Saint-Gobain Sales Down 2.9% in First Half of 2013 - Modern Distribution Management

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Saint-Gobain Sales Down 2.9% in First Half of 2013

Underlying trends are stabilizing for the European building materials supplier, but sluggish European economies continue to dampen results.

European building materials supplier Saint-Gobain reported sales for the second quarter of €11.1 billion (US$14.7 billion), a decrease of 2.9 percent compared to the same period a year earlier. Organic sales declined 1.2 percent, with volumes off 2.2 percent and prices up 1 percent.

The second quarter saw underlying trends stabilize on the group’s main markets in Western Europe, and market conditions continue to rally in other regions. With the exception of flat glass – buoyed by a pick-up in growth in Asia and emerging countries – and Interior Solutions – lifted by the gradual improvement in the U.S. construction market – all of the group’s business sectors and divisions continued to be negatively impacted by sluggish European economies, though less so than in the first quarter.

For the first half of 2013, sales were €21.6 billion (US$28.6 billion), down 3.8 percent in a year-over-year comparison. Profit fell 28.3 percent to €332 million (US$439.2 million).

“The continued upturn in U.S. construction markets and a return to growth for our businesses in emerging countries failed to offset the general slowdown in the European economic environment, exacerbated by a negative calendar impact and very poor weather," CEO  Pierre-André de Chalendar said. "In this tough market climate, we pressed ahead with our cost cutting efforts while successfully pursuing our price-focused policy."  

North America posted a 2 percent decline in like-for-like sales for the first half of 2013, with trading down 6.6 percent in the second quarter after growing 3.1 percent in the first. Sales prices were up sharply over the first half, buoyed by further rises implemented since the beginning of the year in Construction Products.  

France and other Western European countries saw like-for-like sales decline 6.3 percent and 4.8 percent, respectively.  

Asia and emerging countries saw trading pick up pace in the three months to June 30 (up 6.1 percent), and reported 3.9 percent like-for-like sales growth over the first half. This increase chiefly reflects investments made in these countries over the past few years and continues to be led primarily by Latin America, with steep gains in Flat Glass and Interior Solutions. In contrast, Asia continued to decrease in the six-month period, despite advancing 2.7 percent in the second quarter, while Eastern Europe stabilized as vigorous momentum in Russia and the Baltics offset difficulties in Poland and the Czech Republic.

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