Pricing Increases Help Saint-Gobain Gain Momentum in First Nine Months of 2018
On a like-for-like basis, Saint-Gobain’s sales were up 4.3% over nine months and 3.1% in the third quarter.
Saint-Gobain recently announced that its consolidated sales reached €31.1 billion (approximately $35.3 billion) the first nine months of 2018, compared to €30.6 billion (~ $34.5 billion) for the 2017 period. 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 by a high comparison basis in High-Performance Materials and Exterior Products in the U.S.
“Saint-Gobain continues along its growth trajectory despite a tough comparison basis in Q3 2017,” said Pierre-André de Chalendar, chairman and CEO. “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-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. 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.”
Sales for the Innovative Materials sector rose 5.2% over the nine-month period, including 3.5% in the third quarter. Flat Glass performed in line with first-half trends, reporting organic growth of 3.2% in the third quarter and of 3.4% over the nine-month period. The automotive business continued to enjoy good growth momentum, particularly in Asia and emerging countries, despite market disruptions relating to the introduction of the new automotive emission regulations in Europe. The recent capital expenditure and innovation investments continued to gather pace. Sales linked to the construction market continued along the lines of the positive trends seen in the first half in the group’s main regions, driven in particular by a better mix effect and an acceleration in price increases for transformed glass in Europe. Following the restart of production at the float glass facility in Romania in the second quarter, production resumed in Poland and Egypt in September as expected, and India started up its fifth float line.
High-Performance Materials’ (HPM) sales were up 7.3% over the nine-month period and 3.5% over the third quarter, with advances in all businesses. This slower pace of growth reflects the high comparison basis, especially in Ceramics, which had reported exceptionally strong sales in the prior-year period. All businesses and regions progressed over the nine months.
Regionally, France enjoyed further good momentum in the quarter and over the nine-month period, with sales up 3.1%, benefitting from robust markets in new construction and renovation where growth remains nevertheless constrained by the lack of skilled labor. Other Western European countries progressed 3% over the nine-month period and 1.7% in the third quarter. Nordic countries continued to report a good pace of growth. The UK was up slightly due to sales prices, but with declining volumes in an uncertain environment. Germany remained hesitant.
North America climbed 6.8% over the nine-month period and 1.3% in the third quarter, against a high comparison basis in Exterior Products and HPM. Construction and industrial markets remained robust.
Asia and emerging countries continued to enjoy good momentum in the third quarter, up 7.1% (up 7.9% over nine months). Growth was reported in all regions.
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