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Saint-Gobain: 2012 Results

                          Saint-Gobain: 2012 Results

PR Newswire

PARIS, February 20, 2013

PARIS, February 20, 2013 /PRNewswire/ --

Publication of sales for the fourth quarter of 2012 and of results for the
year ended December 31, 2012.

    KEY FIGURES
                                                             Change
    (EURm)                         2011         2012       2012/2011

    Sales                         42,116       43,198        +2.6%

    Operating income              3,441        2,881         -16.3%

    Recurring net income[1]       1,736        1,126         -35.1%

    Net income                    1,284         766          -40.3%

2012 dividend:stable at €1.24, paid in cash or in shares, at shareholders'
discretion

Ongoing pursuit of strategic goals:

  oRefocus on Habitat: sale of Verallia NorthAmericaannounced for USD 1.7bn
  oDevelopment in high-growth countries, energy efficiency and energy markets
    and Building Distribution: €1.3bn invested in 2012, or 66% of the Group's
    capital expenditure and acquisitions

Swift roll-out of action plan to address economic climate:

  oPriority focus on sales prices: up 1.7% (up 2.0% excluding Flat Glass)
  o€520m in cost savings in 2012; €1,100m in 2013 (calculated on the 2011
    cost base)
  oSharp improvement in operating WCR^[^2^]: down 5.0 days, representing a
    gain of €555m
  oFree cash flow^[^3^] after changes in operating WCR: up 73.2% to €1.4bn
  oStrong balance sheet: net debt/equity at 47% and net debt/EBITDA at 1.9

Pierre-André de Chalendar, Chairman and Chief Executive Officer of
Saint-Gobain, commented:

"2012saw a further general slowdown in economies across Europe as well as
slacker growth on our main markets (particularly Flat Glass) inAsiaand
emerging countries. Faced with this bleaker economic climate, which hit our
trading and earnings performances,we were very quick to react,cutting
another €520 million in costs and keeping a closer watch on cash.At the same
time, we continued to pursue a selective investment policy focused on our
strategic goals. The announced divestment of Verallia NorthAmericaon very
favorable financial terms confirms the refocusing of our business on the
Habitat sector.

The global economic environment looks set to remain uncertain for the time
being, despite the improvements expected in theUSandAsia.We remain firmly
committed to our strategic goals, while continuing to keep an extremely tight
rein on cash.In 2013,we anticipate operating income to recover in the second
half of the year, after having bottomed out in the second half of 2012 or
first half of 2013".

1. Excluding capital gains and losses on disposals, asset write-downs and
material non-recurring provisions.

2. Operating working capital requirements.

3. Excluding the tax effect of capital gains and losses on disposals, asset
write-downs and material non-recurring provisions.

Operating performance

After a broadly satisfactory start to the year, the Group's businesses were
hit as from the second quarter by the deteriorating economic climate in Europe
and by difficult trading in Flat Glass, in both Europe and Asia and emerging
countries. Sales edged down 1.9% on a like-for-like basis (comparable Group
structure and exchange rates), with volumes down 3.6% and prices up 1.7% over
the year as a whole. Barring Interior Solutions - buoyed by the upturn in
residential construction in the US and the growing energy efficiency market in
Europe - and Packaging (Verallia) - boosted by good household consumption
levels, all of the Group's Business Sectors and Divisions saw sales decline
over the year as a whole, affected by the slowdown in industrial and
residential construction markets in Western Europe. While Latin America picked
up in the second half, markets in Asia and emerging countries remained stable
overall in 2012. Among the major geographic areas in which the Group operates,
only North America remained upbeat, fuelled by the ongoing upturn in housing
and despite tough 2011 comparatives for this market (roofing renovations had
been boosted in this prior period by severe storms).

In this challenging economic environment, with commodity and energy costs
jumping over the year, sales prices remained an important priority for the
Group, and moved up 1.7%, or 2.0% excluding Flat Glass.

Despite profitability gains in North America, the Group's operating margin
narrowed, to 6.7% versus 8.2% in 2011, impacted mainly by the decline in sales
volumes in Western Europe and a sharply negative price/cost spread in Flat
Glass.

1°) Performance of Group Business Sectors

Innovative Materials sales fell 4.4% on a like-for-like basis, hit by tough
trading in Flat Glass and by the slowdown in High-Performance Materials,
particularly in Western Europe. The Business Sector's operating margin fell to
7.7%, from 11.8% in 2011.

  oFlat Glass reported a 6.6% decline in like-for-like sales, driven by a
    combination of adverse economic factors including a contraction in its
    main markets (automotive, construction and solar) in Western Europe, slack
    trading in Asia and emerging countries, lower float glass prices, and
    soaring raw material and energy costs. Only Latin America remained upbeat,
    with growth picking up pace in the second half. Despite measures taken to
    address the deteriorating economic climate (significant capacity
    reductions, restructuring, etc.), the operating margin for the Division
    was down sharply, at 2.0% of sales from 8.8% in 2011.

  oAfter brisk first-half trading, High-Performance Materials (HPM) sales
    slipped 1.7% on a like-for-like basis over the year as a whole, chiefly
    due to the economic slowdown in the second half of 2012, particularly in
    Europe. Thanks to cost savings and to upbeat sales prices, the operating
    margin held up well, at 14.2% versus 15.7% in 2011.

Construction Products (CP) like-for-like sales dipped 1.3%, due to the decline
in sales volumes in Western Europe and Asia. Sales prices remained upbeat. The
operating margin fell to 8.3% from 9.5% in 2011.

  oInterior Solutions reported mild 1.3% organic growth for the year, buoyed
    by strong sales price momentum (especially in the US), which helped offset
    the impact of rising energy and raw material costs on earnings. Volumes
    were up in both North and especially South America, and also in Asia, but
    retreated in Western and Eastern Europe. In France, Isover continued to
    benefit from stricter energy efficiency regulations in the Habitat
    industry (and particularly from Thermal Regulation 2012 in France),and
    delivered organic growth of 5.4% for the year. The Division's operating
    margin improved, at 8.3% of sales versus 8.2% of sales in 2011.

  oExterior Solutions saw like-for-like sales fall 3.7%, hit by the sharp
    drop in Pipe sales, while the Division's other businesses remained stable.
    Exterior Products continued to benefit from the upturn in residential
    construction in the US, but suffered from the very tough 2011 comparison
    basis (severe storms in the US in early 2011 had temporarily boosted
    roofing renovations). This temporarily conceals advances in the business.
    Industrial Mortars delivered double-digit growth in Asia and emerging
    countries, but the worsening economic crisis took its toll on trading in
    Western Europe. For the Division as a whole and Mortars in particular,
    sales prices remained upbeat, but could not fully offset the spike in raw
    material and energy costs. Consequently, despite the first effects of the
    cost cutting measures, the operating margin declined to 8.3% from 10.7% in
    2011.

Building Distribution saw a 2.0% dip in like-for-like sales, reflecting the
gradual deterioration in market conditions across all Western European
countries as from the second quarter, not entirely offset by sales prices.
Over the year as a whole, only Germany, Scandinavia, the US and Brazil
continued to report positive organic growth. Trading in France proved
resilient (down slightly), as a result of further market share gains, as in
Scandinavia. The operating margin for the Business Sector came in at 4.0%
versus 4.2% in 2011.

Packaging (Verallia) delivered 3.5% organic growth, buoyed by a strong uptrend
in sales prices in the main countries in which it operates. Trading remained
brisk in the US, France and Brazil, but fell back in Southern and Eastern
Europe. However, the Business Sector's operating margin lost ground, falling
to 10.9% of sales from 12.3% of sales in 2011, due mainly to difficulties in
Southern Europe and to the time needed to fully pass on the rise in energy
costs to sales prices.

2°) Analysis by geographic area

An analysis by geographic area reveals contrasting trends between Western
Europe - where trading slowed - and NorthAmerica - which reported modest
organic growth. Asia and emerging countries remained stable, although there
were stark differences from one country to the next.

Profitability improved in North America, but waned in all other geographic
areas.

  oIn Franceand other Western European countries, like-for-like sales were
    down 2.5% and 4.3%, respectively, due to the sharp drop in Flat Glass and
    Pipe sales. Overall, all of the Group's other businesses were affected by
    the deteriorating economic environment in Western Europe as from the
    second quarter. In contrast, Packaging sales (Verallia) held up well
    throughout the year. The operating margin declined, both in France and in
    other Western European countries, to 5.4% and 5.3%, respectively (versus
    6.6% and 6.7%, respectively, in 2011).

  oNorth America posted 2.3% organic growth, with a positive contribution
    from all Business Sectors and especially Construction Products, where the
    gradual upturn in residential construction and positive trends in sales
    prices boosted trading. The operating margin continued to advance, up to
    11.1% from 10.4% in 2011.

  oSales in Asia and emerging countries were virtually stable (down 0.1%) on
    a like-for-like basis, with the downturn in the Group's Asian markets
    (particularly in Flat Glass and Pipe) countered by upbeat trading in Latin
    America. Trading in Eastern Europe retreated slightly, as strong growth in
    Russia and the Baltics failed to fully offset the slowdown in other
    Eastern European countries. The operating margin fell sharply, chiefly
    reflecting tough trading conditions for Flat Glass, and came out at 6.8%
    of sales versus 10.2% of sales in 2011.

2012 consolidated financial statements

The Group's consolidated financial statements and the financial statements of
the Group's parent company, Compagnie de Saint-Gobain, were approved and
adopted by Saint-Gobain's Board of Directors at its meeting of February 20,
2013. These financial statements have been audited by the Statutory Auditors.
Key consolidated data are shown below:


                                                      2011   2012    %
                                                      EURm   EURm   change

    Sales and ancillary revenue                     42,116 43,198    +2.6%

    Operating income                                 3,441  2,881   -16.3%

    Operating depreciation and amortization          1,511  1,550    +2.6%
    EBITDA (op. inc. + operating
    depreciation/amortization)                       4,952  4,431   -10.5%
    Non-operating costs                              (395)  (507)   +28.4%
    Capital gains and losses on disposals, asset
    write-downs,

    corporate acquisition fees and earn-out
    payments
                                                     (400)  (390)    -2.5%

    Business income                                  2,646  1,984   -25.0%

    Net financial expense                            (638)  (724)   +13.5%
    Income tax                                       (656)  (476)   -27.4%
    Share in net income of associates                    8     12   +50.0%
    Income before minority interests                 1,360    796   -41.5%
    Minority interests                                (76)   (30)   -60.5%

    Recurring[1] net income                          1,736  1,126   -35.1%
    Recurring[1] earnings per share[2] (in EUR)       3.30   2.14   -35.2%
    Net income                                       1,284    766   -40.3%
    Earnings per share[2] (in EUR)                    2.44   1.46   -40.2%

    Cash flow from operations[3]                     3,421  2,791   -18.4%
    Cash flow from operations excl. capital gains
    tax[4]                                           3,349  2,668   -20.3%
    Capital expenditure                              1,936  1,773    -8.4%
    Free cash flow (excluding capital gains
    tax)[4]                                          1,413  895     -36.7%
    Investments in securities                          702    354   -49.6%
    Net debt                                         8,095  8,490    +4.9%

1.Excluding capital gains and losses on disposals, asset write-downs and
    material non-recurring provisions.

1.Calculated based on the number of shares outstanding (excluding treasury
    stock) at December 31 (526,434,577 shares in 2012 versus 526,205,696
    shares in 2011). Based on the number of shares comprising the share
    capital at December 31 (531,125,642 shares in 2012 versus 535,563,723
    shares in 2011), recurring earnings per share comes out at €2.12 (versus
    €3.24 in 2011), and earnings per share comes out at €1.44 (versus €2.40 in
    2011).

1.Excluding material non-recurring provisions.

1.Excluding the tax effect of capital gains and losses on disposals, asset
    write-downs and material non-recurring provisions.

Salesclimbed 2.6% to €43,198 million, versus €42,116 million in 2011. The
currency impact was a positive 1.8%, primarily reflecting gains in the US
dollar and pound sterling against the euro. Changes in Group structure also
had a positive impact of 2.7%, resulting mainly from the acquisitions of Build
Center and Brossette (Building Distribution) and Solar Gard (High-Performance
Materials), along with bolt-on acquisitions carried out by Construction
Products (CP) in Asia and emerging countries and on energy efficiency markets
in Europe.

Like-for-like, sales slipped 1.9%, with the 1.7% increase in sales prices
failing to fully offset the 3.6% downturn in volumes.

Operating incomeshed 16.3%, squeezed by both a decline in sales volumes and
a sharply negative cost/price spread in Flat Glass, to come in at €2,881
million versus €3,441 million one year earlier. The operating margin was 6.7%
(8.5% excluding Building Distribution) compared to 8.2% (10.9% excluding
Building Distribution) in 2011.

EBITDA (operating income + operating depreciation and amortization)fell
10.5%. The consolidated EBITDA margin came in at 10.3% of sales (13.7%
excluding Building Distribution), versus 11.8% of sales (16.0% excluding
Building Distribution) in 2011.

Non-operating costs rose 28.4%, due to the rise in restructuring costs aimed
at addressing the deteriorating economic climate in Europe. The accrual to the
provision for asbestos-related litigation in the US was the same as in 2011,
at €90 million (see "Update on asbestos claims in the US" on page 7).

The net balance of capital gains and losses on disposals, asset write-downs,
and corporate acquisition fees was a negative €390 million. This amount
includes €436 million in asset write-downs and €60 million in capital gains on
disposals. Asset write-downs include €310 million taken against property,
plant and equipment relating to solar businesses (restructuring plans and site
closures), with the remainder relating primarily to cost cutting programs put
in place in certain Building Distribution and Construction Products businesses
in Southern Europe.

Business income fell 25.0% to €1,984 million, hit by the sharp rise in asset
write-downs and non-operating costs (see above).

Net financial expense advanced €86 million (up 13.5%) to €724 million, chiefly
reflecting the rise in average net debt over 2012 as a whole. The average cost
of gross debt at December 31 fell slightly, to 4.7% from 4.8% in 2011.

In line with the 36.9% decline in pre-tax income, income tax expensewas
27.4% lower, falling to €476 million from €656 million one year earlier. Due
mainly to the rise in the income contribution from the United States (with an
income tax rate of 39%), the tax rate on recurring net income rose to 34% from
29% in 2011.

Recurring net income (excluding capital gains and losses, asset write-downs
and material non-recurring provisions) amounted to €1,126 million, a 35.1%
fall on 2011. Based on the number of shares outstanding (excluding treasury
stock) at December 31, 2012 (526,434,577 shares versus 526,205,696 shares at
December 31, 2011), recurring earnings per share came out at €2.14, down 35.2%
on 2011 (€3.30).

Net income came in at €766 million, a decline of 40.3% year-on-year. Based on
the number of shares outstanding (excluding treasury stock) at December 31,
2012 (526,434,577 shares versus 526,205,696 shares at December 31, 2011),
earnings per share came out at €1.46, down 40.2% on 2011 (€2.44).

Demonstrating the Group's strict financial discipline amid a slowing economy,
capital expenditure was down 8.4% or €163 million over the year, after a fall
of 21.3% or €276 million, in the second half. Capital expenditure totaled
€1,773 million over the year as a whole, or 4.1% of sales, compared to 4.6% in
2011. Almost half of this amount relates to growth capex, earmarked almost
entirely for Asia and emerging countries.

Cash flow from operations came in at €2,791 million, 18.4% lower than in 2011.
Before the tax impact of capital gains and losses on disposals and asset
write-downs, cash flow from operations fell 20.3% to €2,668 million, from
€3,349 million in 2011.

Following the 25.0% fall in business income and despite the tight rein on
capital expenditure:

  ofree cash flow (cash flow from operations less capital expenditure)fell
    31.4%, to €1,018 million. Before the tax impact of capital gains and
    losses on disposals and asset write-downs, free cash flow stood at €895
    million, down 36.7% on 2011 (€1,413 million), representing 2.1% of sales
    (versus 3.4% in 2011);

  othe difference between EBITDA and capital expenditure was €2,658 million,
    versus €3,016 million in 2011, representing 6.2% of sales (7.2% in 2011).

Operating working capital requirements (WCR) improved sharply amid a slowdown
in trading, falling 5 days to 29 days'sales at December 31, 2012, a record
low for the Group. This performance represents a gain of €555 million.

Investments in securities came in at €354 million, almost half the figure for
2011 (€702million), reflecting the Group's emphasis on cash generation.
Investments in securities relate chiefly to acquisitions focused on the
Group's key growth drivers, namely Asia and emerging countries, energy
efficiency and consolidation in the Construction Products and Building
Distribution businesses (in particular, with the purchase of Brossette on
April 1, 2012).

Net debt rose 4.9%, or €395 million, to €8.5 billion at December 31, 2012. Net
debt represents 47% of consolidated equity versus 44% one year earlier. The
net debt to EBITDA ratio came out at 1.92, slightly above the end-2011 figure
(1.63). Based on the proforma financial statements at December 31, 2012
(following the sale of Verallia NorthAmerica), the Group's net debt falls to
€7.5 billion, giving a net debt to equity ratio of 41% and a net debt to
EBITDA ratio of 1.77.

Update on asbestos claims in the US              

Some 4,000 claims were filed against CertainTeed in 2012, stable compared with
2011. At the same time, 9,000 claims were settled (versus 8,000 in 2011), and
4,000 claims were transferred to inactive dockets. As a result, the total
number of outstanding claims at December 31, 2012 fell sharply, to 43,000 from
52,000 at December 31, 2011.

A total of USD 67 million in indemnity payments were made in the 12 months to
December 31, 2012, down sharply compared to 2011 (USD 82 million).

In light of these trends, and particularly the decrease in indemnity payments
and the €90 million provision accrual in 2012 (see p.6), the total provision
for CertainTeed's asbestos-related claims amounted to around USD 550 million
at December 31, 2012, compared to USD 504 million at December 31, 2011.

Action plan to address the deteriorating economic climate

The Group once again showed its extensive capacity to adapt to the
deterioration in the economic climate as from the second quarter in Western
Europe and in Flat Glass as a whole. It also showed steely financial
discipline while pursuing its strategic goals, by:

  ocontinuing to give priority to sales prices, which rose 1.7% over the year
    (2.0% excluding Flat Glass), and helped curb the impact of rising raw
    material and energy costs;

  orolling out new cost cutting measures representing savings of €520 million
    over the year as a whole (including €110 million in Flat Glass). The cost
    cutting program primarily focused on Western Europe, Asia and emerging
    countries (for Flat Glass and Pipe in particular) will be extended and
    intensified in 2013, bringing its full-year impact (in 2013) to €1,100
    million (calculated on the 2011 cost base) - including €240 million in
    Flat Glass - instead of the €750 million initially forecast;

  oslashing operating working capital requirements (WCR), with a gain of 5
    days (€555million) over the year as a whole, representing a rise of €613
    million (73.2%) in cash generated (free cash flow* + change in operating
    WCR) to reach €1,450million;

  okeeping capital expenditure and financial investments in check (down 19%
    on 2011), particularly in the second half (down 39% on second-half 2011).
    Spending focused primarily (66%) on strategic growth drivers, namely Asia
    and emerging countries, energy efficiency and energy markets, and
    consolidation of the Group's strengths in Construction Products and
    Building Distribution;

  oentering a new phase in its strategy of refocusing on Habitat, with the
    signature of an agreement concerning the sale of Verallia North America on
    very favorable pricing terms (USD 1.7 billion, or 6.5 x EBITDA). This
    transaction also enables the Group to reinforce its balance sheet and
    consolidate its financial strength. Accordingly, taking into account this
    disposal and on a pro forma basis at December 31, 2012:
  othe gearing ratio (net debt to equity) falls from 47% to 41%,
  othe net debt to EBITDA ratio falls from 1.92 to 1.77;

  oincreasing its R&D expenditure by 11.1%, up to €479 million.

* Excluding the tax effect of capital gains and losses on disposals, asset
write-downs and material non-recurring provisions.

Dividend

At its meeting of February 20, Compagnie de Saint-Gobain's Board of Directors
decided to recommend to the June 6, 2013 Shareholders' Meeting a dividend
of€1.24 per share, unchanged from 2011. The Board also decided that
shareholders may receive their dividends in cash or in shares*, at their own
discretion. The dividend represents 58% of recurring earnings per share, 85%
of earnings per share, and a dividend yield of 3.8% based on the closing share
price at December 31, 2012 (€32.22). The record date is set for June 11 and
will be followed by an option period of 15 days, from June 12 to 26.
Consequently, the dividends will be paid in cash or in shares on July 5, 2013.

* For dividends paid in shares, Compagnie de Saint-Gobain's Board of Directors
will recommend that the Shareholders' Meeting set the issue price for the new
shares by applying a 10% discount to the average opening share price over the
20 trading days preceding the June 6, 2013 AGM, after deducting the discount
from the amount of the dividend.

Outlook for 2013

After a difficult year in 2012 affected by the sharp decline in Flat Glass
markets and slowdown in European economies, the outlook for 2013 appears very
uncertain for the time being. However, the year should see an ongoing economic
recovery in North and South America and Asia, although significant
uncertainties will continue to plague Europe.

Against this backdrop, the Group expects the following trends in its main
markets:

  oin North America, the gradual upturn in the residential new-build and
    renovation markets should continue, while industrial output should remain
    at a good level;

  oin Asia and emerging countries, trading overall should get back into
    positive territory, although trends are likely to differ widely from one
    country to the next, with moderate growth in Brazil and China, a slowdown
    in India, and stability in Eastern Europe;

  oinWestern Europe, industrial markets and particularly automotive, should
    continue to contract, while construction market trends should remain very
    uncertain for the time being. Regulatory measures promoting energy
    efficiency in new-builds and existing homes should shore up demand,
    however, and allow the Group to outperform its underlying markets;

  olastly, household consumption should hold firm overall.

In the face of persistently unsettled market conditions, in 2013 Saint-Gobain
will continue to demonstrate its extensive capacity to adapt to changes in its
markets, by swiftly implementing the necessary adjustments in countries and/or
businesses where trading continues to suffer (in particular Flat Glass and
Southern Europe), but also by continuing to pursue its strategic goals, namely
development in high-growth countries and on energy efficiency and energy
markets, and consolidation in Building Distribution and Construction Products.
Profitability will be a constant focus, underpinned by strict financial
discipline.

Its action priorities will be to continue:

  oincreasing sales prices, with the aim of passing on the rise in raw
    material and energy costs;

  ostepping up its cost cutting measures in order to achieve savings of
    €1,100 million in 2013 (calculated on the 2011cost base);

  okeeping a close watch on cash management and financial strength;

  ocontinuing to pursue its strategic goals, through a selective investment
    policy (capex and financial investments);

-   pursuing its R&D efforts.

For 2013, the Group is therefore anticipating:

- its operating income to recover in the second half, after having bottomed
out between mid-2012 and mid-2013;

- a high level of free cash flow, namely as a result of a €200 million
reduction in capital expenditure;

-   a robust balance sheet, strengthened by the disposal of Verallia North
America.

Given the deterioration in the global (and particularly European) economic
environment in 2012 and the deep-seated uncertainties plaguing the short-term
macro-economic outlook, the Group's 2015 financial targets set in 2010 are
unlikely to be met at this date. However, aside from the current lack of
visibility, the Group is firmly pursuing its strategy, underpinned by two key
growth drivers: high value-added products for mature markets in the
environment and energy efficiency sectors, and the growth of Habitat markets
inAsiaand emerging countries.

In the second half of 2013, the Group will present its outlook for the mid to
long-term taking into account the economic environment.

The Group will also maintain strict financial discipline, by continuing to
apply stringent financial criteria (to capital expenditure, disposals and
acquisitions, and restructuring operations) and by pursuing its
shareholder-focused policy defined in 2010 (dividend to remain stable or to
increase from one year to the next, and to be paid as soon as possible in cash
and the number of shares comprising the share capital gradually stabilizing,
at a level close to today's figure of around 530 million shares).

Forthcoming results announcement

  oSales for the first quarter of 2013: April 25, 2013, after close of
    trading on the Paris Bourse.

    Appendix 1: Results by business sector and geographic area - Full Year

                                          change on  change on   change on a
    I. SALES                     2011       2012    an actual   a comparable  comparable
                              (in EUR m) (in EUR m) structure   structure   structure and
                                basis      basis    currency       basis
    by sector and division:
    Innovative Materials (1)    9,596     9,485      -1.2%         -2.7%        -4.4%
    Flat Glass                  5,460     5,130      -6.0%         -6.3%        -6.6%
    High-Performance Materials  4,163     4,376      +5.1%         +1.9%        -1.7%
    Construction Products (1)  11,426    11,709      +2.5%         +1.0%        -1.3%
    Interior Solutions          5,511     5,847      +6.1%         +3.7%        +1.3%
    Exterior Solutions          5,967     5,915      -0.9%         -1.4%        -3.7%
    Building Distribution      18,492    19,233      +4.0%         -0.6%        -2.0%
    Packaging (Verallia)        3,628     3,792      +4.5%         +5.9%        +3.5%
    Internal sales and misc.   -1,026    -1,021       n.m.          n.m.         n.m.
    Group Total                42,116    43,198      +2.6%         -0.1%        -1.9%
    (1) including intra-sector eliminations

    by geographic area:
    France                     11,802    12,044      +2.1%         -2.5%        -2.5%
    Other Western European
     countries                 18,049    18,014      -0.2%         -2.3%        -4.3%
    North America               5,505     6,179     +12.2%        +10.7%        +2.3%
    Emerging countries and Asia 8,643     8,709      +0.8%         -0.7%        -0.1%
    Internal sales             -1,883    -1,748      n.m.           n.m.         n.m.
    Group Total                42,116    43,198      +2.6%         -0.1%        -1.9%

                                                   change on
    II. OPERATING INCOME        2011      2012     an actual       2011          2012
                            (in EUR m) (in EUR m)  structure (in % of sales)(in % of sales)
                                                     basis
    by sector and division:
    Innovative Materials        1,130      726      -35.8%         11.8%         7.7%
    Flat Glass                    478      104      -78.2%          8.8%         2.0%
    High-Performance Materials    652      622       -4.6%         15.7%        14.2%
    Construction Products       1,086      974      -10.3%          9.5%         8.3%
    Interior Solutions            450      484       +7.6%          8.2%         8.3%
    Exterior Solutions            636      490      -23.0%         10.7%         8.3%
    Building Distribution         768      761       -0.9%          4.2%         4.0%
    Packaging (Verallia)          448      414       -7.6%         12.3%        10.9%
    Misc.                           9        6        n.m.          n.m.         n.m.
    Group Total                 3,441    2,881      -16.3%          8.2%         6.7%

    by geographic area:
    France                        781      648      -17.0%          6.6%         5.4%
    Other Western European
     countries                  1,205      955      -20.7%          6.7%         5.3%
    North America                 574      683      +19.0%         10.4%        11.1%
    Emerging countries and Asia   881      595      -32.5%         10.2%         6.8%
    Group Total                 3,441    2,881      -16.3%          8.2%         6.7%

                                                 change on
    III. BUSINESS INCOME        2011     2012    an actual       2011           2012
                           (in EUR m) (in EUR m) structure  (in % of sales) (in % of sales)
                                                   basis
    by sector and division:
    Innovative Materials         928       261      71.9%          9.7%          2.8%
    Flat Glass                   340      -274    -180.6%          6.2%         -5.3%
    High-Performance Materials   588       535      -9.0%         14.1%         12.2%
    Construction Products        752       794      +5.6%          6.6%          6.8%
    Interior Solutions           211       408     +93.4%          3.8%          7.0%
    Exterior Solutions           541       386     -28.7%          9.1%          6.5%
    Building Distribution        598       613      +2.5%          3.2%          3.2%
    Packaging (Verallia)         437       387     -11.4%         12.0%         10.2%
    Misc.                        -69 (a)   -71 (a)   n.m.          n.m.          n.m.
    Group Total                2,646     1,984     -25.0%         +6.3%         +4.6%

    by geographic area:
    France                       707       589     -16.7%          6.0%          4.9%
    Other Western European
     countries                   926       431     -53.5%          5.1%          2.4%
    North America                173 (a)   524(a) +202.9%          3.1%          8.5%
    Emerging countries and Asia  840       440     -47.6%          9.7%          5.1%
    Group Total                2,646     1,984     -25.0%         +6.3%         +4.6%
    (a) after asbestos-related charge (before tax) of EUR90m in 2011 and EUR90m in 2012

                                                 change on
    IV. CASH FLOW             2011       2012    an actual       2011            2012
                            (in EUR m)(in EUR m) structure (in % of sales) (in % of sales)
                                                   basis
    by sector and division:
    Innovative Materials       1,102      730     -33.8%          11.5%          7.7%
    Flat Glass                   521      221     -57.6%           9.5%          4.3%
    High-Performance Materials   581      509     -12.4%          14.0%         11.6%
    Construction Products        888      641     -27.8%           7.8%          5.5%
    Building Distribution        566      555      -1.9%           3.1%          2.9%
    Packaging (Verallia)         512      506      -1.2%          14.1%         13.3%
    Misc.                        353 (a)  359 (a)   n.m.          n.m.            n.m.
    Group Total                3,421    2,791     -18.4%          +8.1%         +6.5%

    by geographic area:
    France                       568      387     -31.9%          4.8%           3.2%
    Other Western European
     countries                 1,314    1,149     -12.6%          7.3%           6.4%
    North America                594 (a)  610 (a)  +2.7%         10.8%           9.9%
    Emerging countries and Asia  945      645     -31.7%         10.9%           7.4%
    Group Total                3,421    2,791     -18.4%         +8.1%          +6.5%
    (a) after asbestos-related charge (after tax) of EUR55m in 2011 versus EUR55m in 2012

                                                 change on
    V. CAPITAL EXPENDITURE    2011       2012    an actual       2011            2012
                           (in EUR m) (in EUR m) structure (in % of sales) (in % of sales)
                                                   basis
    by sector and division:
    Innovative Materials        880      695      -21.0%          9.2%           7.3%
    Flat Glass                  682      459      -32.7%         12.5%           8.9%
    High-Performance Materials  198      236      +19.2%          4.8%           5.4%
    Construction Products       553      535       -3.3%          4.8%           4.6%
    Interior Solutions          330      339       +2.7%          6.0%           5.8%
    Exterior Solutions          223      196      -12.1%          3.7%           3.3%
    Building Distribution       210      233      +11.0%          1.1%           1.2%
    Packaging (Verallia)        267      282       +5.6%          7.4%           7.4%
    Misc.                        26       28        n.m.          n.m.           n.m.
    Group Total               1,936    1,773       -8.4%         +4.6%          +4.1%

    by geographic area:
    France                      313      300       -4.2%          2.7%           2.5%
    Other Western European
     countries                  547      435      -20.5%          3.0%           2.4%
    North America               295      314       +6.4%          5.4%           5.1%
    Emerging countries and Asia 781      724       -7.3%          9.0%           8.3%
    Group Total               1,936    1,773       -8.4%         +4.6%          +4.1%

    VI. EBITDA                                  change on
                               2011   2012      an actual       2011            2012
                           (in EUR m)(in EUR m) structure (in % of sales) (in % of sales)
                                                  basis
    by sector and division:
    Innovative Materials      1,605    1,226      -23.6%         16.7%          12.9%
    Flat Glass                  793      437      -44.9%         14.5%           8.5%
    High-Performance Materials  812      789       -2.8%         19.5%          18.0%
    Construction Products     1,590    1,481       -6.9%         13.9%          12.6%
    Interior Solutions          769      805       +4.7%         14.0%          13.8%
    Exterior Solutions          821      676      -17.7%         13.8%          11.4%
    Building Distribution     1,041    1,035       -0.6%          5.6%           5.4%
    Packaging (Verallia)        685      657       -4.1%         18.9%          17.3%
    Misc.                        31       32        n.m.          n.m.           n.m.
    Group Total               4,952    4,431      -10.5%        +11.8%         +10.3%

    by geographic area:
    France                    1,143    1,014      -11.3%          9.7%           8.4%
    Other Western European
     countries                1,743    1,500      -13.9%          9.7%           8.3%
    North America               797      909      +14.1%         14.5%          14.7%
    Emerging countries and
     Asia                     1,269    1,008      -20.6%         14.7%          11.6%
    Group Total               4,952    4,431      -10.5%        +11.8%         +10.3%

    Appendix 2: Results by business sector and geographic area - Second Half

                               H2       H2      change on    change on a     change on a
    I. SALES                  2011     2012     an actual    comparable      comparable
                          (in EUR m) (in EUR m) structure   structure and   structure and
                                                 basis     currency basis  currency basis
    by sector and division:
    Innovative Materials (1)   4,769    4,632      -2.9%         -3.8%          -5.7%
    Flat Glass                 2,696    2,533      -6.0%         -5.9%          -6.7%
    High-Performance Materials 2,081    2,104      +1.1%         -1.3%          -4.9%
    Construction Products (1)  5,713    5,806      +1.6%         +0.2%          -2.3%
    Interior Solutions         2,790    3,001      +7.6%         +5.0%          +1.9%
    Exterior Solutions         2,950    2,831      -4.0%         -4.4%          -6.3%
    Building Distribution      9,449    9,777      +3.5%         -1.5%          -3.2%
    Packaging (Verallia)       1,810    1,883      +4.0%         +6.3%          +3.9%
    Internal sales and misc.    -500     -490       n.m.          n.m.           n.m.
    Group Total               21,241   21,608      +1.7%         -0.9%          -2.9%
    (1) including intra-sector eliminations

    by geographic area:
    France                     5,664    5,896      +4.1%         -2.1%          -2.1%
    Other Western European
     countries                 9,221    9,113      -1.2%         -2.9%          -5.4%
    North America              2,733    2,987      +9.3%         +8.2%          -0.2%
    Emerging countries and Asia4,494    4,446      -1.1%         -1.5%          -1.1%
    Internal sales              -871     -834       n.m.          n.m.           n.m.
    Group Total               21,241   21,608      +1.7%         -0.9%          -2.9%

                                H2      H2       change on        H2              H2
    II. OPERATING INCOME       2011    2012      an actual       2011            2012
                           (in EUR m)(in EUR m)  structure  (in % of sales) (in % of sales)
                                                   basis
    by sector and division:
    Innovative Materials         528      318     -39.8%         11.1%           6.9%
    Flat Glass                   217       50     -77.0%          8.0%           2.0%
    High-Performance Materials   311      268     -13.8%         14.9%          12.7%
    Construction Products        534      454     -15.0%          9.3%           7.8%
    Interior Solutions           234      237      +1.3%          8.4%           7.9%
    Exterior Solutions           300      217     -27.7%         10.2%           7.7%
    Building Distribution        441      391     -11.3%          4.7%           4.0%
    Packaging (Verallia)         222      207      -6.8%         12.3%          11.0%
    Misc.                         -4       -1       n.m.          n.m.           n.m.
    Group Total                1,721    1,369     -20.5%          8.1%           6.3%

    by geographic area:
    France                       339      299     -11.8%          6.0%           5.1%
    Other Western European
     countries                   654      421     -35.6%          7.1%           4.6%
    North America                264      313     +18.6%          9.7%          10.5%
    Emerging countries and Asia  464      336     -27.6%         10.3%           7.6%
    Group Total                1,721    1,369     -20.5%          8.1%           6.3%

                                H2       H2      change on         H2             H2
    III. BUSINESS INCOME       2011     2012     an actual        2011           2012
                            (in EUR m)(in EUR m) structure (in % of sales)(in % of sales)
                                                  basis
    by sector and division:
    Innovative Materials        453        -4    -100.9%         9.5%           -0.1%
    Flat Glass                  151      -198    -231.1%         5.6%           -7.8%
    High-Performance Materials  302       194     -35.8%        14.5%            9.2%
    Construction Products       248       342     +37.9%         4.3%            5.9%
    Interior Solutions           16       203   +1168.8%         0.6%            6.8%
    Exterior Solutions          232       139     -40.1%         7.9%            4.9%
    Building Distribution       331       338      +2.1%         3.5%            3.5%
    Packaging (Verallia)        217       186     -14.3%        12.0%            9.9%
    Misc.                       -59 (a)   -31(a)   n.m.          n.m.            n.m.
    Group Total               1,190       831     -30.2%         5.6%            3.8%

    by geographic area:
    France                      289       260     -10.0%         5.1%            4.4%
    Other Western European
     countries                  494       111     -77.5%         5.4%            1.2%
    North America               -35 (a)   216 (a)   n.m.         n.m.            7.2%
    Emerging countries and Asia 442       244     -44.8%         9.8%            5.5%
    Group Total               1,190       831     -30.2%         5.6%            3.8%
    (a) after asbestos-related charge (before tax) of EUR41.5m in H2-2011 and EUR45m
        in H2-2012

                                H2        H2     change on      H2              H2
    IV. CASH FLOW              2011      2012    an actual     2011            2012
                           (in EUR m)(in EUR m) structure  (in % of sales) (in % of sales)
                                                   basis
    by sector and division:
    Innovative Materials       502        338     -32.7%        10.5%           7.3%
    Flat Glass                 236        119     -49.6%         8.8%           4.7%
    High-Performance Materials 266        219     -17.7%        12.8%          10.4%
    Construction Products      464        264     -43.1%         8.1%           4.5%
    Building Distribution      314        300      -4.5%         3.3%           3.1%
    Packaging (Verallia)       251        258      +2.8%        13.9%          13.7%
    Misc.                      169 (a)    169 (a)   n.m.         n.m.           n.m.
    Group Total              1,700      1,329     -21.8%         8.0%           6.2%

    by geographic area:
    France                     235        168     -28.5%         4.1%           2.8%
    Other Western European
     countries                 669        515     -23.0%         7.3%           5.7%
    North America              303 (a)    289 (a)  -4.6%        11.1%           9.7%
    Emerging countries and Asia493        357     -27.6%        11.0%           8.0%
    Group Total              1,700      1,329     -21.8%         8.0%           6.2%
    (a) after asbestos-related charge (after tax) of EUR25m in H2-2011 versus EUR28m
        in H2-2012

                               H2        H2      change on       H2             H2
    V. CAPITAL EXPENDITURE    2011      2012     an actual      2011           2012
                           (in EUR m)(in EUR m)  structure (in % of sales)(in % of sales)
                                                   basis
    by sector and division:
    Innovative Materials      557       370       -33.6%       11.7%           8.0%
    Flat Glass                431       214       -50.3%       16.0%           8.4%
    High-Performance Materials126       156       +23.8%        6.1%           7.4%
    Construction Products     406       332       -18.2%        7.1%           5.7%
    Interior Solutions        242       218        -9.9%        8.7%           7.3%
    Exterior Solutions        164       114       -30.5%        5.6%           4.0%
    Building Distribution     141       136        -3.5%        1.5%           1.4%
    Packaging (Verallia)      175       166        -5.1%        9.7%           8.8%
    Misc.                      16        15         n.m.        n.m.           n.m.
    Group Total             1,295     1,019       -21.3%        6.1%           4.7%

    by geographic area:
    France                    235       181       -23.0%        4.1%           3.1%
    Other Western European
     countries                356       261       -26.7%        3.9%           2.9%
    North America             182       181        -0.5%        6.7%           6.1%
    Emerging countries and
     Asia                     522       396       -24.1%       11.6%           8.9%
    Group Total             1,295     1,019       -21.3%        6.1%           4.7%

    VI. EBITDA                H2        H2      change on        H2             H2
                             2011      2012     an actual      2011            2012
                         (in EUR m)(in EUR m)   structure(in % of sales) (in % of sales)
                                                  basis
    by sector and division:
    Innovative Materials      763       575       -24.6%       16.0%           12.4%
    Flat Glass                372       223       -40.1%       13.8%            8.8%
    High-Performance Materials391       352       -10.0%       18.8%           16.7%
    Construction Products     787       706       -10.3%       13.8%           12.2%
    Interior Solutions        395       398        +0.8%       14.2%           13.3%
    Exterior Solutions        392       308       -21.4%       13.3%           10.9%
    Building Distribution     579       530        -8.5%        6.1%            5.4%
    Packaging (Verallia)      338       324        -4.1%       18.7%           17.2%
    Misc.                       6        12         n.m.        n.m.            n.m.
    Group Total             2,473     2,147       -13.2%       11.6%            9.9%

    by geographic area:
    France                    521       484        -7.1%        9.2%            8.2%
    Other Western European
     countries                924       695       -24.8%       10.0%            7.6%
    North America             372       424       +14.0%       13.6%           14.2%
    Emerging countries and
     Asia                     656       544       -17.1%       14.6%           12.2%
    Group Total             2,473     2,147       -13.2%       11.6%            9.9%

    Appendix 3: Sales by business sector and geographic area - Fourth Quarter

                               Q4          Q4     change on   change on    change on a
    I. SALES                  2011        2012    an actual  a comparable  comparable
                           (in EUR m)  (in EUR m) structure   structure   structure and
                                                  basis       basis     currency basis
    by sector and division:
    Innovative Materials (1)  2,366      2,303     -2.7%       -2.9%         -4.2%
    Flat Glass                1,339      1,270     -5.2%       -5.1%         -6.0%
    High-Performance Materials1,030      1,036     +0.6%       -0.1%         -1.8%
    Construction Products (1) 2,723      2,805     +3.0%       +1.2%         +0.1%
    Interior Solutions        1,389      1,513     +8.9%       +5.7%         +3.6%
    Exterior Solutions        1,347      1,306     -3.0%       -3.5%         -3.5%
    Building Distribution     4,729      4,854     +2.6%       -2.1%         -3.5%
    Packaging (Verallia)        910        937     +3.0%       +5.3%         +4.7%
    Internal sales and misc.   -241       -242     n.m.         n.m.          n.m.
    Group Total              10,487     10,657     +1.6%       -0.9%         -2.1%
    (1) including intra-sector eliminations

    by geographic area:
    France                    2,880      3,020     +4.9%       -1.9%         -1.9%
    Other Western European
     countries                4,552      4,472     -1.8%       -3.0%         -5.1%
    North America             1,291      1,397     +8.2%       +8.2%         +4.4%
    Emerging countries and
     Asia                     2,177      2,185     +0.4%       +0.1%         +0.6%
    Internal sales             -413       -417      n.m.        n.m.          n.m.
    Group Total              10,487     10,657     +1.6%       -0.9%         -2.1%

    Appendix 4: Consolidated balance sheet

    in EUR million                                         Dec 31, 2011     Dec 31, 2012

                                ASSETS
    Goodwill                                                         11,041       10,936
    Other intangible assets                                           3,148        3,196
    Property, plant and equipment                                    14,225       13,696
    Investments in associates                                           167          206
    Deferred tax assets                                                 949        1,236
    Other non-current assets                                            347          359

    Non-current assets                                               29,877       29,629

    Inventories                                                       6,477        6,133
    Trade accounts receivable                                         5,341        5,017
    Current tax receivable                                              182          204
    Other accounts receivable                                         1,408        1,425
    Assets held for sale - Discontinued operations                        0          936
    Cash and cash equivalents                                         2,949        4,179

    Current assets                                                   16,357       17,894

    Total assets                                                     46,234       47,523

                 Liabilities and Shareholders' equity
    Capital stock                                                     2,142        2,125
    Additional paid-in capital and legal reserve                      5,920        5,699
    Retained earnings and net income for the year                    10,654       10,334
    Cumulative translation adjustments                                 (476)        (523)
    Fair value reserves                                                 (22)         (15)
    Treasury stock                                                     (403)        (181)

    Shareholders' equity                                             17,815       17,439

    Minority interests                                                  403          412

    Total equity                                                     18,218       17,851

    Long-term debt                                                    8,326        9,588
    Provisions for pensions and other employee benefits               3,458        3,465
    Deferred tax liabilities                                            893          792
    Provisions for other liabilities and charges                      2,143        2,171

    Non-current liabilities                                          14,820       16,016

    Current portion of long-term debt                                 1,656        1,732
    Current portion of provisions for other liabilities and charges     733          457
    Trade accounts payable                                            6,018        6,143
    Current tax liabilities                                             165           70
    Other accounts payable                                            3,562        3,408
    Liabilities held for sale - Discontinued operations                   0          497
    Short-term debt and bank overdrafts                               1,062        1,349

    Current liabilities                                              13,196       13,656

    Total equity and liabilities                                     46,234       47,523

    Appendix 5: Consolidated cash flow statement

    (in EUR million)                                             2011     2012

    Net income attributable to equity holders of the parent     1,284      766

    Minority interests in net income                               76       30
    Share in net income of associates, net of dividents
    received                                                      (1)      (6)
    Depreciation, amortization and impairment of assets         1,892    1,988
    Gains and losses on disposals of assets                       (1)     (60)
    Unrealized gains and losses arising from changes in fair
    value and share-based payments                                 48     (23)
    Changes in inventories                                      (551)      252
    Changes in trade accounts receivable and payable, and
    other accounts receivable and payable                          18      429
    Changes in tax receivable and payable                         (6)    (118)
    Changes in deferred taxes and provisions for other
    liabilities and charges                                     (374)    (696)

    Net cash from operating activities                          2,385    2,562

    Purchases of property, plant and equipment [ 2011:
    (1,936), 2012: (1,773) ] and intangible assets            (2,028)  (1,883)
    Purchases of property, plant and equipment in finance
    lease                                                        (18)     (18)
    Increase (decrease) in amounts due to suppliers of fixed
    assets                                                         18     (67)
    Acquisitions of shares in consolidated companies [ 2011:
    (688), 2012: (338) ], net of debt acquired                  (710)    (366)
    Acquisitions of other investments                             (8)     (15)
    Increase in investment-related liabilities                      0       46
    Decrease in investment-related liabilities                   (17)      (8)
                          Investments                         (2,763)  (2,311)
    Disposals of property, plant and equipment and
    intangible assets                                              90       83
    Disposals of shares in consolidated companies, net of
    cash divested                                                   9       98
    Disposals of other investments and other divestments            2        1
                          Divestments                             101      182
    Increase in loans and deposits                               (38)     (85)
    Decrease in loans and deposits                                 53       58

    Net cash used in investing activities / divestments       (2,647)  (2,156)

    Issues of capital stock                                       158      127
    Minority interests' share in capital increases of
    subsidiaries                                                    4       13
    Acquisitions of minority interests                            (6)        4
    Changes in investment related liabilities following the
    exercise of put options of minority                          (20)     (69)
    (Increase) decrease in treasury stock                       (186)    (162)
    Dividends paid                                              (603)    (646)
    Dividends paid to minority shareholders of consolidated
    subsidiaries and increase (decrease) in dividends
    payable                                                      (20)     (55)

    Cash flows from (used in) financing activities              (673)    (788)

    Increase (decrease) in net debt                             (935)    (382)

    Net effect of exchange rate changes on net debt              (24)      (4)
    Net effect from changes in fair value on net debt              32      (8)
    Cash and cash equivalents classified as assets held for
    sale                                                            0      (1)

    Net debt at beginning of year                             (7,168)  (8,095)
    Net debt at end of year                                   (8,095)  (8,490)

    Other long-term debt                      0.3

    Short-term debt                           1.9    (excluding bonds)
    Commercial paper (< 3 months)             0.7     Maximum amount of bond issue: EUR3bn
    Securitization                            0.1    (USD 0.1bn)
                                                      Annual rollover; several hundreds
    Local debt and accrued interest           1.1     of different sources of financing

    Credit lines, cash & cash equivalents         8.2

    Cash and cash equivalents                 4.2
    Back-up credit-lines                      4.0      See breakdown below

    Breakdown of back-up credit lines         4.0

    All lines are confirmed and undrawn, with no Material Adverse Change (MAC) clause

                                            Expiry                         Covenants
    Syndicated line: EUR2.5bn            December 2015                     None
    Syndicated line: EUR1.5bn            December 2017                     None

Analyst/Investor relations
Florence Triou-Teixeira
+33-1-47-62-45-19

Vivien Dardel
+33-1-47-62-44-29

Alexandra Baubigeat
+33-1-47-62-30-93

Press relations
Sophie Chevallon
+33-1-47-62-30-48

Susanne Trabitzch
+33-1-47-62-43-25

SOURCE Saint-Gobain
 
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