Saint-Gobain posts record operating margin of 11.0% in 2023

2024-03-01

Mar. 1, 2024 - Like-for-like sales showed good resilience, down 0.9%, supported by advances in Asia-Pacific, the Americas and High Performance Solutions, in contrast to the difficult macroeconomic environment in Europe. The Group continued to outperform its main markets thanks to the pertinence of its strategic positioning at the heart of energy and decarbonization challenges, and the strength of its local organization by country, offering comprehensive solutions to its customers.

In a less inflationary environment, Group prices were up 4.6% over the year (up 0.8% in the fourth quarter), generating a positive price-cost spread once again.

In line with the Group’s expectations for the year announced at the start of 2023, volumes were down by 5.5% over the year (down 4.5% in the fourth quarter), reflecting a contrasting situation: a marked decline in new construction but good resilience overall in renovation. In each local market, the Group is taking the proactive commercial and industrial measures necessary to maintain its strong operating performance.

On a reported basis, sales were down by 6.4% to €47.9 billion, with a negative currency effect of 2.3% and a negative Group structure impact of 3.2%. The Group structure impact results from the ongoing optimization of the Group’s profile, both in terms of disposals – mainly in distribution (UK, Poland and Denmark), glass processing activities, Crystals & Detectors and ceramics for the steel industry – and in terms of acquisitions, mainly in construction chemicals (GCP Applied Technologies, Impac in Mexico, Matchem in Brazil and Best Crete in Malaysia), exterior products in Canada (Kaycan and Building Products of Canada) and insulation (U.P. Twiga in India).

Thanks to its recent acquisitions and investments, the Group has successfully strengthened its position in North America, Asia and emerging countries, as well as in construction chemicals. Construction chemicals overall delivered solid 3.4% organic growth in 2023.

Operating income was €5,251 million, a record-high at constant exchange rates (2022 rates). The operating margin reached a new record-high of 11.0% in 2023 (versus 10.4% in 2022), representing an increase of 330 basis points since the launch of the Group’s transformation at the end of 2018. Despite a difficult macroeconomic environment, all Regions reported operating margin growth, once again testifying to the Group’s resilience.

2024 will be another successful year for Saint-Gobain, thanks to good momentum in the fast-growing North American, Asian and emerging markets and to the seamless integration of our recent acquisitions, particularly in construction chemicals. In Western Europe, renovation will continue to show resilience, while new construction will remain difficult but will gradually reach a low point country by country, in a market that remains structurally healthy given its construction needs. In this context, in 2024 we expect a double-digit operating margin for the fourth consecutive year.