Saint-Gobain: First-half 2015 Results
Upswing in results
PARIS, July 29, 2015 /PRNewswire/ --
Following the signature of the agreement with Apollo and in accordance with IFRS 5, the Packaging business (including Verallia North America) was reclassified within "Net income from discontinued operations" in the 2014 and 2015 income statement.
- Organic growth at 0.5% (including a positive 0.5% price impact)
- Strong 4.6% positive currency impact on sales and 0.3% negative Group structure impact
- Operating income up 7.8% on a reported basis and up 1.2% like-for-like before the reclassification of Verallia
- Net debt reduced by EUR0.5 billion compared to June 30, 2014
- Repurchase of around 4.6 million shares over the last 3 months
(EURm) H1 2014 H1 2015 Change
(restated)
Sales 18,946 19,860 +4.8%
EBITDA 1,767 1,886 +6.7%
Operating income 1,183 1,275 +7.8%
Recurring[1] net income 441 552 +25.2%
Net income[2] 671 558 -16.8%
Free cash flow[3] 647 728 +12.5%
Operating performance
First-half sales were up 4.8% to €19,860 million, after reclassification of the Packaging business (including Verallia North America) within "Net income from discontinued operations" in the income statement.
After this restatement (IFRS 5), changes in Group structure had a negative 0.3% impact on sales. Exchange rates continued to have a strong positive impact (4.6%), chiefly driven by the US dollar and pound sterling.
On a like-for-like basis, sales edged up 0.5%. Volumes were stable over the first half and rose 1.5% in the second quarter alone. Amid low raw material cost inflation and energy cost deflation, prices continued to rise slightly, up 0.5% over the first half.
After a slight decline in the first quarter, the three months to June 30 saw growth in all regions except France and Germany. By business, the first half confirmed the upturn in Flat Glass and the expected contraction in Exterior Solutions, related mainly to price levels in the Roofing business.
The Group's operating income climbed 7.8% on a reported basis and remained stable like-for-like versus first-half 2014 due to the absence of volume growth. Before the reclassification of the Packaging business and on a like-for-like basis, operating income moved up 1.2%. The Group's operating margin widened 0.2 points year-on-year, to 6.4%.
Performance of Group Business Sectors
Innovative Materials like-for-like sales continued to improve, up 2.6% thanks to Flat Glass. The Business Sector's operating margin moved up to 10.2% versus 9.1% in first-half 2014.
- The second quarter confirmed the upbeat trends seen early in the year in Flat Glass, which posted 5.6% organic growth over the six months to June 30. Automotive Flat Glass continued to report strong gains in all regions, excluding Brazil. Construction markets remained upbeat in Asia and emerging countries, but retreated in Western Europe where prices remained stable.
Rising volumes, together with the full impact of cost savings and an improved product mix, helped drive renewed growth in the operating margin at 7.4%.
- High-Performance Materials (HPM) like-for-like sales slipped 0.8% over the first half, hit mainly by the downturn in ceramic proppants. Other HPM businesses continued to deliver organic growth.
Despite this decline in organic growth, the operating margin came in at 13.5% versus 13.3% in the same period one year earlier.
Construction Products (CP) like-for-like sales advanced 0.9% over the first half. The operating margin narrowed to 8.7% versus 9.0% in first-half 2014, affected by Exterior Solutions.
- Interior Solutions posted 2.2% organic growth over the six-month period. In Western Europe, despite a slight improvement in volumes, trading continued to be affected by the market situation in France and Germany, coupled with a slight downward pressure on prices. The US, Asia and emerging countries continued to grow.
The operating margin moved up to 9.0% versus 8.5% in first-half 2014.
- Exterior Solutions slipped 0.4% despite a 5.7% rally in the second quarter, due mainly to the Roofing business, where volumes rose sharply after a very weak start to the year. Prices for this business were down significantly on the same year-ago period, despite stabilizing quarter-on-quarter. Pipe continued to be buoyed by export contracts, but was affected by anemic demand in infrastructure markets in Western Europe and Brazil. Mortars enjoyed good organic growth in Asia and emerging countries, although growth continued to be hindered by Western Europe.
The operating margin fell to 8.3% from 9.5% in first-half 2014, due chiefly to prices for Exterior Products in the US: Roofing benefited from falling asphalt prices, mainly in the second quarter.
Building Distribution like-for-like sales stabilized in the second quarter, up 0.1%, limiting the decline over the six-month period to 1.1%. France was once again impacted by the sharp contraction in new-builds and by a renovation market yet to show signs of improvement. Germany declined over the first half, although the pace of decline slowed in the second quarter. In contrast, the UK reported further organic growth and a particularly upbeat trend emerged in the Nordic countries, the Netherlands, Southern Europe and Brazil. Overall, despite the downturn in France and Germany which together account for around half of the Business Sector's sales, the operating margin proved resilient, at 2.6% versus 2.9% in first-half 2014, thanks to the advances reported in all other regions.
Analysis by region
The Group's organic growth and margins advanced, lifted by Asia and emerging countries, and by countries in the "Other Western Europe" region.
- France was hit once again by the decline in the construction market in the second quarter, reporting negative organic growth of 3.3% for the three months to June 30 and of 4.2% over the first half. The operating margin narrowed as a result, at 2.6%.
- Other Western European countries, up 2.4% over the quarter, confirmed their organic growth, which came in at 1.7% for the first half. This performance reflects good market conditions in the UK and Scandinavia and an upturn in Southern European countries. Germany, which was still slightly down in the second quarter, retreated 3.7% on the back of sluggish renovation activity. The operating margin for the region improved, at 5.4% versus 4.7% in first-half 2014.
- North America posted 4.9% like-for-like sales growth in the second quarter, powered by the catch-up in Roofing volumes and to a lesser extent by Interior Solutions. Over the six-month period, the region posted negative organic growth of 2.2%, chiefly impacted by subdued Roofing prices and a slower pace of growth in industrial markets. The operating margin was therefore down, at 9.5% compared to 10.9% in first-half 2014.
- Asia and emerging countries continued to deliver good organic growth, which came in at 4.8% for the first six months of the year. Latin America advanced 8.2%, with Brazil proving resilient in a tough macroeconomic environment. Eastern Europe was up 4.3%, buoyed by brisk trading in the Czech Republic, while Asia advanced 0.8%, lifted by India.
The operating margin rose to 10.0% of sales, compared to 8.8% one year earlier.
Verallia
Packaging (Verallia) sales moved up 2.1% at constant exchange rates excluding Verallia North America. Organic growth over the first half was driven by small volume gains in Europe and by rising prices in Latin America in an inflationary environment.
The operating margin came in at 9.7%.
Analysis of the consolidated financial statements for first-half 2015
The unaudited interim consolidated financial statements were subject to a limited review by the statutory auditors. They were approved and adopted by the Board of Directors on July 29, 2015.
Following the signature of the agreement with Apollo on June 6, 2015 (involving a firm and binding offer from Apollo regarding the Packaging business and exclusive talks with Apollo) and in accordance with IFRS 5, the Packaging business (including Verallia North America) is shown within "Net income from discontinued operations" in the income statement for 2014 and 2015.
H1 2014 H1 2014
Restated* H1 2015 % change Published
EURm (A) (B) (B)/(A)
Sales and ancillary revenue 18,946 19,860 4.8% 20,446
Operating income 1,183 1,275 7.8% 1,330
Operating depreciation and amortization 584 611 4.6% 667
EBITDA (op.inc. + operating depr./amort.) 1,767 1,886 6.7% 1,997
Non-operating costs (12) (154) n.s. (16)
Capital gains and losses on disposals, asset
write-downs, corporate acquisition fees and
earn-out payments (51) (41) -19.6% (54)
Business income 1,120 1,080 -3.6% 1,260
Net financial expense (336) (328) -2.4% (354)
Income tax (158) (236) 49.4% (212)
Share in net income (loss) of non-core
business equity-accounted companies (1) 0 n.s. (1)
Net income from continuing operations 625 516 -17.4% 693
Net income from discontinued operations 68 69 1.5% 0
Net income before minority interests 693 585 -15.6% 693
Minority interests 22 27 22.7% (22)
Net attributable income 671 558 -16.8% 671
Earnings per share[2] (in EUR) 1.19 0.98 -17.6% 1.19
Recurring[1] net income from continuing
operations 441 552 25.2% 511
Recurring[1] earnings per share[2] from
continuing operations (in EUR) 0.78 0.97 24.4% 0.91
Cash flow from continuing operations[3] 1,045 1,195 14.4% 1,198
Cash flow from continuing operations excl.
cap. gains tax[4] 1,010 1,185 17.3% 1,162
Capital expenditure of continuing operations 363 457 25.9% 449
Free cash flow from continuing operations 647 728 12.5% 713
(excluding capital gains tax)[4]
Investments in securities of continuing
operations 48 92 91.7% 48
Net debt 8,519 7,995 -6.2% 8,519
* First-half 2014 figures have been restated to reflect the impacts of IFRS 5.
1 Excluding capital gains and losses on disposals, asset write-downs and material non-recurring provisions.
2 Calculated based on the number of shares outstanding (excluding treasury shares) at June 30 (569,364,905 shares in 2015, including the increase in capital following payment of the stock dividend on July 3, 2015, versus 564,079,733 shares in 2014).
3 Excluding material non-recurring provisions.
4 Excluding the tax impact of capital gains and losses on disposals, asset write-downs and material non-recurring provisions.
The comments below make reference to the restated financial statements for 2014, after reclassification of the Packaging business (including Verallia North America) within "Net income from discontinued operations" in the income statement.
Consolidated sales advanced 4.8% on a reported basis. Exchange rates had a positive 4.6% impact on sales, mainly due to gains in the US dollar and pound sterling against the euro. Changes in Group structure had a negative 0.3% impact, primarily reflecting sales of small, non-core businesses. Like-for-like (comparable structure and exchange rates), sales were up 0.5%, lifted by the price effect.
Operating income climbed 7.8% on a reported basis, driven chiefly by the currency effect. The operating margin improved to 6.4% of sales versus 6.2% in first-half 2014, buoyed by an improved margin in Innovative Materials.
EBITDA (operating income + operating depreciation and amortization) was up 6.7%. The Group's EBITDA margin came out at 9.5% of sales versus 9.3% of sales in first-half 2014.
Non-operating costs totaled €154 million, with a decrease in restructuring costs compared to the same period in 2014. The first-half 2014 basis for comparison (€12 million) included the €202 million write-back from the provision to reflect the reduction in the automotive Flat Glass fine. The €45 million accrual to the provision for asbestos-related litigation involving CertainTeed in the US is unchanged from the last few half-year periods.
The net balance of capital gains and losses on disposals, asset write-downs and corporate acquisition fees was a negative €41 million versus a negative €51 million in first-half 2014, which had benefited from the €375 million capital gain on the disposal of Verallia North America. Asset write-downs also represented €452 million in first-half 2014 compared to €24 million in the six months to June 30, 2015. Business income for the period fell to €1,080 million (down 3.6% on first-half 2014 which included the one-off €202 million provision write-back).
Net financial expense improved, down 2.4% to €328 million from €336 million one year earlier, reflecting the decrease in the cost of gross debt to 3.7% at June 30, 2015 (4.4% at June 30, 2014). The improvement came despite the increase in other financial expenses mainly due to the discounting of provisions with no cash impact.
The income tax rate on recurring net income remained stable at 30%. Income tax expense totaled €236 million, up from the exceptionally low €158 million in first-half 2014 resulting from asset write-downs in the period, capital gains on the disposal of Verallia North America and the write-back of the provision for the Flat Glass fine.
Recurring net income from continuing operations (excluding capital gains and losses on disposals, asset write-downs and material non-recurring provisions) jumped 25.2% to €552 million.
Net attributable income was down 16.8% to €558 million and includes net income relating to Verallia (attributable to the Group) for €65 million (€67 million in first-half 2014).
Capital expenditure totaled €457 million (€363 million in first-half 2014), representing 2.3% of sales compared to a particularly low 1.9% of sales in the same period one year earlier.
Cash flow from operations rose 14.4% to €1,195 million; before the tax impact of capital gains and losses on disposals, asset write-downs and material non-recurring provisions, cash flow from operations was up 17.3% to €1,185 million, while free cash flow (cash flow from operations less capital expenditure) advanced 12.5% to €728 million (3.7% of sales versus 3.4% of sales in first-half 2014).
The difference between EBITDA and capital expenditure improved, up 1.8% to €1,429 million (€1,404 million in the six months to June 30, 2014), representing 7.2% of sales (7.4% in first-half 2014).
Operating working capital requirements (WCR) totaled €4,448 million at June 30, 2015 (€4,888 million in the same year-ago period), representing 40.8 days' sales, an improvement of 2.5 days year-on-year (an improvement of around 1 day excluding the impact of Verallia and exchange rates).
Investments in securities were limited, at €92 million (€48 million in first-half 2014) and correspond to small-scale acquisitions in the three business sectors.
Net debt continues to improve gradually, down 6.2% year-on-year to €8.0 billion. Net debt represents 40% of consolidated equity, compared to 46% at June 30, 2014.
The net debt to EBITDA ratio came in at 2.1 (1.9 before the reclassification of the Packaging business), compared to 2.0 at end-June 2014.
Update on asbestos claims in the US
Some 2,000 claims were filed against CertainTeed in the first half of 2015 (as in first-half 2014). At the same time, around 2,000 claims were settled (versus 3,000 in first-half 2014), bringing the total number of outstanding claims to around 37,000 at June 30, 2015, unchanged from December 31, 2014.
A total of USD 71 million in indemnity payments were made in the US in the 12 months to June 30, 2015, versus USD 68 million in the year to December 31, 2014.
2015 outlook and action plan priorities
After a first half penalized by tough prior-year comparatives, the Group will benefit from a more favorable climate in the six months to December 31:
- France should gradually stabilize.
- Regarding other Western European countries, the outlook in Germany remains uncertain; the UK and Nordic countries should continue to deliver good growth in the second half, and Spain should continue to improve significantly.
- In North America, trading should improve in the second half.
- In Asia and emerging countries, our businesses should continue to post good organic growth over the full year, despite the slowdown in Brazil.
The Group confirms its action plan priorities:
- keep its priority focus on increasing sales prices amid low raw material cost inflation and energy cost deflation;
- unlock additional cost savings of €360 million excluding Verallia (calculated on the 2014 cost base), of which €190 million in the first half;
- pursue a capital expenditure program of around €1,500 million excluding Verallia;
- renew its commitment to invest in R&D in order to support its differentiated, high value-added strategy;
- finalize the divestment of Verallia, which should be effective before the end of the year;
- pursue its plan to acquire a controlling interest in Sika.
In line with its long-term objectives, Saint-Gobain repurchased 4.6 million shares over the last three months. To date, this almost entirely offsets the 2015 dilution resulting from the Group Savings Plan and the exercise of stock options.
Lastly, Saint-Gobain confirms its objectives and expects a further like-for-like improvement in operating income for 2015 and a continuing high level of free cash flow.
Financial calendar
- Sales for the first nine months of 2015: October 28, 2015, after close of trading on the Paris Bourse.
An information meeting for analysts and investors will be held at 8:30am (GMT+1) on July 30, 2015 and will be broadcast live on http://www.saint-gobain.com.
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 Saint-Gobain's registration document available on its website (http://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 http://www.saint-gobain.com.
Appendix 1: Results by business sector and geographic area
H1 2014: restated accounts including IFRS 5 impact
Change on
a
Change on comparable
a
H1 Change on comparable structure
2014 H1 an actual and
Restated 2015 structure structure currency
(in EUR m)(in EUR m) basis basis basis H1 2014
I. SALES
Published Impact
By sector and division:
Innovative
Materials [1] 4,484 4,922 +9.8% +9.6% +2.6% 4,484
Flat Glass 2,398 2,633 +9.8% +10.0% +5.6% 2,398
High-Performance
Materials 2,091 2,297 +9.9% +9.3% -0.8% 2,091
Construction
Products [1] 5,643 6,079 +7.7% +7.8% +0.9% 5,643
Interior Solutions 2,954 3,197 +8.2% +7.9% +2.2% 2,954
Exterior Solutions 2,719 2,913 +7.1% +7.5% -0.4% 2,719
Building Distribution 9,287 9,338 +0.5% +0.8% -1.1% 9,287
Packaging (Verallia) 0 0 1,500 -1,500
Internal sales and misc. -468 -479 n.m. n.m. n.m. -468
Group Total 18,946 19,860 +4.8% +5.1% +0.5% 20,446 -1,500
[1] including intra-sector eliminations
By geographic area:
France 5,547 5,282 -4.8% -4.2% -4.2% 5,948 -401
Other Western
European countries 8,204 8,574 +4.5% +4.6% +1.7% 8,835 -631
North America 2,326 2,738 +17.7% +19.1% -2.2% 2,641 -315
Emerging countries
and Asia 3,851 4,219 +9.6% +9.0% +4.8% 4,024 -173
Internal sales -982 -953 n.m. n.m. n.m. -1,002 20
Group Total 18,946 19,860 +4.8% +5.1% +0.5% 20,446 -1,500
H1 Change on H1 H1
2014 H1 an actual 2014 2015
Restated 2015 structure (in % of (in % of
(in EUR m)(in EUR m) basis sales) sales) H1 2014
II. OPERATING INCOME
Published Impact
By sector and division:
Innovative Materials 409 504 +23.2% 9.1% 10.2% 409
Flat Glass 131 194 +48.1% 5.5% 7.4% 131
High-Performance
Materials 278 310 +11.5% 13.3% 13.5% 278
Construction Products 508 529 +4.1% 9.0% 8.7% 508
Interior Solutions 251 288 +14.7% 8.5% 9.0% 251
Exterior Solutions 257 241 -6.2% 9.5% 8.3% 257
Building Distribution 265 242 -8.7% 2.9% 2.6% 265
Packaging (Verallia) 0 0 147 -147
Misc. 1 0 n.m. n.m. n.m. 1
Group Total 1,183 1,275 +7.8% 6.2% 6.4% 1,330 -147
By geographic area:
France 209 136 -34.9% 3.8% 2.6% 247 -38
Other Western
European countries 382 460 +20.4% 4.7% 5.4% 442 -60
North America 253 259 +2.4% 10.9% 9.5% 298 -45
Emerging countries
and Asia 339 420 +23.9% 8.8% 10.0% 343 -4
Group Total 1,183 1,275 +7.8% 6.2% 6.4% 1,330 -147
H1 Change on H1 H1
2014 H1 an actual 2014 2015
Restated 2015 structure (in % of (in % of
(in EUR m)(in EUR m) basis sales) sales) H1 2014
III. BUSINESS INCOME
Published Impact
By sector and division:
Innovative Materials 359 463 +29.0% 8.0% 9.4% 359
Flat Glass 131 181 +38.2% 5.5% 6.9% 131
High-Performance
Materials 228 282 +23.7% 10.9% 12.3% 228
Construction Products 323 475 +47.1% 5.7% 7.8% 323
Interior Solutions 235 258 +9.8% 8.0% 8.1% 235
Exterior Solutions 88 217 +146.6% 3.2% 7.4% 88
Building Distribution 105 196 +86.7% 1.1% 2.1% 105
Packaging (Verallia) 0 0 515 -515
Misc. (a) 333 -54 n.m. n.m. n.m. -42 375
Group Total 1,120 1,080 -3.6% 5.9% 5.4% 1,260 -140
By geographic area:
France 661 107 -83.8% 11.9% 2.0% 696 -35
Other Western
European countries 182 393 +115.9% 2.2% 4.6% 240 -58
North America (a) 66 200 +203.0% 2.8% 7.3% 110 -44
Emerging countries
and Asia 211 380 +80.1% 5.5% 9.0% 214 -3
Group Total 1,120 1,080 -3.6% 5.9% 5.4% 1,260 -140
(a) after asbestos-related charge (before tax) of EUR45m in H1 2014 and EUR45m in
H1 2015
H1 Change on H1 H1
2014 H1 an actual 2014 2015
Restated 2015 structure (in % of (in % of
(in EUR m)(in EUR m) basis sales) sales) H1 2014
IV. CASH FLOW
Published Impact
By sector and division:
Innovative Materials 344 465 +35.2% 7.7% 9.4% 344
Flat Glass 105 221 +110.5% 4.4% 8.4% 105
High-Performance
Materials 239 244 +2.1% 11.4% 10.6% 239
Construction Products 369 415 +12.5% 6.5% 6.8% 369
Building Distribution 199 188 -5.5% 2.1% 2.0% 199
Packaging (Verallia) 0 0 123 -123
Misc. (a) 133 127 n.m. n.m. n.m. 163 -30
Group Total 1,045 1,195 +14.4% 5.5% 6.0% 1,198 -153
By geographic area:
France 99 90 -9.1% 1.8% 1.7% 134 -35
Other Western
European countries 359 470 +30.9% 4.4% 5.5% 439 -80
North America (a) 209 200 -4.3% 9.0% 7.3% 236 -27
Emerging countries
and Asia 378 435 +15.1% 9.8% 10.3% 389 -11
Group Total 1,045 1,195 +14.4% 5.5% 6.0% 1,198 -153
(a) after asbestos-related charge (after tax) of EUR27m in H1 2014 and EUR27m in H1 2015
H1 Change on H1 H1
2014 H1 an actual 2014 2015
Restated 2015 structure (in % of (in % of
(in EUR m)(in EUR m) basis sales) sales) H1 2014
V. CAPITAL EXPENDITURE
Published Impact
By sector and division:
Innovative Materials 129 165 +27.9% 2.9% 3.4% 129
Flat Glass 75 91 +21.3% 3.1% 3.5% 75
High-Performance
Materials 54 74 +37.0% 2.6% 3.2% 54
Construction Products 150 183 +22.0% 2.7% 3.0% 150
Interior Solutions 79 110 +39.2% 2.7% 3.4% 79
Exterior Solutions 71 73 +2.8% 2.6% 2.5% 71
Building Distribution 76 82 +7.9% 0.8% 0.9% 76
Packaging (Verallia) 0 0 86 -86
Misc. 8 27 n.m. n.m. n.m. 8
Group Total 363 457 +25.9% 1.9% 2.3% 449 -86
By geographic area:
France 72 69 -4.2% 1.3% 1.3% 80 -8
Other Western
European countries 95 107 +12.6% 1.2% 1.2% 139 -44
North America 63 119 +88.9% 2.7% 4.3% 83 -20
Emerging countries
and Asia 133 162 +21.8% 3.5% 3.8% 147 -14
Group Total 363 457 +25.9% 1.9% 2.3% 449 -86
H1 Change on H1 H1
2014 H1 an actual 2014 2015
Restated 2015 structure (in % of (in % of
VI. EBITDA (in EUR m) (in EUR m) basis sales) sales) H1 2014
Published Impact
By sector and division:
Innovative Materials 626 731 +16.8% 14.0% 14.9% 626
Flat Glass 274 347 +26.6% 11.4% 13.2% 274
High-Performance
Materials 352 384 +9.1% 16.8% 16.7% 352
Construction Products 732 765 +4.5% 13.0% 12.6% 732
Interior Solutions 403 448 +11.2% 13.6% 14.0% 403
Exterior Solutions 329 317 -3.6% 12.1% 10.9% 329
Building Distribution 394 374 -5.1% 4.2% 4.0% 394
Packaging (Verallia) 0 0 230 -230
Misc. 15 16 n.m. n.m. n.m. 15
Group Total 1,767 1,886 +6.7% 9.3% 9.5% 1,997 -230
By geographic area:
France 360 287 -20.3% 6.5% 5.4% 419 -59
Other Western
European countries 570 650 +14.0% 6.9% 7.6% 674 -104
North America 327 349 +6.7% 14.1% 12.7% 372 -45
Emerging countries
and Asia 510 600 +17.6% 13.2% 14.2% 532 -22
Group Total 1,767 1,886 +6.7% 9.3% 9.5% 1,997 -230
Appendix 2: Sales by business sector and geographic area - Second Quarter
Q2 2014: restated accounts including IFRS 5 impact
Change on a
comparable
Change on Change on a structure
Q2 2014 an actual comparable and
Restated Q2 2015 structure structure currency
(in EUR m) (in EUR m) basis basis basis Q2 2014
SALES
Published Impact
By sector
and division:
Innovative
Materials [1] 2,309 2,537 +9.9% +9.8% +3.0% 2,309
Flat Glass 1,239 1,348 +8.8% +9.3% +5.5% 1,239
High-Performance
Materials 1,073 1,193 +11.2% +10.3% +0.3% 1,073
Construction
Products [1] 2,886 3,246 +12.5% +12.2% +4.6% 2,886
Interior
Solutions 1,502 1,656 +10.3% +9.7% +3.4% 1,502
Exterior
Solutions 1,401 1,606 +14.6% +14.7% +5.7% 1,401
Building
Distribution 4,926 5,023 +2.0% +2.2% +0.1% 4,926
Packaging
(Verallia) 0 0 678 -678
Internal sales
and misc. -227 -255 n.m. n.m. n.m. -227
Group Total 9,894 10,551 +6.6% +6.9% +2.1% 10,572 -678
[1] including
intra-sector eliminations
By geographic area:
France 2,863 2,743 -4.2% -3.3% -3.3% 3,076 -213
Other Western
European
countries 4,340 4,584 +5.6% +5.6% +2.4% 4,685 -345
North America 1,168 1,493 +27.8% +29.2% +4.9% 1,205 -37
Emerging countries
and Asia 2,026 2,215 +9.3% +8.7% +5.8% 2,119 -93
Internal sales -503 -484 n.m. n.m. n.m. -513 10
Group Total 9,894 10,551 +6.6% +6.9% +2.1% 10,572 -678
Appendix 3: Consolidated balance sheet
Dec 31,
(in EUR million) June 30, 2015 2014
Assets
Goodwill 10,897 10,462
Other intangible assets 3,229 3,085
Property, plant and equipment 11,776 12,657
Investments in associates 374 386
Deferred tax assets 1,325 1,348
Other non-current assets 699 646
Non-current assets 28,300 28,584
Inventories 6,157 6,292
Trade accounts receivable 5,990 4,923
Current tax receivable 128 156
Other accounts receivable 1,658 1,356
Cash and cash equivalents 4,249 3,493
Assets of discontinued operations 2,253 0
Current assets 20,435 16,220
Total assets 48,735 44,804
Liabilities and Shareholders' equity
Capital stock 2,294 2,248
Additional paid-in capital and legal reserve 6,785 6,437
Retained earnings and net income for the year 10,412 10,411
Cumulative translation adjustments (173) (953)
Fair value reserves 318 (63)
Treasury stock (174) (67)
Shareholders' equity 19,462 18,013
Minority interests 406 405
Total equity 19,868 18,418
Long-term debt 8,495 8,713
Provisions for pensions and other employee benefits 3,426 3,785
Deferred tax liabilities 802 634
Provisions for other liabilities and charges 1,290 1,225
Non-current liabilities 14,013 14,357
Current portion of long-term debt 2,096 1,389
Current portion of provisions for other liabilities and charges 423 409
Trade accounts payable 5,854 6,062
Current tax liabilities 104 97
Other accounts payable 3,770 3,460
Short-term debt and bank overdrafts 1,653 612
Liabilities of discontinued operations 954 0
Current liabilities 14,854 12,029
Total equity and liabilities 48,735 44,804
Appendix 4: Consolidated cash flow statement
2014 restated accounts including IFRS 5 impact
H1 2014 H1 H1 2014
(in EUR million) Restated 2015 Published
Net income of continuing operations
attributable to equity holders of the parent 604 493 671
Minority interests in net income 21 23 22
Share in net income of associates, net of dividends received (10) (12) (11)
Depreciation, amortization and impairment of assets 1,036 633 1,119
Gains and losses on disposals of assets (402) 10 (399)
Unrealized gains and losses arising from
changes in fair value and share-based payments (17) 21 (17)
Changes in inventories (463) (250) (475)
Changes in trade accounts receivable and payable,
and other accounts receivable and payable (1,097) (1,128) (1,199)
Changes in tax receivable and payable 17 24 34
Changes in deferred taxes and provisions
for other liabilities and charges (1,141) 43 (1,129)
Net cash from operating activities
of continuing operations (1,452) (143)
Net cash from operating activities
of discontinued operations 68 61
Net cash from operating activities (1,384) (82) (1,384)
Purchases of property, plant and equipment
[ H1-2014: (363), H1-2015: (457) ] and intangible assets (412) (511) (499)
Acquisitions of property, plant
and equipment in finance leases (5) (8) (5)
Increase (decrease) in amounts
due to suppliers of fixed assets (100) (135) (140)
Acquisitions of shares in consolidated companies
[ H1-2014: (29), H1-2015:(85)], net of debt acquired (89) (86) (89)
Acquisitions of other investments (19) (7) (19)
Increase in investment-related liabilities 1 4 1
Decrease in investment-related liabilities (1) (14) (1)
Investments (625) (757) (752)
Disposals of property, plant and equipment
and intangible assets 35 73 35
Disposals of shares in consolidated companies,
net of net debt divested 866 7 999
Disposals of other investments and other divestments 0 0 0
Divestments 901 80 1,034
Increase in loans and deposits (55) (84) (57)
Decrease in loans and deposits 32 33 34
Net cash from (used in) investment and divestment
activities of continuing operations 253 (728)
Net cash from (used in) investment and divestment
activities of discontined operations 6 (107)
Net cash used in investment and divestment activities 259 (835) 259
Issues of capital stock 408 394 408
Minority interests' share in capital
increases of subsidiaries 8 12 8
Increase (decrease) in investment-related liabilities
(put on minority interests) 0 0 0
Disposals of minority interests without loss of control 0 0 0
(Increase) decrease in treasury stock 0 (104) 0
Dividends paid (685) (695) (685)
Increase (decrease) in dividends payable 441 455 441
Dividends paid to minority shareholders
of consolidated subsidiaries (34) (34) (35)
Net cash from (used in) financing activities
of continuing operations 138 28
Net cash from (used in) financing activities
of discontinued operations (1) (1)
Net Cash from (used in) financing activities 137 27 137
Increase (decrease) in net debt (988) (890) (988)
Net effect of exchange rate changes on net debt (12) (13) (5)
Net effect from changes in fair value on net debt (13) 33 (13)
Net effect of exchange rate changes on
net debt of discontinued operations 7 (3)
Transfer of net debt in assets and
liabilities of discontinued operations 0 99
Net debt at beginning of period (7,513) (7,221) (7,513)
Net debt at end of period (8,519) (7,995) (8,519)
Appendix 5: Results of Packaging Sector (Verallia)
Change
on a
comparable
Change on an Change on a structure
H1 H1 actual comparable and
2014 2015 structure structure currency
(in EUR m) (in EUR m) basis basis basis
I. SALES
Packaging (Verallia) 1,500 1,194 -20.4% +0.7% +2.1%
including VNA 314 0
Total 1,500 1,194 -20.4% +0.7% +2.1%
Change on an H1 H1
H1 H1 actual 2014 2015
2014 2015 structure (in % of (in % of
(in EUR m) (in EUR m) basis sales) sales)
II. OPERATING INCOME *
Packaging (Verallia) 147 116 -21.1% 9.8% 9.7%
including VNA 45 0
Total 147 116 -21.1% 9.8% 9.7%
Change on an H1 H1
H1 H1 actual 2014 2015
2014 2015 structure (in % of (in % of
(in EUR m) (in EUR m) basis sales) sales)
III. BUSINESS INCOME *
Packaging (Verallia) 140 112 -20.0% 9.3% 9.4%
including VNA 43 0
Total 140 112 -20.0% 9.3% 9.4%
Change on an H1 H1
H1 H1 actual 2014 2015
2014 2015 structure (in % of (in % of
(in EUR m) (in EUR m) basis sales) sales)
IV. CASH FLOW
Packaging (Verallia) 153 140 -8.5% 10.2% 11.7%
including VNA 27 0
Total 153 140 -8.5% 10.2% 11.7%
Change on an H1 H1
H1 H1 actual 2014 2015
2014 2015 structure (in % of (in % of
(in EUR m) (in EUR m) basis sales) sales)
V. CAPITAL EXPENDITURE
Packaging (Verallia) 86 67 -22.1% 5.7% 5.6%
including VNA 19 0
Total 86 67 -22.1% 5.7% 5.6%
Change on an H1 H1
H1 H1 actual 2014 2015
2014 2015 structure (in % of (in % of
VI. EBITDA (in EUR m) (in EUR m) basis sales) sales)
Packaging (Verallia) 230 200 -13.0% 15.3% 16.8%
including VNA 45 0
Total 230 200 -13.0% 15.3% 16.8%
* After stop of depreciation of EUR18m in H1 2014 and before stop of depreciation of
EUR14m in H1 2015
Appendix 6: Debt at June 30, 2015
Amounts in EURbn Comments
Amount and structure of net debt EURbn
At end of June 2015, 74% of gross debt
was at fixed interest rates and the
Gross debt 12.2 average cost of gross debt was 3.7%
Cash & cash equivalents 4.2
Net debt 8.0
Breakdown of gross debt 12.2
Bond debt and perpetual notes 9.5
September 2015 1.0
May 2016 0.7
September 2016 0.5
December 2016 0.4 (GBP 0.3bn)
April 2017 1.3
June 2017 0.2
March 2018 0.1 (NOK 0.8bn)
October 2018 0.7
September 2019 0.9
After 2020 3.7
Other long-term debt 0.7 (including EUR 0.4bn long-term
securitization)
Short-term debt 2.0 (excluding bonds)
Commercial paper (< 3 months) 0.9 Maximum amount of bond issue: EUR3bn
Securitization 0.3 (EUR 0.2bn equivalent in USD + EUR 0.1bn)
Annual rollover; several hundreds of
Local debt and accrued interest 0.8 different sources of financing
Credit lines, cash & cash equivalents 8.2
Cash and cash equivalents 4.2
Back-up credit-lines 4.0 See breakdown below
Breakdown of back-up credit lines 4.0
All lines are confirmed and undrawn, with no Material Adverse Change (MAC) clause
Expiry Covenants
Syndicated line: EUR2.5bn December 2019 None
Syndicated line: EUR1.5bn December 2018 None
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SOURCE Saint-Gobain
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