Compagnie De Saint-gobain Sa · EURONEXT:SGO
Compagnie De Saint-gobain Sa — Saint-Gobain — FY2009 Earnings Presentation
58 slides from Compagnie De Saint-gobain Sa's earnings presentation, March 2010
Slide 1: 2009 Results and Outlook for 2010
2009 Results and Outlook for 2010 Analyst-Investor meeting March 2010
Slide 2: Contents
Contents 1 2009 Highlights 2 2009 Results 3 Strategy 4 Outlook and Objectives for 2010
Slide 3: 2009 Highlights
1 2009 Highlights
Slide 4: 2009 key figures
2009 key figures Amounts in €m 2008 2009 % change Net sales 43,800 37,786 -13.7% Operating 3,649 2,216 -39.3% income Recurring net 1,914 617 -67.8% income* Free cash flow* 1,338 1,019 -23.8% Net debt 11,679 8,554 -26.8% * excluding capital gains/losses on disposals, exceptional asset write-downs and
Slide 5: Very tough economic climate in 2009
Very tough economic climate in 2009 > Global economic crisis, affecting in particular Europe and North America. Recession in the first half of 2009 in most Western countries > Sharp downturn in all Construction markets > Steep decline in industrial markets in the first half Sluggish trading througho
Slide 6: Action plan: ahead of targets
Action plan: ahead of targets Significant upswing in operating performance in H2 > Priority given to sales prices: up 0.8% over the year > Cost cutting programs: additional savings of €1.1bn in 2009 versus 2008 Change H1-2009 H2-2009 H2-09/H1-09 Operating €930m €1,286m +38% income Recurring net €210
Slide 7: Action plan: ahead of targets
Action plan: ahead of targets Very strong cash flow generation and robust financial position > Sharp reduction in capital expenditure: down €900m in 2009/2008 (versus target reduction of €700m) > Tight rein on WCR: down €1.4bn or 7 days’ sales at end- 2009/end-2008 > Free cash flow above €1bn: €1,01
Slide 8: 2009 Results
2009 Results Group Business Sectors Geographic Areas
Slide 9: Net sales
Net sales €m 43,800 +0.8% +0.9% -1.4% -13.7% 37,786 -14.0% -13.2% on a like-for-like basis 2008 sales Exchange Structure Price Volumes 2009 sales rate
Slide 10: Half-year organic growth
Half-year organic growth % change in 2009/2008 sales on a like-for-like basis +0.8% price 1.7% -0.2% volumes -10.6% -14.0% -17.2% -10.8% -13.2% -15.5% H1-2009/ H2-2009/ 2009/ H1-2008 H2-2008 2008
Slide 11: Half-year operating income
Half-year operating income (€m and % of sales) 2,005 2009 op. income: €2,216m, down 39% 1,644 +38% 1,286 930 as % 9.1% 7.6% 5.0% 6.7% Total Group of sales 12.1% 9.8% 7.6% 9.1% excl. Building Distribution 4.7% 4.4% 1.4% 3.4% Building Distribution H1-2008 H2-2008 H1-2009 H2-2009 FY 5.9% Total Group 8.
Slide 12: Non-operating costs
Non-operating costs (€m) 2008 2009 % change Operating income 3,649 2,216 -39.3% Non-operating costs (710)* (596) o/w: Provision for asbestos-related (75) (75) litigation Restructuring costs (190) (435) Other items (128) (380) Gains (losses) on disposals 53 (32) Asset write-downs (181) (348) Business
Slide 13: Outstanding claims
Outstanding claims Asbestos claims against CertainTeed in the US > Approximately US$ 77m paid out (US$71m in 2008) and a further €75m accrual to the provision in 2009 (€75m in 2008), bringing the total coverage to US$ 500m at end-2009 (versus US$ 502m at end-2008) 2008 2009* New claims 5,000 4,000 S
Slide 14: Net financial expense and income tax
Net financial expense and income tax (€m) 2008 2009 Net financial expense (750) (805) Cost of net debt 5.5% 5.5% 2008 2009 Income tax (638) (196) Tax rate on recurring net income 26% 26%
Slide 15: Half-year recurring net income
Half-year recurring net income* (€m) 1,101 813 +94% 407 210 H1-08 H2-08 H1-09 H2-09 > Sharp improvement in H2 compared to H1 * excluding capital gains and losses on disposals, asset write-downs and provision for Flat Glass fines
Slide 16: Recurring net income, Net income
Recurring net income* Net income €m 1,914 1,378 -68% -85% 617 202 2008 2009 2008 2009 > Recurring EPS*: €1.20 (-76%) EPS: €0.39 (-89%) * excluding capital gains on disposals, asset write-downs and provision for Flat Glass fines
Slide 17: Reduction in Capex ahead of target
Reduction in Capex ahead of target (€m and % of sales) 2,149 -42% 1,249 4.9% 3.3% 2008 2009 €900m reduction in Capex, versus target reduction of €700m
Slide 18: Cash from operations and Capex
Cash from operations (excl. tax impact of cap. gains /losses) and Capex (€m and % of sales) 3,712 3,487 €1,439m €1,338m -24% 3.3% 3.1% 2,273 2,149 2,268 €1,019m 2.7% 1,249 8.5% 5.2% 8.0% 4.9% 6.0% 3.3% (% of sales) 2007 2008 2009 Cash flow from operations Capex Free cash flow above €1bn – in line wi
Slide 19: EBITDA and Capex
EBITDA and Capex (€m and % of sales) 5,629 5,160 €3,356m €3,011m -18% 7.7% 6.9% 3,730 €2,481m 2,273 2,149 6.6% 1,249 13.0% 5.2% 11.8% 4.9% 9.9% 3.3% (% of sales) 2007 2008 2009 EBITDA Capex EBITDA after Capex virtually stable as % of sales * EBITDA = Operating income + depr./amort. of operating item
Slide 20: Further gains in WCR: -7 days' sales
Further gains in WCR: -7 days’ sales (-€1.4bn) (at December 31, in €m and no. of days) -€1,393m 4,951 5,123 4,773 4,858 4,677 4,529 4,642 59d 54d 51d 3,284 49d 44d -7 days 40d 38d 31d 2002 2003 2004 2005* 2006 2007 2008 2009 2002 and 2003 under French GAAP 2004 and 2005 under IFRS * 2005 excl. Gypsu
Slide 21: Free cash flow and change in WCR
Free cash flow (excl. tax impact of capital gains and losses) and change in WCR, over 12 months €m 2,412 +€892m 1,704 1,520 1,393 265 181 Change in WCR Free cash flow 1,439 1,339 1,019 2007 2008 2009 Free cash flow generation of €2.4bn after WCR, over 12 months
Slide 22: Acquisition projects scaled back
Acquisition projects scaled back (Investments in securities, €m) 830 * 16,6% 15,0% 14,4% 13,9% -75% 204 2008 2009 Fall of €626m in investments in securities * Maxit acquisition signed in 2007, completed in early 2008
Slide 23: Net debt & Shareholders' equity
Net debt & Shareholders’ equity €bn 16.2 15.3 14.5 14.5 12.9 12.6 12.0* 11.7 Net debt 11.6 8.6 Shareholders' equity '12-05 12-06 12-07 12-08 12-09 Net debt/Equity 102% 80% 78%* 80% 53% Net debt/EBITDA** 2.6*** 2.2 2.1* 2.3 2.3 * after Maxit acquisition ** EBITDA = operating income + depr./amort. ***
Slide 24: 2009 Results
2009 Results Group Business Sectors Geographic Areas
Slide 25: Trading by business sector
Trading by business sector % change in 2009/2008 sales on a like-for-like basis Group: -13.2% Innovative Materials -17.4% Construction Products Flat Glass -14.9% -14.4% HPM -21.1% 20%* 26%* Interior Solutions -17.2% Exterior Solutions -11.3% Packaging 9%* -3.8% 45%* Building Distribution -12.2% * 20
Slide 26: Innovative Materials (Flat Glass - HPM)
Innovative Materials (Flat Glass - HPM) (€m) Sales 9,677 -19.5% 4,993 4,684 7,792 3,991 3,801 Flat 2,885 Glass 2,664 2,198 2,374 Organic growth (like-for-like) H1/H1 H2/H2 09/08 IM -22.1% -12.3% -17.4% HPM 2,123 2,042 Flat -20.4% -8.9% -14.9% 1,611 1,629 Glass HPM -24.7% -17.2% -21.1% H1-2008 H2-200
Slide 27: Innovative Materials: operating income and EBITDA
Innovative Materials (Flat Glass - HPM) (€m and % of sales) Operating income EBITDA 1,244 12.9% & Capex 706 843 538 387 Flat 14.2% 5.0% Glass 9.7% 10.9% 456 370 4.7% 269 7.1% 6.0% 12.3% HPM 13.9% 101 12.1% 0.6% 5.5% 7.8% 4.0% H1-2008 H2-2008 H1-2009 H2-2009 EBITDA Capex 2009
Slide 28: Construction Products
Construction Products (€m) Sales 12,035 -13.5% 5,988 6,047 10,414 5,233 5,181 Interior 3,170 2,979 Solutions 2,539 2,495 Organic growth (like-for-like) H1/H1 H2/H2 09/08 Exterior Solutions CP -15.3% -13.5% -14.4% 2,835 3,084 2,710 2,703 Int. Sol. -19.5% -14.8% -17.2% Ext. Sol. -10.4% -12.2% -11.3% H
Slide 29: Construction Products: operating income and EBITDA
Construction Products (€m and % of sales) Operating income EBITDA 1,070 8.9% & Capex 604 985 9.5% 1,494 511 466 474 Interior 6.9% 13.3% Solutions 12.0% 6.7% 7.2% 1,130 10.9% 12.5% 15.2% 11.2% 364 Exterior 8.2% Solutions 7.9% 4.0% 3.0% H1-2008 H2-2008 H1-2009 H2-2009 EBITDA Capex 2009
Slide 30: Building Distribution
Building Distribution (€m) Sales 19,696 -13.2% 10,039 17,101 9,657 8,657 8,444 Organic growth (like-for-like) H1/H1 H2/H2 09/08 Building -14.5% -9.9% -12.2% Distrib. H1-2008 H2-2008 H1-2009 H2-2009
Slide 31: Building Distribution: operating income and EBITDA
Building Distribution (€m and % of sales) Operating income EBITDA 894 4.5% & Capex 470 424 698 412 2.4% 296 4.7% 543 4.4% 3.2% 4.1% 3.4% 116 155 1.4% 0.9% H1-2008 H2-2008 H1-2009 H2-2009 EBITDA Capex 2009
Slide 32: Packaging
Packaging (€m) Sales 3,547 -2.9% 3,445 1,814 1,733 1,744 1,701 Organic growth (like-for-like) H1/H1 H2/H2 09/08 Packg. -3.5% -4.1% -3.8% H1-2008 H2-2008 H1-2009 H2-2009
Slide 33: Packaging: operating income and EBITDA
Packaging (€m and % of sales) Operating income EBITDA 442 12.5% 437 12.7% & Capex 233 233 209 657 204 398 11.6% 13.4% 13.4% 19.1% 259 11.5% 12.0% 7.5% H1-2008 H2-2008 H1-2009 H2-2009 EBITDA Capex 2009
Slide 34: 2009 Results
2009 Results Group Business Sectors Geographic Areas
Slide 35: Organic growth by geographic area
Organic growth by geographic area % change in 2009/2008 sales on a like-for-like basis Group: -13.2% Asia & o/w: Latin Am. (6%) : -2.1% emerging Asia (4%) : -13.6% countries East. Eur. (5%) : -18.1% -11.4% 16%* France North 29%* America -12.3% 13%* -14.5% 42%* o/w: Germany (10%) : -12.8% Other Scand
Slide 36: Operating income by geographic area
Operating income by geographic area (€m and % of sales) 893 637 576 486 470 414 360 316 313 292 260 221 211 8.5% 8.7% 161 11.7% 7.8% 6.6% 122 9.3% 133 8.8% 8.9% 8.5% 5.6% 5.6% 5.4% 3.2% 4.6% 5.6% 4.5% H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2008 2009 2008 2009 2008 2009 2008 2009 France Othe
Slide 37: EBITDA and Capex by geographic area
EBITDA and Capex by geographic area (2009, €m and % of sales) 1,282 EBITDA after Capex 1,013 Capex 868 761 674 759 347 507 414 414 254 167 2.2% 2.5% 3.4% 6.5% France Other Western Europe North America Asia & emerging countries
Slide 38: Strategy
3 Strategy
Slide 39: The crisis has reinforced our ambition
The crisis has reinforced our ambition: To be a world leader in Habitat, offering innovative solutions to today’s critical challenges of growth, energy and the environment Unrivalled positioning enabling the Group to meet the needs of the Habitat market
Slide 40: Our strategic priorities
Our strategic priorities > Capture growth at the different stages of economic development > Maintain our technological edge > Constantly adapt our organization and industrial facilities to changing trends in our markets
Slide 41: Solutions for every stage of the development cycle
Solutions for every stage of the development cycle • Coated glass • Renewable energy • HPM for construction and ls Potential market teria industry per capita al ma g ic nolo ch Te • Building Distribution s ns /Service io Solut • Insulation ns • Plasterboard Interior Solutio • Flat Glass Exterior and
Slide 42: Growing markets in mature countries
Growing markets in mature countries… > Technical solutions for tomorrow’s homes Consumption per capita based on wealth Consumption Coated glass Mortars (€) Consumption per capita (m2) Plasterboard per capita (m²) Insulating materials (m3) Cement (kg) GDP per capita GDP per capita > Solutions promoti
Slide 43: … as well as in emerging countries
… as well as in emerging countries > Meet vigorous demand for new construction and materials: pipe, mortars, flat glass, reinforced concrete > Progressive switch to high-end products: plasterboard, coated glass, renewable energies… > Continue to deepen our footprint on these markets Eastern Eur. and
Slide 44: Innovation at the service of local markets
Innovation at the service of local markets > Ongoing R&D efforts R&D expenditure maintained at €400m Development in emerging countries (particularly in Shanghai) R&D center in Shanghai > Priorities underpinning our Habitat strategy Solar program Exterior thermal insulation High-performance insulatin
Slide 45: Constantly adapting to developments in our markets
Constantly adapting to developments in our markets > Additional selective cost reductions (€200m) mainly in Europe in businesses reliant on capital expenditure €2.1bn in cumulative cost savings since 2007 > Seize growth opportunities in industrial businesses : ~80% of growth capex earmarked for emer
Slide 46: Outlook and Objectives for 2010
Outlook and Objectives for 2010
Slide 47: Economic outlook for 2010
Economic outlook for 2010 Economic environment > Western Europe and North America: - fragile recovery; mixed impacts of stimulus packages in 2010 - trading conditions in Construction markets to remain very tough, with trends varying widely from one country to the next - industry should pick up sligh
Slide 48: Economic outlook for 2010: Group businesses
Economic outlook for 2010 Group businesses Innovative Materials > Significant upturn in volumes and robust sales prices > Upswing in margins (impact of cost savings) CP > Market conditions to remain tough in mature countries > Strong growth in emerging countries and Asia > Rise in the cost of raw ma
Slide 49: Our priorities in 2010
Our priorities in 2010 > Continued focus on 2009 action plan priorities, but with a more selective approach: - priority focus on sales prices - additional cost savings of €600m compared with 2009, including €200m from new focused programs in 2010 - strict cash discipline > Same level of R&D > Select
Slide 50: 2010 objectives
2010 objectives > Strong growth in operating income* > Free cash flow > €1bn > Continuing robust financial structure *at constant exchange rates
Slide 51: 2009 dividend
2009 dividend* > Same amount as in 2008 : €1 per share Î Net dividend yield at 12/31/2009 = 2.6% > Payment: in cash or in shares, at shareholders’ discretion > Timetable: - June 3, 2010: AGM - June 8, 2010: record date - June 9, 2010: dividend cut-off date - June 9-23, 2010: take-up period - July 2,
Slide 52: Conclusion: a stronger Group
Conclusion: a stronger Group > Positioned on growth markets in both mature and emerging countries > Constantly adapting to developments in our markets > Robust financial structure allowing us to capitalize on any growth opportunities
Slide 53: 2009 Results and Outlook for 2010
2009 Results and Outlook for 2010 Analyst-Investor meeting March 2010
Slide 54: Attractive positioning focused on residential construction and renovation
Attractive positioning focused on residential construction and renovation New residential 8% 8% 2% 3% construction 21% New non- 2% 5% 1% 2% residential construction 10% 15% 21% 4% 6% Renovation/ Infrast. 46% ** 1% 2% 1% 1% Automotive 5% 2% 4% 3% 2% Household cons. 11% 1% 2% 2% 2% Other ind. 7% Franc
Slide 55: Renovation: structural growth in mature markets
Renovation: structural growth in mature markets 90 Renovation spending in France (€bn) CAGR 80-08 = 2.2% CAGR 00-08 = 4.5% 65 40 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 Source: BIPE, actual € Market driven by stricter energy performance requirements
Slide 56: Cost savings
Cost savings cumulative, €m ~€2,100m New selective 200 measures in 2010 €1,500m 400 2009 carry-over New 920 measures in 2009 1,500 €400m 180 2008 carry-over 400 400 2007 cost base 2008 2009 2010 €600m in additional cost savings in 2010/2009
Slide 57: €2.1 billion in additional cost savings: breakdown by business sector
€2.1 billion in additional cost savings in 2008-2010 compared to 2007: breadown by business sector €m ~2,100 ~700 Innovative Materials business-specific programs Construction ~650 Products ~450 Building Distribution cross-functional programs ~300* * NB €300m target set in July 2007
Slide 58: 2009 Results and Outlook for 2010
2009 Results and Outlook for 2010 Analyst-Investor meeting March 2010