St Gobain posts better than expected performance
Published:  03 May, 2011

FRANCE: Global building materials giant, Saint-Gobain, posted a stronger-than-expected 12.2% rise in first-quarter sales.

The parent company of national merchant, Jewson, maintained its outlook for a double-digit percentage rise in operating profit this year and robust organic sales growth.

Saint-Gobain, which has been hit by the global slowdown in housebuilding, said Asia and emerging countries should continue posting robust growth, with recovery continuing in western European new construction and renovation markets.

In North America, industrial markets should see "brisk trading", but conditions in the construction sector remained 'challenging', the statement said.

Quarterly sales reached 9.799bn euros, beating the average forecast for 9.523bn euros in a Reuters' poll of 10 analysts. Like-for-like sales were up 9.6% at constant exchange rates.

Pierre-Andre de Chalendar, chief executive, stated: "The volume upturn is now also driven by the rebound in residential construction and renovation markets in Europe, amplified by much better weather conditions than in first-quarter 2010."

The company also kept its target to increase capital expenditure by 500m euros this year and achieve free cashflow of 1.3bn euros.

Saint-Gobain shares closed up 0.34% at 47.16 euro on Thursday, valuing the company at 24bn euros. The stock has gained 22% so far this year, outperforming the European construction sector that has risen 6%.

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