Compagnie De Saint-gobain Sa · EURONEXT:SGO
Compagnie De Saint-gobain Sa — Saint-Gobain — Investor Day (May 2017)
127 slides from Compagnie De Saint-gobain Sa's investor day presentation, May 17, 2017
Slide 1: Investor Day
@by Feldman_1, Getty image MAY 17, 2017 INVESTOR DAY
Slide 2: Agenda
@by Feldman_1, Getty image How has the Group changed since 2013? Is it time for a recovery in Saint-Gobain’s end markets? Can Saint-Gobain grow faster than its markets? Is a more digitized world a threat or an opportunity? AGENDA Is there more cost reduction potential beyond the existing savings pla
Slide 3: 2013-2017: A Group transformed and ready for growth
3 2013-2017: A GROUP TRANSFORMED AND READY FOR GROWTH Pierre-André de Chalendar Chairman and Chief Executive Officer INVESTOR DAY / MAY 2017
Slide 4: On track to deliver most Investor Day 2013 targets
On track to deliver most Investor Day 2013 targets STRENGTHEN THE GROUP’S PROFILE INCREASE FOCUS ON DIFFERENTIATION 1 2 Reduce capital intensity Strengthen our innovation pipeline in developed countries Enhance the Refocus industrial assets Group’s online offer outside Western Europe Increase our br
Slide 5: 2013-2017: a Group transformed and ready for growth
2013-2017: a Group transformed and ready for growth A renewed management team with broad international experience A coherent set of businesses aligned with a clear mission statement 5 Robust positions in emerging countries A lighter and more disciplined Saint-Gobain Steady improvement of value creat
Slide 6: A renewed management team with broad international experience
A renewed management team with broad international experience 28 10 24 1 18 1 18 3 15 1 28 1 27 1 7 7 PIERRE-ANDRÉ DE CLAUDE IMAUVEN BENOÎT BAZIN PATRICK DUPIN LAURENT GUILLOT TOM KINISKY KÅRE O. MALO CLAIRE PEDINI CHALENDAR COO Construction Flat Glass High-Performance North America Building Distrib
Slide 7: A coherent set of businesses, with strengths and opportunities in each
A coherent set of businesses, with strengths and opportunities in each Sector… Technology Innovation Co development 7 INNOVATIVE MATERIALS Breadth of clients Leading positions and brands Depth of materials and solutions’ selection Emerging countries Energy savings Consolidation Efficient materials R
Slide 8: Synergies creating a unique offer adapted to customers' needs
… and synergies creating a unique offer adapted to customers’ needs Mission statement INNOVATION Saint-Gobain helps to create great living places and improve daily life by combining comfort HIGH-EFFICIENCY and sustainability SERVICE 8 MANUFACTURING INNOVATIVE MATERIALS Customers request a more compl
Slide 9: Examples of answering customers' multi-criteria requirements
Examples of our ability to answer our customers’ multi-criteria requirements BEARINGS FOR AUTO ACOUSTICAL SOLUTIONS PREFAB 9 Customer OEM*, part-maker Home or business owner Homebuilder, contractor Unfulfilled needs Vibration control, durability Sound comfort Productivity innovation requirements Cus
Slide 10: From a product-centric to a customer-centric organization
From a product-centric to a customer-centric organization LARGE COMMERCIAL MARINE Technologies BUILDINGS Markets FROM 10 Technologies Markets TO INVESTOR DAY / MAY 2017
Slide 11: Robust positions in emerging countries
Robust positions in emerging countries OPERATING PROFIT IN ASIA INDUSTRIAL ASSETS OUTSIDE AND EMERGING COUNTRIES WESTERN EUROPE (€m) Innovative Materials + Construction Products at constant exchange rate 901 11 66% 62% 551 57% 2012 2016 2012 2016 2018 target BRICS Asia & other emerging countries INV
Slide 12: Example: the journey to build a leader in India
Example: the journey to build a leader in India BADDI, HP 1 19% >50% JIND BHIWADI DELHI JAIPUR Flat Glass Sales CAGR Spontaneous KANPUR Abrasives since 1996 Saint-Gobain brand 12 AHMEDABAD Plasterboards awareness BARODA Refractories NAGPUR JAMSHEDPUR KOLKATA WADA MUMBAI PUNE Saint-Gobain contributed
Slide 13: A lighter Saint-Gobain
A lighter Saint-Gobain Capital intensity in developed countries 34% 33% 27%-29% 30% Downstream investments in industrial activities 13 Optimized use of capacity Lower capital intensity in Flat Glass 2008* 2012* 2016 2018 target *including Verallia INVESTOR DAY / MAY 2017
Slide 14: A disciplined Saint-Gobain
A disciplined Saint-Gobain Cost reductions in excess of €4.2bn Active operating WCR management between 2008 and 2016 (€bn) number of days, at the end of December* -10 equivalent to 38d days - €1.1bn 2008-12 2.6 14 28d 2013-16 1.6 2008 2009 2010 2011 2012 2013 2014 2015 2016 *including Verallia until
Slide 15: Steady improvement of value creation ratios
Steady improvement of value creation ratios +1.5pt ROCE (pre-tax) x2 FCF (€bn) 2012 - 2016 2012 - 2016 10.1% 1.3 15 8.6% 0.6 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 INVESTOR DAY / MAY 2017
Slide 16: Progress on all CSR dimensions
Progress on all CSR dimensions EXECUTIVES FOLLOWING THOUSANDS OF THE COMPLIANCE INDIRECT JOBS created in employment areas BUSINESS PROGRAM PRACTICES & within the year following their integration (%) ETHICS 550 87 460 HEALTH & DIVERSITY SAFETY 33 2012 2016 2014 2016 16 #1 in Europe #2 Workdwide FOREI
Slide 17: A strong governance with significant evolutions between 2012 and 2017
A strong governance with significant evolutions between 2012 and 2017 New committee: strategy and CSR BUSINESS PRACTICES & Appointment of a lead independent director (Administrateur ETHICS Référent)* HEALTH & DIVERSITY SAFETY # Board members Independents 17 16 14 44% 64% 2012 2017 * 2012 2017* CIRCU
Slide 18: Saint-Gobain, engaged for sustainable growth
Saint-Gobain, engaged for sustainable growth… CO2 emissions* BUSINESS ENERGY, AIR 100 PRACTICES & 93 80 ETHICS EMISSIONS & CLIMATE CHANGE HEALTH & 2010 2016 2025 DIVERSITY SAFETY Water discharge* 18 100 WATER WITHDRAWAL 68 & DISCHARGE 20 CIRCULAR LOCAL VALUE 2010 2016 2025 ECONOMY CREATION Non-recov
Slide 19: Acting against climate change
… and acting against climate change Greenhouse gases emitted by Saint-Gobain in a given year AN INTERNAL CARBON PRICE INTRODUCED IN EARLY 2016 19 Step up the mobilization of our Businesses x90 Encourage disruptive innovation Emissions avoided with our insulation solutions produced and sold in the sa
Slide 20: A macroeconomic environment turning more favorable
20 A MACROECONOMIC ENVIRONMENT TURNING MORE FAVORABLE Guillaume Texier Chief Financial Officer INVESTOR DAY / MAY 2017
Slide 21: Construction recovery is now underway in Western Europe
Construction recovery is now underway in Western Europe Construction markets 2007 = 100 100 95 90 21 85 80 75 70 65 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Western Europe United States Source: Euroconstruct, IHS INVESTOR DAY / MAY 2017
Slide 22: France: considerable recovery potential
France: considerable recovery potential Construction market 2007 = 100 110 100 90 +24% 22 80 70 60 50 1990 1995 2000 2005 2010 2015 1990-2007 2007-2016 Source: Euroconstruct INVESTOR DAY / MAY 2017
Slide 23: France: new construction has restarted
France: new construction has restarted H2-2016 Q1-2017 Housing permits and housing starts yoy market change trend Thousands of dwellings, 2000-2016 650 Concrete blocks +10% 600 550 Concrete beams +3% 23 500 Roofing 450 400 Insulation ~0% 350 Partitions 300 2000 2002 2004 2006 2008 2010 2012 2014 201
Slide 24: France: encouraging advanced indicators, limited by employment?
France: encouraging advanced indicators, limited by employment? 86 CONSTRUCTION +20 April 15 April 16 April 17 COMPANIES ADVANCED days -0.1 INDICATORS 76 Order Balance of backlog in -19 opinion on 66 working days employment in 3 months 24 Q1-15 Q1-16 Q1-17 -35 43 42 16 30 8 % suffering 7 % suffering
Slide 25: Germany & Nordics: encouraging outlook
Germany & Nordics: encouraging outlook GERMANY NORDICS Housing permits and housing completions Construction markets Thousands of dwellings, 1996-2016 Volumes, 2017-2019 CAGR 550 450 25 350 Flat permits 5% 250 4% 4% 4% 4% 3% 150 Single family 2% 2% 2% 2% permits 1% 50 0% 1996 1998 2000 2002 2004 2006
Slide 26: United Kingdom: construction sector resisting well
United Kingdom: construction sector resisting well CONSTRUCTION MARKETS SHOW NO SIGN POSITIVE SHORT-TERM INDICATORS OF WEAKNESS YET OUTSIDE LONDON Residential construction permits CONFIDENCE HOUSING PRICES 2012 = 100 140 52.5 +3.8% 120 Average construction yoy % change 26 PMI in 2017 100 GOVERNMENT
Slide 27: United States: potential for further improvement in new residential
United States: potential for further improvement in new residential Housing starts Thousands of dwellings, 1964-2016 2 500 2 000 27 1 500 1 000 500 0 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 Long-term average 1964-2016 Flats Single family INVESTOR DAY / MAY 2017
Slide 28: Largest emerging countries demonstrate resilience
Our largest emerging countries demonstrate resilience… Construction output 2012 2013 2014 2015 2016 Positive Negative TOTAL* Brazil 28 China Czech Republic India Korea Mexico Poland Thailand *Construction output weighted by Saint-Gobain’s 2016 sales INVESTOR DAY / MAY 2017
Slide 29: Strong underlying dynamics in emerging countries
… and strong underlying dynamics DYNAMIC URBANIZATION ON ALL CONTINENTS RAPID RISE IN MIDDLE CLASSES, CONSUMERS OF OUR PRODUCTS Urbanization Urban population Mortars rate 2015 2015-2025 (€) Consumption Coated glass Plasterboard (sqm) +105m per capita (sqm) India 32% 420m 525m Insulation 29 (cu. m) S
Slide 30: Industrial markets benefit from strong momentum
Some of our most important industrial markets benefit from strong momentum global markets specific 2012-2016 CAGR long-term trends Electric vehicle AUTOMOTIVE +3% Comfort 30 CO2 emissions AEROSPACE +5% Connectivity Single use HEALTHCARE +4%* Tailor-made * 2012-2015, OECD countries Source: IHS, Airbu
Slide 31: Grow faster than our underlying markets
31 GROW FASTER THAN OUR UNDERLYING MARKETS Thomas Kinisky Benoît Bazin Laurent Guillot Patrick Dupin North America Construction Products Innovative Materials – Innovative Materials – High-Performance Materials Flat Glass INVESTOR DAY / MAY 2017
Slide 32: Long-term trends are positive for our businesses
Long-term trends are positive for our businesses FLAT GLASS CONSTRUCTION Recycling PRODUCTS Autonomous Ageing cars population Middle classes in 32 Air transport growth emerging countries Water stress Industry Resource 4.0 scarcity Climate change 3D printing Healthy housing HIGH-PERFORMANCE BUILDING
Slide 33: Critical needs of our core customer segments
Critical needs of our core customer segments 33 MULTI-COMFORT PRODUCTIVITY TAILOR-MADE for the building end-user for the professional builder INNOVATION (homeowner, commercial (contractor, homebuilder) for the industrial company building occupant) INVESTOR DAY / MAY 2017
Slide 34: Comfort in living spaces: hugely underestimated
Comfort in living spaces: hugely underestimated EXTERIOR VIEW ACOUSTIC LIGHT VENTILATION 34 Mental capacity Sound level Employee Productivity and memory recommended to prevent productivity improved improved by sleep problems improved by as a result of better ventilation by 10-25% <35db 18% 11% INVES
Slide 35: Saint-Gobain's unique comfort offer
Saint-Gobain’s unique comfort offer At work At home In all living places 35 Solargard automotive sunroof Ecophon ceiling INVESTOR DAY / MAY 2017
Slide 36: Towards a productivity revolution in construction
Towards a productivity revolution in construction Hourly productivity per branch in France Hourly productivity per branch in the UK 1994 = 100 1994 = 100 +95% +57% 36 +29% +27% +15% -9% 1994 1998 2002 2006 2010 2014 1994 1998 2002 2006 2010 2014 Construction Services Industry Construction Services I
Slide 37: Solutions to enhance efficiency
Saint-Gobain’s solutions to enhance efficiency Prefab Light-weight materials Precut 37 > -66% waste Bathroom cost -50% -40% weight generation On-site work duration -20% drying time -20% laying time & -99% arduousness INVESTOR DAY / MAY 2017
Slide 38: Industry: a growing need for tailor-made innovation
Industry: a growing need for tailor-made innovation Refining & petrochemical Zero emission mobility Biopharmaceutical manufacturing Unique process CO2 emission Sterilization 38 optimum restrictions Diversity of Reduced Small batch reactions fuel capacity Catalytic support Weight reduction Single-use
Slide 39: Open innovation approach in industrial markets
Saint-Gobain’s open innovation approach in 2016 R&D spend: ~€440m industrial markets Top100 Global Innovators for 6 consecutive years CO-DEVELOPMENT, A SOURCE OF OUR … REINFORCED BY FABLABS, PILOT TECHNOLOGICAL LEADERSHIP… LINES AND SHOWROOMS DEPLOYMENT High-Performance Materials sales include: ~60%
Slide 40: Growth acceleration in Construction Products
Growth acceleration in Construction Products 40 Benoît Bazin Senior Vice-President in charge of the Construction Products Sector INVESTOR DAY / MAY 2017
Slide 41: Construction Products Sector 2016 sales: €11.9bn
Construction Products Sector 2016 sales: €11.9bn 13-16 CAGR*: +1.6% 2016 OP margin: 9.3% Industrial presence in 62 countries Sales presence in 74 countries EXTERIOR 8 to 10 new plants 41 GYPSUM INSULATION MORTARS PIPE PRODUCTS per year END-MARKETS 2016 SALES SPLIT 2016 14% 12% France Other industrie
Slide 42: How can Construction Products outperform its markets?
How can Construction Products outperform its markets? Unlock unique customer-centric assets and accelerate growth 1 A market-driven organization supported by a unique portfolio of brands and strong customer intimacy 42 2 Setting the tone in innovation and offering integrated solutions to capture ful
Slide 43: A market-driven organization
Unlock unique customer-centric assets A market-driven organization Regional organization: P&L and Sales & Marketing across brands to capture local growth and leverage local synergies Acceleration of Key Account 43 Management Coverage and joint commercial excellence programs for more efficiency Commo
Slide 44: Customer intimacy at each step of the value chain
Unlock unique customer-centric assets Customer intimacy at each step of the value chain End- customer DIYers Preferred supplier of our trade Building owners customers and installers with more services and digital 44 Builders Specifiers Wide technical know-how for further merchants & architects presc
Slide 45: Setting the tone in innovation
Accelerate growth Setting the tone in innovation COMPREHENSIVE PORTFOLIO SUSTAINABLE SOLUTIONS 45 HIGH-VALUE PRODUCTS SERVICES INVESTOR DAY / MAY 2017
Slide 46: Capturing full potential from attractive building markets
Accelerate growth Capturing full potential from attractive building markets High-performance applications Ceiling Acoustic partitions #2 global player Ventilation 46 Technical insulation Flooring Facade Heat Installation exchangers services to all Innovative systems Soil & drain end-markets systems
Slide 47: Expanding further in emerging countries
Accelerate growth Expanding further in emerging countries Plasterboard capacities in China, Russia, Brazil & Acquisitions 2013-2016 Indonesia ~50% Insulation plant in Saudi Arabia 47 TOTAL ~€635m 10 premix plants Growth CAPEX 2013-2016 Major 2017 projects ~50% • • Plasterboard plants construction in
Slide 48: Expanding further in emerging countries
Accelerate growth Expanding further in emerging countries Russia, mineral wool Acquisitions Vietnam, plasterboard and fibercement 2013-2016 ~50% Albania, premix JV in Morocco, gypsum plasters 48 TOTAL ~€635m Slovenia, premix JV in Chile, premix Brazil, premix Growth CAPEX 2013-2016 Tanzania, plaster
Slide 49: Strengthening our leading local positions
Accelerate growth Strengthening our leading local positions 26 business clusters > €100m MATURE POSITIONS NEW BUSINESS CLUSTERS RISING STARS CONSOLIDATION • > €100m sales • > 10% CAGR* Indonesia > 30% CAGR* 49 Argentina India Vietnam Qatar UAE > 15% CAGR* New businesses *Sales CAGR : 2010-2016 perio
Slide 50: Growth acceleration in High-Performance Materials
Growth acceleration in High-Performance Materials 50 Laurent Guillot Senior Vice-President in charge of the High-Performance Materials Activity (HPM) INVESTOR DAY / MAY 2017
Slide 51: High-Performance Materials 2016 sales: €4.5bn
High-Performance Materials A key component of our customers’ performance 2016 sales: €4.5bn 13-16 CAGR*: +1.9% 2016 OP margin: 13.7% Zirconia beads for iPhones’ surface treatment Complete solutions for car refinishing & CERAMIC PERFORMANCE TEXTILE 51 ABRASIVES paint protection MATERIALS PLASTICS SOL
Slide 52: How can we accelerate HPM growth?
How can we accelerate HPM growth? 1 Increase share of wallet through expansion of product & service portfolio 2 Develop new applications and markets thanks to our innovations 3 Gain market shares by leveraging digital 52 4 Invest more in fast-growing markets INVESTOR DAY / MAY 2017
Slide 53: Increase share of wallet through expanded product & service portfolio
Increase share of wallet through expansion of product & service portfolio FULL PRODUCT RANGE EXPANDED SERVICES OFFERING PORTFOLIO 53 Automotive aftermarket “We make the difference” Beyond Abrasives, an integrated products and services network INVESTOR DAY / MAY 2017
Slide 54: Develop new applications and markets thanks to innovations
Develop new applications and markets thanks to our innovations INNOVATION & CO-DEVELOPMENT FOR OUR CUSTOMERS Examples of 2016 launches New products: New products New markets New applications >1/3 of our sales 54 R&D: ~4% of our sales ~700 first patent filings in the last Coated veil Refractories “Sa
Slide 55: Gain market shares by leveraging digital
Gain market shares by leveraging digital EASE OF DOING DIGITAL SERVICES NEW SALES CHANNELS BUSINESS WITH US FOR OUR CUSTOMERS THROUGH E-COMMERCE 2015-16 indirect +55% e-commerce sales growth for Adfors 55 New tools for an optimized co-development process INVESTOR DAY / MAY 2017
Slide 56: Invest more in fast-growing markets (1/3)
Invest more in fast-growing markets (1/3) HPM current focus (about 2/3 of its investments*) METAL FABRICATION TRANSPORTATION CONSTRUCTION Organic Total Organic Total growth: growth: growth: growth: ~6% ~7% ~3% ~3% 56 GENERAL MANUFACTURING HEALTHCARE AEROSPACE Organic Total Organic Total growth: grow
Slide 57: Invest more in fast-growing markets (2/3)
Invest more in fast-growing markets (2/3) Acquisitions Clean rooms for Life Science 2013-2016 ~1/3 Refractory site in India 57 TOTAL ~€600m Glass fiber capacity extension in Czech Republic and Mexico Growth CAPEX 2013-2016 ~2/3 New billet press for Bearings INVESTOR DAY / MAY 2017
Slide 58: Invest more in fast-growing markets (3/3)
Invest more in fast-growing markets (3/3) Polymer components for auto and medical Acquisitions 2013-2016 ~1/3 Filtration systems for medical Extruded tubing in South America 58 TOTAL Tapes for various applications in Brazil ~€600m High-performance specialty adhesive tapes Various acquisitions for si
Slide 59: Growth acceleration in Flat Glass
Growth acceleration in Flat Glass 59 Patrick Dupin Senior Vice-President in charge of the Flat Glass Activity INVESTOR DAY / MAY 2017
Slide 60: Flat Glass 2016 sales: €5.4bn
Flat Glass 2016 sales: €5.4bn 13-16 CAGR*: +5.0% 2016 OP margin: 9.1% 1 out of 2 European cars equipped with Sekurit glazing The world’s leading supplier of glazing for electric vehicles 60 SPECIALTY AUTO GLASS BUILDING GLASS Saint-Gobain SOLUTIONS Vetrotech solutions withstand fire for up to 180 mi
Slide 61: How can Flat Glass grow faster than its markets?
How can Flat Glass grow faster than its markets? 1 Build upon our leadership in innovation for the glass industry 2 Focus building segment on high-performance glazing and glazing systems 3 Develop innovative systems and solutions in glazing for automotive & transport 61 4 Strengthen our positioning
Slide 62: Innovation leader in the glass industry
Saint-Gobain, the innovation leader in the glass industry NEW R&D COSTS PATENTS DEVELOPMENT % sales, 2016 #/year PROJECTS R&D Patents including those invoiced >4% to our clients >150 62 % HAVP* INDUSTRY 4.0 Float products JV High Added Operational Value +22% 27% 33% excellence Products 2012 2016 *HA
Slide 63: Focus building segment on high-performance glazing and systems
Focus building segment on high-performance glazing and glazing systems PERFORMANCE GLAZING: FIRE RESISTANT AND BURGLAR-PROOF ADVANCED FACADES 63 • Saint-Gobain Contraflam withstanding fire up to 180 minutes • From extra large glass panes to color changing • Used for doors, partition walls, staircase
Slide 64: Innovative glazing for automotive & transport
Develop innovative systems and solutions in glazing for automotive & transport AUTOMOTIVE SUNROOFS SMART WINDSHIELD 64 • #1 player in high-performance glazing for roofing • Smart windshields developed by Sekurit • Major properties: optical clarity, weight and • Major features: OLED displays, HUDs*,
Slide 65: Strengthen our positioning in emerging countries – automotive glazing
Strengthen our positioning in emerging countries – automotive glazing #1 Katowice EMEA (2015) STRONG POSITIONS Romania Horowice (2018) IN AUTOMOTIVE (2016) GLAZING Targeted investments in emerging markets and low Kenitra cost countries 65 (2017) Cuautla (2015) Further growth in China #1 Wuhan NAFTA
Slide 66: Emerging countries and North America – building glass
Strengthen our positioning in emerging countries and North America – building glass LEADERSHIP JV RUSSIA IN OUR KEY TARGET MARKETS Full reflective & interior glass offer JV #1 #2 SOUTH 66 EGYPT EGYPT Facades glazing for Middle KOREA #1 East, ASEAN, India and MEXICO Korea #1 INDIA #1 Advanced coated
Slide 67: Develop sustainability-enhancing solutions
Develop sustainability-enhancing solutions AUTOMOTIVE WINDSHIELDS ELECTROCHROMIC GLAZING 67 • Thin glazing reduces overall vehicle weight, • By reducing sunlight transmission while maintaining hence reducing fuel consumption and transparence, electrochromic glazing saves energy increasing vehicle ra
Slide 68: Opportunities to seize in a digital world
68 OPPORTUNITIES TO SEIZE IN A DIGITAL WORLD Fabrice Didier Kåre O. Malo Vice-President, Marketing Senior Vice-President in charge of the Building Distribution Sector INVESTOR DAY / MAY 2017
Slide 69: Digital ambition for Saint-Gobain
Digital ambition for Saint-Gobain …TO DIGITAL DIFFERENTIATION OPPORTUNITIES 6 Services 5 Fablabs & showrooms 69 4 Open innovation 3 Industry 4.0 2 PIM referencing & BIM FROM FUNDAMENTALS… 1 Web presence & e-commerce Very advanced Strong position Starting INVESTOR DAY / MAY 2017
Slide 70: Digital offers new ways to address customers' needs
Digital offers new ways to address our customers’ needs Web presence PIM* BIM** PERFORMANCE IN 2016 DETAILED INFO DEDICATED EARLY SPECIFICATION TO PROFESSIONAL PUBLICS OF OUR SOLUTIONS 70 Required number Social Website App of attributes per article network Architect, industrial 115m sessions on our
Slide 71: Digital transformation of operations and innovation processes
Digital transformation of our operations and innovation processes Industry 4.0 Fablabs & Showrooms Relation with start-ups A dedicated start-up scooting team: NOVA 71 >80 strategic deals signed over 10 years 3 partnerships with incubators (7 expected in 2017) 3 business challenges in 2016 To be furt
Slide 72: Growth by services beyond our current playing field
Growth by services beyond our current playing field SAINT-GOBAIN’S SERVICE NON CUSTOMERS CORE MARKET ADJACENCIES BUSINESS MODEL INNOVATION 72 Business Non-invasive Intermediation service for partners club existing pipe private individuals with a quality renovation project and assessment building pro
Slide 73: Leverage synergies to support digital transformation
Leverage synergies to support the Group’s digital transformation Data analysis Software development Increased visibility capabilities competencies with end-customers Competence hub dedicated 73 to apps development and augmented reality Central team of data scientists A new corporate identity to spec
Slide 74: Digital transformation for Building Distribution
Digital transformation for Building Distribution 74 Kåre O. Malo Senior Vice-President in charge of the Building Distribution Sector INVESTOR DAY / MAY 2017
Slide 75: Building Distribution 2016 sales: €18.2bn
Building Distribution 2016 sales: €18.2bn 13-16 CAGR*: +1.0% 2016 OP margin: 3.4% 4,100 sales outlets Close to 100m visits/year on our brands’ websites More than 7m 75 SPECIALISTS customers served GENERALISTS SPECIALISTS FOR INDIVIDUALS each year END-MARKETS 2016 SALES SPLIT 2016 Asia & emerging 3%
Slide 76: Offer a seamless omnichannel experience
Digital transformation for Building Distribution Offer a seamless omnichannel experience 1 Engage customers throughout their journey 2 Generate rich and relevant content 3 Deploy omnichannel capabilities 76 4 Services & solutions for professionals and end-customers 5 Logistics & IT: fundamental enab
Slide 77: Engage customers throughout their journey
Engage customers throughout their journey I train & I look for I provide My client I buy the I want to I collect & I handle I share get worksites quotes chooses product trans- arrange admini- with my informa- the form the delivery strative com- tion product product matters munity 77 I get ideas I de
Slide 78: Offer a seamless omnichannel experience
Offer a seamless omnichannel experience GENERATE RICH DEPLOY BROADEN 78 AND RELEVANT OMNICHANNEL SERVICES OFFER CONTENT CAPABILITIES REINFORCE LOGISTICS, THE KEY ENABLER INVESTOR DAY / MAY 2017
Slide 79: Provide the richest and most relevant on-line content
Be the reference by providing the richest and most relevant on-line content PRICES & STOCKS 24/7 79 Labels & Store logos availability HOW-TO GUIDES & VIDEOS Documents PRODUCT GUIDES Rich technical attributes DOP* Related products *Declaration Of Performance INVESTOR DAY / MAY 2017
Slide 80: Deploy omnichannel capabilities
Deploy omnichannel capabilities BUILDING QUICKLY OUR ROBUST E-SALES GROWTH E-COMMERCE CAPABILITIES 78% of Building Distribution sales are covered by online transactional capabilities +15% 2013-16 CAGR Recent achievements: +17 points vs. 2014 80 OMNICHANNEL OFFERS ROLL-OUT before 2014 2015 2016 2017
Slide 81: Better match professional customers' needs
Better match professional customers’ needs Digital services Value-added Relationships & to improve solutions customer orientation customer efficiency & services Simulators & Advanced logistic services Loyalty clubs 81 configurator tools (track & trace, jobsite logistics) Intermediation Prefab soluti
Slide 82: Target empowered end-customers
Target empowered end-customers Tools & formats to Intermediation allow inspiration services to capture renovation needs Digital showrooms 82 Virtual reality INVESTOR DAY / MAY 2017
Slide 83: Logistics: a fundamental enabler
Logistics: a fundamental enabler 123 distribution centers & warehouses FIRST CLASS PRODUCT RANGE AND AVAILABILITY: example of Plumbing, Heating and Sanitary in France 1.2m m² - Day+1 delivery achieved for 25,000 SKUs ~ €100m invested - SKU availability increased by +20% in 2 years in surface extensi
Slide 84: IT: a fundamental enabler
IT: a fundamental enabler ~ €320m invested in Information SUPPORT CORE BUSINESS & IMPROVE PRODUCTIVITY Systems since 2013 - Significant ERP programs in most of our geographies Major ERP projects - Strong impact on salesforce efficiency, and in-branch & back office in Nordics, UK, productivity German
Slide 85: A renewed cost savings potential
85 A RENEWED COST SAVINGS POTENTIAL Benoît d’Iribarne Industrial Excellence INVESTOR DAY / MAY 2017
Slide 86: Push further our excellence programs
Push further our excellence programs SIGNIFICANT POTENTIAL ASSOCIATED EXTENDING OUR PURCHASING WITH THE ROLLOUT OF WCM ACTION PLAN SINCE 2012 of sites included in >90% the WCM program CENTRALIZATION & DIGITAL 83% EXPERTISE 86 57% Professional E-auctions +46% purchasers x5 & e-tenders ~50% of best-in
Slide 87: Industry 4.0: why today?
Industry 4.0: why today? Cost reduction over the last 10 years Multi-task operator 1 SENSORS: /3 + INTEGRATED SYSTEMS > data availability and automatically coordinated machines PROCESSING: /60 87 2 > real time data analysis cobot* 3 ROBOTS: /2 > Automated guided vehicles and cobots 4 BANDWIDTH: /40
Slide 88: Data availability and automatically coordinated machines
1 DATA AVAILABILITY AND AUTOMATICALLY COORDINATED MACHINES Advanced infrastructures deployment 88 INVESTOR DAY / MAY 2017
Slide 89: Real time data analysis
2 REAL TIME DATA ANALYSIS Smart analytics to improve OEE*, quality, logistic flows, resource usage, predictive maintenance 89 *Overall Equipment Effectiveness INVESTOR DAY / MAY 2017
Slide 90: Automated guided vehicles and cobots
3 AUTOMATED GUIDED VEHICLES AND COBOTS Number of robots to increase to 3,500 in 2020 90 INVESTOR DAY / MAY 2017
Slide 91: Augmented workers made experts
4 AUGMENTED WORKERS MADE EXPERTS Remote instructions, training, technical teams management 91 INVESTOR DAY / MAY 2017
Slide 92: Industry 4.0
Industry 4.0 92 INVESTOR DAY / MAY 2017
Slide 93: Industry 4.0 brings us closer to our customers
Industry 4.0 brings us closer to our customers 93 Real-time interaction with the customer Made-to-order Service Co-development INVESTOR DAY / MAY 2017
Slide 94: New savings target: €300m/year over 2017-2020
New savings target: €300m/year over 2017-2020 Average yearly cost savings €m 383 300 Two main sources of additional savings 267 94 Further roll out of existing cost savings programs in Purchasing and Operations Progressive benefit from new digital manufacturing initiatives 2014-15 2016-18 2017-20 ol
Slide 95: Profit improvement and cash flow acceleration
95 PROFIT IMPROVEMENT AND CASH FLOW ACCELERATION Guillaume Texier Chief Financial Officer INVESTOR DAY / MAY 2017
Slide 96: Operating leverage theory
Operating leverage theory… IDEAL OPERATING LEVERAGE: VARIABLE MARGIN Building Distribution: 20-30% Other activities: 35-55% 96 OPERATING PROFIT MARGIN Building Distribution: 3.4% Other activities: 10.2% VOLUME GROWTH 3 STRONG ASSUMPTIONS No fixed costs or SG&A added Constant price/cost spread Consta
Slide 97: Operating leverage confirmed by experience
…confirmed by experience OPERATING LEVERAGE ON POSITIVE VOLUME*, OPERATING LEVERAGE ON POSITIVE VOLUME*, DISTRIBUTION ACTIVITIES INDUSTRIAL ACTIVITIES 57% Impact of 46% 97 price deflation 39% 22% 22% 8% 2014 2015 2016 2014 2015 2016 *LFL change in €m operating profit / LFL change in €m sales volumes
Slide 98: Potential margin improvement in Innovative Materials
Potential margin improvement in Innovative Materials Operating profit % sales 16 Margin improvement drivers in Flat Glass: 14 HPM Price 12-14% 12 Value added products IM 98 10 Emerging countries FG 8 Industry 4.0 6 Margin improvement drivers in HPM: 4 Differentiated solutions 2 Industry 4.0 0 Focus
Slide 99: Potential margin improvement in Construction Products
Potential margin improvement in Construction Products Operating profit % sales 13 Margin improvement drivers in Construction Products: 12 11-13% Interior Volume and operating leverage 11 Solutions 99 Emerging countries 10 Value added solutions CP 9 Industry 4.0 8 I Exterior Pipe recovery 7 Solutions
Slide 100: Potential margin improvement in Building Distribution
Potential margin improvement in Building Distribution Operating profit % sales 6 Margin improvement drivers in Building Distribution: 4.5- 5 5.5% Volume recovery and operating leverage 100 4 New and digitized formats BD 3 Logistics efficiency 2 1 0 2011 2012 2013 2014 2015 2016 Potential INVESTOR DA
Slide 101: Non-operating costs trending down
Non-operating costs trending down Asbestos: stable, but too early to point to a reduction Non-operating costs* €m - €138m -31% since 2012 since 2012 450 Restructuring costs: less necessary in a better 101 volume environment but industry 4.0 may require some restructuring 312 Others: litigation costs
Slide 102: Tax rate trending down
Tax rate trending down Tax rate on recurring net income* In % -7pts equivalent to €140m 34% in 2016 102 27% 2012 2013 2014 2015 2016 *including Verallia until 2013 INVESTOR DAY / MAY 2017
Slide 103: Operating WCR: now durably under 30 days
Operating WCR: now durably under 30 days Operating working capital* Days of sales at the end of December 59 103 28 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 *including Verallia until 2013 INVESTOR DAY / MAY 2017
Slide 104: CAPEX: normative level lowered to ~4%
CAPEX: normative level lowered to ~ 4% CAPEX % of sales 5.0 4.4 4.2 3.5 3.5% - 4.5% 104 3.5 2.7 2004 2006 2008 2010 2012 2014 2016 medium term INVESTOR DAY / MAY 2017
Slide 105: A constant push to optimize CAPEX
A constant push to optimize CAPEX… Bergish furnace (Insulation) Chennai coaters (Flat Glass) Cost of CAPEX per unit output, 1999 = 100 Cost of CAPEX per unit output, 2007 = 100 rebuild Coater 1 rebuild 105 Coater 2 rebuild 100 100 70 64 48 1999 2006 2015 2007 2017 INVESTOR DAY / MAY 2017
Slide 106: Defined focus areas for development CAPEX
… as well as defined focus areas for development CAPEX Growth in Logistics & digital Industry 4.0 Industrialization emerging countries of innovations 106 IRR* > 20% *Internal Rate of Return INVESTOR DAY / MAY 2017
Slide 107: Net financial expense
Net financial expense Net financial expense* Bond debt maturities (€bn) €m Cost of repaid gross debt (%) - €270m -33% since 2012 since 2012 812 1.5 107 541 0.8 1.0 <500 4.8% 4.5% 4.0% 2016 3.4% Average cost 2012 2013 2014 2015 2016 2017 2017 2018 2019 *including Verallia until 2013 INVESTOR DAY / MA
Slide 108: Attractive value creation for shareholders
Attractive value creation for shareholders Priorities for dividend: Payment in cash Move towards normalized payout ratio of 35-40% Grow dividend 108 Continue to reduce number of shares to 530m (2010 level) A decrease of ~20m shares vs. current 553m shares outstanding Opportunistic in terms of timing
Slide 109: A dynamic and value-creating portfolio management
109 A DYNAMIC AND VALUE-CREATING PORTFOLIO MANAGEMENT Pierre-André de Chalendar Chairman and Chief Executive Officer INVESTOR DAY / MAY 2017
Slide 110: Creating value through efficient portfolio management
Creating value through an efficient portfolio management FINANCIAL INVESTMENTS DISPOSALS €0.9bn €0.9bn between 2013 and 2016 between 2013 and 2016 110 (excluding Verallia) Value creation on average from year 1 INVESTOR DAY / MAY 2017
Slide 111: Three focus areas for small and medium-sized acquisitions
Three complementary focus areas for small and medium-sized acquisitions 111 BOLT-ON NEW TECHNOLOGICAL ACQUISITIONS GEOGRAPHIES NICHES INVESTOR DAY / MAY 2017
Slide 112: Bolt-on acquisitions: fast materialization of cost synergies
Bolt-on acquisitions: fast materialization of cost synergies BOLT-ON ACQUISITIONS ROCE SYNERGIES Cost (purchasing, SG&A, operations) mostly achieved in the first year 112 EXAMPLES Building Distribution in Europe and Brazil Construction Products in countries where we time have a large presence Compan
Slide 113: Example of bolt-on acquisition: Building Distribution in Norway
Example of bolt-on acquisition: Building Distribution in Norway Optimera build-up acquisitions 2014-16 Optimera: Dahl: Bergen area Dahl build-up acquisitions 2014-16 3 acquisitions 2 acquisitions 2014 2015 2014 2015 Ventilation: Ventilation: Trondheim area 2 acquisitions 1 acquisition Oslo area 113
Slide 114: New geographies: accelerate penetration in emerging markets
New geographies: accelerate penetration of high value-added solutions in emerging markets NEW GEOGRAPHIES ROCE SYNERGIES Cost (operations) within two years Commercial (sales network capillarity, ability to serve global customers) 114 Innovation through accelerated penetration of differentiating solu
Slide 115: Example of new geographies: entry strategy in Vietnam
Example of new geographies: entry strategy in Vietnam ROCE > WACC Acquisition of from year 1 14.8% of the share Entry in Vietnam capital of VTI, a with the acquisition Gyproc customer in of a Gypsum plant Vietnam 115 2007 May 2015 Dec. 2016 Gyproc plant Project for 2nd plasterboard plant Control of
Slide 116: Technological niches: go beyond current frontiers
Technological niches: go beyond current frontiers with techno bricks TECHNOLOGICAL NICHES ROCE SYNERGIES New techno bricks: expand in new markets or new geographies Digital & services: address non customers 116 (end-users) with business model innovation EXAMPLES High-Performance Materials time Compa
Slide 117: Technological niche: medical segment strategy of PPL
Example of technological niche: medical segment strategy of Performance Plastics (PPL) Applied PPL acquisitions in medical segment since 2012 Twin Bay Bioprocess (ROCE pre-tax*) Medical Containers Dec. 2012 Value creation level (2016) Nov. 2012 March 2013 American Fluorseal 117 Zenpure 2013 2014 201
Slide 118: Boost leadership strategy with an active stream of acquisitions
Boost leadership strategy with an active stream of acquisitions Small and medium size acquisitions Financial investments, €m 750 ~20 ~10 ~10 ~15 ~20 ~30 XX # acquisitions 118 500 250 0 2011 2012 2013 2014 2015 2016 2017-2020 avg INVESTOR DAY / MAY 2017
Slide 119: Value creation through the Sika transaction
Value creation through the Sika transaction EBITDA multiple including proforma synergies A successful company: facts have proven us right A great strategic fit: beneficial for Saint-Gobain and for Sika 119 A constructive project, aiming at building rather than restructuring 10.5x 8x Patience, determ
Slide 120: Conclusion
120 CONCLUSION Pierre-André de Chalendar Chairman and Chief Executive Officer INVESTOR DAY / MAY 2017
Slide 121: Questions we answered today
@by Feldman_1, Getty image How has the Group changed since 2013? Is it time for a recovery in Saint-Gobain’s end markets? Can Saint-Gobain grow faster than its markets? Is a more digitized world a threat or an opportunity? QUESTIONS WE Is there more cost reduction potential beyond the existing ANSWE
Slide 122: Strategy positions us to benefit from several growth drivers
Our strategy positions us ideally to benefit from several growth drivers, short term and long term 1 Good macroeconomic prospects in our main markets France, Western Europe, US 2 Continued focus on fast growing geographies and markets Reinforcing already strong positions in emerging countries 122 Hi
Slide 123: Credible action plans on all value creation levers
We have credible action plans in place on all value creation levers 1 New cost savings program fully exploiting the opportunities of Industry 4.0 €1.2bn over the next 4 years 2 Strong focus on operating profit leverage as volumes recover 3 Optimization of all P&L and cash lines 123 Non-operating cos
Slide 124: Potential for significant value creation
Potential for significant value creation Cash allocation 2013 – 2016 2017-2020 TREND Excluding Verallia Cash generated by operations 9.1 124 Disposals 0.9 CAPEX -5.0 Acquisitions -0.9 Dividends and share buybacks -3.9 INVESTOR DAY / MAY 2017
Slide 125: Investor Day
@by Feldman_1, Getty image MAY 17, 2017 INVESTOR DAY
Slide 126: Disclaimer
Disclaimer 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", "p
Slide 127: Glossary
Glossary Organic growth and like-for-like changes in sales and operating income reflect the Group’s underlying performance excluding the impact of: changes in Group structure: indicators for the period concerned are calculated based on the scope of consolidation for the previous period (Group st