RNS Number : 4146Q
Compagnie de Saint-Gobain
25 February 2021
Paris, February 25, 2021, 5:45pm
2020 results and evolution in governance
Record free cash flow(1) in 2020
Record operating margin(2) and recurring net income(3) in H2
-- Responsible management of the health crisis with regard to
all of the Group's stakeholders; solid achievements in ESG(4) ,
with new commitments for 2030
-- Successful completion of "Transform & Grow", a year earlier than planned
-- Strong 4.8% organic growth in sales in H2, accelerating to 6.4% in Q4
-- Sharp rebound in operating income in H2 2020 up 22.4%
like-for-like, with a record operating margin of 10% (up 160 bps
versus H2 2019)
-- Increase of 20 bps in the EBITDA margin(5) to 11.6% for the full year, and of 200 bps in H2
-- Record recurring net income(3) in H2, up 23.4% to EUR1,198 million
-- Record free cash flow(1) of EUR3,044 million in 2020 (up
64%), and net debt reduced to EUR7.2 billion
-- Reduction in the number of shares outstanding, to 530 million from 542 million at end-2019
-- 2020 dividend at EUR1.33 per share, to be paid wholly in cash
-- Evolution in Saint-Gobain governance with effect from July 1(st) , 2021
(EURm) 2019 2020 Change Change Change
like-for-like H2 2020/H2
Sales 42,573 38,128 -10.4% -3.8% +4.8%
EBITDA(6) 4,870 4,415 -9.3%
Operating income 3,390 2,855 -15.8% -12.3% +22.4%
income(3) 1,915 1,470 -23.2%
Free cash flow(1) 1,857 3,044 +63.9%
1. 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 changes
in working capital requirement.
2. Operating margin = Operating income divided by sales.
3. Recurring net income = Net attributable income excluding
capital gains and losses on disposals, asset write-downs and
material non-recurring provisions.
4. ESG = Environmental, Social and Governance.
5. EBITDA margin = EBITDA divided by sales.
6. EBITDA = Operating income, plus operating depreciation and
amortization, less non-operating costs.
Evolution in Saint-Gobain governance
In line with best corporate governance practices, the Board of
Directors of Compagnie de Saint-Gobain has been working extensively
since 2019 under the responsibility of the Lead Independent
Director and the Nomination and Remuneration Committee, and with
the assistance of an independent recruitment firm, on preparing the
succession of Pierre-André de Chalendar, Chairman and Chief
Executive Officer since 2010.
As a result of this process, the Board of Directors deems it
essential for Saint-Gobain that there is a seamless transition,
which is achieved by separating the roles of Chairman and Chief
Executive Officer. Acting on the recommendation of Pierre-André de
Chalendar, the Board has unanimously decided to appoint Benoit
Bazin as Chief Executive Officer with effect from July 1, 2021.
Pierre-André de Chalendar will continue to serve as Chairman of the
Board of Directors. The Board has also decided to recommend to the
June 3, 2021 Annual General Meeting to appoint Benoit Bazin, as a
director of Saint-Gobain.
Pierre-André de Chalendar, Chairman and Chief Executive Officer
of Saint-Gobain, commented:
"The record results of the Group for second-half 2020, in a year
in which the world suffered its worst crisis in decades, confirms
the pertinence of the Group's differentiation strategy and the
success of its profound transformation begun several years ago. Its
new decentralized organization closely aligned with its markets and
customers gives it the agility, efficiency and responsiveness it
needs to capture all opportunities and maximize synergies. In
reshaping its portfolio, the Group is focusing its energies on
businesses offering the highest potential for profitable,
sustainable growth. Our record free cash flow generation, the
result of operational improvements and strict financial discipline,
has enabled us to significantly reduce our debt despite the
difficult economic environment. I would like to sincerely thank the
teams for these excellent results achieved and for their unwavering
commitment and solidarity.
Exceeding our operating and financial objectives reinforces our
commitment and action in favor of a more sustainable and
responsible world, which is at the heart of Saint-Gobain's business
model and values. Our comprehensive range of innovative solutions
promoting energy efficiency, along with our extensive exposure to
the renovation market, ideally position the Group to benefit from
plans launched across the globe to support the energy transition
For this new chapter, I am delighted to be soon handing over the
executive role to Benoit, who has in-depth knowledge of the Group,
has shown his leadership in the different strategic and operating
roles he has held, and has managed, with the success we see today,
critical projects like our transformation plan "Transform &
Grow" or the acquisition of Continental Building Products. He
perfectly embodies the Group's values and its future, and will
successfully steer the Group forward in the best interests of its
shareholders and all of its stakeholders."
Benoit Bazin, Chief Operating Officer of Saint-Gobain,
"The Group's performance in 2020 testifies to the impressive
reaction of our teams in our new organization by country and by
market, who took the right health decisions from the very outset of
the crisis, and then in the second half successfully seized all
opportunities for growth. Over the year as a whole, we unlocked
significant savings of EUR690 million, with a strong contribution
from "Transform & Grow" which met its target of EUR250 million
in structural gains in 2019-2020 a year earlier than planned,
significant reductions in discretionary spending at the peak of the
crisis, the successful roll-out of our operational excellence
programs, and the launch of additional adaptation measures to lower
the break-even point of our businesses where the recovery is more
uncertain. In parallel, we actively pursued our portfolio
optimization strategy despite the health crisis, as illustrated by
the agreements signed for the sale of Lapeyre and the Distribution
business in the Netherlands and Spain. With more than EUR4.6
billion in sales sold or signed since the launch of "Transform
& Grow", Saint-Gobain has significantly exceeded its initial
objectives announced at the end of 2018. On the acquisitions side,
we are extremely satisfied with the swift integration of
Continental Building Products and synergies have exceeded
expectations; 12 other acquisitions were also finalized last year.
Overall, the Group has emerged stronger from its profound
transformation process launched at the end of 2018, and will pursue
its portfolio optimization in order to continuously enhance its
growth and profitability profile going forward.
I feel very honored that the Board has appointed me to take over
as Group Chief Executive Officer and I would like to thank them for
their trust. I would also like to particularly thank Pierre-André,
with whom I have worked for many years: he launched the profound
transformation of the Group - the benefits of which we are seeing
today - and put me in a position where I could play a leading role
in this process alongside him. I look forward to serving as Chief
Executive Officer under his Chairmanship. I firmly believe that
thanks to the quality and engagement of our teams, Saint-Gobain has
significant growth and profitability potential while being ideally
placed to play a decisive role in meeting today's global challenges
of climate change, protection of natural resources and
Biography of Benoit Bazin:
After studying in France and in the United States, and spending
four years at the Treasury department within the French Ministry of
Finance, Benoit Bazin joined Saint-Gobain in 1999. He held various
positions in France and, starting in 2002, in the United States -
in a general management role within High-Performance Materials,
before taking the Chief Financial Officer role of Compagnie de
Saint-Gobain in 2005. From 2009 to the end of 2015, Benoit Bazin
headed the Building Distribution Sector. In 2010, he was named
Senior Vice President of Compagnie de Saint-Gobain. From 2016 to
the end of 2018, Benoit Bazin headed the Construction Products
Sector. During 2017, he was President and CEO of CertainTeed
Corporation in the United States. Since January 1, 2019, he has
been Chief Operating Officer of the Saint-Gobain Group.
Like-for-like sales climbed 4.8% in the second half, with a
marked improvement in all segments after the steep 12.3%
contraction in the first half, helping to limit the full-year
decline to 3.8%. After hitting a low in April with trading at 60%
of prior-year levels, the Group's sales steadily rallied, back to
normal levels in most countries as from June. There was good
momentum in volumes (up 3.4%) and in prices (up 1.4%) in the second
half (down 4.7% and up 0.9%, respectively, over the full year).
On a reported basis, sales came in at EUR38,128 million. The
currency effect was a negative 2.7% over the year, including a
negative 4.1% in the second half due notably to the depreciation of
the Brazilian real and other emerging country currencies, the US
dollar, and the Norwegian krone.
Changes in Group structure had a negative 3.9% impact on sales
over the year, and a negative 3.2% impact in the second half, as a
result of the divestments carried out as part of "Transform &
Grow", with negative structure impacts for the year of 10.0% in
Northern Europe (in Germany with the Raab Karcher Distribution
business and Glassolutions; in Denmark with the Optimera generalist
distribution business), 3.2% in Southern Europe - Middle East &
Africa (in France with DMTP civil engineering materials
distribution and K par K, and with the expanded polystyrene
business; in the Netherlands with Glassolutions) and 9.3% in
Asia-Pacific (in South Korea with Hankuk Glass Industries, an
upstream glass business). The Group structure impact also reflects
acquisitions carried out to consolidate our strong positions
(Continental Building Products in North America as from February) ,
develop new niche technologies (HTMS in HPS) or services, and
expand in emerging countries (gypsum and mortars in Latin America).
In light of the hyperinflationary environment in Argentina, this
country which represents less than 1% of the Group's sales, is
excluded from the like-for-like analysis.
Operating income rose 15.8% on a reported basis in the second
half to EUR2,028 million, and 22.4% like-for-like, helping to limit
the full-year decline to 15.8% at EUR2,855 million as reported and
The Group's operating margin rose to a record level of 10.0% in
second-half 2020 from 8.4% in second-half 2019, standing at 7.5%
for the full year compared to 8.0% in full-year 2019.
In the second half of 2020, the Group benefited from:
- Good momentum in volumes, reinforced in the post-pandemic
period by increased demand on the renovation market, which the
Group was able to take full advantage of thanks to its new
organization close to customers in each country or market;
- Upward trends in sales prices, generating a positive
price-cost spread of EUR110 million in the second half (after EUR50
million in the first half);
- Structural improvement in its profitable growth profile as part of "Transform & Grow":
(1) EUR 50 million in additional recurring and structural
savings, allowing the Group to meet its savings target of EUR250
million at the end of 2020, a year earlier than planned;
(2) successful optimization of the portfolio through divestments
and acquisitions (particularly Continental Building Products), with
a positive impact on the operating margin;
- EUR50 million in cost savings resulting from additional
adaptation measures launched in order to lower the break-even point
of businesses where the recovery is more uncertain ;
- EUR45 million temporary decrease in discretionary spending
(after EUR65 million in the first half);
- EUR165 million resulting from the continuation of the
operational excellence program, which offset wage inflation and
other fixed costs.
Over full-year 2020, the Group took strong action on costs,
achieving EUR690 million in cost savings:
- EUR130 million in recurring and structural savings under "Transform & Grow";
- EUR190 million to mitigate the impact of the health crisis
during the lockdown periods, thanks to the temporary reduction in
discretionary spending and partial employment measures (net of
additional Covid costs); EUR50 million resulting from the
additional adaptation measures launched;
- EUR320 million relating to the continuation of the operational
excellence program, which aims to offset the various impacts of
inflation on costs.
Segment performance (like-for-like sales)
High Performance Solutions (HPS): sequential improvement
HPS sales edged down 1.9% in the second half and advanced 0.8%
in the fourth quarter (down 10.1% over the full year). HPS
benefited from a recovery in most industrial markets in the second
half of 2020. Against this backdrop, the operating margin was 11.1%
for the second half (versus 12.5% in second-half 2019), a clear
improvement on the six months to June 30, 2020 at 7.4%, and 9.4%
for the full year (versus 12.7% for full-year 2019).
- Mobility sales stabilized in the second half, and even
progressed in the fourth quarter against an easier comparison
basis. Sales for the year remained sharply down, affected by the
second quarter (market contraction of 17% in 2020 in terms of
volumes). Although Europe was down in the second half, sales to
China and the Americas were up sharply. Mobility once again
outperformed the automotive market throughout the year, due mainly
to its increasing exposure to products for electric vehicles.
- Industry sales remained down in the second half, but showed a
clear improvement on the six months to June 30. Activities linked
to consumable goods, particularly in Do-It-Yourself (DIY) markets,
rallied steadily, delivering growth in emerging countries. However,
the slowdown in our customers' investment cycles took a heavy toll
on related activities throughout the year.
- Activities serving the Construction Industry held up well over
the full year, with sales virtually stable and significant gains in
market share. The upturn was pronounced in the second half,
especially for external thermal insulation solutions (ETICS),
leading to double-digit growth in the fourth quarter.
- Life Sciences continued to enjoy good growth momentum in the
pharmaceutical and medical sector, benefiting from its recent
Northern Europe: sales growth in the second half; significant
rise in margin
Northern Europe progressed 2.0% in the second half and 3.8% in
the fourth quarter (down 3.1% over the full year), with a return to
good market trends across the Region and robust trading in the
month of December.
Nordic countries delivered a solid performance, posting sales
growth in each quarter in 2020, thanks notably to Distribution,
which continued to outperform the market thanks to its successful
omnichannel digital strategy and benefited largely from its
exposure to the renovation market, despite less dynamic new
construction. UK sales, which were down by nearly half in the
second quarter, picked up in the second half, driven by a good
fourth-quarter performance in Distribution, bolstered by network
optimization efforts. Germany limited its decline over the full
year and leveraged its successful local organization to bounce back
in the second half, led by all of its light construction solutions
in the fourth quarter. Eastern Europe was up slightly over the full
year, enjoying a good dynamic in its main markets in the fourth
The Region's operating margin for 2020 was back at 2019 levels
(6.2% versus 6.3%), thanks to a significant advance in the second
half, up to 7.9% (from 6.6% in second-half 2019), supported by the
full impact of "Transform & Grow" with portfolio divestments
and structural cost reductions, along with post-coronavirus cost
adaptation measures, a clear positive raw material and energy
cost-price spread, and an upturn in volumes.
Southern Europe - Middle East & Africa: significant upturn
in sales in the second half; strong margin growth
Sales for the Southern Europe - Middle East & Africa Region
rebounded 6.7% in the second half (down 4.9% over the full year),
with a good performance in both the third and fourth quarters led
by upbeat renovation markets and additional activity in
France drove the momentum for the entire Region in the second
half, reporting a sharp rise in renovation projects with high
levels of orders, fueling growth in the Distribution business in
particular. The Group's efforts in terms of training trade
professionals in the full range of Saint-Gobain's solutions, common
referrals for different product categories, positioning in
energy-efficient renovation solutions and intermediation with its
other activities within the scope of the Group's new organization,
have created significant opportunities for growth and market share
gains. The website "La Maison Saint-Gobain", for example, reported
a 60% jump in work requests in the fourth quarter. Excluding the
Netherlands which was down slightly, other European countries
advanced in the second half, with Spain and Italy in particular
seeing the full benefits of the new organization on their
performance. Lastly, the Middle East and Africa also delivered
growth in the second half of 2020, despite a different pace of
recovery from one country to the next.
The operating margin for the Region in 2020 was close to last
year's figure, at 5.2% (versus 5.4% in 2019), lifted by a very
strong performance in the second half, at 8.0% (versus 5.8% in
second-half 2019), here again benefiting from the full impact of
"Transform & Grow" - with successful portfolio divestments and
structural cost reductions, a clear positive raw material and
energy price-cost spread, and good volume growth.
Americas: sales growth over the year; sharp rise in operating
The Americas delivered 15.7% organic growth in the second half,
with an acceleration in the fourth quarter at 20.6%, resulting in a
4.7% advance over the full year.
- North America rebounded sharply by 11.2% in the second half
(up 2.8% over the full year), driven by renovation volumes and new
residential construction, and by an effective pricing strategy.
Thanks to the successful integration of Continental Building
Products, the profit target was exceeded, as well as the expected
synergies, with USD 20 million in synergies unlocked during 2020.
Combined with the benefits of the new organization, this
acquisition broadly strengthens the Group's positions in
construction businesses in North America, which delivered a very
- Latin America enjoyed vigorous momentum in second-half sales,
up 25.3% (after the major disruptions in the second quarter),
buoyed by strong local sales synergies and significant market share
There was a significant rise in the Region's operating margin,
at 11.5% for the year (versus 10.1% in 2019), lifted by the 15.4%
margin recorded in the second half (11.2% in second-half 2019),
supported mainly by double-digit growth in volumes and a clear
positive raw material and energy cost-price spread.
Asia-Pacific: return to sales growth in the fourth quarter;
margin up slightly over the full year
The Asia-Pacific Region saw 2.1% organic growth in the second
half, driven by the 7.6% rebound in the fourth quarter (down 7.1%
over the full year), with a month-on-month improvement in a more
favorable pricing environment.
From the second quarter on, China enjoyed bullish trading, with
double-digit growth, a marked improvement in the margin, and a
significant advance for all of our construction solutions, which
continued to capture market share. In India following a marked
contraction in the second and third quarters, trading rallied
towards the end of the year, driven by both volumes and prices -
particularly for building solutions. South-East Asia reported a
mixed picture over the year, with growth in Vietnam spurred by
gains in market share, and an improvement in other countries in the
second half, although this was not enough to fully offset the sharp
downturn reported in first-half 2020.
The Region's operating margin was up slightly, at 10.7% over the
year (from 10.6% in 2019), despite the drop in sales, supported by
a strong second-half increase, up to 13.5% (from 11.6% in
second-half 2019), on the back of a sharp decrease in costs and a
clear positive raw material and energy price-cost spread.
Analysis of the 2020 consolidated financial statements
The 2020 consolidated financial statements were approved and
adopted by Saint-Gobain's Board of Directors at its meeting of
February 25, 2021. The consolidated financial statements were
audited and certified by the statutory auditors.
2019 2020 %
in EUR million (A) (B) (B)/(A)
Sales 42,573 38,128 -10.4%
Operating income 3,390 2,855 -15.8%
Operating depreciation and amortization 1,901 1,902 0.1%
Non-operating costs (421) (342) -18.8%
EBITDA 4,870 4,415 -9.3%
Capital gains and losses on disposals,
asset write-downs and impact of changes
in Group structure (416) (1,081) n.s.
Business income 2,553 1,432 -43.9%
Net financial expense (496) (453) -8.7%
Dividends received from investments
(Sika) 28 34 21.4%
Income tax (631) (526) -16.6%
Share in net income (loss) of associates 0 2 n.s.
Net income before non-controlling interests 1,454 489 -66.4%
Non-controlling interests 48 33 -31.3%
Net attributable income 1,406 456 -67.6%
Earnings per share (2) (in EUR) 2.59 0.85 -67.2%
Recurring net income (1) 1,915 1,470 -23.2%
Recurring earnings per share(2) (in
EUR) 3.53 2.74 -22.4%
EBITDA 4,870 4,415 -9.3%
Depreciation of right-of-use assets (682) (675) -1.0%
Net financial expense (496) (453) -8.7%
Income tax (631) (526) -16.6%
Capital expenditure (1,818) (1,236) -32.0%
o/w additional capacity investments 536 371 -30.8%
Change in working capital requirement 78 1,148 n.s.
Free cash flow(3) 1,857 3,044 63.9%
Free cash flow conversion(4) 44.3% 81.4%
Lease investments 955 833 -12.8%
Investments in securities(5) 297 1,343 n.s.
Divestments 1,052 2,567 n.s.
Consolidated net debt 10,491 7,181 -31.6%
1. Recurring net income = net attributable income (loss)
excluding capital gains and losses on disposals, asset write-downs
and material non-recurring provisions.
2. Calculated based on the weighted average number of shares
outstanding (536,452,195 shares in 2020, versus 542,079,771 shares
3. 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 changes
in working capital requirements.
4. Free cash flow conversion = free cash flow divided by EBITDA
less depreciation of right-of-use assets.
5. Investments in securities: EUR1,343 million in 2020, of which
EUR1,240 million in controlled companies.
Consolidated sales were up 4.8% like-for-like in the second half
(including a positive 3.4% volume impact and a positive 1.4% price
effect), helping to limit the full-year decline to 3.8%. On a
reported basis, sales retreated 2.5% in the second half (down 10.4%
over the full year), with a negative 4.1% currency effect (negative
2.7% for the full year) and a negative 3.2% Group structure impact
(negative 3.9% for the full year), reflecting divestments carried
out as part of "Transform & Grow" and the acquisition of
Continental Building Products.
Operating income progressed in the second half, up 15.8% on a
reported basis to EUR2,028 million and up 22.4% like-for-like,
helping to limit the full-year decline to 15.8% and 12.3%,
respectively. The consolidated operating margin increased to 10.0%
of sales in second-half 2020 (versus 8.4% in second-half 2019), and
7.5% for the full year (8.0% for 2019).
EBITDA climbed 13.3% in the second half to EUR2,780 million,
helping to limit the full-year decline to 9.3%. The Group's EBITDA
margin improved to 13.7% in the second half (11.7% in second-half
2019), and to 11.6% for the full year (versus 11.4% in 2019).
Non-operating costs improved, at EUR342 million versus EUR421
million in 2019, mainly due to the discontinuation of the accrual
to the provision for asbestos-related litigation involving
CertainTeed in the US (EUR88 million accrual in 2019). The amount
for 2020 includes EUR42 million in restructuring costs associated
with cost savings measures linked to "Transform & Grow".
The net balance of capital gains and losses on disposals, asset
write-downs and impacts of changes in Group structure represented
an expense of EUR1,081 million compared to an expense of EUR416
million in 2019. This item consists mainly of a write-down of
intangible assets in the UK Distribution business (EUR571 million),
and write-downs taken against operations held for sale (including
Lapeyre) or related to new post-coronavirus adaptation
Business income totaled EUR1,432 million compared to EUR2,553
million in 2019.
Net financial expense excluding Sika dividends fell to EUR453
million (from EUR496 million in 2019). Dividends received from
equity investments (Sika) totaled EUR34 million.
Income tax was EUR526 million compared to EUR631 million in
2019. The tax rate on recurring net income was 28% (25% in 2019),
and 23% in the second half (25% in second-half 2019), after a first
half which included several exceptional items.
Recurring net income (excluding capital gains and losses on
disposals, asset write-downs and material non-recurring provisions)
was down 23.2% at EUR1,470 million. In second-half 2020, it hit a
record high of EUR1,198 million, a rise of 23.4% versus second-half
Net attributable income amounted to EUR456 million for the year,
compared to EUR1,406 million in 2019.
Investments in property, plant and equipment and intangible
assets (capital expenditure) fell 32.0% to EUR1,236 million,
exceeding the target reduction of over EUR500 million, and as a
percentage of sales were down to 3.2% from 4.3% in 2019. However,
the Group took care to continue investing in additional capacity in
order to prepare for future growth, with an outlay of EUR371
million in the year, mainly in the following areas: Construction
Industry and Life Sciences, façade and gypsum solutions in emerging
countries (Mexico, India and China).
Free cash flow soared 63.9% to an all-time high of EUR3,044
million (8.0% of sales compared to 4.4% in 2019), with a rise in
the free cash flow conversion ratio at 81% (44% in 2019), thanks
mainly to a significant improvement in working capital requirement
(WCR), the reduction in capital expenditure, and the fall in
non-operating costs. Operating WCR represented a historic low of 18
days' sales at December 31, 2020, versus 27 days' sales at
end-December 2019, attributable in equal proportions to a
structural gain and a one-off gain.
Investments in securities totaled EUR1,343 million (EUR297
million in 2019) and mainly included the acquisition of Continental
Building Products. Continental Building Products reported USD 480
million in 12-month pro forma sales and USD 112 million in 12-month
pro forma EBITDA, representing an EBITDA margin of 23.3%. The
amount of synergies generated has exceeded initial expectations, at
USD 20 million in 2020. Expectations for value creation in year
three are confirmed. In all, the Group made 13 acquisitions in
2020, representing around EUR500 million in full-year sales and
EUR110 million in EBITDA.
Divestments totaled EUR2,567 million (EUR1,052 million in 2019),
and mainly related to the sale of Sika shares.
Net debt fell sharply to EUR7.2 billion at December 31, 2020
compared to EUR10.5 billion at end-December 2019, thanks mainly to
sharp growth in free cash flow generation, the accounting
classification of debt carried by entities in the process of being
sold within liabilities held for sale for EUR0.15 billion, and
proceeds from disposals net of acquisitions for around EUR1.2
billion. In fact, the sale of the 10.75% stake in Sika for EUR2.4
billion generated a net cash gain of EUR1.5 billion. Excluding IFRS
16, net debt fell to EUR4.1 billion at December 31, 2020, compared
to EUR7.3 billion at December 31, 2019. Net debt represents 39% of
consolidated equity compared to 53% at end-December 2019. The net
debt to EBITDA ratio came in at 1.6 (1.1 excluding IFRS 16)
compared to 2.2 (1.8 excluding IFRS 16) at December 31, 2019.
Shareholder return policy
In the second half of 2020, the Group reduced the number of
shares outstanding to 530 million at December 31, 2020 from 542
million at end-December 2019.
At today's meeting, Saint-Gobain's Board of Directors decided to
confirm its recommendation for the Shareholders' Meeting of June 3,
2021 to pay a cash dividend of EUR1.33 per share. This dividend
represents 48% of recurring net income and a dividend yield of 3.5%
based on the closing share price at December 31, 2020 (EUR37.50).
The ex-dividend date has been set at June 7 and the dividend will
be paid on June 9, 2021.
The Board has moreover confirmed that it will maintain its
policy of privileging a dividend in cash targeting a normalized
dividend payout rate representing between 35% and 40% of recurring
net income, a rate that will be exceeded for the dividend payable
in respect of 2020 in the context of the pandemic.
Completion of "Transform & Grow"
The Group's "Transform & Grow" initiative has brought a
profound transformation of the Group thanks to a lean, agile and
customer-focused organization and to accelerated portfolio rotation
to secure profitable and sustainable growth.
Structural cost savings:
The new organization by country and by market had generated cost
savings of EUR250 million by end-2020, meeting its target a year
earlier than planned, with savings of EUR120 million in 2019 and
EUR130 million in 2020. The positive operating margin impact is
around 60 basis points.
This structural improvement in the Group's cost base results
mainly from Europe (around 70%), High Performance Solutions (15%),
the Americas (10%) and Asia-Pacific (5%). It was driven by
simplified organizations (around 55% of cost savings), streamlined
central structures and support functions (around 25% of cost
savings), as well as synergies and optimizations within each
country and market (around 20% of cost savings).
Ongoing accelerated rotation of the portfolio:
With EUR3.4 billion in sales divested as of the end of 2020, the
Group has already exceeded its initial target: the positive
full-year impact on the operating margin is more than 40 basis
Saint-Gobain continues to optimize its portfolio, and its total
divestments now represent sales in excess of EUR4.6 billion (for
over EUR1 billion in total divestments), of which around EUR1.2
billion in additional sales is in the process of being divested,
with Lapeyre (EUR641 million) and Distribution Netherlands (EUR522
These local optimization measures should continue, depending on
the strengths and weakness identified by management teams in each
country or market.
A stronger growth outlook:
Having aligned its organization more closely with its customers
in each country or market, the Group has improved its growth
profile, by offering a comprehensive range of integrated solutions
for each segment of the construction (individual homes, apartment
blocks, hospitals, schools) and industry sectors.
Environment, Social, Governance (ESG) performance
The Group's ESG performance continued to progress well in
- Confirmation of the upward trends in our safety score: Total
Recordable Accident Rate (TRAR) at 1.8 (versus 2.2 in 2019).
- Further progress in the fight against climate change:
-- First milestone of our ambitious 2030 roadmap towards carbon
neutrality in 2050 successfully completed:
-- 4% (0.4 million tons) reduction in scope 1 and 2 CO(2)
emissions, to 10.4 million tons versus 2019, and 22.2% reduction
versus 2017, in line with our 2030 target of a 33% reduction;
-- 19% increase in extractions of natural resources avoided
-- 14% reduction in non-recovered production waste versus
-- Reporting in line with TCFD (Task Force on Climate-related
Financial Disclosures) and SASB (Sustainability Accounting
Standards Board) standards and publication of carbon scenarios.
- 2020 diversity target met: 25% of women managers (24% in
- Implementation of the "CARE by Saint-Gobain" social welfare
program for all of the Group's employees and their families:
-- In all countries, the length of maternity or adoption leave
with guaranteed full pay is at least 14 weeks;
-- The roll-out of health and personal risk insurance is in line
with the target of having all employees insured by the end of
- Stronger ties with local communities in order to support
-- Nearly EUR10 million in donations for local philanthropic initiatives;
-- Development of training for young adults ("CFA"
apprenticeship training center in France for instance) and
tradespeople in order to promote the use of sustainable products
and accelerate building renovation;
-- Participation in local schemes to facilitate access to decent
housing for vulnerable populations, combat energy poverty, and help
people move into the world of work.
- Strong employee engagement during the health crisis:
engagement rate of 82%, confirming our employees' pride, loyalty
and satisfaction with the Group (79% in 2019).
- Ongoing compliance training, once again in 2020 exceeding a
90% completion rate for those concerned.
The Group unveiled new goals in 2020:
- In embedding social and environmental criteria in its
businesses, with its new purpose:
"Making the World a better Home", devised as a result of a
collective process involving almost 15,000 employees .
- In fighting against climate change, with the publication of
its 2030 roadmap to reach carbon neutrality by 2050 ("Net Zero
-- New CO(2) targets validated by the Science-Based Targets initiative (SBTi):
-- 33% reduction in absolute terms in its direct and indirect
CO(2) emissions (scopes 1 and 2), compared to 2017;
-- 16% reduction in absolute terms in its scope 3 CO(2)
emissions for all relevant categories for Saint-Gobain, compared to
-- Increase in carbon prices used internally to EUR50 per ton
for investment decisions (versus EUR30 previously) and to EUR150
per ton (versus EUR100 previously) for R&D investments in
-- In order to meet its carbon neutrality targets, each year
through to 2030 the Group will allocate around EUR100 million to
selective capital spending and R&D.
- In basing a larger proportion of executive long-term
compensation plans on CSR criteria (Corporate social
responsibility), with 20% of plans now determined by CSR criteria
compared to 15% previously, and a weighting of 10% for CO(2)
targets versus 5% previously .
- In linking its responsible procurement program to the "Net
Zero Carbon" roadmap for evaluating and reducing scope 3 CO(2)
- In looking to constantly improve inclusion and diversity: new
target of having women make up 30% of the Group's Executive
Committee by the end of 2025 (25% in 2020).
In a macroeconomic and health environment which remains affected
by uncertainties, the dynamic in our main markets proved upbeat -
especially renovation in Europe and construction in the Americas -
in second-half 2020 and the start of 2021. In this market
environment , and provided there is no new impact relating to the
coronavirus pandemic, Saint-Gobain expects the following trends for
- High Performance Solutions : continued sequential improvement
in most industrial markets. Businesses related to customer
investment should rally steadily during the year, although are
expected to remain down on the good level recorded in 2018;
- Northern Europe : continued outperformance in construction and
support from stimulus programs; Nordic countries and Germany should
benefit from good momentum in renovation, except in the event of
strict new lockdown measures; the UK should bounce back though the
environment remains uncertain;
- Southern Europe - Middle East & Africa: continued
outperformance in construction thanks to strong residential
renovation markets and support from national and European stimulus
plans which should particularly benefit the Group's
energy-efficient renovation solutions, notably in France, although
certain markets such as new construction remain down;
- Americas : market growth, particularly new residential
construction, in both North America - as expected - and Latin
- Asia-Pacific : market growth, with continued good momentum in
China and a sharp rebound expected in India.
1) Improvement in the Group's profitable growth profile, driven
- the continuation of its portfolio optimization (divestments
and acquisitions) and growth in plasterboard in North America
fueled by Continental Building Products;
- outperformance versus the markets thanks to its range of
integrated solutions for customers in each country and end market,
meeting the full breadth of needs of the construction world and
- strategy of differentiation and innovation to develop
solutions for sustainability and performance.
2) Rise of more than 100 basis points in the operating margin
compared to the 2018 margin of 7.7%, and ongoing strong discipline
in terms of free cash flow generation :
- constant focus on the price-cost spread , thanks to strong
pricing discipline, amid inflation in raw material and energy
- reduction in costs as part of additional post-coronavirus
adaptation measures , which should generate EUR150 million in cost
savings in 2021, following EUR50 million in second-half 2020;
- continuation of the operational excellence program aimed at
offsetting inflation (excluding raw material and energy costs);
- maintaining the structural drivers for improvement in
operating working capital requirement ;
- capital expenditure of around EUR1.5 billion, with investments
in additional capacity focused on high-growth markets; ongoing
- continued reduction in non-operating costs.
For 2021, the Group is targeting a significant like-for-like
increase in operating income, with an improvement of more than 100
basis points in the operating margin compared to the 7.7% margin in
2018 (assuming that volumes return to their 2018 levels),
confirming the success of "Transform & Grow".
The Group's extensive exposure to the renovation market means it
is ideally placed to benefit from stimulus plans focused on the
energy transition across the globe, which in turn should drive
Saint-Gobain's structural growth.
Saint-Gobain's medium and long-term outlook are robust thanks to
its successful strategic and organizational choices and its
development of a range of integrated solutions for each country and
end market. The strategy of differentiation and innovation means
that Saint-Gobain is well placed to provide its customers with
solutions for sustainability and performance. This strategy is
perfectly in step with the Group's purpose of "Making the World a
better Home ".
- An information meeting for analysts and investors will be held
behind closed doors at 8:30am (GMT+1) on February 26, 2021 and will
be broadcast live on:
- Sales for the first quarter of 2021: April 29, 2021, after
close of trading on the Paris Bourse.
- First-half 2021 results: July 29, 2021, after close of trading
on the Paris Bourse.
- Investor Day: October 6, 2021.
Analyst/Investor relations Press relations
+33 1 88 54 +33 1 88 54 23
29 77 45
+33 1 88 54 +33 1 88 54
Vivien Dardel 19 09 Laurence Pernot 26 83
Floriana Michalowska +33 1 88 54 Patricia Marie +33 1 88 54 27
Christelle Gannage 15 49 Susanne Trabitzsch 96
----------------------- -------------- -------------------- ----------------
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 year (Group structure impact);
-- 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 year (currency
-- changes in applicable accounting policies.
All indicators contained in this press release (not defined in
the footnote) are explained in the notes to the 2020 consolidated
financial statements, available by clicking here:
The glossary below shows the notes in which you can find an
explanation of each indicator.
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
Business 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 ) and the main risks and
uncertainties, presented within the half-year 2020 financial
report. 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 document. 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.
For further information, please visit www.saint-gobain.com .
Click on, or paste the following link into your web browser, to
view the associated PDF document.
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(END) Dow Jones Newswires
February 25, 2021 12:06 ET (17:06 GMT)
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