Compagnie de Saint-Gobain (SGO) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw sequential improvement in organic growth, driven by strong activity in the Americas, Asia-Pacific, and High-Performance Solutions, while Europe remained weak, especially in new construction, with renovation showing resilience.

• Recent acquisitions in North America, Asia-Pacific, and construction chemicals contributed positively, with successful integration underway for Bailey (Canada), CSR (Australia), and FOSROC.

• Achieved record operating and EBITDA margins in H1 2024 despite a challenging environment, with strong recurring net income and free cash flow generation.

• Strategic focus remains on light and sustainable construction, cross-selling, and disciplined capital allocation to accelerate growth in fast-growing markets.

Financial highlights

• Q3 2024 reported sales were €11.6 billion; nine-month sales were €35.0 billion, down 3.9% like-for-like, with a 3.4% positive structure impact from acquisitions.

• Organic sales volumes declined 1.5% in Q3 and 3.1% over nine months; prices were down 0.5% in Q3 and 0.8% over nine months, but a positive price-cost spread was maintained.

• Record H1 2024 operating margin at 11.7% and EBITDA margin at 15.6%; recurring net income reached €1.7bn in H1 2024, with free cash flow at €2.5bn and a 75% cash conversion ratio.

Outlook and guidance

• Further increase in operating margin is expected in 2024, with a new record margin for the full year despite challenging macroeconomic and geopolitical conditions.

• H2 price-cost spread will remain positive but smaller than H1; volumes expected to remain negative in H2.

• Gradual improvement in volumes anticipated for 2025, with no V-shaped recovery; North America and emerging markets expected to remain strong.

• Confident in maintaining a positive price-cost spread in 2025, supported by proactive pricing strategies.