Compagnie de Saint-Gobain SA · EURONEXT:SGO
Compagnie de Saint-Gobain SA — Saint-Gobain — H1 2009 Earnings Presentation
27 slides from Compagnie de Saint-Gobain SA's earnings presentation, Jul 24, 2009
Slide 1: 1st Half 2009 Results - Analyst-Investor meeting
1st Half 2009 Results Analyst-Investor meeting July 24, 2009 Contents 1 Highlights 2 Group Results 3 Outlook and Action Plan for Second-Half 2009 4 Conclusion 1
Slide 2: Highlights: first-half 2009 key figures
1 Highlights First-half 2009 key figures: impact of an unprecedented crisis Amount in Change €m H1-2009/H1-2008 Sales 18,715 -15.5% Operating 930 -53.6% income Net income 128 -88.1% Recurring 210 -80.9% net income* * excluding capital gains on disposals and asset write-downs 2
Slide 3: Dismal economic environment; swift roll-out of action plan
Dismal economic environment > Global financial and economic crisis, affecting virtually every country and business sector > Fierce recession in most Western countries (US, Germany, France, UK, Spain) > Continued strong decline in Construction markets > Slump in all industrial markets since Q4 2008 (
Slide 4: Priority given to sales prices; extension of cost cutting programs
Priority given to sales prices Like-for-like price trends based on 100 at end-June 2002 +1.7% in H1-2009 120 110 100 90 H1-02 H1-03 H1-04 H1-05 H1-06 H1-07 H1-08 H1-09 Extension of cost cutting programs cumulative, in €m +440 550 260 290 180 110 290 110 110 2007 basis H1-2008 H2-2008 H1-2009 4
Slide 5: Action on costs: capacity adjustments
Action on costs: capacity adjustments Group total North America . 139 Distribution outlets closed . 6 Distribution outlets closed . 101 plant closures . 29 plant closures United Kingdom . 39 Distribution outlets closed . 8 plant closures Spain . 13 Distribution outlets closed . 16 plant closures Oth
Slide 6: Significant reduction in capital expenditure; tight rein on operating WCR
Significant reduction in capital expenditure (in €m and as % of sales) 872 -41% 16,6% 15,0% 14,4% 13,9% 514 3.9% 2.7% H1-2008 H1-2009 Capital expenditure scaled back €358m Tight rein on operating WCR (at June 30, 6400 in €m and in no. of days) 65 6,234 6200 6,167 60d 6,054 6000 60 Cut by 5800 €924m
Slide 7: Free cash flow and change in operating WCR; acquisitions on hold
Free cash flow (excl. tax impact of capital gains and losses) and change in operating WCR, over 12 months in €m 1,797 +€471m 1,270 1,326 924 Change in operating WCR 1,383 1,393 Free cash flow 873 -113 -67 end-June 07 end-June 08 end-June 09 The Group generated €1.8bn in free cash flow after operatin
Slide 8: Balance sheet strengthened; results of action plan
Balance sheet strengthened > €2.4bn of net debt paid down (end-June 2009/end-June 2008): - February 2009 rights issue: €1.5bn - 65% of 2008 dividend paid in stock - focus on cash management > All maturing debt refinanced until Q1-2011: - bond issues (€1bn in January 2009 and €0.75bn in May 2009) - n
Slide 9: Group Results: sales trends
2 A. Group Group Results B. Sectors C. Geographic areas Sales trends in €m +1.7% 22,141 +1.3% -1.3% -15.5% 18,715 -17.2% -15.5% on a like-for-like basis H1-2008 sales exchange rate structure price volumes H1-2009 sales 9
Slide 10: Quarterly organic growth; operating income
Quarterly organic growth % change in 2009/2008 sales on a like-for-like basis volumes prices 2.3% 1.2% 1.7% -17.2% -17.2% -17.1% -15.5% -14.9% -15.9% Q1-2009/ Q2-2009/ H1-2009/ Q1-2008 Q2-2008 H1-2008 • Sharp drop in sales volumes • Sales prices held up well Operating income in €m 2,093 -4.2% 2,005
Slide 11: Non-operating items; recurring net income; net income
Non-operating items in €m H1-08 H1-09 Change Operating income 2,005 930 -54% Provision for asbestos-related litigation (37) (37) Non-operating costs (42) (227) Other operating costs (31) (65) Business income 1,897 601 -68% Net borrowing costs (326) (332) Cost of net debt in % 5.3% 5.4% Other financi
Slide 12: Cash flow from operations and capital expenditure
Cash flow from operations (excl. tax impact of cap. gains and losses) and Capital expenditure in €m 1,883 1,887 €1,061m €1,015m 4.9% 4.6% 1,064 822 872 €550m 2.9% 514 8.6% 3.8% 8.5% 3.9% 5.7% 2.7% (% of sales) H1 2007 H1 2008 H1 2009 Cash flow from operations Capital expenditure Free cash flow repre
Slide 13: Balance sheet: net debt and shareholders' equity
Balance sheet: Net debt & Shareholders’ equity (in €bn) 16.4 15.4 14.5 13.3 Net debt 11.7 10.9 Shareholders' equity '30/06/2008 31/12/2008 30/06/2009 > Net debt/Shareholders’ equity 86% 80% 67% > Net debt/EBITDA* 2.4 2.3 2.7 * over 12 months Very healthy financial position > Reduction of €2.4bn in n
Slide 14: Organic growth by sector
2 A. Group Group Results B. Sectors C. Geographic areas Organic growth Group: -15.5% % change in H1-2009/H1-2008 sales on a like-for-like basis Innovative Materials -22.1% Construction Products Flat Glass -20% -15.3% HPM -25% 20%* 26%* Interior Solutions -20% Exterior Solutions -10% Packaging 9%* -3
Slide 15: Innovative Materials and Construction Products
Innovative Materials (Flat Glass - HPM) (in €m and as % of sales) Sales Operating income Cash flow from 4,993 operations & Capex -23.9% 706 3,802 2,885 209 Flat Glass 2,198 14.2% 123 6.8% 1.9% HPM 2,123 13.9% 1,611 101 0.6% 5.5% 5.1% 3.7% H1-2008 H1-2009 H1-2008 H1-2009 Cash flow Capex like-for-like
Slide 16: Building Distribution and Packaging
Building Distribution (in €m and as % of sales) Sales Operating income Cash flow from operations & Capex 470 10,039 -15.9% 80 8,445 67 116 0.9% 0.8% 4.7% 1.4% H1-2008 H1-2009 H1-2008 H1-2009 Cash flow Capex -14.5% on a like-for-like basis Packaging (in €m and as % of sales) Sales Operating income Ca
Slide 17: Organic growth by geographic area
2 A. Group Group Results B. Sectors C. Geographic areas Organic growth by geographic area % change in H1-2009/H1-2008 sales on a like-for-like basis Group: -15.5% Asia & o/w: Eastern Europe (6%) : -19% emerging Latin America (5%) : -2.9% countries Asia (4%) : -21% -13.5% 15%* France North 30%* Ameri
Slide 18: Operating income, cash flow and capex by geographic area
Operating income by geographic area (in €m and as % of sales) H1-08 H1-09 893 576 414 316 260 221 8.5% 8.7% 11.7% 133 5.4% 3.2% 122 8.8% 4.5% 4.6% France Other Western North America Asia & emerging Europe countries * at constant exchange rates Cash flow and Capex by geographic area (in €m and as % o
Slide 19: Outlook and Action Plan for Second-Half 2009
3 Outlook and Action Plan for Second-Half 2009 Economic outlook for second-half 2009 Economic environment > Economic environment should remain in the doldrums, though no further overall deterioration is expected compared with first-half 2009 > So far only limited benefits from economic stimulus pack
Slide 20: Economic outlook for second-half 2009
Economic outlook for second-half 2009 Group businesses > Trading to remain sluggish in most Group businesses > Lower basis for comparison than in first-half 2009, especially in Q4 > Favorable impact of fall in the cost of raw materials and energy Vigorous roll-out of action plan continued in second-
Slide 21: Sales prices priority; cost cutting program targets
Priority given to sales prices > Sales prices to remain a priority focus, despite downward price pressure in certain businesses (particularly Insulation) and slowing momentum compared with the first half > The Group will seek to maintain a positive price/cost spread: energy and raw material costs mu
Slide 22: Cost savings per half year and by sector
Cost savings per half year cumulative, in €m +1,100 2009 total 1,500 950 400 550 2008 total 260 400 290 550 180 110 290 110 110 2007 basis H1-2008 H2-2008 H1-2009 H2-2009 €400m of additional cost savings in second-half 2009 compared with the first half €1.5 billion of cost savings in 2008-2009: brea
Slide 23: Cost savings breakdown by type
€1.5 billion of cost savings in 2008-2009: breakdown by type 10% Purchasing Purchasing: - pooling 23% Overheads - low-cost countries Overheads: - administrative functions pooled Operational (cross-functional savings): 67% savings more than 80 shared service centers set up in 2008-2009 - additional c
Slide 24: Industrial infrastructure improvement; cash management
Structural improvement in industrial and commercial infrastructure > Economic crisis: opportunity to accelerate renewal/upgrade of industrial facilities > Highly selective approach in Building Distribution - core network preserved: strategic locations maintained; closure of structurally less profita
Slide 25: Conclusion: summary of second-half 2009 outlook
Summary of outlook for second-half 2009 > Aim of maintaining positive spread between sales prices and energy/raw material costs > Extension of cost cutting program > Close monitoring of cash management Barring a further deterioration in the economic environment, operating income and recurring net in
Slide 26: Core assets for emerging from the crisis as a stronger player
Core assets for emerging from the crisis as a stronger player > Cost base significantly reduced and structural improvement in industrial and commercial infrastructure > Ongoing expansion in emerging countries > Continued R&D efforts > Worldwide leadership on fast-growing energy efficiency markets, k
Slide 27: 1st Half 2009 Results
1st Half 2009 Results Analyst-Investor meeting July 24, 2009 27