SIG (LON:SHI) reported full-year 2025 results against what management repeatedly described as a “challenging” and “very subdued” backdrop across European construction markets, particularly in the second half. Chief Executive Officer Pim Vervaat, who joined the company in October and has been in the role for five months, said his early observations included “very strong management” across SIG’s businesses, resilient execution in difficult conditions, and “a number of very good market positions” in what he characterized as a structurally growing market.
2025 results: flat sales, higher operating profit, improved cash flow
Chief Financial Officer Ian Ashton said group sales were flat year-over-year on a like-for-like basis, with small movements in volume and price “virtually” offsetting each other. He noted that some markets weakened further in Q4, “notably the U.K. and Germany,” while the company believes it continued to take share in the “vast majority” of markets.
Below underlying profit, “other items” totaled GBP 42 million, including GBP 30 million of non-cash impairment charges tied to certain UK assets and GBP 9 million of restructuring costs.
Free cash outflow improved to GBP 12 million, which management described as a “marked improvement” on 2024, driven by working capital discipline. Operating cash flow was GBP 43 million, or 133% of operating profit. SIG ended the year with GBP 171 million of liquidity, including an undrawn GBP 90 million revolving credit facility (RCF). Net debt finished at GBP 518 million, of which GBP 323 million related to leases. Leverage was unchanged at 4.7x year-over-year.
Cost reductions and procurement: “self-help” emphasized
Management highlighted cost reduction as a central driver of 2025 performance. Ashton said SIG reduced underlying operating expenses by GBP 39 million before inflation, following similar savings in 2024. Over the past three years of “negative or flat” top-line conditions, SIG said it has removed roughly GBP 80 million of underlying operating cost.
Ashton broke down the 2025 savings into GBP 18 million of restructuring savings and GBP 21 million of other initiatives, including not backfilling roles amid natural churn, fleet efficiencies (especially in the U.K. and Germany), and around GBP 3 million of one-off property profits. Group headcount ended the year down 230 roles (about 3%), and down about 660 roles (about 9%) over two years.
Looking ahead, SIG expects to offset anticipated 2026 OpEx inflation of approximately GBP 15 million through the annualization of prior actions and additional measures, including in Germany. Procurement was described as an area of “good early progress,” though too early to guide for 2026. Ashton said SIG believes its target of at least 1% savings on total spend of GBP 2.3 billion from 2027 onward is “very achievable.”
Vervaat said the company’s approach is not a centralized buying function, but rather optimizing procurement in a decentralized structure with improved data visibility. He pointed to an example in the U.K. where terms with the same supplier across acquired operations were aligned, delivering an estimated GBP 0.5 million to GBP 1 million saving. SIG also hired Darin Evans as Chief Procurement Officer to coach local procurement teams.
Business performance: roofing leads; turnarounds in UK Interiors and Benelux
Ashton reiterated that SIG’s roofing businesses in the U.K. and France generate the majority of profit and cash. He also highlighted progress in UK Interiors and Benelux.
- UK Insulation & Drylining / UK Interiors: Vervaat said the UK Insulation and Drylining business moved from a GBP 3.5 million loss to a GBP 5.6 million profit in 2025, driven by significant cost measures and market share gains (8% in H1, 3% in H2). In Q&A, management said 2026 will balance market share ambitions with a need to enhance margins, noting weather impacted the first two months of the year.
- Benelux: Operating losses improved from -GBP 4.5 million to -GBP 1.5 million. Vervaat said the Dutch operations were at breakeven, and the group is targeting a second-half run rate that “is turning a little bit of a profit.”
- UK Roofing: Now includes Building Solutions, previously within UK Specialist Markets, and delivered year-on-year profitability improvement. Vervaat said UK Roofing achieved 2% like-for-like growth and gained share, and noted an industry award: National Merchant of the Year 2025.
- Germany: Like-for-like sales declined 3%, but management said it believes it gained share. SIG has initiated strategic sales actions and a “quite significant” cost reduction program. Vervaat referenced a German government stimulus package that “still has to take effect,” which he said supports a better medium-term outlook.
- Poland: Like-for-like growth was 5%, with management describing SIG as market leader and outperforming a market growing roughly 1%-2%. In Q&A, Ashton said profitability was lower mainly due to slightly lower gross margin, while OpEx was managed well.
- Ireland: Vervaat said SIG took share in most areas, but noted the distribution business was “very price-disciplined” in H2, leading to some share loss the company aims to win back in 2026 at “good, responsible margins.” SIG’s three contracting businesses in Ireland were described as resilient.
France: market share gains, cost reduction, and AI initiatives
France Managing Director Julien Monteiro said the French construction market declined around 6% in 2025 amid political and regulatory uncertainty. Despite that, SIG France gained share, outperforming core segments by roughly 1 to 2 percentage points. Like-for-like sales declined 5%, but underlying profit increased to GBP 14.5 million, up GBP 0.3 million, helped by GBP 9 million of cost reductions, network optimization (including branch closures and property disposals), and operational efficiency measures.
Monteiro said SIG France generated GBP 18 million in free cash flow, primarily supported by working capital management. He also discussed progress on AI-driven tools, including systems intended to improve sales activity productivity and speed up complex quotations, as well as work under way on AI applications for working capital management, pricing, and customer-facing services (including roof imagery and diagnostics support for customers).
For 2026, Monteiro cited industry forecasts for about 2% overall market growth in France, driven primarily by new construction, with renovation and maintenance expected to be broadly stable. He also referenced the reactivation of the government renovation incentive MaPrimeRénov’ as a potential support for energy-saving renovation work.
Outlook and strategy: Vision 2030, portfolio review, and continued market softness early 2026
Vervaat said SIG has developed a Vision 2030 strategy with two legs: evolving the prior GEM strategy with more emphasis on procurement, working capital, and operating expenses; and optimizing and simplifying the business portfolio. He said SIG has identified “a little bit over 20” product-market combinations and is assessing each one strategically over a 3–5 year horizon, considering organic potential and industry structure.
Management said it expects continued market softness in the first half of 2026, citing difficult weather conditions early in the year, but anticipates improvement over the balance of the year alongside self-help measures. Ashton said the group expects sales pricing in aggregate to be “flattish” during 2026, with OpEx inflation broadly similar to recent years (2%-3%). CapEx guidance was GBP 15 million to GBP 20 million, and interest expense was guided to GBP 54 million to GBP 56 million.
On liquidity, management said SIG has added receivables financing facilities in French roofing and Poland, using them to around GBP 15 million to GBP 20 million at month-end (higher intra-month), and described net costs as not material. The RCF remains undrawn, and Ashton said the group is “very confident” it will maintain ample liquidity throughout 2026.
In Q&A, management reiterated it is not in a rush to sell assets in a weak part of the cycle, emphasizing liquidity headroom and a desire to time any portfolio moves appropriately. Vervaat also argued that consolidation is likely across European building materials distribution over the next 5–10 years, driven by enhanced market positions and synergies.
About SIG (LON:SHI)
SIG is a leading pan-European provider of specialist insulation and sustainable building products and solutions, differentiated through specialist knowledge, product mix and end markets.
We connect over 75,000 customers with thousands of leading and specialist products and brands from our suppliers. We use our network of around 430 winning branches across local markets with superior customer service, specialist expertise and on-time delivery to add value to both our customers and suppliers.
