Compagnie de Saint-Gobain (SGO) Q2 2024 earnings summary

Executive summary

• Achieved record operating margin of 11.7% in H1 2024, with strong free cash flow of €2.5bn and a 75% cash conversion ratio, despite challenging markets and stable prices.

• Net income rose 14.5% year-over-year to €1,660m, and EPS increased 16.5% to €3.31.

• Strategic acquisitions (CSR, Bailey, FOSROC) to add ~€2bn to annual sales and ~€450m to EBITDA, reinforcing presence in high-growth regions.

• Over two-thirds of operating income now generated in North America, Asia, and emerging markets.

• Continued strategic repositioning with focus on sustainable, innovative solutions and local market accountability.

Financial highlights

• H1 2024 sales totaled €23.5bn, down 6.0% year-over-year, mainly due to lower volumes in Europe.

• Record EBITDA margin of 15.6% (EBITDA at €3,652m), close to all-time high.

• Operating income was €2,751m, down 2.2% from H1 2023, but margin improved to 11.7%.

• Free cash flow increased 12.2% to €2,460m, with working capital requirement reduced to 23 days' sales.

• Net debt at €9.4bn (39% of equity), net debt/EBITDA ratio at 1.4x.

Outlook and guidance

• Double-digit operating margin expected for H2 and full-year 2024, for the fourth consecutive year.

• Sequential volume improvement anticipated in H2, with low single-digit volume decrease for the full year.

• Price effect to remain slightly negative in H2, but less so than H1; positive price-cost spread expected for full year.

• Europe: renovation resilient, new construction nearing low point; Americas: North America stable, Latin America recovery expected; Asia-Pacific: growth led by India and CSR integration.

• Continued focus on profitability, free cash flow, and ESG leadership in sustainable construction.