Saint-Gobain forecasts "new record" margin in 2024, but suffers in Europe

For the past four years, Saint-Gobain has achieved double-digit margins, recalled the group's CEO Benoit Bazin during a telephone interview with the press: 10,2% in 2021, 10,4% in 2022 and 11% in 2023.

"We will be above that in 2024 and that will therefore be a new record," he said during the presentation of the group's turnover for the third quarter of the year.

From July to September, Saint-Gobain posted a 0,1% increase in sales to 11,57 billion euros, bringing its nine-month sales to 35 billion - a 4,1% decline compared to the first nine months of 2023.

The group suffered from a negative exchange rate effect and benefited from a scope effect following its recent acquisitions in Australia (CSR), Malaysia (Hume), North America (Building Products of Canada and Bailey in Canada, ICC in the United States) and in construction chemicals (Izomaks in Saudi Arabia, Menkol Industries in India, Technical Finishes in South Africa).

It also suffered from the decline in new construction in Europe, the Middle East and Africa.

However, he highlighted a "significant improvement" in the situation compared to the first quarter.

The new construction sector in Europe represents 12% of the group's turnover.

"As expected, the group anticipates a decline in some of its markets over the whole of 2024, with a decline in new construction in Europe and resilience in renovation, and also good performance in the Americas, Asia-Pacific and high-performance solutions," the press release details.

With the drop in rates underway in Europe, "the speed of recovery depends a lot on the way in which citizens finance themselves" estimates Mr. Bazin.

"In the Nordic countries where we have more variable rate financing, when rates fall, we have a rather faster recovery than when we are on fixed rates," he adds.

In France, the recovery will be "gradual", according to him, "it will take several quarters" (...) "it will not be a V-shaped recovery".

"Depending on the country, there is a time lag of between 6 and 12-18 months between the drop in rates and the recovery in volumes for new builds," added Mr. Bazin.