SAINT-GOBAIN (EPA:SGO) - Nine-month 2021 Sales
Transparency directive : regulatory news
28/10/2021 17:45
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PRESS RELEASEParis, October 28, 2021, 5:45pm
Continued dynamic organic growth in the third quarter
* Sequential acceleration in organic growth: up 13.3% in Q3 2021 versus Q3
2019, confirming the good momentum in underlying markets, with volumes up 3.6%
* The Group is confident that it will be able to offset raw material and energy
cost inflation over full-year 2021 given the sharp 8.7% acceleration in prices
in Q3 2021 versus Q3 2020
* Ongoing optimization of the Group's growth and profitability profile(1):
o Acquisitions signed contributing around EUR850m to full-year sales
(including Chryso)
o Divestments representing around EUR1,850m in full-year sales
* Annual targets confirmed: a very strong increase in operating income over
full-year 2021 to a new all-time high, with like-for-like operating income in
second-half 2021 close to the previous record of second-half 2020
* Launch of the "Grow & Impact" plan at the Capital Markets Day on October 6,
2021: strong commitment from teams to accelerate profitable growth and maximize
the Group's positive impact in the fight against climate change
Q3 2020 Q3 2021
sales sales
(in EURm) (in EURm)
High Performance Solutions 1,678 1,815
Northern Europe 3,403 3,816
Southern Europe - ME & Africa 3,318 3,150
Americas 1,553 1,808
Asia-Pacific 404 447
Internal sales and misc. -229 -234
Group Total 10,127 10,802
2021-2020 2021-2019
Change on Change on Like-for- Like-for-
actual a comparable like change like change
structure structure
basis basis
+8.2% +8.1% +7.0% +2.5%
+12.1% +13.2% +10.7% +11.5%
-5.1% +4.6% +4.7% +12.7%
+16.4% +15.3% +14.9% +28.2%
+10.6% +20.9% +19.8% +15.9%
--- --- --- ---
+6.7% +10.5% +9.4% +13.3%
(1). Since the beginning of 2021
9m 2020 9m 2021
sales sales
(in EURm (in EURm)
High Performance Solutions 4,780 5,494
Northern Europe 9,493 11,234
Southern Europe - ME & Africa 8,986 10,607
Americas 4,223 5,068
Asia-Pacific 1,059 1,322
Internal sales and misc. -650 -792
Group Total 27,891 32,933
2021-2020 2021-2019
Change on Change on Like-for- Like-for-
actual a comparable like change like change
structure structure
basis basis
+14.9% +14.8% +17.8% +2.2%
+18.3% +18.4% +16.6% +10.4%
+18.0% +23.7% +24.2% +13.0%
+20.0% +18.0% +25.7% +26.2%
+24.8% +29.0% +32.9% +16.1%
--- --- --- ---
+18.1% +19.7% +21.0% +12.4%
Like-for-like sales were up by 9.4% in the third quarter compared to
third-quarter 2020 (up 13.3% on third-quarter 2019, following a rise of 11.9%
in the first half versus first-half 2019), driven by an acceleration in prices
which increased 8.7% (after a 3.9% increase in the first half) in a far more
inflationary raw material and energy cost environment. As expected, there was a
more modest rise in volumes, which progressed 0.7% over the quarter given the
high comparison basis in third-quarter 2020, when trade professionals had taken
few holidays during the summer period in Europe on account of the coronavirus
pandemic. Compared to the third quarter of 2019, volumes were up by 3.6% - with
a stronger increase in the Americas and in Asia-Pacific - despite a contraction
in the automotive market. The calendar effect compared to third-quarter 2020
and third-quarter 2019 was negative at around 0.5%, with the impact being more
significant in Southern Europe.
On a reported basis, sales came in at EUR32,933 million for the nine-month
period. The currency impact reduced sales by 1.3% over the nine-month period
and added 1.1% to sales in the third quarter, mainly reflecting less
depreciation of the US dollar along with the appreciation of the British pound
and Nordic krona.
The Group structure impact reduced sales by 1.6% over the nine-month period and
by 3.8% in the third quarter, reflecting the ongoing optimization of the
Group's profile, with divestments mainly in Southern Europe (Lapeyre in France,
Distribution in the Netherlands and in Spain), Northern Europe (Graham in the
UK, Glassolutions in Germany), and Asia-Pacific (Pipe in China). Total
divestitures since the end of 2018 represent EUR5.3 billion in sales. The
acquisitions of Chryso - a leading global player in construction chemicals -
and of Panofrance - a specialist distributor of timber and panels - will be
consolidated as from fourth-quarter 2021. Note that in light of the
hyperinflationary environment in Argentina, this country which represents less
than 1% of the Group's consolidated sales, is excluded from the like-for-like
analysis.
Update on raw material and energy cost inflation
Amid the current context of accelerating inflation in energy costs,
Saint-Gobain is now expecting energy and raw material cost inflation of around
EUR1.5 billion in 2021 compared to 2020 (in line with the estimate given during
the Capital Markets Day on October 6, 2021 and compared to its previous
estimation for the full-year of EUR1.1 billion made at the end of July), of
which EUR1.1 billion in second-half 2021 alone.
Thanks to the priority given to sales prices, in third-quarter 2021 the Group
achieved a positive price impact of 8.7% overall and of 8.1% for its industrial
businesses alone.
In the current energy price context and given the new price increase
announcements in most countries in Europe and in the US, Saint-Gobain is
confident that it will be able to offset raw material and energy cost inflation
over full-year 2021.
Segment performance (like-for-like sales)
High Performance Solutions (HPS): sales growth in the third quarter
Sales were up 7.0% on third-quarter 2020 (up 2.5% on third-quarter 2019) in
broadly recovering industrial markets, with the exception of the automotive
market in Europe.
- Mobility sales were down over these two periods, with a stronger 7.2%
contraction versus third- quarter 2019 owing to the sharper decline on the
European market, while sales to the Americas and China rose sharply. Supply
chain tensions related to the shortage of semi-conductors are weighing on the
production capacity of automotive manufacturers. However, our Mobility business
continued to significantly outperform the automotive market in the period,
thanks to its increasing exposure to electric vehicles and to high value-added
products.
- Businesses serving Industry were supported by decarbonization solutions for
our customers and posted a further sequential improvement in surface finishing
solutions and activities related to investment cycles, even though the latter
remained slightly down on third-quarter 2019.
- Businesses serving the Construction Industry delivered further growth and
continued to benefit from upbeat trends in textile solutions for external
thermal insulation systems (ETICS), thanks to good momentum in sustainable
construction.
Northern Europe: sharp acceleration in price increases
Sales in Northern Europe were up by 10.7% in the third quarter (up 11.5% versus
third-quarter 2019), with a slight increase in volumes and a strong increase in
prices aimed at offsetting raw material and energy cost inflation.
Sales in Nordic countries continued to see robust growth, particularly light
construction solutions on the supportive renovation market. The pace of growth
in Germany slowed as the impact of the automotive market contraction affected
demand for glass; the markets for light and sustainable construction such as
modular construction remained upbeat. Growth accelerated in the UK, driven
solely by prices in a market affected by certain supply chain disruptions and
in the context of an optimized distribution network post restructuring. Eastern
Europe enjoyed strong growth in both prices and volumes.
Southern Europe - Middle East & Africa: sales growth against a high comparison
basis
Sales for the Southern Europe - Middle East & Africa Region were up 4.7% in the
third quarter against a high comparison basis in third-quarter 2020, when trade
professionals took few holidays during the summer period in Europe owing to the
coronavirus pandemic. Compared to the third quarter of 2019, the Region
reported strong sales growth of 12.7%, driven by prices as well as good volume
momentum for light and sustainable construction solutions.
France reported further good momentum, driven by renovation markets and energy
efficiency solutions. The full impact of France's household stimulus package
MaPrimeRenov' contributed to the successful overall performance, with almost
400,000 projects submitted since the start of the year. In terms of renovation
of public buildings, the first effects of the stimulus plan should begin to be
felt in 2022. Spain advanced, particularly in light construction solutions,
despite the closure of a flat glass manufacturing plant in 2020 as part of the
optimization of the Group's industrial footprint. Italy continued to benefit
from support for energy-efficient renovation in the form of tax credits, which
helped accelerate growth. Benelux was also up, as were Middle East and African
countries, led by robust growth in Turkey and Egypt.
Americas: strong sales growth in the third quarter
The Americas Region reported organic growth of 14.9% in the third quarter -
with a continued acceleration in prices against a high comparison basis for
volumes - and of 28.2% versus the third quarter of 2019, with volumes up by
almost 10%.
- North America progressed by 13.6% and 18.3%, respectively, over the two
periods, driven by an acceleration in prices and good momentum in volumes for
light construction solutions thanks to the successful acquisition of
Continental Building Products, which has reinforced the Group's positions in
construction. Our local organization enabled us to limit the impact of the
strong supply chain tensions - particularly for raw materials - which slightly
disrupted production in the third quarter.
- Latin America achieved further substantial growth in terms of both prices -
to offset inflation - and volumes. Sales increased by 18.3% in the quarter and
by 50.5% compared to third-quarter 2019, thanks to an approach in which the
Group's full range of solutions can be offered to customers.
Asia-Pacific: strong sales growth in the third quarter
The Asia-Pacific Region saw organic growth of 19.8% in the third quarter and of
15.9% versus third- quarter 2019.
China continued to report robust growth over the two periods thanks to an
upbeat market for construction solutions. India's recovery gathered pace -
against a third-quarter 2020 comparison basis affected by the health situation
- given the very robust growth compared to pre-Covid levels, driven both by
volumes and prices. South-East Asia was down, hit by the restrictions in place
to combat the coronavirus pandemic.
2021 outlook and strategic priorities
In fourth-quarter 2021, against a high comparison basis and in a macroeconomic
and health environment which remains affected by uncertainties, the Group
should continue to benefit from strong momentum in its main markets -
especially renovation in Europe, as well as construction in the Americas and in
Asia-Pacific - and from a solid operating performance. In this environment and
provided there is no new major impact related to the coronavirus pandemic,
Saint-Gobain expects the following trends for its segments:
- High Performance Solutions: supportive industrial markets, excluding the
contraction of the automotive market in Europe in particular; businesses
related to customer investment should rally steadily, although they are
expected to remain down on the good level recorded in 2018;
- Europe: continued sales outperformance on a dynamic renovation market, albeit
with a high comparison basis for December, with trade professionals having
worked over the 2020 Christmas and New Year period;
- Americas: market growth, particularly residential construction, in both North
and Latin America;
- Asia-Pacific: market growth with continued good momentum in China and India,
but with the situation still affected by health-related disruptions in
South-East Asia.
Strategic priorities
Sustainable construction is essential to achieving carbon neutrality.
Saint-Gobain's comprehensive solutions offer makes it a leading player in light
and sustainable construction. Together with a performance-driven local
operating model, this positioning will enable the Group to accelerate its
growth and outperform its markets, and disciplined capital allocation will also
ensure a step-up in value creation for our shareholders.
In this supportive environment, our strategic priorities, which are based
around the "Grow & Impact" plan, were presented during our Capital Markets Day
on October 6, 2021.
1) Accelerate the Group's growth and impact:
- Outperformance versus the market thanks to an agile organization focused on
its customers in each country and end market;
- A range of integrated, differentiated and innovative solutions to decarbonize
construction;
- Acceleration of ESG initiatives, with the deployment of our 2030 roadmap
towards carbon neutrality in 2050;
- Continued optimization of the Group's profile (divestments and acquisitions)
and integration of Chryso, a leading global player in construction chemicals.
2) Continue its initiatives focused on profitability and performance: maintain
robust margins and strong free cash flow generation
- Constant focus on the price-cost spread, thanks to strong pricing discipline,
amid strong inflation in raw material and energy costs;
- Reduction in costs as part of post-coronavirus adaptation measures to lower
the break-even point of certain businesses, which should generate EUR150
million in cost savings in 2021 versus 2020;
- Reinforcement of the operational excellence program aimed at offsetting
inflation (excluding raw material and energy costs);
- Maintaining the structural improvement in operating working capital
requirement and rebuilding adequate inventories in order to best serve
customers;
- Capital expenditure of around EUR1.5 billion, focused strictly on high-growth
markets, and ongoing digital transformation;
- Continued reduction in non-operating costs.
For full-year 2021, the Group is targeting a very strong increase in operating
income to a new all-time high, with like-for-like operating income in
second-half 2021 close to the previous record of second-half 2020.
Financial calendar
- 2021 results: February 24, 2022, after close of trading on the Paris Bourse
Analyst/Investor relations
Vivien Dardel +33 1 88 54 29 77
Floriana Michalowska +33 1 88 54 19 09
Christelle Gannage +33 1 88 54 15 49
Press relations
Laurence Pernot +33 1 88 54 23 45
Patricia Marie +33 1 88 54 26 83
Susanne Trabitzsch +33 1 88 54 27 96
A conference call will be held at 6:30pm (Paris time) on October 28, 2021: dial
+33 1 72 72 74 03 followed by the code 36430350#
Glossary:
Indicators of organic growth and like-for-like changes in sales/operating
income reflect the underlying performance excluding the impact of:
* changes in Group structure, by calculating indicators for the year under
review based on the scope of consolidation of the previous year (Group
structure impact)
* changes in foreign exchange rates, by calculating the indicators for the year
under review and those for the previous year based on identical foreign
exchange rates for the previous year (currency impact)
* changes in applicable accounting policies
Operating income: see Note 4 to the financial statements in the interim
financial report, available by clicking here: https://www.saint-
gobain.com/en/finance/information-reglementee/half-yearly-financial-report
EBITDA = operating income plus operating depreciation and amortization, less
non-operating costs
Free cash flow = EBITDA less depreciation of right-of-use assets, plus net
financial expense, plus income tax, less investments in property, plant and
equipment and intangible assets excluding additional capacity investments, plus
changes in working capital requirement
ESG = Environment, Social, Governance
Important disclaimer - forward-looking statements:
This press release contains forward-looking statements with respect to
Saint-Gobain's financial condition, results, business, strategy, plans and
outlook. Forward-looking statements are generally identified by the use of the
words "expect", "anticipate", "believe", "intend", "estimate", "plan" and
similar expressions. Although Saint-Gobain believes that the expectations
reflected in such forward-looking statements are based on reasonable
assumptions as at the time of publishing this document, investors are cautioned
that these statements are not guarantees of its future performance. Actual
results may differ materially from the forward-looking statements as a result
of a number of known and unknown risks, uncertainties and other factors, many
of which are difficult to predict and are generally beyond the control of
Saint-Gobain, including but not limited to the risks described in the "Risk
Factors" section of Saint-Gobain's Universal Registration Document available on
its website (www.saint-gobain.com). Accordingly, readers of this document are
cautioned against relying on these forward-looking statements. These
forward-looking statements are made as of the date of this document.
Saint-Gobain disclaims any intention or obligation to complete, update or
revise these forward-looking statements, whether as a result of new
information, future events or otherwise.
This press release does not constitute any offer to purchase or exchange, nor
any solicitation of an offer to sell or exchange securities of Saint-Gobain.
For further information, please visit www.saint-gobain.com.
Appendix 1: Contribution of price and volumes to organic sales growth by
Segment
2021-2020
Q3 2021 Like-for- Prices Volumes
like change
High Performance Solutions +7.0% +0.6% +6.4%
Northern Europe +10.7% +9.5% +1.2%
Southern Europe - ME & Africa +4.7% +8.4% -3.7%
Americas +14.9% +15.0% -0.1%
Asia-Pacific +19.8% +8.0% +11.8%
Group Total +9.4% +8.7% +0.7%
2021-2019
Like-for- Prices Volumes
like change
+2.5% +0.9% +1.6%
+11.5% +10.0% +1.5%
+12.7% +9.5% +3.2%
+28.2% +18.6% +9.6%
+15.9% +6.6% +9.3%
+13.3% +9.7% +3.6%
2021-2020
9-month 2021 Like-for- Prices Volumes
like change
High Performance Solutions +17.8% +0.0% +17.8%
Northern Europe +16.6% +5.7% +10.9%
Southern Europe - ME & Africa +24.2% +4.6% +19.6%
Americas +25.7% +12.1% +13.6%
Asia-Pacific +32.9% +5.1% +27.8%
Group Total +21.0% +5.5% +15.5%
2021-2019
Like-for- Prices Volumes
like change
+2.2% +0.4% +1.8%
+10.4% +5.8% +4.6%
+13.0% +5.6% +7.4%
+26.2% +13.1% +13.1%
+16.1% +3.7% +12.4%
+12.4% +6.1% +6.3%
Appendix 2: Breakdown of organic sales growth and external sales
Q3 2021, in % of total
Like-for-like Like-for-like
change 2021-2020 change 2021-2019 % Group
High Performance Solutions +7.0% +2.5% 16.7%
Mobility -5.0% -7.2% 6.1%
Other industries +15.2% +8.9% 10.6%
Northern Europe +10.7% +11.5% 34.5%
Nordics +10.5% +10.8% 13.5%
United Kingdom - Ireland +11.7% +12.5% 11.0%
Germany - Austria +6.1% +5.3% 3.4%
Southern Europe - ME & Africa +4.7% +12.7% 28.4%
France +3.2% +11.7% 22.0%
Spain - Italy +5.5% +11.3% 3.3%
Americas +14.9% +28.2% 16.4%
North America +13.6% +18.3% 11.4%
Latin America +18.3% +50.5% 5.0%
Asia-Pacific +19.8% +15.9% 4.0%
Group Total +9.4% +13.3% 100%
9-month 2021, in % of total
Like-for-like Like-for-like
change 2021-2020 change 2021-2019 % Group
High Performance Solutions +17.8% +2.2% 16.5%
Mobility +17.4% -4.6% 6.3%
Other industries +18.0% +6.6% 10.2%
Northern Europe +16.6% +10.4% 33.2%
Nordics +8.6% +11.5% 13.4%
United Kingdom - Ireland +32.9% +8.2% 10.5%
Germany - Austria +11.4% +6.3% 3.3%
Southern Europe - ME & Africa +24.2% +13.0% 31.4%
France +24.9% +13.6% 24.3%
Spain - Italy +21.3% +7.2% 3.4%
Americas +25.7% +26.2% 15.1%
North America +21.7% +19.3% 10.8%
Latin America +37.6% +41.7% 4.3%
Asia-Pacific +32.9% +16.1% 3.8%
Group Total +21.0% +12.4% 100%
Appendix 3: Distribution Europe
9m 2020 9m 2021
sales sales
(in EURm) (in EURm)
Distribution (Europe) 11,919 13,905
2021-2020 2021-2019
Change on Change on Like-for- Like-for-
actual a comparable like change like change
structure structure
basis basis
+16.7% +22.3% +20.8% +13.5%
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