- Record operating margin of 11.7%
- Sequential improvement in volumes
- Positive price-cost spread with prices stable sequentially
- Three strategic acquisitions focused on profitable growth: CSR, Bailey and FOSROC, together adding around €2bn to full-year sales and around €450m in EBITDA (including €100m of synergies in year 3)
- More than 2/3 of the Group’s pro forma operating income is now generated in high- growth geographies: North America, Asia and emerging countries
- Strong free cash flow generation of €2.5bn, with a cash conversion ratio of 75%
- Double-digit operating margin expected for H2 and full-year 2024, for the fourth consecutive year
Benoit Bazin, Chairman and Chief Executive Officer, commented:
“Our first-half results once again demonstrate the success of Saint-Gobain’s new profile, reflecting the Group’s ability to adapt to different macroeconomic environments and to continue to outperform. The roll-out of our comprehensive range of sustainable and innovative solutions and the resulting enhancement in our mix, together with our decentralized organization by country with accountability on commercial performance and on proactive cost management, have enabled us to deliver a new record operating margin and strong free cash flow generation. I am very grateful for our teams’ dedication and their contribution to the Group’s consistent improvement in its performance.
Since the start of the year, Saint-Gobain has accelerated efforts to reinforce its profitable growth profile with three landmark acquisitions in light and sustainable construction: CSR in Australia, Bailey in Canada and FOSROC in construction chemicals, mainly in India and the Middle East. Pro forma for these changes in structure, more than two-thirds of Group operating income is now generated in North America, Asia and emerging countries, areas that enjoy strong structural growth and where Saint-Gobain is achieving an excellent performance.
New construction markets remain difficult in Europe but are nearing a low point and we expect trading to continue to improve in the second half. I am confident that 2024 will be another successful year for Saint-Gobain, with a double-digit operating margin in the second half and over the full year, for the fourth consecutive year.”
Successful strategic execution: a new profitable growth profile
The Group continues to outperform its markets thanks to the pertinence of its strategic positioning at the heart of energy and decarbonization challenges, and the strength of its local organization by country, offering comprehensive solutions to its customers.
- Almost 40% of Group sales rotated since 2018, with €9.4 billion in sales divested (EBITDA margin less than 5%) and €6.5 billion in sales acquired (EBITDA margin of around 20%);
- Acceleration in the Group’s repositioning towards North America, Asia and emerging countries, which accounted for 67% of the Group’s operating income in the first half (pro forma for recent changes in Group structure): 35% in North America, 32% in Asia and emerging countries, and 33% in Western Europe;
- Further strengthening of the Group’s presence in construction chemicals, with €6.2 billion in annual sales (pro forma). The acquisition of FOSROC (closing expected in first-half 2025) will reinforce Saint-Gobain’s presence in high-growth emerging markets, particularly India and the Middle East, and will perfectly complement the market positions of Weber, Chryso and GCP;
- A comprehensive range of sustainable, differentiated and innovative solutions – leveraging integrated systems and an industry-leading low-carbon offer – broadening the range of options offered to each customer and reinforcing the Group’s mix as well as its capacity to capture a bigger part of the value chain. Saint-Gobain has the broadest range of low-carbon solutions in the world, particularly in terms of plasterboard (Klima), glass (ORAÉ®), glass wool (LANAÉ®), additives and admixtures (Chryso EnviroMix®);
- A local organization, with 90% of CEOs native to their country, resulting in close proximity to customers, good pricing power, strong adaptability, efficiency gains and accountability for local teams;
- Strong operating margin growth in recent years, reaching a new record-high in first- half 2024 despite a difficult macroeconomic environment.
Asia-Pacific: sales growth and record operating margin
The Region delivered 1.2% organic growth in first-half 2024, driven by strong momentum in India in particular. The operating margin hit a record-high in the period, at 13.0% (versus 12.5% in first- half 2023), supported by volumes and well-managed pricing.
India continued to outperform, delivering volume growth once again driven by its comprehensive and innovative range of solutions. The Group is seeing the benefits of its numerous recent sustainability-driven initiatives in the country, including the production of low-carbon glass (ORAÉ®, reducing CO2 emissions by 42%) and very low-carbon plaster. In a difficult new construction market in China, the Group continued to capture market share against a high comparison basis in the second quarter, extending its footprint towards inner China thanks to the success of its highly digitalized sales model. South-East Asia remained at a good level, led by Malaysia, Indonesia and Singapore, owing mainly to the enhancement of its offering and a strong innovation drive.
2024 outlook and strategic priorities
In a geopolitical and macroeconomic environment that remains challenging, Saint-Gobain will once again demonstrate its resilience and its excellent operating performance in 2024, thanks to its focused strategy and its proactive commercial and industrial initiatives allowing it to outperform its markets.
Saint-Gobain expects some of its markets to remain difficult over 2024 overall, but in the second half should benefit from an easier comparison basis and a sequential improvement in certain countries:
- Europe: resilience in renovation; new construction remaining difficult before gradually reaching a low point country by country;
- Americas: construction to hold firm in North America (new build and renovation); recovery expected in Latin America;
- Asia-Pacific: good growth led mainly by India and the integration of CSR;
- High Performance Solutions: Construction Chemicals to see dynamic growth; Mobility to hold firm and a contrasting situation on industrial markets in terms of demand.
Against this backdrop, in 2024 the Group will continue to implement the strategic priorities set out in its “Grow & Impact” plan for 2021-2025:
- Continue our initiatives focused on profitability and free cash flow generation
- Constant focus on the price-cost spread;
- Productivity initiatives and swift adjustments from country to country where necessary;
- Capital expenditure slightly above 4% of sales, with strict allocations to high-growth markets.
- Outperform our markets by strengthening our profitable growth profile
- Enrich our comprehensive range of integrated, differentiated and innovative solutions offering sustainability and performance for our customers;
- Continue our value-creating targeted acquisitions and divestments dynamic, and benefit from the successful integration of recent acquisitions.
- Continued focus on our ESG roadmap as leader in sustainable construction
- Promote our positive-impact and low-carbon solutions among our customers;
- Extend the decarbonization of construction to the entire value chain, playing our full role as leader in light and sustainable construction.
