Saint-Gobain: Organic growth at 4.3% for the first nine months of 2018

2018-11-09

Nov. 09, 2018 - Consolidated sales for the first nine months of 2018 were €31,130 million compared to €30,570 million for the first nine months of 2017. 

The negative currency impact was 3.6% over the nine-month period, with a smaller 1.9% negative impact in the third quarter resulting mainly from the appreciation of the US dollar against the euro, despite the ongoing depreciation of the Brazilian real, Nordic krona and other Asian and emerging country currencies. 

The Group structure impact added 1.1% to total growth over the nine-month period, essentially reflecting the consolidation of acquisitions in Asia and emerging countries (KIMMCO, Megaflex, Isoroc Poland, Tumelero), in new niche technologies and services (TekBond, Scotframe, Maris, Logli Massimo) and to consolidate our strong positions (Glava, Kirson, Wattex, Biolink, SimTek, bolt-on acquisitions in Building Distribution such as Per Strand). The smaller Group structure impact in the third quarter (+0.6%) reflects the acceleration in the Group’s portfolio optimization program, with in particular the disposal of the EPS insulation foam business in Germany and glazing installation operations in the UK. The Group has also launched a process to sell the legal entity of its Pipe business in Xuzhou, China. It should be noted that in light of the now hyperinflationary environment in Argentina, this country which represented less than 1% of the Group’s 2017 sales, is excluded from the like-for-like analysis as of July 1, 2018. 

On a like-for-like basis, sales were up 4.3% over nine months and 3.1% in the third quarter. This reflects a further acceleration in pricing, up 3.5% after a 2.5% rise in the first half, in a context of continued raw material and energy cost inflation. Volumes were up 1.4% over the nine-month period, and remained almost stable in the third quarter (down 0.4%), affected in particular by a high comparison basis in High-Performance Materials and Exterior Products in the US.

Pierre-Andréde Chalendar, Chairman and Chief Executive Officer of Saint-Gobain, commented:

“Saint-Gobaincontinuesalongitsgrowthtrajectorydespitea tough comparison basis in Q3 2017. Our focus on increasing prices – critical in an inflationary environment – continues to pay off. The industrial issues that had weighed on our profitability in the first half of the year are largely behind us. Saint-Gobainisthereforeconfirmingitsobjectivesforfull-year  2018 and for the second half expects the like-for-like increase in operating income to be clearly above the level achieved in the first half. The strategic initiatives announced in July are moving forward; they will help accelerate the Group’s profitable growth momentum. This new organization will be outlined in a specific announcement on November 26th.”