REG - Compagnie St-Gobain - Annual Financial Report
23/02/2023 17:15
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RNS Number : 9046Q Compagnie de Saint-Gobain 23 February 2023
The worldwide leader
in light & sustainable construction
Record 2022 results
· All financial performance indicators at a record high in 2022 (growth,
operating income, margin, recurring net income, free cash flow, ROCE)
· Profound transformation of the Group's profile towards fast-growing
markets: one-third of sales rotated in the past four years, increasing its
exposure to North America and emerging countries and taking construction
chemicals sales to €5.3bn
· 27% reduction in CO(2) emissions versus 2017 (scopes 1 and 2), -5% in
2022 versus 2021
· Shareholder return: €1.35bn in 2022 (share buybacks and 2021
dividend). Dividend of €2.00 (+23%) recommended for 2022
· 2023 outlook: further execution of the "Grow & Impact" strategy,
with the operating margin to remain in the 9%-11% range
(€m) 2021 2022 Change
Sales 44,160 51,197 +15.9%
Operating income 4,507 5,337 +18.4%
Operating margin (%) 10.2% 10.4% +20 bps
Recurring EPS (€) 5.35 6.48 +21.1%
Free cash flow 2,904 3,791 +30.5%
ROCE (%) 15.3% 16.1% +80 bps
Benoit Bazin, Chief Executive Officer of Saint-Gobain, commented:
"In an unsettled geopolitical, energy and macroeconomic environment in 2022,
the Group once again delivered record results. Over the last four years of its
transformation, Saint-Gobain has outperformed, achieving a two-fold increase
in its earnings per share, a structural improvement of 240 basis points in its
operating margin, and a three-fold increase in its cash flow generation. The
Group's profile has been profoundly optimized: one-third of the Group's scope
has changed in the past four years and over 60% of our earnings now come from
North America and emerging countries. As the worldwide leader in light and
sustainable construction, the Group draws on its innovation capabilities and
expertise to provide solutions to the considerable challenges posed by the
climate and energy crises, which are structural growth drivers for
Saint-Gobain for the coming decades.
I am confident that 2023 will be a good year for Saint-Gobain. Our roadmap is
clear: disciplined execution of the "Grow & Impact" strategic priorities,
leveraging the strength of our operating model against the backdrop of a
slowdown in new construction but good resilience in renovation. I know I can
rely on the dedication and talent of our teams, who do everything possible to
best serve their customers and who monitor their performance in real time
within our organization by country. In this context, in 2023 we are targeting
an operating margin of between 9% and 11%, in line with the objectives set out
in our "Grow & Impact" plan for 2021-2025."
A new, resilient growth profile
2018-2022: years of profound transformation for the Group
- 23% increase in sales in a context of a profound change in Group
structure, with one-third of sales rotated since 2018: €9 billion in
divestments and almost €4 billion in acquisitions;
- Sharp improvement in the operating margin in 2022 versus 2018 (270 basis
points), including a structural gain of 200 basis points in the period - set
to rise to 240 basis points on a full-year basis after the disposal of the UK
distribution business - thanks to cost savings related to the new organization
and the optimization of the Group's profile;
- Significant efficiency improvements thanks to our new organization,
reflected especially in close proximity to customers, stronger pricing power
and an enhanced culture of results-driven accountability for local teams.
(€m) 2018 2022 Change
Sales 41,774 51,197 +23%
Operating income 3,207 5,337 +66%
Operating margin (%) 7.7% 10.4% +270 bps
Recurring EPS (€) 3.18 6.48 x 2
Free cash flow 1,236 3,791 x 3
ROCE (%) 10.7% 16.1% +540 bps
2021-2022: successful deployment of the "Grow & Impact" strategic plan
The first two years of the plan successfully met the new financial trajectory
set out in "Grow & Impact", with an acceleration in results, cash flow and
value creation, exceeding objectives across the board:
- Strong organic growth of 10% per annum on average(1), benefiting from an
unrivalled offer of sustainable solutions accounting for almost three-quarters
of Group sales;
- A world leader in construction chemicals, with annual sales of €5.3
billion (pro forma basis for changes in Group structure in 2022), thanks to
strong organic growth and recent acquisitions (Chryso, GCP, Impac in Mexico,
Brasprefer and Matchem in Brazil, IDP Chemicals in Egypt, Best Crete in
Malaysia, Choksey Chemicals in India, and Urumix in Uruguay);
- Operating income now well-balanced between the three geographic zones (pro
forma basis for changes in Group structure in 2022): 30% in North America, 32%
in Asia and emerging countries and 38% in Western Europe;
- Record financial results, with on average over two years: an operating
margin of 10.3%, a free cash flow conversion ratio of 56% and strong value
creation with a ROCE of 15.7%;
- Record-high shareholder return: €2.6 billion over two years through
share buybacks and dividend payouts. With over €1 billion in shares bought
back over two years, the Group is ahead of its €2 billion buyback target
over five years (2021-2025).
1. Average organic growth in 2021 and 2022: +6.9% in 2021 (+13.8% for
2021/2019 divided by two) and +13.3% in 2022.
Sustainability is at the heart of the Group's strategy
As worldwide leader in light and sustainable construction, Saint-Gobain has a
key role to play in building a carbon-neutral economy. The Group made further
significant progress on environmental and social matters in 2022, allowing it
to reduce its footprint while maximizing the positive impact of its range of
solutions, in line with its "Grow & Impact" strategy. The solutions sold
by Saint-Gobain across the globe in one year result in around 1,300 million
tons of avoided CO(2) emissions over their lifespan, i.e., more than 100 times
its scope 1 and 2 footprint.
Saint-Gobain achieved three world-firsts during 2022:
- Zero-carbon production (scopes 1 and 2) of glass in France;
- Zero-carbon production (scopes 1 and 2) of plasterboard in Sweden;
- Very low carbon production (scopes 1 and 2 down 93% versus average) of
insulation (glass wool) in Finland.
The Group has reduced its scope 1 and 2 CO(2) emissions by 27% since 2017,
including a 5% reduction in 2022 (to 9.8 million tons), in line with the 33%
emissions reduction target through to 2030 validated by the Science-Based
Targets initiative (SBTi).
Growth decoupled from its CO(2) emissions: carbon intensity per euro of sales
and EBITDA fell by 42% and 57%, respectively, in 2022 versus 2017, reflecting
the Group's objective of maximizing its positive impact for the environment
while minimizing its footprint.
We stepped up our commitment to the circular economy, reducing our
non-recovered waste by 37% versus 2017. Saint-Gobain rolled out ORAÉ®, the
world's first low carbon glass featuring 70% of cullet (recycled glass), as
well as Placo® Infini 13, the first plasterboard made with over 50% of
recycled gypsum.
In 2022, in line with its commitment, Saint-Gobain finalized the roll-out of
its "CARE by Saint-Gobain" social protection and prevention program. The
program provides cover for the Group's employees, in all countries where it
operates, supporting them during different stages of their lives (maternity
and paternity leave, medical and hospitalization costs for the entire family,
life insurance).
In terms of safety, our accident frequency rate with and without lost time
(TRAR or total recordable accident rate) fell by 19% between 2021 and 2022,
and has been almost halved in the last five years.
The year's progress was recognized by the following major independent
organizations:
- SBTi validated Saint-Gobain's 2050 target and confirmed that the
Group's net-zero carbon trajectory is in line with the Paris agreement;
- CDP "A List": second consecutive year;
- Bloomberg Gender-Equality Index 2023: fifth consecutive year;
- Top Employer Global 2023: eighth consecutive year, with only 15
companies worldwide globally recognized.
Group operating performance
Like-for-like sales rose 13.3%. This performance - supported by strong
momentum in all our segments with double-digit organic growth in each - was
driven by the Group's worldwide leadership in light and sustainable
construction.
Leveraging the added value offered by its solutions and its dynamic local
organization as close to its customers as possible, Saint-Gobain was able to
protect its operating margin, generating a positive price-cost spread over
2022 as a whole and in each half of the year, thanks to a 14.6% price increase
overall (13.8% increase in the second half against a higher comparison basis).
This agility enabled the Group to effectively manage energy and raw material
cost inflation, which represented about €3 billion in 2022 versus 2021.
The Group reported a slight decline in volumes, down 1.3% over the year as a
whole and down 2.3% in the second half (with a negative working day effect of
around 0.5% for this latter period).
On a reported basis, sales jumped 15.9% to €51.2 billion, with a positive
currency effect of 3.6% over the year as a whole (2.4% in the fourth quarter).
The Group structure impact reduced sales by 1.0% over the year as a whole but
was positive in the second half, adding 1.3% to sales.
The Group resolutely continued to optimize its profile in 2022, in terms of
both divestments, with €3.8 billion in sales divested or in the process of
being divested - namely distribution in the UK and Poland, glass processing
and Crystals & Detectors businesses - and in terms of acquisitions, with
€1.9 billion in sales acquired, mainly GCP Applied Technologies (GCP) in
October 2022 and Impac in Mexico in April 2022 in construction chemicals,
Kaycan in North America in August 2022 in exterior products, and Rockwool
India Pvt Ltd. in February 2022 in insulation.
The disposal of all remaining UK distribution brands (around €2.7 billion
in sales in 2022) will be finalized by the end of March 2023.
The integration of recent acquisitions is proceeding seamlessly, and all
synergies have been confirmed and are being put in place:
- Chryso: 20% growth in sales and €100 million in EBITDA for 2022,
maintaining an industry-leading EBITDA margin;
- Kaycan: USD 84 million in EBITDA for 2022 as a whole;
- GCP: EBITDA forecast at USD 170 million in 2023 for the first full year.
Operating income rose sharply to a new record high of €5,337 million, up
18.4% as reported versus 2021 and up 13.3% at constant exchange rates (up
11.7% like-for-like). Operating income is 66% higher than in 2018.
The Group's operating margin hit a new record high, at 10.4% in 2022 (versus
10.2% in 2021), representing an increase of 270 basis points since the launch
of the Group's transformation at the end of 2018.
Segment performance (like-for-like sales)
Northern Europe: good growth in sales driven by renovation; record operating
margin
Northern Europe was up 12.4% in the year against a strong inflationary
backdrop, with a slight decrease in volumes amid a slowdown in new
construction. Renovation remained at a good level, supported by stimulus
measures and stricter energy performance regulations. The Region's operating
margin came in at a new record high of 7.8% (versus 5.6% in 2018), thanks to
an optimized business profile and sound management of the price-cost spread.
Nordic countries outperformed their market thanks to their successful presence
across the entire construction value chain. Trade professionals continued to
see full order books. Our Fredrikstad factory in Norway, the world's first
carbon-neutral plasterboard plant, will start production by the end of
first-half 2023. The UK put in a satisfactory performance amid a more
pronounced slowdown in the market in both new construction and renovation. The
country has been very active in optimizing its portfolio, with about
€3.4 billion in sales divested or in the process of being divested (all
distribution brands and glass processing) over the past two years. In Germany,
where the market slowed in the second half owing to fears regarding inflation
and the energy supply, the Group benefited from its solid positions in energy
efficiency renovation. Despite a slowdown in the second half, Eastern Europe
posted an excellent performance in 2022 - led by Poland and Romania -
benefiting from its leadership positions. A renewable electricity supply
agreement has been signed in Poland which will cover around 45% of
Saint-Gobain Poland's electricity needs from 2025.
Southern Europe - Middle East & Africa: good sales growth driven by
renovation; very good margin level
Sales in Southern Europe - Middle East & Africa were up by 12.6% in a
strongly inflationary environment, with volumes down slightly over the year on
the back of a slowdown in new construction. Note that the Region delivered a
good fourth-quarter performance with stable volumes, thanks to its continued
outperformance on the more resilient renovation market, where demand was
driven by stricter regulations, government stimulus measures and faster
payback for energy efficiency renovation projects. Operating income hit a new
record high with an operating margin of 8.0% (versus 4.6% in 2018), thanks to
a highly optimized post-transformation profile, good management of the
price-cost spread, productivity gains and a tight rein on costs.
In France, the Group strengthened its presence on the renovation market, where
trade professionals continue to see healthy order books - thanks mainly to a
favorable regulatory environment, public building programs and household
stimulus packages (MaPrimeRenov'). Saint-Gobain's presence across the entire
value chain - the market's first low-carbon glass solutions, digital apps for
customers, a focus on collection and recycling, training centers for trade
professionals - confirms the Group's position as undisputed leader in energy
efficiency renovation.
Spain and Italy delivered robust growth with a further increase in volumes,
thanks to their commercial organization by sales channel and range of light
and sustainable construction solutions. Benelux held firm in a more difficult
market and benefited from the development of innovative solutions improving
our clients' productivity. Middle East and Africa continued to see robust
growth, benefiting from the opening of three new construction chemicals plants
(Kenya, South Africa, Oman) and by upbeat markets, particularly in the Gulf
States and Egypt.
Americas: good sales growth driven by comprehensive light construction
solutions; robust margin
The Americas Region delivered 13.9% organic growth, despite a slowdown in new
construction in the second half of the year. Operating income for the Region
hit a new record high of €1.5 billion with a 30% increase in absolute
terms; the US now represents the Group's biggest market in terms of operating
income. The Region achieved an operating margin of 16.1% (versus 11.2% in
2018), supported by good momentum from recent acquisitions, cost and sales
synergies and a clear positive raw material and energy price-cost spread.
- North America progressed by 15.0%, driven by the development of a
comprehensive range of solutions, by good momentum in light construction
solutions, and by a strong presence in renovation. 2022 saw the launch of
MaxPro, a new blowing wool to insulate attics. Although new construction
slowed, the structural need for more housing, as well as the number of
construction projects currently in progress, should help limit the slowdown.
Our teams made good progress on the integration of Kaycan and of GCP's
specialty construction materials business (waterproofing membranes), helping
to speed up implementation of the expected synergies, confirm the sales
development opportunities and reinforce Saint-Gobain's leading position in
construction materials in North America. After a renewable wind farm energy
supply agreement executed in 2021, in 2022 the Group signed a new contract
based on solar energy: together these agreements will cover over 60% of
Saint-Gobain's electricity needs in North America by the end of 2024.
- Latin America reported 11.0% growth in a macroeconomic environment
that remains challenging in Brazil. Growth in all countries of the Region was
supported by higher sales prices, an enriched offer and mix, and a geographic
footprint and product range enhanced by bolt-on acquisitions
country-by-country in construction chemicals (Impac in Mexico, Brasprefer in
Brazil in waterproofing, and Urumix in Uruguay - Saint-Gobain's first facility
in the country) and in insulation (Termica San Luis in Argentina).
Asia-Pacific: strong sales growth and record margin
The Asia-Pacific Region reported 23.6% organic growth, led by India and
South-East Asia. The operating margin came in at an annual record high of
12.1% (compared to 10.4% in 2018), supported by good momentum in volumes and
by a positive raw material and energy price-cost spread.
India delivered an excellent performance in 2022, thanks to further market
share gains and an innovative, integrated range of solutions rolled out to new
customers. Around 85 "MyHome by Saint-Gobain" showrooms presenting our range
of solutions to a new consumer market will soon be operational in the country.
To remain in step with market growth, Saint-Gobain has inaugurated a new
plasterboard plant which will be powered by biomass in 2024, continued to
expand in construction chemicals and made preparations for the opening of its
sixth float glass plant in 2023. The successful integration of Rockwool India
Pvt. Ltd. (stone wool insulation) and the definitive agreement to acquire U.P.
Twiga Fiberglass Ltd. (glass wool insulation) complete the Group's leading
positions in façade and interior solutions. Despite disruptions owing to the
health situation, China posted moderate growth mainly driven by prices,
benefiting from its distinctive positioning on the growing light construction
and renovation markets. In South-East Asia, the Group continues to enjoy a
strong growth dynamic and to outperform the market - particularly in Vietnam
and Malaysia - supported by a diversified offering in construction chemicals
with two new production lines opened in 2022 (Vietnam and Philippines). In
addition, the acquisition of Best Crete in Malaysia at the end of the year
enhances our resin-based flooring solutions.
High Performance Solutions (HPS): acceleration in sales growth
HPS sales were up by 14.3%, benefiting from an acceleration in prices in the
second half and from good volume growth (up 5.0% in 2022), thanks mainly to
the recovery in automotive in Europe in the second half. The operating margin
came in at 12.0%, down slightly year-on-year owing to a negative mix effect
and to the gradual catch-up in prices in Mobility in a strongly inflationary
environment.
- Businesses serving global construction customers achieved record sales and
outperformed the market with 19.5% growth. They continued to benefit from
upbeat trends in textile solutions for external thermal insulation systems
(ETICS). The very strong trends in Chryso sales and results continued, driven
by decarbonization in the construction sector, growth capex (fifth additives
plant in India) and targeted acquisitions (Matchem in Brazil, IDP Chemicals in
Egypt). The new Construction Chemicals organization integrating GCP has been
in place since October 1, 2022 and will help to accelerate implementation of
the expected synergies.
- The Mobility business saw sales progress 14.9% over the year, with an
acceleration in the second half at 24.4%, supported by both a gradual catch-up
in sales prices and by a rebound in volumes. The business continued to enjoy
upbeat momentum in the Americas, India and China. Thanks to its technological
lead in solutions for electric vehicles - which accounted for 30% of our sales
at the end of the year - and to its high value-added solutions, the Mobility
business continues to outperform the automotive market.
- Businesses serving Industry grew 12.8%, supported by activities relating
to investment cycles such as ceramics, which benefited from strong demand for
innovation in specialty materials and new decarbonization technologies.
Against this backdrop, Valoref, a pioneer in ceramic recycling in Europe,
increased its sales by almost 50% in 2022 by expanding its operations
internationally into India and China, and is now targeting North America.
Analysis of the 2022 consolidated financial statements
The 2022 consolidated financial statements were approved by Saint-Gobain's
Board of Directors at its meeting of February 23, 2023. The consolidated
financial statements were audited and certified by the statutory auditors.
in € million 2021 2022 % change
Sales 44,160 51,197 15.9%
Operating income 4,507 5,337 18.4%
Operating margin 10.2% 10.4%
Operating depreciation and amortization 1,934 2,048 5.9%
Non-operating costs -239 -262 -9.6%
EBITDA 6,202 7,123 14.9%
Capital gains and losses on disposals, asset write-downs and impact of changes -332 -493 -48.5%
in Group structure
Business income 3,936 4,582 16.4%
Net financial expense -408 -405 0.7%
Dividends received from investments 1 1 n.s.
Income tax -919 -1,082 -17.7%
Share in net income of associates 4 5 n.s.
Net income before non-controlling interests 2,614 3,101 18.6%
Non-controlling interests 93 98 5.4%
Net attributable income 2,521 3,003 19.1%
Earnings per share(2) (in €) 4.79 5.84 21.9%
Recurring net income(1) 2,815 3,335 18.5%
Recurring(1) earnings per share(2) (in €) 5.35 6.48 21.1%
EBITDA 6,202 7,123 14.9%
Depreciation of right-of-use assets -679 -716 -5.4%
Net financial expense -408 -405 0.7%
Income tax -919 -1,082 -17.7%
Capital expenditure(3) -1,591 -1,940 -21.9%
o/w additional capacity investments 516 830 60.9%
Changes in working capital requirement -217 -19 91.2%
Free cash flow(4) 2,904 3,791 30.5%
Free cash flow conversion(5) 53% 59%
ROCE 15.3% 16.1%
Lease investments 769 764 -0.7%
Investments in securities net of debt acquired(6) 1,352 3,783 179.8%
Divestments 322 501 55.6%
Consolidated net debt 7,287 8,232 13.0%
1. Recurring net income = net attributable income excluding capital gains
and losses on disposals, asset write-downs and material non-recurring
provisions.
2. Calculated based on the weighted average number of shares outstanding
(514,372,413 shares in 2022; 526,244,506 in 2021).
3. Capital expenditure = investments in tangible and intangible assets.
4. Free cash flow = EBITDA less depreciation of right-of-use assets, plus
net financial expense, plus income tax, less capital expenditure excluding
additional capacity investments, plus change in working capital requirement.
5. Free cash flow conversion ratio = free cash flow divided by EBITDA,
less depreciation of right-of-use assets.
6. Investments in securities net of debt acquired = €3,783 million in
2022, of which €3,684 million in controlled companies.
EBITDA climbed 15% to a new record high of €7,123 million (up 53% compared
to 2018). EBITDA includes €262 million in non-operating costs.
The net balance of capital gains and losses on disposals, asset write-downs
and the impact of changes in Group structure represented an expense of €493
million (versus an expense of €332 million in 2021). It reflects €292
million in asset write-downs mainly relating to disposals (UK distribution in
particular), €116 million in Purchase Price Allocation (PPA) intangible
amortization, and €85 million in disposal losses and impacts relating to
changes in Group structure.
Recurring net income hit a new record high of €3,335 million (up 18%). The
tax rate on recurring net income was 25%.
Capital expenditure totaled €1,940 million (up 22%), driven by a 61%
increase in growth capex, of which almost 70% was in North America and
emerging countries. Capital expenditure represented 3.8% of sales in 2022. The
Group opened 17 new plants and production lines to bolster its leading
positions on the fast-growing markets of construction chemicals and light
construction, particularly in Asia (India, Philippines, Vietnam, China),
Africa and the Middle East (Kenya, Zimbabwe, Oman), Latin America (Mexico,
Brazil) and Europe (Czech Republic with a 3D printing site, Poland).
Free cash flow came in at a record €3,791 million - a rise of 31% and a
three-fold increase compared to 2018 - with a free cash flow conversion ratio
of 59% (versus 53% in 2021 and 31% in 2018). This reflects strong growth in
EBITDA and very good management of operating working capital requirement
(WCR), which represented 15 days' sales at end-December 2022 compared to 17
days' sales at end-December 2021.
ROCE hit a new all-time high of 16.1% (versus 15.3% in 2021 and 10.7% in
2018), resulting in strong value creation for our shareholders, exceeding or
meeting the 12%-15% objective in all our segments.
Investments in securities of controlled companies net of debt acquired totaled
€3,684 million (versus €1,319 million in 2021), primarily reflecting the
acquisition of GCP in construction chemicals - but also Impac in Mexico,
Matchem and Brasprefer in Brazil, Urumix in Uruguay, and IDP Chemicals in
Egypt - as well as Kaycan in exterior products in North America and Rockwool
India Pvt Ltd. in insulation in India. In total, acquisitions made by the
Group in 2022 represent approximately €1.9 billion in full-year sales and
approximately €300 million in EBITDA.
Divestments totaled €501 million, corresponding essentially to the sale of
specialized distribution activities in the UK, Crystals & Detectors and
ceramics for the steel market.
Net debt was €8.2 billion. Net debt as a percentage of consolidated equity
was stable at 35% at December 31, 2022. The net debt to EBITDA ratio also
remained stable year-on-year at 1.2, half its end-2018 level.
Attractive shareholder return policy
In 2022, Saint-Gobain returned a record €1.35 billion to its shareholders,
representing a total yield of 5.8% based on its closing share price at
December 31, 2022 (€45.65):
- Around €835 million was paid by the Group to its shareholders in respect
of the dividend for 2021;
- €520 million was allocated for share buybacks in 2022 (net of offsetting
employee share creation) in order to reduce the number of shares outstanding
to 511 million at December 31, 2022 from 521 million at December 31, 2021.
In 2023, the Group plans to return over €1.4 billion in total to
shareholders:
- At today's meeting, Saint-Gobain's Board of Directors decided to recommend
to the Shareholders' Meeting on June 8, 2023 a cash dividend up 23% to
€2.00 per share for 2022 (versus €1.63 in 2021). This dividend represents
31% of recurring net income.
The ex-dividend date has been set at June 12 and the dividend will be paid on
June 14, 2023;
- The Group will allocate at least €400 million for share buybacks in 2023
(net of offsetting employee share creation) - in order to further reduce the
number of its outstanding shares - in line with the objectives set out in its
"Grow & Impact" plan.
2023 outlook and strategic priorities
In an uncertain geopolitical and macroeconomic environment, the Group will
continue to outperform its markets thanks to the pertinence of its strategic
positioning at the heart of energy and decarbonization challenges.
In 2023 the Group's focus will be on consolidating its high operating
performance level, supported by its resilience and ability to swiftly adapt to
local market developments. Action plans are overseen by country CEOs in order
to optimize in real time their P&Ls in terms of sales prices, fixed and
variable costs, or production capacities.
Saint-Gobain expects a moderate slowdown in its markets in 2023, with
contrasting trends: a decline in new construction in certain regions but good
resilience overall in renovation:
- 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.
Against this backdrop, in 2023 the Group will continue to implement the
strategic priorities set out in its "Grow & Impact" plan for 2021-2025:
1) Consolidate our initiatives focused on profitability and performance:
maintain a very good operating margin level and strong free cash flow
generation
- Constant focus on the price-cost spread;
- Productivity initiatives and swift adjustments of fixed and variable costs
where necessary;
- Maintaining an optimized operating working capital requirement while
ensuring a good level of inventories to best serve customers;
- Capital expenditure of just over 4% of sales, consistent with the Group's
objective of between 3.5% and 4.5% of sales, with strict allocation to
high-growth markets.
2) Outperform our markets and continue to strengthen our profitable growth
profile
- Enrich our comprehensive range of integrated, differentiated and
innovative solutions offering sustainability and performance;
- Continue our targeted acquisition and divestment dynamic, and benefit from
the integration of recent acquisitions.
3) Accelerate our engagement in building a carbon-neutral economy
- Enrich our positive-impact and low-carbon solutions;
- Accelerate decarbonization across the value chain: optimization of
manufacturing processes, development of the circular economy, partnerships in
renewable energies and ESG emissions reduction roadmaps at our suppliers and
partners.
Amid a moderate market slowdown,
in 2023 Saint-Gobain is targeting an operating margin of between 9% and 11%,
in line with the "Grow & Impact" strategic plan target
Financial calendar
An information meeting for analysts and investors will be held at 8:30am (GMT
+1) on February 24, 2023 and will be streamed live on Saint-Gobain's website:
www.saint-gobain.com (http://www.saint-gobain.com)
- Sales for the first quarter of 2023: Thursday April 27, 2023, after close
of trading on the Paris stock exchange.
- First-half 2023 results: Wednesday July 26, 2023, after close of trading
on the Paris stock exchange.
Glossary:
- 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
structure impact);
· changes in foreign exchange rates, by calculating indicators for the
year under review and those for the previous year based on identical foreign
exchange rates for the previous year (currency impact);
· changes in applicable accounting policies.
- EBITDA = operating income plus operating depreciation and amortization, less
non-operating costs.
- Operating margin = operating income divided by sales.
- ROCE (Return on Capital Employed): operating income for the year adjusted
for changes in Group structure, divided by segment assets and liabilities at
year-end.
- ESG = Environment, Social, Governance.
- Purchase Price Allocation (PPA) = the process of assigning a fair value to
all assets and liabilities acquired and of allocating the residual goodwill as
required by IFRS 3 (revised) and IAS 38 for business combinations. PPA
intangible amortization relates to amortization charged against brands,
customer lists, and intellectual property, and is recognized in "Other
operating expenses and asset impairment".
- Pro forma: sales or operating income including the full-year impact of
changes in Group structure in 2022.
- TRAR: total recordable accident rate with and without lost time for 1
million hours worked for the Group's employees, temporary workers and
permanent subcontractors.
All indicators contained in this press release (not defined in the footnotes)
are explained in the notes to the consolidated financial statements as at
December 31, 2022, available by clicking here:
https://www.saint-gobain.com/en/news/full-year-2022-results
Net
debt
Note 10
Non-operating
costs
Note 5
Operating
income
Note 5
Net financial
expense
Note 10
Recurring net
income
Note 5
Business
income
Note 5
Working capital
requirement
Note 5
Important disclaimer - forward-looking statements:
This press release 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
similar expressions. Although Saint-Gobain believes that the expectations
reflected in such forward-looking statements are based on reasonable
assumptions as at the time of publishing this document, investors are
cautioned that these statements are not guarantees of its future performance.
Actual results may differ materially from the forward-looking statements as a
result of a number of known and unknown risks, uncertainties and other
factors, many of which are difficult to predict and are generally beyond the
control of Saint-Gobain, including but not limited to the risks described in
the "Risk Factors" section of Saint-Gobain's Universal Registration Document
and the main risks and uncertainties presented in the half-year 2022 financial
report, both documents being available on Saint-Gobain's website
(www.saint-gobain.com (http://www.saint-gobain.com) ). Accordingly, readers of
this document are cautioned against relying on these forward-looking
statements. These forward-looking statements are made as of the date of this
document. Saint-Gobain disclaims any intention or obligation to complete,
update or revise these forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by applicable laws
and regulations.
This press release does not constitute any offer to purchase or exchange, nor
any solicitation of an offer to sell or exchange securities of Saint-Gobain.
For further information, please visit www.saint-gobain.com
(http://www.saint-gobain.com) .
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