Saint-Gobain: second revision of outlook for 2008

French construction materials group Compagnie de Saint-Gobain SA reported a 2.5% rise in revenue for the first nine months of 2008 on 22 October 2008 and cut its full-year targets, as the company“s b…

French construction materials group Compagnie de Saint-Gobain SA reported a 2.5% rise in revenue for the first nine months of 2008 on 22 October 2008 and cut its full-year targets, as the company“s business was hit by the continuing slowdown in European residential markets. In the second warning on its financials for 2008, Saint-Gobain now seeks results “slightly below the targets announced at the end of July”. In July, Saint-Gobain said it was “expecting operating income at constant exchange rates and recurring net income close to the high 2007 levels”. Saint-Gobain said it anticipates an “overall decrease” in business volumes in the 4Q 2008 in Western Europe, mainly Spain and the UK, and “to a lesser extent” in Eastern Europe. The company added that it will respond quickly to the downturn “by intensifying, in those countries concerned, its purposeful and vigorous cost-saving, workforce-reduction and economic-adaptation programs, as announced in July 2008”. Saint-Gobain said in July 2008 that it would step up its cost-cutting plans aimed at saving EUR 300 million in the year and which will lead to 4,000 job losses in 2008, in the US, Spain and the UK. Saint-Gobain said revenue for the first nine-months rose to EUR 33.44 billion from EUR 32.63 billion a year earlier, with sales growth hit by the weakness of both the US dollar and UK sterling. The company also said the rise in sales for the period was supported by a 3.3% rise in sales prices, off-setting a 0.9% decrease in sales volumes. Shares in the group have lost over 62% of their value over the past year, hit by the impact of the financial crisis and by the ongoing downturn in the construction sector. Saint-Gobain said sales in France rose 2.1% to EUR 9.91 billion, helped by price rises, and sales in North America fell 6.6% to EUR 4.18 billion. Sales in emerging countries and Asia-Pacific rose 9.8% to EUR 5.61 billion. The French firm declined to comment further on the extent of its increased cost-savings and restructuring plans although it said it will directly publish final annual results as from the publication of its full-year results for 2008, instead of publishing estimated results first. The company said it plans to release 2008 sales figures on 22 January 2009 and final results 19 February 2009.