Ladies and gentlemen, welcome to the Saint-Gobain conference call. I now hand over to Pierre-André de Chalendar, Chairman and CEO. Sir, please go ahead.
Good morning, everybody. I hope that you have had time to review our press release and that you have been able to go through the highlights of our first quarter sales. Let me first sum up in very few words our performance. You have seen that our organic growth is at 5.7%, coming both from prices at +2.6% and volume at +3.1%. We clearly started the year off well with good sales trend. This was helped by supportive market and an easier comparison basis given the harsh winter weather we saw in Q1 last year in Europe. We once again demonstrated our ability to increase prices in an environment where we continue to see inflation in raw materials and energy, but a bit less so than in 2018. Sreedhar is now going to give you additional information, including by our new reporting segments.
Thank you, Pierre-André. Good evening to everyone. Let me give you more details about our sales for the first quarter. Sales increased by 5.7% on a like-for-like basis over the first quarter and 6.4% on a reported basis, with a positive impact of 0.6% from exchange rates and 0.1% from structure. I will take a moment to give you some more details on these two effects. The exchange rate impact turned positive for the quarter after we saw the significant negative impact last year. This was driven primarily by US dollar turning positive against the euro, despite the continued negative impact from the Brazilian real and the Nordic krona, as well as the emerging currencies. The currency impact was positive for all our new reporting segments, apart from Europe.
The structure impact was almost neutral, with the impact from the acquisitions being offset by the divestments, especially part of our pipe business in China. The acquisitions impact reflected the acquisition made in new niche technologies such as Kaycan in technical solutions, emerging markets like Joinleader in adhesives in China, and in the reinforcement of our strong positions like Hunter Douglas in the ceilings business. The impact was positive in all segments apart from in Asia because of Pipe China. Coming back to the most important part, the like-for-like growth. We started the year with very good sales trends, helped by overall supportive wider markets as well as an easier comparison basis due to the harsh winter weather that we saw in the first quarter last year, particularly in Europe. As a result, group volumes increased by 3.1% for the quarter.
We also achieved the pricing of 2.6% in Q1. We are pleased to see our focus on pricing pay off once again. This is important as we continue to see inflation in raw materials and energy, even if current price trends confirm that the inflation should be less than 2018. Regarding the impact of working days, the first quarter had a small negative working day effect of around -0.5%. We will still see a negative working day impact in the second quarter of around -1%. Then catch up these negative impacts in Q3 with a positive impact of around 1.5%. Q4 should be slightly negative. I will now comment on each of our five new reporting segments. Starting with High Performance Solutions, we saw like-for-like growth of 2.4% in Q1. Industrial markets were overall supportive, apart from the weakness in automotive market.
Mobility market held up well despite the declines in automotive in Europe and in China, supported by market share gains. Our differentiation strategy of moving towards high value-added products continues to pay off. In the industrial market, the sales stabilized. The level of activity in ceramics is in line with second half 2018. North America was slightly down as a result of a high comparison basis, while Asia and emerging countries continue to advance. Activities serving the construction industry showed strong growth in our main regions, Europe and the Americas. Finally, the life sciences continued to show an excellent growth dynamic. Coming to the regions, Northern Europe grew 7.8% like for like in the first quarter, helped by the easier comparison basis given the harsh winter weather last year and benefiting from the good market conditions in our main countries.
Distribution in particular, had a very good start to the year. Our industrial businesses progressed well. The Nordic countries started off the year with very good sales trends in all businesses. In particular, distribution, we showed double-digit organic growth. The construction market continued to show good sales momentum. In the U.K., despite the uncertain market environment, it continued to grow. Germany progressed well, continuing on from the better trends seen in the second half of 2018. Lastly, Eastern Europe continued to show good growth in all our main businesses and countries, particularly in Poland, Czech Republic, and Russia. Coming to Southern Europe region, posted good organic growth of 5% on an easier comparison basis, given last year's harsh winter weather. The growth was led by distribution and all industrial businesses grew, especially plasterboard, insulation, and mortars. Pipe sales increased slightly, along with our efforts to improve its competitivity.
France continued to show good growth trend with a very good start to the year. Once again, supported by both renovation and the new construction market. insulation continued to benefit from strong demand in energy efficiency related renovations. Amongst our other countries in the region, Spain posted good growth, Benelux and Italy progressed. The Middle East and Africa had a more difficult start to the year, with sales down for the quarter, particularly in Turkey. One word on distribution across all Europe. It had a good start to the year, with sales up by 7.3%, like-for-like, of which pricing contributed to 1.5%. The Americas region grew by 4.6% on a like-for-like basis. North America benefited from good pricing at the expense of volumes, in a context of a continued raw material inflation. Exterior Products stabilized on a tough comparison basis, benefiting from strong pricing.
In Latin America, we saw a strong growth, once again with an accelerated recovery of Brazil. Now coming to the Asia Pacific region, increased by 7.7% organically, supported in particular by building glass and plasterboard. India benefited from additional sales from its new float line, start of fifth float line, and the plasterboard continued its strong growth trajectory. Amongst our other countries in this region, China also grew. In summary, we have started the year with a very good overall sales trends, particularly in Europe, with an easier comparison basis, and we continue to have a good pricing level. I will now hand over to Pierre-André for concluding remarks.
Thank you, Sreedhar. Now let me make a few comments about our strategic priorities and the outlook for the rest of the year. First, our new organization structure has been fully in place since January 1st, and the enthusiasm of the team on the ground is very encouraging. We are on track to unlock EUR 250 million in additional savings by 2021, and our program to divest businesses representing more than EUR 3 billion in sales by the end of this year is progressing well, with divestments representing over EUR 2.4 billion of sales already completed or announced. We confirm our action priorities for the year, in terms of our cost savings program, with EUR 300 million of additional savings through our operational excellence program, as well as more than EUR 50 million savings from the Transform & Grow program, mainly through SG&A reduction.
We confirm our CapEx program, our commitment to our investment, and our focus on high level of free cash flow generation. I reemphasize our focus on pricing. We confirm, in fact, the outlook for our new reporting units in 2019. For High Performance Solutions, the industrial market should remain supportive, particularly in the U.S., despite uncertainties on the automotive market in Europe and China, following a difficult start there. Northern Europe should progress despite uncertainties remaining in the U.K. We expect overall growth for the region of Southern Europe, Middle East and Africa, with a construction market in France, which should be supported by progress in renovation, while new construction could be more difficult from the second half. Market growth should continue in North and Latin America, and we expect also growth in Asia.
To conclude, and as you have seen in the press release and in line with our objective as announced in February, we are targeting with confidence a further like-for-like increase in operating income in 2019. Now, Sreedhar and I, we are happy to answer any questions you may have.
Ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad. The first question comes from Yves Bromehead from Exane BNP Paribas. Sir, please go ahead.
Good evening, gentlemen. I will have two questions if I can. My first question is on underlying trends. We have seen some of your peers in the U.S. cutting their gross projection on the back of slower demand in new residential construction and also some industrial markets. Some European names are also talking, as you just mentioned, about sequential slowdown in new building activity in H2. Could you maybe help us to understand how you see underlying trends going forward, especially in Europe and North America, and how you see that organic growth phasing throughout the year with the tougher base effects? My second question is on your capital allocation strategy. Last time you updated the market, you mentioned that you would be undergoing further portfolio review to lead to additional divestments.
Could you maybe update us on this and if you already have in mind a target in the medium term, and also what is the group strategy in terms of the proceeds of those divestments? Thank you very much.
Concerning the first question on the underlying trend, I would like first to remind you that at the end of February, when I presented the results of 2018, I already told you that we had a good beginning of the year, and I was reasonably optimistic for 2019. At that time, I sounded more optimistic than the investment community. I'm still in that mood, and the first quarter is clearly in line with our expectation. There was, as usual, during the first quarter in the winter season, some question marks, because you know that the winter has an impact. Last year, we had a very negative impact in Europe, even more in the northern part of Europe than the southern part of Europe. We had last year, a good weather overall in Europe. Concerning the U.S., last year was a cold part of the U.S.
This year was cold as well. It's generally cold in the U.S. in the first part of the year. Not always the same way in the various regions, but I don't think there are significant weather impact. If I exclude this weather impact, the underlying trends are in line with what I have in mind, and they are good. You have seen, you have mentioned some competitors or peers who have expressed recently sales for the first quarter and outlook. Our sales for the first quarter in the same businesses are better, both as far as industrial markets are concerned and in construction in the U.S., where we have put a very strong focus on pricing. Concerning the trends going forward, I have not changed the scenario we have had for the year. We have not seen a change in the trend.
We said that the industrial markets would continue to grow, but at a lower pace than last year. We are seeing that. In construction, I expect, as I said, the new construction market in France to go down in the second half. Renovation, I would say the trend in the last two, three months is probably a little bit better than what we could have expected. I don't change at all my views on the French market for this year. We may have some, in terms of growth and stimulus on growth, the news are slightly more positive in terms of macroeconomics than they were two months ago. Concerning Nordics, where I have disagreed with market analysts last year, we have posted very good growth in 2018. I confirm this year that we should have less growth, but a reasonable level.
We have started the year extremely well, with double-digit nearly sales in the construction market in the Nordics. We are not going to continue at that level. Clearly, there is also the Easter impact. I have not changed my forecast for the year for the Nordics. There is always the question, which I am never able to answer completely, is that when you have had bad weather, are you going to recover? When you have a good weather, are you going to lose it again? Last year, in fact, we didn't recover, maybe we'll lose a little bit in April and May, but that's not what I expect at this time. No, underlying trends have not changed from what I was having in mind in February, and we have had a good start to the year in addition.
On your second question on capital allocation, I have no more comments to make on that. That's what I said in February. We have started a number of reviews within the framework of our new organization, but there is no decision which has been made, and I have no specific number to communicate. We are progressing well with our current plan to divest EUR 3 billion of sales this year. We will, for the time being, in terms of numbers, I concentrate on that. We have a number of reviews going on, but I have no specific things to communicate today. Concerning the proceeds, they will fuel our. They will be part of the pot, I would say, in terms of our CapEx, in terms of our dividends, which are always my first two priorities.
We will continue our program when the opportunities are good in terms of small acquisition and our buyback program, where we have already bought back 4 million of shares in the beginning of this year.
Thank you very much. Could it be fair to assume that you actually feel a bit more optimistic today versus February?
No, I am not more optimistic than in February. I am not more negative and I was not very negative. I think there are some areas which are going to slow, there are some good areas. I have the same mood for the rest of the year, what has changed is that, I told you that the year had started well. I think we have had a good first quarter in the bank, which is good also. We don't comment on profit today, it's already a good start of the year.
Great. Thank you very much. Have a good evening.
The next question comes from Elodie Rall from JP Morgan. The floor is yours.
Hi. Good evening, everyone. Couple questions, if I may. First of all, on cost inflation, please could we have an update on energy and raw materials cost inflation? I think your previous guidance for the year was to be slightly lower than last year, I think it was an increase of EUR 600 million last year. Please could you provide us an update in your view on this? Second, would you also have an update on the discussions with the government and the trade unions regarding the potential disposal of pipes, the Pont-à-Mousson, following the recent news flow? If I may ask a third question on HPS, the like-for-like growth has been a bit slower in Q1 than last year at 2.4%. Notably, you mentioned that the activity has stabilized in ceramics, that led to North America being slightly down.
Yet in the outlook, you're guiding for industrial markets to be supportive in America. Does that mean that you expect ceramics to pick up in H2? What would drive a more supportive outlook? Thank you.
Sreedhar, first question.
Yeah. Okay. I'll take the first question on the inflation. We continue to see the inflation in raw material and energy. Having said that, it still remains quite volatile. You see that the oil price in October it was 86, in December it became 50, and now it's again back to 75. It still remains volatile, but I can only say that the trend which I see, the current trend, the prices of our raw material and energy, I can only confirm that it should be lower than last year. The first quarter, I think we have a good positive set.
In terms of pipe, there have been a lot of comments from outside Saint-Gobain in this topic in the French press. I have not commented, and I have nothing to say about it. We are continuing the recovery plan that we announced 18 months ago, and it's progressing well. At the same time, as Sreedhar mentioned in February, we are reviewing the best strategic option for the evolution of this business. We have started preliminary studies regarding a partnership that we could have for all or part of our business. We have several options that we are currently looking at, but I have no additional comment to make at this stage, and this is preliminary studies. Concerning Americas, maybe you want to answer.
No, the HPS.
Yeah.
Concerning HPS, we just have to keep in mind that the last year, the ceramic was exceptionally good year for us. It's basically a comparison basis, which is high. Otherwise, it's in line with what we saw in the second half.
All right. Thank you very much.
The next question comes from Jean-Christophe from CM-CIC. Sorry, CIB.
Monsieur Lefèvre-Moulenq.
[Non-English content]
We call you by your first name.
Anyway, I am very difficult name. Sorry.
Yeah, you have a long name.
I have a long name. I didn't choose it, sorry. I cannot change. Three question for me, if you accept. First one, could we have more flavor on North America business? We have 1.9% organic growth, lower than for the other geographical zones. Could we have some details regarding materials and HPM? Secondly, could we have the order of magnitude of flat glass pricing? Last question regarding the provision made end of 2018 for German distribution, is that sufficient to complete the deal, or could it be necessary to make additional value correction for these assets? Many thanks.
On the first question of North America, the activity level is reasonably good. You saw 1.9%. In fact, our construction activity is also slightly positive. There is a strong emphasis that we have put on price, because we had an increase in our raw materials. We have a very significant price increase in the majority of our construction businesses in the U.S., and we have had relatively low volume. In fact, the volumes are only slightly negative. You need to remember that for our biggest business, which is roofing and construction in the U.S., we have had a very high comparison basis. In 2017, there were very high sales, which maintained in 2018 because our distributors were putting inventory, hoping the same storm than the storm in 2017. This year, we have had a lower volume, but we have had good pricing.
We expect the year, in terms of construction, to hold up reasonably well with some good trends in renovation, which could continue to be good in volumes, and construction activity which is still at a reasonably low level. I think that the fact that the volumes are down for the first quarter is not necessarily an indication that they are going to be down for the whole year. We expect more something like flat. The good news is that we have very good pricing, very strong price increase in the first quarter in North America. Concerning the activities in the HPS business are also positive. Globally, more or less the same level, a little more driven by our plastics life science business, which is very good. Ceramics that Sreedhar already commented, they are a little bit down in the U.S.
I just want to add that, if you noticed it, that the overall price increase in total Americas is 6.7%. It's substantially higher than all other regions.
Yes. In a global America aspect for North America is the order of magnitude of the price hikes the same? I guess slightly bigger.
Yeah. It is slightly, but it's around 6%.
Oh, 6%. Very good. Thanks, Sreedhar. Regarding the other questions, German distribution for sale.
We are in the process of divesting this business, and we will give you more details when the deal is signed, but I don't expect a problem.
Okay, for the flat glass price levels?
I know you would always ask for MMF price. It's same what I said in the end of February. Sequentially, it is stable. If you compare with last year first quarter, it's 1.5% increase. It's actually in a good shape.
Many thanks, Sreedhar.
The next question comes from Josep Pujal from Kepler Cheuvreux. Josep, go ahead.
Yes, hello. Two questions on my side, please. On the price increases seen in Q1 and which are slightly smaller than in H2 last year, at the same time you also say that the cost inflation is lower too. My question is, are those price increases of the Q1 enough to offset the cost inflation in Q1? My second question is on LATAM. When I look at your Americas reporting and also you give North America on the other side, I did not have the time to do the calculation, but that means probably that LATAM had an almost double-digit like-for-like growth, maybe. Could you give more flavor on that? Was it linked to anything exceptional, or could you give more flavor on that region? Is it purely the recovery of Brazil, or are there other countries that they are doing very well? Thank you.
I'll take the first question on the price inflation spread. As I said, the first quarter, the price inflation spread was positive. As you saw, we keep saying this quite often, that we remain focused on pricing, and that's something which has been clearly one of the topmost priority in the organization. Last year, if you recall, the second half, we actually privileged pricing over volumes. We ended the year with a higher price increase. Clearly, we were put in a positive situation when we started the year. Clearly, if you look at the pricing for the first quarter, it is very much in line with what we expected, and it is certainly compensating the inflation.
That would remain our objective for the year, to make sure that we pass on all the inflation to the market, which we do it successfully year after year, leaving very few exceptions.
Concerning Latin America, yes, we are double digits. In fact, we are at 13% like-for-like growth in Latin America, and most of our countries are doing quite well. Brazil has had a good recovery in our construction market. Mexico is doing very well. There is one country which is a little more difficult than it was last year, although countries were very good. On the back of the investment that we have made also, and which is Argentina, is a little more difficult since a few months than it was before. Good trends in both Brazil and Mexico, and the other countries where we are, which are a little bit smaller.
Thank you.
Next question comes from Sven Edelfelt from Oddo BHF.
Yes. Hello, good evening, gentlemen. I had two questions.
Yeah.
Firstly, the base effect was very favorable in Q1. To what extent it will reverse in Q2 and potentially be negative, as this quarter was very strong last year? That's the first question. The second question, the disposal program is progressing well. I would like to understand if Saint-Gobain is preparing for a structural acquisition anytime soon, or if you are in a mode of disposal and reorganization.
Well, concerning the first question, I remind you a few things that we have already said, is that last year we had a negative impact this year of the working days in the first quarter, which is a negative 0.5%. On the other hand, we had, as I said, in Europe, not elsewhere, but in Europe, we had a difficult weather in the month of March, especially last year. Yes, as I said, globally, the comparison basis was easier because of the weather, but not because of the number of days. Last year, we had a good growth in the second quarter. Last year we had one working day more, and we had the impact from a very low comparison because of the cyberattack in 2017, which was more than 2% of sales on the second quarter.
From that standpoint, you have to be careful when you look at the comparison basis of last year, which is more relative to the year before than in absolute terms. On the former question, I said that whether we are going to lose back a little bit of the good sales because of the weather is still uncertain. Last year, I don't think we recovered a lot of the loss of the first quarter. This year, I don't know. I don't know whether we may lose a little bit, but it's early to know. Those are the points. The second question-
Could you give us, sorry, could you give us a sense of how April is progressing?
No, I don't have anything to say special on April. The only thing I know, and it is valued more in some countries than in others, is that the Easter week last year was in March and this year was in April. If I take that out, the trends in April for the time being, I don't see a change. There. Concerning your second question, no, I didn't mention that in February, and I have no change. There is no change from that standpoint in our priorities, which is to continue our policy in terms of M&A or small acquisition when they make sense. We have done a few small ones, very small ones in the first quarter, including one that we announced yesterday to establish a plasterboard business in Mexico.
You know about our divestment program, for the time being, I concentrate on those two things.
Thank you very much.
Next question comes from Arnaud Lehmann from Bank of America. Sir, please go ahead.
Thank you. Good evening, gentlemen. Two questions, if I may. Firstly, on the High Performance Solutions division, you report broadly stable volumes. I know you don't report the old style anymore, the old divisions, but could we have a feel for the trends between high-performance materials and automotive glass? Basically, I'm trying to understand if the automotive glass decline was offset by more positive trends overall in HPM. That's my first question. My second question is on distribution. You report 7.3% like-for-like growth for distribution Europe in your appendix. Is it a level where you start to get positive operating leverage, improvement in margins, including obviously the digitalization cost that you still have for this year? Thank you.
Okay. I take the first question on HPS. Arnaud, the sales of Sekurit, the automotive glass is certainly impacted negatively in Europe and China. With all our initiatives of working on value-added products and developing the new customer base, certainly it is helping us to compensate, maybe more than compensate, the downward trend which we saw in these two regions. I just want to confirm that Sekurit automotive glass had a positive like-for-like growth in the first quarter.
Similar to-
Yeah. It's in line with the average of High Performance Solutions.
Okay.
On the second question, yeah, we don't give a profitability by quarter, number one. Number two, I don't expect sales of the distribution division like for like to be at 7% for the year. Third, I confirm what I said in February, which I expect to improve the margins for the whole year in distribution. You can derive from that we have taken a little bit of comfort in the first quarter.
Absolutely. Makes sense. Thank you very much.
Next question comes from Will Jones from Redburn. Sir, please go ahead.
Thanks. I've got three, if I could please. The first, just going back to France, when we looked at the second half, you highlight the likely decline in new construction at that point. Do you have a number in mind or a scale of the decline that you might see in that area of construction in France in the second half? When that happens, do you think that renovation in other areas can offset it? The second was just focusing on Germany, where you sounded quite positive in the statement. It's a country where recently you flagged issues around labor availability. Have those problems been overcome there now? I guess more generally on labor availability, are there any countries where that's an issue currently? The last one was just more a point of confirmation.
Obviously in the first half of last year, you'd seen some issues around production facilities in flat glass. Can you confirm that across your portfolio, there's nothing that we need to be aware of around any production issues at this point in time? Thanks.
Concerning labor availability, I don't have specific new comments on that. I just want to say that you could be disturbed by the fact that we have a very good growth in the first quarter. On the other hand, how we can sustain that given the fact that we quoted this labor availability. You need to have in mind that the absolute level of activity in the winter is clearly lower than in the summer. Having more activity in the winter is not an issue for a small mid-size company who has people who sometimes are not busy enough in the winter. I think that it doesn't change the overall picture, but it's not a factor during the winter.
Concerning Germany, I must stress that we saw already, especially in the construction market, much better trends in the second half, which were globally compensated in Saint-Gobain because we saw a decline in Germany in the automotive market in the second half of last year especially. We see those trends continuing. If I take out the fact that the weather has helped in the first quarter, I think the trends in construction are a little bit better than they were one year ago. We see a continuation of the trend of the last few months. I am positive for Germany for construction activity this year. I don't know whether the labor availability has been completely solved, but I think there are some progress in Germany. The second question was?
The France renovation market.
Concerning France, I made a lot of comments about that in February. There is no change. In my view, I consider that the renovation, which is slightly improving, will compensate the decline in new in the second half. That's what I have in new. You need to have in mind that our renovation market for Saint-Gobain is much bigger. It's about 70% versus 30% for the new construction. That's the reason why. The rate of growth in renovation will be less than probably the rate of decline in new, but I think they should compensate, at least for Saint-Gobain, clearly in the second half.
Is there industrial issues in the flat glass? I can answer that. I think, as we said in February, I think all these issues are behind us. It's true that we did have an impact on our results last year. There are no such big issues.
They were solved by the third quarter.
Yeah. To be precise to your question, there are no big issues to talk about at this point of time.
Thank you.
Next question comes from Robert Gardiner from Davy. Sir, please go ahead.
Good evening. Thanks very much. Two quick ones from me. One, you might just expand on your comments on the U.K. I know there's little you can add in terms of politically, in terms of the outlook there. Just in terms of how the market has trended for you through Q1, how you think about it for the 12 months. I also note in your Northern European division, you talk about strength, particularly in gypsum and in mortars. I am just wondering what you saw in insulation across Europe through the first quarter. Thank you.
Concerning the U.K., there are uncertainties and we do not know what is going to happen. That being said, we had a reasonably good first quarter in the U.K. also because the weather was not very good in the first quarter of last year. We had also an easy comparison. I would say that the sales are all very well in the U.K., globally around 5%, like for Saint-Gobain in the first quarter, both volume and price. I think also we have in some businesses had some good activity. I am still uncertain for the year depending on the scenario about Brexit, but for the time being, it has been going well.
The other question was on insulation. I think we have a good trend of insulation. The first quarter was good for us.
Yes.
Especially in France.
I think the energy renovation market for our insulation business is picking up quite strongly. In fact, we have some small bottlenecking CapEx, which are really needed, which are coming into place. We have a good market, especially in France.
Okay. Thank you.
Next question comes from Gregor Kuglitsch from UBS.
Hi. Thanks for taking my questions. Two questions. One is on the new organizational structure. Can you give us a bit of a feel, I know it's still early days, how things are going? Any kind of positive and negative observations so far? Second question is, obviously, you've announced a few disposals or planned disposals in distribution. There's a number of assets on the block, for instance, in the U.K. Are you looking at these or are you simply saying at this stage that's not for you? Thanks.
You mean acquisitions in distribution?
No.
No. Disposal.
Yeah. Well, you've announced disposals, but would you consider some consolidation moves given some of the assets that are up for sale, or is that not on the agenda for you?
Oh, no, I don't think it's on the agenda for us, especially the large operation. That's not the way we look at it. Concerning the new organization, as I said in my introductory comments, I think it's going quite well. I think that the fact that we have given simplified and given more responsibilities at the country level is very well received in the countries. And I think the headquarter functions, which were maybe a little bit. There was some anxiety. We moved very fast because as I explained in February, we've announced many moves between end of November and January. I think all that is in place now. I think the momentum is quite good in this reorganization, and I feel very confident.
Thank you. Thank you very much.
We will tell you more in July, I guess.
On the savings and how things are progressing.
Yeah.
Next question comes from Nabil Ahmed from Barclays. Sir, please go ahead.
Yeah, good evening. Thanks for taking my question. I actually got three very quick ones, hopefully. First one on the pricing effect in Asia, the +0.7%, this is looking relatively low considering, I assume, significant cost inflation in those countries. Could you come back on that? Is it a mixed effect or any specific reason why the pricing is looking lower than for the rest of the group? Second question, coming back on the distribution Europe performance, the 7.3% like-for-like growth, and forgive me if you already mentioned that number, but how much was pricing into the like-for-like change? Finally, Pierre-André, I think you mentioned some possible fiscal stimulus in your introduction. I guess you were talking about France specifically. Could you elaborate a bit on what you would expect there? Are you referring to the new measures for the renovation? I'm talking about the Denormandie scheme.
Is that also the reason why you sound a little bit more optimistic about French renovation market? Thank you.
I'll take the first two questions. Pricing in Asia, it's true that it's lower, as compared to what we have realized in other regions. It's primarily we had certain challenges in Southeast Asia to raise the price. Even China was, I would say, a bit of a challenge to push the price. Sometimes it's quite normal situation when you have the volumes not there and the market is in a difficult situation. Pushing price also becomes equally a challenging point. Second question on distribution, Europe, we have 1.5% is the price impact overall for us.
For rest of the volume, yes.
Yeah, rest of the volume.
Concerning energy renovation, I think that there are a few measures which are gathering speed. First, the energy certificate is quite effective in France. Second, there have been a few things following, I would say, the Yellow Vests movement on the announcement that our president made concerning reintroduction of tax credit for windows, which is also positive. Then there are some tax, small things on for the buying all goods to make renovation. There are some tax incentives that is called the Denormandie scheme, which is a little bit early to say whether it's going to be very significant, but it's going in the right direction. Then on the trend, we have had a first quarter which was relatively good.
The association of the craftsmen is also saying that it's a little bit better than what they said two months ago, which is in line with our members, even though our numbers are a bit better than their numbers. Then I don't know what the president is saying at the moment, but maybe there is a little more. I saw that there was yesterday an agreement on social housing, which is also positive. I think the idea of helping energy renovation in France is an idea which is popular at the moment. How the schemes are going to be done exactly, there are some to be seen, and some historically have worked, some have less worked. I would say that the general feeling is probably on those topics a bit more supportive than it was six months ago.
Okay. Thank you.
Next question comes from Eric Lemarié from Bryan, Garnier .
Yes, good evening. Two quick questions from my side. First, going back to France and renovation, what's your view on the growth of the renovation market in France currently? In term of number, what is the market growth in your view, especially for the energy efficiency renovation? Still in France, do you already see today a transfer from the new residential to the renovation market in France in Q1, or is it not the case yet?
Well, Q1 was quite strong. There is also this weather impact. What I would say is that the trend I see at the moment on renovation for the market is around, in volumes, is around 1.5%. Obviously, the activity was higher in the first quarter. There was also this weather impact. As I said for Germany, the level of activity still in the first quarter is always lower than in the summer. Have we seen a transfer from new to renovation yet? Honestly, I don't know. I don't think the new activity has started to slow down in the first quarter. I have not seen that yet.
Okay. Thank you.
We have no further questions.
Okay. Well, thank you, and good evening to everybody. Our next conference call will be on July 25th for the first half results. I will also make some comments at our general shareholders meeting in early June. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect.