Saint Gobain, one of the largest producers of glass and building materials in the world, has just released their full-year 2020 results. In what was a turbulent year for everyone in the industry and indeed around the world, the results are respectable.
The key points
Taken from the published summary, these are the key points of the report according to Saint Gobain, as well as an overview of the figures that matter.
- Responsible management of the health crisis with regard to all of the Group’s stakeholders; solid achievements in ESG4, with new commitments for 2030
- Successful completion of “Transform & Grow”, a year earlier than planned
- Strong 4.8% organic growth in sales in H2, accelerating to 6.4% in Q4
- Sharp rebound in operating income in H2 2020 up 22.4% like-for-like, with a record operating margin of 10% (up 160 bps versus H2 2019)
- Increase of 20 bps in the EBITDA margin to 11.6% for the full year, and of 200 bps in H2
- Record recurring net income in H2, up 23.4% to €1,198 million
- Record free cash flow1 of €3,044 million in 2020 (up 64%), and net debt reduced to €7.2 billion
- Reduction in the number of shares outstanding, to 530 million from 542 million at end-2019
- 2020 dividend at €1.33 per share, to be paid wholly in cash
- Evolution in Saint-Gobain governance with effect from July 1st, 2021
You can read the full 2020 report here.
As with most major companies in our sector, 2020 comparisons to the year before will have taken a hit, most of it being done in the first half of the year. Then, as with most companies, H2 of 2020 saw business roar back and far outpace the business done in H2 of 2019. It meant that much of the damage done in the first half of the year was reversed. And if you look at the free cash flow levels, the company ended up nearly 64% higher than in 2019. A remarkable stat for what was a truly extraordinary year in all senses of the word.
Still, it did not prevent a 3.8% drop in sales year on year or a reduction of 12.3% in income. Considering the damage done in 2020 and the extreme challenges all businesses faced, these, I believe, are respectable numbers. And with H2 performing so well, it sets up Saint Gobain for a very positive 2021.
This is what the Chairman and outgoing CEO Pierre-Andre de Chalendar had to say about the results:
The record results of the Group for second-half 2020, in a year in which the world suffered its worst crisis in decades, confirms the pertinence of the Group’s differentiation strategy and the success of its profound transformation begun several years ago. Its new decentralized organization closely aligned with its markets and customers gives it the agility, efficiency and responsiveness it needs to capture all opportunities and maximize synergies. In reshaping its portfolio, the Group is focusing its energies on businesses offering the highest potential for profitable, sustainable growth. Our record free cash flow generation, the result of operational improvements and strict financial discipline, has enabled us to significantly reduce our debt despite the difficult economic environment. I would like to sincerely thank the teams for these excellent results achieved and for their unwavering commitment and solidarity.
Exceeding our operating and financial objectives reinforces our commitment and action in favor of a more sustainable and responsible world, which is at the heart of Saint-Gobain’s business model and values. Our comprehensive range of innovative solutions promoting energy efficiency, along with our extensive exposure to the renovation market, ideally position the Group to benefit from plans launched across the globe to support the energy transition imperative.
For this new chapter, I am delighted to be soon handing over the executive role to Benoit, who has in-depth knowledge of the Group, has shown his leadership in the different strategic and operating roles he has held, and has managed, with the success we see today, critical projects like our transformation plan “Transform & Grow” or the acquisition of Continental Building Products. He perfectly embodies the Group’s values and its future, and will successfully steer the Group forward in the best interests of its shareholders and all of its stakeholders.”
Earnings season in fenestration continues. As more major companies in this sector report their full-year results for 2020, I expect many to look and feel very much the same as this. A terrible H1, then a barnstorming H2 which makes up much of the lost ground in the first six months of 2020.
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