Compagnie de Saint-Gobain (SGO) Q2 2024 earnings summary

Executive summary

• Achieved record operating margin of 11.7% in H1 2024, with strong free cash flow of €2.5bn and a 75% cash conversion ratio, despite challenging markets.

• Recurring net income reached €1.7bn, with EPS up 16.5% to €3.31 and free cash flow up 12% year-over-year.

• Strategic acquisitions (CSR, Bailey, FOSROC) to add €2bn to annual sales and €450m to EBITDA, reinforcing presence in high-growth regions.

• Over two-thirds of operating income now generated in North America, Asia, and emerging markets, reflecting a well-balanced geographic footprint.

• Resilient performance with sequential volume improvement and positive price-cost spread.

Financial highlights

• H1 2024 sales totaled €23.5bn, down up to 6% year-over-year, mainly due to lower volumes in Europe.

• Record EBITDA margin of 15.6% (EBITDA at €3.65bn), and operating income at €2.75bn.

• Recurring net income at €1.66bn; recurring EPS at €3.40.

• Free cash flow increased to €2.5bn, with a 75% cash conversion ratio.

• Net debt/EBITDA ratio at 1.4x at June-end, expected to remain at the low end of 1.5–2x range after acquisitions.

Outlook and guidance

• Double-digit operating margin expected for H2 and full year 2024, marking the fourth consecutive year.

• Sequential volume improvement anticipated in H2, with low single-digit volume decrease for the full year.

• Price effect to remain slightly negative in H2, but less so than H1; positive price-cost spread expected for full year.

• Free cash flow generation to remain strong for the full year.

• Continued focus on profitability, free cash flow, and strategic acquisitions/divestments.