Saint-Gobain reports Q2 growth

Published:  03 August, 2010

COVENTRY: After a first quarter affected by very cold winter weather in Europe, trading rebounded sharply overall in the second quarter of 2010, with the Saint-Gobain Group reporting 3.9% organic growth.

This, said the company, reflected both a significant upturn in sales volumes, which rose 3.1% after slipping 1.7% in the first quarter, boosted by a positive 1.4% impact, due to the rise in the number of working days, and upward trends in prices, which gained 0.8% after falling 0.7% in the first quarter.

All of the Group's business sectors and activities contributed to the upswing, reporting a gradual improvement in market conditions as from March. In the second quarter as in the first, organic growth continued to be driven overall by emerging countries and Asia, along with businesses related to industrial output (each reporting double-digit organic growth in the three months to 30 June.

Most of the Group's businesses linked to construction markets in Europe and North America also reported a relative improvement in trading over the second quarter, in terms of both volumes and sales prices, partly due to a favorable basis for comparison.

Household consumption remained stable over the first half. Overall, the Group's organic growth for first-half 2010 came in at 1.0% (including a positive 0.9% volume impact and a positive 0.1% price effect).

Thanks to the cost savings achieved, Saint-Gobain's operating margin widened significantly, to 7.4% versus 5% for first-half 2009, with a positive contribution from all of the Group's major geographic areas.

'Innovative materials' delivered the Group's best organic growth performance, at 13.8%. Trading for the sector gained momentum in the second quarter compared to the first (up 17.0% versus 10.4%). The rebound in markets linked to industrial output intensified over the three months to 30 June, both in North America and Western Europe.

Like-for-like sales for construction products remained stable over first-half 2010, with the 2.9% sales advance in the second quarter fully offsetting the 3.3% drop in sales over the three months to 30 March due to very poor weather conditions. The business sector's operating margin continued on an upward trend, at 10.1% versus 9.1% in first-half 2009, thanks mainly to the cost savings achieved.

Like-for-like sales for the interior solutions business slipped 3.6% over the first half, but edged up 0.9% in the three months to 30 June. Operating margin remained stable, at 6.8% versus 6.7% in first half 2009.

Building distribution continued to be affected by persistently tough conditions on European construction markets throughout the first half and by very slack trading in the first two months of the year due to harsh winter weather. First-half sales for the sector fell 4.1% but were virtually flat in the second quarter (down 0.1%). This stability reflects widely contrasting trends across Europe: while trading recovered in the UK, Scandinavia and Germany, there was a further decline in Southern and Eastern Europe as well as in the Netherlands, and a more moderate slowdown in France.

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