A long-term investor
Wendel is a hands-on investor and shareholder that assists sector-leading companies in their long-term development. Wendel's business model combines the entrepreneurial passion born of a long family tradition with a culture of performance and accountability.
Saint-Gobain
Habitat, construction, design, manufacturing and distribution of building materials
Present in 59 countries • 210,000 employees • 4,000 Building Distribution sales outlets. Flat Glass: n°1 in Europe • Insulation: n°1 worldwide • Gypsum: n°1 worldwide (plasterboard) • Pipe: n°1 worldwide • Specialized Distribution: n°1 in Europe • Packaging: n°1 in Europe • High-Performance Materials: n°1 worldwide
| (in millions of euros) | 2007 | 2008 | Δ |
| Net sales | 43,421 | 43,800 | + 0.9% |
| Operating income | 4,108 | 3,649 | |
| as a % of net sales | 9.5 % | 8.3 % | -11.1% |
| Net income (1) | 2,114 | 1,914 | -9.5 % |
| Net financial debt | 9,928 | 11,679 |
(1) Net income (group share) excluding capital gains or losses
on divestments, asset impairments and significant non-recurrent
provisions (including the European Commission’s Flat Glass fines)
How Wendel is involved
• Board of Directors:
Frédéric Lemoine beginning April 9, 2009,
Bernard Gautier and Gilles Schnepp following the 2009 annual shareholders’ meeting
• Appointments and Compensation Committee:
Bernard Gautier
• Strategy Committee:
Frédéric Lemoine beginning April 9, 2009
Why we invested
Saint-Gobain focuses on the housing market and aims to be the world leader through high-performance solutions and materials that meet the industrial challenges of tomorrow. As the European or global leader in all its activities, with very strong local positions, Saint-Gobain boasts a strong capacity for innovation in developing high-value building materials.
The Group bases its development on three pillars: building products, innovative materials and specialized distribution. Each of these segments has specific growth drivers with their common denominators being energy efficiency and expansion in emerging markets.
How Wendel has helped Saint-Gobain to expand
Through its two seats on Saint-Gobain’s Board of Directors (with a third to come after the 2009 shareholders’ meeting), Wendel has reaffirmed its support for Saint-Gobain’s strategy. It is represented on its Strategy Committee, which is chaired by an independent Board member and includes Saint-Gobain’s CEO and the Chairman of Wendel’s Executive Board. This Committee is a forum for further discussion and reflection on strategic issues and sources of improvement. It has worked, among other things, on Saint-Gobain’s adjustments to the economic downturn, as well as on active management of its sale prices. Wendel also has a seat on the Appointments and Compensation Committee, which, among other things, lays down the principles of management incentives.
Holding up well in a tough environment
Saint-Gobain’s consolidated net sales rose 3.7% on a constant-currency basis in 2008, to €43.8 billion. Organic growth accounted for +0.3% of this (including +3.4% from prices and -3.1% from volumes), while showing a sharp contrast between a solid first nine months of the year (organic growth of 2.4%, including +3.3% from prices and -0.9% from volumes) and the fourth-quarter downturn (organic growth of -5.5%, including +3.8% from prices and -9.3% from volumes). This sharp fourth-quarter drop in sales volumes was driven by an accelerating downturn on the construction markets in most developed countries, the global contraction in industrial markets, the automotive sector in particular, and the spread of the economic slump to emerging markets. In spite of these unfavorable developments, Saint-Gobain managed to maintain satisfactory pricing throughout the year in each of its sectors.
Operating income fell by 11.2% to €3,649 million and by 9.1% on a constant-currency basis. The operating margin came to 8.3% of net sales (11% excluding Building Distribution), while net income on ordinary activities came to €1,914 million.
Financial debt came to €11,679 million. Saint-Gobain got the jump on its upcoming maturities in postponing the Maxit maturity to October 2010, in issuing €1.75 billion in debt on the bond markets and in issuing €1.5 billion in new shares.
Outlook
Saint-Gobain will continue its aggressive operating adjustments in 2009, in particular in optimizing its sale prices and cutting costs further in all its business lines. In 2009, it has already begun plans that will cut another €700 million in costs, thus raising the total reduction for 2008 and 2009 to €1.1 billion. In addition, capital expenditure will be cut by €500 million, acquisitions will be put on hold, and a divestment plan will be managed on a pro-active and opportunistic basis.
