Compagnie De Saint-gobain Sa · EURONEXT:SGO
Compagnie De Saint-gobain Sa — Debt Investor Presentation (August 2022)
49 slides from Compagnie De Saint-gobain Sa's debt investor presentation, August 2022
Slide 1: Bond Investor Presentation August 2022
B O N D I N V E S TO R P R E S E N TAT I O N AUGUST 2022
Slide 2: AUGUST 2022 INVESTOR PRESENTATION
AUGUST 2022 INVESTOR PRESENTATION 2
Slide 3: Saint-Gobain at a Glance and Recent Developments
SAINT-GOBAIN AT A GLANCE AND RECENT DEVELOPMENTS
Slide 4: The worldwide leader in light & sustainable construction
MAKING THE WORLD A BETTER THE WORLDWIDE LEADER IN LIGHT & SUSTAINABLE CONSTRUCTION SRN 2021-2025 ‘ cat Wh. SAINT-GOBAIN
Slide 5: Breakdown of turnover by market and by geography
Other Industries Mobility Asia & emerging 7% countries 6% Western New Construction - 22% Europe Non Residential 12% 35% 53% North America 18% 22% New Construction - Renovation & Residential infrastructure1 25% France Saint-Gobain breakdown of turnover by market2 Saint-Gobain breakdown of turnover by
Slide 6: Agile, country-based, performance-driven
AGILE Proven proactivity and resilience To successfully navigate through uncertainty COUNTRY-BASED Decisions adapted to local specificities By empowered and accountable country CEOs PERFORMANCE-DRIVEN Disciplined focus on execution With key performance indicators CUSTOMER-CENTRIC Outperformance vs.
Slide 7: Value-creative acquisitions, underperforming assets sold
VALUE-CREATIVE ACQUISITIONS UNDERPERFORMING ASSETS SOLD Sales acquired since T&G1 EBITDA / sales Sales divested since T&G1 EBITDA / sales ~20% <5% of which LTM² of which LTM² (China) 3 (Denmark, Estonia, Germany, Austria, UK) 1. Deals closed or signed since the launch of Transform & Grow (end of 201
Slide 8: Sales and operating income since launch of transformation
Operating income Sales 10.2% +7.3% +250 bps 7.7% 4 507 M€ 4 507 M€ €44,160m €4,507m 3 207 M€ 3 207 M€ €41,174m €3,207m 2018 2021 2018 2021 Launch of Launch of transformation transformation AUGUST 2022 INVESTOR PRESENTATION 8
Slide 9: Free cash flow and working capital
2,904 2018-2021 New cash culture Positive impact of change in the Group’s profile 53% Optimization of capital expenditure Reduction in operating working capital requirement 1,236 (operating WCR): decrease of 12 days’ sales 31% End of June 2022 Free cash flow of €1.7bn Free cash flow conversion ratio
Slide 10: Net debt and credit rating upgrade
Net debt, €bn Net debt / EBITDA 11.2 IFRS16 2.4 7.3 IFRS16 1.2 8.2 1.2 4.1 4.1 2018 2021 End-June 2018 2021 2022 Launch of transformation Net debt/EBITDA ratio between 1.5x and 2.0x CMD target Saint-Gobain's credit rating upgraded from Baa2 to Baa1 by Moody's Standard & Poor’s has also revised its o
Slide 11: Debt structure and liquidity
3 000 2,884 Short-term debt Cash & equivalent: €6,935m Gross debt (without lease debt): 2 800 regularly renewed • 85% in Euro 2 600 • 71% at fixed rate 2 400 Back-up lines: €4,000m • Average maturity above 4 years 2 200 2,033 2 000 1 800 1,585 1 600 1 400 1 200 989 1,041 1 000 763 754 696 800 600 32
Slide 12: ROI and ROCE
(before tax, after IFRS16) 27.6% ROI ROCE +950 bps 15.3% 18.1% +460 bps 10.7% 2018 2021 2018 2021 Launch of Launch of transformation transformation 2021 results presentation 12
Slide 13: H1-2022 Results, Operational Priorities and Outlook
H1-2022 RESULTS, OPERATIONAL PRIORITIES AND OUTLOOK
Slide 14: H1 2022 results: an excellent performance
Sales growth +15.1% vs. H1 2021 (+15% like-for-like) €25,481m Operating income +17.5% vs. H1 2021 (+13% at constant exchange rates) €2,791m (record operating margin of 11.0%) Price Cost Spread +€250m Recurring net income +20.5% vs. H1 2021 €1,814m Free cash flow €1,686m with a conversion ratio > 50%
Slide 15: H1 2022 income statement
H1-2022/ H1-2021 H1-2022 €m H1-2021 Sales 22,131 25,481 +15.1% Operating income 2,376 2,791 +17.5% Non-operating costs (82) (100) Capital gains (losses) and impacts resulting from (53) (138) changes in Group structure Asset write-downs and other (97) (60) Business income 2,144 2,493 +16.3% Net finan
Slide 16: A large part of markets are resilient
A large part of Saint-Gobain markets are resilient We are better positioned than ever to face more challenging conditions AUGUST 2022 INVESTOR PRESENTATION 16
Slide 17: Construction CO2, resource consumption and urbanization
40% of global CO2 emissions linked to construction x3 increase in resource consumption in the last 50 years +2bn urban population in emerging markets in the next 30 years AUGUST 2022 INVESTOR PRESENTATION 17
Slide 18: Renovation drivers: EU regulations and country initiatives
Powerful drivers EU Regulations Country initiatives are aligned Energy Performance of Buildings Directive Acceleration of energy savings stimulus plans • Introduction of minimum required standards of energy efficiency in buildings MaPrimeRénov’: renewed commitment by Commitment to government aiming
Slide 19: Housing shortage and housing starts
Housing shortage Housing starts much lower than peak 12.5% 7.3% - - - - 4.1% 4.2% 2.7% 3.2% -12% 1.6% -21% -23% US UK In ‘000 670 3,800 160 1,200 331 150 1,800 units -87% Housing shortage, as % of housing stock1 Housing starts in 2021 vs. previous peak² 1. Estimate for 2020 by Freddie Mac & Housing
Slide 20: Light construction growing faster than traditional
Light construction is growing faster than Strong rationale traditional construction by 1 to 5 points Construction decarbonization, 5pts resource intensity reduction -50% raw material usage 3pts 3pts Time & productivity gains 1pt Up to 20% time saved on site - - - - Well-being benefits for all Light
Slide 21: Better positioned than ever
A large part of Saint-Gobain markets are resilient We are better positioned than ever to face more challenging conditions AUGUST 2022 INVESTOR PRESENTATION 21
Slide 22: Limited exposure to Russian gas
ACROSS ALL PLANTS • Priority industry qualification, especially in glass and insulation • Increasing flexibility in our plants GLASS INSULATION GYPSUM 13 floats, most of which are or will • Half of plants are equipped • Plasterboard plants are very be very soon able to run without with electrical fu
Slide 23: Positioning, full solutions offering, powerful organization
Positioning on strong Full solutions offering Powerful organization & underlying markets culture, truly multi-national AUGUST 2022 INVESTOR PRESENTATION 23
Slide 24: Regional market outlook and 2022 target
Europe: supportive renovation market requiring comprehensive solutions within each country, especially for energy efficiency Americas: upbeat market trends, particularly in residential construction in North America; less dynamic environment in Brazil Asia-Pacific: market growth with continued very g
Slide 25: ESG Strategy
| ESG STRATEGY
Slide 26: AUGUST 2022 INVESTOR PRESENTATION
AUGUST 2022 INVESTOR PRESENTATION 26
Slide 27: AUGUST 2022 INVESTOR PRESENTATION
AUGUST 2022 INVESTOR PRESENTATION 27
Slide 28: 72% sustainable sales
72% sustainable sales AUGUST 2022 INVESTOR PRESENTATION 28
Slide 29: Low carbon products and solutions
Low carbon products and Admixture solutions: solutions: 1,700 EPD1 -50% on the 1st issuer carbon footprint worldwide in of concrete construction Up to 70% energy 95% heat loss savings with reduction with External Thermal technical Insulation Systems insulation (ETICS) 1. Environmental Product Declar
Slide 30: Low carbon concrete and facades
Environmix Ultra Low Carbon admixture Co-development of a low carbon concrete Low carbon concrete 1st utilization of 0% clinker decarbonized clay Highly insulated lightweight facades with concrete on a construction site 2x less CO2 and water consumption1 1. vs. traditional wall facade with similar p
Slide 31: 2021 vs. 2017 progress
, * 2021 vs. 2017 AUGUST 2022 INVESTOR PRESENTATION 31
Slide 32: Scope 1+2 and Scope 3 CO2 emissions
Scope 1+2 Scope 3 10.3 Mt CO2 21.3 Mt CO2 Scope 1+2: -33% CO2 emissions Scope 3: -16% CO2 emissions Extension of the coverage of impacts Science Based Targets initiative -23% CO2 emissions validation 2021 vs. 2017 Collaboration with suppliers 2030 vs. 2017 AUGUST 2022 INVESTOR PRESENTATION 32
Slide 33: Net zero trajectory validated by SBTi
* . . * Target on the net zero trajectory validated by Science Based Targets initiative AUGUST 2022 INVESTOR PRESENTATION 33
Slide 34: World's first zero carbon plasterboard plant and flat glass
World’s first zero carbon plasterboard plant World’s first zero carbon production of flat glass Investment €25 million Operational in 2023 Pilot production in May 2022 100% recycled glass (cullet) Investment CAD$90 million 100% biogas and decarbonized energy Operational in 2024 AUGUST 2022 INVES
Slide 35: Reducing waste, increasing recycling content
Increasing recycling Promoting circular Reducing waste flows content Non recovered waste Virgin raw material Avoided 0.459 Mt 9.952 Mt -24% +1% Substitution of all plastic bags with 2021 vs. 2017 2021 vs. 2017 paper packaging for mortars in Brazil -80% +30% 100% recyclable packaging 2030 vs. 2017 20
Slide 36: Waste-to-value: Tri'n'Collect in France
100% Recycling Waste-to-value: technically possible contribution to industry-wide but limited by the recycling initiatives availability Networks / services Recycling services: to upcycle wastes development of waste • 150 Collection points in collection in our value chain: our distribution network Tr
Slide 37: Nashville, Arkansas gypsum plant recycling
Investments in Nashville, Arkansas, gypsum plant to recycle and reuse 65,000 tons of materials per year New glass wool production capacity with installation of a treatment unit for deconstruction waste AUGUST 2022 INVESTOR PRESENTATION 37
Slide 38: Health & Safety
Heath & Safety Ensure safety on sites: Safety culture Employees, temporary workers and permanent subcontractors 2/3 of sites did not report an accident in 2021 With and without lost time accident rate 7.6 Divided by 4 in 10 years 2021: 1.9 2030 Objective: 1.5 1.9 2012 2013 2014 2015 2016 2017
Slide 39: ESG into management processes
ESG = 10% in STI1 for all executives, Embed 20% for all 2,300 beneficiaries of LTI2 ESG into ESG part of all capex validation management processes Board + ExCo ESG Committees Orchestrate the CO2 roadmaps by country and regional carbon funds to support employees initiatives Local ESG 75€/t CO2 price
Slide 40: ESG scoring agencies and third-party recognition
ESG SCORING AGENCIES INDICES & THIRD-PARTY RECOGNITION Ranked Medium ESG Risk Top 13% of industry Ranked A Ranked Climate Change A Among best 200 companies ranked Ranked Prime (C+) Top 10% of industry Ranked 60/100 Top 12% of industry AUGUST 2022 INVESTOR PRESENTATION 40
Slide 41: Sustainability-Linked Financing Framework
SUSTAINABILITY-LINKED FINANCING FRAMEWORK
Slide 42: A Framework reflecting Saint-Gobain's purpose
A Framework reflecting Saint-Gobain’s purpose: Making the World a Better Home Saint-Gobain ambitions to contribute to a responsible development, by addressing the climate Rationale for establishing emergency, committing to carbon neutrality and developing the circular economy. a Sustainability-Lin
Slide 43: KPIs selected for inaugural SLB transaction
KPI 1: Absolute Scope KPI 2: Absolute Scope KPI 3: Non-recovered KPI 4: Total Recordable 1 & 2 CO2 emissions 3 CO2 emissions production waste Accident Rate -33% by 2030 -16% by 2030 -80% by 2030* 1.5 by 2030 Financing Relevant KPI(s), SPT(s) and financial characteristics to be specified in each char
Slide 44: SPT: Reduce absolute Scope 1 and 2 CO2 emissions
Sustainability Reduce absolute Scope 1 and 2 Well- Performance CO2 emissions 33% by 2030 Below 2°C Target (from a 2017 base year) Definition Saint-Gobain’s direct emissions and indirect emissions associated with energy, in line with the GHG Protocol Historical performance Strategy to achieve the SPT
Slide 45: SPT: 80% reduction of non-recovered production waste
Sustainability Achieve an 80% reduction of non- Performance recovered production waste by 2030 Target (SPT) (from a 2017 base year) Non-recovered production waste (including non-hazardous and hazardous waste), i.e. excluding waste that is generated following the delivery of a designated product to t
Slide 46: Framework alignment with Sustainability-Linked principles
“The Framework is in line with the Sustainability-Linked Bond Principles by ICMA and Sustainability-Linked Loan Principles by LMA, APLMA and LSTA” Relevant and Core KPI 1: Absolute Scope Material to the company’s direct operations 1&2 CO2 emissions Ambitious against past performance Relevant and Cor
Slide 47: Transaction Overview
| TRANSACTION OVERVIEW
Slide 48: Terms of the bond tranches
Issuer Compagnie de Saint-Gobain Format Tranche 1 (Standard) Tranche 2 (Standard) Tranche 3 (Sustainability-Linked) Status of the Notes Senior Unsecured, Bearer Dematerialized Notes Issuer Rating BBB (positive) by S&P / Baa1 (stable) by Moody’s Expected Issue Rating BBB by S&P / Baa1 by Moody’s Use
Slide 49: 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
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