Gypsum industry news

France: Saint-Gobain's net income has risen by 36% year-on-year to Euro1.3bn in 2015 from Euro953m in 2014. Its sales revenue rose by 3.3% to 39.6bn from 3.4bn. However, its overall sales volumes remained static with only 0.1% growth. Growth in the company's Flat Glass and Interior Solutions divisions, including wallboard and insulation, held up sales despite sharp declines in sales in France.

"Saint-Gobain delivered improved earnings in 2015 in a sharply contrasted economic climate. The improvement was dampened by continued weak trading in France, hurt in particular by the sharp contraction in our Pipe division in the second half of the year, despite the first signs of an upturn in construction indicators. The group completed a key stage in the reorganisation of its business portfolio, with the sale of Verallia on very favourable terms, and continues to pursue its plan to acquire a controlling interest in Sika after obtaining all antitrust approvals prior to closing the deal," said Pierre-André de Chalendar, Chairman and Chief Executive Officer of Saint-Gobain.

The group's Interior Solutions division reported a 7.1% rise in sales revenue to Euro6.49bn from Euro6.06bn. Reduced volumes and prices in the French market slowed growth in Western Europe, although this impact eased in the fourth quarter of 2015. Trading in North America was dented by a slight dip in prices in the second half and by the decline in the Canadian market. Asia and emerging countries continued to deliver growth.

France/Switzerland: Saint-Gobain has said that the validity of its agreement with the Burkard family for the acquisition of the shares in Sika has been extended to 30 June 2016, with an option to further extend the agreement.

French construction material producer Saint-Gobain and the Burkard family decided to change their agreement on the sale of the shares of Schenker-Winkler Holding (SWH), which holds the majority of the voting rights in Sika, and to extend the validity of the agreement, the French group said in a statement. Holding company SWH owns a 16.1% stake in Sika and 52.4% of the voting rights.

"Under no circumstance can Saint-Gobain be forced to purchase the shares of SWH if its stake in Sika would not represent the majority of the voting rights or if such acquisition would trigger the obligation to launch a mandatory offer to all Sika shareholders," the company said in a statement.

In December 2014, Saint-Gobain had announced its intention to buy this stake for Euro2.6bn, thus acquiring control over Sika.

France: Saint-Gobain aims to improve underlying operating profit in 2015 and save a further Euro400m. Saint-Gobain saw its 2014 operating profit rise by 1.6% to Euro2.8bn. On a like-for-like basis, the increase came to 7%.

"The group should benefit from good momentum in the US as well as in Asia and emerging countries in 2015," said Saint-Gobain in a statement. "In Western Europe, recovery will be held back by France."

Saint-Gobain derives about 66% of its sales from Europe and 25% from its home market in France. Total sales reached Euro41.1bn in 2014, down by 1.7%. Savings in 2014 reached Euro450m, as predicted in October 2014 when Saint-Gobain said that it aimed to do better than the Euro350m cost savings it had previously targeted for 2015. Saint-Gobain's net income, excluding depreciations and one-off charges, came to Euro1.1bn in 2014.

France/Switzerland: Saint-Gobain plans to acquire a controlling stake in Sika, a construction chemicals producer. The transaction involves Saint-Gobain's purchase of Schenker Winkler Holding AG, which owns 16.1% of Sika's capital and 52.4% of voting shares, for Euro2.3bn.

After the acquisition, Saint-Gobain will be able to fully-consolidate Sika into its operations, which will have a positive impact on net income in the year after consolidation. Saint-Gobain Group does not intend to make an offer for the remaining shares of Sika.

Sika has 16,000 employees in 84 countries. Its total sales in 2013 amounted to Euro4.3bn. It has experienced an average of 8%/yr growth in 2007-2013. Given the similarity in the activities of Sika and Saint-Gobain, it is expected that the acquisition will generate Euro100m in synergies from the second year of consolidation (2017) and Euro180m by 2019.

The deal requires the permission of the competent antitrust authorities and is expected to be completed no later than the second half of 2015.

France: Saint-Gobain and EBRD (European Bank for Reconstruction and Development) have signed an agreement whereby EBRD will increase its participation in Saint-Gobain Construction Products Rus LLC from its current stake of 11% to 33%.

The EBRD equity injection will contribute to financing Saint-Gobain Construction Products' planned investments in Russia for the next three years, including projects in the gypsum, industrial mortars and insulation activities in several regions.

The investments will reflect the Environmental and Social Action Plan that was agreed with EBRD, thereby reaffirming the commitment of Saint-Gobain Group to the highest standards in environmental performance, corporate governance and business conduct.

This operation will contribute to the acceleration of Saint-Gobain's development in Russia, in alignment with the Group's strategy of strengthening its position in fast growing markets.

France: Saint-Gobain has reported that its sales fell by 4.8% to Euro9.67bn for the first quarter of 2013, down from Euro10.2bn in the same period in 2012. The France-based building materials multinational blamed the decline on bad weather, fewer working days in the period compared to the previous year and the continued economic slowdown in Europe.

"We anticipate a gradual recovery in the group's trading over the next few quarters and confirm our target of a recovery in operating income in the second half after having bottomed out between mid-2012 and mid-2013," said chairman and chief executive, Pierre-André de Chalendar.

Sant-Gobain's Construction Products Interior Solutions sector, which includes gypsum wallboard manufacturing, reported a 4.4% drop in like-for-like sales in the first quarter of 2013, mainly due to a drop in volumes in western Europe. However, Asia and emerging countries reported a 8.8% rise in sales.

By region across all business sectors, in France Sant-Gobain reported a 8.8% fall in sales to Euro2.80bn in the first quarter of 2013 from Euro2.90bn in the same quarter in 2012. Other western European countries saw a 9.5% fall in sales to Euro3.80bn from Euro4.18bn. North America reported a rise of 3.1% to Euro1.56bn from Euro1.52bn. Emerging countries, Asia and Pacific saw a 1.5% rise to Euro2.03bn from Euro1.94bn. In this territory Sant-Gobain singled out 5.4% sales growth in Latin America for offsetting declines in China and South Korea.

France: Lafarge, the French building materials giant, has announced plans to restructure the group along national lines instead of product types. The move will be implanted from the start of 2012 and was described by Lafarge as 'the natural next step' following its geographical expansion and its recent refocusing on cement, aggregates and concrete. This has become more pertinent following the disposal of most of its gypsum activities, with only North America the only area in which it still has gypsum operations. The aim of the project is to increase Lafarge's differentiation through the development of higher value-added products and solutions for construction.

Bruno Lafont, chief executive at Lafarge, said that the project may have a 'limited' impact on staff numbers. "It is premature to speak of the consequences in terms of employment," said Lafont. "If there is an impact, we think it will be limited." Lafarge previously said that it would remove a layer of management at the 'regional' level as part of the reorganisation

France: Lafarge has received Euro850m from the sale of its European and South American gypsum assets to Belgium's Etex Group. Lafarge will retain a 20% interest in the new partnership. The new entity created by the acquisition will have an annual revenue of around Euro1bn, according to Etex.

France: Lafarge's Olivier Guilluy has said that the company will not decide on a winning bid for its gypsum unit before September 2011. The business, reportedly valued at around Euro800m, has attracted around 10 serious bids from a variety of established gypsum wallboard producers and new players.

"In principle there will be no decision before the back-to-school season (in September)," said Guilluy. "A price has not yet been set for the division." In June 2010, local press reported that private equity funds, including Kohlberg Kravis Roberts & Co. and Carlyle, were in the running alongside industrial buyers including US-based Eagle Materials.Sources close to the situation have said the gypsum unit may be sold by geographic zone, split into Europe, North America and Asia, depending on whether antitrust rules complicate the sale or not.

Despite the high level of interest, Guilluy added that Lafarge may yet scrap the sale, depending on a decision to be made by its CEO Bruno Lafont. Guilluy said, "The unit generated about 9% of group sales in 2010, with revenue of Euro1.4bn and a current operating profit of Euro58m."

France: The Annual General Meeting of Compagnie de Saint-Gobain shareholders was held on 9 June 2011 in Paris. Gérard Merstrallet and Denis Ranque were re-elected to the board of directors. Mrs Anne-Marie Idrac, Mrs Olivia Qiu and Mr Jacques Pestre were elected as directors to replace Robert Chevrier, Yuko Harayama and Bernard Cusenier respectively. Shareholders also approved the payment of a dividend of Euro1.15 per share (up 15% on the year), paid entirely in cash.