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Investing.com -- Saint-Gobain (EPA:SGOB) shares rose over 4% on Friday after it reported a strong 3.2% increase in first-quarter sales to €11.7 billion, driven by improved volumes, acquisitions, and strong pricing.
Despite regional challenges, particularly in Southern Europe, the company remains confident in a gradual recovery for the European construction market in the second half of 2025.
Sales for Q1-2025 exceeded company consensus by 1%, with pricing rising by 0.8%, surpassing expectations.
Barclays (LON:BARC) emphasized the "success of the Group’s strategic execution," particularly with pricing and the strong volume growth in Northern Europe, which rose by 2%, led by the Nordics.
Morgan Stanley (NYSE:MS) also flaged the positive surprises in Northern Europe and the solid performance in Asia-Pacific, where growth was driven by double-digit gains in India.
In Southern Europe, performance remained weak, with sales down 5%, including a 7% decline in France.
However, as BofA Securities noted, "Southern Europe was still weak (-5%), but Northern Europe showed a 2% growth," suggesting potential stabilization, particularly in France.
The Americas saw a 3% sales increase, driven by strong pricing in North America and better performance in Latin America.
However, BofA noted that the impact of foreign exchange fluctuations was a headwind, particularly in the higher-margin North American division, which led them to slightly lower their earnings estimates for FY-2025.
Morgan Stanley echoed this, stating that while pricing in the Americas was stronger than expected, FX was a drag on results.
In Asia-Pacific, the region posted 4% organic growth, driven by double-digit growth in India, which continues to be a standout market.
However, performance in the High-Performance Solutions (HPS) segment was weaker than expected due to geopolitical uncertainties, as noted by both Morgan Stanley and Barclays.
Saint-Gobain reaffirmed its full-year EBIT margin guidance of "at least 11%," with a positive price/cost spread expected through the rest of 2025.
Both Barclays and BofA Securities flagged the positive trends in pricing and cost reductions, particularly with lower energy prices.
While BofA Securities remains cautious about volumes in the second half of 2025, they expect some growth, though they continue to monitor specific risks, such as in the automotive and French markets.