Saint-Gobain Announces Positive Results for 2016 First Half
Saint-Gobain recently announced its financial results for the first half of 2016.
Saint-Gobain recently announced its financial results for the first half of 2016. First-half sales came in at €19.5 million (approximately $21.6 million), including a significant 3.5% negative currency impact resulting namely from the depreciation of Latin American currencies (and to a lesser extent the pound sterling) against the euro. The negative 1% group structure impact is a result of the disposals carried out in 2015 aimed at optimizing the Building Distribution portfolio. On a like-for-like basis, sales were up 2.9% on the back of 3.5% volume growth driven partly by the positive impact of a greater number of working days in the second quarter (estimated impact of just over +1% in the first half).
All business sectors and regions delivered volume growth. In a still deflationary environment in terms of raw material and energy costs, prices remained slightly down, losing 0.6% over the six months to June 30. The group’s operating income climbed 7.3% on a reported basis and 10.2% like-for-like. The group’s operating margin rallied to 7%, gaining 0.6 percentage points compared to first half 2015. All business sectors reported margin growth, particularly in industry and to a lesser extent Building Distribution, which was hit by the deflationary environment.
“Saint-Gobain’s sales for first-half 2016 confirm our February forecasts, with France stabilizing and all regions making a strong contribution to growth,” said Pierre-André de Chalendar, chairman and CEO. “Our strategy of investing in emerging markets provides us with a diversified platform for profitable growth. Our first-half results also benefited from efforts to optimize our operations, particularly in Western Europe, and from upbeat trading in the U.S. The results are in line with our objectives and we expect a like-for-like improvement in operating income for second-half 2016 vs. second-half 2015. While the June 23 Brexit vote in the UK has created a climate of uncertainty, it does not affect our objectives.”
Innovative Materials’ like-for-like sales moved up 4.4%, powered by Flat Glass. There was a further significant improvement in the business sector’s operating margin, which came in at 11.2% vs. 10.2% last year.
The second quarter confirmed the upbeat trends seen early in the year in Flat Glass, which posted 6.5% organic growth over the first half. Automotive glass continued to enjoy good momentum in all regions except Brazil. Construction markets remained upbeat in Asia and emerging countries and benefited from the upturn in volumes in Western Europe and a rise in float glass prices. The operating margin continued to recover, at 8.8% vs. 7.4% in first half 2015, buoyed by additional volumes and improved operating leverage.
High-Performance Materials’ (HPM) like-for-like sales rose 2% over the first six months of 2016. Plastics and Textile Solutions performed well; Abrasives delivered organic growth led by prices. Ceramics contracted in the three months to June 30 after a first quarter boosted by high levels in refractories. The operating margin widened to 14% from 13.5% in first half 2015.
For more information, visit www.saint-gobain.com.