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

[Presentation] Hello, everyone, and welcome to Saint-Gobain 2021 Investor Day. I'm delighted to host you in our Saint-Gobain headquarters. This is a fantastic display of all the know-how of Saint-Gobain, more than 80 Saint-Gobain solutions. We are entering a new chapter for Saint-Gobain. I'm very excited, very confident to open a new growth chapter for Saint-Gobain. In the next 3 hours, I will present to you my vision for the group. I'll do it together with my team, the executive committee that I put in place on July 1. We have shared, we have worked on our strategy and we are all committed to execute it very successfully. Our capital market is all about the mid- to long-term strategy of Saint-Gobain. On the short term, you have read our press release, we are confident, confident and comfortable with our guideline for a very, very good year, 2021. Any short-term questions you may have, we have our third quarter conference call on the 28th of October. We'll take all your short-term questions. Let's dedicate this time for the mid- to long-term strategy of Saint-Gobain. There is so much to do, so much to share together. We face an unprecedented change, an unprecedented climate change. This is our starting point. We are entering into a net zero carbon economy. More than 70% of the world GDP is now committed to reach carbon neutrality. This is more than 120 countries around the world. We have seen more than EUR 1 trillion of investment on renovation, construction, infrastructure, put together by the different governments. And you, investors, more than 80% of you have deep demanding sustainable criteria in your investment. We just cannot go into net zero carbon economy if we don't go towards sustainable construction. It is essential to get to a net zero carbon economy. The buildings, private, public, are the largest source of CO2 emissions around the world, 40% more than industry, more than transport. Second challenge, in the last 50 years, we have used 3x more natural resources versus the past for a population which has just doubled. And third, we have to build faster, better buildings in emerging markets. There will be 2 billion more population, inhabitants in the big metropolis of the emerging markets. We need to build faster, better buildings. These are 3 important challenges for the world. Our ambition at Saint-Gobain is to answer on those challenges. And for that, I have a clear and simple vision: Be the worldwide leader in light & sustainable construction. This is aligned with our purpose, making the world a better home. In order to deliver on this vision, we have a plan. I have crafted, together with my team, a plan: Grow & Impact. Grow because growth is a core priority to us to build on the success of Transform & Grow. And to that, we add Impact. Impact for the planet, impact for you, shareholders, our commitment to create value, impact for our customers, impact for our teams to win -- to make the Saint-Gobain team win, impact for our customers, impact for the communities we live in. This is Grow & Impact. This is our plan for the next 5 years. Preparing for this day, I also wanted to answer 3 important questions for Saint-Gobain while opening this new inspiring chapter going forward. First question, do we have a clear, simple, easy-to-read strategy? The answer is yes. We have a strategy focused on light and sustainable construction. We know what we stand for. Second question, in this fast-changing world, answering the challenges I just mentioned, are we going to be able to lead the race to drive the changes? The answer is yes. We have the solutions. We are moving massively towards solutions to our customers backed by the full innovation potential of Saint-Gobain. We have the solution, which means added value margins, pricing power going forward. And third question, do we have a new culture within Saint-Gobain? The answer is yes. I've worked hard together with all the team to change radically the organization of Saint-Gobain in the last 2.5 years. We have a totally new business governance driven by decentralized teams, country CEOs empowered, fully accountable, to drive performance, to drive our P&L and to deliver on our plan, Grow & Impact. All of them, they want to grow and impact in their country. So let's turn now to our plan on how to be leader worldwide on light and sustainable construction. First pillar, leverage attractive positioning on accelerating markets. Second pillar, outperform our markets. We are outperforming our markets. And third, the core of Grow & Impact, create value for our shareholders. I'll start with the first one, the first pillar. We are positioned on markets which are attractive and which are structurally accelerating. Renovation in Europe, light construction in Americas and in Asia and, third, call for technology and the sustainability imperative for our global markets. So let's go in details into this first pillar on how we are going to take the most of those underlying markets, which are accelerating. First, renovation, this is our largest market, notably in Europe. We all know that a lot of money post COVID in terms of economic stimulus by the different government has been put on energy, efficiency of homes, of buildings, private and public. It will be public buildings in our figures next year in France. We see all the stimulus in Spain, in Italy. We see the success of MaPrimeRénov' in France, 400,000 projects in just 10 months, another EUR 2 billion of support next year. This is real. But besides the post COVID, the short-term measures, I would say, we have structural shifts, structural shift in terms of much more demanding building standards. The call from the EU, the Fit for 55 asks for a true acceleration, doubling the renovation rate in Europe, public, private buildings. There are more than 70% homes in Europe that are not going to be net zero carbon by 2050. In the U.K., since April last year, you just cannot rent a house if it's at a minimum of energy efficiency. It is the same in France by 2025 and the next grade by 2028. And we have also, in the U.S., some additional and increased building standards. So this is the second pillar behind the tailwind of renovation. The third is that post lockdowns, we have all experienced that in our personal life, there is a renewed usage for the buildings, starting with work from home. There is a renewed usage, which calls for renovation, particularly on single-family homes in Europe, but also a big wave in the U.S. Also, modular evolution of the buildings. In Paris alone, we have 1 million square meters of office space which is empty, yet a lot of housing demand which is not met. But there is a call for renovation also on this transforming deep usage of the buildings. Second, structural shift. The move of construction towards light construction, light frame construction, substituting traditional heavy building materials type of construction. What do I mean by light frame construction? It's a construction where the number of load bearing elements is drastically reduced versus traditional heavy construction. You can see on the picture. This is a construction where basically the load relies on the frame structure. You take this building, just some pillars of concrete. It could be steel, it could be wood. Wood is growing a lot. But just the structure holds the building. All the rest is open for a lot of Saint-Gobain products. Glass, of course, plasterboard, flexible mineral wood to shape ventilated facade, construction chemicals on the facade, all that is a very supportive trend for the Saint-Gobain products. And there is a rationale behind it. The rationale is that you can save up to 50% of weight of materials when you move from traditional heavy construction to light construction. 50% less natural resources means less CO2, less transport, less cost. You can save also time and productivity up to 20% when you need to build fast, better buildings in emerging markets. And of course, those buildings met -- meet all the characteristics in terms of well-being. This is why this modern light construction is growing not only in developed countries, but also in emerging markets. And we are, Saint-Gobain, second to none in terms of the span of our offer towards light construction. Third, structural shift within our global markets. There is an imperative call for sustainability. It is urgent. It is now, which does require technology, specialty materials. This is a good positive trend in terms of innovation for our global markets within High Performance Solutions. On 3 areas, take sustainable construction. Our leadership with ADFORS on Textile Solutions allows us to expand by 3x the lifetime of a wall or the wood with reinforced textile; Chryso on admixtures, and we are happy to have Thierry Bernard, the CEO of Chryso with us today. We closed the acquisition a bit earlier than planned on October 1. We'll decarbonize by 3, 4, 5x, cement and concrete will be called to accelerate to decarbonize construction. Second, sustainable mobility. We know that the big metro in the emerging market, it's not air quality. It's not just the buildings. It's also the car traffic moving fast towards electrical vehicles. This is what we are doing with our fantastic glazing technologies across the board that we apply to electrical vehicles, where we grew 90% in the last [ 3 ] years and where we have a share of 20% of our sales. This is 3x higher than the average market of electrical vehicles around the world. And last but not least, sustainable industry. In all the initial processes, including within Saint-Gobain, there is a call for sustainable processes, reducing a big way the content of CO2. When we move towards high-performance ceramics, refractories, new generation, we can save up to 25% the energy spend of a furnace. That means the glass could be for packaging, it could be for building glass, out of this furnace has 25% less Scope 2 CO2 content. This is a big ask from all our industrial customers. So here also a structural shift with an acceleration on technology and innovation. When we ask and look outside on what it means, we took the Oxford Economics' view on our underlying markets. How does that translate those structural shifts into our underlying markets? This is basically 2x faster than what we have seen in the last decade. 2x faster. This is not my view. This is the Oxford Economics. I shared with you. There might be bumps down the road here and there in the next years, but there is a structural shift on all those markets, 2x faster. And our goal is, of course, to take the most of the underlying markets into the sales of Saint-Gobain. So what does that mean for the sales of Saint-Gobain and our ambition in terms of sales growth? Given the fact that our underlying markets are accelerating, doubling, plus our confidence and our proven confidence to outperform the market, gain market share, we are increasing our growth ambition. We are increasing our growth ambition for 3% to 5% average organic growth over the period. Absent any major economic slowdown, 3% to 5%. And of course, we shoot for the high side of the range. This is a real step change for Saint-Gobain versus the 1.5% we had for several years in the past. This is our growth ambition, and we are all committed to deliver on this growth ambition. Now I told you that we are going to outperform our markets. So how are we going to do that? Two success factors on our outperformance. First, a massive drive towards solutions. We are not selling anymore SKU by SKU, our products, like we used to do in the past. We are moving towards massive solutions to answer the needs of our customers. And second, leveraging our new business governance, our performance-driven organization. Let me take a step back a minute. When you take the world CO2 emission, 40% come from the building; 2/3 of that is during the lifetime of the building, the usage of the building, energy, air conditioning and so on; 1/3 is the construction activity of the building. We at Saint-Gobain, we have levers on 2/3 of that, we have levers on 2/3 of the buildings' emissions around the world. I'll start with the first one, the building envelope. This is the first order of magnitude on any energy-efficient [ preferred ] building, the envelope, whether it's new or whether it's through renovation. This is what we are doing on the building envelope within Saint-Gobain. We have all the applications. We cover all the applications. Interior, exterior, roof, floor. We have all the applications. We are the #1 worldwide in terms of energy efficiency offer. And on top of that, in Europe, we have a very strong presence on renovation. We have a full presence across the value chain, and we offer and we leverage our distribution network so that we can talk to all the small craftsman. You are not [ too serious actually ] on renovation if you don't talk to the hundred of thousands of craftsmen which are close to any single home in France or in Europe. This is what we are doing at Saint-Gobain. This is more than 50% of group sales, our #1 market. Second, on light construction, this is more related to the construction activity of the building. When you move towards light construction at the expense of heavy traditional construction, we have also the widest range in the industry. Internal partitions, ceilings, facades, cladding systems, light structure, off-site manufacturing, kitting services, and of course, because that's part of it, the manufacturing of the big materials, we are also moving towards zero carbon products. This is a picture of the plant we announced in Norway, the first net zero carbon worldwide plasterboard plant. So this is what we are doing in terms of comprehensive solutions for light construction. So I talk a lot about solutions. What do I mean by a solution? Each time we answer a customer need, we start from the customers. We understand the pain points of the customers, their expectations, how to make their life easier, how to save them time, how to solve a problem that they have, how to differentiate also versus a competitor, which sells just 1 or 2 product lines versus the full set of Saint-Gobain. So it starts from the bottom. I would say, traditional cross-selling, having one head covering all the Saint-Gobain products, one truck, one invoice, one call to the customer service. One catalog by vertical of market, schools, hospitals, this is what we have in Europe, to target the big renovation of public buildings coming next year and the years to come, key accounts. And then when we move up into the value chain, we add some services. It could be unmanned stores in our distribution in the Nordics. If it's more convenient for the customers to shop at 10 p.m., that's fine, we offer this service. We offer also digital solutions so that’s all the craftsmen that we target in renovation can make very fast quotes, precise on their pricing, so that they answer faster to their end customers. When they have 10 months of backlog in France, the largest ever we have seen, it is a service to differentiate versus competitors. It's also intermediation platform. We have it in Czech Republic, in India, in France. To link our customers, [ prominent ] customers with the end customers. It could go up to recycling services. This is something we are supposed to do next year in France, recycle the demolition waste. And then it goes up to systems. Systems is a complete set of products that we put together at Saint-Gobain. It is, for instance, the partition systems. We have Optimax Habito. It is a full set of partition where you save 80% on the steel frame, faster to install, less CO2, less costly and with a granted performance by Saint-Gobain. External insulation on the facade where we put together installation ADFORS Textile Solutions and [ materials ]. And of course, we support all that with our building science knowledge. So you can see all examples, and I could go on and on, this is the job that our country CEOs are doing, are developing more and more to enrich their solutions and answer the customer needs. When we take the full spectrum of the different products of Saint-Gobain, we measure our solutions for our customers along 2 axes which are critical to our customers: sustainability and performance. Over the last year, we have spent quite a lot of time across more than 400 product families of Saint-Gobain to measure precisely what our sales are doing on sustainability and performance. Sustainability means what we are providing to the planet, CO2 reduction, energy savings, natural resource preservation, circularity when you recycle products and also the well-being of the people, health and benefit -- health and safety, sorry, comfort. On the performance side, it's, of course, the economic value, the productivity, the financial benefits and also what we call user experience. When we match the color of roofing and siding in the U.S., this is an aesthetic user experience that we provide to the end customers. So we have measured accurately in details all the offer of Saint-Gobain. We have measured that we have 72% of our total sales which are providing an impact on sustainability. And within our plan, Grow & Impact, we want to continue to drive the group with this high content of sustainability sales and move progressively towards 75%. This is how we are going to impact our customers, impact the planet and grow more. In order to make it a commercial success, what we have done also is not only to measure what it makes within Saint-Gobain sales, it is what it makes in terms of impact for our customers. And of course, they have a different view. If you are a developer, total cost of ownership is very important. If you are a craftsman, you want to save time. It has to be easy and fast to install. You will have some examples later in the day. If I'm a homeowner, I want to drop my energy bill. So we have measured within our solutions in order to truly sell them to our customers what is the impact and how to value and, therefore, price our solutions to the different customers. Our solutions are down to earth. Our solutions are down to worth. The real life of Saint-Gobain, of our sales teams, of Saint-Gobain teams around the world is summarized in this chart. Saint-Gobain is vast, yes, but it is simple. If I take those 9 use cases, what I call use cases, the bread and butter of what we are servicing in terms of market, you have Saint-Gobain activity. It means on renovation, single-family home renovation. In France, whether it's north, south of France, or in Manchester, this is the same type of solution we sell to our customers. Public buildings, school, hospitals, multifamily home renovation in Eastern Europe, where you have those collective buildings with a big need of external insulation on the facade. That also for our new build, new build family -- multifamily in Brazil, single-family home in the U.S., office buildings in India. And then, of course, within our global markets, green mobility. What are all the features and how much do we impact the customers, what we measure. If I take a school, we'll measure how much we save when we renovate the school in terms of CO2, in terms of thermal performance. We'll also measure the acoustic performance of the classroom. And therefore, you can link it as a head of school with the absenteeism of the teachers because the acoustic is linked to that. There are a lot of studies. You will hear this afternoon from the CEOs of the executive committee their main use case and how much we impact in terms of criteria, natural resource savings, productivity savings, CO2 performance, what it means in each use case within their region, their perimeter. So you have understood that the construction market is at a tipping point. In order to tackle the challenges of the world, CO2 emissions, natural resources, fast urbanization, we just cannot build like we have built for the past decades. We want to lead the changes. We want to lead the changes. And we'll do that by tailored solutions, by sophisticated solutions with all the innovation of Saint-Gobain behind it. And on top of that, we have the international presence to scale up those solutions. Carbon neutrality is not France by 2040 and India by 2080. It's all the countries at the same time. We have the ability to scale up our solutions around the world. How we are going to do that is by leveraging to its full potential, our strong performance-driven operating model. So let's go to that. First, at the core of that is innovation. Innovation is the engine for our solutions going forward. I've appointed Anne Hardy -- where is Anne? -- on July 1 as Chief Innovation Officer, a new position for Saint-Gobain. Taking together all the R&D technology platforms of Saint-Gobain plus our marketing resources, our product management resources in a true customer-centric innovation. And I've given to Anne 2 objectives as part of Grow & Impact. First, enrich our solutions on sustainability and performance; and second, accelerate our time to market and our differentiation versus competitors. We'll continue to invest on R&D, on innovation, on service innovation, it's just not products or R&D, across the board through Anne's group going forward. Second pillar on our organization is data. Being a designer of products talking to architects, a manufacturer, a distributor, we have the largest number of touch points across the value chain. Every single day we generate hundreds of thousands of data, data on customers. We have done a bit of that. We have leveraged a bit our data. We have done it in some of our distribution businesses, big data for pricing, upselling, cross-selling, product recommendation, anticipating churn of customers, but there is so much more we can do. There is so much more in terms of power of data. So in order to drive the group forward and to make a true impact from our data and to accelerate our growth with our data, I have hired Ursula Soritsch, she is here from outside. She joined the executive committee, joined 6 months ago Saint-Gobain to lead us through this transformation journey on data and truly leverage the millions of data and customer touch points we have across the board. Third, ESG, which is the core of our operating model. Our business model drives positive ESG outcomes. I've asked Claire Pedini to take the lead on ESG across all the group. And Claire will highlight to you later this afternoon on all the parameters, social governance, environment, all our actions and roadmaps. In a nutshell, what means [ ESG ] for us is first to minimize our footprint. We have a commitment to reach carbon neutrality by 2050, but more importantly, maximize our impact in terms of CO2 avoidance for our customers. What we sell in 1 year will avoid 40x, 40x the CO2 emissions that we have used during this year for the production as long as we are not yet carbon zero. So 40x CO2 avoided emissions for our customers, 40x on Scope 1, 2, 3. So this is how we view and live with ESG, minimize our footprint on the way to carbon neutrality and maximize our impact for the planet and for our customers. Here, again, you understand that the more we impact, the more we'll grow. If we provide faster, bigger solutions for our customers to decarbonize, they will ask more from our solutions and we'll grow more. In order to deliver on this sustainability roadmap, operational excellence is at the core of Saint-Gobain. All the country CEOs have their sustainability roadmap between now and 2030, this is an important milestone for us. You will hear from Benoit d'Iribarne, our VP in charge of technology and all industry performance for the group, how he drives those sustainability roadmaps. And on top of that, how we continue to open initiatives, opportunities on world-class manufacturing for productivity, for savings and also how we are going to optimize our maintenance CapEx going forward in order to free up room for growth. So operational excellence is also at the core of Grow & Impact. Now on the organization itself. I've put a lot of energy in the last 3 years to prepare this organization. We have put collectively together a lot of energy and effort to prepare the foundation PR of Grow & Impact. This is the new organization of Saint-Gobain. We have prepared the organization for Grow & Impact. Today, we are organized by countries. 90% of our country CEOs are native from their countries. Some years ago, when I wanted to know what was going on in plasterboard in China, I was talking to a French manager in Paris, Head of Worldwide Plasterboard. Today, what I'm doing, and I did that no later than last week, I take Santhanam, our Head of Asia Pacific based in Chennai; Sreedhar, our CFO; and I called Paul Sheng directly, the CEO of China. And if I want to hear from Joanna Czynsz about how the Polish market is doing, I call directly Joanna, together with Patrick, Head of Northern Europe. Marco Corrales in Mexico, Mexican in Mexico. Mariano Bo, Argentina in Argentina. This is the reality of Saint-Gobain today. We are a truly multinational organization. All the country CEO, they have a full ownership, they have full accountability and they have the decision power to take fast decisions. And of course, they are the best persons, the best managers to hire the right teams. It's better to be U.S. citizen to hire in the U.S. or German, like Raimund Heinl, in Germany. So no surprise if we have 82% of engagement from the employees, which is top quartile in terms of internal benchmark. And we have 60,000 employee/shareholders of Saint-Gobain. This is a powerful business governance, again, a strong pillar of confidence going forward. And it brings 2 very essential points for me. First is speed and quality of execution, lean organization, fast decisions; one boss, one topic, one topic, one boss. We trust, we empower our managers. And second, customer centricity. We have increased our market share. We have 80% of countries with joint specification team. We have 90% of our salespeople cross selling. And we benchmark our performance every quarter. We benchmark our performance. We benchmark our performance with the light side building materials, some of them being highly valued in terms of multiple. We have the ambition to outperform and to continue to outperform like we have done in the last 2 years. I have the ambition. I have the goal to make the Saint-Gobain team win. And we have the ambition not only to beat those peers in terms of benchmark, but also progressively, also to increase our valuation, to grow towards higher multiples that I think we deserve. Of course, to support all this, we align our incentives with the ownership of the countries. 100% bonus aligned to their own country. It's used to be 40%, the rest was in the kind of solidarity in the metrics, complex organization. It's 100%. I'm Mike Chaldecott, CEO of the U.K., 100% of my bonus is linked to my U.K. performance and decisions and 2x bigger in terms of financial weight. And second, long-term incentives for the top 2,300 managers with 80% on value creation, 60% return on capital employed, 20% share performance above the CAC 40, if we are below, then it's 0 and 20% of quantitative ESG metrics. So you can see the power of this new organization in terms of speed of decision, ownership and also in terms of alignment and accountability. So value creation is at the core of Grow & Impact. It is at the core of our plan. We are committed to drive value creation for our shareholders. We have laid down strong fundamentals over the last 2.5 years with Transform & Grow, speed of execution and consistency, focus on growth and cash; Sreedhar did a fantastic job to increase the cash performance of the group; alignment on management accountability and compensation; and third, decisive strategic pruning of the portfolio to make the group stronger and to create value. Going forward, we have clear investment priorities and we'll be very disciplined on that. Leverage our very strong footprint in Europe on renovation, enriching our solutions. Expand light construction in North America, expand our range, expand within residential, nonresidential markets. Expand our light construction presence also in emerging markets, whether it's Latin America or Asia. You will hear from Javier this afternoon and Santhanam beyond some already very strong existing footprint. And fourth, leverage also our solutions technology, competitive advantage on sustainability for our global markets. If I go one step beyond the 2025 time line, we have the goal also to balance our geographic presence with more emerging markets and more North America. In terms of our own organization, we'll keep more or less an 80-20 organization between the local countries, local markets, where it makes sense to be very local to drive local solutions day in/day out and what is required in terms of global markets for global innovation and global customers. This is the good setup for Saint-Gobain going forward. As part of Grow & Impact, we'll, of course, use M&A to drive the performance of the group. We'll continue to make regular reviews of our perimeter without waiting too long to take decisions. We have been very decisive to criteria, performance and strategic alignment. We'll make value-creative acquisitions on 2 criteria: consolidation of leadership positions by geography. This is what we have done very successfully with Continental Building Products. I wish Jay Bachmann, the CEO of Continental, could be there. But will -- Mark will connect with him on the video. It's a fantastic acquisition. We created value 18 months after the close of the acquisition in February 2020 despite the COVID [ euro ] value. Second criteria, enrich our offer and enrich our presence along the value chain. This is exactly in line with the Chryso acquisition that we made, totally aligned with the strategy of sustainability and performance, enrich our offer towards construction chemicals. And of course, we'll use CapEx, growth CapEx in particular, to expand the group to grow and impact with notably 2/3 more or less of our growth CapEx outside of Western Europe. So we are committed to drive attractive value creation. We are committed to drive attractive value creation for our shareholders. ESG will remain at the core of our business model. We will deliver best-in-class financials. Organic growth, we shoot for the high side of the range. We target a double-digit margin. We'll continue to make solid progress on cash generation and free cash flow. We'll be extremely disciplined on capital allocation and returns and M&A acquisitions. And we are committed to drive attractive shareholder returns, with the right combination of attractive dividend policy and also EUR 2 billion of share buybacks over the period '21-'25. So this is Grow & Impact. I've put a lot of thoughts to prepare that over the last 3 years. It's also reflecting my strong conviction about how the construction market is changing, changing fast, the challenges ahead of us and my strong convictions about the strengths and the potential for Saint-Gobain to deliver success. So a focused strategy on light and sustainable construction, making the most of accelerating underlying markets, outperformance and winning, the fighting spirit mindset, outperformance on our markets, thanks to solutions, pushed to its limits and to its maximum potential, our strong operating model and a strong value creation for our shareholders. You can count on very skilled, very committed management committee. I'm extremely happy, extremely honored to lead this team, and you can see how much Saint-Gobain has changed. Almost 40% women, 8 nationalities. This is the team which will drive the success of Grow & Impact, which will inspire and mobilize all the teams of Saint-Gobain. And I'm extremely confident, extremely excited also about all the journey. Thank you very much. And now here's the plan. If I could go to the next slide, which is the agenda for the day. The agenda of the day, we will start with a review of the regions and high-performance solutions. So you will hear from each region CEO what -- so you see on the slide, the solutions in action. Let's start right away with the Americas, with Mark Rayfield for North America and Javier Gimeno for Latin America. Mark, Javier, the floor is yours.

Thank you, Benoit. I'm very happy to be here with Javier to talk about the Americas. So we'll start with the first slide at a high level overview of the Americas. I'll let you read the numbers. Significant scale and impressive margin. The 2 points I would point out on this slide is, first, that we're leaders in the main markets we participate in. We're #1 in Canada. We're #1 in the U.S., in Brazil and Argentina. And second, along with what Benoit shared, the vast majority of our CEOs, myself included, are native to the region. If I take North America, again, significant size and solid operating margin. And again, I'd highlight 2 points for North America. We have 61 plants covering across North America from Calgary in Canada, Jacksonville in Florida, Norwood, Massachusetts, Wilmington in California. It means we have plants close to our customers, producing products they need close to their locations, supplying them faster at a lower cost and a lower environmental impact. It also means within North America, we are the leader in light construction. We are the only manufacturer in North America with all of the products needed for both commercial and residential light construction, ceilings, grid, insulation, gypsum, roofing, siding, everything under one umbrella. In over 115 years of producing quality products, we remain the #1 brand for both homeowners and contractors for over a decade in our exterior products solutions. When we look at North America, it's a growth market for Saint-Gobain. I bring 3 reasons up. First off, it's a very solid market. You've seen that in 2021. You've heard about the impact of the pandemic on household creation, on renovation, on larger homes. We've seen that in North America. The first time in 10 years, homes are being built larger than before. Even with this expansion and the expansion we've seen in 2021, we still have over 3.8 million homes of deficit within North America from a decade of underbuilding. So it's structurally a very strong market. And the majority of the market is in light construction materials, where we are #1 in the region. So 45% of the purchases are light construction materials where we lead. And our products solve our customers' problems. What you need is light, sustainable, easy-to-install products for construction and renovation, and we provide that, whether it be lightweight gypsum board, EZ Stab grid for commercial installations or whether it’d be our integrated blowing wool machines, tubing and product that allows better coverage at a lower cost. Or what you see here, stone facade, mechanically fastened to a house with an integrated rain screen. So we provide solutions that solve our contractors' problems, both sustainability and performance-wise. So how do we win? Two main reasons and then a use case. First, we win by taking the foundation of Transform & Grow and what it changed within the region and what it provided for us in North America: operational excellence, agility, nimbleness. We combine that with expanding in markets that we're already strong. You see the Continental logo there. We'll talk a bit about that expansion, which was a major acquisition for the region going forward. And then we show it all in the use case, which is a single-family home in North America that's constructed a typical house and also we'll share how it works in renovation. So to begin with, the integration and acquisition of Continental was probably the most transformational moment within the region for us. And it was a very successful integration. Value creation within 2 years. Synergies achieved above and faster than the business plan and 7x 2021 [ EBITDA ] was the cost of the acquisition, a fantastic acquisition. And this was done by the team within the first 3 months during COVID, aligning the sales and marketing team to a single face to the customer. So our customers could feel confident. They could grow with us right out of the bat. Then within the first 6 months, aligning the best of products of both businesses and the best of formulations in both businesses, placing them in all of our plants across the region. So faster service of the best products close to our customer, optimizing the transportation synergies going forward. All of it driven by Jay Bachmann and his team that came from Continental merging with the Saint-Gobain team. One of the greatest assets that came with Continental was the asset of human capital, as with Chryso with Thierry. The asset of human capital that aligns culturally with our business drove this integration and gave us this great success as well as a footprint in retail where they had a strong relationship. The second transformational moment or factor was focusing on breaking down silos and building collaboration, which allowed us to hold SG&A flat for a number of years by working across our businesses in a single team. And by doing this, we ended up with R&D, purchasing, manufacturing, working across the whole collaborative team to ensure that we were outperforming cost of factors in both inflationary and deflationary environments, supported by WCM, supported by digital. In my favorite graph I have here, you see SG&A flat, sales slightly going up and massive leverage on your operating margin. Now I want to hear a little bit from Jay on customer centricity.

So as a small child learning American football, I remember my father gave me 2 simple rules of advice: always keep your legs moving and don't get tackled. Well, I can tell you, here in the United States, we have been empowered with the freedom to run, and we don't intend on getting tackled. That empowerment to run has meant a quick and successful integration of Continental Building Products. That empowerment to run means that we will capture growth in lightweight construction for residential housing where a shortage exists of over 4 million housing unit. Our presence in retail means that we are going to grow with repair and renovation as home equity values rise and as people take care of a housing stock that is over 40 years old. Working closely with our customers, deepening those relationships, running with them together to partner for growth is what will make us all successful.

At Foundation, we've built our business based on the relationships with our customers who trust us to deliver best-in-class service with high-quality products. The partnership and trust extends to Jay and the Saint-Gobain team. They have taken a unique approach of seeking out direct input from us on continuous improvement and how they can make it easier for us to serve the market. By focusing on our needs, I know that Foundation and Saint-Gobain will both succeed in growing together as the construction markets expand.

So like Ruben, all our customers demand the breadth of service and the breadth of products to be successful with our contractors, our builders, our architects, as they all seek sustainable solutions for the long term. Our leadership position in our markets means that we will generate success for them. I'm excited about our opportunities in the United States, our legs are going to keep on moving and we are not going to get tackled.

So building on Jay's film there, I'll talk a couple of slides about customer centricity and what it means to us within the region. So first, it means one face to the customer. We have over 3,000 contacts per week through our dedicated customer experience team with our customers. We realize a single instance of sales force across all of our businesses and used at every level of the organization so we can track what the customers' needs are and how they're developing. We can follow them and make sure our products and services are following what the customer needs going forward. We also strongly believe our organization must mimic the customers we sell and the communities we work in. So we have an extremely diverse team at all levels in our business that drive innovation and retention. We take this into our commercial markets to make a commercial team that can talk to the owner operator, the architect, the contractor all the way through the system about electrochromic glass, specialty ceilings, gypsum, everything the product needs. And all -- we'll be able to handhold that project from start to finish. We do the same in residential, where we have one sales force talking to the homeowner, the contractor, the distributor and our exterior products, making sure that we get the right products in the right hands. And of course, we go one step beyond when we get to retail, not just the certainty level, but the Saint-Gobain level is our face to the retail market, ensuring we leverage our scale. Customer intimacy also means understanding the customer journey in a very intentional way and understanding where their pain points are. So we do hundreds of interviews for every segment we're trying to enter to know what that customer is truly looking for and to make sure we know how we can solve that. And as they grow and evolve, we grow and evolve with them, including digital tools, such as this picture of digital rendering, allowing our customers to see their project beforehand with multiple different products on it to see which fits best. And that allows us to get the massive share of wallet per project. So when we look at a residential remodeling or residential rebuild, we can have over 20 products in that project, and we can get the biggest share of wallet of any other manufacturer in North America. And we understand the sustainable solutions, like solar, have to be both effective, like you see in the bottom right-hand corner, but also attractive, where they really would prefer a single view with solar cells buried within the roof and not seen. And this brings us to our use case. Our use case is a typical single-family home in the U.S. This happens to be in Northern Ohio, where we have a large presence, is a net zero ready home. Meaning if you put solar panels on it, it takes no electricity off the grid. It's built with 24 of our products. It saves $100,000 in electrical bills over 30 years. It is weather-resistant against ever-increasing weather events and gives 95% thermal comfort to its occupants and 99.5% of the products are locally sourced. And in this, whether new build or renovation, it shows how all the products can come together across the region. And with that, I'll leave it to Javier.

Thank you very much, Mark. So I'm very happy to be here with you and to introduce you to the Latin American region of Saint-Gobain. Last 12 months, Saint-Gobain generated in Latin America, a revenue of EUR 1.8 billion. We were able, in this difficult time of pandemic, to deliver a quite good operating profit, close to 17%. Today, Saint-Gobain in Latin America is employing some 13,000 people, of which around 1/3 are women. We are operating 55 plants in 9 different countries. If you look at Saint-Gobain in Latin America, you will see a very rich commercial, logistics and industrial footprint. This footprint is basically the expression of our leadership, especially in Brazil, which for years has been the center of gravity of Saint-Gobain in Latin America, but also in other countries, like Mexico or Argentina. Our strong leadership is also supported by another 3 pillars. First, a rich portfolio of local and international brands, very well known all across the region. Second, our valuable and long-lasting partnership with some major sectors in the region. And third, very importantly, our capacity of innovation. One of those main tools is a research and development center in São Paulo. As you know, in the last year, Saint-Gobain has undergone a quite remarkable transformation. This has also been the case of Saint-Gobain in Latin America, which has very quickly evolved into a lighter, more agile organization with a faster decision-making process in which the local point of view has more important weight. The breaking of the silos that in the past were separating our different business units and activities has allowed us to approach the market, to approach our customers in a much more comprehensive manner. In this approach, we are -- we try to be a company that is selling solutions. We are focusing on the most valuable verticals, malls, hospitals, schools, and we are doing so by dedicating specialized sales teams. In this approach, we are really supported by the increasing desire of the Latin American consumers to get access to the best solution in terms of environment, comfort and well-being. In this research of performance and quality, those new Latin American consumers are more and more attracted by prestigious brands, brands like Saint-Gobain, which enjoy a high level of credibility. For sure, this process is supported by the fast development of the middle classes in Latin America. They are larger and larger, better and better educated and more and more environmentally aware. A very capital point here is those new consumers are really willing to pay for the solutions they are looking for. And this willingness is the main explanation of the price premium that many of our brands are enjoying in Latin America. And this willingness explains also why in the last 3 years we have been able to more than compensate the inflation that has hit the construction industry in Latin America. So this new strategic approach, offering our customers with a comprehensive set of solutions, is the core message of the video I would like to share with you today. Please.

Here in Brazil, in 2019, we decided to change our whole organization and adopt new ways of working to increase synergies, productivity and customer intimacy. Now all of our construction business in the country are under the same umbrella. That meant changing our approach from brands or products to customer segments and solutions. Today, in our Technical Sales segment, every single one of our 3,000 customers interacts with one and only on Saint-Gobain contact person.

It's much easier now with the new Saint-Gobain organization. The specification flow is easier, negotiations are faster and problems are solved more rapidly. Most importantly, we now have a solution to a long request made from our side: customized integrated solutions, follow-up at site, logistic optimization and site monitoring. Honestly, it's a unique offer. Saint-Gobain is the only company to provide these services.

Like Fábio, we can tell many of our customers are really happy with this new organization. We gained several thousand new customers, increased sales from synergies by 4% and grew our market share. So it is very promising indeed, and it seems like we have a great journey ahead of us in Brazil.

We go now to the use case of Latin America. We are talking here about a new multifamily apartment building. And here, we are dealing with 2 basic problems. The first one is the urgent need for urban renovation, for urban regeneration in Latin America, for the region to reach much better standards. As you know, many of our countries have reached high level of urbanization in the last 3 years in the sense that the fundamental part of the population are already living [ status ]. But this process of urbanization has been often [ caustic ] and we felt attending to the basic requirements in terms of well-being, comfort and sustainability. Now there is a massive movement towards this urban regeneration. And this is strongly supported by the public authorities and more importantly, by the consumers I described before. For sure, the ambition of Saint-Gobain is to play a fundamental role on this. The second problem here is the absolute need of the Latin America construction industry to make substantial gains in terms of productivity. It's not only that labor is more and more expensive and difficult to find, it's also that the public authorities, the companies and individuals are looking for solutions, constructions which are lighter, faster to implement and less intense in terms of resources utilization. So in very simple terms, the problem we are trying to solve here is how to build faster this building while minimizing the environmental impact and maximizing the comfort for the users. As you can see with the Saint-Gobain solutions, we are able to get a modern, larger, more comfortable living space in which we minimize the environmental impact, and we increased in a significant manner, the profitability for the investor and the satisfaction for the user. So this richer value proposition has allowed us to get very significant gains of market share in the region in the last 3 years. More than 2.5 points of market share were got all across the region, which basically means that we have been able to systematically to overperform in terms of growth, both the market and our competition. To digest this growth, up to 50 new plants were launched in Latin America. On the other hand, this more intensive orientation towards innovation is now visible in 2 things. First, in the significant enrichment of our product portfolio, very often compose some solutions that have been developed locally to address the specific needs of a local market. And second, in the increasing ways that the sales of those new products and solutions have in our total revenues. So under those conditions, you understand that I am extremely convinced about the solidity of the Saint-Gobain leadership, as I am convinced that we fulfill most of the conditions for us in the coming years to consolidate and reinforce this leadership, to accelerate our growth and to increase our profitability. In this move, we have to follow basically 2 axes. The first one is to expand our solutions in those countries where we are enjoying a position of leader or a position of challenger. And the second way is by going into new geographies to go to some countries where we are not still present. Consistent with that, we have set up very ambitious targets for Americas. We are aiming at an organic growth between 4% and 6% and a very robust level of profitability between 13% and 15%. This is the job of Mark and me for the new year, and we are very excited and committed about that. Thank you very much.

Thank you.

Thank you. Thank you very much, Javier and Mark. I wish we would have time to travel to Brazil, to travel to the U.S., but let's take quickly another travel. We'll go with Santhanam in India. Santhanam could not travel to Europe for obvious health reasons. So he's out of Chennai. Santhanam, I think you are live line. And Santhanam has been leading the success of Saint-Gobain in India over the years. And I appointed Santhanam, Head of all Asia Pacific, to replicate across all the big potential of Asia what he has done so well in India. Santhanam, your turn. Thank you.

Thank you, Benoit. It's really a pleasure to explain the Saint-Gobain in Asia to all of you. Next. Asia, as you all know, has some of the most and the fastest-growing economies. Saint-Gobain has a unique and a very strong market position in many countries in Asia, led by really outstanding national leaders in each of these countries; a rapidly growing sales profile of about EUR 1.7 billion with a solid operating margin; and the sales have grown nearly 2.5x in the last decade; 10,000-plus highly motivated, engaged and empowered employees; a fantastic brand equity for Saint-Gobain; and excellent solutions for hot and humid climates, which are very relevant in Asia. All of this has led us to a very strong position in many of the countries. Our well-positioned manufacturing footprint of 72 plants in 11 countries have led us to become the #2 in light construction. The 3 mega trends in Asia: urbanization, digitalization and drive towards light construction. The middle class consumers in Asia are thirsty and aspirational, and that really gives us nonlinear growth opportunities. Asia is really home to the largest cohort of digital meetings, and there is a very systematic drive towards lean construction that uses less resources, less energy, less labor, less skills and faster. And this trend is coming in now. Next. And driving the strength towards light construction, we have fantastic opportunities. Firstly, in the multifamily residential complex, the one that you see the Lodha World One in Mumbai, single-family homes, offices and new home build, all of them are really driving the need for light construction. Our architects, builders, consultants and consumers are increasingly asking us for enduring support. Digital is dramatically changing. Our solutions in gypsum, glass, construction chemicals and the building sciences together with the value chain optimization is making a huge difference. The next one. You will see the video... [Presentation]

That's a use case in India where over 16 products and solutions have been given by our teams, be it in the facades or in the partitions or in the ceilings of our acoustic comfort or thermal comfort, improvement in the air quality. We helped build this building faster with lower resources, lower weight, lesser energy consumption and superior comfort. We also provided on-site monitoring and skill and training. The next one, please. Home is where our heart is. Making the world a better home is our focus. Expanding our reach with home solutions is a very natural progression for us. The pandemic has really opened up quite a lot of opportunities. You heard that from Mark, you heard that from Javier. Homes are becoming larger and people are asking for superior interiors. All of this is leading to opportunities for solutions. In India, we have created the homes unit which provides solutions for windows, ceilings and showers, end-to-end. We have tied up with a very large digital integrator and have a fantastic franchisee model to leverage this mega B2B2C opportunity. The next one.

Here in China, we have digitalized our operations to improve our customer experience and fuel our growth. We developed our digital sales platform knowing that our customers need solutions to increase their productivity and profitability. Behind the platform, we ensure that our customers receive streamlined digital services. These allow us to optimize stock, manage production, reduce costs and minimize CO2 emissions from transportation. Thanks to this seamless experience, 100% of our sales are now placed online via our e-shop. It's a real success that we are very proud of.

We now do all our purchases online via this platform. It's very convenient, fluid and reliable. I have access to all my information and can follow up my orders very easily. Saint-Gobain has done a great job. They are the only ones to provide such a platform. They are really helping my business.

Digitalization has been a great lever to accelerate our business. Our revenues have doubled in the last 4 years, and our profits have tripled. And last but not least, all the data we gather now are helping us anticipate our customers' needs and deliver even greater solutions.

Not only in China, we are digitalizing the customer journey in India and connecting that to the physical distributors, retailers and contractors and fabricators in Tier 2, Tier 3, Tier 4 towns. There is a fantastic, unified CRM that's really been developed that helps our teams to collaborate -- multiple teams to collaborate on a given project and do cross-selling. Data and analytics group has been formed. This is really strongly supported by the 1,400-plus full-time [ equivalents ] that we have in the IT and the digital serving India and the global markets. All this is also helped heavily by the fantastic start-up system that we have in India and in China. Next one. We get inspired by the work that Saint-Gobain has done in the last 2 decades since 2001. We have grown at the rate of about 17% year-on-year, nearly doubling our sales every 4 years and more than that in profits. We have a fantastic brand record over 68%, great market position over 50% in glass and gypsum. And we are investing heavily. We believe that through a combination of large organic investments and sensible M&As, we'll be able to triple our turnover in India in 12 years. This will be an inspiration for ASEAN and China. Our real goal would be to seize the growth opportunities in Southeast Asia and Vietnam, initially by expanding on our gypsum and the construction products. And later on, liberating the fantastic manufacturing footprint that we have in India. We'd like to do that in China by both organic investments and in joint ventures. By the middle of this decade, we hope to be able to expand significantly and offer a full range of solutions for light construction. In summary, we have a fantastic brand; great talented team, both digital, innovation, commercial, manufacturing talent; an unmatched range of solutions; strong B2B2C shift; and digitally native talented team; and an ability to roll out fast and replicate what we have done in China, India and other countries. All of this is going to mean that we'll grow at a rate between 8% and 10% organically, which would be tripling our turnover in 12 years. And at the same time have a very solid impact, a favorable impact on the environment, a favorable impact on the customers, a favorable impact on the -- on our shareholders. So we hope to maintain our high profitability at this level of 13% to 15%. Thank you.

Thank you very much, Santhanam, for this very inspiring journey through Asia. And now let's turn to Europe with Patrick Dupin heading Northern Europe; and Thierry Fournier for South Europe. You will see it's a strong duo, a tandem to take care of all Europe. Patrick and Thierry, the floor is yours.

Thank you very much, Benoit, for your introductions. Good afternoon to all of you. Europe. Europe is our largest regions in Saint-Gobain. We are large. We are solid. We are locally driven in order to take into account all the local construction particularities. First, we are large with EUR 28 million (sic) [ EUR 28 billion ] sales, above 8% operating profit, 90,000 employees and huge numbers of customers with all their related data. Second, we have a strong local organization managed by countries. The vast majority of our managers are local nationals, very seasoned, very motivated. Third, we are strong. Our brands are strong. Our footprint is dense. Our capability to innovate is incredible. And with that, we feel capable even to outperform the market evolution that is taking place in Europe because the European market is a good market. It's good because of the huge potential in the renovation. It's good because of the demography. And it's good because of the recent stimulus plans which has been launched by the states in order to accompany the climate transition. Thierry and myself would like to lead you through our market drivers, to our strategy, to show you how do we want to grow, how do we want to impact.

First of all, looking backwards, Transform & Grow gave us opportunity to review our business profile and select the businesses on which we will focus on in the years to come in line with Saint-Gobain strategy. We have divested 30 businesses, representing EUR 4.5 billion sales, impacting our bottom line by 130 basis points. Transform & Grow was also an opportunity to review our organization, to make it leaner, more streamlined, closer to the market. And we have been able to reduce our fixed cost base by EUR 150 million per year, impacting our bottom line by 60 base points. This has not been done at the expense of our service quality. At the contrary, our service quality has improved, which has led us to market share gains everywhere in almost all businesses. Therefore, our organization is ready, prepared, aligned to take the full benefit of this booming trend, which is renovation in Europe. Public policies and post-COVID recovery plans are putting a lot of emphasis on renovation so as to improve the energy efficiency of existing park and adapt it to the new ways of living and working. A lot of money is being put on the table, completing unprecedented savings on European personal accounts. Renovation growth rate is, therefore, expected to double by 2030. We know this market. We know this market because already today, 2/3 of our sales are made in this segment.

Beyond renovation, we see new customers' expectation arising in the different countries where we already play a role, where we have already invested. What are those changes, those moves? The first is the move to circularity, less waste, less emission, less CO2, more recycling. With Saint-Gobain and its set of solution and process, Saint-Gobain is the leader in the recycling. Then we see the emergence of the -- of new bio-sourced product which have -- which benefit from a very strong perceptions from the end customers like wood, fiber wood insulation in Switzerland or in Germany or in the Nordics or dry clay in France. Here as well, we have a strong role to play. Then the off-site manufacturing. With off-site manufacturing, we can optimize the construction processes while keeping, even improving, the level of quality of them. We can solve the problem of the labor scarcity, we can massify renovation. And with the firepower of our distribution network, it plays a role as an [ amplificator ]. Here as well, we are extremely well positioned. I would like to share with you the testimony of our German teams after the acquisition 1 year ago of a company, Brüggemann, that we acquired in the field of the prefabrication. Let's listen to the German team.

In 2021, Saint-Gobain has acquired a majority stake in Brüggemann. This German family business designs, manufactures and delivers timber-based offsite solutions that provide time and cost savings, thanks to a proprietary digital suite. A market that has been growing at about 10% per year.

[Foreign Language]

We needed an intermediate building while we were renovating the old primary school building. And now we have a wonderful wooden module building which was built in record times with Brüggemann and shows a high quality. It will stay here on the green park for the next 3 years, and then we will move it to the final destination.

Joining forces with a prefab specialist enriches our expertise in this growing market segment. We gain new customers, thanks to our deep construction market expertise and accelerate the development of our own offsite solutions. More globally speaking, offsite construction is exemplary as it addresses major trends like digitalization, sustainability and high energy efficiency as well as speed of construction.

In order to capture this market potential, we want to use our strengths, our very robust strengths in Europe. And we want to use our very robust strengths in Europe and we want to go for more, much more impact on growth aspect. The core of our strategy is to organize our offer around solution, consistent solutions addressed -- addressing homogeneous construction domains. This strategy has 3 contents. The first content is the offer itself, where we orientate this offer towards those construction domains, like new build, renovation, schools and hospitals, offices. The second pillar is a reloaded go-to-market where we improve our sales power where we improve our specification. Third, the customer proximity. We want to engage to a higher level of intimacy with our customers. We want to be end-to-end. We want to understand their pain point, to solve them, to use data, to have customer intimacy and then capturing the new trends. We would like to share with you 2 illustration of the power of selling solutions in our traditional business in France and in Germany.

This first example is representative of residential renovation market in France. This is a house in northwestern part of France. The owners wanted to reduce their energy bill, increase the living space and improve the overall comfort in the living space. They have 2 options. First one, to renovate step by step, first year, taking care of the envelope; second year, taking care of the windows; and the third years, maybe taking care of the ventilation and heating system. And the second option, going through a full global renovation project, selecting the right solution, combining them in an optimal way, dealing with the interface in the most efficient way. Of course, they have selected the second way, and we had the solution for them. We have addressed their needs of energy efficiency, working on the envelope with them. We have addressed their need for more space and more performance within the house with all our solutions for entire fittings. The impact at the end of the day was maximized, as you can see in terms of energy reduction, CO2 emissions in the future life of the building, but it has also been a good case in terms of quality improvement to the job site, and the final comfort is fantastic. This has been made possible thanks to competent craftsmen who can rely for their training, for their materials on Saint-Gobain distribution unparalleled network in France. Each job site in France is at less than 9 kilometers from a point of sale of Saint-Gobain distribution. Again, this example is representative of renovation market in France, as I said. It shows that when we assemble cleverly solutions and products and install them in the most efficient way, we can address 2 main challenges of renovation program in Europe, which is decarbonization and energy efficiency improvement.

After the do home renovation in France, let's move to another construction domain, which is very important for us. The construction of multifamily houses here in Germany, where the trend is to go more and more for lightweight construction. Here again, we have a set of product and service that we orientate towards this specific market segment. And we adapt our value proposition. We expand the range of solutions. We make a suite of solution for them to be much more powerful. With that, we become the one-stop shop for those customers. And with that, we can maximize our sales. We can grow. But only -- not only we can grow, we can also, with the completeness of our offer, answer better their [ preoccupation ]. Do they want to speed up the construction time? We offer efficiency in the construction mode. Do they want to sell sustainability to their own customers? We sell resource preservation, reversibility with a high degree the recycled materials. Do they want to sell performance? Do they want to sell comfort? We bring those attributes within our offer. You see, it's a change. After being described to you with those use cases, our strategy, we would like to lead you on the way how we are going to implement it in the offer, in the go-to-market and in the customer proximity. First ingredient, the range itself. This range must be permanently enriched, permanently differentiated, permanently developed. How do we do that? We do that with traditional mix enrichments, the day-to-day work, bolt-on innovation, incremental differentiation. This is something that we do every day everywhere. Then we inject, with our high specialty solutions, this offer into the global offer of solutions in order to save more complex problems, like acoustic or fire resistance or airflow management. We combine our product into systems to create a higher level of integrity, so more value. And finally, we develop new business models. New business models to capture more value to offer to our customers an increased value proposition, either with service, with digital, with circularity. Generally, it starts in a country like here in Denmark, where we have developed a meter solution for the municipality. And afterwards, we scale up. The development of this portfolio, this solution portfolio, goes along 2 main attributes, 2 main axes as described by Benoit. The axis of the sustainability and the axis of the performance. And we are proud to say that already 70% of our sales in Europe are aligned with the sustainability criteria, but we want to go beyond. We want to go further. Sustainability for the same performance like with light plasterboards or with [ 2D ] modules in order to be more efficient in the lightweight constructions, easy to install, easy to displace. Sustainability with resource preservation, product coming from the recycling [ buckles ] that we have organized. Performance with efficiency on job sites for the contractors with modules or for the applicators with preassembly product. After the [ offer ] part, let's go to the go to market.

Our teams today are prepared, aligned and engaged to deliver, promote, sell our solutions on the market. Salespeople are not anymore mono product-driven. They do offer a large range of products and services to all kinds of customers adapted to their need. They do work collectively on specification in order to offer one-stop shop to builders, architects and design bureaus, facilitating their life. They do offer key account management facilities when needed. Customer satisfaction is at the top list of their priority. They do strive for continuous improvement towards excellence. Omnichannel approach is definitely a key lever for us in order to deliver our ambition for growth. Let me propose to you that we listen to Patrice Richard, Head of Distribution in France, elaborate a little bit about it.

In France, we have a sales outlet every 9 kilometers, and we work with 70% of French craftsmen. We help them for energy efficient renovation project. Imagine a family who wants to extend their house with good insulation. This family will post their project on Saint-Gobain's intermediation platform, La Maison Saint-Gobain, and will find the answers to all their questions about cost, financial aid, qualified professional. On that same platform, by using our digital suite, our pro customer will be able to answer to the family and save a lot of time. Quotes like this usually takes up to 4 hours, but with our digital tools, 1 hour is enough.

[Interpreted] Totally helped us. With just a few clicks and filters, we can find a prospect within in the vicinity of our business. La Maison Saint-Gobain customers represent between 60% and 70% of our order book. It's a real pleasure working on this site.

We help both the family and the pro customer to benefit from public aid. We've trained 10,000 of our pro customers to become officially qualified for energy-efficient renovations. All our teams constantly enrich our actions to deliver the best customer journey possible. For example, to keep this up despite COVID, we digitalized our training program. It's now available on mobile, and we are very happy of our 80% success rate.

Customer centricity is key in order to understand better and anticipate better the market needs, so as to innovate better and operate better our industrial and distribution network. Thanks to our capillarity and our connections with the market, we are pushing for more sustainable and lighter construction in the whole segment. We are working with all the stakeholders in order to improve the attractiveness of the construction sector, so as to have the right level of labor force and address the need for renovation across Europe. The trends are clearly here. We have fantastic teams. We have fantastic innovation potential, an unparalleled offer. We can rely on an unprecedent industrial and distribution footprint. So we are committed to overperform the market by 3% to 4% organic growth per year. We are committed to deliver high level of profitability in the range of 7% to 9%. And above all, we are committed to grow and impact all our stakeholders. Thank you.

Thank you.

Thank you, Patrick. Thank you, Thierry. So last round in terms of the operational priorities of Saint-Gobain with High Performance Solutions. David Molho, the CEO of High Performance Solutions. And after the presentation from David, we'll make a short break and come back to [ you all ]. David, the floor is yours for the world of High Performance Solutions.

Thank you very much, Benoit. Good afternoon. High Performance Solutions is an organization of global businesses addressing growing markets. Our business model is based on our unique material and technology expertise, the power of our global innovation and our worldwide footprint with 240 plants all around the world. This is what allows us to codevelop high-performing solutions with our customers in order to address their needs for more sustainable and better performing solutions. In High Performance Solutions, we posted sales over the last 12 months above EUR 7 billion with 12.3% operating margin, 11.1% in the second half of 2020 and 13.5% in H1 2021. We have very diverse teams in terms of nationality; in terms of gender, 1/3 of our managers are women; and in terms of skills and competencies all across our teams. We have leadership positions in our main markets worldwide. And we address 3 markets: construction, 20% of our sales; mobility, 35% of our sales; and industry, 45% of our sales. For sustainable construction, my colleagues have explained already in great details what are the key main growth drivers based on the need for renovation and energy efficiency. What we bring in High Performance Solutions is global innovation and specialty materials for construction. Chryso is a worldwide leader in construction chemicals, delivering high-performance solutions for concrete and cement manufacturers. ADFORS is a worldwide innovative leader in technical textiles, addressing building material manufacturers or construction professionals. And we have unique opportunities to grow in sustainable construction because we deliver our customers, but we can also leverage the synergies we have with the Saint-Gobain group and the regions of Saint-Gobain to maximize our impact on sustainable construction. We can also bring to the construction sector technologies that have been developed for other applications such as the electrochromic glass, for example, [ who was born ] for automotive or when we share our knowledge on acoustics, so significant growth in sustainable construction. Sustainable mobility, autonomous driving, connected vehicle and electrification are changing the way we move. And we are very well positioned to benefit from this shift because we have recognized very early on the emergence of electric vehicle technologies and we have combined them with new trends in connected mobility. This is why, today, 20% of our sales address the electric vehicle, and that is 3x the share of the electric vehicle on the automotive market. So how can innovative solutions drive sustainable mobility? In High Performance Solutions, we have developed a wide set of applications to provide safe driving, zero emissions in use and a unique driving experience. And let me illustrate some of them, starting with some of our glazings from Saint-Gobain Sekurit. Our interactive dimmable sunroofs offers light dimming and interior ambience. Our heat insulated windshields improve thermal comfort and allows energy savings in the vehicle. Our windshields also allow for optimal head-up display image quality, showing important information on the windshield, such as driving speed or GPS navigation without altering driver safety. And it is much more than automotive glass. Our NORGLIDE bearings reduce friction and improve acoustic comfort in the vehicle. We developed compression pads and thermal interface materials to protect the battery and to expand its life span. Our RENCOL tolerance rings ensure retention in the electric motor. And our Norton grinding wheels are a key element of the manufacturing process, also contributing to the performance of the electric vehicle. In High Performance Solutions, we shape the future of sustainable mobility today. Sustainable construction, sustainable mobility, sustainable industry, we are a key partner of our customers for their decarbonization commitments. Thanks to our leadership position in refractories, in abrasives, in polymers, in ceramics, we support our customers on their carbon neutrality roadmap. We are also a pioneer in circular economy, especially through our recycling offer. And when we work with glass manufacturers to reduce the energy consumption of their furnace, we directly contribute to the sustainability and the performance of the construction sector. So let us hear from our customers how big is our impact on their activity.

The drive towards global decarbonization is at the heart of our Ceramics business. For my team, it is an extraordinary opportunity to demonstrate our creativity to make the world a better home. First, we continuously strive to minimize the environmental impact of all our operations. We work hard to increase longevity and circularity of our products. In addition, our solutions help our customers reduce their own carbon footprint by minimizing their energy consumption and increasing their yields. Thirdly, we help our customers decarbonize their markets. This is the case when we help them produce critical components for electric vehicles, and this is the case when we help them produce low carbon content materials for construction. A great example is our SEFPRO teams, who are codeveloping with glass manufacturers the next generation of furnaces for producing low carbon glass powered by electricity and hydrogen instead of natural gas.

Ardagh have been working with SEFPRO for a good number of years now. SEFPRO is committed to helping us with sustainability both in terms of lending their expertise and also product innovation. So the Furnace of the Future (sic) [ the Furnace for the Future ] is a very exciting program. It's a consortium of 19 glass container manufacturers across Europe to manufacture a furnace that, basically, takes the current fuel mix and invert it towards 80% green electricity and 20% natural gas. It is an opportunity to really make a change. It could be up to 60% reduction in emissions.

Innovation is our DNA, and we are investing massively to maintain our unmatched core competencies and strong technical leadership. As you saw, we are passionate to innovate with key industry players to solve their toughest sustainability challenges.

Sustainable construction, sustainable mobility, sustainable industry and 3 pillars to accelerate even more on these 3 growing markets. First, our global balanced footprint. It allows us, at the same time, to leverage the whole strength of Saint-Gobain, the power of our global innovation and to serve our customers close to their needs. It gives us flexibility and resilience, and this is why we are seen by our customers as a trustworthy and reliable partner. Second, our specialty materials innovation platform that allows us to codevelop solutions and that fuels innovation for the whole group. And third, our ability to differentiate by providing solutions to our customers when we work with glass manufacturers, for example, all along the lifetime of their furnace. Or when we provide data-driven services, monitoring in real time the performance of our customers' equipments. In High Performance Solutions, we have leadership, attractive position on fast-growing markets, sustainable construction, mobility and industry. We have a unique innovation platform in specialty materials that fuels the group. And we will deliver on Chryso acquisition, and we will continue to grow in construction chemicals. So for the next years, we target an average growth between 4% and 5% with an operating margin between 13% and 14%. Thank you.

Thank you. Thank you, Mark, Javier, Santhanam, Thierry, Patrick and David. I propose we make a stop, a break for no more than 15 minutes. So we are back sharp at 4. Stay on the line for all of you who are on the line, and we come back with our sharing on ESG, on operational excellence, on data, innovation and, of course, the financial with Sreedhar, and I will conclude. So no more than 15 minutes, be sharp back on time at 4 p.m. Thank you. [Break]

Thank you to be back, and thank you to be back also on the line. Let's continue our journey now with ESG, maximize our impact, minimize our footprint. Claire, the floor is yours.

Thank you, Benoit. Good morning, good afternoon, everyone. I'm really happy to be with you today and to share how and why ESG is truly at the heart of our impact and grow strategic plan and on our -- for Saint-Gobain strategy. Our strategy on ESG is very clear. We want to maximize our impact on ESG topics for our customers through our solutions, and we want to minimize our footprint. And this strategy is available across all the 6 pillars of ESG. We want to build a decarbonated home to fight climate change. We want to drive circularity into our markets to push circular economy. We want to pioneer the highest standards in health and safety across the value chain, to empower our local ecosystems, pushing for inclusive growth; foster an open and engaging work environment, leveraging employee engagement and diversity; and last but not least, act without any compromise, this is Saint-Gobain business ethics. Saint-Gobain is recognized as a key ESG enabler. By ESG scoring agencies, you can see some of our already very good ratings in this domain or indices or third-party recognition. Let me go through the first pillar, climate change, and how we built a decarbonated home. How we maximize our impact for our customers through our solutions, whether it is through external insulation, which enable them, our customers, to save up to 70% of energy. Whether it is our ECLAZ solutions, which brings 10% additional insulation compared to standard double glazing, double glazing itself not being yet deployed everywhere by far. Whether it is technical insulation, which also can bring up to 95% reduction of heat loss in factories, all through our high-performance solutions like the GlasGrid reinforcement, which enables our customer to extend by a factor of 3 the road life. Our solutions sold last year avoided 1,300 million tons of emissions for our customers. This is 40x, 40x the group carbon footprint, and I mean Scope 1, 2 and 3. This is a huge level -- a huge leverage for our customers, thanks to our solutions. Indeed, we work to minimize our footprint. Whether it is on Scope 1 where we invest, for example, in turbine to decrease by 15%, the energy consumption in glass factory or whether we sign a PPA, power purchase agreement, to reduce Scope 2. We will this year double the share of green electricity in our Scope 2 to put it to 40%. All in all, the combined Scope 1 and 2 target of Saint-Gobain is to be reduced by 33% in 2030 compared to 2017. Indeed, we also work on the Scope 3 like the logistic emissions, which we plan to reduce by 16%, again, in 2030 compared to 2017. We also work hard on water, which is a key component, obviously, of the climate agenda. The water withdrawal has decreased already by 18% last year compared to 2017. If I move to the second pillar, the circular economy. Here, again, we want to maximize our impact for our customers through our solutions. Our solutions in light facades as an example, which allow to decrease by 50%, divide by 2, the raw material that are used for this construction, working also on waste to value and all the industry-wide recycling initiatives we are part of, like the [indiscernible] initiative that we are part of in France together with 26 other companies. Or life cycle management, like the gypsum recycling network that we push in northern Europe. Gypsum is a fantastic material, it's 100% recyclable. In HPS also, in High Performance Solutions, where our innovation enabled our customer to recycle up to 99%, not to say 100% but it's 99%, of the refractory waste. Our target -- our objective is to reach 75% of sustainable sales in our turnover by 2025. And indeed, we do our homework. We minimize our footprint. Last year, we avoided 10.1 million tons of nonrenewable raw material in our production processes. We already recovered 82% (sic) [ 92% ] of production waste in our factories. We are certainly the first issuer worldwide in construction of EPDs, 1,500 of them last year, which represents already 50% of our industry turnover. Indeed, we work also very hard on packaging on -- especially on plastic, which is a key topic on the earth, and we substitute wherever we can plastic bag with paper packaging like what we did in Brazil earlier this year. Our objective is to reduce nonrecovered waste by 80% in 2030, again, compared to 2017. Moving to the third pillar: health and safety, comfort and well-being. Here, again, we want to maximize our impact for our customers through our solutions. Acoustic comfort, our Ecophon solutions, our Ecophon ceiling brings a significant reduction of noise disturbance, which is divided by 2, very key for schools or hospitals are an example. Our solution that improve air quality, indoor air quality, Activ'Air plasterboard. Solutions, VARIO membrane, that bring better control hydrothermal comfort in pitched roofs. And also working for installers who are key stakeholders for us where we bring them ergonomic material. Again, our objective in 2025 is to have 75% of sustainable sales in Saint-Gobain turnover. Minimizing our footprint on this domain also for sure, implementing indicators to decrease very significantly the noise in our factories, reducing lost time accident, safety is our first priority. 82% of our site were no lost time accident last year. And I would say even more importantly, we divided by a factor of 6 in the last 10 years our lost time accident rate in our sites. We have put in place well-being programs that was largely accelerated last year during COVID, very well needed. And we work also very hard on ergonomic risk, striving to eliminate manual handling risks for our employees. I want to stress one program, which I'm really proud of, which is the CARE program by Saint-Gobain. It's a program that's going to be rolled out starting this year until 2023, which will provide medical, parental and life insurance coverage for each and every employee of Saint-Gobain and his or her family wherever it is around the world. This is indeed a key program for our employer brand to attract the key talent that we will need to fuel the growth of our company in the next years. I could go through around the 6 pillars to let you know how we work also on including growth to train our craftsman as an example, which we will double the rate of their training on energy certification this year, how we work on business ethics in training and communication across the company, how we leverage and nurture the fantastic employee engagement that we have in Saint-Gobain, 84% of our employee recommend Saint-Gobain as a great place to work. And obviously, working on diversity and even more on inclusion, you see the progress we made on this domain. And we obviously have, again, improvement to do in this domain still. I want to convince you also about the leadership and the accountability across the whole Saint-Gobain on ESG. We have embedded ESG into management processes, whether it is incentive short term and long term, whether it is the key role that now we play in CapEx validation, we have our say in the decisions. We have also orchestrate the local ESG roadmap acceleration, and we’re working very strongly on that. Benoit d'Iribarne will say also a few words on this domain. We have tens of thousands of employees that embark in ESG-linked communities. We have decided to increase the price of CO2 per ton that we use for CapEx decision from EUR 50 to EUR 75 per ton. In R&D decisions also, it's now EUR 150 per ton. And as some of you may know, we have put aside a dedicated budget each year, EUR 100 million for CapEx and R&D on CO2. This is for our minimizing our footprint program. As you understand, the bulk of the CapEx of R&D of -- the bulk of the CapEx of Saint-Gobain are for the maximizing our impact for our customers going forward. And last but not least, as a leader in light and sustainable construction, we shape the industry ESG agenda. We collaborate with governmental organization and NGOs. We partner with the ecosystem and more and more we nurture and we exchange with start-ups. We have a very innovative and we have a very strong relation with them. We have also put in place across the company [ transversal ] programs to embark each and every manager and each and every employee on the key domain of ENG (sic) [ ESG ], as you can see on the right side of the chart. Indeed, we are committed to succeed in this domain, and we will measure how we truly make the world a better home. We have put in place one unique indicator, which aggregates our progress in 4 key sustainability KPIs. Those are the one you can see on the left side. And if we are successful in this domain, this KPI should be at 100 in 2030, which is the year where we will measure and where we have targets actually on those KPIs. Indeed, we will share regular -- our regular updates on our progress with you as we will share progress indeed on all the KPIs that we have on the 6 pillars of ESG that you will, by the way, find in the appendix and that we will regularly communicate and make available. Before I conclude, I would like to share with you a video of Simona Gamboa (sic) [ Cristina Gamboa ]. Simona is the CEO of the World Green Building Council, which is an active network of 70 Green Building Council around the world and a member of the UN compact -- UN Global Compact, which catalyze the uptake of sustainable building everywhere for everyone around the world. Cristina Gamboa.

The building and construction industry is a very important pillar in achieving sustainability and addressing the net zero challenge we faced worldwide. It is responsible for almost 40% of energy-related carbon emissions. And it also consumes 50% of raw materials. My journey with Saint-Gobain goes back to 2009. And back then, Saint-Gobain was already partnering with Green Building Councils around the world to promote this practice. Saint-Gobain has been key to show that industry is willing and ready. We very much value the contributions, the ideas, the thought leadership. Saint-Gobain has also innovated and championed solutions to decarbonize its own operations and also bring more transparency to its products and making sure that their clients also are educated and informed to make better choices. A lot of stakeholders have to come together, and that means that we urgently need to shape the agenda. It’s what gets me up from every day, and in particular, we need to address the political agenda: asking governments to do better procurement of what they buy, but also giving the right policy signals so the private sector knows that this change is unstoppable. And I'm confident Saint-Gobain will continue to prove that this can be done, and of course, from World GBC, we have the promise of continuing to advocate for better policies to advance business models that make sense in the 21st century.

That is a great illustration of the impact that Saint-Gobain has on this industry of our long-standing commitment to sustainability in construction and how we can shape the agenda as a leader in light and sustainable construction. I want to leave you with one takeaway. Our business model directly contributes to ESG outcomes. Indeed, our impact is maximized, and our commitment is to minimize our footprint. Thank you very much.

Thank you. Thank you very much, Claire. Now we turn to Benoit d'Iribarne for operational excellence. Benoit is leading and gathering all the skills and knowledge and the scale of Saint-Gobain towards technology and industry performance. Benoit?

Thank you, Benoit. It's a pleasure to be with you to share our priorities in manufacturing and technology. I will present to you 3 focus area. First, how we use technical performance in order to improve our costs and our margin. Second, how we have a much stronger focus on growth and leverage in our CapEx. And last, how do we manage our CO2 roadmap. Starting with our technical performance, you see that we have been consistently delivering EUR 300 million saving year after year through our WCM, world-class manufacturing program, which is embedded very solidly in our 800 factories around the world. The good news is we still have more going forward. We have a clear roadmap, good idea, good levers on productivity, on weight, yield improvement on energy and supply chain. And for all of that, we have something relatively new, which started at a small scale 2 or 3 years ago, and now is really blossoming and really scaling up all around the group which is really Industry 4.0. So I will just like to start with how Industry 4.0 helped us in our productivity roadmap. We want to deliver at least 3% productivity per year. With good volume, it can be even more. And in order to do that, we have, for example, a platform, which is gathering all the data we have in our plant, and the data, it can be processed, quality, maintenance, [ ESG ] data. Everybody on the shop floor has access to those data on mobile, and for that can be very, very efficient in order to drive all the action on the shop floor toward improving the performance. Today, we have about 22,000 of our operators who are using this platform, and the feedback is very positive. We are also going on with the deployment of our robot and cobots that we started many years ago. And today, we enjoy around 4,000 of those machine in our factories. Next is the way we use the data, not for the productivity, but to really make a step change in our process. And I propose to you to hear an example of what is going on in Poland with our CEO, Joanna Czynsz.

As the CEO of Poland, operational excellence is one of my key priorities. This is why in 2019, I sponsored the launch of DnA Academy. The academy is about upskilling our teams in data and analytics so that we can deliver step changes in our plants' performances and sustainability. So far, we have trained nearly 1,800 people in 90 plants around the world.

In 2019, our plant was chosen to be a pilot for the DnA Academy.

We have made huge progress in learning how to use our data and sensors better. And we have had very impressive results: significant decrease in electricity consumption and gas consumption.

Our gypsum plant is equipped with a lot of different sensors along the production line. However, it's not only about the sensors, it's about how to use them.

The DnA Academy training brings powerful and long-term benefits: a radical change of culture with regard to digital technologies. At the end of the day, it's the people and their skills that make the difference. And this is what the DnA Academy is all about.

To date, we have started more than 100 local data projects, and the results so far, in terms of cost savings, CO2 reduction and team engagement are impressive. Already this year, we have saved over EUR 1.5 million, and we plan to triple that by the end of the year. We are now expanding the DnA Academy into new areas, and we look forward to delivering even more results to the benefit of our customers.

So you have seen the Polish example with EUR 4 million saving. Obviously, we are scaling up all around Saint-Gobain, and we are scaling up in all area in order to improve our process, improve our energy. And it's usually always the same fundamental methodology, we manage all the data on one platform. And when we have those data in real time, we achieve some smart intelligence artificial to find some correlation on regulation that we couldn't do it before and we improve our process. So this is not only helping us to reduce our cost, but we have some example, right, it also improve our product. I know one example from my colleague of Sekurit who is using that in order to reduce the tolerance on the big windshield in order to achieve much, much higher quality, HUD, which is very important in the new windshields that we have seen presented by David Molho before. In supply chain also, we can also use the 4.0 through digital tower, digital [ way ] in order to map all the transport from every single product to every single customer, optimize the flow. And in the example of glazing that you see here, using more multimodal transport in order to decrease not only the cost, double digit, but also the CO2 if you use, for example, more train or ship on a big country like Brazil. Second important priority for our manufacturing and technology team is optimizing the CapEx. And for that, you have heard that we are reducing our maintenance CapEx around 20% through footprint optimization, through extending the life of the furnaces. For example, we have just stopped a furnace in the U.K. after 21 years, so it's less CapEx versus competition. We stopped it after 15 years. And for that, we free up some capital in order to increase our CapEx for growth up to 50%. And we not only free up capital, we also try to use it in a smarter way in order to do not only greenfield, which is very important, but also [ WCM ] and debottlenecking with a strong leverage effect. For example, we have been this year able to increase the capacity of our plaster plant board line in Vietnam from 15 million to 25 million square meter with a small incremental investment. Looking at greenfield, our team is very busy. We are starting one new factory every 3 weeks. You see, for example, here, the new plasterboard plant in India. It will be the sixth plasterboard plant in India, which will start in February next year. In Mexico, we have started our third float line this year on time, directly fully loaded because the market is very, very, very strong. We also have a mortar plant in Malaysia, a new roofing plant in Brazil who will start in the state of Goias early next year and many, many plaster activities in China. Our third priority, which is very important and coming back to the introduction from Claire, is making sure that we're going to be successful in our CO2 roadmap. The first step is 2030. In 2030, we have to achieve 33% reduction despite the strong volume growth. We are using 3 levers. First of all, product design. For example in plasterboard, we managed to reduce the weight of the plasterboard, average weight 1% every year. Over 10 years, it's 10%. Second, everything we do, again, with 4.0 world-class manufacturing, but also specific investment in order to improve energy or make energy recuperation in our factories. And last, to convert our classic electricity to green electricity with a certificate. But even better, when we are in a position to invest in our plant, for example, what we did in India in our biggest factory in Chennai, we have 22,000 square meters of solar panel, which is saving 3,000 tons of CO2 per year. We are also working for the long term. Beyond the 33%, we really want to make sure that we are zero carbon in 2050. And we will start in 2023, the first of the world carbon-free gypsum factory through a new concept of drying and calcination in Norway. We are also working in Isover and on the float in order to make selected production with hydrogen and/or biogas in order to be CO2-free on part of our production. So altogether, you see our team is very busy, very, very motivated in order to achieve the acceleration of growth and totally committed and convinced that we will be able to impact -- continue to impact our margin with our EUR 300 million saving and to be successful in our CO2 roadmap. Thank you very much.

Thank you, Benoit. So we move from the manufacturing world, and you have seen how operational excellence can help us to grow and impact more. We move now to you, Ursula, on data and what is the data transformation of Saint-Gobain going forward.

Thank you very much. So you heard from Benoit all about the improvements that digitalization can bring in the industrial environment. Let me talk you through some of the commercial aspects on this. So the construction market had actually a structural challenge in productivity, minus 20% in 50 years. Now truly digital is reshaping this market. Let's look at some of the examples. Prefabrication modular construction would be impossible without the possibilities that digital provides to us. Real-time collaboration on and off the construction site, extremely helpful and important. Augmented reality and virtualization allows a seamless information flow while people and factories have their hands free to work, applications that we couldn't think of before. We have building information models, something that is truly a game changer. It allows the entire product life cycle of construction to happen in a controlled way, a unique way for Saint-Gobain to differentiate themselves and create the impact in the market. We have 3D printing, and you've heard that we printed a house earlier. And if you want, you can visit the family that is living in there now in the Netherlands. But last but not least, let me talk about data. And data is something that we have really in a very, very unique way. It's a data gold mine. Work daily in contact with construction workers, with architects, with construction companies and everybody in the entire value chain of the construction market. This data is something that is waiting to get exploited. Now let's look into the data part. E-commerce, something you normally would not actually relate together with the construction market, yet though, we're very successful in this and it shows. We can personalize recommendations, we can personalize sales campaigns, search engines, et cetera. Through adding an additional digital channel and providing an omnichannel experience, you really create more revenue as well as an increased basket size through cross-selling. Since 2021 in the beginning of the year, POINT.P added 18% new customers. Now in China, they're going as far as a full digital platform where you order online on WeChat, where you have an online claim management and an Uber-like transportation. Now the Nordics, 30%. But don't believe my words, let's listen to our colleagues from Sweden.

In Saint-Gobain Distribution Sweden, we are innovating to create a superior customer experience. In our biggest company in the group, Dahl Sweden, 30% of our sales is today digital, and this share is growing each year. And now we're moving beyond the traditional e-commerce with pioneering initiatives. For example, today, our customers can use their phone to shop in our stores. They check in by scanning a QR code. They do their shopping with their phone. They check out and they leave the store. Very, very convenient for our customers. On top of that, this has also enabled us to open unmanned stores in smaller regions of Sweden, and we're planning to expand this very rapidly. And today, 25% of our sales in-store is done through this touchless app, and this share is increasing rapidly. Secondly, we are helping our customers with an in-house developed ERP system for small craftsmen. With this system, our customers can manage their whole business, everything from their customer records to the projects, to the material purchasing, to the invoicing. This makes life so easy for our customers that it's a big loyalty driver for us. And thirdly, we are innovating with Internet of Things. This moves us from selling only products to selling complete solutions. And this brings us much closer to the customer and is really differentiating our offering. All of these initiatives are carried out with a strong innovation mindset: bringing maximum customer value and a solid long-term performance for our business.

Now let's stay with data, one more, artificial intelligence. Something where you can mine, exploit and really look for churn, pricing and other optimizations. We're applying this diligently already in over 3 countries in our distribution. And I think we only scratched the surface so far. The visibility on the P&L is clear. 1% of sales through the churn optimization and the margin improvement and not even talking about the customer intimacy and information that you gain in order to do more with it. Now walk -- let me walk you through the next example, the limitation of our imagination, deciding the roofing, the flooring, how will it all look like? Through digital rendering, we're not only much, much faster in the market but we can really avoid planned trials and expensive demo homes. In addition, the insights that we're gaining is something that helps us to develop more products that are very specifically tailored to the needs of the customers. We're doing this now in 4 continents in our major environments on glass, automotive, roofing, siding and façade, and we're looking forward to expand this further. The next example gets us into the building information model. Something that I elaborated shortly earlier. In this case, we're focusing on the design, the preplanning, it's precut, prestacked with associated training. The results are amazing. There is less waste. There's a much improved installation time of the craftsman. We have a 10-month backlog currently on renovation orders, and it hits our bottom line. We actually have advanced solution where we have a margin up to 50%. We're having currently market penetration of 8%. The target is 20%, and we're looking to go with this beyond. The next example that I want to talk about, connected objects. We're putting measures, sensors into walls to get environmental data back for performance optimization. It allowed us to reduce 90% of the rework. Now is that immediate cash to the bottom line? Well, it is indirectly because the significant sales that happened in Canada is tribute to us being seen as the solution experts. Little things, big impact. Now let me conclude from an example perspective with our overall ecosystem where we added significantly digital services on all sides. So the entire life cycle from La Maison de Saint-Gobain, which is a Tinder-like system where we match customers with craftsman, whether energetic performance solutions for our architects and craftsmen, where we help them in the material planning until, you know what, there's a quotation needed, which is something that is typically something that can be supported and automated by us. It pays. We have a loyalty program in France with 16,500 people, which we're training regularly. And just from those, we had a 3-point increase sales. Two points came from the SOLU+ users, which in itself increased 15% the NPS scores. These adjacencies, these additional services are key to the success of Saint-Gobain. We have that now in multiple countries, but we're going beyond, and that segment is growing rapidly. Now you might ask yourself, why do we think that we're going to be successful in digitalization? Well, we have the scale, we have the will and we know how to do it. And that means that we need to create or we are working on the foundation to have the data as a service set up, to have the platforms for people to accelerate and speed in the countries, that we explore expiring technologies and push as a catalyst together with the countries in the customer proximity way new solutions. We're scaling very successful innovative proof of concept across the entire group. And last but not least, it's about the strategic moves that we can do in, you know what, becoming actually also a software company and using digital service to actually enrich the customer experience and therefore, the positioning of our company. Summarizing. We're really building an integrated digital powerhouse, which is a cornerstone of the Saint-Gobain strategy. And let's not forget, we're sitting on a data gold mine. Thank you very much.

Thank you. Thank you very much, Ursula. So we are moving now from the gold mine of data through the diamond mine of innovation with you, Anne, lead you on innovation. Thank you. Anne?

Thank you very much, Benoit. It is a pleasure for me to be here today to talk about innovation in Saint-Gobain. And I'm going to start by talking about our customers. And so you've heard already from Ursula and from others that we have a big gold mine of data. And part of that helps us understand our customers. And so when we think about understanding our customers, we have many stakeholders in the path that our products are going to take. There are common interests, but there are also interests where people have different priorities and different expectations. And so an owner has a different priority sometimes than the developer, a different priority than a homeowner. And so we need to understand what their common interests are and what the specific interests are as we look at the different customers. We say all the time that the customer is at the heart of innovation. And that's part of what you'll see that we're deploying as I talk about innovation today. So to begin, I'm going to take you through an abbreviated journey, an abbreviated customer journey, looking at designing something, looking at producing, looking at using and then the end of life, deconstructing and reuse using those 2 pillars of sustainability and performance. I'm going to give 2 examples, quick zooms, to give you a flavor of some of the things that we're working on. These are innovations that we're working on right now. Some of them are innovations that we've just launched. So let's start with reimagining design. And the first example that I'm going to use here is an example that we pull from the U.K. In the U.K., they're building a design platform that helps to support off-site manufacturing. And so you can easily interchange different facades into that to be able to compare one look with another look. But what we've added into that is our building science knowledge so that you can actually compare 2 different designs, design A versus design B, and to say which one of those designs will be more comfortable on a hot August day. Because that's really what we want to know. We want to have that user experience embedded in our designs. From there, we're going to move to the United States, and we have a platform there around solar, a project called Solar 3.0. It's about building aesthetically uniform solar roofs. And what that means is that the solar panels look just like the roofing tile. We've seen in our market data that people strongly prefer this kind of solution. They're willing to pay more for it. And we think that we can bring our decades of experience in roofing solutions, roofing installations, along with our PV experience to be able to reduce and simplify -- reduce the cost of installation and decrease the complexity of that. That's important to us because we think that's a big cost factor and a big complexity in installing solar roofing. From design, we're going to move to changing construction. You've heard a lot today about lightweight construction. I'm going to just talk about ETICS, this external insulation. This is insulation that sits on the outside of a building that's used in some new construction. It's also used in -- it's also used a lot in renovation. And it's interesting for us because it's a system approach, and it pulls in -- we have all of the major components that go into that system in our Construction business and in our ADFORS business. So it combines our HPS and our Construction businesses. And it's a platform that we can use as we've developed it in one country, we can then deploy it to another region of the world into another country and build on the knowledge that we have in that first country. And at the same time, we have to understand how we customize that solution to make it unique for that environment. And you can see that one of the things that we're working on today is to deploy it into hot and humid climates. On the bottom, you see a picture that might be familiar to you. This is a home that was built in the Netherlands. It's one of a series of homes that we're building. And we have a 3D printing platform that we're using not just to build homes, but we're also using it to build infrastructure, for example. So we can build elements of a bridge to quickly assemble a bridge. This is a platform that extends to our High Performance Solutions business as well, where we're looking at how we can directly print some of our components. So then the user experience because this is really the validation of the products that we're making. I show a picture here of our North American headquarters. We use this as an experiment. When we built the headquarters, we brought in our own products. And then we use the best of our design knowledge, trying to understand how we could design for good light, for good thermal properties, for good acoustics, for good indoor air quality. And we looked at our employees. They became our test subjects in our old building. And then we looked at their performance, their behavior, the impact that this new building had on their lives. And we saw measurable improvements in things like their productivity when they worked in an environment that took our types of solutions into account. We're not just doing it with our headquarters, but it's something that we've also looked at in looking at thousands of office buildings in India, looking at hospitals, looking at school rooms and understanding the impact of our products and our systems on the user experience. So when we talk about the user experience or about the occupant experience, it's not just about buildings. We can also look at cars, for example, and you saw from David, examples of some of the things that we're doing in automotive. And so there, we bring these different innovative coated glass solutions that we can use in automotive. We can use it in aerospace, we can use it in shipping products. And we have products, for example, that allow you to control the light that comes in by changing the glass from being transparent to being -- from being clear to being dark. We have products where we put a transparent film on the glass so that we minimize the amount of heat that comes in to your car, for example, on a hot summer day, and that has the impact as well of reducing the amount of air conditioning that's used. That has an impact for electric vehicles where we can extend the range of an electric vehicle. When we look at the end of life, redefining life cycles, I don't think we have a single business that is not looking right now at how they can recycle their own waste materials, how they can recycle their materials at the end of life, how they can pull in recycled materials from other industries. Here, we show an example of a product that we've launched where we've replaced into that mortar a substantial amount of recycled material. And by doing so, we've reduced the CO2 footprint by 50%. We reduced the amount of water. We reduced the amount of raw materials that we're using. Those are the kind of successes that we're looking at and using recycling as a platform. Open innovation. It's an important platform for us as well. And one of the focus areas that we've put on open innovation is to look at how we -- as a focus on sustainability, a focus on end of life, a focus on CO2 footprint. And the example that we show here is a collaboration that we have with a startup company in Belgium that has developed an interior wall solution that allows you to install that wall system 7x faster. In addition, though, that's a wall assembly that can be completely reusable if you decide to change the interior of your office building, for example. So not only is it reusable, but the fact that it's reusable also contributes to a 30% lower cost of ownership. So if we take some of the stories that I've just told, some of the examples, and we look at some of the threads that tie those together, I want to come back to 4 things, 4 capabilities that I think are unique to Saint-Gobain. We've talked a lot about customer proximity. So let me add to that, the way we are organized within R&D is that we have R&D in 7 -- excuse me, in 6 of the major regions of the world that we're present. And that's to link our global capabilities with our local markets, with our local businesses, with our local research teams and to make sure that we're able to take the best of those local ideas and to spread them globally as well as to take the global developments that we're doing and to spread them into the local arenas. Building science. We have invested for more than a decade and developing building science to be able to link our product performance, our system performance with the occupant experience. I think that's a really powerful thing that we have. It's a really powerful capability that we have, and I think it's rather unique to Saint-Gobain. Looking at transversality. I talked already about global and local. And with transversal technologies, we have within the company, a gold mine of data, but we also have a gold mine of technologies. As you look at the many different products that we cover, the many different expertise that we have, and part of our ambition is to make sure that those technologies, that expertise is well integrated across the company. We have more than 20 global platforms that are structured to allow us to connect across the different transversal centers and locally as well. And then last of all, we look at open innovation. We have smart, bright, dedicated researchers and marketing people, but we know that our lens needs to be wide when we're looking at innovation. And so we look to our customers. We look to our suppliers. We look to universities. We look to startups to help us keep that lens wide on innovation. And we have an organization, our NOVA organization, that is specifically devoted to looking at how we can connect with startups. And in 2020, in the middle of the pandemic, they created more than 30 partnerships, bringing that innovation input into Saint-Gobain. We have a robust innovation platform today, but we also look at what can we do to -- as we go forward to accelerate on our innovation and to capitalize on that innovation. Benoit mentioned that we have a new organization that brings together R&D, marketing as well as a third leg, as I call it, around innovation methods. And we're doing that to really emphasize this customer-centric innovation that you've heard about, to help us move from products to solutions. And we're using those innovation methods that we're developing to really help us accelerate our time to market and to optimize our return on innovation. We want to ensure as well that we pull that strong innovation synergy that we have within the organization across the entire organization. So if we -- if I summarize, sustainable innovation as a driver of growth and impact for Saint-Gobain. It's an engine of growth and impact for Saint-Gobain, as we heard earlier. Our innovation model is geared towards customer centricity. And last of all, innovation fuels our transition from products to solutions. Thank you very much.

Thank you very much, Anne. Now Sreedhar, your turn with the financials, the figures and how to sum up all this in grow and impact in figures.

Thank you, Benoit. So you have heard in all the presentations, you have seen concrete examples how Saint-Gobain is poised to accelerate its growth. What I'm going to do is to share with you the biggest outcome, what Benoit said, the biggest outcome of growth and impact that is creation of value for our shareholders. By accelerating the cash generation and at the same time, having a discipline in the way we allocate our cash. So before I get into the details, I'm revealing all these numbers, the targets we are taking for ourselves. I know you have been waiting with a lot of patience. So in terms of organic growth, we have taken the target in the range of 3% to 5%. As Benoit said, we have an ambition of a higher range of this 3% to 5%. And this is because we are confident that not only we are going to grow with our underlying market, which is accelerating, but we are also going to outperform our markets because of our solutions, which are sustainable driven and performance driven. In terms of operating margin, we have taken the target in the range of 9% to 11%, but we have an ambition of double-digit margin. Free cash flow conversion, our target is over 50%. You have seen us, the progress we have made in terms of cash culture. We will continue to nurture this cash culture throughout the organization. In terms of return on capital employed, it's in the range of 12% to 15%, which means we will invest in growing markets. We will make acquisitions which are value creative acquisitions. And at the same time, we will be decisive when it comes to dealing with underperforming businesses. In terms of financial leverage, the net debt will be in the range of 1.5 to 2x of EBITDA, which means we will have a strong balance sheet and also the credit rating will be solid. Shareholder return. We are committed to return EUR 2 billion cash through share buyback to our shareholders and this will be done by 2025, which actually translates to more than 30 million net share count reduction. I'm sure you've done the calculation, clearly, it reflects directly on earnings per share in the range of 6%. In terms of dividend, our payout ratio will be between 30% to 50%. We target to have a sustainable growth in our dividend. And we will pay dividend in cash. Now let me get into the details of how we are going to accelerate the growth in free cash flow generation. You have seen us, the progress we have made. You have seen us, the significant shift we have made in cash focus. And you have seen the numbers it has delivered in the last 2.5 years. We focused on every single line of cash throughout the organization. Looking at higher growth organic growth, increased operating margin and operating profit, reduced nonoperating costs, optimized maintenance CapEx and working capital. Our target for our free cash flow will be cash conversion ratio over 50% as compared to 40%, which we have seen in the past. You have heard fairly a detailed presentation and vision of Benoit, which actually articulates well how we are going to accelerate our growth, so I'm going to focus on the other levers of improving the free cash flow generation. Let me start with operating profit. You have seen the progress we have made in operating margin. We have improved 300 basis point margin ever since we started this Transform & Grow when you compare with what we have done, what we used to be in the past. Significant progress. We have an ambition of double-digit margin. We will remain focused on securing the volume leverage, focus on price/cost spread, constantly looking for avenues to improve the price, constantly differentiating ourselves, looking for mixed premium, drive operational excellence in all our industrial sites. You have heard Benoit d'Iribarne talking about how structured way we want to progress in operational excellence. This is part of Saint-Gobain's DNA, and we will continue to rotate the portfolio. When you see the targets by segment: High Performance Solutions, 13% to 14%; Europe, 7% to 9%; Americas and Asia Pacific, 13% to 15%. It actually translates into the best-in-class margin if you look at all the industrial businesses together and distribution businesses together separately. We are talking about a range of 6% to 7% in distribution actually delivers a return on capital employed, similar to what you can have in industrial businesses with 13% to 14% margin. It clearly demonstrates that distribution is a low CapEx, low capital-intensive business. And at the end of the day, what matters is the return on capital employed. We are committed to reduce nonoperating costs. We have the target we have taken, which is going to be around EUR 250 million. We will focus on restructuring costs. We will bring more discipline. At the same time, we would keep the flexibility to ensure that as and when it is required, as and when we need to respond to the market situation, we will do it but with a lot of discipline. In terms of CapEx, we have a target of 3.5% to 4.5% of sales. We will optimize the maintenance CapEx in the range of 2.5% as compared to 3% in the past. This will allow us to invest more in growth CapEx. We intend to invest the growth CapEx in the range of 1% to 2%, again, depending on the opportunities, attractiveness, the growth. We will make trade-off. We will make sure that the CapEx is going in the right market, in the growing market, profitably growing market. And our hurdle rate for any new investment of greenfield or any CapEx, any capital capacity addition would be minimum of 20% and more of internal rate of return. In terms of operating working capital, you have seen the progress we have made. Again, I keep saying this because we have done a lot of things in the last 3 years. Working capital, we have actually reduced [ all this ] if you compare with the last 2 years. It's a significant progress. Last year, we reduced 9 days, 9 days of working capital. And this has happened because we used various digital tools, monitored it at a very grassroot level, make sure that we are rotating our inventory faster. We make sure that we recover our money, which is due from our customers faster. If you recall, I said last year, we reduced [ 26% ] of overdue receivables from our customers, and that brought a significant drop in our working capital. Having said all this, we will remain focused. We have to have this ambition, clear focus on working capital, but it's also important that we need to keep the right level of inventory because we need to serve the customer correctly. So keeping all this in mind, our target for working capital will be less than 25 days as compared to the past less than 30 days. So you have seen how we intend to accelerate further the free cash flow generation. I know now you are curious to know how we are going to allocate the capital. I can only tell you that we will be very disciplined when it comes to allocation of capital. I think this concrete example demonstrates what we mean by disciplined capital allocation. This is exactly what we did in the last 2.5 years. It's a big change. It's a significant change in Saint-Gobain. We are looking portfolio. We are looking at the perimeter by country. This allows us to make intelligent trade-off. This allows us to identify the country where the business is doing well. This allows us to invest in attractive markets, growing markets. This also allows us to identify underperforming businesses. And then we ask the country CEO. He needs to have a plan. If the business is underperforming, he needs to have a plan. How is he going to optimize? How is he going to restructure? How is he going to improve the margins? And in case if he are not able to succeed in the 3 years' time, 4 years' time, we will draw the line. Saint-Gobain will be decisive. Saint-Gobain will take decisions to ensure that the underperforming businesses are divested from Saint-Gobain. It's a big change, a big cultural change because country CEOs are expected to create value from every single asset that they are holding in their country, in their businesses. And that's a big shift. This gives you a nice summary of how we intend to prioritize when it comes to allocation of capital. I hope you're all convinced that Saint-Gobain is going to grow. Saint-Gobain is going to generate a lot of cash, significantly more than what we did in the past, which means we will have money to invest. So when it comes to allocation of capital, the first priority is growth CapEx. We will invest in growing markets, attractive markets. The second priority is return to shareholders -- shareholder returns in the form of dividend, we have articulated 30% to 50% payout ratio. Share buybacks. We have given a specific target of EUR 2 billion. We will return the cash to the shareholders by 2025. And the third priority is acquisitions, while we'll continue to do the divestments of underperforming businesses. But again, I want to reemphasize here, Saint-Gobain will not go and acquire because we have a strong balance sheet. We are not going to buy a company because we have cash. We are going to make acquisitions only when we are confident that we are going to create value. And that is a significant shift. So if you keep this in mind, we envisage that we could allocate around EUR 5 billion of money for attractive value creative acquisitions, midsize in the years to come, again, net of the divestments we will do. And the criteria of acquisition will be, again, value creation within year 3. And this will be the minimum criteria. And I say why? Because I want to remind you the success story of Continental Building Products. Mark Rayfield shared with you. We have created value in the year 2 when we bought Continental Building Products. So it clearly demonstrates that we are not going to stop here. The focus is value creation, we will do it as fast as possible while we have this hurdle rate of creating value within 3 years' time frame. So with this allocation, priorities and the discipline, we are confident to have our balance sheet strong. We are confident to have our credit rating solid. In a nutshell, a step change. A step change in value creation. We have inspiring purpose. We have a clear vision. We have a good strategic plan. I am confident we are going to accelerate the cash generation by focusing on growth profitability. We are going to be disciplined when it comes to investment, when it comes to divestment, when it comes to making acquisitions. We will remain focused on executing everything what we say in a disciplined manner. At the end of the day, the credibility matters, we will execute. That's what we try to do. We will demonstrate the rigor. We will focus, and I am very confident that with Grow & Impact, we will create value in the future and have an attractive returns to our shareholders. So before I pass on the floor to Benoit, let me, once again, reinforce our commitment to engage all of you investors community with all sincerity and humility. Thank you.

Thank you very much, Sreedhar. A few words of conclusion. You have heard from our customers. You have heard from some of our colleagues around the world, in China, in Sweden. You have heard from the management team, our passion, our energy, our strength and also our alignment on our vision and on our plan. There is also something which is important to me that there will be bumps down the road. There will be surprises, but we have created a platform of organization, of mindset, of team work to be able to overcome that. We have the agility. We have the empowerment. We have the accountability, and we have proven it. The COVID was not an easy task. The agility we have delivered over the last 10 months to struggle with supply chain, high solutions day in day out. We have the platform ready for any bump. There will be some bumps down the road. Our plan, Grow & Impact is a real step change for Saint-Gobain. Acceleration on our ESG commitment, we cannot slowdown. Climate change is an urgency, so we are accelerating. A real step change also in our financials, truly accelerating our organic growth, fully accelerating our organic growth versus the 1-ish of the past. A 300 basis point step change in terms of margin, double-digit margin. We are running there and we want to continue translating into a strong value creation, a strong ROCE, again, 300 basis points above where we used to be to have after-tax double-digit return on capital employed and attractive shareholder returns. I'm very confident that we'll deliver on this plan and create a lot of value for our shareholders. Remember the 3 points I started my presentation with on what I call the investment case on Saint-Gobain, a clear strategy focused on light and sustainable construction and worldwide leadership. Second, an acceleration towards solutions because we are on this tipping point of the construction world changes. And we have the solutions, we have the innovation, we have the data behind that to answer and anticipate on the changes and the customer needs. And third, a very solid platform empowered committed, accountable, proud when we deliver results and when we see the alignment of our efforts and our results. So I want to leave you with this confidence that our vision, the clarity of our vision, which is important for me. It gives a lot of strength, a lot of power and also the strength of all our team. We have seen and touched the surface of the executive committee, but I can tell you that all around the world, the Saint-Gobain teams are committed, very engaged and driving for success. I've presented this plan to the top 150 managers of Saint-Gobain early September. We have shared it for 3 days, exchange on ideas, on initiatives, on how to accelerate and make sure that we grow and we impact. I can tell you they are all excited, very enthusiastic, ready to drive it into their own country. We kept it confidential until today, but we are all ready to go with a fantastic mobilization of the top 150 managers of Saint-Gobain and starting tomorrow, I will exchange with thousands of the managers, thousands of the employees of Saint-Gobain. They received a teaser from me yesterday, and we are going to engage, mobilize and embark all the 170,000 employees of Saint-Gobain to drive, grow and impact success. Thank you very much for all your attention during the 3 hours and after a short movie, we have now time for your questions. We'll take the questions in the room. Vivien Dardel, our Investor Relations, will help us moderate the questions and also balance with the questions online. So a short movie. [Presentation]

Thank you, everyone.

So we'll start with questions from the room. Arnaud Pinatel first.

I will start with a comment, if you allow me to do one. I'm covering Saint-Gobain since, I think, 25 years now. And this is the first time in my career as a financial analyst I have the feeling that I saw today a comprehensive vision for the group. So that's very, very refreshing. That was my first comment. But my question is we have heard a lot...

No. You can stop there, Arnaud.

No, wait for my question because I'm not sure you will answer to it, but we have heard a lot today about acceleration of growth. We have heard a lot about cash conversion, sustainability. We have heard a lot about your vision about outperforming your markets and your peers. We have heard about higher return on capital employed than the past. So when I look at the current multiples of Saint-Gobain, the submarket, I think you are trading at 6x EBITDA, [ 11x ] compared to your peers. I'm sure that you look at them. And perhaps you can share comments about what in your view should be the minimum multiple Saint-Gobain should trade at to consider that the group has delivered on the growth and impact plan.

Well, thank you for the comment first. Thank you very much. Yes, we have put a lot of thoughts together and personally over the years to prepare this plan because, again, it's a true reflection of my conviction regarding the strengths of Saint-Gobain and all the potential we need to deliver to the construction space. Your question is very valid on -- I'm not happy with the valuation of Saint-Gobain. We are not happy with the valuation of Saint-Gobain. And I see a huge upside. Now the answer is on us -- the job is on us. Clearly, we benchmark with the light side building materials, which have double-digit multiple, sometimes even higher than that. Our ambition is to grow the multiple of Saint-Gobain. Again, it's not going to be overnight. It's something we need to earn in terms of credibility, in terms of consistency of execution. We have delivered on the last 2.5 years. Transform & Grow. A lot of the investors were highly skeptical. The 8.7% margin of 2021, less than a year ago, everyone was skeptical. We have been above 10%. So it is on us to convince the investors about the strategic focus of the group. So it's easy to read. Saint-Gobain is not complex. Saint-Gobain is a nonuse case. This is our life. So it's not complex. We have a clear strategy. We are not on commodity. We are driving to our solutions, therefore, higher margin. And the organization is ready. We are going to work hard and step by step earn the increased multiple. I clearly shoot for a double-digit multiple and on the high side of it.

Second question from Elodie Rall, JPMorgan.

I think it was great, as Arnaud said. So very much appreciate it. I think just a little bit of frustration maybe on the range in the operating margin that you provided. You vary a bit in the ability to be at double digit plus. So while providing a range of 9% to 11%. First of all, the 9%, given that you were already at 9.5%, I think, on normalized margin and you have more scope, positive impact to come and you want to make more M&A that would be more accretive on margins. So why that 9%? And how would you ever get to that? And equally, why not being a bit more a bit and above 11% since you have all these nice targets in mind and -- yes, and given the operational leverage. So that's my first question. And second, on your sales growth ambition, actually, the 3% to 5%. So you target indeed to be more around the 5% and you told us that you want to outperform your underlying markets. But you haven't told us what would be your ambition in terms of outperformance. So basically, what is your view on the underlying market? And is it that you want to outperform by 100 bps, 200 bps, 300 bps. So if you could give us some color on that.

Thank you for those 2 questions. First, there is not much to read on the range of the operating margin, except that it is purely the math addition of the ranges we have given to you in the different segments. So when you add the different segments on the bottom, on the high side, this is exactly the addition of the ranges. So there is no miracle on the math. It's purely as basic as that. Second, we clearly state that we want to run double digit. So I cannot be -- and it starts at 10.0%. It doesn't start with 19%, but I cannot be more clear than that. Which means, again, in our mix of business, best-in-class margins, that means we run 7% type of operating margin in distribution, which makes fantastic ROCE and we run at 13% to 14% operating margin in our manufacturing businesses, which is compared to some of the [ light side ] peers that I benchmark with [ some are ] 10% to 11%. Others are slightly above 15%. But 14%, we are in the ballpark, if not in the top quartile. So this is the way we review the businesses. We budget in our operations for coming years. Clearly, staying the best-in-class, stay on the high side and clearly double digit. After that, on your question, what about -- and it's good that you take the glass half full, the high side of the margin. Let's do it step by step. So I prefer to do it step by step. Again, a year ago, I think -- correct me if I'm wrong, Vivien, in your models, there was not a lot of -- 8.7. It changed. That's fine. The multiple didn't change. So yes, the share price improved, but the multiple didn't change. So let's do it step by step. Let's be consistent on our delivery, on execution. It's very important for me, execution, speed, quality of execution on our P&L, on our acquisitions. And this is the way we are going to drive the group going forward on the margin. In terms of the organic growth, you have had some hints in terms of market share gain in some markets in Brazil, for instance, we are in the 1% to 2%. What we have delivered in terms of outperformance versus our peers, the benchmark that we highlighted very transparently. This is what we have done, 1% to 2% over the last 2 years. So that's the ballpark of the partition between the underlying markets and the outperformance we expect to continue to deliver.

Next question from Laurent Runacher.

It's -- we can go to a next row because it's -- they prepared the same question in the...

Took the mic. He took the mic.

Very organized on the 5th row.

Looking again at -- if you implied that your outperformance is 1% to 2%. And if I look at Europe, which is your main market, it means that the underlying growth of the market is in the region of 2% in light of the green deal, isn't it a very, very cautious assumption. And the second question I had is, since currently, and I would believe that it is a number to trend, the cost -- the huge cost inflation, especially in energy, and also carbon right increase maybe is done at the expense of heavy material industries, i.e., to what extent they are going to be forced to push price very, very intensively? And to what extent it could help you in terms of an alternative way to build and the switch from heavy materials to light side? Also, in view of the agenda and obviously, the circular economies where you can also get some additional sales.

Well, on your question, you have to make a distinction between our ambition and the way we drive and we benchmark and we push our teams on the ground and the different countries. When you talk about all Europe, it is 70% of Saint-Gobain. So if we were to gain 2 points every year on 70% of Saint-Gobain, it would be huge. So when you talk about Brazil on a smaller scale, yes, we gained 2.4 points of market share, like you heard from Javier in the last year. So the magnitude of the outperformance is adapted also to the magnitude of the business. So that doesn't cut any ambition and solid trend of the renovation trend, the green stimulus in Europe. But don't apply the exact same outperformance on the business, which is EUR 30 billion versus a business, which is one. So that's the comment I would make. On the cost inflation, yes, the big evolution of inflation does shift a bit of some applications and some materials. We have seen that in normal years when you compete with other materials with foam in insulation or things like that. It does open up some room. So there could be a trend there. I think the bigger trend is more the CO2 impact. If you have the ability to reduce by 50% the weight of natural resources, save 20%, 30% CO2, it's bigger than what is the cost to drive that. So for me, the first order of magnitude is, again, the CO2 footprint, the drive to carbon neutrality versus the short term or midterm slight variation in terms of competitiveness of one way to build versus the other. Beyond that, the speed of construction is also a way to reduce the construction cost.

Next question from Jean-Christophe Lefèvre-Moulenq, same row, to finish with this row.

The 2 questions from my side. The first one on price versus cost inflation. And so only your margin target in Northern and Southern Europe, your margin target range is between 7% and 9%. Is that not too conservative, given the gap between your plasterboard operation and your best competitor, not listed as there is a relative big gap between you and the German not listed company, Knauf? The second issue, price cost inflation. You increased your cost inflation number to EUR 1.5 billion. Should we exceed this number? Would you implement a third price hike this year?

So I'll take the first one, and you will go with the second one. If it was only the third price hike we would be in April, Jean-Christophe, so I don't count anymore, partly in the U.S. or elsewhere. Keep in mind that in Europe, we have 65%, 67% of our business which is distribution. We run on a high margin in distribution. So you cannot compare a mix of business with something on the manufacturing side. And we are very happy with our margins of insulation versus some listed peers in Europe and plasterboard in Europe versus listed peers or not listed peers because we can gather the data from the 2 big other players, Belgium and German in Europe. So we benchmark. Sometimes there is a lag. It's not quarterly result. There is a lag, but we have access to some of those data, and we are happy with overall our margin in Europe on those businesses country by country, and this part of our job is to say, hey, why are we a bit lower in Germany versus being higher in France or much higher in Spain and what about Norway and Sweden? This is our job. But big picture in Europe on some of the product lines you mentioned, we are happy with our margin above the benchmark. You want to take the...

Yes, sure. So in terms of inflation, I mean, you have seen the way we have proactively moved in pushing the prices up. You have seen in the first quarter, we were 2.6%. Second quarter, we almost doubled. Third quarter, we announced in the morning, we said around 8%. I think that should give you clear confidence that Saint-Gobain is focused on price. So now your question is, are we going to continue to do it? Yes, there's no reason why we will not do it because the inflation is not coming down. So there are already many price increase announcements in Europe and Americas in the last few weeks. So this will be an ongoing exercise and it is important that we constantly monitor to ensure that we are able to compensate the inflation at any given point of time, and that's our goal. And we will demonstrate that. We have shown you in the last 18 months, the proactiveness and this will happen.

Next question from Yves Bromehead, Exane.

Cedar was patient on the...

I'd reiterate also the comments before on a very digital and very refreshing presentation. So well done.

Thank you.

I have a few questions. I guess the first one is, I think one of the major theme that we saw today is to try and become a one-stop shop. How easy is this to actually implement when you are a renovation company with a big exposure to distribution? When a craftsman come to Point.P, for example, in France, and he comes for one product, are there clear incentives for your salesperson to try and cross-sell other products? Can you give us a bit more concrete example as how you can really drive that one-stop shop in your channels? And I'll maybe come back to a second question just after this one.

Well, you should talk to Patrice Richard, who is the Head of Distribution in France on the other side of the room. But first, a craftsman doesn't come very often for just one product. And by the way, they come 2, 3 times a day, if not 5 times a week. So we have this demand across the board. There is not a craftsman buying just plasterboard or buying just insulation. They work on the complete renovation set. And very often, it's not just energy efficiency. Patrice would be 40% of it, and the rest is global renovation. And then we sell the full pack of products. So it's very rare that you go for just one product. And therefore, our sales teams, they are trained on the environmental certification. We train also the customers, what do you need to get to your end customer and apply the full renovation spectrum so that they could deserve the public aid and support. So this is the real life. It never happens. Patrice, if you want to comment. It doesn't happen that we have just one product. We sell a complete solution. This is exactly what you experience on a personal life when you renovate your bathroom. Sometimes you buy just the glass shower, but you buy also the plasterboard behind for the wet environment, the tile fixing, the tiles and everything. So you buy the complete set of renovation.

Craftsman in the morning is in a rush to go and start the job. So he is really going to pick up everything that's available to him, and that's also important. That's why I think distribution, having the full range, also helps because he's got one shop -- stuff available.

And maybe a second question on a different subject. This is a growing impact. The previous one was Transform & Grow. Does it mean that Transform is completely finished on the wide scale? And have you made a decision on the U.K. Distribution, which was on the slide showing in fixing. So do you want to fix the business and wait a few more years? Or are you looking for an exit strategy there?

Two answers on your question. First, there is something deep, which we have done with Transform & Grow on the organization side. Organization has totally changed. And we have pushed principles of management, which are extremely important for all of us, for me, which is trust, empowerment and collaboration. Trust, empowerment, collaboration, it's a never-ending journey. When you hire new managers, when you make an acquisition, you need to earn this trust and credibility. So that part of the Transform for all of us, personally and as managers, it's a never-ending journey because this is how we unleash the full talent of Saint-Gobain and to make the Saint-Gobain team win. Second part of your question, I told you that we make regular reviews of our perimeter to continue to optimize the business profile of Saint-Gobain in terms of performance, growth, cash, margin and also, of course, alignment with our strategy. We have made some divestitures on our plumbing, heating, sanitary business in the U.K. We are working, as we speak, on some small secondary brands which are not aligned with the performance we expect. And on the generalist business in the U.K., we are improving very strongly. And this is the turnaround that we have launched 18 months ago with some restructuring and a lot of qualitative actions, which are bearing fruit. I give you one example. Our U.K. colleagues were a bit late versus Nordic versus France to invest on IT and ERP. We have done it 2, 3 years ago, and we capitalize now on all the benefits in terms of pricing management, in terms of margin, in terms of purchasing from those investments. So it's a fast evolution of the margin. So this part of the business will do well -- is improving and will do well in 2022. So some minor topics here and there, but nothing major and ongoing regular review for the perimeter of the group.

Next question, Cedar Ekblom from Morgan Stanley.

A few questions just to follow on from Yves. You spoke about how you've reorganized the business along country lines. Can you talk more specifically about what you've done on the sales side? And here, as an example, you've got in the U.S. many different businesses under your country CEO. Do you have a combined sales function in the U.S. to enable the cross-selling potential? And in other regions, do you have the right sales organization in place to make sure that you can leverage the portfolio? Second question is on distribution again. So in the U.S., you spoke about growing your relationship on the retail side with Lowe's. You don't own that distribution channel. Why do you need to own the distribution channel in Europe? And then can you move faster than your peers? Because the comments around selling solutions and being an ESG enabler, it's not unique in the industry. Can you take share as your competitors are also trying to take share? And then last point is on the trade-off between growth and return. So would it be fair to say that while the return in distribution is equal to the returns in your industry business, it's actually a lower-growth business? Is that true or not? And how do you trade that up, growth versus the return potential?

Thank you, Cedar. A lot of questions. The first answer to your point about sales organization, it varies by country. You have heard Renato Holzheim, CEO in Brazil. He has completely reorganized with one head for the sales organization, divided below him into 3 pieces. There is one joint prescription team when we talk to architects or the big homebuilder. There is a second one, which is the bulk of the sales heads covering the territories. In the past, there were 4 silos for the different product lines. Now it's one, and one sale guide covers the 4 product lines. So more frequent visits, additional point of sales. We can hear from Mark about what you have done in the U.S. on exterior products, roofing and siding. It's one sales organization. Distributors and customers are not the same interior solutions. So it doesn't make sense to mix the 2. But within exterior products, we have indeed a common sales organization towards roofing and siding. But we have been extremely precise and accurate on how to do that around the world. It's not the one organization between rural areas in Argentina. Yes, we have one person covering all the sales. In a big urban metropole, Paris or Buenos Aires, it makes sense sometimes to keep the experts because they are not wasting time going from one customer to the other. And they have the technical ability if there is a big project to upsell other product lines of Saint-Gobain. So it's a lot of fine-tuning and relying on the knowledge of the country from each of our country CEOs. Mark, do you want to complement for your [ experience ] in the U.S., benefiting from what you have done?

No, I think it's exactly accurate. We do the same thing with prescription services on interior products. But you need to keep the specialisms to understand to sell the higher-margin products and then be very local where you merge them together, and it gives you huge selling skills and leverage by doing that.

To your second question, no, we don't intend to buy a big DIY player in the U.S. I don't look at distribution per se in a vacuum. For me, I look at the country organization, whether it's in France, whether it's in Norway, whether it's in Sweden and how powerful we are with the full set of Saint-Gobain. When we have strong leadership positions on both sides, we are extremely powerful. What we are driving in terms of outperformance in France across the board on the one-stop shop for renovations, it's because we are very strong brands. Saint-Gobain glass is over in insulation, Placo for plasterboard, Weber and all the Point.P brands. So this is the alignment of stuff that we like. So we are not going to build it from scratch elsewhere. So in my plan, I don't intend to go into new countries. On distribution, we'll leverage within a country, the strength that we have in the Nordics, in the U.K. and in France. So this is something which has radically changed versus the prior organization of Saint-Gobain. We don't have a plasterboard on the side. We don't have distribution or glass on the side. We are running in one country. So this is the way we move forward. To your question about how do we gain share versus peers, yes, it's a constant battle. We don't always win. We are humble and we learn from our mistakes. We learn from other businesses. Where I'm confident is that we have, by far, the largest product offering. On light construction, on renovation, we have the largest product offering. So if we do a good job, and again, it's not 100% the case all the time, we have an argument to convince the customer that if you go one-stop shop for your boardroom, we have the ceilings, we have the plasterboard, we have the acoustic performance, we have the measurement from the building science. And by the way, if you need electrochromic glass, we have it. So if we are strong enough with the right mindset and the technical skills to go above that decision SKU by SKU, yes, we win. After that, again, it's a constant battle on some materials. So we had a question about heavy construction, light construction. Those changes are not happening overnight. We are very happy, for instance, with our flexible mineral wool. When you shape, we compete with rigid forms. But rigid forms, it's good for sandwich panel, but you cannot shape in a renovation market. So those products win in the renovation market because you put your insulation in whatever angle, attics of the piece. So this is a constant fight with the support of innovation to make sure we have the solutions ahead. And to your question about whether we have more growth, the growth we have seen, thanks to our very strong leadership positions in distribution in the Nordics, in France, is higher than what we have seen in our manufacturing business. So it's pulling. And if you were to ask my colleagues in distribution, sometimes they have not been so happy about their service. They had stock-outs. It has improved recently. But distribution has been pulling because they were confronting with a huge demand of renovation. So in the last 18 months, we have seen a higher growth, thanks to our distribution, and then ordering and pushing everything we could on the manufacturing side. So it's not lower growth. It has been actually the opposite because of the -- such a strong demand on the ground.

Next question from the room from Sven Edelfelt, ODDO.

I would have a question on emerging markets. You are targeting 25% revenue in emerging market from 20%. And in 2010, you were also targeting 26% in emerging markets from 20%. So the growth in emerging markets seems to have been the same across your portfolio. So I just would like to better understand what really happened there. From externally, it seems that there is probably a pricing issue for your product may be linked to the currency depreciation. And what I would like to know as well is how does this translate in return on capital employed. So perhaps you can share with us the return on capital employed in emerging markets. And what are your targets there?

Well, first, I look forward, not backward. So our plan is to get there. And why I wanted to go beyond 2025 is that because of the size of the group, moving 5 points of sales, you don't do that overnight. The point is that the way to do it, it will be a combination of organic growth and external growth in emerging markets. We have been looking and doing some acquisitions in emerging markets. We have -- you have heard that from Benoit d'Iribarne, adding a lot of plans regularly. A lot of the Chryso growth will come also from new geographies where Chryso is not today. So we have a good combination in emerging markets of organic growth and acquisitions versus what we have done in the past, where a lot of our acquisitions were actually in developed countries. There has been -- if you take Latin America, there has been a currency impact in terms of euro translation. That's for sure. The euro translation of Brazil has changed quite a bit over the last 10 years. So that's a real impact in terms of overall percentage of the group, which is not the case for Asia. Sreedhar, you want to...

No. I mean the return on capital employed is higher in emerging markets. They are more profitable. That's why we want to invest. I mean Benoit has clearly articulated that we want to focus on North America and emerging markets in the future, so -- because it's better return. So it will continue to be like that.

Next question from Nabil Ahmed, Barclays.

I have 2 actually. First one, would you mind updating operating leverage by division? You did that in the past. The divisions have changed. So I guess it would be useful to explain us, if you do 1% volume growth in Southern Europe, how much incremental margin you get on that? And the second question and maybe following up on earlier questions on the one-stop shop concept, and we also heard a lot about solutions. How advanced are you to your -- on your journey to selling solutions as opposed to selling products? So maybe if you could give us how much of your revenues are generated by solutions, how much it was 5 years ago and what's the ambition in 5 years ahead. And maybe as well, if you could elaborate a little bit on the challenges because, I guess, it's a big cultural shock for people that were previously ran in silos and selling products as opposed to selling solutions. So how do you make sure that those barriers and those constraints are broken into parts and people have the right mindset to sell solution as opposed to products?

I take the 2 and 3 and you go back to the first one. Well, it's done. We did it 3 years ago. Transform & Grow is done. It's behind us. So all those cultural shifts in terms of being ready with the organization, it's done. So this attitude of selling roofing and siding in the U.S., it has been about 2 years now. In Brazil, it started 3 years ago. So the bulk of that is truly behind us. What we have done is that we have trained a lot of our salespeople. When you have been selling one product for 10 years and you are asked to sell 2, 3, we have done actually 3x more training than what you anticipate at first. So it has required a lot of training. But when you are a good salesperson, you have been selling one product for 10 years and suddenly, you open up avenues to sell more, it's positive. So for me, there is no cultural risk. And again, the organization, that's what I told you, we have created over the last 3 year the foundation, the pillar to accelerate on Grow & Impact. In addition to your question is that the more we go up into systems in my chart on the solutions, yes, the more sophisticated we need to be. When you talk to architects, it's not the same. So this is a journey that will continue to improve, that will continue to enhance based on the evolution of our solutions and our innovation. So -- and if one day we add something else in our offer that we enrich our offer, I take one example in the Nordics because you are so well insulated in your house, you need to ventilate. We make EUR 0.5 billion of ventilation in the Nordics. So far, in France, we have one network where we sell ventilation, but this is something in the product offer, air quality that one day, we may train our teams in Spain, in Italy to sell ventilation products. But we do that step by step once we enrich the offer. On your question about solutions, I just don't want to answer because I'm not going to put a sticker on the shoulder of each sales guy, did you sell a solution? A good one, a not so good one, 3 products, a system? I'm not going to create a bureaucracy because of that. For me, the judge at the end of the day is whether we outperform because we have such a wide spectrum of solutions versus some peers. If I take Italy, we have some big competitors on glass with just one product. You know Gaetano Terrasini, our CEO of Italy. He has a full team leveraging all the spectrum of Saint-Gobain. And when you do that and you talk to an architect for nonregional buildings, you sell more than glass. You sell plasterboard, you sell insulation, and you have a better chance to win. This is how we do it. So if I were to give a high-level figure on the scale from 1 to 10, we are at 2 to 3. So I still see a huge potential for acceleration on solutions, but we have started. We have started. But I'm not going to create a huge bureaucracy of this is solution. This is not a solution. This is a good one. This is the blue one. This is the red one. We are driving this mindset of upselling, cross-selling, digital servicing and systems.

So on leverage, at the group level, I've always said that it's in the range of 20% to 30%. That remains valid, but you just have to keep in mind that we are going to invest. If we have to grow, we need to support with the proper investment. So I don't want you to take exactly the same number, so it could vary from year to year. And normally in Europe, it should have a better leverage than the industrial businesses, which are in other regions. But at the group level, I will say that it should keep that 20% to 30%.

There was one question...

Next question from Yassine Touahri on the left from On Field.

I would have 2 questions. First, you're talking about 30 million net share count reduction. But if I look at over the past [ 10 ] years, historically, you were issuing 4 million to 5 million shares every year for employees because you were offering share at a discounted price. When we look at the next full year, should we expect the -- this share issuance to go on? So let's say, should we expect another 20 million share being issued and the total net reduction being 30 million? Or should we expect the total number of share to go down by 30 million?

The number, what we have given, is the net reduction. So whatever we issue to employees, it will be compensated by buying an additional share. So I've always said what is the share which is available in the market. Last year, it was 530 million, and we intend to reduce 30 million if you take the current price level.

And then my other question would be, you've looked at the outperformance over the past couple of years. Historically, when you look at the past 10, 15 years, how much did you underperform? Is it something that you've looked at? And when you looked at -- you mentioned about learning for your mistake, whether that really change culturally apart from the transformation from silos into multichannel business units?

Well, again, I look at the future, I'm not going to look at what we did right or wrong 350 years ago. I look at the future. So I'm not going to waste my time. Yes, we have a lot of experience within Saint-Gobain. We know what works very well. We have learned. We are accelerating. So all my presentation was about what has changed, how we drive the group for one, how confident I am to capitalize on the strength of the teams of Saint-Gobain, the positions of Saint-Gobain. And this is what we are going to execute and to prove. We have proven it. If I take the recent past of this significant transformation of the group organization, business profile, M&A, acquisitions, divestitures and the results. So let's continue to focus ahead, accelerate, make the Saint-Gobain team win. In the past, it's not my cup of tea. We look forward, and this is our commitment for the shareholders. I don't think you value -- I don't have any chance to look at the path to get rerated, I don’t know if I'm correct. So it's more in the future. So this is the way we are going to do it.

Maybe one last question from the room before switching to the conference call. Yves Bromehead from Exane.

Another follow-up. Just in light of the inflationary concern that we see today and the headwinds, could you maybe help us to remind what is the percentage of cost in the renovation work that your products actually represent just so we can sort of understand the elasticity of pricing maybe on demand? And maybe just as a quick follow-up. You mentioned the backlog is 10 months, that was in France. Do you have any other indicators in other countries? And is there a risk that this does not stick with price actions that you will need to put in place next year?

Well, the cost of materials in renovation, we could have used it in the example that Thierry gave for single-family renovation. The cost is roughly 25%, 30% of the total work. It could be higher depending on what you put, I would say, a good third. If I take what we see double-digit increase versus 2 years ago at 5% per year on 30%. I would advise you if I have a craftsman today, keep it because you are not going to find another one before 12 months. And you should not bother about 3% higher inflation at the end of the day. So I don't see any job site stopping because of increased inflation. We have mature, which was our big task in the first half and still our big task. We have to make sure that we could service our customers. This has been our #1 priority. And I can tell you the #1 topic for the customers is to get serviced. It was timber, it has been steel frame, it has been all kinds of different products. The stock outs we had in some of our distribution outlets was 3x what it used to be. We have brought it down to improve our service. When you improve your service, you gain market share. But I don't see any slowdown of our renovation activity because of the increase in raw materials -- or in the raw materials. And I would say, if anything, the energy price that we see today is another wake-up call for the governments, for the homeowners, for the social housing to accelerate energy efficiency renovation. Otherwise, we are going to spend money to slow down and lower the bill for the low-income wages. But the first topic is to fix it and to accelerate the renovation. So if 2x acceleration on renovation is not enough, we should accelerate. This is the topic, not firefighting on the invoice of energy for the homeowner. So for me, what we see in terms of inflation is clearly a need. This is what I showed in my first slide. There is urgency on climate change. There is urgency to enter net-zero carbon economies.

So let's switch now to the conference call where we have normally one question waiting from Arnaud Lehmann, Bank of America. Operator?

Can you hear me?

Yes.

Excellent. I have 4. Hopefully, they are quite short. Firstly, just on the top line growth, the 3 to 5, just to make sure I understand properly. You are including the 2021 organic growth versus '19, which from my estimate will be about 10%, including some exceptional pricing. So are you making life easier for yourself by including 2021, which on average at 1% through the period? That's my first question. The second question is just on the Americas margin guidance, 13% to 15%. I think you've done slightly above 16% in the last 12 months. So what was exceptionally strong in the last 12 months in the Americas that you think is going to fade from next year? Thirdly, on acquisition, the EUR 5 billion, is there any way you could give us a bit of color into what you are thinking in terms of deals? Is it going to be similar to Continental, like expanding market share in existing activities? Or are you happy to further expand the product portfolio like you did with Chryso, in particular, in construction chemicals? And lastly, you talked a lot about the data gold mine. I guess my question is, do you have the right tools to extract the gold from this mine? Do you need to invest in software related to supply chain management or to BIM?

You take the...

Yes. Yes, I'll take the first 2. So in terms of organic growth, Arnaud, we are comparing with 2019, so we are taking 2 years' period. So there's no reason to take the full organic growth just like that. So you can assume 50-50. So that's what you should take for the full year. So we don't know what will be the full year. That's what we should assume. We will not be taking just the total figure as it is. Coming to the margin of Americas. If you recall, I said it in the end of June, Americas had one of the biggest impact of price/cost spread, which was very positive. And I'd done that normalization of margin, saying there is an exceptional price/cost spread. And this comes -- one of them was clearly America. So that's only one reason. I would say that the 14% to 15% is still a very realistic margin when you compare what it used to be in the past. I mean I would say it's a significantly ambitious margin.

But it's normalized, but not in the budget for [ '20 ]...

For sure. I mean...

Mark and Javier, you are allowed to...

I'm -- yes, nobody is hearing...

High margin. On the third question, I've given very clear criteria on -- the 2 criteria we are looking at for acquisitions. And again, small to midsized acquisitions, geographic development to strengthen our local leadership, bang in line with what we did for Continental Building Products, and then continue to enrich the offer, broaden it a bit from time to time, also expand a bit on the value chain. What we did with Brüggemann, you have heard from Brüggemann, we're still managing with us his business. It's exactly that, moving a bit downstream because we think of side manufacturing, wood construction in Germany is going up strongly. So that's the kind of -- also of second criteria to offer and reach the offer or expand a bit our presence along the value chain. So nothing more specific. What we wanted also to highlight is that we don't intend and we don't have in our radar and we don't have in mind to have any transformational deal. This is not the way we are going to make acquisitions going forward. And the last question on data. Well, we have a gold mine, which is Ursula. So that's the first gold that we have within the team. More seriously, we have strong platforms within Saint-Gobain. So it was good to hear from Ursula coming from outside that there is no legacy problem within Saint-Gobain in terms of having the right ERP, the right CRM, the warehouse management system, the team in play, the website, the e-shops, all that is in place. The question is, do we leverage that enough? So we are going to work on a common data platform, data lake. We have started to create some what we call data lakes, where you throw all the data from your customers, and then you extract what is relevant for a given application, a given market. So that's more this kind of initiative to have data platform that we are going to drive in the next years and continue to add on the skills. We hire a lot of digital experts every year around the world, and we are attractive for that. So Ursula will lead the game in that regard with a combination of talent and also some data platform. But the basic -- I would say, more than the basic is in place, and there is no need for any catch-up. We can accelerate now on data.

So let's switch now to questions received from the Internet. So the first question is from Matthias Pfeifenberger, Deutsche Bank. Please share a scenario where you generate 9% margins in absence of a major economic slowdown? What would be the margin flow in an economic slowdown or crisis?

We have not made any scenario such as this one. I repeat again that we target double-digit margin. The 9% or the 11% is just the addition of the min and the max, so I would say quite a simple math. And for me, I'm very confident about the volume momentum that we have ahead of us. You have heard from Mark what is going on with almost 4 million housing units, which are lacking in the U.S. We have heard what we need in order to accelerate renovation in Europe. We have heard in Latin America. You have heard what we are going to replicate in Asia based on the success in India. So I'm confident about the volume trend of Saint-Gobain going forward with all -- everything we are doing also within the global markets. One small caveat as of today is the automotive market in Europe. Yes, the supply chain, we hoped it would find a solution. It's going to take a while, but automotive market is growing nicely in America, nicely in Asia. We are very well placed with the growing customers, which have published even better quarter than last year. So we are growing in those geographies. But short term, those volumes would be a bit down. The rest, I'm very confident, very optimistic and very passionate about driving growth volumes going forward. So there is no downside or whatever scenario that we have in our period.

Next question from Angus Middleton, United Workers Australia. The growth strategy for Europe, North and South America is well developed. Any reasons why Saint-Gobain has not adopted such a strategy in Australia?

I'm not going to take some short-term public information that could decrease a bit the sympathy we have between those 2 countries. So I'm not going to take any decision on the business for Saint-Gobain based on that. For sure, we love Australia. It's a big country. We have had so far other priorities. We have some small High Performance Solutions business in Australia. We have some licenses in Australia. So we sell products, we ship products to Australia. But so far, we have considered that within Asia Pacific, we have a lot on our plate with Santhanam. In Vietnam, we have been growing a lot and fast in Vietnam. In China, we are growing extremely fast. You heard from Paul Sheng, in Southeast Asia, Indonesia. So we have so much to do between India, China, South East Asia, that so far, Australia, frankly, has not been in our radars.

Next question from Patrick Millecam, Value Square. Why is the operating margin in Europe the lowest of all regions?

It's not lowest. Actually, it has the distribution content. And it is just the combination of that. It appears like that. Otherwise, as we said, again, distribution business, we are in best-in-class. The range is 6% to 7%. That's what we are saying. First half, it was 6.7%. So that's the only reason why it is, on the face of it, it looks lower.

Which at the end of the day, give the same ROCE.

Yes. Yes, I said that.

Again, let's look at the ROCE. We don't publish it by region because, again, we have one ROCE for the group. This is good enough. Our job is to create value for the group. But at the end of the day, those ROCEs are very similar.

Next question from Jean-Baptiste Rouphael, ODDO. 72% of sustainable sales, is it based on taxonomy?

Could we put the questions also on the screen, please? So the taxonomy coming from Europe is not defined. So we are not going to wait for that. It's going to be a complex matter. This is the reason why, a year ago, we embarked on this deep, thorough analysis of more than 400 product families of Saint-Gobain. To some extent, this is our own internal taxonomy. It has been audited by a third party. So it's a very serious methodology. We are going to track it every month. It doesn't change the needle every month. But regularly, every year, we are going to measure our share of sustainable sales. So we don't wait for Europe or other public bodies to find a world taxonomy. We take the lead because we think we can drive the changes within the construction sector. We are going to publish this methodology on our website. We are going to advocate with the Green Building Council of the deep job we have done because maybe it will be some of the corporate players who are going to drive this kind of view and thorough analysis on the taxonomy.

Next question, almost on the same subject from Gregor Kuglitsch. Have you calculated how much of your revenues are EU taxonomy aligned?

Again, the EU is not yet defined. So for instance, everything we do within our distribution, it’s 60% sustainable, all the job we do on renovation, so far, the EU have not made their mind about whether distribution should be allowed or not. For now, for us, it's absolutely obvious because when you train thousands of contractors to be certified for energy renovation -- energy efficiency renovation, it's part of how you can drive renovation in Europe. But again, it's going to take a while from the EU to finally land on the taxonomy. So we take the lead.

Second question is still from Gregor Kuglitsch. Do you think the 2022 margin will be closer to the 9% or the 11% of the range?

We'll talk in February. We will talk in February.

You will see the very strong margin of 2021. And again, you know our ambition, we are crystal clear. And you know that we are committed to execute and drive the group going forward for the better.

Next question again from Patrick Millecam, Value Square. To reach the 2025 target for growth, which expansion CapEx is needed?

In the CapEx range that we have given around 4% -- 3.5% to 4.5%, there is...

1% to 2% is for the growth CapEx.

Exactly. So this year, we should land around EUR 1.5 billion with EUR 1 billion in maintenance, EUR 500 million in gross CapEx. Going forward, we are going to grow a bit the growth CapEx aligned with this percentage related to sales, but towards EUR 600 million, EUR 700 million, EUR 800 million of growth CapEx step by step with very solid returns and very attractive products. So yes, there is a need for growth CapEx, 2/3 of that being outside of Western Europe. Back to the question of then on how to move our share towards North America and emerging markets, but clearly more CapEx for growth going forward. The one plant every 3 weeks, some of them are small construction chemical plant. It's a EUR 3 million to EUR 5 million investment. Other plants are big ones. When you invest in the plasterboard, this is our #6 in India, 6 on glass in India, #3 in Mexico, it's a big one. It's not every 3 weeks.

Next question from Ramsai Neelam, State Street Global Advisors. Glad to see increasing market share in major markets. Would you please share with us your market share by country or market?

If you have time. No, the big picture, you have heard from the region's CEO is that we are a leader on the renovation in Europe. We are a leader on renovation in Europe. I don't know anyone with EUR 30 billion in Europe with the bulk of that towards renovation. We are #1 in light construction in North America, certainty across the board is #1 on building materials offer. And you could ask -- you have the names of the customers, you could ask and you could look at the public peers in the U.S. We are #1 in Latin America. We are #1 in India. Santhanam showed you above 50%. We are shy about the last figure, above 50% in glass, above 50% in gypsum. This is the way we drive the business in terms of leadership positions. Same in Vietnam. We are #1 in plaster in China. Believe it or not, we are #1 in plaster in China.

I can tell you that the day a public report is released by any competitor, same day or the latest by next day morning, we get the analysis showing how we have performed as compared to the competition in their country. So it is reviewed and seen and we also share this to the Board every 3 months.

Second question from State Street again. Would you please share with us the current penetration rate of light construction in residential and commercial markets and the anticipated growth rates in these markets?

Well, again, we should go around the world because it varies a lot depending on the local construction habits. This is the reason why we have created local country organizations. So it's a lot about that in North America, a single-family home in the U.S. It's based on timber frame, cladding from Saint-Gobain, plasterboard and insulation behind it and roof. This is all the products of Saint-Gobain, fast and easy to install. If I take those of site manufacturing and new light construction trends, they are accelerating a lot in the Nordic countries. It's already there, but they are accelerating a lot. So it's double-digit type of growth, double-digit type of growth in Germany, Austria, Switzerland. It's moving also into Latin countries. So it varies, but that's on the residential side. If you think of the emerging markets, it's also a different story. But when you think of the steel frame, the multifamily homes in India or in China, it's moving towards that. On the nonresidential space, here also, it varies, but this building is not made of plain walls of concrete or cement. As I said, it's a pillar of concrete. All the rest is made of partitions, plasterboard and glass. So the new way of building nonresidential buildings is a lot on light construction. Again, because it saves on materials, it's very attuned in terms of circularity and very good in terms of wellbeing for the habitants.

Next question from Eric Lemarie, Bryan, Garnier. Do you intend to systematically cancel the shares you intend to purchase?

Yes.

Then second question from Eric. Would you be interested in acquiring software companies?

We have done so on a small scale. We have the example that Patrick showed in Denmark -- was a software company in Denmark, which is very successful, even faster than what we thought when we bought it. So we are testing the water with some small projects. We don't have anything big in mind. I've seen some recent examples. But yes, we are doing that, and we also participate and take majority positions in start-ups. We have that in Germany. We have that in the U.S. with some off-site manufacturing companies, very strong on software. So yes, it's part of the ecosystem of how we drive new ways of construction, light construction and making sure that we put our knowledge on sustainability and performance measurements into the software to design smart building. So it's part of the move of Saint-Gobain going forward.

Next question from [indiscernible] Holding. I'm going to translate. Could you please update us on the growth projects in plasterboard in Europe and in France that seem to grow faster than in the past, thanks to light construction?

Yes. No, this is the chart I've highlight in one of my slides on why we see a shift towards modern light construction with growth and big silos markets in emerging market but also in developed countries. I think you know very well the chart where we can measure the square meters of plasterboard per head in the different countries. It's above 10% in the U.S. It's in the 5% to 6% range in France, accelerating. It's 2% to 3% in Spain. It's below 1% in Brazil. It's below 0.5% in India. So this is the path towards light construction acceleration country by country. So this is clearly, a very strong dynamic. We see it in France, countries like Spain, which 15, 20 years ago, were a bit skeptical about the attributes of plasterboard are accelerating in a big way, and we expand our capacity in Spain as we speak.

Next question from Tobias Woerner, Stifel. You grew organically over the last 20 years by 2% with 0.5% volume. Now your target 3% to 5% like-for-like. How do you split this in price and volume?

First, look at the future but, Sreedhar, I'll let you answer.

Yes.

The group has totally changed. The group has changed in terms of organization. The group has changed -- we have divested EUR 5 billion of businesses. Those businesses in a downfall, they would fall like a rock in terms of sales and in terms of margin. So the business profile of the group -- if you want to take time to modelize any kind of scenario, the business profile of the group has radically changed. We have healthy businesses. And during tough times, if there is any downturn in a country or we did have difficulties in India in April and May because of the health situation, and again in Vietnam in recent months, but the good businesses, they make a difference during the tough times. So we have divested so many businesses in the last 2.5 years. I don't compare with 20 years ago. The group profile has totally changed without even mentioning the strong acquisitions we have made. So for me, when I think ahead, I know that I don't have a poor business which is going to fall like a rock like we used to have in some of our portfolio.

We've just taken a minimal assumption of price. I mean if you really -- while I don't like and I agree with Benoit, we should not be looking at the past. If you really want to have a reference of last 10 years, we had a price increase of 1%. So for us, it's a bare minimum price assumption we have taken.

We didn't want to screw the organic growth ambition with high inflation that we face right now. So we take a normalized type of inflation versus we'll have 8%, otherwise, it doesn't make sense.

So that's a good transition for a second question from Tobias Woerner on the pricing. Do you think that you will have enough pricing power to offset a longer-lasting inflationary period? And where does this pricing power come from when compared to the past?

The answer is yes on the first side of the question, and I think we have delivered that quarter-by-quarter. And we'll go into more details during our third quarter conference call. Distribution, our outlets is doing that extremely well, whether it's in the U.K., in the Nordics or in France. And this pricing power, again, we have divested businesses which didn't have any pricing power. That's point number one. Second, we are moving towards solutions, added value, not comparing SKU by SKU, not comparing the 4 millimeter of glass with 4 millimeter of glass on the other side. We are moving toward systems and solutions. This is the way we are going to continue to shift and enhance our pricing power. We have seen what we have delivered in the last 12 to 18 months, and we'll continue to drive an increase for that.

Next question from [ Emmanuel ] [indiscernible]. What do you think the impact of increasing raw materials and energy could be on margin?

We said and confirmed in the morning this press release that Saint-Gobain is confident to offset the inflation. So we'll continue to do that. And I said, our objective is to really compensate the inflation every time when we see it, and we have been extremely proactive in pushing this.

And an inflation environment for us is good. We know how to price that to the end customers, and it doesn't change the volume of activity because customers are busy and there is an urgent call for build renovation. It's there around the world. So an inflationary -- inflation environment for us is something we know how to deal with and to make good margins and good money.

Yes. And in distribution, it clearly is very favorable.

Next question, again from Gregor Kuglitsch, UBS. What would you do if the multiple rerating does not happen? Would you consider more radical action like spinoff or more aggressive buybacks?

I don't consider this scenario, the multiple rerating will happen.

Next question from Matthew Donen, Morningstar. Heavy sides are investing in downstream offering to provide one-stop shop solutions and raw material as cement. How are you dealing with this threat? And would you acquire your heavy materials business to secure supply chain?

Well, first, I don't see that happening and challenging our solutions when we talk to our customers. And second part of the question, the answer is clearly no. They are not going to go into heavy materials business.

Next question from Cesare Colombo, Fideuram Asset Management. Considering how low valuation multiples you are, why are you not buying back your shares for just EUR 2 billion and not EUR 5 billion like acquisitions?

Because when we make such a good acquisition like Continental Building Products and we create value in 18 months, we strive with absolutely exceptional teams that are embedded in Mark's team, it creates much, much more value for the mid to long term for our shareholders. I'm absolutely convinced about that. When we buy Chryso at 12x multiple, below 8 after synergies, I know, I'm extremely confident that will drive long-term value for our shareholders and the shareholders will reconnect that will give us the credit and the confidence to continue to do that. So I'm absolutely confident.

But I think it's important to recognize that it's the first time we have given a precise in euro terms, the share buyback, we are going to do in a given time frame. So in the past, we have always said that we will see it opportunistically. So we have been much more committed, and we have given the numbers.

Next question from [indiscernible]. Would you say that the group is globally negatively impacted by economic inflation or a plus in distribution and a minus in manufacturing?

We look -- I mean we look at each business. I mean the compensation of inflation has to be done. The review has to be done by business and by country. So you don't offset one in business inflation with some other business upside. So everything -- what I say is manufacturing businesses, we will compensate the inflation.

Next question from Eric Lemarie. You've mentioned you know your customer policy as well as your efforts to deploy tools like CRM, but it's difficult to believe customers were not a top priority in the past for Saint-Gobain. What has changed?

What has changed fundamentally is that the decision on customers across all Saint-Gobain offer is made in the country, is made extremely fast. In the past, I give you a precise example, if you were to talk to a big civil engineering company, let's say, in Germany, you could have a big job site, a big margin in one product line, except that for the other product line, it was a negative margin or a challenging margin. We had to go to Paris to see whether we should take the job. And at the end of the day, no decision was already taken, and we lost the job. Today, the guy, women, the men running the countries take a decision, and they don't care whether the product line has a higher margin versus a lower one for the other as long as the overall contract for this civil engineering company makes sense. So this is a drastic change in terms of speed of decision and then decision to ultimately say, "I go with this offer for this civil engineering company, even if it's 5 product line, 3 superb margins, 2 so-so." In the past, we would lose the job. So in terms of market share gain and in terms of driving the speed and the commitment of our same people, this is a drastic change.

And bonuses are aligned to the performance of the country. So that also makes a huge difference.

Next question from [indiscernible]. The CO2 reduction is a challenge today with sometimes being a bit late on it. What other challenge do you see on the subject in the short and middle term to fight CO2 reduction?

What are the other challenges to fight -- I don't exactly understand the question.

She seems to believe that we are a bit late on the CO2 challenge to reduce, not Saint-Gobain, but especially in the world. What could we do to tackle that faster?

Well, clearly, we need to accelerate in how we maximize our impact, so accelerate our growth. That's on the one side. The one area where I think we are late is on the green energy. On green energy, there is clearly a need to accelerate. When we make plasterboard in Romania, we have no choice but buy energy with coal content. Same in Poland. So we need to drastically accelerate on green energy available around the world. For me, that's on our Scope 2. This is clearly one area where we need to accelerate. We cannot do it alone. We can go with hydropower in Norway like we have done for our plasterboard plant. We can go with windmill energy on our Scope 2 for the U.S., what we have done, but there is a need for supply on green energy.

We are getting towards the end, maybe a couple more. Manish Beria, Societe Generale. Your IR on growth CapEx will be 20%. Will you not be investing in capital-intensive business? This suggests growth CapEx on incremental sales will be 0.5 versus 1 in the past. What has changed to give such a difference in capital intensity?

I think the CapEx will be invested if there is an IRR. So I mean I -- there may be a business which is capital-intensive. As long as it gives me the return, I have no problem in investing and growing the business. Again, that's where there will be a trade-off each time when we have to allocate CapEx, and that will happen in a very systematic manner.

The journey we have seen from Santhanam in India, 17% annual growth rate was purely organically.

Yes.

We have not made acquisitions.

Yes.

It was organically done. 17% compound annual growth for the last 20 years, 17% purely on organic growth. I don't even give you the ROCE and the IR of those investments. This is what we have done. So that's a great example of we can have a capital-intensive business, it was glass, delivering fantastic IR and growth over this kind of period.

[indiscernible] Why have you decided to widen the payout ratio range for the dividend? Could you expect to be in the midpoint range?

We -- as we said, we target to have a sustainable growth in the dividend. So that's the point which you have to keep in mind, one. Second, we are in a growth story. We want to grow. We want to accelerate growth, profitable growth. So I don't see any reason why you should assume that the dividend will not progress because we are going to grow profitably. It is true that we have widened the range. It gives us the flexibility when you reduce by 5, but you also increase it by 10. So at this point of time, I just want to say that we remain ambitious. We want to grow. We want to profitably grow, which means the net result after tax will also grow. It will have a better return for the shareholders.

And last but not least to conclude this fantastic journey, Tobias Woerner, Stifel. What trajectory would you envisage in achieving your return on capital employed target of 12% to 15% by 2025?

Well, we'll publish it for 2021 in February, and I hope we'll surprise you positively. So I'm confident, I'm very confident about our trajectory on this journey for return on capital employed. Again, this is a range on average during the period. That means we can be on the high side during this period. Was it the last question?

That's the last question.

So thank you very much for all your time. Thank you for your attention behind the screen, and thank you again for the commitment you made for a full day for some of you coming from London. It is very much appreciated to put some faces on names that we have not seen for a while. So again, for us, it's a very important moment in terms of opening this new chapter for Saint-Gobain. Thank you for the support and the positive comments that you have made. I'm extremely confident about this inspiring chapter for growth within Saint-Gobain. You have seen a fantastic team, and there is even more behind all of them. I can tell you that they all have a fire in their bellies to deliver. We are committed to create value for our shareholders. We are excited about Grow & Impact. It is a very, very inspiring journey and plan for all the teams within Saint-Gobain. I'm thrilled to work with Sreedhar and Vivien on how we communicate to our shareholders. I know the journey. You have highlighted where we need to go. I'm confident we'll get there with a big success on Grow & Impact. Again, thank you very much for your time and safe trip back home. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]