Compagnie De Saint-gobain Sa · EURONEXT:SGO
Compagnie De Saint-gobain Sa — Saint-Gobain — FY2023 Earnings Presentation
49 slides from Compagnie De Saint-gobain Sa's earnings presentation, Mar 1, 2024
Slide 1: 2023 Results and Outlook
2 0 2 3 R E S U LT S AND OUTLOOK M a r c h 1 st, 2 0 2 4
Slide 2: 2023 Highlights
2023 HIGHLIGHTS Benoit Bazin Chief Executive Officer
Slide 3: Saint-Gobain solutions in landmark projects
Varso Place – Warsaw, Poland Amaryllis residence – Delhi, India 12 Saint-Gobain solutions 8 Saint-Gobain solutions Expected Long Thanh Airport – Vietnam Midtown Union – Atlanta, USA 3 8 Saint-Gobain solutions 7 Saint-Gobain solutions Expected
Slide 4: Leading on energy-efficient renovation
LEADING ON ENERGY-EFFICIENT RENOVATION > 80% of renovations eligible for MaPrimeRénov’ have used our digital configurator 4 FY 2023 RESULTS
Slide 5: Expanding our presence in high-growth markets
EXPANDING OUR PRESENCE IN HIGH-GROWTH MARKETS Close to 2/3 of Group operating income from high-growth markets1 ~€2bn of growth capex and acquisitions2 Acquisition of Building Products of 5 1. North America, Asia and emerging markets, 2023 pro forma for Canada in September 2023 recent acquisitions an
Slide 6: Strengthening our leadership in construction chemicals
STRENGTHENING OUR LEADERSHIP IN CONSTRUCTION CHEMICALS €5.7bn sales1 +11 bolt-on acquisitions in construction chemicals2 High Speed rail link HS2 – UK 6 1. Pro forma 5 Saint-Gobain solutions and services 2. Signed or closed in 2023
Slide 7: Achieving new milestones in decarbonization
ACHIEVING NEW MILESTONES IN DECARBONIZATION -34% CO2 emissions1 57% carbon-free electricity €223m invested2 World-first glass trial production with >30% hydrogen 7 1. Scope 1+2, in 2023 vs. 2017 2. Capex and R&D investments for decarbonization in 2023
Slide 8: Our teams are always committed to aiming higher
OUR TEAMS ARE ALWAYS COMMITTED TO AIMING HIGHER 83% Engagement rate of our employees1 8 1. Annual survey with 87% participation rate (>126,000 respondents)
Slide 9: 2023: Strong results despite a challenging environment
2023: STRONG RESULTS DESPITE A CHALLENGING ENVIRONMENT sales -0.9% Like-for-like operating margin and operating income at constant exchange rates free cash flow 62% conversion rate recurring EPS value creation ROCE World Expo United Arab Emirates Pavilion – 19 Saint-Gobain solutions 9 FY 2023 RESULT
Slide 10: Value creative leader in light and sustainable construction
VALUE CREATIVE LEADER IN LIGHT AND SUSTAINABLE CONSTRUCTION Demonstrated with a third consecutive year of Solutions approach delivering superior Attractive profile on and decarbonization (-34% in CO2 emissions and -44% in carbon intensity1) 10 1. In 2023 vs. 2017, scope 1+2 emissions. Intensity = em
Slide 11: 2023 Results: Group
2023 RESULTS Group Sreedhar N. Chief Financial Officer 11 FY 2023 RESULTS
Slide 12: Good resilience in like-for-like sales
GOOD RESILIENCE IN LIKE-FOR-LIKE SALES 2023/2022 -0.9% like-for-like +4.6% Outperformance on our main markets -2.3% -6.4% -3.2% -5.5% Price effect: +4.6% over the year Structure: continued optimization of Group’s profile, in terms of both divestments and acquisitions 51,197 47,944 (€m) (€m) 2022 sal
Slide 13: Double-digit margin for the third consecutive year
DOUBLE-DIGIT MARGIN FOR THE THIRD CONSECUTIVE YEAR Operating income in €bn and margin in % 5.3 5.3 4.5 Record operating margin at 11.0% and record operating income at constant exchange rates 11.0% Positive price-cost spread 10.4% 10.2% Operating income up 64% and +330bps in the margin since the laun
Slide 14: New record EBITDA margin
NEW RECORD EBITDA MARGIN 2022 2023 €m Operating income 5,337 5,251 Non-operating costs (262) (236) Capital gains (losses) and impact resulting from (85) (365) changes in Group structure Asset write-downs and other (408) (419) Business income 4,582 4,231 Operating income 5,337 5 251 Operating depreci
Slide 15: Recurring net income and EPS at a very good level
RECURRING NET INCOME AND EPS AT A VERY GOOD LEVEL 2022 2023 €m Business income 4,582 4,231 Net financial expense (405) (425) Income tax (1,082) (1,060) Net attributable income 3,003 2,669 Recurring net income 3,335 3,242 Recurring EPS (in €)* 6.48 6.39 * Recurring EPS: calculated based on the weight
Slide 16: Record free cash flow generation
CONVERSION RATIO CONSISTENTLY ABOVE 50% NEW RECORD FREE CASH FLOW GENERATION Free cash flow in €bn and conversion ratio in % 3.8 3.9 2.9 59% Reduction of 2 days in OWCR* 62% Strict allocation of capex to high-growth 59% markets, by optimizing maintenance capex 53% 31% Three-fold increase in cash sin
Slide 17: Strong financial structure
STRONG FINANCIAL STRUCTURE Net debt / EBITDA ratio 1.2 1.2 1.1 Net debt / EBITDA exceeding objective of 1.5x to 2.0x Strong financial discipline recognized by rating agencies 2021 2022 2023 17 FY 2023 RESULTS
Slide 18: Strong value creation for the third consecutive year
STRONG VALUE CREATION FOR THE THIRD CONSECUTIVE YEAR Recurring EPS (€) ROCE* 16.1% 15.9% 6.48 6.39 15.3% 5.35 2021 2022 2023 2021 2022 2023 Delivering value creation on acquisitions by year 3 * ROCE: before tax, after IFRS 16 18 FY 2023 RESULTS
Slide 19: Delivering on all Grow & Impact targets
DELIVERING ON ALL “GROW & IMPACT” TARGETS 2021-2025 targets (on average) 2021-2023 average Accelerated Organic sales growth profit & cash Operating margin generation Free cash flow conversion ratio Disciplined ROCE capital allocation Net debt / EBITDA Attractive shareholder return: ~€1.4bn in divide
Slide 20: 2023 Results: Segments
2023 RESULTS Segments Sreedhar N. Chief Financial Officer 20 FY 2023 RESULTS
Slide 21: Northern Europe: record margin despite lower sales
NORTHERN EUROPE: RECORD MARGIN DESPITE LOWER SALES 1,279 -3.7% 1,039 -23.1% -13.5% -5.9% 8.2% 7.8% 16,413 12,614 2022 sales Exchange rates Structure like-for-like 2023 sales 2022 2023 Change in sales on Nordics United Kingdom Germany a like-for-like basis -6.2% -0.9% -13.2% 21 FY 2023 RESULTS
Slide 22: Southern Europe – Middle East & Africa: resilient sales and margin growth
SOUTHERN EUROPE – MIDDLE EAST & AFRICA: RESILIENT SALES AND MARGIN GROWTH +0.0% 1,219 1,208 -1.7% -0.8% -0.9% 8.1% 8.0% 15,198 14,941 2022 sales Exchange rates Structure like-for-like 2023 sales 2022 2023 Change in sales on France Spain-Italy a like-for-like basis -1.9% +0.9% 22 FY 2023 RESULTS
Slide 23: Americas: sales growth in North America and record margin
AMERICAS: SALES GROWTH IN NORTH AMERICA AND RECORD MARGIN +1.9% +4.1% +3.9% 1,586 1,462 -1.7% 16.8% 16.1% 9,064 9,439 2022 sales Exchange rates Structure like-for-like 2023 sales 2022 2023 Change in sales on North America Latin America a like-for-like basis +5.3% -7.3% 23 FY 2023 RESULTS
Slide 24: Asia-Pacific: good sales momentum and record margin
ASIA-PACIFIC: GOOD SALES MOMENTUM AND RECORD MARGIN +5.3% -0.4% 267 257 +1.3% -7.0% 12.6% 12.1% 2,132 2,123 2022 sales Exchange rates Structure like-for-like 2023 sales 2022 2023 24 FY 2023 RESULTS
Slide 25: High Performance Solutions: sales and margin held firm
HIGH PERFORMANCE SOLUTIONS: SALES AND MARGIN HELD FIRM +2.6% +4.5% 1,207 1,155 +3.6% -1.7% 12.0% 12.0% 9,648 10,083 2022 sales Exchange rates Structure like-for-like 2023 sales 2022 2023 Construction and Change in sales on Mobility industry a like-for-like basis -3.2% 12.9% 25 FY 2023 RESULTS
Slide 26: Strategy
STRATEGY Benoit Bazin Chief Executive Officer 26 FY 2023 RESULTS
Slide 27: Energy efficient renovation, lightweight construction, decarbonization
Energy efficient renovation Lightweight construction Industry & construction decarbonization 27 FY 2023 RESULTS
Slide 28: European renovation market continues to demonstrate resilience
EUROPEAN RENOVATION MARKET CONTINUES TO DEMONSTRATE RESILIENCE Impact of energy label on dwelling’s selling price in France in 2023 vs. D label2 +28% +17% -12% -26% in 2024 for energy Unblocking of funds AB C D E FG renovation programs with strong under the focus on deep renovations including for re
Slide 29: Structural needs for new build in all regions
STRUCTURAL NEEDS FOR NEW BUILD IN ALL REGIONS NORTH AMERICA ASIA & EMERGING COUNTRIES WESTERN EUROPE Stabilizing new build market Growing need for new build Improving housing with improving sentiment driven by demography and affordability urbanization Large housing shortage Rising sustainability age
Slide 30: Paving the way for sustainable construction
WE ARE PAVING THE WAY FOR SUSTAINABLE CONSTRUCTION Paris – New York – Dubai Global barometer Digital magazine CARBON INDICATOR 3.79 Kg CO2 eq/m² on 50 years more 1st low-carbon glass 1st low-carbon Carbon indicator for in Europe and India plasterboard > 100,000 references 30 FY 2023 RESULTS
Slide 31: Allocating capital towards high-growth markets
WE DECISIVELY ALLOCATE CAPITAL TOWARDS HIGH-GROWTH MARKETS Share of Group operating income 32% North America of growth capex in North America, Asia & emerging countries Asia & emerging 18% 31% countries 2023 Construction chemicals plant, Turkey 24% 58% 37% Western Europe Before Transformation Pro fo
Slide 32: Leveraging two recent acquisitions in Canada
WE ARE LEVERAGING OUR TWO RECENT ACQUISITIONS IN CANADA TO BUILD A FULL-RANGE EXTERIOR OFFER August 2022 • C$ 101m EBITDA • Synergies ahead of plan • Key commercial successes with our complete CertainTeed and Kaycan offers • Increased sales of Kaycan aluminum siding solutions with CertainTeed’s cust
Slide 33: Strengthening presence in Asia-Pacific with acquisition of CSR
WE ARE STRENGTHENING OUR PRESENCE IN THE HIGH-GROWTH MARKETS OF ASIA-PACIFIC WITH THE ACQUISITION OF CSR 1 supported by strong demographics and government programs in Australia, with strong iconic brands A track record of and for smooth combination and strong execution on synergies Building solution
Slide 34: Strong global leadership in construction chemicals
WE HAVE BUILT A STRONG GLOBAL LEADERSHIP IN CONSTRUCTION CHEMICALS Continued bolt-on acquisitions Backward integration of polymerization Major commercial wins fully effective in all countries EBITDA 2023 Combined Combined EBITDA margin1 synergies 4 new sites and production lines Value creation in im
Slide 35: Country organization brings structural effectiveness
OUR COUNTRY ORGANIZATION BRINGS STRUCTURAL EFFECTIVENESS IN OPERATIONS 90% of CEOs native to their country Constant focus on price-cost management In-depth understanding of local markets Proactive operational action plans to adjust cost structure to market changes Country CEOs promoting a very effic
Slide 36: Increased share-of-wallet thanks to full range of solutions
WE HAVE SIGNIFICANTLY INCREASED OUR SHARE-OF-WALLET THANKS TO OUR FULL RANGE OF SOLUTIONS EXTENDED OFFER FOR OUR COMMON SPECIFICATION TEAM DISTRIBUTOR CUSTOMERS ACROSS PRODUCTS TO TARGET COMPLEX PROJECTS Sales teams leveraging local leadership to Targeting sustainable projects with technical increas
Slide 37: Solutions bring proven and measurable performance to buildings
OUR SOLUTIONS BRING PROVEN AND MEASURABLE PERFORMANCE TO BUILDINGS Prefab thermal efficient roof • World’s largest climatic Render & chamber of its type decorative finish creating a Thermal insulating glass Glasswool insulation (-20°C to +40°C, wind, rain, snow, solar Brick-effect Prefab floor finis
Slide 38: Capturing high-growth markets with innovations and digital solutions
WE CAPTURE HIGH-GROWTH GLOBAL MARKETS WITH OUR INNOVATIONS AND DIGITAL SOLUTIONS In-transit concrete management Development of multi-material Glass furnace energy optimization software >5,000 trucks deployed compression pads for EV1 batteries 38 1. EV: Electric Vehicle FY 2023 RESULTS
Slide 39: Track record of attractive shareholder returns
TRACK RECORD OF ATTRACTIVE SHAREHOLDER RETURNS +13% CAGR 21-23 1,555 1,355 1,218 2024: 542 Share buyback1 (€m) 520 518 • Dividend of €2.10 per share (+5%) Board’s recommendation to the June 6th, 2024 AGM 1,013 Cash dividend (€m) • Share buybacks1: €420m 835 (€2.00) Dividend per share (€) 700 (€1.63)
Slide 40: Strong performance trajectory
STRONG PERFORMANCE TRAJECTORY DYNAMIC RECORD OPERATING RECURRING NET FREE CASH FLOW VALUE CREATION SALES GROWTH MARGIN INCOME DOUBLED GENERATION TRIPLED (ROCE) UP 50% +330 +520 +15% x2 x3 bp bp €47.9bn €5.3bn 15.9% €41.8bn €3.2bn €3.9bn €3.2bn 10.7% €1.7bn €1.2bn 7.7% 10.4% 7.7% 11.0% 2018 2023 2018
Slide 41: Outlook
OUTLOOK Benoit Bazin Chief Executive Officer 41 FY 2023 RESULTS
Slide 42: 2024 Outlook
2024 OUTLOOK • Europe: resilience in renovation; new construction remaining difficult before gradually reaching its low point country by country • Americas: construction to hold firm in North America (new build and renovation); recovery expected during the year in Latin America • Asia-Pacific: good
Slide 43: The sustainable construction leader delivering consistently strong results
SAINT-GOBAIN, THE SUSTAINABLE CONSTRUCTION LEADER DELIVERING CONSISTENTLY STRONG RESULTS Efficient local organization and strong pricing 3 years of outperformance within our Grow & Largest low-carbon offer on the market and power with a full-range solutions offer Impact strategy, supported by teams’
Slide 44: Important disclaimer – forward-looking information
IMPORTANT DISCLAIMER – FORWARD-LOOKING INFORMATION This presentation 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", "anticipa
Slide 45: 2023 Results and Outlook
2 0 2 3 R E S U LT S AND OUTLOOK M a r c h 1 st, 2 0 2 4
Slide 46: 2023 end markets sales split
2023 END MARKETS1 SALES SPLIT NEW RESIDENTIAL 7% 7% 7% 2% CONSTRUCTION 23% NEW NON-RESIDENTIAL 4% 3% 3% 1% 2% CONSTRUCTION 13% 14% 21% 9% 5% RENOVATION / INFRAST. 1% 50% INDUSTRIES 14% 14%2 NORTHERN SOUTHERN AMERICAS ASIA-PACIFIC HPS EUROPE EUROPE - 19% 4% 21% 25% ME & AFRICA 31% 1. Saint-Gobain est
Slide 47: Optimizing profile towards higher growth and profitability
WE ACTIVELY OPTIMIZE OUR PROFILE TOWARDS BUSINESSES WITH HIGHER GROWTH AND PROFITABILITY Continued dynamic optimization of Group profile in 2023 1/3 of sales rotated2 €0.9bn (JV in Turkey) sales1 from value creative acquisitions ~20% EBITDA / Sales €3.0bn sales of underperforming assets divested (Po
Slide 48: Maximize our impact, minimize our footprint
MAXIMIZE OUR IMPACT, MINIMIZE OUR FOOTPRINT More performance A decarbonated home A better living for all with less 2030 2030 Yearly Yearly 2023 OBJ. -33% -80% 100% of managers trained on ethics in Employee engagement rate above Scope 1 & 2 vs. 2017 non-recovered waste vs. 2017 1st year benchmark >74
Slide 49: Energy renovation: enhanced state support
ENERGY RENOVATION: ENHANCED STATE SUPPORT NETHERLANDS NORWAY DENMARK NEW • All office buildings must have at least an NEW • Publication in Oct-23 of an energy DKK30bn allocated from the National Building fund for the energy label C efficiency action plan by the government renovation of social housin