3rd Quarter Results
Compagnie de Saint-Gobain
24 October 2006
October 24, 2006.
Press
release
SALES FOR THE FIRST NINE MONTHS OF 2006:
• UP 20.1% ON A REPORTED BASIS
• UP 6.3% LIKE-FOR-LIKE
The Saint-Gobain Group delivered consolidated sales of €30,925 million during
the first nine months of 2006, an increase of 20.1% on a reported basis and of
19.1% at constant exchange rates (based on average exchange rates for the first
nine months of 2005).
The contribution from acquisitions, net of disposals, accounted for an increase
of 12.8%. The Gypsum division (formerly BPB) posted a 13.3% rise in sales over
the nine months period, to €2,931 million.
Organic growth for the first nine month came in at 6.3% on a like-for-like basis
(comparable Group structure and exchange rates), fuelled by continuous sales
price rises (up 3.3%) and on-going satisfactory growth in volumes (up 3.0%). The
robust trading performance recorded in the first six months of the year (up 6.3%
for first-half 2006) continued throughout the third quarter (up 6.2%), enabling
the Group to maintain organic growth for the nine months at the same level as
for first-half 2006.
Each of the Group's five business sectors reported a notable advance in
like-for-like sales over the first nine months of 2006.
Businesses related to construction markets, in particular, continued to post
overall healthy growth figures, boosted by the impact of new European
regulations on energy efficiency in the building industry and by the upswing in
Germany. In Europe, vigorous construction markets (new residential and
commercial construction and renovation spending) balanced the impact of the
slowdown in US housing starts, which broadly evolved in line with the Group's
economic assumptions for full-year 2006.
Businesses exposed to household consumption and industrial production markets
remain on the growth track.
Sales trends by business sector, division and geographic area are as follows:
Sales for Sales for Change Change based Change based
the first the first based on on on
nine months nine months actual comparable comparable
of 2006 of 2005 structure structure structure
and exchange
rates
(in € (in € (%) (%) (%)
millions) millions)
SECTORS & DIVISIONS
Building Distribution sector 12,883 11,370 13.3% 6.0% 5.7%
High-Performance Materials sector (1) 3,745 3,623 3.4% 5.6% 3.8%
Ceramics & Plastics and Abrasives 2,706 2,668 1.4% 4.9% 3.3%
Reinforcements 1,050 969 8.4% 6.9% 5.0%
Flat Glass sector 3,716 3,460 7.4% 7.5% 5.7%
Packaging sector 3,094 2,990 3.5% 4.2% 2.9%
Construction Products sector (1) 8,198 4,740 72.9% 11.6% 10.3%
Gypsum 2,931 n.a. n.a. 13.3% 12.2%
Building Materials 2,087 2,082 0.2% 6.1% 4.0%
Insulation 1,872 1,612 16.1% 13.1% 12.2%
Pipe 1,333 1,060 25.8% 15.2% 14.1%
Internal sales and misc. (711) (440) ------ ------ -----
GROUP 30,925** 25,743** 20.1% 7.3% 6.3%*
GEOGRAPHIC AREAS
France 9,296 8,524 9.1% 5.3% 5.3%
Other western European countries 13,604 11,025 23.4% 5.7% 5.8%
North America 5,309 4,430 19.8% 7.8% 5.7%
Emerging countries and Asia-Pacific 4,316 3,168 36.2% 17.6% 11.9%
Internal sales and misc. (1,600) (1,404) ----- ----- -----
GROUP 30,925** 25,743** 20.1% 7.3% 6.3%*
* 5.8% excluding BPB's organic growth
** including ancillary revenue of €197 million for the first nine months of
2006, compared with €181 million for the year-earlier period
(1) including inter-division eliminations
The Building Distribution sector posted a sharp increase in sales on a reported
basis (up 13.3% over the first nine months and up 11.9% in the third quarter),
including contributions from recent acquisitions, particularly Sanitas-Troesch
and Optimera, which were consolidated with effect from March 1, 2005 and August
1, 2005, respectively. Organic growth for the nine-month period (5.7%) picked up
pace compared with the first six months of 2006, thanks to a very good third
quarter (+6.3% organic growth), buoyed by brisk business conditions in French
and Scandinavian markets, the upswing in the German market and a more favorable
trading environment in the UK.
High-Performance Materials generated sustained like-for-like sales growth (3.8%
over the nine months to September 30, 2006 and 4.3% over the third quarter).
Sales reported by the Ceramics, Plastics and Abrasives businesses expanded 3.3%
over the first nine months (with a high basis for comparison in 2005), while
Reinforcement sales climbed 5%, chiefly in terms of volumes.
The Flat Glass sector notched up a significant rise in sales at comparable
structure and exchange rates (up 5.7% over the first nine months of 2006, and up
8.8% over the third quarter). This performance was bolstered by strong
construction markets which, in the third quarter, saw significant price rises in
Europe, coupled with robust business levels in Europe and in most emerging
countries. The automotive market continued to present a mixed overall picture.
Like-for-like Packaging sales inched up a moderate 2.9% over the nine-month
period, and 2.0% in the third quarter, reflecting the sustained organic growth
of the Flasks business (4.8% over the nine-month period) and the benefits reaped
by the Bottles & Jars businesses from price increases in both Europe and the US.
The Construction Products (CP) sector continued to register very significant
like-for-like growth (10.3% over the nine-month period and 7.6% in the third
quarter). The interior building solutions businesses (Gypsum and Insulation)
reported very strong overall organic growth figures (12.2% over the nine-month
period), powered by vigorous residential and commercial construction markets,
measures designed to promote energy efficiency, and good price levels. The
strong growth momentum experienced by the Pipe division continued apace, coming
in at 14.1%, on the back of robust sales volumes and a healthy order book both
in Europe and for exports. The Building Materials division posted further
organic growth gains in Europe through the Industrial Mortars business, while
on-going sharp increases in sales prices in the US since the beginning of the
year more than offset the fall-off in volumes observed on the US market in
recent months.
By geographic area, like-for-like growth remained buoyant in France (5.3% over
the nine first months) and accelerated in other western European countries (5.8%
over the nine-month period, of which 6.2% in the third quarter). The upswing in
the German economy - which currently accounts for 10.7% of Group sales - took
hold and picked up pace, with organic growth of 5.3% over the nine-month period,
and of 8.6% in the third quarter. Growth slowed in the United States (16.0% of
Group sales), as anticipated (5.7% over the first nine months of 2006 and 2.2%
in the third quarter).
Emerging countries and Asia-Pacific put in another strong performance,
particularly Eastern Europe and Latin America, with aggregate organic growth of
11.9% over the nine months to September 30, 2006, and of 14% in the third
quarter.
**************
Update on asbestos claims in the United States: Some 2,000 new claims were filed
against CertainTeed in the third quarter of 2006. Over the first nine months of
the year, approximately 6,000 new claims were filed, compared with 12,000 in the
same period of last year Since the beginning of the year, 10,000 claims have
been resolved, including 2,000 in the third quarter. The number of claims
outstanding at September 30, 2006 remained stable in relation to end-June 2006,
at 86,000. The average cost per claim settled in the last 12 months or in the
process of settlement came in at USD 2,800, above the end-June 2006 figure due
to fewer mass actions as a proportion of total claims.
**************
Outlook and targets: the Group confirms its targets for full-year 2006:
- an increase of 27% - 28% in operating income at constant exchange
rates (average rates for full year 2005),
- 25% - 26% growth in net income excluding capital gains.
**************
Forthcoming results announcements:
>> Estimated 2006 results: Thursday, January 25, 2007, after close of trading on
the Paris Bourse.
Investor Relations department
Florence Triou-Teixeira Tel.: +33 1 47 62 45 19
Alexandre Etuy Tel.: +33 1 47 62 37 15
Fax: +33 1 47 62 50 62
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