24th Oct 2007 07:00
Compagnie de Saint-Gobain23 October 2007 October 23, 2007 SALES FOR THE FIRST NINE MONTHS OF 2007: • +5.5% ON A REPORTED BASIS • +6.0% LIKE-FOR-LIKE The Saint-Gobain Group delivered consolidated sales of €32,630 million for thefirst nine months of 2007, compared to €30,925 million for the same year-agoperiod, representing a rise of 5.5% on a reported basis and of 6.7% at constantexchange rates*. Changes in the scope of consolidation over the first nine months of the yearaccounted for an increase of 0.7% in sales, with contributions from bolt-onacquisitions (mainly in the Construction Products and Building Distributionsectors) slightly ahead of contributions from divestments (mainly Desjonqueresand Calmar in the Packaging sector and Synflex in the High-Performance Materialsbusiness). Fluctuations in exchange rates had a negative 1.2% impact, chieflyreflecting the fall in the value of the US dollar. On a like-for-like basis (constant Group structure and exchange rates*), theGroup's sales advanced €1,825 million, or 6.0%, buoyed by a significant rise insales prices (3.6%) and, to a lesser extent, volumes (2.4%). The vigorous growthin the first half of the year (organic growth of 6.9% at end-June), buoyed bythe very favorable weather conditions during the first quarter, continued intothe third quarter (up 4.2%), albeit at a slightly slower pace due to a highercomparison basis (for information, the Group's organic growth for third-quarter2006 was 6.2% versus 4.0% in the three months to June 30, 2006) as well as moremoderate growth in certain European countries in the third quarter. All of the Group's business sectors saw a rise in like-for-like sales for thefirst nine months of the year, as well as for the third quarter. Overall, demandheld firm in all of the Group's construction-related businesses: vigorousmarkets in western Europe, bolstered by the impact of regulations promotingenergy efficiency in the building industry, more than offset the low level ofconstruction activity in the US. Demand related to industrial output and capitalspending remained satisfactory in both Europe and the US. Lastly, all of theGroup's businesses in emerging countries and Asia continued to report veryrobust growth (up 17.3%). (*) Based on average exchange rates for the first nine months of 2006. Sales trends by business sector and geographic area are as follows: Sales for the Sales for Change based on Change based on Change based on first nine the first actual comparable comparable months of nine-months structure (%) structure (%) structure and 2007 (•m) of 2006 (•m) exchange rates (%)SECTORS Flat Glass 4,152 3,716 +11.7% +11.8% +12.4% High-Performance Materials (1) 3,670 3,745 -2.0% -1.6% +1.9%Ceramics & Plastics and Abrasives 2,688 2,706 -0.7% 0.0% +3.9%Reinforcements 992 1,050 -5.5% -6.1% -3.3% Construction Products (1) 8,447 8,198 +3.0% +1.3% +3.3%Interior solutions (2) 5,028 4,795 +4.9% +3.0% +4.6%Exterior solutions (3) 3,442 3,420 +0.6% -0.9% +1.7% Building Distribution 14,445 12,883 +12.1% +7.5% +7.3% Packaging 2,712 3,094 -12.3% +3.1% +5.9% Internal sales and misc. (796) (711) -------- -------- -------- GROUP 32,630 30,925 +5.5% +4.8% +6.0% GEOGRAPHIC AREAS France 9,702 9,296 +4.4% +6.0% +6.0%Other western European countries 14,960 13,604 +10.0% +7.6% +7.5%North America 4,475 5,309 -15.7% -13.8% -7.0%Emerging countries and Asia/Pacific 5,112 4,316 +18.4% +16.2% +17.3%Internal sales (1,619) (1,600) ----- ----- ----- GROUP 32,630 30,925 +5.5% +4.8% +6.0% (1) including inter-division eliminations. (2) including: - Insulation: €2,087 million for the first nine months of 2007, up 11.5% on theyear-earlier period (up 3.5% on a comparable structure basis and up 5.0% on acomparable structure and exchange rate basis). - Gypsum: €2,958 million for the first nine months of 2007, up 0.9% on theyear-earlier period (up 3.0% on a comparable structure basis and up 4.4% on acomparable structure and exchange rate basis). (3) including: - Building Materials: €2,025 million for the first nine months of 2007, down3.0% on the year-earlier period (down by 4.5% on a comparable structure basisand by 0.4% on a comparable structure and exchange rate basis). - Pipe: €1,417 million for the first nine months of 2007, up 6.3% on theyear-earlier period (up 4.7% on a comparable structure basis, and up 5.1% on acomparable structure and exchange rate basis). Performance of Group sectors The Flat Glass sector delivered the Group's strongest organic growth for thefirst nine months of the year and for the third quarter (respectively up 12.4%and 11.3%). Amid buoyant building markets in western Europe and emergingcountries, the Flat Glass business also benefited from growing demand forenergy-efficient glass. European building markets also continued to enjoy ahighly favorable pricing environment throughout the period. Automotive FlatGlass reported robust trading activity worldwide. In the High-Performance Materials sector, Ceramics, Plastics and Abrasivesdelivered solid organic growth, at 3.9%, contrasting with the slowdown in theReinforcements business. Overall, High-Performance Materials posted a moderate1.9% rise in sales on a like-for-like basis. The Construction Products sector (CP) advanced 3.3% on a like-for-like basis,with western Europe and emerging countries (74% of sales) more than offsettingthe fall-off in construction in the United States (26% of sales). InteriorSolutions businesses (Insulation and Gypsum) reported solid organic growth of4.6% on the back of regulatory measures and tax incentives designed to encourageenergy-efficient buildings. Exterior Solutions businesses (Building Materialsand Pipe) delivered more moderate 1.7% growth, with improving sales of mortarsand pipe in western Europe and emerging countries countering the strong downturnin sales of siding and roofing products in the US. The Building Distribution sector posted sharp 7.3% organic growth. Most Europeancountries contributed to this vigorous performance, especially France, Spain,Scandinavia and central Europe, while the UK market reported more modest growth.After a strong upward growth momentum early in the year, trading in Germany hasbeen slower since the end of the second quarter. The Packaging sector delivered organic growth of 5.9%, bolstered by significantadvances in sales prices and volumes in Europe throughout the first nine monthsof the year. * * * Analysis by geographic area Overall, the geographic breakdown of sales is in line with the trends observedin the first six months of 2007, although the growth momentum appears to haveslowed. On a like-for-like basis: - Growth remained a buoyant 6.0% like-for-like in France (28.0% ofconsolidated sales over the first nine months of 2007) and 7.5% like-for-like inother western European countries (44.1% of consolidated sales). Growth held firmin southern Europe and Scandinavia. UK and German markets reported a moresubdued performance, with Germany seeing a reversal of its upward momentum asfrom May. - Sales declined (by 7.0% like-for-like, compared to a 7.2% fall atend-June 2007) in North America (13.4% of consolidated sales), due to thecontinuing low level of construction activity, partially offset by the upbeatperformance of other sectors of the US economy, particularly capital spending. - Asia and emerging countries (14.5% of consolidated sales) reportedvigorous 17.3% organic growth, driven in particular by eastern Europe (organicgrowth of around 28%). Trading in Latin America and Asia was also buoyant(organic growth of around 13%). * * * Update on asbestos claims in the United States Some 5,000 claims were filed against CertainTeed in the first nine months of2007, versus 6,000 in the first nine months of 2006. After taking into accountsettlements made during the first nine months of 2007, the number of outstandingclaims at September 30, 2007 remained unchanged since June 30, 2007, at 75,000. * * * 2007 outlook and targets The Group expects business in its key markets in western Europe, Asia andemerging countries to remain satisfactory in the fourth quarter (which will becompared against the strong growth momentum recorded in fourth-quarter 2006),while US construction markets should continue to post a low level of activity.The Group confirms its objectives (which were raised on July 26, 2007) forfull-year 2007, namely: - double-digit growth in operating income at constant exchange rates (average exchange rates for 2006); - growth in recurring* net income of at least 20%. These objectives take into account the sale of Desjonqueres at March 31, 2007and of the Reinforcements and Composites business in the fourth quarter of 2007. * excluding capital gains, asset write-downs and the provision for the FlatGlass fines (European Commission). * * * Forthcoming results announcements: - Estimated 2007 results: January 24, 2008, after close of trading on the Paris Bourse. * * * Investor Relations Department Florence Triou-Teixeira Tel.: +33 1 47 62 45 19Alexandre Etuy Tel.: +33 1 47 62 37 15 Fax: +33 1 47 62 50 62 Appendix : Q3 Sales by Sector and Divisionand by Geographic Area(in compliance with the interim informationregulation as defined by the "Loi Breton") Sales (in EURm) 2007/2006 Change (in %) Q3-2007 Q3-2006 Change on Change on Change on a an actual a comparable structure comparable structure and basis structure currency basis basisBy Sector and division Flat Glass 1,355 1,219 11.2% 11.5% 11.3% High Performance Materials 1,184 1,201 -1.4% -1.8% 1.0%(1)Ceramics & Plastics and 863 873 -1.1% -1.5% 1.5%AbrasivesReinforcements 325 332 -2.1% -2.9% -0.5% Construction Products 2,803 2,738 2.4% 0.2% 1.7%Interior Solutions (2) 1,636 1,612 1.5% -0.5% 0.5%Exterior Solutions (3) 1,175 1,132 3.8% 1.4% 3.5% Building Distribution 4,923 4,481 9.9% 5.0% 4.8% Packaging 842 965 -12.7% 2.1% 4.7% Internal sales and -257 -230 -------- -------- --------Miscellaneous GROUP TOTAL 10,850 10,374 4.6% 3.4% 4.2% By geographic area France 2,996 2,938 2.0% 4.9% 4.9%Other Western European 5,040 4,718 6.8% 4.1% 4.1%countriesNorth America 1,495 1,676 -10.8% -12.9% -6.5%Emerging countries and Asia 1,823 1,554 17.3% 15.8% 14.5% Internal sales -504 -512 ----- ----- ----- GROUP TOTAL 10,850 10,374 4.6% 3.4% 4.2% (1) including intra-sector eliminations (2) of which : - Insulation : EUR 688m in Q3 2007, up 6.1% vs. Q3 2006 (down 1.6% on a comparable structure basis and down 0.1% on a l.f.l. basis)- Gypsum : EUR 954m in Q3 2007, down by 1.5% vs. Q3 2006 (up 0.4% on a comparable structure basis and up 1.1% on a l.f.l. basis) (3) of which : - Building Materials : EUR 712m in Q3 2007, up 1.2% vs. Q3 2006 (down 2.2% on a comparable structure basis and up 1.2% on a l.f.l. basis)- Pipe : EUR 463m in Q3 2007, up 8.1% vs. Q3 2006 (up 7.2% on a comparable structure basis and up 7.2% on a l.f.l. basis) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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