• 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 CO2 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
2021-2022: successful deployment of the “Grow & Impact” strategic plan
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 CO2 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.
Growth decoupled from its CO2 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.
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.”
2021-2022: successful deployment of the “Grow & Impact” strategic plan
• Strong organic growth of 10% per annum on average1, 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;
• 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%;
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.
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.