Saint-Gobain’s energy and raw material costs increased by nearly $3 billion in 2022 as a result of rising inflation, according to a quarterly report released by the designer, manufacturer and distributor of materials and services for the construction and industrial markets. Saint-Gobain says that it expects the costs of energy alone to amount to nearly $2.5 billion.
The company adds that it is confident that it can offset the cost increases. This is because of rapid progress in rolling out continuity plans and ensuring production flexibility to operate with less or alternative energy for its main gas-consuming manufacturing businesses in Europe.
“If the material cost comes down, we need to also then adapt and adjust ourselves in the market to make sure that we don’t stand out as the only one who is looking for the price,” says Saint-Gobain finance chief Sreedhar Natarajan.
Saint-Gobain’s third-quarter revenue rose 19.6% year-on-year to $12.88 billion, beating the $12.6 billion average estimate from a company-provided consensus. This is due to double-digit organic growth in all segments, driven in particular by high-performance solutions and growth in the Asia-Pacific and North American sectors.
Saint-Gobain also reports that third-quarter North American sales were up 16.9% despite the slowing of the new construction market. This was driven by the development of a range of light construction solutions, writes Saint-Gobain.
Saint-Gobain adds that in the final months of 2022 it expects renovations to remain resilient in Europe while new construction markets slow down, growth in the Americas will remain steady, growth in the Asia-Pacific will increase and momentum will continue in high-performance solutions thanks to innovation.
The company, however, expects further increases in operating income in the waning months of 2022 compared to 2021 at constant exchange rates.