Saint-Gobain: First-Quarter 2009 Sales Down 14.8% or 12.9% at Constant Exchange Rates*
COURBEVOIE,
consolidated sales for first-quarter 2009 came in at
compared with
a decline of 14.8% on a reported basis and 12.9% at constant exchange rates.*
Changes in Group structure accounted for a 1.9% increase in sales. This
was almost entirely offset by the 1.8% negative currency effect, due for the
most part to the slide in the British pound and Brazilian real against the
euro, which was not offset by the climb in the US dollar.
On a like-for-like basis, consolidated net sales contracted by 14.9%.
Sales prices remained robust, gaining 2.3%, while volumes slumped 17.2%.
The sharp downturn in trading conditions observed in fourth-quarter 2008
intensified in the first quarter of 2009 as the economic climate continued to
deteriorate, with virtually every country across the globe now affected. In
addition, sales in the first two months of the year were weighed down by
particularly unfavorable weather conditions in both
States
Construction markets continued to decline – even in
where activity had picked up during the second half of 2008 – and the
downturn in industrial markets observed at the end of last year deepened in
the first quarter, impacting sharply the High-Performance Materials and Flat
Glass businesses.
Only the household consumption market (Packaging) remained relatively
less affected by the worsening economic conditions.
* Based on average exchange rates for first-quarter 2008.
Sales trends by business sector and major geographic area were as follows:
Q1 2008 Q1 2009 % change on a % change % change on a
(EUR (EUR reported basis on a like-for-like
million) million) comparable basis
structure
basis
BY SECTOR
Innovative
Materials (1) 2,428 1,863 -23.2% -22.4% -21.4%
Flat Glass 1,399 1,050 -25.0% -24.9% -21.0%
High-Performance
Materials 1,036 818 -21.1% -19.0% -22.3%
Construction
Products (1) 2,730 2,456 -10.0% -14.6% -14.0%
Interior
Solutions 1,578 1,280 -18.9% -20.3% -18.0%
Exterior
Solutions 1,159 1,184 +2.2% -6.8% -8.5%
Building
Distribution 4,637 3,911 -15.7% -17.7% -14.0%
Packaging 797 800 +0.5% -0.5% -3.7%
Inter-sector
sales and other (291) (248) ------ ----- -------
GROUP 10,301 8,782 -14.8% -16.7% -14.9%
BY GEOGRAPHIC
AREA
France 3,250 2,822 -13.2% -13.2% -13.2%
Other western
European
countries 4,699 3,756 -20.1% -23.4% -19.1%
North America 1,263 1,228 -2.7% -0.7% -12.6%
Emerging economies
and
Asia-Pacific 1,630 1,339 -17.9% -21.7% -13.7%
Internal sales (541) (363) ----- ----- -----
GROUP 10,301 8,782 -14.8% -16.7% -14.9%
(1) Including inter-division eliminations.
Performance of Group business sectors (like-for-like)
All of the Group’s business sectors were strongly affected by the further
deterioration of the global economic environment and reported a sharp decline
in sales volumes over the quarter. Sales prices, in contrast, remained upbeat
despite the downward trend in inflation worldwide.
Innovative Materials posted the biggest drop in sales, which retreated
21.4% over the quarter due to the continued decline of the sector’s main
markets, both in construction and industry.
- Flat Glass reported a 21% drop in sales, triggered by the collapse of
the global automotive market and, to a lesser extent, the continuing
slowdown in construction. Sales prices remained stable overall: a
slight decline in Western Europe due to a sharp fall in the price of
commodity products (float glass) was offset by significant increases in
Asia and emerging countries, which represent 38% of the division's
sales.
- High-Performance Materials (HPM) were strongly impacted by the slump in
industrial output, particularly in Germany and the United States, and
posted a decline in sales similar to Flat Glass (22.3%), despite a rise
of 2.6% in sales prices.
Construction Products (CP) sales contracted by 14.0%. The significant
5.0% increase in average sales prices during the quarter was unable to offset
the sharp drop in sales volumes in Interior Solutions and, to a lesser
extent, in Exterior Solutions.
- Interior Solutions sales retreated 18.0% over the quarter, as the
business continued to feel the full impact of weakening construction
markets. Sales prices, however, were up 1.7% on average over the period,
thanks in particular to price increases implemented by the Gypsum
business in the United States and Europe in the past few months.
- Exterior Solutions also reported a significant decrease in volumes
across all business lines. Despite price hikes of 9.7%, sales were down
8.5%.
Building Distribution reported a similar sales decrease as the
Construction Products sector, at 14%. The sharp downturn in the UK and
Spanish construction markets continued during the quarter and markets in the
rest of
reflected the impact on sales volumes of very unfavorable weather conditions
in the first two months of the year. In contrast, sales prices held up well.
In the Packaging business, sales prices also remained robust, gaining
4.0% over the quarter, while volumes dropped 7.7%, dragged down by a sharp
falloff in demand in its main European markets.
Analysis by major geographic area (like-for-like)
In first-quarter 2009, all of the geographic areas where the Group
operates were affected to a roughly similar extent by the economic crisis:
- In France, sales retreated 13.2%, due to the downturn in the
construction and industrial markets. The decline was particularly sharp
in the first two months of the year, reflecting the impact of
unfavorable weather conditions.
- The downturn in other Western European countries was even greater, with
sales falling 19.1%. The downturn in the UK and Spanish markets
persisted during the first quarter, while other European countries also
suffered a sharp slowdown in both construction and industrial markets.
- Despite the upturn observed in the second half of 2008, sales in North
America contracted 12.6% in the first quarter, as construction markets
fell once again and industrial output dropped sharply.
- Asia and the emerging economies were also severely hit by the economic
crisis, with sales down 13.7%. The decline was significant in Eastern
Europe and Asia - with the exception of India, where sales continued to
grow - while Latin America proved more resilient.
Update on asbestos claims in
Some 1,000 claims were filed against CertainTeed in the first quarter of
2009, on a par with the number of claims filed in the three months to
31, 2008
number of outstanding claims at
31, 2008
Outlook
With all global markets in the doldrums during the first quarter of the
year and faced with persistent uncertainty going forward, Saint-Gobain has
not yet seen any concrete evidence that the economic crisis has bottomed out.
As a result, and given the unfavorable basis for comparison, first-half 2009
will be extremely challenging.
In line with its announcement, the Group has therefore resolutely stepped
up the financial and operational measures launched over the last few months,
in particular:
- Giving operating priority to sales prices.
- Accelerating and extending the restructuring and cost reduction
program.
- Strictly controlling working capital requirement.
- Significantly reducing capital expenditure.
- Putting external growth plans on hold.
Thanks to a solid balance sheet strengthened by a successful rights
issue, Saint-Gobain should be able to weather the crisis and take full
advantage of the economic recovery when it occurs.
Forthcoming results announcements
– First-half 2009 results:
Paris Bourse.
Analyst/Investor relations
Florence Triou-Teixeira +33-1-47-62-45-19
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SOURCE Saint-Gobain