Compagnie de Saint-Gobain S.A.

Good morning. It is my pleasure to present our full year 2024 results together with Frida, our group CFO. Once again, in 2024, Saint-Gobain has delivered a very strong performance with a new record operating margin, record recurring net income, record cash flow demonstrating the strengths of our operating model and the success of our grow and impact strategy. Let me first share with you some highlights of 2024. I start as always with a few examples in light and sustainable construction of Saint-Gobain solutions being used around the world with iconic buildings. For example, Saint-Gobain provided a comprehensive range of solutions, including facet systems, fireproofing, insulation, and ceilings for the Research and Development District in Life Science in San Diego in the U.S., the largest urban commercial waterfront site in California. In 2024, we expanded our presence in high-growth markets with four major acquisitions, CSR in Australia, Bailey in Canada, Fosrock Australia, in India, Middle East, and Asia-Pacific, and Cemex in Mexico. With these acquisitions, we have further increased our presence in the high-growth geographies of North America, Asia, and emerging markets, where we now generate more than two-thirds of our operating profit, and we have also strengthened our global leadership in construction chemicals. In 2024, we also continue to differentiate our offer through sustainability with our low-carbon, energy-efficient, high-recycle content solutions, such as the recently launched Infinize Soundblock plasterboard, which is the first in the world made of 100% recycled gypsum. We launched it in the UK with British gypsum. and we achieved a 34% decrease in our scope 1 and 2 CO2 emissions versus 2017, further lowering the carbon footprint of our products. The great results have been achieved thanks to a fantastic commitment by all our teams who are always aiming higher, and I would like to congratulate and to thank warmly all of them. Let's come now to the financial results. We have delivered record results in 2024, despite the challenging environment, notably in Europe. A sequential improvement in sales, with plus 1.6% growth in the second half of 2024 compared to the previous year, a constant exchange rate, a record operating margin at 11.4%, a record recurring net income at 3.5 billion euros, and also record level of free cash flow at 4 billion euros with a 62% cash conversion ratio. Shredda will give you all the details on the financials in a few minutes. In a nutshell, we have constantly delivered on our grow and impact strategy. with first of course a very strong set of financials demonstrating our excellent operational execution Second, our solutions approach reflecting in our pricing power, increased share of wallet and enhanced product mix. Third, a very disciplined capital allocation towards high growth geographies and construction chemicals. And last, our focus on sustainability, which is more and more a competitive advantage for us. Before I leave the floor to Shredda, I would like to say a few words about the changes that we have announced last week. As you know, Shredda will be taking over a new role as CEO of Asia-Pacific and India region, starting beginning of April and succeeding to Santanam, our Asia and India CEO, who is retiring at the age of 68 after a brilliant career of 45 years within Saint-Gobain. I would like to thank you, Chredin, to thank Chredin very warmly for the deep, successful impact he has made to the group as CFO for the past six years and for being an exceptional business partner for me and for all Saint-Gobain colleagues. In his new role in the executive committee, I have every confidence that Sheda will bring all his skills, all his passion, all his energy, and all his experience to accelerate the profitable development, no pressure, Sheda, of Sangoma in the high-growth markets of India, across also Asia-Pacific, and, of course, including our recent move, big move in Australia with CSR. I'm very pleased to welcome Maud Thiodet as our new CFO after 13 years of Thales, where she had various roles, operations, M&A, In India, in Egypt, in France, Mo joined Sangoma in 2019 as VP of Strategy. She played a critical role, by my side, in our successful acquisitions of Continental Building Products in 2019 and also of Criso in 2021. She has been also very instrumental of shaping the 2021 Capital Market Day of growing impact with the success that we know over the last four years. In the last three years, Maud has been CEO of our French glass operations, where she notably pioneered the world premiere of zero carbon production and thereafter the launch of the first low carbon glass under the brand name of OHAI. So please join me in welcoming Maud. And now, Frida, I leave you the floor to take us through the financial details.

Thank you, Benoit. Good morning, everyone. Let me get into the more details of our financial results of 2024. So starting with sales growth, as you can see, our organic growth are sequentially improving between H1 and H2. And we also posted the growth in the second half. All the segments were stable or growing organically in the second half, except Europe, even though it showed a sequential improvement in H2 versus H1. For the full year, the volumes were down low single digit, bang in line with what we guided the market in the beginning of last year, and the prices were slightly down given the deflationary environment that we witnessed in 2024. And when you look at the trend, the Q4 prices were virtually stable, which bodes well for the start of the year 2025. The positive structure, you can see here, the effect has actually started accelerating throughout the year with the impact of the integration of Bailey and CSR in Australia. Please note that we have a working day impact, minus one in Q1 as well as in Q2, slight negative in Q3, and plus 1% in Q4. Regarding the operating results, you see here we have delivered a record operating margin of 11.4% and a record operating income at the constant exchange rate, despite the fact that we had the volumes which were lower. All the segments delivered stable or increasing margin. The margin improvement year after year clearly shows the capability of the group to demonstrate its ability to deliver even in a challenging environment. And it also reflects the success of the strategic repositioning of the group and also the execution, the strong execution of the team. We achieved a positive price-cost spread over the full year and slightly positive in H2. thanks to our robust pricing discipline, even in a deflationary environment. Let's look at the other P&L lines below the operating income. We once again achieved a new EBITDA margin, which is a new record, the margin of 15.5%. The non-operating costs remain below our guidance of 250 million that we communicated during the capital market day. The next financial expense increased slightly, mainly due to some increase in the net debt due to the important acquisition that we did during the year. Recurring net income and recurring earnings per share also has demonstrated a record level. Please note that to reflect the true operating performance, we have excluded the impacts of hyperinflation and amortization of purchase price allocation from recurring net income. If you look at the free cash flow generation, you can see that this year we have set, once again, a new record with a €4 billion free cash flow and a conversion rate of 62%. We have further reduced one-day working capital, which means a total reduction of 17 days in the last six years. This consistent performance year after year demonstrates the cash culture which is completely ingrained throughout the organization. This also has helped to strengthen the balance sheet, and at the same time, we are able to consistently invest on the growth for the Sangamama performance. The net debt to EBITDA ratio was 1.4 times at the end of December, Taking into account the recently closed acquisition of CEMIX and FOSROC, and the net debt to EBITDA ratio will still remain at the low end of the target that we gave at the Capital Market Day, which was 1.5 times to 2 times in 2025. And I know, knowing Maud very well, she will continue to keep this financial discipline and you will see that we will have the balance sheet strong even in the future for Sangoba. Now let's look at the results by reporting segment. I'll start with Europe. Overall, we saw a strong sequential improvement in organic growth between H1 and H2, even though the new construction market remained down, thanks to the renovation market, which remained resilient. Globally, all the countries in Europe have touched the low point, including France, and we expect to continue with the sequential improvement progressively, quarter after quarter. We had positive volumes in the UK in Q4, in Germany for the last two quarters, in the Eastern European countries, and Spain and Italy throughout the year. The operating margin stood at 8.4%, a new record, reflecting the successful management of costs, including the headcount reduction, productivity improvement, price-cost spread management, the solution journey that has got a positive impact on our business, and also all the optimization of portfolio that we are doing consistently. Let's move now to Americas. North America grew with the volumes holding up well thanks to a dynamic renovation market in roofing. We are progressing well with our capacity expansions investments. We expect them to be operational by middle of the next year, middle of this year, and a progressive ramp up in the second half. In Latin America, the markets remained down over the full year, but picked up as expected in H2, mainly driven by Brazil, helped by the market share gain in the light construction market. The closing of CEMEX acquisition will further strengthen our position in Mexican market and Central America. The operating margin reached a new record of 18%. Now coming to my region, Asia Pacific, the organic growth in Asia Pacific was driven by India, where once again we delivered a market share gain and the volume growth was 10%. We continue to play a leading role in sustainable construction in India with our comprehensive and innovative offer. In China, the new construction market remains significantly depressed. However, we continue to outperform thanks to our renovation exposure and to the success of countries highly digital driven to the market and the way we serve the customers in the region. Southeast Asia recorded growth in H2O. driven by the strong momentum in Indonesia and Vietnam. Our CSR acquisition in Australia was closed on 9th July and the integration is going on very well. It delivered a good operational performance in the second half of the year in line with our expectations. Each time I go to Australia, I'm really impressed with the team, their competence, their enthusiasm, the way they engage the customers in the market, and their understanding of the customer's needs. Clearly, I see under the leadership of Paul Dalton, they are generating a good number of ideas to leverage Sangamon's strength and deliver very strong results in Australia through the CSR team. And I'm very confident that we will create value in this attractive acquisition. And the region's operating margin remains at a record level of 12.6%. Now let us look at the global customer markets. High-performance solutions saw like-for-like sales down over the full year, but with a strong sequential improvement in H2. Businesses serving global construction customers grew slightly over the full year and accelerated in H2. driven by both at-force glass-grade solutions and construction chemicals growing 3.1% life-for-life. The recently closed acquisitions of FOSROC marks the acceleration of the group's presence in construction chemicals markets, particularly in high-growth countries like India and the Middle East and Asia-Pacific. Businesses serving industry declined over the full year but stabilized in the second half with an increase in the order book at the end of 2024. Mobility sales were down slightly over the full year but gained share in high-value added models thanks to its differentiation strategy and investment in innovation. The operating margin increased slightly to 12.1%. Now to conclude, in a nutshell, you have seen in 2024, we have once again delivered a very strong financial performance. And I remain very confident that we will deliver even in 2025. Over the last six years, you have seen Sangamma has radically transformed and repositioned itself as a group which is going to continue to remain profitable, cash generating, and value creative. And this clearly a good performance, a consistent performance, is also reflected even in a difficult environment. And that's why I'm very much convinced that a lot more to come in the future. Now that I pass on the baton to Maud, who will further strengthen the group under the continued inspiring leadership of Benoit. and you will get to meet her during the roadshow with me and have a chance to interact with her. I commit myself to contribute to the exciting future of the group through my new role in Asia Pacific. As you all know, I have been in the past in the operational role, and I love to be on the ground. So I'm super thrilled to be back on the ground, be closer to the customer, and look for how Sangha Bank can differentiate and develop the accelerated profitable growth in the future. As this is my last presentation of the results, it's a very emotional moment for me, I really want to take an opportunity to thank Benoit. And I always said this quite often, that any CFO of any group can contribute only when you have a CEO who has the ability to listen. Because if the CEO is not willing to listen, the CFO can do nothing. So I had the big privilege and fortunate boss who was willing to listen, allowed me to challenge him, had the humility to have this conversation with the open mind. And that's what made a huge difference in the journey of last six years. And I know, Belua, that you will allow me to continue to do even in the future. So I want to also thank each one of you, all the investors, sell side, buy side. It has been a huge privilege because this is not something I knew. This is the first experience I had. I think you all gave me a strong support. You trusted me. I think it was a great experience. I just want to thank you, and I'm sure that I will host you one day in the region and demonstrate again and show you, showcase every good work the team is doing in the region. Thank you once again, and then I'll pass on the floor to Benoit.

Thank you, Freda. Now let me update you on our strategy. As the worldwide leader in light and sustainable construction, Saint-Gobain is stronger than ever. because strategically we are positioned on attractive growth markets, and also because operationally we have strong action plans to consistently deliver and execute very well. In all regions of the world, we see strong megatrends driving the need for sustainable construction. Energy efficiency in buildings, public and private, is supported by enhanced regulations and fiscal support in Europe, and we increasingly see a green value reflected in real estate prices. Decarbonization of construction is another strong trend, with an increased penetration of light construction methods that enables a 50% reduction in the embodied carbon and natural resource usage, and also a 20% gain in productivity. Finally, the increased frequency of extreme weather climate-related events calls for significant investments, be it in the US, in Europe, or in emerging markets. Sustainable construction just means better buildings and more resilient buildings and infrastructure. Let me now zoom on each of our markets. First, North America, which is a key growth region for us. The market in the US and in Canada is supported by significant housing shortages and structural renovation needs. We have a leadership position in North America and we have been investing over the past years to strengthen it, notably with more than 300 million euros growth capex in 2024 and new lines and plans that will start from mid 2025. In Asia and emerging markets, construction is driven by continued urbanization, expected to add roughly 2 billion urban residents by 2050, and by ambitious programs like in Egypt and Saudi Arabia with megacities in the years to come. We are reinforcing our presence in these high-growth markets, notably in India, which is the third largest contributor to the group operating profit, and where we have doubled ourselves over the last six years and added 27 new lines or plans from CapEx and acquisitions. Moving to Europe, we see a progressive recovery. For new construction, there is a pickup in housing starts and permits in some countries. Renovation as well, which represents 60% of our European sales, should benefit from rising housing transactions. Thanks to our comprehensive portfolio of solutions, we are very well positioned to resume growth in the second half of 2025 and benefit from a positive operating leverage. Besides the geographic development of our strategy, our second growth axis is construction chemicals, where we have built a global leadership with a platform representing 6.5 billion euros, more than twice what it was five years ago. We have achieved this through a combination of organic growth and successful acquisitions, starting with Criso in 2021, GCP in 2022, and continuing with the recently closed acquisitions of Cemix in January and Fosrock beginning of February. Under the leadership of Thierry Bernard, our CEO for construction chemicals, CRIZO and GCP are delivering strong synergies and have achieved a combined EBITDA of €325 million in 2024. This represents an EBITDA margin of 20%, 140 basis points above 23, on top of the more than 400 basis points improvement we have delivered the previous year. The integration of FOSROC will unlock significant synergies as well with its strong brand, also complementary geographical footprint and comprehensive portfolio of technologies and applications that will reinforce our offerings, particularly in the infrastructure space. Let's hear now directly from Thierry Bernard and Rob Bonici, the CEO of FOSROC, who is reporting to Thierry.