurring provisions, less
capital expenditure.
Capital expenditure: investments in property, plant and equipment.
Financial calendar
- First-half 2019 results: July 25, 2019, after close of trading on the Paris
Bourse.
Analyst/Investor relations
Press relations
Vivien Dardel +33 1 47 62 44 29
Floriana Michalowska +33 1 47 62 35 98
Christelle Gannage +33 1 47 62 30 93
Press relations
Laurence Pernot +33 1 47 62 30 10
Patricia Marie +33 1 47 62 51 37
Susanne Trabitzsch +33 1 47 62 43 25
A conference call will be held at 6:30pm (Paris time) on April 25, 2019:
+33 1 72 72 74 03, dial-in code: 48629596#
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
Saint-Gobain's 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 of purchase or exchange, nor
any solicitation of an offer to sell or exchange securities of Saint-Gobain.
For any further information, please visit www.saint-gobain.com.
Appendix 1: Price and volume effect on organic sales growth by Segment
Like-for-like
First-quarter 2019 change Price effect Volume effect
Segments:
High Performance Solutions +2.4% +2.3% +0.1%
Northern Europe +7.8% +1.9% +5.9%
Southern Europe - ME & Africa +5.0% +2.2% +2.8%
Americas +4.6% +6.7% -2.1%
Asia-Pacific +7.7% +0.7% +7.0%
Group Total +5.7% +2.6% +3.1%
Appendix 2: Sales by geography
Change on Change on
an actual a comparable
Sales Sales structure structure Like-for-like
EUR million Q1 2018 Q1 2019 basis basis change
France 2,673 2,797 +4.6% +4.5% +4.5%
Other Western
European countries 4,166 4,471 +7.3% +6.4% +6.6%
North America 1,275 1,420 +11.4% +9.9% +1.9%
Emerging countries
and Asia 2,184 2,236 +2.4% +5.2% +6.6%
Internal sales -543 -546 --- --- ---
Group Total 9,755 10,378 +6.4% +6.3% +5.7%
Industry Europe 2,409 2,520 +4.6% +5.0% +5.6%
Distribution Europe 4,305 4,640 +7.8% +7.1% +7.3%