First quarter 2005 sales for the Saint-Gobain Group

Consolidated sales for the Saint-Gobain Group in the first quarter of 2005, calculated in accordance with International Financial Reporting Standards (IFRS), came in at €7,633 million, compared with €7,261 million for the same period in 2004 (restated in accordance with IFRS), representing a rise of 5.1% on an actual structure basis and of 5.7% at constant exchange rates.(*) On a comparable structure basis, sales contracted by 1.4%, or by 0.7% stripping out the currency effects,(*) due to the 3.2% fall in sales volumes, which was not wholly offset by the sharp upswing in sales prices (up 2.5% on average over the quarter). These like-for-like sales compare unfavorably with the particularly robust business levels reported in the first quarter of 2004 – which benefited from the last deliveries under the Abu Dhabi contract in the Pipe Division – and reflect the adverse impact of the severe winter on Flat Glass and Building Distribution, the Group’s businesses the most exposed to the European new construction and renovation markets.Overall, sales prices have jumped across most of the Group’s Sectors and Divisions, on the back of the price rises implemented throughout 2004 and, for some businesses, in the first quarter of 2005.

Sales volumes dropped back in Group’s operations exposed to the construction market in Europe due to the severe winter weather in Western and Eastern Europe, and to a reduced number of working days – ranging from 1 to 3 depending on the country – compared with the same period in 2004. Sales for the Pipe Division also struggled with an unfavorable basis for comparison, with first-quarter 2004 benefiting from the last deliveries made under the Abu Dhabi contract. However, business held firm for Building Materials and Insulation Divisions, buoyed by a vigorous residential housing market in the US. High-Performance Materials also delivered consistent sales, in line with the forecast economic scenario presented at the beginning of 2005. The Group’s performance in non European emerging countries and Asia remains strong, with an increase of 5.5% in like-for-like sales (constant Group structure and exchange rates).

(*) based on average exchange rates for the first quarter of 2004.

New businesses:

Building Distribution experienced a 13.5% surge in sales, thanks to the contribution of recent acquisitions to first-quarter revenues, in particular that of Dahl. Like-for-like sales dipped slightly, reflecting an unfavorable basis for comparison (with first-quarter 2004 organic growth of 7.5% boosted by favorable climatic conditions and a higher number of working days), and the far-reaching impact of the severe winter weather throughout Europe in February and March 2005. Germany, Central Europe and the United Kingdom were the worst hit, while France and Spain achieved moderate first-quarter growth, despite fewer working days.

High-Performance Materials reported the Group’s strongest like-for-like growth, at 2.6%, thanks mainly to an overall rise in sales volumes and prices for Ceramics & Abrasives, which are still enjoying the benefits of the upturn in manufacturing and capital spending, especially in the US. Sales prices in the Reinforcements Division advanced for the first time in two years.

Historic businesses:

Flat Glass sales retreated slightly, reflecting lower volumes on the European building market compared with the first quarter of 2004, due to the severe weather conditions. Float glass prices were on an upward trend. However, prices fell back slightly in glass processing for the Building industry and in Automotive Flat Glass in Europe, the latter being due to an unfavorable product mix. Business remained virtually stable on Europe’s automotive market, while it notched up impressive gains in emerging countries.

Packaging saw a slight dip in like-for-like sales, with higher sales prices across all its activities more than offset by a drop in sales volumes in the European wine market since last Fall.

Construction Products (CP) reported like-for-like results on a par with first-quarter 2004, despite the strong fall in Pipe sales, down 8.6% on a constant structure and exchange rate basis, further to the last deliveries made under the Abu Dhabi contract at the end of first-quarter 2004. Sales for the Building Materials and Insulation Divisions continued to reap the benefits of a buoyant construction market in the US, which was not affected by any major climatic impact. The vigorous sales posted in the US mitigated the impact of the severe winter weather that hit Europe in the first quarter of 2005.

The breakdown of sales by geographic area reveals, on a like-for-like basis, robust business levels in France – with the exception of Pipe – and especially in the United States. Growth in other western European countries generally registered a slight contraction due to climatic conditions. Emerging countries – particularly Asia and Latin America – remained buoyant.

Asbestos claims in the United States: Around 6,000 new claims were filed against CertainTeed in the first quarter of 2005, including only 50 in the State of Mississippi. This slight increase compared with the same period of 2004 (5,000 new claims including 700 in Mississippi) reflects an influx of approximately 3,000 mass claims not supported by any medical proof in the State of Kentucky. 7,000 claims were resolved in the first quarter of 2005, compared with 5,000 in the first quarter of 2004, and 3,000 claims were transferred in “inactive dockets”. Consequently, the number of outstanding claims at March 31, 2005 continued to drop, to around 102,000, compared with 106,000 at December 31, 2004.
The average cost of settlement over the past 12 months stands at USD 3,000 per claim, on a par with previous period.

Driven by the new Chairman of the US Senate Judiciary Committee, further active negotiations have taken place during the last few weeks concerning the proposed legislation to set up a National Asbestos Trust Fund. An amended bill co-sponsored by three Democrats and three Republicans is expected to be put before the Judiciary Committee in the next few days.

Outlook: Saint-Gobain first-quarter performance is not representative of full-year trends, and this is particularly the case in 2005. The Group expects sales volumes to pick up over the next few months and therefore confirms its full-year target of 6% growth in operating income (calculated in accordance with IFRS) on a constant exchange rate basis. The Group also aims to maintain strong free cash flow levels.

600450 First quarter 2005 sales for the Saint-Gobain Group

Others also read

Robert Bürkle GmbH launches a new inline process developed for the lamination of flat glass with particularly short cycle times.
The handling of thin and ultra-thin glass between individual production steps is a real challenge.
Automation 4.0. The future is smart. Italcarrelli revolutionizes logistics in float glass factories by introducing Automated Guided Vehicles (AGV).
Research Frontiers Inc. and Gauzy Ltd. announced that Gauzy will be exhibiting SPD-Smart light control film at Glasstec.
NSG Group announced today it has selected a location for its new glass production facility in the United States.
Laser glass processing specialist 4JET microtech is now offering a turnkey solution for high-volume precision cutting of technical glass.

From industry

Portuetxe bidea 18
20018 San Sebastián (Gipuzkoa) Guipúzcoa

Is Kuleleri, Kule: 2, Kat: 22, 4. Levent
34330 Levent-Istanbul/İstanbul

40 Corniche El-Nil,
Al Sharafain Tower Maadi,
Cairo Governorate

Add new comment