EuroBusiness Media (EBM): Saint-Gobain, the world leader in construction and high-performance materials, reports results for the full year 2016. Pierre-André de Chalendar hello. You are the Chairman and CEO of this 352-year old French-based company. What are some of the highlights of these full-year results?
Pierre-André de Chalendar: 2016 has been a good year for Saint-Gobain, with steady progress of all our results. Our sales grew organically 2.6%, our operating income grew organically, like-for-like, more than 10%, our recurrent net income + 20% and our net self-financing +29%. So, a good set of results. This is the case in all our sectors which grew and improved their profitability. So, in fact our efforts in terms of innovation, in terms of investment in emerging markets, in terms of operational excellence are paying off. And what I find really good in this year is that this progress has been realised in all our geographical regions. All geographical regions have improved their volumes and pricing has got better as the year progressed. So, a very good year for Saint-Gobain.
EBM: Close to 50% of your profits and 2/3rds of your sales come from Europe, countries such as France, Germany, the UK and the Nordic countries, so what is your outlook for the housing and residential renovation markets there? Is the long-awaited recovery set to take off?
Pierre-André de Chalendar: When you look a little more in-depth at our result it is clear that in Europe the crisis in our markets is behind us. And our very strong European footprint is becoming a growth asset for Saint-Gobain in the future. The recovery will continue in our main countries. Despite Brexit we have a steady performance in the UK and in France, a year of stabilisation, but we have seen an improvement in volumes in the last few months and this should amplify in 2017, despite some uncertainties on the renovation market.
EBM: You are a strong player in the US, both in construction and industrial markets. Why are the US so important to Saint-Gobain and what is your outlook for 2017 in the US?
Pierre-André de Chalendar: Since the acquisitions of Norton, CertainTeed, our main flagship brands in the US, Saint-Gobain has been clearly a market leader in its main markets and the US is important for us, it’s around 15% of our sales. We have a strong R&D capability in the US and we intend to grow further. It’s a priority for us to improve our footprint even more in the US, so we will be very active on that front.
EBM: Beyond the upcoming French presidential election, are you concerned about other political risks elsewhere around the globe, be-it for example, Brexit or another Greek crisis or even a Trump presidency?
Pierre-André de Chalendar: There are clearly a number of clouds in the political world around the planet. We are used to that and what is particularly important for me is that Saint-Gobain markets, despite all that, should be well oriented, and so I am optimistic for Saint-Gobain despite those uncertainties that we will manage.
EBM: What can you tell us about the status of your bid for the Swiss chemicals maker, Sika, and what implications might this have for the future of your M&A strategy?
Pierre-André de Chalendar: Sika is a very good strategic opportunity for Saint-Gobain. It is an operation which will be good for our shareholders, which will be good for Sika, which is economically sound and which is perfectly lawful. So, it may take a bit more time than what we planned, but we are patient. We are 352-years’ old, as you said, so we are able to be patient and we have not paid anything yet. What is important to have in mind is that we are not in the meantime standing still. We have been quite active, we have made more than 30 acquisitions this year, either in the field of new territories or to add technological niches to our portfolio or to consolidate our markets, and we will continue to do so. We have also accelerated the pace of our digital transformation, so Saint-Gobain is marching forward.
EBM: And finally, what can we expect of Saint-Gobain for the rest of this year and what is your path to growth?
Pierre-André de Chalendar: Growth, you said it, this is our main agenda and Saint-Gobain will grow in 2017. A few priorities for this year. First: Price. The environment has changed, our raw materials and energy prices are bouncing back and we need to increase prices. We have a good track record but we will push that ahead strongly. Second: innovation. That’s a strong part of our DNA and I am very proud that we have once again been nominated among the 100 most innovative companies in the world. So, we will continue to invest in R&D and innovation for more differentiation. Third, we will continue to work on cost and operational excellence. We have a programme launched last year and we should generate around €270m – that’s our goal- of savings this year in addition to what we have done last year. And, finally, we will continue to prepare for the future. We will continue to invest more and we have increased our CAPEX program to €1.6bn, in terms of industrial automation, modernisation of our plants, in terms of digital transformation and to invest in new countries and in addition to that we have a good pipeline of small and medium-sized acquisitions that we intend to pursue on an opportunistic basis. So, we will stay very active to grow significantly this year.
EBM: Pierre-André de Chalendar, Chairman and CEO of Saint-Gobain, thank you very much.
Pierre-André de Chalendar: Thank you.
