TIDMCOD
RNS Number : 4544I
Compagnie de Saint-Gobain
26 November 2018
PRESS RELEASE
November 26, 2018
Saint-Gobain accelerates its transformation by launching the
"Transform & Grow program"
Acceleration of portfolio rotation
New organizational structure
Enhanced OPERATING MARGIN
-- Acceleration of portfolio rotation in line with our announced
objective to divest businesses representing sales of at least EUR3
billion, with 3 significant processes already launched together
representing EUR2.3 billion of full-year sales, and 17 acquisitions
completed over the first nine months of 2018 for EUR561 million
-- New organizational structure with five reporting units to
align the business more closely to its markets, to increase agility
and empowerment, to enhance synergies through drastic
simplification, and to foster growth
-- Additional portfolio review to be performed within the framework of the new organization
-- Positive impact of the transformation program on operating
margin of more than 100 basis points: new organizational structure
expected to deliver EUR250 million savings in addition to the
current cost savings program in place; acceleration of portfolio
rotation expected to improve operating margin by c.40 basis
points
-- New management structure as of January 1, 2019: Benoit Bazin
will become Chief Operating Officer of the Group. He will in
particular be in charge of the transformation of Saint-Gobain and
the management of the four regional reporting units. Sreedhar N.
will be appointed Chief Financial Officer
Pierre-André de Chalendar commented:
"Saint-Gobain is evolving in a fast changing market environment
which can be a source of substantial growth opportunities, provided
we are sufficiently close to our markets and sufficiently agile. We
are launching an ambitious transformation plan, 'Transform and
Grow' based on two pillars, an in-depth transformation of the
Group's organizational structure and an accelerated portfolio
rotation program.
Much leaner, more integrated, with a strong entrepreneurial
spirit and putting digital at the heart, our new organizational
structure will allow us to be more aligned with our customers, more
agile and more synergistic."
Benoit Bazin said:
" 'Transform and Grow' will allow us to unlock substantial
additional growth and profitability potential. It will put our
teams in an ideal situation to fully leverage our portfolio of
solutions in each country and our market synergies for the benefit
of our customers. We are also setting ourselves ambitious financial
targets for this transformation, including EUR250 million of
additional savings thanks to a leaner and more efficient
organization contributing to an overall improvement of more than
100 basis points in our operating margin by 2021."
The new Group organizational structure intends to align the
Group more closely with its end markets, taking into account the
regional dimension of the majority of our markets and the global
nature of our most innovative businesses. The new structure will
consist of five reporting units, with four regional businesses and
a global High Performance Solutions unit:
-- Northern Europe: Nordic countries, United Kingdom, Ireland,
Switzerland, Germany, Austria, Eastern Europe, Russia
-- Southern Europe, Middle East and Africa: France, Benelux, Mediterranean, Middle-East, Africa
-- Americas: North America, Latin America
-- Asia-Pacific
-- High Performance Solutions: High-Performance Materials (HPM)
and Sekurit (automotive glass) businesses
These five reporting units will replace the current three
business sectors and fourteen delegations, allowing for a more
agile Group leveraging new opportunities from our digital program
and with simplified decision making processes which will enhance
competitiveness. Tailoring our business models to regional and
market specificities will allow us to accelerate profitable growth,
and streamlined management structures will result in a leaner
organization. In addition, the new organizational structure will
allow increased synergies at local, market and global levels, to
the benefit of customers.
In line with our culture of social dialogue, the relevant
representative bodies will be consulted and informed.
In addition to the organizational review, the Group has
accelerated its portfolio rotation, and is on track to divest
businesses representing sales of at least EUR3 billion by the end
of 2019 for around EUR1 billion in value, resulting in a positive
impact of around 40 basis points on the operating margin; more than
10 companies of various sizes across all sectors are being actively
prepared for divestment and three significant processes have
already been launched:
-- Divestment of the entities of the Xuzhou Pipe site in China
Pipe for c.EUR200 million (2017 sales: c. EUR250 million)
-- A divestment process has been launched for Building
Distribution Germany (2017 sales: c. EUR1.9 billion)
-- A divestment process is underway for the silicon carbide
business (part of HPM, with 2017 sales: c. EUR120 million)
A further exhaustive review of the portfolio will be carried out
by each of the new business units in the new organization.
As a result of these strategic initiatives, in particular the
new organizational structure and the accelerated portfolio rotation
program, the Group expects a positive impact on operating margin of
more than 100 basis points:
-- Acceleration of portfolio rotation expected to improve
operating profit margin by around 40 basis points
-- New organizational structure expected to improve operating
profit margin by around 60 basis points thanks to new cost savings
of EUR250 million by 2021 (EUR50 million in 2019, EUR120 million in
2020) in addition to our existing EUR1.2 billion cost savings
program for 2017-2020
A conference call will be held at 8:00am (Paris time) on
November 26, 2018: dial +33 1 72 72 74 03 followed by the code
32678726#. A presentation regarding these announcements will
shortly be available on Saint-Gobain's website at:
https://www.saint-gobain.com/en/finance/events-and-financial-results
New Senior management team
Pierre-André de Chalendar, Chairman and CEO
Benoit Bazin, Chief Operating Officer
Laurent Guillot, Senior Vice President, CEO High Performance
Solutions
Patrick Dupin, Senior Vice President, CEO Northern Europe
Region
Guillaume Texier, Senior Vice President, CEO Southern Europe,
Middle East and Africa Region
Thomas Kinisky, Senior Vice-President, Innovation and Chairman
North America
Javier Gimeno, Senior Vice-President, CEO Asia-Pacific
Region
Claire Pedini, Senior Vice-President, Human Resources and
Digital Transformation
Sreedhar N., Chief Financial Officer
Antoine Vignial, Corporate Secretary, in charge of Corporate
Social Responsibility
ABOUT SAINT-GOBAIN
Saint-Gobain designs, manufactures and distributes materials and
solutions which are key ingredients in the wellbeing of each of us
and the future of all. They can be found everywhere in our living
places and our daily life: in buildings, transportation,
infrastructure and in many industrial applications. They provide
comfort, performance and safety while addressing the challenges of
sustainable construction, resource efficiency and climate
change.
EUR40.8 billion in sales in 2017
Operates in 67 countries
More than 179,000 employees
www.saint-gobain.com
@saintgobain
Analyst/Investor relations Media relations
+33 1 47 62
44 29
+33 1 47 62 +33 1 47 62
Vivien Dardel 35 98 30 10
Floriana Michalowska +33 1 47 62 Laurence Pernot +33 1 47 62
Christelle Gannage 30 93 Susanne Trabitzsch 43 25
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END
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