(AOF) – Saint-Gobain indicated that it had successfully launched a bond issue of two billion euros, made up of two tranches of one billion each, respectively at three years with a coupon of 3.75%, and at seven years with a coupon of 3.875%. With this operation, the group explained that it had “taken advantage of favorable market conditions to anticipate the refinancing of future bond maturities, while optimizing its financing conditions”.
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Key points
– World leader in materials for housing, created in 1665;
– Turnover of €51.2 billion divided into 5 branches, Northern Europe for 24%, Southern Europe & Africa (including France) for 30%, America for 18% and High Solutions performance ;
– Business model based on a complete portfolio of brands and a solutions approach: productivity gains for construction professionals, well-being for the end user and tailor-made performance & innovation for the industrial client;
– Split capital (8.3% for employees), Pierre-André de Chalendar, chairing the board of directors of 14 members, Benoît Bazin providing general management;
– Solid balance sheet with net debt of €8.2 billion, i.e. 1.2 leverage and 35% of equity, and free self-financing of €3.8 billion.
Challenges
– “Grow & Impact” strategic plan launched in October 2021:
– growth superior to the markets
– offering integrated, differentiated solutions for the decarbonization of construction,
– industrial investments around €1.5 billion;
– Innovation strategy with 3 principles, anticipation of standards, integration of digital into production and customer journeys and sustainable growth:
– structured by 20 platforms shared by industrial and construction client businesses: intelligent materials, robotization, lightweight materials, reduction of the carbon footprint in manufacturing processes, etc.,
– customer experience with 90% of sales covered by PIM, “digital pricing” accelerating sales;
– internally, Open program in the form of “Digital journey”, Datala, partnerships with start-ups supported by NOVA, etc.,
– externally, partnerships with research or industrial centers, such as Ecocem, participation in EAGLE, WOOL2LOOP, etc. projects, and co-development with customers;
– Environmental strategy integrated into the product offering, 72% of the portfolio contributing to the reduction of CO2 emissions, aiming for total neutrality in 2050, validated by the SBTi and with intermediate objectives 2030 vs 2017:
– 33% reduction in CO2 emissions compared to 2017, with zero carbon production in 2022 of glazing in France and plaster in Sweden,
– research in solid oxygen fuel cells,
– circular economy avoiding the collection of solid raw materials,
– launch of green loans;
– Optimization of the group’s profile through disposals and acquisitions (Chryso and GPC, Panofrance and Rockwool, India, Kaycan, Urumix, etc.), resulting in a strengthening in North America and emerging countries as well as in construction chemicals ( 10% of sales).
Challenges
– Reduction in the cyclical nature of the activity, less dependent on the construction sector;
– Inflation of raw materials, transport and energy, for a cost of €3 billion in 2022, more than offset by increases in sales prices and by energy cost hedging;
– Use of funds from the sale of British construction activities;
– Towards a moderate slowdown of the markets in 2023;
– After a record net profit, 2023 objective of sales growth above that of the market and an operating margin of 9 to 11%;
– 2022 dividend up 23% and share buyback.
Learn more about the Building Materials sector
Lack of visibility
The National Union of Quarry and Construction Materials Industries (Unicem) indicates that, after an initial decline in the second quarter, activity continues to deteriorate in the third quarter and records a decline as much in aggregates (-1.3 %) than on ready-mixed concrete (-0.9%). Over the first nine months of the year, the decline was 2% for the entire materials activity. Only tiles and bricks manage to show slight increases in activity.
The general outlook is deteriorating and recruitment difficulties and rising costs are the main sources of concern. Furthermore, Unicem highlights the difficulties in implementing the projects. Production of materials could decline this year by 3% for ready-mixed concrete (BPE) and 4% for aggregates.