Saint-Gobain's North America Units Boost '09 Operating Income
Post 8.9% rise on like-for-like, constant currency basis
Saint-Gobain, the French construction materials giant whose subsidiaries include America's CertainTeed Corp., reported today its North American units' operating income rose 8.9% in 2009 from 2008 on a same-structure, constant-currency basis.
Sales in North America shrank to 4.86 billion billion euros ($6.6 billion at current exchange rates), down 11.5% from 5.5 billion euros ($7.46 billion) in 2008. When measured on a like-for-like structure basis, sales slipped 10.1%, Saint-Gobain side, and when one also removes exchange-rate changes from the equation, sales fell 14.5% last year from 2008. (All currency conversions here value one euro at $1.357.)
Operating income jumped to 432 million euros ($586.2 million) from 283 million euros ($384 million). 52.7% increase in actual terms, but Saint-Gobain noted that it grew just 5.1% on a comparable structure basis and 8.9% on a comparable-structure, consistent-currency basis.
EBITDA--earnings before interest, taxes, depreciation and amortization--increased to 674 million euros ($914.6 million) from 2008's 516 million euros ($700.2 million). That's 30.6% growth. Comparable-operations EBITDA in North America increased 9.4%, and with currency changes scrubbed out, the percentage rise was 13.9%.
"North America was affected by the continuing decline in construction coupled with the collapse in industrial markets over the first half of the year," the company said in a statement. "Like-for-like sales retreated 14.5% over the year. The decline was smaller in the second half due to a slowdown in the decrease in volumes. Over the year as a whole, the operating margin rose sharply to 8.9% from 5.1% in 2008, on the back of the restructuring measures carried out and robust sales prices, with the increase gathering pace in the second half of the year (8.9% versus 8.8% in the first half."
Saint-Gobain set aside 75 million euros ($101.8 million) in 2009 for asbestos-related litigation involving CertainTeed, just as it did in 2008. Roughly 4,000 claims were filed against it in 2009, down from 5,000 in 2008. A total of 8,000 claims were settled last year, same as in 2008, bringing the total number of outstanding claims to 64,000 as of Dec. 31. A total of $77 million in indemnity payments were made in 2009, up from $71 million the previous year.
Saint-Gobain also wrote down 215 million euros ($291.8 million) worth of goodwill related to its gypsum business in the United States, usually as a result of restructuring and site closures.
