Compagnie de Saint-Gobain S.A. (SGO) Earnings Call Transcript & Summary

[Interpreted] Hello, shareholders. Good afternoon. And in this context of a fight against coronavirus, Saint-Gobain has given itself as a priority to guarantee the health and security of everybody. That is why according to the regulations applicable to the shareholders' meeting right now, again, this year, we are going to convene behind closed doors. We regret that situation because this shareholder meeting is a unique opportunity to meet our shareholders. This is why we have devised a solution in order to be in touch with you. I know that you appreciate that, and you really use those devices. Thank you for your participation. You have voted remotely before the general meeting, the shareholders meeting. And I really look forward to exchanges with you on the webcast platform that we have set up. This is Mr. Benoit Bazin, the COO; Mrs. Claire Pedini, responsible for Digital Transformation; Mr. Sreedhar, the CFO; and Antoine Vignial, he is responsible for CSR. Mr. [indiscernible] is also here in order to take up the regulations and the compliance with all the regulations. I think that I should now read the agenda. I have the honor to chair this assembly. The 2 tellers has been appointed amongst the 10 shareholders having the largest number of votes. The savings -- Employee Savings Group, Mrs. Sibylle Daunis; and Amundi, represented by Mrs. [ Corien Ferrier ]. They all attend the shareholders' meeting remotely, and they have -- both of them have accepted this position. With the agreement of Mrs. Daunis and [ Mrs. Ferrier ], I would like to appoint Mr. Antoine Vignial as Shareholders' Meeting secretary, and I give him the floor now.

[Interpreted] Thank you very much, Pierre-Andre. Good afternoon, fellow shareholders, ladies and gentlemen, and directors. The agenda of this meeting is the following: ordinary general meeting; approval of the company's nonconsolidated financial statements; approval of the company's consolidated financial statement; appointment of Mr. Benoit Bazin; renewal of the terms of office of 4 directors; approval of the compensation components of Mr. Pierre-Andre de Chalendar and of Mr. Benoit Bazin, who has been appointed CEO. We will discuss the exposed compensation; approval of the compensation of the corporate officers and the ex ante compensations; approval of the compensation components for the corporate offices and share granted program. You are also requested to give your opinion about a set of resolutions, giving power to the company management in order to increase or decrease the share capital with increase in the subscription rights or cancellation of the preferential subscription right. It's also about the increase of share capital and in kind contributions, increase of share capital with the capitalization of premiums and reserves, increase in share capital for the members of the group savings scheme, decrease in the share capital by cancellation of shares and powers. This agenda has just been read. And now I would like to talk about the -- this meeting. A quorum of 20% of shares is requested with a voting right for the 10 first resolutions concerning the ordinary meeting and 25% quorum of the voting right for the extraordinary part of this meeting. According to our indications on the attendance sheet set on the basis of the instructions that we've received by postal vote up until yesterday, Wednesday, the 2nd of June, the day before the meeting. It shows that more than 68.3% of voting shares have been expressed. And the requested required quorum has been even exceeded. In the file, which is on the desk, we have the legal components necessary for the meeting to be held or the documents for convening the meeting, the Board report, auditors report, resolution tax copy of the bylaws of the company and a list of shareholders -- registered shareholders. All those documents and regulatory documents have been made available for the shareholders according to the statutory regulations. So this meeting is validly constituted and can start. Now for your information, there will be a first presentation concerning our impact and performance with the presentation of the financial results by Sreedhar and the presentation of our non-financial results by Claire and Antoine. Another presentation by Benoit, COO, concerning the strategy and prospects of the group. And 2 prerecorded presentations containing the group governance, Jean-Dominique Senard, Lead Independent Director; and Mrs. Idrac, Chairwoman of the Compensation Committee. Mrs. Cécile Saint-Marti is going also to make a presentation -- prerecorded presentation for the auditors. Then questions and debates. In order to encourage a dialogue with our shareholders, we wanted it to be possible to ask questions in writing during the meeting. It's very simple. In order to do that, you have to click on the button and Ask a Question, it will appear on your broadcast screen provided that you have identified yourself as a shareholder. I would like you to be brief in your questions in order for everybody to have the possibility to ask their questions. And we'll have the announcement of the voting results by Antoine, and the meeting is going to be closed. I would like to give the floor to Sreedhar.

[Interpreted] Thank you, Pierre-Andre. Ladies and gentlemen, shareholders, good afternoon. I'm very happy to be able to present the results for 2020. 2020 has been, of course, affected by coronavirus. After a nadir in April, the results picked up for the group. We have noticed a return to a normal situation in most countries as of the month of June 2021. In the second half of 2021, as soon as the second half of 2020, our results have improved and particularly, the prices have picked up. Concerning our turnover, our sales volume, EUR 38 billion over 2020. And on a like-for-like basis, 3.8%, thanks to the 4.8% pickup or increase recorded in the second half of 2020. The operating income, EUR 2.9 billion, limits its drop at 9% over the whole year, thanks to an increase of 22% in the second half of the year. Concerning the operating margin, down 50 basis points in this year. It has picked up by 10% in the second half. It's a 150-basis point increase. Let's go on with other key figures for 2020. EBITDA, EUR 4.4 billion for this year, 2020, down 9%, but it picked up by 13% in the second half. The EBITDA margin reached 11.6%, with a 20-basis point increase over the whole year and 200 basis points during the second half of 2020 and 13.3% margin. The recurring net income, which is almost EUR 1.5 billion over the year, a drop of 23%. But during the second half, it reached EUR 1.2 billion, a 23% increase from the second half of 2020. The free cash flow in 2020, has reached a record level, more than EUR 3 billion, a 64% increase. 2 comments concerning the results according to each reporting segment. The higher performance solutions has been, of course, the most affected by the sanitary crisis. The turnover has decreased over 2020, but it has picked up in most industrial markets, manufacturing markets in the second half with an operating margin of 11.1%. In Northern Europe, sales have dropped over 2020, but they have increased in the second half with the sound trend on the market in all the regions. The operating margin has found the same level as last year, 6.2%. Concerning Southern Europe. This region has been more affected by the sanitary crisis than Northern Europe. However, there has been a sharp pickup in the second half, driven by France, with a sharp increase in the rehabilitation works. The operating margin which is 5.2%, which is very close to the percentage of last year, 2019. In Northern and Southern America, we have a double-digit increase, which is fine growth all over the year. In Northern America, North America has been driven by the building market and a very good price management. In Latin America, after the turmoil in the second half, sales picked up, driven by a significant market gains -- market share gains. The operating margin has increased all over the year, reaching 11.5%. Finally, the Asia Pacific region has posted a drop in sales in 2020 and the first half of the year has been strongly affected by the sanitary crisis. However, China and India, the 2 main countries in this region, have contributed to a strong pickup in the second half of the year. The operating margin has slightly increased reaching 10.7% in spite of the sales decrease. Ladies and gentlemen, a few words about the sound financial discipline that we have shown once again. We have made EUR 320 million in savings after our operational excellence program. And in the framework of the Transform & Grow program, we have posted EUR 135 million additional savings and our objective has been reached 1 year ahead of schedule, EUR 240 million in savings. Thanks to the temporary drop in discretionary spendings and our adjustment measures, the group has posted EUR 240 million additional euros in savings. As I told you before, our free cash flow has reached a record level, EUR 3 billion in 2020, a 64% increase with an exchange rate of 81%. Balance sheet structure has been enhanced, strengthened, and our credit rating is still very strong. A few words on the first half of 2021. The group has started this year with a record organic growth, 14.3% versus the first half of 2020 and plus 9% versus the 2019 first 6 months. This growth is driven by the very comprehensive offering of the group. Also, it's due to gains in market shares and good momentum in underlying markets, particularly rehabilitation market in Europe and building market in America and Asia. Concerning the returns to shareholders. We recommend the payout of the dividend of EUR 1.33 per share with a comprehensive payment in cash. This represents 48% of the recurring net income. Moreover, the group has decreased by 12 million, the outstanding shares in line with our objectives. Concerning our share price, you can see the very nice trends on this graph for Saint-Gobain compared to its benchmark index. In conclusion, ladies and gentlemen, our group has been strengthened by this year 2020. And this group begins 2021 with a lot of confidence. Thanks to a sound balance sheet, we have outperformed on our markets. We have profitable growth ambitions. And our teams, our staff are very much mobilized and dedicated. Thank you very much for your confidence and your attention, and I would like to give the floor to Antoine.

[Interpreted] Thank you, Sreedhar. Well, now with clear, we are going to present the nonfinancial results for 2020. And it will be an opportunity to recall our CSR approach and our road map for a CSR climatic change, circular economy, inclusive growth, business ethics, health and security all throughout the value chain, engagement and diversity, staff diversity. For each of our pillars, we contribute to the UN ODD fight against poverty, health, welfare, education, water, low carbon energy, decent work, economic growth, innovation, decrease of inequalities, sustainable communities, responsible manufacturing, peace, justice and efficient institutions and protection of the environment. Before giving the floor to Claire, I would like to recall that CSR is our core business in our DNA at Saint-Gobain. Our solutions protect our planet from a climate change with recyclable materials like plaster or glass. And we have been created more than 300 years ago and its evidenced all throughout these years that this is very important for us. I would like to give the floor to Claire for the first pillar.

[Interpreted] Thank you, Antoine. Good afternoon, ladies and gentlemen, fellow shareholders. Let's start with the climate change. Of course, it's a key feature in our CSR policy, and it's very important for our planet and its inhabitants. Our goal at Saint-Gobain is to contribute to the emergence of a low-carbon economy, able to protect our common good. And we have committed ourselves to be -- to have carbon neutrality by 2050. 2020, we have had important milestones concerning our CO2 emission, a 10.4 million tonnes, down 20% versus 2017 or increase in renewable energy reaching 19% last year. We have decreased by 5%, our water discharges, and we have increased the number of our environmental reporting for our products, more than 1,300. We have also finalized our CO2 road maps for 2030, perfectly in line with the Paris agreement guidelines, and it has been validated by the science-based target initiative. I would like to share with you a fine example of Saint-Gobain investment towards zero-carbon. Hello, Lars.

[Interpreted] Good afternoon, Claire, and hello, everyone.

[Interpreted] Lars, could you share with us information about Swedish Investment Project.

[Interpreted] Yes, so what we will do is to convert the Gyproc [indiscernible] plants to become the first zero CO2 plasterboard factory in the world. By transforming all processes from LNG to clean electricity from hydropower, we will eliminate more than 23,000 tonnes of CO2 emissions. And while increasing capacity with 40%, we will improve the energy efficiency with more than 30%. This is a pioneer project in the industry, where Saint-Gobain leveraged the industry-leading technical capabilities of the TIC team and the operational excellence of Gyproc [indiscernible]. I believe this can have industry-wide implications. Plasterboards is a key building material. And this project is a significant contribution towards a more sustainable construction sector. In fact, with a massively improved CO2 footprints, it will make plasterboards more competitive in a low-carbon future. When the conversion is done early 2023, plasterboards from Gyproc [indiscernible] will be in a class of its own, with a unique low carbon product. And I expect Gyproc in Norway to deliver solid growth in the coming years. It shows that sustainability and business performance can go hand-in-hand. Goodbye, everyone.

[Interpreted] Thank you, Lars. Moreover, we have continued with our sustainable energy investments. It's -- their share should be multiplied by 2 this year, particularly with significant investments in the United States. We also have materialized our biodiversity commitment with Act for Nature and overall, our approach is quite clear cut. We want to fight against the impact of climate change. On the one hand, we want to frequent, on a regular basis, decrease CO2 impact. And we also would like to propose to our customers, energy efficiency and low-carbon solutions in order to avoid carbon emission increases, another really significant pillar of CSR circular economy. We want to continue with growth and development. Everybody must be in a position to improve its way of life, but we want to promote the integration, inclusion of commodities and recycling of those commodities. For instance, in 2020, thanks to multiple substitutions, we have avoided 10.1 million of tonnes consumption of commodities. We have decreased by 14% the use of non-recycled waste. And I would like to give the floor to Emma [indiscernible] in Portugal. Hello, Emma.

Hello, Claire. Using waste products allows to reduce consummation of raw materials. In this case, slab and rubber granules. A slab is our product of the metallurgical process with composition and reactivity similar to [ polar ] cement, producing them the amount of cement needed. The rubber granules result from the processing of in a flat tires and work as a light aggregate, producing the impact associated to the use of aggregates of natural origin. The benefits achieved have exceeded expectations. On sustainability, less building raw materials, reducing CO2 emissions associated to the use and to the transport is 5% lighter than the previous product. On health, liners on handling and easiness and comfort during application, less muscle fatigue and less noise. And finally, corporate image. The product was recognized and distinguished by 3 external entities with 3 different award: Consumer Choice, [ fiber set ] and Sustainability.

[Interpreted] Thank you, Emma. Another example, we have made available for our customers more than 120 waste collection points or stations. And by 2030, we would like to decrease by 80% on non-recycled waste. We would like to increase by 30% our avoidance of commodity use and 100% of our packages should be recyclable. We also would like to make available to our customers, stations where they can recycle the glass, the glass can be recycled in our factories. Those services are made available to our customers in Nordic countries, and, of course, France as well as in the U.K. Those solutions aimed at more and more integrating recycled and recyclable materials in the proposals that we make to our customers is in our offerings to our customers. And we work with our customers in order to improve the organization of waste collection. And I'm going to give the floor back to Antoine, who is going to talk about business ethics.

[Interpreted] Business ethics, the third pillar of our road map. It is very important because it determines the confidence that our staff, our clients, our suppliers, civil society can show and how confident they can be in the sustainability of our operations. Of course, training is a very important part of this pillar because it is a guarantee of compliance. In 2020, we have trained 97% of our new managers as of the first year, our onboarding year. And 80% of our staff members are trained concerning fight against corruption. Now highlights in 2020, we have a professional website in order to report some corruption facts anonymously. We have a new policy to combat corruption. We already had one. Now it's more visible, more understandable. Moreover, our responsible buying program has been accelerated. We also have made more transparent our policy concerning the wood purchases. Our approach concerning business ethics is to use our ethics code in all circumstances. We want in all our factories, in all our offices, these ethic codes to be well-known and used on a daily basis in order to support our decision-making process. In our operations and our value chain, we want this ethics code to be applied. So our staff members and all throughout our value chain at each level, we want to comply with this ethics code. Inclusive growth is our fourth pillar. Inclusion is becoming more important in a public debate. It has always been very important at Saint-Gobain. We are very careful about our staff members and our clients and the people who have difficulties. We are very careful about professional insertions, the increase of open spaces, the improvement of open spaces. And also, we are supported by NGOs. We have many resources. We have the Saint-Gobain Foundation, and we also are helped by local initiatives. I would say that we have received EUR 10 billion in donations, which has tremendous impact. More than 50,000 people in 2020 has been helped by our foundation. Concerning the highlights, I would like to say that there are 4 of those highlights. The first is the care program to protect our employees and their families, i.e. more than 500,000 people benefited from this program. I will also mention the new development and training program to train trade professionals in Morocco, in Kenya or in France for sustainable construction. Many solidarity-based initiatives we're taking in the face of the pandemic. This was an exceptional circumstances. And the response was exceptional on Pierre-Andre and Claire will mention this later in the presentation to end. I will mention that the apprenticeship training center was created in France, one of the first in France, which over the next 3 to 5 years, will train some 250 apprentices in any given year. So we've had a diverse approach and the foundation and the sponsorship program are the visible tip of the iceberg. But there are many more with many achievements in the various countries at the local level. I would now give the floor to Claire, who will be focusing on health and safety.

[Interpreted] Thank you, Antoine. Ladies and gentlemen, dear shareholders, as you know, protecting the health and safety of our employees above and beyond our stakeholders is our foremost and primary responsibility. And here again, we have clearly improved our performance in 2020 with an injury frequency rate of 1.8, down from 2.2 in 2019, as you see on the curve, a very positive curve over the last 10 years. So this is a milestone, a step towards our goal to have zero-accident, zero-injuries on our work sites and facilities. Now 2020 was marked by the pandemic, in which Saint-Gobain got heavily mobilized by multiplying by a number -- by factor 15, the components to manufacture respirators to be used across the world or by swiftly investing into 4 production lines to produce a face mask, which have made it possible to produce more than 11 million face masks last year. Our obsession, and again, this is the case this year with the pandemic crisis still present has been to protect our employees and to protect all people on our facilities. All our procedures, processes and systems were reviewed and revised in 2020 to offer full protection. The COVID crisis, of course, did not have us deviate from our training programs on the health and safety risks for all our subcontractors and employees and people on our work site. In the [indiscernible] we developed a performance indicator on managing risk connected with noise, which has made it possible to work on reducing noise exposure. Here again, our approach has been to design solutions, which incorporates health, safety and the well-being of all of our stakeholders, including our employees, of course, but of course, also our clients and the final, the end users of our solutions. The last pillar of our CSR policy has been engagement and diversity of our employees. Our goal and ambition at Saint-Gobain has been to create a working environment, which will foster self-actualization for all categories in respect of people and integrity. In 2020, we had a global satisfaction survey. And 78% of our employees responded, which is a response rate, which has been outstanding. 82% of Saint-Gobain employees stated that they were engaged and 88% of employees say that they have been well-trained. Our commitment as a company towards our employees involves a rich social dialogue. 2,800 -- more than 2,800 collective bargaining agreements and labor agreements were signed across the world last year. Last year also, we reached many key milestones in the field of diversity and engagement. The CARE program by Saint-Gobain, which Antoine mentioned a few minutes ago, aims at providing each and every employee, irrespective of their home countries and nationalities, supports to parenting, medical coverage and death and disability coverage. This program in the first pillar, was rolled out, enabling every woman, every female employee to benefit irrespective of the rules in place in their countries to benefit from 14 maternity weeks. In 2020, we reached our first goal, which we had set for ourself a few years ago with respect to gender balance to have at least 25% of female managers as part of our management plan. And we also set more stringent goals and targets, which will make it possible to keep improving gender balance and reach 30% of female employees on -- and members of our Executive committee. Last year, again, we also developed lots of training programs to combat stereotypes, as an example, to keep making Saint-Gobain an inclusive company. HR policy, labor dialogue, openness and kindness and care, and helping to develop talent via our CARE program are the foundations of our policy in this respect. I will now give the floor to Antoine, who will give concluding remarks on these aspects.

[Interpreted] Thank you, Claire. This is Antoine. By way of conclusion, I would say, that the ESG nonfinancial performance of the group testifies to continued improvement on the CSR pillars. This performance has been supported by defining operating programs to reach our targets with medium-term road maps to guide our action and also strong consistent values to give a meaning and purpose to our approach. You will understand that at Saint-Gobain, CSR is used to generate value by way of developing the growth of the group, especially with the impact of our solutions to combat climate change or promote circular economies, shared and common growth including the stakeholders, as we mentioned, "how to best illustrate our purpose, making the world a better home."

[Interpreted] Thank you, Claire. Thank you, Antoine. Thank you, Sreedhar. As you see, we put social, societal and environmental responsibility and commitment at the heart of our strategy. Performance and impact, growth and responsibility are interconnected and form an integral part of our developing model. We have showed this and proven this in the course of 2020, which was a very special year in many respects. And I suggest now that we watch a short video on 2020. [Presentation]

[Interpreted] I spoke about 2020 as a very special year. Well, I would like to tell all our shareholders and employees who were affected by the pandemic that our hearts and our thoughts are with them. Undisputably, the most marking fact and factor in 2020 was the pandemic. It puts the global economy to its knee. And it's stalled abruptly the very fine momentum in our markets that -- and our operations we reported in Q1. It, without any doubt, upended our societies and the communities in which Saint-Gobain has been operating, but also it has revealed what I can be very proud of. That is the formidable ability of our teams to engage and mobilize to play out the value of solidarity in the heart of the crisis to reinvent itself to keep serving our clients and ensuring the continuity of our operations. And finally, to bounce back and capture market opportunities connected with economic recovery everywhere in the world. Their creativity to provide support and help to the doctors and nurses and the sick and the most vulnerable was limitless. Gypsum partitions and drywalls being provided to the field hospitals or to the nursing homes, materials being made available to create a huge medical center in London and to convert stadium and gymnasiums in transitory hospitals as we did in the U.S. or to produce face masks as was done on Saint-Gobain production lines in the [indiscernible] Foundations. All these initiatives testify to the corporate culture in Saint-Gobain, which promotes trust, confidence, empowerment and collaboration. These were -- and these will remain the key precious assets in order to make the difference in the fields at the closest level and the closest contact of our clients and stakeholders. This unwavering commitment of our teams without never sacrificing our humanistic values in a very brisk dynamic construction market has made it possible after collapse in trading between March and May of 2020, which severely had impacted the earnings of the first half, enabled us to generate a record performance in the second half of 2020, as the CFO showed. The sales exceeded that of 2019 by 5%. And the operating income, operating margin, EBITDA margin and the recurring net income and free cash flow all reached historic record levels. And the reasons for this fine performance is multiple. The first, as I said, is the expertise and level engagement of our team to serve our clients, support them in their recovery across all their markets, including in those sectors and industries, which were the most affected as that of mobility. And the second was a very fine business performance, both in terms of volumes and selling prices. Construction market booming, driven by consumers looking for comfort after month of lockdown. The third reason is our savings and cost-cutting programs, which reached some EUR 700 million in savings for the year, which was conducted with discipline and rigor. And the fourth and last reason is success and the successful completion of our transformation plan, called Transform & Grow, 1 year ahead of schedule, which was the culmination of a program of cultural change, which was started a number of years ago. This plan had 2 areas of focus, profoundly reorganizing our organizational structure, no longer by product but by countries, especially for the local construction businesses. And it also involves optimizing our portfolio to improve our offerings and create more value. This new country-based organization, closest to our markets and to our clients, has now been fully completely rolled out. It has showed its relevance, generating strong commercial and business synergy as well as industrial efficiency gains. It is this strategy and new organization, which makes it possible today to offer our clients complete, sustainable, innovative and differentiating solutions versus competitors, which very often have a single line of product. And this organizational structure was very precious during crisis, making us agile to act swiftly in full respect of the economic and health and statutory measures, as decided by the local government is following a simple and efficient principle, act locally and coordinate at a global level. Also, the rotation of our portfolio, which I had started with the divestment of our distribution business in Germany, this was announced in the summer of 2018, knowing that the goal already had been achieved in late 2019, went on in 2020 with [ 13 ] acquisitions, including the very successful acquisition of Continental Building Products, a key player in the drywall industry of North America, and its integration to the group is going smoothly and will benefit from the brisk recovery in the construction market in the U.S. Similarly, new divestments were conducted with a total amount of EUR 5 billion of sales from the beginning of the launch of our plant to be compared with the initial goal of divestments of EUR 3 billion. So as soon as late 2020, 1 year ahead of schedule, we exceeded all goals and targets set for in this plan. It's rolling out and steering and management day in, day out was done by Benoit Bazin, which I had suggested to your Board that he be appointed as a COO in late 2018. With the perfect execution of this transformation plan, Benoit Bazin confirmed his ability his talent. And I considered that he was now ready to occupy the role of Chief Executive Officer of the Saint-Gobain Group, as the group is faring very well and that we have to prepare the next strategic plan for the next 3 to 5 years, it was logical and it was timely that he should take the helm of the company starting from this summer. Your Board of Directors approved this proposal, and I'm happy with this. I have known Benoit for many, many years. He is a man, who owns the values of the group. He's a man of conviction, who inspires teams so that they give the best of themselves. He also has a long-standing and extensive experience of the group, both in France and internationally, combined with a strong client culture. Deep, extensive knowledge of the markets of the company and of its operation. It will be his task to write up, with the support of the Board of Directors and the teams in the group, to write up a new page in the 300-year history of Saint-Gobain. And Benoit Bazin will be able to do this building upon a very robust foundation. That is the baseline reality of today. We are a group who's been profoundly transformed, which has been equipped with an exciting purpose with the benefits of having a promising long-term vision statement with very strong values, which are embodied by talented teams with a robust, strong governance system with very positive prospects benefiting from the right positioning in buoyant markets. I would like very quickly to review each of these fundamentals, which today are the strength of Saint-Gobain currently. The first of those is our new purpose that we have formulated following a participatory work, which engaged more than 15,000 employees in the group and which we summarized -- which we've been summarizing since September of 2020 in this fine inspiring and engaging sentence, and I quote, "Making the world a better home". One of the words which comes out most importantly in this purpose is home. In English, where home, the word home is more inclusive than it is in French, with a strong emotional charge, very strong. In fact, home both translates the infinitely small of everyone's home and the infinitely large of our common shared home that is the planet, the globe. In both embodies a fundamental need by humanity that is universal aspiration at every place in the world and a smooth harmonious intertwining of the physical and emotional spheres of the private and collective spheres. This purpose clearly states what we are, that is a multi-local organization, which is driven by the desire and ambition to take action every day to make the world better and more sustainable home. Let's watch. [Presentation]

[Interpreted] And the second of our fundamentals is the strength of the vision that we have to steer the group's development. When the executive management was given to me 14 years ago, I set the ambition for it to become the benchmark company in sustainable habitat. The word habitat, to acknowledge the very significant rotation moves in the portfolio of the group. Jean-Louis Beffa, which led us to have the construction market to account for more than 2/3 of our business operations. Habitats, because I wanted to define the group by its markets and no longer by its products and materials. And also, I wanted to define the group by its customers, by its clients by demonstrating our ability to bring solutions. This client focus has always been our guiding theme. And I'm very proud to have helped steer and develop the corporate culture of the group until the deep profound change in the organizational structure, which was launched when I considered that the group was ready and that the execution risk was low. "Sustainable habitat" because my intuition back in 2007, leading the pack, I would say, that the issue of protecting the environment and the climate change challenges would become major issues and that our group had everything it took to become a key player in [ LNG ] transition. This is -- this belief, which was shared in the context of the COP21 conference, which led me to set ambitious goals to reduce our environmental footprint and to equip ourselves with the needs to achieve these goals. Then some 2 years ago, I decided to cross the line again by committing the group and engage it towards carbon neutrality by 2050. 2020 was a new significant year since, as Claire explained to you, we finalized our road map in order to achieve these intermediary goals to reduce our CO2 emissions by 2030. And this was combined by -- this was combined with other environmental goals. Among these goals to be achieved by 2030, it is a question of reducing our carbon emissions by 33% in the so-called Scope 1 and Scope 2, that is direct CO2 emissions and indirect CO2 emissions, knowing that we already have reduced CO2 emissions by 40% since 2020. It's also a question of reducing by 16% our Scope 3 emissions, i.e., emissions produced upstream and downstream from a value chain. This is to be achieved by 2030. This comprehensive road map is cascaded by every country, by every market, with ambitious action plans with 6 areas of focus: energy efficiency, the mix of energy, working on our processes, formulating our products, transportation, mobility and all of our procurement and supply chain. We also equipped ourselves with tools and instruments, and we've been devoting significant means and resources to make sure we successfully conduct this road map. And Benoit will speak about this again. These new commitments, in fact, go in the direction of the priorities set by the carbon neutrality trajectories and the stimulus plans, which have been adopted in Europe and in the United States. And at the heart of this, you have the energy renovation of buildings. One of the most useful measures in the world in order to both create local jobs, improve purchasing power and reduce the energy bill by reducing the emissions of greenhouse gas. For Saint-Gobain, knowing that it is the first and the largest market, this is a huge opportunity for the upcoming years going forward. And this eco responsible positioning, building upon our industrial and manufacturing practices and building upon our products and solutions is one of our greatest strength. Our ambition to be the leader in sustainable habitat has gradually become a reality. Your group has transformed itself gradually into a leader in urban renovation and sustainable construction. The conditions under which we're able to announce 10 days ago, the planned acquisition of Chryso are one of the latest illustration. We've been able to attract this golden nugget, thanks to the talent of your future CEO and the team which has been supporting us, but also it is due to our great attractivity and the strength of our development model. Being the leader, being the reference being the benchmark involves accepting to set the example and to pioneer the way in everything we do. Setting the example and pioneering the way, first, by how we pay attention and care for the well-being and development and growth of our employees. You've seen the level of engagement and commitment. Our talents are our most precious assets. And for the sixth year in a row, we were awarded the Top Employer Global Award, which is a very fine consecration. We are setting the example and pioneering the way in our force of innovation. For the 10th year, in a row, we are ranked among the Top 100 Most Innovative Companies of the World by Clarivate Analytics. And Saint-Gobain, in fact, is the only French company to be awarded this label 10 years consecutively. And only 3 European companies achieved this, setting the example and pioneering the way again by the speed and swiftness by which we have engaged a group in digital technology and the digital revolution, which was even accelerated by the pandemic. In the construction industry, which is possibly more conservative than other, Saint-Gobain wants to lead the pack and be ahead of the game in order to improve client experience but also to aim for operating excellence in its production processes. This digital revolution as any revolution has been done recklessly, thanks to the mobilization and engagement of each and every employee, and I'm very proud together with them, of the way we've traveled. But this conquering spirit is only meaningful if and as it is anchored into founding and nonnegotiable values. After the purpose, after the vision statement, the third and last of our fundamentals is our values, which are the legacies of our history. They are utilized in our behavior principles, which have been guiding our way day in, day out, engagement, respect for people, integrity, loyalty and solidarity, as well as our principles for action, which are respecting rules, respecting the environment, respecting health and safety as well as good labor relations. These principles where, for me, a constant guide in my action. And I know that they are also for Benoit as well as for all group employees. Let me add that we have a very robust governance. And I would like once again thank all the Board members, Jean-Dominique Senard, our Lead Independent Director; Anne-Marie Idrac, Chairwoman of the Remuneration and Appointment Committee. They already reported about the Board activity. They have supported me constantly, but they have been very demanding in order for our governance to be at the highest level possible. All those forces in the group are reflected by our results, very buoyant results and prospects are promising. We will reach new record. Yes. Saint-Gobain is in a very good condition. Saint-Gobain is positioned to outperform and the financial markets have started to recognize that. The share price, very sensitive to that, and it's quite normal, has increased, and it is not finished. The financial results of the second half 2020 have reached -- Sreedhar has showed it to you, has reached unprecedented levels. And I can tell you today that the first half of 2021 results should be even better. Indeed, after a first quarter with a very strong growth, more than 9% versus 2019. April and May have confirmed this acceleration versus 2019. Comparison with 2020 is not really meaningful in view of the sanitary crisis. Under those circumstances, the operating income of the first half 2021 will be above. Obviously, this -- the income of the second half 2020 and the operating margin will reach a new record. At the end of June, the financial results of the group for the last 12 months will have been the best in our long history. And they go hand-in-hand with our fine nonfinancial performance. And this -- against this background, I would like to reiterate my confidence in the choice that your Board has made in order to ensure the management of the group. I am going to focus on my role as a Chairman. Based on our results, based on very buoyant trends, based on the talent and experience of Benoit, Saint-Gobain has an outstanding future in front of it. And it's at the heart of the major challenges in our world. Ladies and gentlemen, I'm very proud to have managed this group for the past 14 years. And I can, in that way, hand over this management under the best circumstances. And I'm very emotional when I think of the outstanding human adventure that I have experienced at the helm of this outstanding team and thinking about the 170,000 staff members of our fine group. And I would like to devote my last words to them saying thank you. Benoit, over to you.

[Interpreted] Shareholders, ladies and gentlemen, good afternoon. I'm very moved about what you said. And on my behalf, on behalf of the Saint-Gobain staff members, I would like to express all our gratitude. Thank you for all those years, those 14 years. A large part of your life has been the Saint-Gobain life, and it's 170,000. But you have changed the group very deeply, and you have opened 2 main objectives and 2 main approaches. First of all, client-centric approach, which was not the group approach when you started to be its manager. And also, you had a vision, you positioned the group on the development of sustainable habitat. You have been able to combine care and [indiscernible] and also an aspiration to perfection for excellence. And you also had a vision about values. You have a team spirit and it made it possible for us to make progress to combine the long-term approach with the day-to-day approach. Of course, you had to withstand a few crisis. There were a few crisis during your management years and on my behalf, I would like to thank you for your relentless and demanding support that you showed for me. You expected a lot from me, and I really am very grateful for that. And this is priceless. I don't count the thousands of years -- of hours that we exchange our views on the Saint-Gobain strategy and on the staff members. We spent hours and hours discussing all that, in fact, for me an honor to accept this position as CEO under your chairmanship. I'm very, very happy that the group is such in a fine condition today. And it is in this way, the best way possible that all the Saint-Gobain staff members can pay tribute to your dedication to your commitment and can say, congratulations. Well done. You Know, Pierre-Andre, because you have experienced that at one point in time and one story, in one's experience, you know that you are in the right position. And you are happy about this position. This is what I feel here today, and I owe it to you. Thank you, of course, to all the staff members, all the teams, they have given me a lot, and I've learned a lot with them. Thank you to the Board members. Thank you to the shareholders for your confidence, which is an honor for me, but also a commitment. Dear shareholders, I would like to introduce myself and talk about my experience. I've been at Saint-Gobain for 22 years in various positions. I have been in most of the Saint-Gobain business lines in France as well as abroad. I know the experience is priceless, very valuable in order to know about all the talents of the staff members in order to leverage the potential of those talents in order for Saint-Gobain to go faster and further. I'm 52 years of age. I was born in Normandy. And as many people born in Normandy, I am very grateful to the United States. The Americans came to France in order to defend our culture and idea of freedom. My daughter was born in the United States. I studied at the MIT and I'm constantly in touch -- have been constantly in touch for the past 20 years with our American teams. And at present, the U.S. is the first country as far as the results -- financial results are concerned. But I've been very attracted by the manufacturing sector, particularly in my country because I'd like to manufacture -- create. I joined the group in 1999. First of all, alongside John [indiscernible] as the planning manager. I've learned a lot. And as of 2001, I prepared our first experience with the plasterboard sector. Saint-Gobain, in 2002, sent me to the U.S. as a general manager of our Abrasive business line. It is my first operational experience. And I really loved it. I'd like to manage teams and I like the American pragmatism and the way they decide very quickly. Of course, I lived through the September 20 -- 2001 tower attacks. And then I come back to France. And I worked in the financial business lines. And those were 4 years with a lot of work, public tender of a bid -- the tender on British plasterboard. And then the experience of the financial crisis in 2008, 2009, it was a challenging period. And I worked through that crisis with Pierre-Andre de Chalendar. He helped me a lot going through this crisis. And this is the second crisis, the COVID-19 crisis. In 2019, I was appointed Head of the Distribution and Building business line. I worked on the digitization of our brands and the optimization of our country by country portfolio. So I was in the field. I was working with the teams in the field, and it was an unparalleled experience for me. I worked on the quality of all the details for the product that we make available to our clients. In 2016, I worked in the construction department. And I changed it in order to better serve the construction of the building market. It was successful and growth increased. At the end of 2018, Pierre-Andre and the Board members appointed me COO. As a COO, I was responsible for this radical transformation of the group on the basis of our 2 pillars. First pillar, new organization, leaner and more agile country-by-country organization and market-by-market organization for high-performance global solutions. And the second pillar, the optimization of our assets portfolio. And we went through that or in compliance with the dialogue with the staff members and the trade unions. I have a very deep knowledge of the group and I was very dedicated in order for this new plan to be successful. It was rolled out faster, and it was more successful than we expected. It changed completely your group. Scope of business is very wide, and we can take advantage of growth -- of this new growth. We have very accountable teams and staff members. Our organization proved to be particularly efficient in order to manage the sanitary crisis. Now you can see ladies and gentlemen, fellow shareholders, that I'm very much attached to the Saint-Gobain group. I worked from bottom to top. I am very familiar with all the COGs of this group and with many, many staff members. I pay a lot of attention to all the aspects of this group and to all the staff members. I am convinced about their talent and their diversity. I'm very also keen on acting very fast in a very fast-changing world. Success is based on the quality of our work and on our cooperation within teams. We have to share the same performance values, values of excellency, solidarity, respect for people, care, kindness and confidence and trust. Now what about the future? What will be our road map and our assets? My ambition is to step up our growth, the group's growth. Saint-Gobain is at the very heart of the most significant challenges of our time. 40% of greenhouse gases come from the building sector. The consumption of natural resources have been multiplied by 3, those last few years even though the population has only been multiplied by 2. And during the next 30 years, urban population growth should be multiplied by 2. 121 countries, the equivalent of 70% of the worldwide [ TID ] has committed themselves to carbon neutrality. None of those countries will succeed if the building themselves are not low-carbon buildings, do not have carbon neutrality. My ambition for Saint-Gobain is to be the worldwide leader of sustainable buildings, sustainable construction. It's my responsibility, but I think it's a great opportunity for Saint-Gobain. As of now, we have solutions available in order to promote carbon neutrality for our construction. We have a global footprint. And we have the ability to invent the future solutions, driven by our innovation on many industrial markets, manufacturing markets. Our growth strategy is based on the rollout of Saint-Gobain organic solutions. We can switch from single product to product systems, including -- based on our know-how and giving value to our value chain. For instance, sustainable performance, the integrated availability of facade, recycling solutions for materials. Claire was talking about that earlier, multi-product delivery and trade professionals training by our distribution network. This is a very complicated challenge. We used to have a linear economy, and now we have switched to a circular economy. And Saint-Gobain has to play a pivotal role here. We can bring one-stop solution for the energy-efficient rehabilitation in France in order to renovate schools and hospitals. We can offer high-performance solutions for sustainable mobility in order to build new houses in the United States or elsewhere. In order to illustrate the strategic approach and the solutions, I would like to listen to the [indiscernible] in Brazil.

Hi, everyone. It's a pleasure to be with you today. It remains challenge to innovate in the constructive system in Brazilian market, therefore, bringing well-being to customers, one single system offering all Saint-Gobain products made in the country in a synergic way. The system features high productivity, innovation and mainly the offer of integrated services to our customers. In a market traditionally focus on measuring our dry construction solutions, which allow a faster and lighter process with less waste, have a gradually green space among -- in construction companies. We offer the Brazilian market certified system solutions from, [ OnForce ], Brasilit, ISOVER, Placo, and Weber, jointly, and absolutely aligned with installers and builders. What we do? We help in the design phase of the projects and the specification of the materials. And then we sell the system. After that, we control the delivery on-site with Saint-Gobain materials and monitor all the phases of work, execution to ensure the quality of the installation. We have 85 external partners, including trained installers all through the country. Indeed, lots of opportunities.