Saint-Gobain achieves Q1 beat on resilient renovation business

While the housing market bore the brunt of aggressive interest rate hikes by global central banks in their battle against high inflation, Saint-Gobain is betting on continued growth in lighter building materials for the renovation market to offset a moderate slowdown in new constructions this year.

(Reuters) -French construction materials group Saint-Gobain reported better-than-expected first-quarter sales and confirmed its 2023 guidance on Thursday, citing resilient demand from renovations.

"In an environment that remains inflationary, the Group continued to effectively serve and support its customers while managing energy and raw material cost evolution," the company said in a statement.

The group, which designs, manufactures and supplies materials for the building and industrial market, confirmed its full-year forecast of an operating margin between 9% and 11%.

Quarterly revenue totalled 12.4 billion euros ($13.7 billion), up 4.7% on a like-for-like basis from the same period in 2022, beating the 12.15 billion euros forecast in a company poll of analysts.  

Renovation activities lifted Saint-Gobain's performance in the Southern European, Middle East & Africa region which became the group's main market in the quarter - accounting for almost 70% of sales in the area.

In Northern Europe, accounting for 31.2% of revenues in 2022, refurbishment materials represented 55% of sales as the region saw a sharp slowdown in new constructions.

($1 = 0.9076 euros)

(Reporting by Luca Fratangelo, Enrico Sciacovelli, editing Kirsten Donovan, Elaine Hardcastle)