DAVY VIEW

Harsh weather and a foreign exchange translational headwind combined to make it a challenging first quarter for Saint-Gobain (SGO). That said, the 2.3% year-on-year (yoy) contraction in underlying sales was comfortably better than expectations for a decline of around 4% or more. Outlook comments and guidance are unchanged with a clear determination to recover cost inflation. While this overall points to another muted year, it is arguably already discounted in the group’s modest rating. As we noted previously, the longer-term position is more promising, especially if SGO can deliver on the ambitions of its “Lead & Grow” strategy.