SAINT-GOBAIN CAPITAL MARKETS DAY AND NEW STRATEGIC PLAN "GROW & IMPACT"
* Saint-Gobain is launching "Grow & Impact", its new strategic plan designed to
accelerate the Group's profitable growth
* The Group is very well positioned on the structural growth markets of light
and sustainable construction
* Thanks to its comprehensive range of solutions and its performance-driven
local operating model, Saint-Gobain should outperform its underlying markets
which are accelerating
* Saint-Gobain is a key player in the fight against climate change, aiming to
maximize the positive impact that the Group brings to its customers while
minimizing its own environmental footprint:
- Sustainable solutions represent 72% of Group sales
- Solutions sold by the Group in one year result in the avoidance of around
1,300 million tons of CO2 emissions over their lifespan
* The Group is setting new annual financial targets for 2021-2025(1) on average
including accelerated profit and cash flow generation and attractive value
creation for its shareholders:
- Organic sales growth of 3-5%(2)
- Operating margin of 9-11%
- Free cash flow conversion ratio above 50%
- ROCE of 12-15%
- Annual dividend payout ratio representing 30-50% of recurring net income
- EUR2 billion share buyback program over the 2021-2025 period
Today at 2:00pm CET Saint-Gobain is hosting a meeting for investors and
analysts to present the Group's strategy and targets for 2021-2025.
(1) Assuming no major economic slowdown
(2) Including 2021 organic growth normalized versus 2019
Headquarters: Tour Saint-Gobain * 12 place de l'Iris *
92096 * La Défense Cedex * France * Tel.: +33 1 88 54 00 00
Benoit Bazin, Chief Executive Officer of Saint-Gobain, commented:
"Together with the Executive Committee, I am pleased to launch a new chapter
for Saint-Gobain. Our vision is to become the worldwide leader in light and
sustainable construction. In a world moving towards net-zero carbon,
Saint-Gobain aims to provide a full range of solutions that address three major
issues of our time: drastically reducing the 40% of CO2 emissions linked to
construction, protecting natural resources, and facing the challenge of rapid
urbanization in emerging countries. Today we are launching a new strategic
plan, "Grow & Impact", with the ambition to significantly accelerate our
profitable growth and the value creation for our shareholders. The Group will
build on the success of its new local organization and its "multi-national"
culture driven by performance and by proximity to its customers, in order to
benefit fully from strong growth on its underlying markets.
By capitalizing on innovation and the power of data to enrich our range of
solutions, "Grow & Impact" will enable us to outperform our underlying markets
and maximize our positive impact in numerous areas: the environment with our
decarbonization solutions for construction and industry, well-being and
customer satisfaction, value creation for our shareholders and employee
engagement, and addressing the concerns of all our stakeholders."
Update on raw material and energy cost inflation
Amid the current context of accelerating inflation in energy costs,
Saint-Gobain is now expecting energy and raw material cost inflation of around
EUR1.5 billion in 2021 compared to 2020 (versus its previous estimation for the
full-year of EUR1.1 billion made at the end of July), of which EUR1.1 billion
in second-half 2021 alone. This increase in inflation mainly concerns the cost
of energy in Europe, where the Group is currently hedged for natural gas and
electricity at 50% for fourth-quarter 2021, 65% for 2022 and 25% for 2023, at
levels slightly above 2020.
To offset this inflation over full-year 2021 in its industrial businesses, the
Group needs a positive price impact of around 6% over the full year and of 8%
in the second half.
In light of its proactive strategy in this regard and the price increases
implemented over the past few months, the Group estimates for the third quarter
of 2021 a positive price effect of around 8% and a positive volume effect of
around 1% compared to 2020 (and up around 3% compared to third-quarter 2019).
The Group's underlying markets continued to see good momentum, despite a high
comparison basis in 2020 for the summer period in Europe, when craftsmen took
few holidays owing to the coronavirus pandemic. In the current energy price
context, and thanks to the new price increases announced over the past few
weeks in most countries in Europe and in the US, Saint- Gobain is confident
that it will be able to offset raw material and energy cost inflation over
Accordingly, Saint-Gobain is confidently reiterating its targets as announced
at the publication of the half-year results at end-July 2021: for full-year
2021, the Group is targeting a very strong increase in operating income to a
new all-time high, with like-for-like operating income in second-half 2021
close to the previous record of second-half 2020.
New strategic plan: "Grow & Impact"
Saint-Gobain is very well positioned on the structural growth markets of light
and sustainable construction
120 countries representing over 70% of global GDP have committed to carbon
neutrality. To achieve this, sustainable construction is essential, given that
the construction industry is the primary cause of CO2 emissions, accounting for
40% of emissions around the globe. Saint- Gobain's solutions for renovation,
the building envelope and light construction can tackle at least two-thirds of
these emissions. Light construction - where the wood, concrete or metal frame
is the only load-bearing element of the building - requires the use of light
materials like plasterboard and maximizes the need for glass and insulation,
thereby responding to the growing demand for housing thanks to modular
construction for example, and contributing to the decarbonization of buildings
and to easier dismantling and reutilization.
The Group is attractively positioned on the renovation and light construction
markets, where growth is expected to be structurally faster in a post-Covid
Local renovation markets (around 50% of Group sales) benefit from structural
tailwinds which could double their growth rate: stimulus plans for
energy-efficient renovation of public and private buildings, upward revision of
energy performance standards and changes in building use (working from home, a
return to single-family homes).
The shift to light construction (around 40% of Group sales) responds to the
challenges of decarbonization (time and productivity gains on site) and of
resource scarcity (up to 50% reduction in raw materials usage vs. traditional
building methods), and brings well-being and comfort benefits for occupants.
Lastly, rapid developments in the need for decarbonization among our global
industrial customers require accelerated innovation in decarbonization
technologies for the construction industry (especially cement and concrete),
green mobility (glazing solutions adapted to the challenges of electric
mobility) and in specialty materials for the decarbonization of industrial
processes (e.g., high performance glass refractories).
Saint-Gobain is well-positioned to play a leading role in the fast-changing
The world of construction is at a tipping point, with the need for new
solutions. The Group is ideally placed to lead these developments and benefit
from growth on its underlying markets thanks to its set of solutions meeting
the specific needs of its customers along two key axes: sustainability and
Saint-Gobain is able to offer a comprehensive range of end-to-end solutions,
whether in cross-sell and dedicated channels, services along the value-chain
(logistics & kitting, intermediation, aftermarket sales, unmanned stores,
recycling, digital solutions and services, etc.) or systems (offsite
manufacturing, light façades, partition systems, ETICS - external thermal
insulation composite systems, smart glazing, etc.).
Its broad geographical reach provides it with critical scale (#1 in renovation
in Europe and #1 in construction in North America and certain major emerging
countries such as India or Brazil), and enables broad international deployment
(manufacturing in 70 countries, adapting to local customers' needs and
The Group is present across the full value chain, which allows it to influence
all its stakeholders from architects to end-customers, and to build local
ecosystems, especially via its distribution network close to hundreds of
thousands of craftsmen.
Saint-Gobain's innovation is focused on customers, combining numerous
technological platforms in the construction and industrial markets. This has
enabled the Group to be named a Clarivate Top 100 Global Innovator for the 10th
consecutive year. Leveraging ever more digital data from its multiple customer
interactions along the value chain also allows it to maximize the impact of its
ESG at the core of Saint-Gobain's business model
The Group's solutions sold across the globe in one year result in around 1,300
million tons of avoided CO2 emissions over their lifespan, around 40 times the
Group's own total carbon footprint in 2020 (scopes 1, 2 and 3) or more than 100
times its scope 1 and 2 footprint. Saint-Gobain is therefore a key player in
the fight against climate change, maximizing its positive impact for its
customers whilst minimizing its own footprint as part of its commitment to be
carbon neutral by 2050.
Solutions bringing a sustainability benefit represent 72% of Saint-Gobain's
sales. These solutions benefit either the planet - in terms of CO2 and energy
savings, resources and circularity - or people - in terms of health and safety
and well-being: visual, acoustic, thermal and air quality comfort.(3)
Furthermore, Saint-Gobain is able to measure the impact of its solutions in
use: numerous use cases - some of which will be presented in detail today -
illustrate and quantify the benefits for our customers and end-users. In
addition to the positive impact brought by its solutions, Saint-Gobain
demonstrates its leadership and accountability across the board on ESG
ESG is embedded into management processes. It is taken into account in
short-term incentive plans (at 10%) and long-term incentive plans (at 20%, up
from 15% previously); committees focused on Corporate Social Responsibility
themes have been created within the Executive Committee and Board of Directors;
diversity is a key priority (25% women managers in the Group, 38% women on the
To reach its target of carbon neutrality by 2050, the Group has defined a 2030
roadmap targeting a reduction in CO2 emissions of 33% for scopes 1 and 2, and
of 16% for scope 3, both in absolute terms versus 2017. There has been a
significant acceleration in the ESG roadmaps in each country where Saint-Gobain
is present: EUR100 million is allocated each year to capital expenditure and
R&D focused on reducing CO2 emissions. In investment decisions, the internal
carbon price has been increased to EUR75 per ton for capital expenditure
(versus EUR50 previously), and is EUR150 per ton for R&D projects.
A new composite Sustainability Progress Indicator has been defined to track the
Group's progress towards carbon neutrality. The indicator consists of four
components: scope 1 and 2 CO2 emissions, virgin raw materials avoided,
non-recovered waste and industrial water withdrawal. The current score is 65
from a starting point of 50 in 2017; the 2030 target is 100.
The Group makes a significant contribution to the acceleration of the
industry's ESG agenda in collaborating with governmental and non-governmental
organizations, building ecosystem partnerships and exchanging with start-ups.
(3) Analysis carried out across all product families across the Group and
audited by an independent third-party.
A new model of business governance at Saint-Gobain, close to its markets and
with a resolutely "multi-national" culture
Thanks to the success of "Transform & Grow", Saint-Gobain's local business
model is now well- established. The new organization has enabled a profound
cultural shift, with teams' accountability and performance as well as customer
satisfaction being placed at the core. Our new strategic plan "Grow & Impact"
is therefore built on solid foundations, accelerating the Group's profitable
growth whilst maximizing the positive impact it brings to all of its
The Group's organization and culture have been fundamentally transformed, with
a simplified organization ("one-boss" principle) and 90% of CEOs native to
their country, resulting in an employee engagement rate of 82%.
New remuneration schemes (bonuses 100% aligned to country or market
performance) are aligned with performance: focus on cash, ROCE, EBITDA and ESG
impact (CO2, diversity and safety).
Investment priorities have been clearly defined, with a focus on renovation in
Europe and on North American and emerging markets. The Group scope will
continue to be reviewed regularly, based on performance and strategic alignment
for divestments, and strict capital allocation criteria for value-creating
Saint-Gobain targets attractive value creation for its shareholders
The unique positioning on structurally faster-growing markets, the
comprehensive solutions offer and a performance-accountable organization will
allow the Group to accelerate its growth and outperform its markets, and
disciplined capital allocation will also ensure a step-up in value creation for
shareholders. As a result, Saint-Gobain is today presenting its annual
financial targets for 2021-2025 on average, assuming no major economic
Accelerated profit and cash generation
- Organic sales growth of 3-5%
- Operating margin of 9-11%
- Free cash flow conversion ratio above 50%
Disciplined capital allocation
- ROCE of 12-15%
- Net debt to EBITDA ratio of 1.5-2.0x
Attractive shareholder returns policy
- Annual dividend payout ratio representing 30-50% of recurring net income,
paid in cash
- EUR2 billion share buyback program between 2021 and 2025, equivalent to more
than 30 million net share count reduction based on the recent Saint-Gobain
The Capital Markets Day will be held both physically and virtually via an
immersive platform, already available. The presentation will start at 2:00pm
CET and include a Q&A session for analysts and investors. Documentation and
webcasts will be available on the Saint-Gobain website at the beginning of the
presentation at 2:00pm CET:
https://www.saint-gobain.com/en/finance/investor-days. The webcast replay will
be available on October 7, via the same link above.
Saint-Gobain designs, manufactures and distributes materials and solutions for
the construction, mobility, healthcare and other industrial application
markets. Developed through a continuous innovation process, they can be found
everywhere in our living places and daily life, providing well-being,
performance and safety, while addressing the challenges of sustainable
construction, resource efficiency and the fight against climate change. This
strategy of responsible growth is guided by the Saint-Gobain purpose, "MAKING
THE WORLD A BETTER HOME", which responds to the shared ambition of all the
women and men in the Group to act every day to make the world a more beautiful
and sustainable place to live in.
EUR38.1 billion in sales in 2020
More than 167,000 employees, located in 70 countries
Committed to achieving Carbon Neutrality by 2050
For more information about Saint-Gobain,
visit www.saint-gobain.com and follow us on Twitter @saintgobain
You can also listen in live to the Capital Markets Day via conference call by
France: +33 1 70 70 07 81
US: +1 646 741 3167
UK: +44 84 4481 9752
Event code: 2251919
- Indicators of organic growth and like-for-like changes in sales/operating
income reflect the Group's underlying performance excluding the impact of:
* changes in Group structure, by calculating indicators for the year under
review based on the scope of consolidation of the previous period (Group
* changes in foreign exchange rates, by calculating indicators for the year
under review and those for the previous year based on identical foreign
exchange rates for the previous period (currency impact);
* changes in applicable accounting policies.
- Free cash flow = EBITDA less depreciation of right-of-use assets, plus net
financial expense, plus income tax, less capital expenditure excluding
additional capacity investments, plus change in working capital requirement
over a 12-month period.
- EBITDA = operating income plus operating depreciation and amortization less
- ESG: Environment, Social, Governance.
- Capital expenditure = investments in tangible and intangible assets.
- Operating margin = operating income divided by sales.
- Share buybacks: net of offsetting employee share creation.
- Recurring net income = net attributable income excluding capital gains and
losses on disposals, asset write-downs and material non-recurring provisions.
- ROCE (Return on Capital Employed) = annualized operating income adjusted for
changes in the scope of consolidation (based on 12 months' of operating income
for acquired companies and with no operating income taken into account for
divested companies), expressed as a percentage of total assets at period-end.
- Free cash flow conversion ratio = free cash flow divided by EBITDA less
depreciation of right-of-use assets.
All indicators contained in this press release (not defined above or in the
footnotes) are explained in the Universal Registration Document including the
annual financial report, available by clicking here:
EBITDA Note 4
Net debt Note 9
Non-operating costs Note 4
Operating income Note 4
Net financial expense Note 9
Recurring net income Note 4
Working capital requirement Note 4
Important disclaimer - forward-looking statements:
This press release contains forward-looking statements with respect to
Saint-Gobain's financial condition, results, business, strategy, plans and
outlook. Forward-looking statements are generally identified by the use of the
words "expect", "anticipate", "believe", "intend", "estimate", "plan" and
similar expressions. Although Saint-Gobain believes that the expectations
reflected in such forward looking statements are based on reasonable
assumptions as at the time of publishing this document, investors are cautioned
that these statements are not guarantees of its future performance. Actual
results may differ materially from the forward-looking statements as a result
of a number of known and unknown risks, uncertainties and other factors, many
of which are difficult to predict and are generally beyond the control of
Saint- Gobain, including but not limited to the risks described in
Saint-Gobain's Universal Registration Document available on its website
(www.saint-gobain.com). Accordingly, readers of this document are cautioned
against relying on these forward-looking statements. These forward-looking
statements are made as of the date of this press release. Saint- Gobain
disclaims any intention or obligation to complete, update or revise these
forward-looking statements, whether as a result of new information, future
events or otherwise. This press release does not constitute any offer to
purchase or exchange, nor any solicitation of an offer to sell or exchange
securities of Saint-Gobain.
This press release includes information pertaining to Saint-Gobain's markets
and competitive positions therein. Such information is based on market data and
Saint-Gobain's actual revenues in those markets for the relevant periods.
Saint- Gobain obtained this market information from various third-party sources
(industry publications, surveys, and forecasts) and its own internal estimates.
No representation or warranty, express or implied, is made by Saint-Gobain or
its managers, corporate officers, employees, shareholders, contractors,
representatives or advisors as to the accuracy or completeness of the
information or opinions contained in this press release that have not been