Increasing Volumes and Pricing Push Saint-Gobain’s 2018 First Half Results
Sales in Saint-Gobain’s Innovative Materials business sector climbed 6% in the 2018 first half on a like-for-like basis, driven by High-Performance Materials.
Saint-Gobain recently announced its financial results for the first six months of 2018. Consolidated sales in the first half were €20.8 billion (approximately $24.1 billion), an increase of 1.9% year-on-year on a reported basis and of 4.9% like-for-like. Organic growth was driven both by volumes (up 2.4%) and by prices (up 2.5%), with a progression in all business sectors and regions. Price increases accelerated in the second quarter, up 3% in a context of continued raw material and energy cost inflation.
Growth in the company’s main markets, aided by a weak prior-year comparison basis (due to the June 2017 cyberattack) and a positive 1% calendar effect, also contributed to the 5% uptick in volumes in the second quarter. The calendar effect had a slightly negative impact of around 0.5% over the half-year period as a whole.
Sales in the Innovative Materials business sector climbed 6% in the 2018 first half on a like-for-like basis, driven by High-Performance Materials. Flat Glass reported 3.5% organic growth over the six months to June 30. The automotive business advanced in all of its regions, particularly in Asia and emerging countries, and continues to ramp up its capital expenditure and investments in innovation. Sales linked to the construction market were penalized by float repairs in Poland and Romania. Higher prices in Europe continue to be driven by transformed glass, with a smaller rise in float glass prices. Asia and emerging countries progressed slightly despite the stoppage of the Egyptian float line due to flooding at the end of April and the 10-day truck drivers’ strike in May in Brazil.
High-Performance Materials (HPM) sales rose 9.2% like-for-like over the first half in all businesses and particularly in Ceramics, buoyed by exceptionally strong sales of refractories. All regions contributed to the trading momentum, with strong increases in Asia and emerging countries, the U.S. and Western Europe.
“The second quarter marks a return to supportive trends in all our main markets,” said Pierre-André de Chalendar, chairman and CEO. “After a disappointing first quarter, affected by harsh winter weather in Europe which weighed on results, the second quarter was far more encouraging in terms of volumes and prices. The group succeeded in further raising sales prices amid continued raw material and energy cost inflation. Despite a combination of temporary one-off factors, our first-half results progressed once again. Saint-Gobain is therefore confirming its objectives for full-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.
“After having agreed a transaction with Sika on excellent financial terms, the group will accelerate the implementation of its strategy: the roll-out of a divestment program representing at least €3 billion (~ $3.5 billion) in sales by the end of 2019, the continuation of its policy of value-creating acquisitions, and the launch of a review of the group’s organizational structure in order to give greater priority to the regional dimension of its businesses with the aim of enhancing its agility to drive growth and reinforce its competitiveness.”
Additional details are available at www.saint-gobain.com.