Compagnie De Saint-gobain Sa · EURONEXT:SGO
Compagnie De Saint-gobain Sa — Saint-Gobain — Q1 2023 Earnings Presentation
64 slides from Compagnie De Saint-gobain Sa's earnings presentation, April 2023
Slide 1: Recent Results and Outlook
RECENT RESULTS AND OUTLOOK APRIL 2023
Slide 2: First-Quarter 2023 Sales
| FIRST-QUARTER 2023 SALES
Slide 3: Confirmation of the Group's resilience in a difficult environment
Organic growth: +4.7% Good level of pricing, helping to generate a positive price-cost spread Confirmation of the Group’s resilience in a difficult environment Confidence in the 2023 outlook: operating margin between 9% and 11% Q1-2023 Sales 3
Slide 4: Q1-2023 Group sales change
2023/2022 +4.7% like-for-like +10.2% +3.3% -5.5% -0.5% -0.9% 12,007 12,406 (€m) (€m) Q1-2022 Exchange Structure Prices Volumes Q1-2023 sales rates sales Q1-2023 Sales 4
Slide 5: Q1 sales: Northern Europe
2023/2022 +1.0% like-for-like +11.4% -3.2% -12.3% -10.4% -10.1% 4,014 3,519 Q1-2022 sales Exchange Structure Prices Volumes Q1-2023 sales rates Change in United Nordics Germany sales on a like- Kingdom for-like basis +1.4% +2.9% +0.3% Q1-2023 Sales 5
Slide 6: Q1 sales: France, Spain-Italy
2023/2022 +8.1% like-for-like +12.5% +7.7% -4.4% +0.3% -0.7% 3,725 4,012 Q1-2022 sales Exchange Structure Prices Volumes Q1-2023 sales rates Change in France Spain-Italy sales on a like- for-like basis +6.8% +15.5% Q1-2023 Sales 6
Slide 7: Q1 sales: North America, Latin America
2023/2022 +0.5% like-for-like +9.5% +8.6% +13.5% +4.4% -9.0% 1,920 2,180 Q1-2022 sales Exchange Structure Prices Volumes Q1-2023 sales rates Change in North America Latin America sales on a like- for-like basis +0.5% +0.7% Q1-2023 Sales 7
Slide 8: Q1 sales: Asia-Pacific
2023/2022 +5.0% like-for-like +5.6% +2.5% +0.8% -0.6% -3.3% 479 491 Q1-2022 sales Exchange Structure Prices Volumes Q1-2023 sales rates Q1-2023 Sales 8
Slide 9: Q1 sales: High Performance Solutions
2023/2022 +9.0% like-for-like +2.7% +16.7% +6.3% +6.3% +1.4% 2,191 2,556 Q1-2022 sales Exchange Structure Prices Volumes Q1-2023 sales rates Change in Construction Mobility sales on a like- and industry for-like basis +2.7% +20.6% Q1-2023 Sales 9
Slide 10: 2023 operating margin target in line with Grow & Impact plan
In a difficult macroeconomic environment, Saint-Gobain’s priority is to continue to demonstrate its resilience by consolidating its high operating performance level, thanks to its pertinent strategic positioning and its commercial and industrial initiatives enabling it to adapt proactively to the sp
Slide 11: 2022 Highlights
| 2022 HIGHLIGHTS
Slide 12: Engaged teams delivering in a challenging context
ENGAGED TEAMS DELIVERING IN A CHALLENGING CONTEXT 90% of employees are proud to work at Saint-Gobain1 STRONG AND RESILIENT COUNTRY-BASED OPERATING MODEL 1. Annual survey with >125,000 respondents, 84% participation rate
Slide 13: Rebalancing geographic footprint for profitable growth
REBALANCING GEOGRAPHIC FOOTPRINT FOR PROFITABLE GROWTH #1 IN LIGHT & SUSTAINABLE CONSTRUCTION IN CANADA Kaycan acquisition in August 2022 North America, Asia & emerging countries in 2022 62% of operating income1 ~ €4bn of growth capex and acquisitions #1 IN LIGHT & SUSTAINABLE CONSTRUCTION IN INDIA
Slide 14: Strengthening leadership position in construction chemicals
STRENGTHENING LEADERSHIP POSITION IN CONSTRUCTION CHEMICALS €5.3bn sales1 +7 bolt-on acquisitions in 6 countries on top of Chryso and GCP 1. 2022 pro forma
Slide 15: Leadership in renovation
LEADERSHIP IN RENOVATION Apprenticeship programs Digital tools for craftsmen ~50% of Group sales Best-in-class organic growth Presence along the full value chain
Slide 16: Innovation in light & sustainable construction
INNOVATION IN LIGHT & SUSTAINABLE CONSTRUCTION Zero-carbon pilot production Glass, plasterboard, glass wool1 -42% CO2 intensity2 vs. 2017 1. Zero-carbon scope 1 + 2 for glass and plasterboard, -93% scope 1 + 2 vs. average THE WORLD’S FIRST LOW CARBON GLASS OFFER for glass wool -40% CO2 footprint red
Slide 17: 2022 key figures and ROCE 16.1%
2022 vs. 2021 Sales +15.9% €51.2bn Operating income +18.4% €5.3bn (10.4% margin) Recurring EPS +21.1% €6.48 Free cash flow +30.5% €3.8bn Strong value creation ROCE 16.1% vs. 15.3% in 2021 2022 results presentation 17
Slide 18: Plan will continue to drive success
of acquisitions1 and of divestments1 PLAN WILL CONTINUE TO DRIVE SUCCESS 1. Revenues of transactions completed or signed in 2022 2022 results presentation 18
Slide 19: 2022 Results: Group
| 2022 RESULTS GROUP SEGMENTS
Slide 20: 2022 sales change
2022/2021 +13.3% like-for-like +14.6% +15.9% Outperformance on our main markets -1.3% Structure: continued optimization of Group profile (divestments and +3.6% acquisitions) Exchange rates: appreciation of the US -1.0% dollar, Brazilian real and other emerging country currencies 44,160 51,197 (€m) (
Slide 21: Operating income and margin since 2018
+66% +270 bps 5.3 4.5 Sharp rise in operating income since 2018: up 14% per year on average Record double-digit margin for the second 3.2 consecutive year 10.4% 10.2% Improvement in the operating margin: +270 bps versus 2018 7.7% Sound management of the price/cost spread 2018 2021 2022 2022 results
Slide 22: Operating income to EBITDA
2022/ 2021 2022 €m 2021 Operating income 4,507 5,337 +18.4% Non-operating costs (239) (262) Capital gains (losses) and impact resulting from (67) (85) changes in Group structure Asset write-downs and other (265) (408) Business income 3,936 4,582 Operating income 4,507 5,337 Operating depreciation an
Slide 23: Recurring EPS
2022/ 2021 2022 €m 2021 Business income 3,936 4,582 Net financial expense (408) (405) Income tax (919) (1,082) Net attributable income 2,521 3,003 Recurring net income 2,815 3,335 +18.5% Recurring EPS (in €) 5.35 6.48 +21.1% 2022 results presentation 23
Slide 24: Free cash flow
x3 3.8 2.9 Deep-rooted cash culture: three-fold increase in free 59% cash flow vs. 2018 (+31% vs. 2021) 59% Reduction in OWCR* of 14 days’ sales vs. 2018 (-2 days vs. 2021) 53% 1.2 31% Optimization of maintenance capex, total capex in line with the objective of between 3.5% and 4.5% of sales 31% (3.
Slide 25: Net debt and net debt/EBITDA
Net debt, €bn Net debt/EBITDA 11.2 2.4x ratio IFRS16 8.2 divided by 2 IFRS16 8.2 1.2x 5.3 2018 2022 2018 2022 Net debt/EBITDA at 1.2x for the second consecutive year, exceeding objectives (1.5x to 2.0x) 2022 results presentation 25
Slide 26: EPS, ROI and ROCE
Recurring EPS ROI* 30.8% ROCE* 16.1% 6.48 +5.4 points >x2 +12.7 points 10.7% 18.1% 3.18 2018 2022 2018 2022 2018 2022 All segments ≥ ROCE target: 12% to 15% * ROI and ROCE: before tax, after IFRS16 2022 results presentation 26
Slide 27: 2022 Results: Segments
| 2022 RESULTS GROUP SEGMENTS
Slide 28: 2022 sales: Northern Europe
2022/2021 +12.4% like-for-like +15.6% 1,279 +9.2% 1,100 -3.2% +0.4% -3.6% 15,028 16,413 7.3% 7.8% 2021 sales Exchange Structure Price Volumes 2022 sales 2021 2022 rates Change in United Nordics Germany sales on a like- Kingdom for-like basis +10.9% +9.9% +16.4% 2022 results presentation 28
Slide 29: 2022 sales: France, Spain-Italy
2022/2021 +12.6% like-for-like +15.5% 1,219 +8.2% 1,166 -2.9% -0.5% -3.9% 14,044 15,198 8.3% 8.0% 2021 sales Exchange Structure Price Volumes 2022 sales 2021 2022 rates Change in France Spain-Italy sales on a like- for-like basis +9.9% +23.8% 2022 results presentation 29
Slide 30: 2022 sales: North America, Latin America
2022/2021 +13.9% like-for-like +16.8% 1,462 +33.0% -2.9% 1,123 +4.7% +14.4% 6,815 9,064 16.5% 16.1% 2021 sales Exchange Structure Price Volumes 2022 sales 2021 2022 rates Change in North America Latin America sales on a like- for-like basis +15.0% +11.0% 2022 results presentation 30
Slide 31: 2022 sales: Asia-Pacific
2022/2021 +23.6% like-for-like +8.0% +19.3% 257 +15.6% 211 +7.1% -11.4% 1,787 2,132 11.8% 12.1% 2021 sales Exchange Structure Price Volumes 2022 sales 2021 2022 rates 2022 results presentation 31
Slide 32: 2022 sales: High Performance Solutions
2022/2021 +14.3% like-for-like +5.0% +28.5% 1,155 +9.3% 931 +7.6% +6.6% 7,511 9,648 12.4% 12.0% 2021 sales Exchange Structure Price Volumes 2022 sales 2021 2022 rates Change in Construction Mobility Industry sales on a like- for-like basis +19.5% +14.9% +12.8% 2022 results presentation 32
Slide 33: Accelerated profit & cash generation
2021 2022 Accelerated Organic sales growth profit & cash Operating margin generation Free cash flow conversion rate Disciplined ROCE capital allocation Net debt/EBITDA Attractive Average yearly share buyback (€2bn in total) shareholder return Dividend as a % of recurring net income policy * +13.8% f
Slide 34: Strategy
| STRATEGY “FQW2,
Slide 35: Delivering on our strategy
DELIVERING ON A SUCCESSFUL TRANSFORMATION OUR STRATEGY An attractive and resilient STRATEGIC POSITIONING for GROWTH Q1-2023 Sales 35
Slide 36: Increased exposure to high-growth markets
Group operating income Increased exposure to high-growth markets 30% North America Capital Markets Day target on sales by geographies reached1 Asia & emerging • 20% in North America 18% x2 32% in € countries • 25% in Asia & emerging 24% countries • 55% in Western Europe 58% 38% Western Europe Before
Slide 37: New lines and plants worldwide
+13 EUROPE +24 AMERICAS +78 New lines and plants worldwide 2019-2022 plant in Czech Republic Siding plant in the US +22 ASIA +19 MIDDLE-EAST & AFRICA 70% Growth capex in North America, Asia & emerging countries 2019-2022 Construction chemicals Glass plant in India plant in Kenya +x New lines and pla
Slide 38: Value-creative acquisitions and underperforming assets sold
VALUE-CREATIVE ACQUISITIONS UNDERPERFORMING ASSETS SOLD IN LIGHT & SUSTAINABLE CONSTRUCTION Sales acquired1 EBITDA / sales Sales divested1 EBITDA / sales ~20% <5% of which in 2022 of which in 2022 Construction chemicals: STEEL CERAMICS (Glass Korea) (China) (Denmark, Estonia, Germany, Austria, UK, F
Slide 39: Kaycan acquisition: strong results and enriched offering
Strong financial results Complete and enriched offering EBITDA in 2022 Synergies ahead of plan ENGINEERED WOOD RAINWEAR ALUMINUM SIDING VINYL SIDING #1 Building Materials offer in Canada 2022 results presentation 39
Slide 40: Construction chemicals: growth and synergies
Maintain strong growth and On track with synergies deployment best-in-class profitability Sales growth 2022 vs. 2021 EBITDA in 2022 Bolt-on acquisitions leveraging Cross-selling for Saint-Gobain’s footprint infrastructure projects Technology leader in sustainability solutions 1st utilization of 0% c
Slide 41: Synergies confirmed and on track
Synergies confirmed and on track towards best-in-class margin EBITDA targeted in 2023 Operations: freight cost reduction Purchasing: backward integration and industrial optimization of polymerization with • Above target in Year 1: >$25m already secured • Full potential confirmed Bring SG&A costs dow
Slide 42: Integrations on track
INTEGRATIONS ON TRACK Thierry Bernard Mark Rayfield CEO Construction Chemicals - HPS CEO North America - Region 2022 results presentation 42
Slide 43: Delivering on our strategy
DELIVERING ON A SUCCESSFUL TRANSFORMATION OUR STRATEGY An attractive and resilient STRATEGIC POSITIONING for GROWTH Q1-2023 Sales 43
Slide 44: Delivering consistent results
DELIVERING CONSISTENT RESULTS
Slide 45: Strong growth drivers for renovation
THE NATIONAL ENERGY EFFICIENCY REPOWER EU EPBD1 RECOVERY PLAN DIRECTIVE €30bn being Funding for Member states in 2023 to face Final round of negotiations to Directive for Member deployed in 2023 out of States to renovate 3% the energy crisis, renovate all the €40bn planned for of public buildings pe
Slide 46: Presence on the full value chain
Presence on the full value chain Waterproofing membranes Insulated glazing Glass wool insulation Best offer for energy efficiency Exterior thermal insulation Fiber glass reinforced plasterboard Full range of services from digital Waste collection & training, to logistics and recycling recycling serv
Slide 47: Deep renovation: >70% energy bill reduction
Our solutions address more than 80% of the needs x%: share of total energy losses in a building Deep renovation of a low 30% energy-efficiency building1 attics and roof 20% From energy class G to C air permeability DPE DPE 15% windows average cost of renovation2 payback 10% 20% flooring walls 5% the
Slide 48: Powerful commercial organization
Powerful commercial organization Roofing shingles Roofing membranes • Cross-selling Vinyl siding Blowing wool • Growth in multiple channels insulation including retail with strong key Engineered wood siding Lightweight account management plasterboard Fiber glass wall covering • Strong solution-drive
Slide 49: Light construction is growing
~2.5x more Saint-Gobain products used Waterproofing Energy-efficient glazing with light construction vs. traditional Insulation for ventilation ducts in glass in plasterboard Acoustic ceilings Electrochromic glass (stone wool) (glass wool) (construction chemicals) Drywall plasterboard Fire retardant
Slide 50: Superior growth driven by sustainability
ENERGY-EFFICIENT COATED HIGH PERFORMANCE ADMIXTURES FOR LOW CERAMICS GLASS MAT GLAZING FOR EV1 CARBON CONCRETE Artificial intelligence to Increased lifespan Glass and materials for optimize furnace performance of construction products batteries for electric vehicles -50% CO2 emissions Superior growt
Slide 51: Value creation built on leadership positions
2022 PRO FORMA SALES 2022 PRO FORMA END MARKETS Interior solutions Industry1 (insulation, Industry1 gypsum & ceilings) New residential 13% 13% construction Construction 22% 28% chemicals 11% 15% New non- 18% residential 30% 50% Exterior Renovation / construction solutions2 infrastructure Building ma
Slide 52: Maximize our impact & minimize our footprint
Maximize our impact & Minimize our footprint Close to Saint-Gobain sustainable pilot products CO2 emissions3 Carbon-free electricity solutions offer with zero-carbon production1 Share of Saint-Gobain Mobility Top 3% sales in electric vehicles2 ~1,300 million tons of avoided CO2 emissions over our so
Slide 53: Performance since 2018
DYNAMIC NET INCOME CASH GENERATION VALUE CREATION EXCELLENT MARGIN SALES GROWTH DOUBLED TRIPLED UP 50% OPERATING RECURRING FREE CASH SALES ROCE INCOME NET INCOME FLOW +23% 270 + x2 x3 + 540 bp bp €51.2bn €5.3bn €41.8bn 16.1% €3.8bn €3.3bn €3.2bn 10.7% €1.7bn €1.2bn 7.7% 10.4% 2018 2022 2018 2022 201
Slide 54: Record shareholder return and growing dividend
RECORD SHAREHOLDER RETURN A STEADILY GROWING DIVIDEND 2022: €1.35bn • 2021 dividend: ~€835m paid out to shareholders +23% on average/y • Share buybacks: €520m1 (>€1bn over 2021-2022, ahead of €2.00 the target of €2bn over 5 years, i.e. €400m per year)2 €1.63 €1.33 2023: >€1.4bn • 2022 dividend: ~€1,
Slide 55: Outlook
| OUTLOOK /
Slide 56: 2023 outlook: operating margin between 9% and 11%
• Europe: resilience in renovation while new construction slows • Americas: slowdown in new construction, partly mitigated by demand on the renovation market • Asia-Pacific: good growth in most countries • High Performance Solutions: good momentum supported by ongoing improvement in automotive Amid
Slide 57: Outperform our markets, deliver on margin, lead on sustainability
OUTPERFORM OUR DELIVER ON MARGIN LEAD ON MARKETS AND VALUE CREATION SUSTAINABILITY © Sz. Nagy Judit © Scott Norsworthy 2022 results presentation 57
Slide 58: Forward-looking statements
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", "anticipate", "believe", "intend", "estimate", "plan" and si
Slide 59: Definitions of indicators
▪ 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 str
Slide 60: Recent Results and Outlook Appendix
RECENT RESULTS AND OUTLOOK APPENDIX APRIL 2023
Slide 61: End markets by region
NEW RESIDENTIAL 1% 6% 7% 6% 2% CONSTRUCTION 22% NEW NON-RESIDENTIAL 2% 5% 2% 4% 2% CONSTRUCTION 15% 4% 15% 21% 9% RENOVATION / INFRAST. 1% 50% INDUSTRIES 13% 2 13% HPS NORTHERN SOUTHERN AMERICAS ASIA-PACIFIC 20% EUROPE EUROPE - 19% 5% 26% ME & AFRICA 30% 1. Saint-Gobain estimated end markets 2. Of w
Slide 62: Renovation funding and regulation by country
FRANCE SWEDEN DENMARK NEW GERMANY NEW Funding: increase of MaPrimeRenov’ subsidies Commitment: yearly decline Funding: new renovation Commitment: acceleration of the yearly in the share of least energy- grant being prepared by the renovation rate to above 2% by 2030 efficient buildings NEW Regulatio
Slide 63: Sustainability targets and progress
Contribute to a Contribute to more Contribute to a safer decarbonated world performance with less and better living for all 2030 2030 Yearly Yearly Employee engagement -33% -80% non-recovered waste rate above benchmark 100% managers trained scope 1+2 vs. 2017 vs. 2017 every year on ethics in 1st yea
Slide 64: ESG scoring agencies and recognition
ESG SCORING AGENCIES INDICES & THIRD-PARTY RECOGNITION Ranked A 5th year in a row 8th year in a row with only 15 globally recognized companies Ranked Climate Change A Top 3% of companies ranked For the 2nd year in a row Ranked Prime (C+) SBTi validated the Group’s Top 10% of industry net zero carbon