REG - Compagnie St-Gobain - Half-year Report
Thu 18:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250731:nRSe4960Ta&default-theme=true
RNS Number : 4960T Compagnie de Saint-Gobain 31 July 2025
The worldwide leader
in light and sustainable construction
FIRST-HALF 2025 results
New record margin
and very strong operating performance
· Sales up 3.4% in H1 2025 in local currencies
· Record operating margin of 11.8%
· Record EBITDA and operating income in local currencies, up 7.0% and
5.0%, respectively
· Recurring EPS at a record level and 63% free cash flow conversion
ratio
· Strategic acquisitions for €1.7 billion in construction chemicals,
with Cemix (Latin America), FOSROC (India and Middle East) and other selective
acquisitions (Maturix, Interstar Materials, Soquimic, Isoltech)
· 2025 outlook confirmed: the Group expects an operating margin of more
than 11.0%
Benoit Bazin, Chairman and Chief Executive Officer, commented:
"Our first-half 2025 performance once again demonstrates the strength of
Saint-Gobain's new profile, with growth in sales and earnings despite a
certain wait-and-see environment in some markets. Asia and emerging countries
continued to drive growth for the Group and Europe reported a further
sequential improvement, while North America saw a slight decrease in sales.
The integration of our recent acquisitions has enabled us to strengthen the
quality of the Group's profitable growth profile and benefit from balanced
earnings across three geographic zones.
Our decentralized operating model by country, with no direct exposure to
customs tariffs, is key to the Group's ability to withstand external shocks.
Our country CEOs now oversee our entire range of solutions to accelerate the
Group's growth in each of its channels and end markets.
Despite a still contrasted macroeconomic environment and ongoing geopolitical
uncertainty, I am confident that 2025 will be another successful year for
Saint-Gobain, thanks to our dedicated teams: I applaud their commitment. At
our Capital Markets Day on October 6, we will present the Group's new
ambitions as worldwide leader in light and sustainable construction, in terms
of profitable growth and outperformance as well as value creation for all of
our stakeholders."
A new profitable growth profile
The Group continues to outperform its markets thanks to the strength of its
strategic position as worldwide leader in light and sustainable construction:
· An unrivalled range of sustainable and innovative solutions based on
integrated systems and an industry-leading low-carbon offer;
· Strong positioning in construction chemicals, with €6.5 billion in
annual sales (2024 pro forma for recent changes in Group structure). The
integrations of Cemix in Latin America and FOSROC in India and the Middle East
in the first half strengthen Saint-Gobain's presence in high-growth markets;
· A highly effective, proven operating model by country, further
strengthened since July 1, with a fully regional organization to accelerate
growth of our solutions country by country in each market segment (notably
residential, data centers, hospitals, schools, infrastructure);
· Balanced contribution to operating income from three geographic
zones: around 35% from North America, 33% from Asia and emerging countries,
and 32% from Western Europe. This balanced geographic profile has been
achieved thanks to the rotation of around 40% of sales since 2018;
· A transformed financial profile: structurally higher margins, a free
cash flow conversion ratio structurally above 50% and a two-fold increase in
earnings per share since 2018.
Group operating performance
Sales were up by 3.4% in local currencies and by 1.7% as reported, at €23.9
billion, reflecting the depreciation in most currencies against the euro in
the second quarter (negative 2.8% exchange rate impact). The positive 3.9%
impact from changes in Group structure mainly reflects four recent
acquisitions strengthening Saint-Gobain's profitable growth profile: CSR in
Australia, Bailey in Canada, Cemix in Latin America and FOSROC in India and
the Middle East. The optimization of the Group's profile also continued with
the effect of divestments, notably the pipe drainage business for buildings
(PAM Building).
On a like-for-like basis, sales were down by 0.5%, supported by growth in
Asia-Pacific, the Americas and High Performance Solutions, while Europe saw a
smaller decrease. With a negative working-day effect of 1% over the first
half, volumes were virtually stable at comparable working days (down 1.5% at
actual working days), a clear sequential improvement on second-half 2024 (down
2.0% at actual working days and down around 3% at comparable working days).
Prices were 1.0% higher thanks to disciplined execution in a slightly
inflationary cost environment and to the added value that our comprehensive,
sustainable and innovative solutions bring to our customers.
Operating income was €2,803 million, up 5.0% in local currencies (negative
currency impact of over 3%) to a record high. The operating margin also hit a
new record of 11.8% (versus 11.7% in first-half 2024), reflecting the strength
of the Group's strategic positioning and its very good operating performance,
enabling it to outperform in an environment marked by a certain wait-and-see
attitude linked to geopolitical disruptions.
Segment performance (like-for-like sales)
Europe: sequential improvement in sales and good margin resilience
Sales in Europe were down 2.2% over the first half, with volumes down 2.1%
based on actual working days and down around 1% at comparable working days, an
improvement on second-half 2024 (volumes down 3.1% based on actual working
days and down around 4% at comparable working days), as construction markets
stabilized or began to recover, depending on the country. The operating margin
narrowed only very slightly to 8.5% (from 8.7% in first-half 2024) reflecting
the downturn in volumes, but good cost management and price stability over the
first half (prices up slightly in the second quarter).
- Northern Europe edged up 0.4% in the first half, as the price effect
returned to positive territory, with volumes virtually stable at actual
working days and up by around 1% at comparable working days (owing to the
negative 2% working-day effect in the second quarter). The UK and Eastern
Europe reported growth, driven by customer demand for Saint-Gobain's
comprehensive range of solutions, offering customers differentiation and
performance. Nordic countries also reported slight growth, led by Denmark and
Finland, while Sweden and Norway were virtually stable. Germany was slightly
down, affected in the second quarter by a certain wait-and-see attitude in the
prevailing geopolitical climate and pending its stimulus package. Overall,
sales for the Region were supported by the start of a recovery on the
renovation market, which began to see the initial benefits of the rise in the
number of existing home transactions and improved household purchasing power,
whereas improved statistics in new construction typically take longer to
filter through to the business.
- Southern Europe, Middle East & Africa contracted by 4.0% over the
first half (and by around 3% based on comparable working days), with a clear
sequential improvement quarter after quarter (down 6.5% in fourth-quarter
2024, down 4.9% in first-quarter 2025 and down 3.2% in second-quarter 2025),
after a low point reached in France in fourth-quarter 2024. Saint-Gobain
continues to benefit from its renovation exposure and its comprehensive range
of innovative solutions that meet both residential and non-residential
construction needs. Saint-Gobain Solutions France oversaw the selection of 11
of the Group's brands and services for the future University Hospital in
Nantes, one of France's biggest construction projects. France's leading
indicators are encouraging, with a recent rise in existing home transactions,
growth in lending and the beginning of a recovery in housing starts after
three years of decline. Spain saw further growth, while Italy was down against
a high comparison basis. The Middle East and Africa delivered strong growth
led by Egypt, which benefited from the Group's recent investments to expand
its range of local solutions.
Americas: slight growth in sales and record margin
The Region delivered 1.3% organic growth, reflecting a slight contraction in
North America and growth in Latin America. The operating margin reached a new
record high of 19.7% (19.0% in first-half 2024), supported by rigorous pricing
and cost management and despite the decline in volumes.
- North America edged down 1.5%, owing to softness in the new construction
market related to a still high interest rate environment, but which
nevertheless remains at a satisfactory level, albeit below structural market
needs. The Group was supported by its significant exposure to renovation (over
50% of sales) and especially roofing products, which maintained a good level
driven by essential needs. In a more uncertain environment, the Group also
benefited from its highly local business model, protecting it from the direct
impact of tariffs. Saint-Gobain is extremely well placed to continue its
outperformance, thanks to its comprehensive range of sustainable solutions,
increasingly critical for adapting buildings to climate challenges. The Group
also benefited from its leading position in Canada, reinforced by the recent
integration of its local acquisitions. Additional local production capacity
will gradually be opened in the second half of 2025, enabling Saint-Gobain to
reinforce its competitive positioning and customer proximity in a structurally
supportive market.
- Latin America was up 10.4%, driven by further growth in Brazil - despite
the comparison basis starting to become less favorable from the second quarter
- and by the acceleration in Mexico during the first half. Mexico and all of
Central America have started to see spillover benefits from the Cemix
acquisition in construction chemicals. The other countries in the Region also
enjoyed good momentum thanks to an enhanced offer and mix.
Asia-Pacific: sales growth and record margin
The Region delivered robust organic growth of 3.9% over the first half, driven
by strong momentum in India and South-East Asia, which more than offset the
contraction in the Chinese market. The operating margin hit a record high of
13.4% (versus 13.0% in first-half 2024), supported by volumes as well as good
pricing and cost management.
India achieved further market share gains, with double-digit volume growth,
driven by its comprehensive and innovative range of sustainable solutions. The
May launch of India's first low-carbon plaster certified by an Environmental
Product Declaration illustrates the Group's pioneering commitment to improve
sustainable building standards in the country. This milestone follows on from
the arrival of the first Oraé(®) low-carbon glass (42% less CO(2)) on the
Asian market in 2024. China was again affected by the slowdown in the new
construction market over the first half, but outperformed thanks to
renovation. Growth in South-East Asia was led by Indonesia, the Philippines
and Vietnam, which benefited from the Group's investments in personalized
digital distribution and from the rollout of new product lines. The
integration of CSR is progressing well, in terms of both operational
performance and the development of complete solutions for the Australian
market.
High Performance Solutions (HPS): slight sales growth and resilient margin
HPS reported like-for-like sales growth of 0.8% over the first half, supported
by a good performance from construction businesses and Mobility, despite the
decline in other industrial activities. The operating margin narrowed slightly
to 12.0% (from 12.3% in first-half 2024) owing to lower volumes.
- Businesses serving construction customers were up by 3.4%, lifted by the
recovery in Adfors' reinforcement solutions exposed to construction markets in
Central Europe and by growth in the Construction Chemicals business (up 30% as
reported), driven by infrastructure projects and innovation to decarbonize the
construction sector. The integration of FOSROC (India, Middle East and
Asia-Pacific) - the acquisition of which was completed in February - is
progressing well and establishes Saint-Gobain as a construction chemicals
leader in India, where the growth dynamics are particularly promising.
- Mobility performed very well (up 2.6%), benefiting from its customers'
different regional growth dynamics, its positioning on high value-added models
and its innovation investments.
- Businesses serving Industry (down 2.1%) were affected - particularly in
Europe - by a certain wait-and-see attitude to investment due to geopolitical
uncertainties, while emerging markets and North America held firm.
Analysis of the consolidated financial statements for first-half 2025
The unaudited interim consolidated financial statements for first-half 2025
were subject to a limited review by the statutory auditors and adopted by the
Board of Directors on 31 July 2025.
In € million H1 2024 H1 2025 % change
Sales 23,464 23,852 +1.7%
Operating income 2,751 2,803 +1.9%
Operating margin 11.7% 11.8%
Operating depreciation and amortization 1,026 1,065 +3.8%
Non-operating costs -125 -50 +60.0%
EBITDA 3,652 3,818 +4.5%
Capital gains and losses on disposals, asset write-downs and impact of changes -164 -188 -14.6%
in Group structure
Business income 2,462 2,565 +4.2%
Net financial expense -215 -304 -41.4%
Dividends received from investments 1 8 n.s.
Income tax -546 -596 -9.2%
Share in net income of associates 2 0 n.s.
Net income before non-controlling interests 1,704 1,673 -1.8%
Non-controlling interests 44 44 0.0%
Net attributable income 1,660 1,629 -1.9%
Earnings per share(1) (in €) 3.31 3.29 -0.6%
Recurring net income(2) 1,820 1,797 -1.3%
Recurring(2) earnings per share(1) (in €) 3.63 3.63 0.0%
EBITDA 3,652 3,818 +4.5%
Depreciation of right-of-use assets -351 -368 -4.8%
Net financial expense -215 -304 -41.4%
Income tax -546 -596 -9.2%
Capital expenditure(3) -583 -711 -22.0%
o/w additional capacity investments 255 304 +19.2%
Changes in working capital requirement(4) 248 47 -81.0%
Free cash flow(5) 2,460 2,190 -11.0%
Free cash flow conversion(6) 75% 63%
ROCE 14.4% 13.7%
Lease investments 425 267 -37.2%
Investments in securities net of debt acquired(7) 847 1,701 +100.8%
Divestments 60 33 -45.0%
Consolidated net debt 9,443 12,787 +35.4%
1. Calculated based on the weighted average number of shares
outstanding (495,096,191 shares in H1 2025, versus 501,808,814 shares in H1
2024).
2. Recurring net income: net attributable income excluding capital
gains and losses on disposals, asset write-downs, amortization of intangible
assets related to PPA, IFRS3 acquisition costs and other non-recurring items
(material non-recurring provisions, impacts of hyperinflation, etc.). Two
items have been removed from recurring net income: hyperinflation (-€23
million in H1 2025 versus -€37 million in H1 2024) and amortization of
intangible assets related to PPA (-€146 million in H1 2025 versus -€103
million in H1 2024). Netted of related tax effects and non-controlling
interests, the impact amounts to -€132 million in H1 2025 versus -€114
million in H1 2024.
3. Capital expenditure = Investments in tangible and intangible
assets.
4. Changes in working capital requirement over a rolling 12-month
period (see Appendix 4, bottom of "consolidated cash flow statement").
5. Free cash flow = EBITDA less depreciation of right-of-use assets,
plus net financial expense, plus income tax, less capital expenditure
excluding additional capacity investments, plus change in working capital
requirement over a rolling 12-month period.
6. Free cash flow conversion ratio = free cash flow divided by EBITDA
less depreciation of right-of-use assets.
7. Investments in securities net of debt acquired: €1,701 million in
H1 2025, of which €1,678 million in controlled companies.
EBITDA came in at €3,818 million, a new record high. EBITDA includes
non-operating costs of €50 million (€125 million in first-half 2024).
The net balance of capital gains and losses on disposals, asset write-downs
and the impact of changes in Group structure represented an expense of €188
million (€164 million expense in first-half 2024). It reflects €32 million
in asset write-downs essentially relating to site closures and disposals
(€35 million in first-half 2024), €146 million in Purchase Price
Allocation (PPA) intangible amortization (€103 million in first-half 2024
and €130 million in second-half 2024), and €10 million in disposal losses
and other net business expenses (€26 million in first-half 2024).
Net financial expense was €304 million (€215 million in first-half 2024),
reflecting the rise in net debt along with lower proceeds from cash
investments.
Recurring earnings per share was stable at a record level of €3.63, with
recurring net income at €1,797 million. The tax rate on recurring net income
was 26%.
Capital expenditure represented €711 million (€583 million in first-half
2024). The Group opened nine new plants and production lines over the
half-year period, focused on structurally high-growth regions and construction
chemicals.
Free cash flow came in at €2,190 million, with a conversion ratio of 63%
reflecting a good level of EBITDA and very good management of operating
working capital requirement (WCR), which remained stable year-on-year at 23
days' sales at end-June 2025.
Investments in securities net of debt acquired totaled €1.7 billion (€847
million in first-half 2024), primarily reflecting the acquisitions of FOSROC
(India, Middle East) and Cemix (Latin America) in construction chemicals.
The Group carried out further share buybacks for €111 million at end-June
and approximately €160 million at end-July (net of offsetting employee share
creation). This reduced the number of shares outstanding to around 496 million
at end-June 2025 from 499.5 million at end-June 2024.
Net debt was €12.8 billion at end-June 2025, reflecting €4.5 billion of
acquisitions over the past 12 months (mainly CSR, FOSROC and Cemix), partly
offset by good free cash flow generation. The net debt to EBITDA ratio on a
rolling 12-month basis was 1.7 at end-June 2025 (versus 1.4 at end-June 2024).
Strategic priorities and 2025 outlook
In 2025 the Group will continue to implement the strategic priorities of its
"Grow & Impact" plan:
1) Strong execution of our operating initiatives focused on profitability and
free cash flow generation
· Constant focus on margin through management of the price-cost spread
and ongoing productivity and industrial cost-saving initiatives;
· Capital expenditure around 4.5% of sales, with strict allocation to
structurally high-growth markets.
2) 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;
· Leverage the full potential from the integration of recent
acquisitions and continue to enhance the Group's profile through
value-creating acquisitions and divestments.
3) Continued focus on our ESG roadmap as worldwide leader in light and
sustainable construction
· Promote our positive-impact sustainable solutions - low carbon and
with high recycled content - among our customers;
· Extend the decarbonization of construction to the entire value chain,
playing our full role as leader in light and sustainable construction across
the globe.
Following the deepening of our local organization effective July 1 aimed at
accelerating growth of our solutions country by country, the Group will now
publish its accounts based on four Regions: Northern Europe, Southern Europe -
Middle East & Africa, Americas, Asia-Pacific. In the second half and for
its full-year 2025 results, the Group will publish its accounts based on its
new organization and provide equivalent figures based on its existing
organization.
In a macroeconomic environment that remains contrasted, Saint-Gobain will once
again demonstrate a very strong operating performance in second-half 2025.
Assuming no major slowdown in global growth linked to geopolitical
uncertainties, the Group expects the following trends:
· Europe: a gradual recovery country by country;
· Americas: a good level of activity to be maintained in Latin America
and continued softness in new construction in North America amid still-high
interest rates;
· Asia-Pacific: growth led mainly by India, South-East Asia and the
integration of CSR in Australia.
Saint-Gobain expects an operating margin of more than 11.0% in 2025
Financial calendar
An information meeting for analysts and investors will be held at 8:30am (GMT
+1) on August 1, 2025 and will be streamed live on Saint-Gobain's website:
www.saint-gobain.com (http://www.saint-gobain.com)
· Capital Markets Day: Monday October 6, 2025.
To sign up, please click on the following link:
https://digitalevent.saint-gobain.com/cmd2025
(https://digitalevent.saint-gobain.com/cmd2025)
· Sales for the third quarter of 2025: Thursday October 30, 2025, after
close of trading on the Paris stock exchange.
Analyst/investor relations Press relations
Vivien Dardel: +33 1 88 54 29 77 Patricia Marie: +33 1 88 54 26 83
Floriana Michalowska: +33 1 88 54 19 09 Laure Bencheikh: +33 1 88 54 26 38
Alix Sicaud: +33 1 88 54 38 70 Yanice Biyogo: +33 1 88 54 27 96
James Weston: +33 1 88 54 01 24
Glossary:
- Changes on an actual structure basis reflect changes in published indicators
between two periods.
- Changes in local currencies reflect actual performance, applying exchange
rates for the previous period to indicators for the period under review.
- Like-for-like changes (constant Group structure and exchange rates) reflect
underlying performance excluding the impacts of:
• changes in scope, by calculating indicators for the period under
review based on the scope of consolidation of the previous period (structure
impact);
• changes in foreign exchange rates, by calculating indicators for
the period under review and those for the previous period based on exchange
rates for the previous period (exchange rate impact).
- EBITDA: operating income plus operating depreciation and amortization, less
non-operating costs.
- Operating margin: operating income divided by sales.
- ROCE (Return on Capital Employed): operating income for the period under
review, adjusted for changes in Group structure, divided by segment assets and
liabilities at period-end.
- ESG: Environment, Social, Governance.
- Purchase Price Allocation (PPA): the process of assigning a fair value to
all assets and liabilities acquired and of allocating the residual goodwill as
required by IFRS 3 and IAS 38 for business combinations. PPA intangible
amortization relates to amortization charged against brands, customer lists,
and intellectual property, and is recognized in "Other business income and
expenses".
- Pro forma: data including the impact of changes in Group structure (signed
or closed) over the period.
All indicators contained in this press release (not defined above or in the
footnotes) are explained in the notes to the interim financial statements
available by clicking here:
https://www.saint-gobain.com/en/finance/regulated-information/half-yearly-financial-report
(https://www.saint-gobain.com/en/finance/regulated-information/half-yearly-financial-report)
Net debt
Note 10
Non-operating costs
Note 5
Operating income
Note
5
Net financial
expense Note 10
Recurring net
income Note 5
Business income
Note 5
Working capital requirements Note 5
Important disclaimer - forward-looking statements:
This press release contains forward-looking statements with respect to
Saint-Gobain's financial condition, results, business, strategy, plans and
outlook. Forward-looking statements are generally identified by the use of the
words "expect", "anticipate", "believe", "intend", "estimate", "plan" and
similar expressions. Although Saint-Gobain believes that the expectations
reflected in such forward-looking statements are based on reasonable
assumptions as at the time of publishing this document, investors are
cautioned that these statements are not guarantees of its future performance.
Actual results may differ materially from the forward-looking statements as a
result of a number of known and unknown risks, uncertainties and other
factors, many of which are difficult to predict and are generally beyond
Saint-Gobain's control, including but not limited to the risks described in
the "Risk Factors" section of Saint-Gobain's 2024 Universal Registration
Document and the main risks and uncertainties presented in the half-year 2025
financial report, both documents being available on Saint-Gobain's website
(www.saint-gobain.com (http://www.saint-gobain.com) ). Accordingly, readers of
this document are cautioned against relying on these forward-looking
statements. These forward-looking statements are made as of the date of this
document. Saint-Gobain disclaims any intention or obligation to complete,
update or revise these forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by applicable laws
and regulations.
This press release does not constitute any offer to purchase or exchange, nor
any solicitation of an offer to sell or exchange securities of Saint-Gobain.
For further information, please visit www.saint-gobain.com
(http://www.saint-gobain.com)
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR QFLFXEDLZBBDRecent news on Compagnie de Saint Gobain SA
See all newsREG - Compagnie St-Gobain - Half-year Report
AnnouncementREG - Compagnie St-Gobain - Acquisition
AnnouncementREG - Compagnie St-Gobain - Disposal
AnnouncementREG - Compagnie St-Gobain - Acquisition
AnnouncementREG - Compagnie St-Gobain - New organization
Announcement