TIDMCOD
RNS Number : 7761X
Compagnie de Saint-Gobain
27 April 2023
The worldwide leader
in light & sustainable construction
Solid sales growth in first-quarter 2023
-- Organic growth: +4.7%
-- Good level of pricing, helping to generate a positive price-cost spread
-- Confirmation of the Group's resilience in a difficult environment
-- Confidence in the 2023 outlook: operating margin between 9% and 11%
Like-for-like sales progressed by 4.7%, with all segments
reporting growth. In a difficult geopolitical and macroeconomic
environment, the Group continued to outperform its markets thanks
to the pertinence of its strategic positioning at the heart of
energy and decarbonization challenges, and to the strength of its
local organization by country.
In an environment that remains inflationary, the Group continued
to effectively serve and support its customers while managing
energy and raw material cost evolution. Prices were up by 10.2%
over the quarter, owing to price increases implemented last year
and certain additional measures taken locally at the start of 2023,
generating a positive price-cost spread overall. Volumes were down
by 5.5% with a moderate market slowdown as expected, which reflects
a contrasting situation: a marked decline in new construction but
good resilience overall in renovation. The Group is proactively
taking the commercial and industrial measures necessary to adapt to
its environment and to continue its excellent operating performance
in order to deliver an attractive operating margin despite
difficult markets.
On a reported basis, sales progressed by 3.3% to EUR12.4
billion, including a negative currency effect of 0.5%. The Group
structure impact reduced sales by 0.9% and results from the ongoing
optimization of the Group's profile, both in terms of disposals -
mainly in distribution (UK, Poland and Denmark), glass processing
activities, Crystals & Detectors and ceramics for the steel
industry - and in terms of acquisitions, mainly in construction
chemicals (GCP Applied Technologies "GCP" and Impac in Mexico), in
exterior products (Kaycan in North America) and in insulation
(Rockwool India Pvt Ltd.).
Proven resilience in a difficult environment
In an environment characterized by a marked decline in new
construction and good resistance overall in renovation, the first
quarter demonstrated the Group's resilience thanks notably to the
rollout of the initiatives set out in its "Grow & Impact"
plan.
- Strategically, the Group has benefited from the optimization
of its portfolio (one-third of sales rotated since 2018) which has
reinforced its profitable growth profile, and from its strong
positioning on the structurally supportive renovation market (new
energy efficiency regulations and subsidies).
- Operationally, the Group has leveraged its efficient local
organization with close proximity to customers, priority given to
the development of low-carbon solutions and processes, and
results-driven accountability for country teams. This has allowed
us to achieve in particular stronger pricing power (constant focus
on the price-cost spread) and to take proactive measures to adapt
to the local environment wherever necessary.
Segment performance (like-for-like sales)
Northern Europe: slight growth in sales amid a downturn in the
new construction market
Sales in the Northern Europe Region were up by 1% over the
quarter, driven by prices and amid a sharp slowdown in new
construction, while renovation (around 55% of sales) proved more
resilient.
Nordic countries reported a slight rise in sales against a high
comparison basis, thanks to their presence across the entire
construction value chain and despite a declining new construction
market. The world's first carbon-neutral plasterboard production
started in Norway at our Fredrikstad plant, reinforcing our leading
positions in sustainable construction. The UK saw growth in sales
of façade and interior solutions. To prepare for the expected
introduction of stricter energy performance regulations as from
2025, Saint-Gobain is leading the eHome2 ("Energy House 2.0")
project with the implementation of its light and sustainable
solutions. The aim is to advance the construction sector's
knowledge of how to deliver residential buildings with net zero
CO(2) emissions under operation. Germany reported subdued sales
growth in a market affected by an energy shock and a rapid rise in
interest rates that penalized new construction. In March,
Saint-Gobain achieved a world-first, producing flat glass with a
furnace powered by over 30% hydrogen at its Herzogenrath site in
Germany. Eastern Europe was down slightly after its record
performance in first-quarter 2022, amid a sharp rise in interest
rates.
Southern Europe - Middle East & Africa: increase in sales
supported by a resilient renovation market
The Southern Europe - Middle East & Africa Region saw an
8.1% rise in sales, driven by prices and by good resilience in
renovation (almost 70% of sales), while the new construction market
slowed.
France continued to benefit from its strong exposure to the
renovation market, which remained at a good level thanks to a
favorable regulatory environment (MaPrimeRenov' household stimulus
package, Energy Performance Certificates) and healthy order books -
both in residential and non-residential (public buildings), while
new construction slowed. The recognition of Saint-Gobain as the
benchmark across the entire value chain - notably in terms of
energy efficiency - enabled the Group to outperform the market.
The rollout of comprehensive low-carbon solutions accelerated in
France and in other countries in the Region. Saint-Gobain also
submitted the winning bid for the athletes' village at the 2024
Paris Olympic Games, offering an innovative dismountable solution.
In Spain and Italy business was driven by good momentum in the
renovation market, supported by the comprehensive range of
solutions. Middle East and Africa reported significant growth. In
Turkey, Dalsan merged its activities with Saint-Gobain, thereby
creating a leader in plaster and plasterboard with a broadened
offer of light and sustainable solutions.
Americas: sales stable at a good level amid a downturn in the
new construction market
The Americas Region delivered 0.5% organic growth, driven by
prices and despite a decline in the new construction market.
- North America proved resilient, with sales up 0.5% over the
quarter, driven notably by its comprehensive range of light
construction solutions for interiors (gypsum, insulation,
ceilings), despite a slowing new construction market. In terms of
exterior solutions, the siding business continued to capture market
share and to make good progress on the Kaycan integration; the
roofing business continued to see destocking from distributors, but
is well placed to benefit from the current recovery in trading. The
integration of GCP's waterproofing membranes for façade and roofing
applications continued to enjoy good business development momentum.
The acquisition of Asphaltica, an asphalt shingle recycling
technology used in roofing, will help accelerate circular economy
initiatives in the Region.
- Latin America reported 0.7% growth in a macroeconomic
environment that remains challenging in Brazil owing to high
interest rates weighing on construction. Mexico benefited from the
successful integration of Impac in construction chemicals. Most
other countries in the Region reported good growth, supported by
higher sales prices and an enriched offer and mix, along with a
geographic footprint and product range extended by bolt-on
acquisitions. The completion of the acquisition of Termica San
Luis, a leader in insulation in Argentina, will consolidate the
Group's strong operating performance in this country.
Asia-Pacific: good sales momentum
The Asia-Pacific Region reported 5.0% organic growth over the
quarter against a high prior-year comparison basis.
India reported a good performance, thanks to market share gains
and an innovative, integrated offer, enhanced by its recent
acquisition of the glass wool insulation leader U.P. Twiga.
Saint-Gobain continues to play a pioneering role in promoting
"green" buildings thanks to its sustainable construction solutions.
In an environment that continued to see disruptions owing to the
health situation early in the quarter, China nevertheless delivered
moderate growth. South-East Asia continued to see good growth owing
to a diversified offer focusing on integrated and high value-added
solutions.
High Performance Solutions (HPS): strong sales growth
HPS sales were up by 9.0% over the quarter, benefiting from the
strength of its innovation, a recovery in automotive in Europe and
a good level of sales prices.
- Businesses serving global construction customers saw a 50%
rise in sales as reported, due mainly to the integration of GCP.
The good trends in Chryso sales continued, driven by innovation in
decarbonization solutions for construction. Chryso benefited from
Saint-Gobain's strong presence in Brazil and Egypt to accelerate
its external growth with the acquisition of Matchem and IDP
Chemicals. The new Construction Chemicals organization integrating
GCP has been in place since the end of 2022 and is helping us to
swiftly achieve all the expected synergies. In contrast,
reinforcement solutions decreased against a high comparison
basis.
- The Mobility business saw sales progress by 20.6%, supported
by the gradual catch-up in sales prices, an outperformance linked
to its strong technological positioning in electric vehicles, and a
rebound in volumes in Europe. The business continued to enjoy
supportive conditions in the Americas and in Asia.
- Businesses serving Industry grew by 4.1%, driven by sales
prices and strong demand for cutting-edge materials and
decarbonization technologies.
2023 outlook
In a difficult macroeconomic environment, Saint-Gobain's
priority is to continue to demonstrate its resilience by
consolidating its high operating performance level , thanks to its
pertinent strategic positioning and its commercial and industrial
initiatives enabling it to adapt proactively to the specific market
trends in each country.
For Saint-Gobain, 2023 will mark another successful year with
the implementation of its "Grow & Impact" priorities. The Group
confirms the outlook for its markets in 2023 presented at the end
of February, with contrasting trends: a marked decline in new
construction but good resilience overall in renovation.
Amid a moderate market slowdown, Saint-Gobain confirms that it is
targeting an operating margin of between 9% and 11% in 2023,
in line with the "Grow & Impact" strategic plan target
Financial calendar
A conference call will be held at 6:30pm (Paris time) on April
27, 2023:
+33 1 70 91 87 04 or +44 121 281 8004.
- First-half 2023 results: Wednesday July 26, 2023, after close
of trading on the Paris stock exchange.
- Third-quarter 2023 sales: Thursday October 26, 2023, after
close of trading on the Paris stock exchange.
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 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 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 : see Note 5 to the 2022 consolidated financial
statements, available by clicking here:
https://www.saint-gobain.com/en/news/full-year-2022-results
Operating margin = operating income divided by sales.
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
the "Risk Factors" section of Saint-Gobain's 2022 Universal
Registration Document available on Saint-Gobain's 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,
except as required by applicable laws and regulations.
This press release does not constitute any offer to purchase or
exchange, nor any solicitation of an offer to sell or exchange
securities of Saint-Gobain.
For further information, please visit www.saint-gobain.com .
Appendix 1: Sales by Segment
Q1 2022 Q1 2023 Actual Comparable Like-for-like
sales sales structure structure change
(in EURm) (in basis basis
EURm)
----------- -------- ----------- ----------- --------------
Northern Europe 4,014 3,519 -12.3% -2.2% +1.0%
Southern Europe - ME
& Africa 3,725 4,012 +7.7% +7.4% +8.1%
Americas 1,920 2,180 +13.5% +4.9% +0.5%
Asia-Pacific 479 491 +2.5% +1.7% +5.0%
High Performance Solutions 2,191 2,556 +16.7% +10.4% +9.0%
Internal sales and
misc. -322 -352 --- --- ---
Group Total 12,007 12,406 +3.3% +4.2% +4.7%
----------- -----------
Appendix 2: Contribution of price and volumes to organic sales
growth by Segment
Q1 2023 Like-for-like Prices Volumes
change
Northern Europe +1.0% +11.4% -10.4%
Southern Europe - ME
& Africa +8.1% +12.5% -4.4%
Americas +0.5% +9.5% -9.0%
Asia-Pacific +5.0% +5.6% -0.6%
High Performance Solutions +9.0% +6.3% +2.7%
-------------- ------- --------
Group Total +4.7% +10.2% -5.5%
-------------- ------- --------
Appendix 3: Breakdown of organic sales growth and external
sales
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