? Sequential improvement in organic growth
? Significant contribution from recent acquisitions in North America, Asia-Pacific and construction chemicals, with a positive 3.4% structure impact
? Further increase in operating margin expected in 2024
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Sales in the third quarter showed a sequential improvement, down 2.0% like-for-like in the quarter (down 3.9% in the nine-month period to September 30, 2024 and down 4.9% in the first half of 2024), with good levels of activity in the Americas, Asia-Pacific and High Performance Solutions, but still affected by weak new construction markets in Europe, particularly in France.
Prices were stable sequentially, down by 0.5% in the third quarter and by 0.8% over the ninemonth period, generating a positive price-cost spread thanks to disciplined execution and the decrease in certain raw material and energy costs.
Volumes were down by 1.5% in the third quarter and by 3.1% over the nine-month period, in line with the Group’s expectations for the year. This reflects a contrasting situation: weakness in Europe – with a marked decline in new construction but resilience in renovation – and good levels of activity in all other segments.
On a reported basis, sales were stable at €11.6 billion in the third quarter (down 4.1% to €35.0 billion over the nine-month period) despite a negative 1.3% currency effect, thanks to a positive 3.4% Group structure impact linked to recent acquisitions: in Asia-Pacific (CSR in Australia, Hume in Malaysia), North America (Building Products of Canada and Bailey in Canada, ICC in the US) and construction chemicals (Izomaks in Saudi Arabia, Menkol Industries in India, Technical Finishes in South Africa, Adfil and R.SOL in Europe). The integration of recent acquisitions is progressing well, enabling the implementation of the expected synergies. The Group continued to benefit from the optimization of its business profile, with the disposals of distribution and foam insulation businesses in the UK, glass processing activities, and railing and decking in the US.
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Asia-Pacific: good resilience in sales
The Region saw a 0.9% decrease in like-for-like sales in the third quarter (after 1.2% organic growth in the first half), with a rise in volumes driven by India despite the downturn in China.
India outperformed once again with continued volume growth, supported by its comprehensive and innovative range of solutions, as well as by the strength of the Saint-Gobain brand in the country. In a difficult new construction market in China, the Group continued to capture market share thanks to its exposure to renovation, its development towards inner China and its successfulfully digital sales model. South-East Asia reported sales growth, led by Vietnam and Indonesia, benefiting mainly from the enhancement of its offering and its innovation. The Group was awarded several data center projects in the region, thanks to its specific solutions offering energy performance, fire resistance and productivity. The acquisition of CSR, completed on July 9, establishes a leading position in Australia’s light and sustainable construction market.
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2024 outlook
In a geopolitical and macroeconomic environment that remains challenging, Saint-Gobain is once again demonstrating its resilience and its excellent operating performance in 2024,?thanks to its focused strategy of worldwide leadership in light and sustainable construction and its proactive and disciplined execution of commercial and industrial initiatives, enabling it to outperform.
As anticipated, Saint-Gobain expects some of its markets to remain difficult over 2024 overall, with weakness in new construction and resilience in renovation in Europe, and good levels of activity in the Americas, Asia-Pacific and High Performance Solutions.?
Despite a context which remains difficult in certain markets, Saint-Gobain expects a further increase in its operating margin in 2024.
