Saint-Gobain: Strong First-Half 2007 Growth

SALES: up 6.0% to EUR21,779 million up 6.9% like-for-like(*) - OPERATING INCOME: up 15.3% to EUR2,093 million up 16.6% like-for-like(*) - RECURRING NET INCOME(**): up 31.2% to EUR1,067 million Net income amounts to EUR465 million, taking into account the EUR650 million provision for the Flat Glass fines (European Commission). (*) based on average exchange rates for first-half 2006 (**) excluding capital gains, asset write-downs and the EUR650 million provision for the Flat Glass fines (European Commission) 2007 TARGETS RAISED - DOUBLE-DIGIT GROWTH IN OPERATING INCOME (at constant exchange rates(***)) - GROWTH IN RECURRING NET INCOME(**) OF AT LEAST +20% (**) excluding capital gains, asset write-downs and the Flat Glass fines (European Commission) (***) based on average exchange rates for 2006 Performance of Group sectors All of the Group's business sectors saw a rise in like-for-like sales (constant Group structure and exchange rates) in the six months to June 30, 2007 (see Appendix 1).

Organic growth for the Group came in at +6.9% (including a +3.7% price impact and a +3.2% volume effect). Business trends observed in the first quarter - which had been boosted by particularly favorable weather conditions - generally held firm over the three months to June 30, 2007.

Vigorous construction markets in Europe, bolstered by the impact of regulations promoting energy efficiency in the building industry, more than offset the significant downturn in the US housing market. Trading momentum remained very strong in Asia and emerging countries (organic growth of 19%), where the swift expansion of the Group continues apace. Demand related to capital spending and industrial output also remained largely robust.

The Flat Glass sector delivered the Group's strongest growth in like-for-like sales, which surged +12.9%. Construction in Europe is on an upward trend, with a high capacity utilization rate, a very favorable pricing environment and vigorous growth in coated glass for thermal insulation. Sales of automotive glass performed well over the first half of the year. The operating margin for the sector jumped to 13.1%, versus 9.1% in the same year-ago period.

High-Performance Materials reported +2.4% like-for-like sales growth, with a +5.1% advance in the Ceramics & Plastics and Abrasives businesses on the back of robust industrial capital spending. The operating margin for these businesses continued to advance, coming in at 14.0% for first-half 2007 compared to 13.8% for the same year-ago period, while the Reinforcements business delivered an improved 6.7% operating margin versus 3.2% for first-half 2006 despite a dip in sales (down -4.5% on a like-for-like basis). Overall, the sector's operating margin represented 12.1% of sales versus 10.8% of sales over the six months to June 30, 2006.

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600450 Saint-Gobain: Strong First-Half 2007 Growth glassonweb.com
Date: 27 July 2007
Source: Earthtimes.org

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