Compagnie de Saint-Gobain S.A. (CODGF) Q3 FY2025 Earnings Call Transcript & Summary

Thank you. Good evening, everybody. I hope that you have received our press release, and you have been able to go through the highlights. So together with Maud, our CFO, we will present our Q3 2025 sales performance. Saint-Gobain delivered plus 1.3% sales growth in local currencies in the third quarter. Like-for-like sales were stable, driven by good dynamics in Asia Pacific and Latin America and the return to growth in Europe despite the decrease in North America. We have seen a strong dynamic in construction chemicals, which, as you know, has been one of our target areas for growth investment. Sales were up 18% in local currencies in the third quarter. This was driven by an outperformance in like-for-like sales, which were up 2.6% and also double-digit growth from our recent acquisitions in construction chemicals, notably Cemix in Latin America FOSROC in India and the Middle East, contributing to the strong growth. The integrations are going well, and synergies are on track. Many of you participated in our Capital Markets Day earlier this month, and I hope you enjoyed your discussions with the country and regional heads and the rest of our executive committee. I can tell you that internally, our teams are excited about this next stage of profitable growth for Saint-Gobain. In each of our country platforms, the teams are already rolling out their growth plans to take advantage of their unique local positions and also the breadth of Saint-Gobain solutions offer with more upselling, cross-selling and specified sales. Our Lead & Grow strategic plan that we launched for '26 to 2030 is focused on fully leveraging our full solutions offering that delivers clear benefits for our customers. Building on our strong positions in residential markets, we are increasing our exposure to nonresidential and infrastructure markets, where we hold key advantages, including from the strong construction chemicals position that we have built. The focus is on growth and value creation, and we have set an ambitious financial trajectory for '26 to 2030, with a new step-up for sales growth, EBITDA margin and ROCE as well as an attractive shareholder return framework. So our internal road map is clear. The buying from our teams is strong, and all our teams are engaged to deliver. I will now hand over to Maud, who will discuss our third quarter sales in detail.

Thank you, Benoit. Good evening, everyone. I am very pleased to give you some more details on our Q3 sales release. Starting with Q3 sales growth. First, to get the technical effects covered off, we had a negative currency effect in Q3 of minus 2.6% due to the depreciation of the U.S. dollar and many emerging market currencies against the euro. We currently expect Q4 to have a more significant foreign exchange impact of around minus 5%. This would mean a foreign exchange impact for the second half of close to minus 4% on sales and around minus 6% on operating income. The impact is in particular on the Americas region. And remember that foreign exchange is purely a translation effect for Saint-Gobain. Now turning to local currency growth, reflecting the true dynamics of our business. This was up 1.3% in Q3. In Q3, we had a positive scope impact of 1.5%, mainly reflecting our recent acquisitions of Cemix in Latin America, FOSROC in India and in the Middle East, which are perfectly in line with our strategy to focus our investments on high-growth countries and construction chemicals. Like-for-like sales stabilized, driven by good trends in Asia Pacific and Latin America with a return to growth in Europe despite the decrease in North America. Volume showed a sequential improvement compared to the second quarter at minus 0.9% versus minus 1.8% in Q2. Prices were up 0.7% in Q3, thanks to disciplined execution from our teams and the value added that our solutions bring to our customers. This is despite the inflationary environment softening. We still expect the full year to see inflation, but this will be very slight driven by H1, where the inflationary environment in H2 would be broadly stable. We are on track to deliver a slightly positive price cost spread in H2 and for the full year 2025 as planned. Now let us look by segment. Overall, Europe returned to growth in Q3 for the first time since Q1 2023, we saw a clear sequential improvement compared to Q2. Northern Europe was stable, excluding industrial solutions. The U.K. continued to grow, thanks to its complete solution approach for residential and also nonresidential, where it offers energy efficiency, fire resistance and productivity benefits for buildings. Activity remained mixed in the Nordics with signs of improvement in renovation, but not yet in residential new build. We saw growth in Sweden and Denmark, with the latter benefiting from several important infrastructure projects. Eastern Europe grew apart from Poland, which was impacted by lower industrial solutions sales. And we are still seeing some wait-and-see attitude in Germany ahead of the upcoming stimulus plan. Now turning to Southern Europe, we saw growth of 2.8% in local currencies and like-for-like growth of 1.5%, a clear sequential improvement compared to Q2. France showed a good sequential improvement, stabilizing at comparable working days in Q3 and leading indicators are positive pointing to continued improvement in the absence of any new major political instability. Spain and Italy showed growth and continued to gain market share, particularly in renovation. And finally, the Middle East and Africa showed strong growth, driven by the successful integration of FOSROC in construction chemicals and contract wins for large infrastructure projects, including bridges in Abu Dhabi, a subway line in Dubai. We also won projects in residential towers and tourist resorts in the UAE. Now moving on to the Americas. The Americas region decreased 1% in local currencies and 2.9% like-for-like in Q3, given the slowdown in North America, partly compensated by good growth in Latin America. North America decreased 6.5% like-for-like due to 2 factors: First, the continued softness in new construction linked to high interest rates and the lack of significant climate events compared to previous years, which affected roofing sales in Q3. Apart from this, the renovation market remains resilient. The operational performance remained strong, and we expect to maintain a flat margin in the region in H2 2025 versus H2 2024. This is thanks to our strong strategic positioning, as we have seen -- as you have seen during the CMD. We are the partner of choice for distributors in America, in North America, and that's thanks to our complete offer. In Canada, we recently opened the first zero-carbon plasterboard plant in North America. Latin America showed strong growth of 12.8% in local currencies and 6.4% like-for-like despite the comparison basis getting tougher in Q3. Industrial solutions were up double digits, contributing to the good growth. Brazil continued to show -- to grow, thanks to its unrivaled solutions, enabling cross-selling and specified sales, to accelerate. We showed you during our CMD, how we do this in detail. We also launched in Latin America, the first low-carbon glass in Brazil. Mexico and Central America saw spillover benefit from the good integration of Cemix in construction chemicals, and Cemix itself showed strong growth in Q3, up 18% in local currencies. Lastly, moving to Asia Pacific, which grew 8.4% in local currencies and 3.4% like-for-like in Q3. India delivered another strong performance with double-digit volume growth and market share gains, leveraging its complete innovative and sustainable solutions. We won new projects in nonresidential and infrastructure, thanks to the leadership of construction chemicals in India and our reinforced position from the FOSROC acquisition. China improved in the construction market, which is stabilizing at a low level. Southeast Asia continued to grow, driven by Indonesia and Vietnam, where we specified and delivered 15 solutions for a new airport. The integration of CSR is going well, both in operational performance and in the enhancement of its range of solutions for the local market. The Australian market, construction market continues to remain lackluster, but leading indicators are improving. So to sum up the third quarter, total sales were up 1.3% in local currencies. Europe returned to growth for the first time since Q1 2023 with a clear sequential improvement. North America saw some weakness due to the softness in new construction and the lack of major storms, while Asia and Latin America are showing strong growth. Prices were up 0.7%, and I am confident that we will deliver a slight positive price cost for H2 and for the full year. And we remain focused and continuing to deliver very strong operational performance. And I now hand over to you, Benoit, for the concluding remarks.

Thank you, Maud. So let me make a few comments to conclude. So for Q4, we expect a continued sequential improvement driven by Europe recovery. As you have heard from Maud, France has stabilized at comparable working days and leading indicators are moving in the right direction, pointing to an improvement. For Q4, therefore, we expect volume growth in Europe for the first time in 4 years and overall volume growth in H2. In North America, renovation is resilient, but we didn't see major storms this year unlike in previous years for the third quarter. We expect continued softness in new construction. However, the market is structurally healthy with a significant housing shortage and interest rates as well as mortgage rates are starting to decrease. Elsewhere, Asia and Latin America should continue to do well, benefiting from recent acquisitions for selling and specified sales as well as an increasing presence in nonresidential and infrastructure markets. So that's on the macro environment. I can tell you that our regional organization is very robust. You have seen the power of our country platform during the Capital Markets Day. And it's a real strength in the current geopolitical context based on our local value chains. Our country managers are proactive, very focused, hands on. They have a small set of priorities, pricing discipline, cost management and of course, accelerating growth, thanks to our solutions in order to continue to outperform. In this context, 2025 will see another strong operating performance for Saint-Gobain with an operating margin of more than 11% in 2025, which is a great way to successfully finish our last plan, Grow & Impact, which, as you know, was for '21 to 2025. So thank you for your attention. And now, Maud and I are happy to answer any questions you may have.

[Operator Instructions] First question is from Ben Rada Martin, Goldman Sachs.

I just had 3 questions, please. My first is on the second half margin outlook. Noting some of your expectations around the gradual recovery in Europe, your comments around a less inflationary environment. Is it right to think that at a group level, the EBIT margin expansion that we should see in the second half will be slightly better than the flat result in the first half of this year? My second would just be on North America and the third quarter like-for-like performance, a negative 6.5%. I wonder, could you just talk to what kind of benefit you saw within that geography from the new production coming online? And then finally, at a group level, I'd just be interested in any October trading commentary that you have seen relative to the performance in the third quarter?

Well, thank you for all your questions. So on the -- let me recap a bit on the different moving pieces on the margin for the second half. So we expect some positive with volume progressively recovering in Europe and a slight positive price/cost spread and of course, the effect of good acquisitions. Asia as well should continue to do well. We expect some negatives with a stronger negative foreign exchange impact around minus 6% on profit in H2 like Maud highlighted. Some mix effect also between regions with Americas expected to maintain the margin flat and overall, of course, delivering less in mass of margin in the Americas, but being flat in overall margin, be it North or Latin America. So that's a bit the different moving pieces, some technical and some better volume environment and strong resilience on our margins in the Americas for H2. On the third quarter in North America, no, we have started, but there is always a few weeks to ramp up technically the plant. So there is no impact coming from our roofing Peachtree new line in Georgia yet in the third quarter and the same for plasterboard in Florida. So those 2 new investments will help us lower the cost base going forward. And I would say, technically speaking, they are on track with what we expected, but there has been no impact on the third quarter. A few comments maybe on the third quarter in North America. We have been very cautious and conscious on price. Our prices are up in North America for the third quarter, be it on Gypsum or be it on roofing. I would say year-to-date, when I look at the statistics, we are gaining a bit of share in Gypsum. We are gaining a bit of share also in roofing. On the third quarter, specifically in roofing, we are in par with or slightly below the ARMA statistics specifically on roofing, better in Gypsum in the third quarter, better overall for both year-to-date, but I think we have been a bit more conscious on pricing, maybe versus the rest of the market in the third quarter. So that's a bit the moving pieces as well in North America. And regarding October, Maud, I would say nothing specific to say. We see exactly what we told you regarding France, regarding the progressive volume recovery in Europe. So that's in line with what we said and what we have seen for the last months of September and October.

Next question is from Anna Schumacher, BNP Paribas.

It's Anna, on for Paul Roger. We have 2. So the first one, are you still confident that the full year group volumes will be broadly flat? And have trends in October confirmed the implied acceleration needed in Q4? And secondly, what were U.S. volumes specifically? And is it possible to quantify the impact of fewer storms in the quarter?

The impact of what?

Of the storms. Yes.

Sure. Maud, do you want to take the first one?

Yes, sure. So in terms of volume, what we are expecting for Q4, as you said, Benoit, is further volume improvement in Europe. And all the other segments should be similar to what we have seen in Q3. So all in all, of course, there is the -- and related to your second question also is the uncertainty around the weather-related demand, but we should be more or less flattish in terms of volume for Q4.

And maybe with a sequential improvement versus Q3 -- in Q4 versus Q3. Maybe to give you the picture, notably because it's only for roofing. In roofing on a normal year, you had roughly 50% renovation driven, 20% new construction driven and 30% related to weather. You have 10 out of the 30 which are related to extreme weather patterns. And this is the impact we have seen in the third quarter because for the first year in more than 10 years, no hurricane landed in the U.S. on the ground. Of course, we had a bit of hailstorms in the first half, but a bit less than last year, actually. And there has been no major landing of hurricane for the first time in 10 years. So that's a bit this 10% type of volume I would highlight for extreme weather pattern in the third quarter. All in all, again, the roofing is still a very, very resilient and important business and well -- and they are doing well in that regard with the complete offer. And we are the partner of choice of all the major distributors. If you think of the consolidation that happened in North America, when you look at Home Depot, they bought SRS. We are the #1 roofing partner of SRS. After that, bought GMS, if I move to plasterboard, and we are the #1 supplier of GMS. So we are very well placed to continue to outperform on those various building materials.

Next question is from Ebrahim Homani, CIC Market Solutions.

I have 3, if I may. The first one is about the Q3 price effect is still positive on the price cost spread as well. Does it mean that profitability in Q3 has improved compared to the Q3 2024? My second question is on France, which is now stabilizing. Are the volume and price effects comparable to the group level with a positive price effect and slightly negative volume effect? And my last question is on Asia Pacific...

Sorry, could you repeat the second one because you seem to be a bit of an echo, so it's a bit hard for us...

Just on the volume and price effects in France, are this volume and price effect comparable to the group level with a positive price effect and negative volume effect? And my last question. So on Asia Pacific, could you give us more flavor on India's contribution to the organic growth, please?

The last question is on India. So maybe, Maud, you will take the first one, and I will take the -- start with the third one. So Asia Pacific overall is doing -- yes, there is a bit of echo. So I hope it's not uncomfortable for everyone. So Asia Pacific, India is doing very well with ongoing double-digit volumes. I will speak slowly because there is echo. So there is some -- could you put yourself on mute because I think if you stay -- could you put -- okay. Super. Thank you. Thank you very much. Yes, put please your mic on mute so that there is no echo. It seems good now. Okay. Sorry. So Asia Pacific, yes, India is doing well in terms of double-digit volume. That's a strong performance. We had also a good performance in Southeast Asia. As Maud mentioned, China has been recovering in the third quarter. So all in all, a pretty good evolution. There has been some deflation of raw materials, et cetera, in Asia Pacific. So there is a bit of price deflation for us in Asia Pacific, but again, on a very good price cost spread arbitrage. So that's on Asia Pacific. On your second question related to France, we have seen a stable volume at constant number of days -- of working days in France. So that's again moving in the right direction. And we expect France volumes to be positive in the fourth quarter. So ongoing positive evolution like, of course, for Europe, but also for France. We have a bit less pricing in terms of absolute price evolution in France. But overall, volumes, as I said, moving in the right direction, stable but same number of days and moving and turning positive in the fourth quarter. And maybe, Maud, on the...

Yes, on the price/cost spread. So we -- as I said, we are expecting a slight positive price/cost spread. You've seen our pricing, which is up 0.7%, really is a reflection of our pricing power. Inflation is softening. We will -- we expect a very slight inflation for the full year, mainly driven by H1 and inflation to be nearly broadly stable in H2. And that's why we should again continue to see positive price/cost spread, but in the context of a softening inflation.

Next question is from Elodie Rall, JPMorgan.

Just some follow-ups. First of all, on the volume expectation for Q4. So you're quite clear that you expect a positive volume development. Can I just clarify if this would be the case as well without the working day impact that we expect in Q4? Second, to come back on the U.S. and the pricing deceleration that we're seeing. I was wondering if you could give us some color on what's going on in the roofing segment, in particular, where pricing looks maybe weaker even. And if you could give us some color of where margins are trending in the U.S. overall? Could you give us a flat margin for Americas, but not for North America? And lastly, I was wondering if you could give us some color on price and volume and regional performance for your construction chemicals, which seems to be doing very well, not necessarily in line with what we've seen elsewhere. So that would be helpful.

Thank you. So maybe I'll start the third one, and you might take the first one,. Overall, we have a good like-for-like performance on construction chemicals across all regions. Across all regions. I think we are clearly outperforming. For me, it's a clear -- and we are 2.6% like-for-like, and it's both positive volume and price and across all regions. And for me, it's a clear showcase of the benefit of having solutions altogether because there is a pull effect from other solutions to construction chemicals or vice versa. So clearly, this is a positive, and we see that happening in construction chemicals overall. So all our regions are growing. And again, the demonstration of the power of the full range and also the leadership position that we have established with Chryso, GCP, FOSROC. And FOSROC is by far the leading brand in India and in the Middle East. We have won some major infrastructure projects. So again, that's a good performance. And of course, we'll continue to push for that, and we have now all the technologies and all the different positions. So that's on construction chemicals. On U.S. pricing. So it's positive on roofing when I compare Q3 versus Q3 last year. We had, as you remember, a price increase in April that did stick. And we have been, as I said, conscious on price for roofing in North America. So that should continue for the end of the year. So overall, margin, as I said, flat in North America. So that's, I think, a reflection of a very good cost management and pricing discipline. So that's despite, again, a weaker volume support in the third quarter because of the lack of storm and because I think the arbitrage that we have taken on price versus volume. So that's the picture in North America, a very healthy business that should continue. And as I mentioned, we are the partner of choice of all the major distributors in roofing/also Interior Solutions in North America. On volume in Q4?

Yes. So Elodie, Q4, we will see -- we'll continue to see the volume improvement in Europe, and we expect that all other segments should be similar to Q3. So all in all, that -- and of course, again, we have a little uncertainty about the weather-related demand, but it should be more or less flattish in Q4 in terms of volume overall for the group.

Sorry to follow up. You said flat margin in Americas or in North America?

Both, Elodie. Both -- for the second half, I'm commenting on the margins for Americas. And specifically, you asked about North America for the second half, yes. And keep in mind that very often, we try to do our best to give you the impact of working days. Of course, we are entering now in November, December, which are lower months versus the month of September, June or during the high season. So an additional day in late December doesn't have the same impact in the daily sales versus an additional day in September, for instance, just to be a bit more precise on the technical effects of days. We prefer to have one additional day in September than one additional day in December.

But it will help for sure.

Yes, it will help.

Next question is from Arnaud Lehmann, Bank of America.

A couple of questions on my side. Firstly, regarding France, you highlighted the volume recovery for the second half. Could you give us a bit of color whether it's coming more from distribution or more from manufacturing or maybe both? And could we, therefore, expect the margin to expand a little bit in the second half for the Southern European region? And secondly, have you announced any price increases for 2026? Or what's your take generally on the price/cost outlook for next year?

Thank you, Arnaud. So overall, the evolution in the right direction in France is for all product lines. So I would say both. And as you know, they are intertwined, but it's -- and it's both. And we play as a team in France and we win and outperform as a team. I would say the meaningful margin impact because we are not talking that double-digit volume increase in France in the fourth quarter. So the margin impact, I think we'll see more of that in '26. Of course, there is a positive leverage. But in terms of meaningful impact, we'll talk about it more in early '26 for '26. But yes, both are benefiting from market share gain, and I think the better momentum. On '26, yes, we are thinking of some price increase. It's a bit too early to say and to tell. But yes, we have been preparing some price increase, and there should be some moderate price increase going into 2026 overall.

Yes. And we expect slight inflation going into 2026, and we will adjust according to what is indeed happening.

Next question is from Pujarini Ghosh from Bernstein.

I have some follow-ups remaining at this point. So on France, I believe Q4 might have some extra working days. So given -- taking that into account, do you expect the volumes to be flattish or more on the positive side? And one question on construction chemicals and your medium-term guidance, which you provided at the CMD. So we think -- I mean, the growth expectation is more than 7% CAGR. Could you give some -- a bit more color around how much of that you think is going to be organic market share gain, underlying market growth and then so on?

So I'll take the second and Maud will answer the first. Well, if you take construction chemicals, in local currencies, we are up 18%. So it's well above the 7%. And what is important is that in a difficult market environment with 2.6% like-for-like and growth -- organic growth like-for-like in every single region, we are, again, I think, outperforming the underlying market. So directionally, as you know, it's a market that has still a large potential of consolidation in terms of M&A, in terms of bolt-on. So in the 7% CAGR, there is -- and there are some targets for bolt-on acquisitions. Again, not the majority of it because this construction chemical business in a normalized environment, it's more in the kind of 5%-ish, 5% to 6% like-for-like growth. After that, you can always add 1 or 2 points of bolt-on acquisitions without considering any major move like the big ones we have done with GCP in the past or FOSROC recently. So yes, it's -- there is a portion of it. And we have now the platforms being in 76 countries on construction chemicals, if I remember well, we have the platform to add some technologies and to have a snowball effect and also to leverage what we highlighted at the time of the Chryso and GCP acquisitions to leverage the large manufacturing footprint of Saint-Gobain. We did open in Finland Chryso plant in 7 months, not in 3 years within an insulation plant. So we have multiple examples of that, be it in Latin America, in North America, or elsewhere where we can accelerate also the organic growth and leverage the existing footprint of Saint-Gobain now that we have the technologies. So that's on construction chemicals, and we have the teams and everyone aligned for that. Maud on the...

Yes, for France in Q4, we will definitely see volume growth in France, including the extra working days, of course, and that comparable working days as well. So we will see the growth here. Knowing that as Benoit highlighted, those working days having a lesser impact because they are more on December, which is a smaller month.

Next question is from Ephrem Ravi Citigroup.

Just one question left. Can you give some breakdown of your growth in Asia Pacific, specifically looking for China, where you said the market is stabilizing at a growth level, but China improved. So does it mean growth or just less decline? And then on Australia as well, the performance is lackluster, but leading indicators are improving. So again, can you give us a sense of the volume growth in Australia as well?

Yes. So Australia, indeed, we have all the leading indicators moving in the right direction. Interest rates have been cut also. So it's, I think, a good sign for 2026, and we had some average daily sales being up in certain months. So it's more in the mid-single digit so far down in Australia, and that should turn positive. And we had already seen some of that, and we expect that to turn positive in '26, but not yet in the current environment in Australia. And on the rest of Asia, Maud?

Yes. So China, specifically, I think you were asking about China. Like-for-like is slightly down for over the 9 months, but we have turned positive and slightly up in Q3 in China, including Industrial Solutions. So in both markets, we have turned positive.

And I think it's a strong reflection of the conscious decisions we have taken over the last years to have a heavy presence on the renovation in China. We didn't go after the large projects of new construction, but we had made a conscious decisions, notably for our plaster and plasterboard business to have a larger share on the renovation market, which, as you know, has been moving much better and even turning positive in China. And that's something even on sustainability where you have new guidelines and plateau plasterboard substituting some heavy building materials in China is something that I think will support us going forward.

Next question is from Julian Radlinger, UBS.

Just one left for me. On the weather-related demand in roofing in the U.S., I think it usually takes a few months for the industry to deliver product after a storm. So I'm just wondering, with the storm season now slowly coming to an end, how long would you have a negative volume impact from that normally? Is it just Q4 and then we've kind of flushed that through? Or would this go into next year, Q1, maybe even Q2?

I tend to think that it's just Q4, if I take the weather related. You still have this 20% of new construction, which will turn positive. And I'm confident that North America will turn positive in '26 on new construction and the sentiment and what we hear from the market, it will turn positive at some point in '26, but that's for the 20% of new construction. On the weather impact, again, at the end of the year, I think it's done. What is important also that on the residential roofing, we have not seen any impact of the distribution stocking, destocking, whatever. You have seen a bit of some players, I guess, trying to deliver on their gates, on their threshold in terms of rebates and volume targets for some distributors in Q3. But then when you hit that in Q3, you don't get it in Q4. So I think we will get more in Q4 than in Q3. But you have a bit of those end of the year dynamics of distributor by distributor, making sure that they hit their volume targets for the different roofing players. So some maybe got them a bit earlier in Q3. We will get a bit more in Q4. And again, we are against a strong comparison in '24 on roofing in the second half. But -- so anything should be ended by the end of the year on those renovation and weather related. And remember that if I stay on roofing, we had a very strong performance in the first half. Year-to-date, as I said, when we benchmark with ARMA statistics, we are delivering a bit better than the market, again, on roofing, but also on Gypsum. So you have always a bit of those swings. One competitor in Gypsum released some figures earlier today. We are doing better than them in the third quarter, but you have those swings. We do much better on Gypsum in the third quarter. We do a bit less on roofing in the third quarter. But year-to-date, that's what matters when you take the 9-month picture versus 3 months because you could have those stock outs and one distributor buying a bit more than what they sell out. So on the quarter-by-quarter comparison, I think we need to step back on the year-to-date, we are in good shape.

Next question is from Yassine Touahri, On Field Investment Research.

I think I've got a follow-up on roofing. So roofing distribution was on allocation last year in the U.S. Has the drop in demand changed this situation? And also on the distribution situation, we've seen QXO acquiring Beacon Roofing Supply. I think [ Carlisle ] was suggesting some changes in buying pattern. Have you seen any disruption or any opportunities in this change in ownership? I think Beacon is probably one of your big clients for shingles. And then maybe a question for next year in an environment where there is a bit more capacity where the volume are soft, do you see opportunity for more price increases in roofing shingle in 2026 to offset a potentially uncertain volume environment?

Thank you. So I will take those questions. It's a bit -- I would say, a bit too early to say because usually in roofing, you have a price round in March and April. So we are 6 months ahead or 5 months ahead. It's a bit too early to say. If there is a bit of input cost inflation, be it asphalt or elsewhere, there should be a price increase. It was moderate in April 2025. I think the value chain of roofing is used to that as long as it's moderate, where I think it should be because -- so I'm not calling out any price increase for roofing in March, April next year. It's a bit too early to tell. But I would say in a normal environment, which I think we will see next year, we should have -- we could have some normal pattern on the pricing dynamic. On your second question on [ Carlisle ], I think you have to differentiate clearly what is commercial roofing versus residential roofing. We don't have direct sales in residential roofing. And we -- I mean, it's the industry. It is very different than commercial roofing, where some players have up to 30%, 40% of direct sales because you sell directly to the contractors, you train the contractors, you give the guarantee with the contractors. So this is where some at least manufacturers bypass distribution. So we don't have that in residential roofing, and I don't see any space for that, and I don't see any benefit for that because residential roofing, it's a lot of small jobs, home by home, house by house, you need distribution...

I think my question was more about like the acquisition of Beacon Roofing Supply by QXO...

Yes, I was coming to it, but I wanted to distinguish because notably QXO and Beacon Roofing was doing commercial roofing themselves. So they were competing with some of the manufacturers of commercial roofing. So this is why you have a bit more, I would say, disruption or a bit more both in the year on commercial roofing versus residential roofing because I've read, of course, the [ Carlisle ] comments and others. On QXO, for residential roofing, no, we don't see any change on the overall industry with residential roofing distribution with QXO. We were a strong partner of -- and we are a strong partner of Beacon Roofing, now QXO, and we have good discussions with them, be it on siding, be it on residential roofing or other building materials. So no disruption from this evolution. And as I mentioned, the bigger moves were related to retail, Home Depot and Lowe's on either roofing, SRS and GMS or even Interior Solutions with [ FBM ] and all those big names, SRS, FBM, GMS, we are the #1 partner. And for us, it has even been an entry door, I would say, to get stronger in retail. I think we highlighted at the Capital Markets Day that we want to roll out our solutions, our cross-selling initiatives, not only in the merchanting channels, but also on retail and across all channels. So that's an opportunity that we have with the big names of Home Depot and Lowe's, but no change of behavior or whatever on residential roofing. On your third question, sorry, I don't want to be too long. Yes, I think up to July -- June, July, our plants were on allocation and the distributors were asking to get ready with the right inventory in case of a major storm. It didn't happen. So today, they are not on allocation anymore, sometimes a few exceptions, some very specialty high-end product, but not material. So no, they are not anymore on allocation. What will happen, they will end up the year, and then they will make sure that the start of the season, March and April, they restock to be ready for the seasonality, the normal seasonality of 2026. If I stay even on the renovation and weather related, the hailstorms and traditional renovation, the reroof, remember all the aging of homes that we have in the U.S. So all this will restart normally in 2026 for renovation and weather-related patterns. But as of now, they are not any more on allocation from us, and I don't see that from the market from other players.

Next question is from Paul Roger, BNP Paribas Exane. Paul Roger, your line is open.

Sorry, go ahead, Paul. We can't hear you. Sorry, you were on mute maybe. So take your time and go ahead.

Sorry to pop on the end. So a couple of questions. Firstly, on Americas pricing policies come back to this. I know you -- obviously, you put HPS in the regions now. But is it possible to just give us some idea of what HPS pricing in the Americas did in Q3? I'm just wondering to what extent that might have basically compensated for some of the pressure in Roofing. And then secondly, just talking a bit about Northern Europe. Clearly, volume is still weak here. It looks like Germany is the culprit. Do you think there's any signs of turnaround in that country going into 2026?

Maybe I'll take the second one. So your question was specifically on Germany. In Northern Europe, yes, because indeed, we have seen a bit of stop and go and wait-and-see attitude. You have also on Northern Europe, a negative impact from our industrial solutions. The industrial markets in Europe are not in a super strong shape. And there has been a negative impact beyond the construction market in Northern Europe in the first quarter. So including in Germany, of course, including in Germany, where the Industrial Solutions have been slow. And so that's the picture year-to-date. I continue to see a positive signs of what's coming in Germany for next year. I was in Germany 2 weeks ago, right after the Capital Market Day 3 weeks ago. I was in Austria last week. We continue to see some good signs, notably on some public buildings, on some infrastructure markets. So I'm optimistic for that to turn positive into next year. Our teams are ready, but it's true that so far, we have been in this wait-and-see attitude and a bit of extra negative coming from initial markets in Germany because we know that manufacturing in Germany has been quite depleted with a lot of restructuring plans announced, et cetera. On the first question, what's...

Yes. On the first question, Paul, so HPS is -- in terms of pricing is in line with the group pricing. So you don't have any -- and I think Benoit mentioned before that our -- on the construction market in North America, we have -- we are positive in pricing.

Yes. And so just to try and be a little bit more specific. So when you say in line at group level, does that comment also apply in the Americas? So was HPS price in the Americas consistent with the regional average or the group average?

Yes, yes.

Next question is from Will Jones Rothschild & Co Redburn.

A couple from me, please, if I could. First, just extending that prior question around Northern Europe, and you talk more generally about the lead indicators in France and how that gives you confidence for next year. But I think some of the lead indicators in Nordics on new build starts to look better even if you've not seen it yet. Do you agree with that and how you're feeling about the Nordics, I guess, potentially in '26? And the second was when we look at pricing in Southern Europe, it looks like it's got steadily better from Q1 to Q3 and a slight positive in Q3. How do we see that in the context of the kind of easing in inflation? And I wonder when we pull together Europe as a whole, you've given us a view on the Americas 2H on 2H, which is helpful. But would you be drawn on how Europe might do at margin 2H versus 2H?

I will take the first one, and Maud will give you some color on the pricing in South Europe. So Nordics, what we see turning positive is clearly Sweden and Denmark, not yet Norway. So today, I don't have a positive feeling that Norway turning positive in the near future. But Sweden and Denmark, yes, it should continue and it should continue into 2026. Norway, I think will -- I'm afraid, will take a bit more time. Finland was better in the first half, a bit softer recently. But -- so yes, 2 out of 3 should turn positive. Norway, I will be a bit more cautious. If I take Northern Europe, we had a good dynamic, and it has been ongoing now for several quarters in the U.K. I think we are clearly outperforming in the U.K. with our full set of solutions. So U.K. should continue to move in the right direction. And we have seen also a good dynamic in Eastern Europe, Czech Republic, Romania, all that we have good indicators and a good dynamic, and it should bode well for 2026. So that's for Northern Europe. Maud, you want to take the pricing?

Yes. So pricing is incrementally increasing indeed in Southern Europe, but that's -- I mean, it's a small increment. Looking at -- and we are driving the price/cost spread, which is what really matters. And in terms of margin, of course, we see some progressive recovery in volumes, as Benoit highlighted, but it needs to be a bit more substantial before we see more of that impact on the margin, and that we probably [ go into ] 2026 when we really see the uptake in the volumes at Europe level.

In South Europe, one thing which we didn't talk about it, but I can tell you in Spain and Italy, we are clearly outperforming. So I've been very happy about the performance, multiyear performance and outperformance for us in Spain and Italy, both in volume and price and gaining share. So yes, we are French, so we spent a lot of time on talking about France, but Spain and Italy have been strong drivers of performance for us and should continue into next year.

[Operator Instructions] Mr. Bazin, Ms. Thuaudet, there no more questions registered. We have one further question from Martin Flueckiger, Kepler Cheuvreux.

I've just got one left, and I'd like to get back to the topic of China. It's quite extraordinary performance there considering the market data that we have seen coming out of the property market in China. So I'm just trying to better understand the structure of your performance or the key drivers, I should say. Could you talk a little bit, firstly, about the -- your exposure towards the property market, but also towards the infrastructure, construction market, how those weights pan out in China? And then secondly, I'd be interested in particularly your construction chemicals performance, not just -- not the overall country, including building materials and industrial solutions, just construction chemicals alone, that will be of key interest for me in China, of course, in Q3.

In China, first, if I take -- we have roughly half of our business on industrial solutions with a very specific positioning on technology, on high-end innovative products, be it ceramics and also auto glass. So we are performing well, thanks to this high-end approach. And on the construction space, the bulk of our presence is on gypsum, so plasterboard and plaster. We are very small on construction chemicals because we always found it difficult to gain traction on the renovation market in China. So yes, you can be on large projects with big developers, but we always -- we looked at it several times, and there was always a bit of even a credit risk and long-term payment, so not very good on working capital. And we didn't find the software, I would say, the presence to grow in that space. So we have been consciously defining our presence on renovation, plaster or plasterboard. We have also the benefits. We have a very strong Chinese team. We have this country platform in China, and we have a 100% digital approach on how we deliver to our customers. So it's very specific. They can tell you exactly how to upsell, how to cross-sell multiple products. And I just benchmark, for instance, we have a plasterboard competitor, BNBM in China, and they published double-digit down performance in China in the third quarter. We are up. So yes, we have been, I think, outperforming with also being rather small, we have the ability to gain share, but we do it on a nice profitability level. So that has been, I would say, not a massive volume-driven strategy, but I think something which is resilient and good for the long term and well positioned, notably on low carbon solutions, light solutions, i.e., gypsum, and that's something we will continue to push. And we don't have a meaningful presence on construction chemicals. And when we bought GCP and [indiscernible], they didn't have a meaningful presence in China, and we didn't want to accelerate on it or build up on it because it was not an easy road. I think we have taken all your questions. So thank you very much for all that. Again, we have been very engaged like all the teams of Saint-Gobain to launch our Lead & Grow plan. And I think it's a very important plan for Saint-Gobain to accelerate growth, leverage our leadership. Clearly, I think the outperformance of our solutions, we see it on the ground. We see it whether we take a construction chemicals view or whether we take a country view, we see that. So this mindset of outperformance is there, developing and deepening our approach on solutions, expanding that into nonresidential and infrastructure markets. All this is well in the minds and in the targets and the objectives of our team. So I'm confident about what we have in our hands and for the years to come within Saint-Gobain. Of course, we'll continue to work on the -- as you have heard, on the optimization of the group in terms of asset rotation that we expect by 2030. We are very ambitious on the margin. You highlighted and you questioned, of course, the margin, but I'm happy that we finish the plan going back to -- the top end -- above the top end of the margin above 11%, and we are ambitious on the financial targets of Saint-Gobain that we raised for '26, 2030. So I don't want to take too long tonight, but I can tell you all the teams of Saint-Gobain and the local organization are spot on delivering extremely well what we control and continue to deliver a strong performance. We have our next meeting for the full year 2025 results, which will be on February 26, 2026. So thank you again for participating on this call with Maud and myself, and have a good evening to all of you. Thank you very much.