Saint Gobain: Despite a difficult construction market, Saint-Gobain delivers a record margin and progresses on the stock market

(BFM Bourse) – The construction materials specialist is holding its own, announcing a record margin in the first half, despite complicated markets. Saint Gobain is renewing its target of a double-digit operating margin in 2024, for the fourth consecutive year.

It’s a clean sheet for Saint-Gobain so far. After slightly exceeding expectations in the first quarter, the CAC 40’s oldest company has once again delighted the market following its publication.

The share price of the group, whose origins date back to the 17th century under Colbert, rose by 3.8% at around 3:40 p.m., after revealing first-half results that were welcomed by investors.

A difficult context in construction in Europe

Over the period, the group published revenues of 23.46 billion euros, down 4.9% on a comparable basis, and down 6% excluding exchange rate and scope effects.

This is close to analysts’ expectations since the consensus was at 23.55 billion euros and anticipated a decline of 4.9% in comparable data, notes Oddo BHF.

Saint-Gobain continues to suffer in Europe (a region that also includes the Middle East and Africa and which represents 56% of revenues) where its sales fell by 7.9% in comparable data, undermined by the decline in new construction in the region. On the other hand, activity remains growing in the Asia-Pacific (+1.2%) and Americas (+1.2%) regions. This last region is notably driven by North America (+4.1%), where the group has been strengthening in recent years through acquisitions.

A record margin

Above all, beyond the activity, it was the group’s other lines of account that caught the attention of investors. The operating result proved resilient, reaching 2.75 billion euros in the first half, which is close to the group’s historical record of 2.81 billion euros. The corresponding margin, for its part, progressed to “a record level” of 11.7% compared to 11.3% a year earlier.

“The operating margin record in the first half of the year at almost 12% is a good surprise and seems to open the door to exceeding this figure in the future,” says Oddo BHF.

Net profit attributable to the group increased by 14.5% to 1.66 billion euros.

This publication is in line with the expectations of UBS, which indicated at the beginning of July that it expected “solid operational performances”.

But more than the figures themselves, the market also appreciates the management’s confidence for the rest of the financial year. Saint-Gobain anticipates continued improvement in activity in the second half of the year, in “a context of markets that are still difficult for new construction in Europe”, which are, according to the group, “close to a low point”.

Following this publication, the company is expecting a double-digit operating margin in the second half of the year. It also confirmed this same objective for its margin for the whole of 2024, for the fourth consecutive year.

Sabrina Sadgui – ©2024 BFM Bourse