Saint-Gobain: First-half 2016 Results
PARIS, July 28, 2016 /PRNewswire/ --
Organic growth in all three business sectors and in all regions
Significant improvement in results across the board
- Organic growth at 2.9% with a sharp 3.5% improvement in volumes buoyed partly by the positive impact of a greater number of working days
- Negative 0.6% price impact in a still deflationary environment in terms of prices and raw material and energy costs
- Negative 3.5% currency impact on sales and negative 1.0% Group structure impact
- Operating income up 7.3% on a reported basis and up 10.2% like-for-like
- Significant 13.0% rise in recurring net income and free cash flow
- Buyback and cancellation of around 11 million shares in the first half
- Recurring EPS[1] up 16.5%
- Objectives for full-year 2016 confirmed; like-for-like improvement in operating income expected in the second half versus second-half 2015
Change
(EURm) H1 2015 H1 2016 Change like-for-like
Sales 19,860 19,549 -1.6% +2.9%
EBITDA 1,886 1,957 +3.8%
Operating income 1,275 1,368 +7.3% +10.2%
Recurring net income[2] 552 624 +13.0%
Free cash flow[3] 728 823 +13.0%
Pierre-André de Chalendar, Chairman and Chief Executive Officer of Saint-Gobain, commented:
"Saint-Gobain's sales for first-half 2016 confirm our February forecasts, with France stabilizing and all regions making a strong contribution to growth. Our strategy of investing in emerging markets provides us with a diversified platform for profitable growth. Our first-half results also benefited from efforts to optimize our operations, particularly in Western Europe, and from upbeat trading in the US. The results are in line with our objectives and we expect a like-for-like improvement in operating income for second-half 2016 versus second-half 2015. While the June 23 Brexit vote in the UK has created a climate of uncertainty, it does not affect our objectives."
- Recurring earnings per share from continuing operations.
- Recurring net income from continuing operations excluding capital gains and losses on disposals, asset write-downs and material non-recurring provisions.
- Cash flow from continuing operations excluding the tax impact of capital gains and losses on disposals, asset write-downs and material non-recurring provisions less capital expenditure
Operating performance
First-half sales came in at €19,549 million, including a significant 3.5% negative currency impact resulting namely from the depreciation of Latin American currencies - and to a lesser extent the pound sterling - against the euro.
The negative 1.0% Group structure impact is a result of the disposals carried out in 2015 aimed at optimizing the Building Distribution portfolio.
On a like-for-like basis, sales were up 2.9% on the back of 3.5% volume growth driven partly by the positive impact of a greater number of working days in the second quarter (estimated impact of just over +1% in the first half). All Business Sectors and regions delivered volume growth. In a still deflationary environment in terms of raw material and energy costs, prices remained slightly down, losing 0.6% over the six months to June 30.
The Group's operating income climbed 7.3% on a reported basis and 10.2% like-for-like. The Group's operating margin[1] rallied to 7.0%, gaining 0.6 percentage points compared to first-half 2015. All Business Sectors reported margin growth, particularly in industry and to a lesser extent Building Distribution, which was hit by the deflationary environment.
Performance of Group Business Sectors
Innovative Materials like-for-like sales moved up 4.4%, powered by Flat Glass. There was a further significant improvement in the Business Sector's operating margin, which came in at 11.2% versus 10.2% one year earlier.
- The second quarter confirmed the upbeat trends seen early in the year in Flat Glass, which posted 6.5% organic growth over the first half. Automotive glass continued to enjoy good momentum in all regions except Brazil. Construction markets remained upbeat in Asia and emerging countries and benefited from the upturn in volumes in Western Europe and a rise in float glass prices. The operating margin continued to recover, at 8.8% versus 7.4% in first-half 2015, buoyed by additional volumes and improved operating leverage.
- High-Performance Materials (HPM) like-for-like sales rose 2.0% over the first six months of 2016. Plastics and Textile Solutions performed well; Abrasives delivered organic growth led by prices. Ceramics contracted in the three months to June 30 after a first quarter boosted by high levels in refractories. The operating margin widened to 14.0% from 13.5% in first-half 2015.
Construction Products (CP) like-for-like sales advanced 1.6% over the first half lifted by Interior Solutions, which drove a significant improvement in the Business Sector's operating margin, up to 9.4% compared to 8.7% for the same period in 2015.
- Interior Solutions posted 5.2% organic growth in the first half on the back of strong market positions, which allowed it to benefit from good trading in all regions. In a still deflationary environment, volumes proved upbeat in Western Europe (partly helped by the positive impact of a greater number of working days) and in North America. Asia and emerging countries confirmed their good performance as well as the merits of the growth operations carried out in this region over the past few years. The operating margin climbed to 10.2% from 9.0% in first-half 2015.
- Operating margin = operating income expressed as a percentage of sales.
- Exterior Solutions like-for-like sales retreated 2.0% over the first half, due solely to the expected decline in Pipe, which was hit by contracting markets in its main regions. However, Exterior Solutions stabilized in the second quarter, helped by an acceleration in volumes for Roofing in the US. Mortars reported organic growth led by Asia and emerging countries and by the improvement in Western Europe, which offset tougher conditions in Brazil. Overall, the operating margin steadied at 8.3%.
Building Distribution like-for-like sales rose 3.1%, with the second-quarter performance buoyed by the positive impact of a greater number of working days. Trading in France benefited from the first signs of an upturn in new-builds, while the renovation market remains sluggish. Germany, the UK and especially Nordic countries continued to report good volume trends. Amid a fall in the cost of goods sold in Europe, prices were down - particularly in France and the UK. The sharp economic slowdown in Brazil continued to take its toll on trading.
The operating margin came in at 2.8% versus 2.6% in first-half 2015, benefiting from an upturn in volumes in Europe but affected by a deflationary environment.
Analysis by region
The Group delivered organic growth in all of its regions in the first half, as trends observed earlier in the first quarter continued in the three months to June 30.
- France saw confirmation of stabilizing business over the first half, posting organic growth of 0.6% buoyed by the positive impact of a greater number of working days in the second quarter. New-build activity showed the first signs of improvement, while the renovation market remains sluggish for the time being. The decline in Pipe weighed on first-half results. The operating margin narrowed slightly to 2.4%, hit by the deterioration in Pipe.
- Other Western European countries advanced 4.3% over the six months to June 30, with organic growth picking up pace in the second quarter. Besides the positive impact of a greater number of working days, this advance reflects good market conditions in all of the Group's main countries. The region's operating margin continued to rally, at 5.9% versus 5.4% in first-half 2015.
- North America reported a 3.6% rise in like-for-like sales in the first half, in line with the three months to March 31. Activity in the construction market again proved upbeat, while industrial markets remained uncertain. The operating margin rallied sharply, up to 11.6% versus 9.5% in first-half 2015, powered by the strong advance in Roofing.
- Asia and emerging countries reported further good organic growth, at 4.9% for the first half, led by Eastern Europe and Latin America, despite the slowdown in Brazil. Asia was up, with trading bullish in India, despite a downturn in China. The operating margin continued to improve, at 10.6% of sales versus 10.0% one year earlier.
Analysis of the consolidated financial statements for first-half 2016
The unaudited interim consolidated financial statements for first-half 2016 were subject to a limited review by the statutory auditors and were approved and adopted by the Board of Directors on July 28, 2016.
%
H1 2015 H1 2016 change
EURm (A) (B) (B)/(A)
Sales and ancillary revenue 19,860 19,549 -1.6%
Operating income 1,275 1,368 7.3%
Operating depreciation and amortization 611 589 -3.6%
EBITDA (op. inc. + operating depr./amort.) 1,886 1,957 3.8%
Non-operating costs (154) (180) 16.9%
Capital gains and losses on disposals, asset
write-downs, corporate acquisition fees and
earn-out payments (41) (32) -22.0%
Business income 1,080 1,156 7.0%
Net financial expense (328) (287) -12.5%
Income tax (236) (261) 10.6%
Share in net income of associates 0 2 n.s.
Net income from continuing operations 516 610 18.2%
Net income from discontinued operations 69 0 n.s.
Net income before minority interests 585 610 4.3%
Minority interests 27 14 -48.1%
Net attributable income 558 596 6.8%
Earnings per share[2] (in EUR) 0.98 1.08 10.2%
Net attributable income from continuing
operations 493 596 20.9%
Recurring net income from continuing
operations[1] 552 624 13.0%
Recurring earnings per share[2] from
continuing operations[1] (in EUR) 0.97 1.13 16.5%
Cash flow from operations[3] 1,195 1,260 5.4%
Cash flow from operations (excluding capital
gains tax)[4] 1,185 1,251 5.6%
Capital expenditure 457 428 -6.3%
Free cash flow[5] 728 823 13.0%
Investments in securities 92 68 -26.1%
Net debt 7,995 6,624 -17.1%
1. Excluding capital gains and losses on disposals, asset write-downs and material non-recurring provisions.
2. Calculated based on the number of shares outstanding at June 30 (552,574,120 in 2016, versus 569,364,905 in 2015).
3. Cash flow from operations = operating cash flow from continuing operations excluding material non-recurring provisions.
4. Cash flow from operations excluding capital gains tax = (3) - tax impact of capital gains and losses on disposals, asset write-downs and material non-recurring provisions.
5. Free cash flow = (4) - capital expenditure of continuing operations.
Consolidated sales advanced 2.9% like-for-like, buoyed by volume growth and despite a negative 0.6% price effect in a deflationary environment. On a reported basis, sales were down 1.6%, with a negative 3.5% currency impact chiefly resulting from the depreciation of Latin America currencies - and to a lesser extent the pound sterling - against the euro. The negative 1.0% Group structure impact essentially reflected disposals carried out in the Building Distribution business in 2015.
Operating income climbed 7.3% based on reported figures, despite a negative currency impact. The operating margin improved to 7.0% of sales versus 6.4% in first-half 2015, buoyed by margin gains in all Business Sectors.
EBITDA (operating income + operating depreciation and amortization) was up 3.8% to €1,957 million, and the EBITDA margin came in at 10.0% of sales versus 9.5% in first-half 2015.
Non-operating costs totaled €180 million, with a rise in restructuring costs compared to the same period in 2015 owing to the roll-out of certain projects earlier than planned. The Group maintains its forecast of a slight decrease in restructuring costs for the year as a whole. The €45 million accrual to the provision for asbestos-related litigation involving CertainTeed in the US is unchanged from the last few half-year periods.
The net balance of capital gains and losses on disposals, asset write-downs and corporate acquisition fees was an expense of just €32 million versus an expense of €41 million in first-half 2015. In line with the increase in operating income, business income climbed 7.0% to €1,156 million.
Net financial expense improved significantly, down 12.5% to €287 million from €328 million, mainly reflecting the decrease in net debt; the cost of gross debt remained at 3.9% at June 30, 2016, in line with end-2015.
The income tax rate on recurring net income remained stable at 30%. Income tax expense totaled €261 million (€236 million in first-half 2015).
Recurring net income (excluding capital gains and losses on disposals, asset write-downs and material non-recurring provisions) jumped 13.0% to €624 million.
Net attributable income was up 6.8% to €596 million but jumped 20.9% excluding net income relating to Verallia in 2015.
Capital expenditure fell to €428 million including a negative currency impact (€457 million for the same period in 2015). Capex represented 2.2% of sales compared to 2.3% in the same period one year earlier.
Cash flow from operations rose 5.4% to €1,260 million; before the tax impact of capital gains and losses on disposals, asset write-downs and material non-recurring provisions, cash flow from operations advanced 5.6% to €1,251 million and free cash flow rose 13.0% to €823 million (4.2% of sales versus 3.7% in first-half 2015).
The difference between EBITDA and capital expenditure improved, up 7.0% to €1,529 million (€1,429 million in first-half 2015), representing 7.8% of sales (7.2% in first-half 2015).
Operating working capital requirements (operating WCR) totaled €4,244 million (€4,448 million at June 30, 2015) and represented 39.1 days' sales, an improvement of 1.7 days ear-on-year, owing chiefly to the decrease in inventories.
Investments in securities were limited, at €68 million (€92 million in first-half 2015) and correspond to small-scale acquisitions in the three business sectors.
Net debt fell 17.1% from €8.0 billion at June 30, 2015 to €6.6 billion at June 30, 2016, reflecting the favorable impact of the Verallia disposal in second-half 2015, partly offset by the dividend paid out in June 2016 compared to the payment in July 2015, and by the €857 million in share buybacks over the last two half-year periods. Net debt represents 36% of consolidated equity, compared to 40% at end-June 2015.
The net debt to EBITDA ratio on a rolling 12-month basis came in at 1.7, compared to 2.1 one year earlier.
Update on asbestos claims in the US
Some 1,700 claims were filed against CertainTeed in the first half of 2016 (versus 2,000 claims in first-half 2015).
At the same time, around 2,100 claims were settled (versus 2,000 in first-half 2015), bringing the total number of outstanding claims at June 30, 2016 to around 35,200, down slightly on December 31, 2015 (35,600 claims).
A total of USD 89 million in indemnity payments were made in the US in the 12 months to June 30, 2016, versus USD 65 million in the year to December 31, 2015, reflecting the catch-up in payments in respect of settlements still to be documented.
2016 outlook and action priorities
After a first half in line with our forecasts, our outlook for the second half is as follows:
- France should gradually benefit from the recovery in new-builds after stabilizing over the six months to June 30.
- Other Western European countries should continue to deliver growth, even though the UK could be hit by uncertainties following the June 23 Brexit vote.
- North America should advance despite uncertainty in industrial markets.
- Asia and emerging countries should continue to see good organic growth for our businesses, despite the contraction in Brazil.
The Group confirms its action priorities for the year as a whole:
- keep its priority focus on sales prices in a deflationary environment;
- unlock additional savings of around €250 million (calculated on the 2015 cost base), including €150 million in the first half;
- pursue a capital expenditure program of around €1,400 million;
- renew its commitment to invest in R&D in order to support its strategy of differentiated, high value-added solutions;
- keep its priority focus on high free cash flow generation;
- pursue its plan to acquire a controlling interest in Sika.
In line with its long-term objectives, the Group bought back 10.9 million shares and canceled 11 million shares in the first six months of 2016.
The Group confirms its objectives for 2016 and expects a like-for-like improvement in operating income in the second half versus second-half 2015.
Financial calendar
- An information meeting will be held at 8:30am (GMT + 1) on July 29, 2016 and will be broadcast live on http://www.saint-gobain.com
- Sales for the first nine months of 2016: October 27, 2016, after close of trading on the Paris Bourse.
All indicators contained in this press release (not defined in the footnotes) are explained in the notes to the financial statements in the interim financial report, available by clicking here: https://www.saint-gobain.com/en/finance/regulated-information/half-yearly-financial-report
The glossary below shows the note of the interim financial statements in which you can find an explanation of each indicator.
Glossary:
Cash flow from operations :Note 3
Net debt :Note 7
EBITDA :Note 3
Non-operating costs :Note 3
Operating income :Note 3
Net financial expense :Note 7
Recurring net income :Note 3
Business income :Note 3
Important disclaimer - forward-looking statements:
This press release contains forward-looking statements with respect to Saint-Gobain's financial condition, results, business, strategy, plans and outlook. Forward-looking statements are generally identified by the use of the words "expect", "anticipate", "believe", "intend", "estimate", "plan" and similar expressions. Although Saint-Gobain believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions as at the time of publishing this document, investors are cautioned that these statements are not guarantees of its future performance. Actual results may differ materially from the forward-looking statements as a result of a number of known and unknown risks, uncertainties and other factors, many of which are difficult to predict and are generally beyond the control of Saint-Gobain, including but not limited to the risks described in Saint-Gobain's registration document available on its website (http://www.saint-gobain.com). Accordingly, readers of this document are cautioned against relying on these forward-looking statements. These forward-looking statements are made as of the date of this document. Saint-Gobain disclaims any intention or obligation to complete, update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
This press release does not constitute any offer to purchase or exchange, nor any solicitation of an offer to sell or exchange securities of Saint-Gobain.
For any further information, please visit http://www.saint-gobain.com
Appendix 1 : Results by business sector and geographic area
Change on Change on a Change on
H1 H1 an actual comparable a comparable
2015 2016 structure structure sturcture and
(in EUR m) (in EUR m) basis basis currency basis
I. SALES
By sector and division:
Innovative Materials [1 4,922 4,912 -0.2% -0.4% +4.4%
Flat Glass 2,633 2,656 +0.9% +0.8% +6.5%
High-Performance Material 2,297 2,264 -1.4% -1.8% +2.0%
Construction Products [1] 6,079 6,008 -1.2% -2.1% +1.6%
Interior Solutions 3,197 3,297 +3.1% +2.0% +5.2%
Exterior Solutions 2,913 2,753 -5.5% -6.2% -2.0%
Building Distribution 9,338 9,104 -2.5% +0.6% +3.1%
Internal sales and mi -479 -475 n.m. n.m. n.m.
Group Total 19,860 19,549 -1.6% -0.6% +2.9%
[1] including intra-sector eliminations
By geographic area:
France 5,282 5,270 -0.2% +0.6% +0.6%
Other Western European 8,574 8,660 +1.0% +1.6% +4.3%
countries
North America 2,738 2,674 -2.3% +3.1% +3.6%
Emerging countries and Asia 4,219 3,956 -6.2% -6.5% +4.9%
Internal sales -953 -1,011 n.m. n.m. n.m.
Group Total 19,860 19,549 -1.6% -0.6% +2.9%
Change on H1 H1
H1 H1 an actual 2015 2016
2015 2016 structure (in % of (in % of
(in EUR m) (in EUR m) basis sales) sales)
II. OPERATING INCOME
By sector and division:
Innovative Materials 504 552 +9.5% 10.2% 11.2%
Flat Glass 194 234 +20.6% 7.4% 8.8%
High-Performance Materials 310 318 +2.6% 13.5% 14.0%
Construction Products 529 564 +6.6% 8.7% 9.4%
Interior Solutions 288 335 +16.3% 9.0% 10.2%
Exterior Solutions 241 229 -5.0% 8.3% 8.3%
Building Distribution 242 253 +4.5% 2.6% 2.8%
Misc. 0 -1 n.m. n.m. n.m.
Group Total 1,275 1,368 +7.3% 6.4% 7.0%
By geographic area:
France 136 124 -8.8% 2.6% 2.4%
Other Western European 460 513 +11.5% 5.4% 5.9%
countries
North America 259 310 +19.7% 9.5% 11.6%
Emerging countries and Asia 420 421 +0.2% 10.0% 10.6%
Group Total 1,275 1,368 +7.3% 6.4% 7.0%
Change on H1 H1
H1 H1 an actual 2015 2016
2015 2016 structure (in % of (in % of
(in EUR m) (in EUR m) basis sales) sales)
III. BUSINESS INCOME
By sector and division:
Innovative Materials 463 462 -0.2% 9.4% 9.4%
Flat Glass 181 177 -2.2% 6.9% 6.7%
High-Performance Materials 282 285 +1.1% 12.3% 12.6%
Construction Products 475 528 +11.2% 7.8% 8.8%
Interior Solutions 258 319 +23.6% 8.1% 9.7%
Exterior Solutions 217 209 -3.7% 7.4% 7.6%
Building Distribution 196 219 +11.7% 2.1% 2.4%
Misc. (a) -54 -53 n.m. n.m. n.m.
Group Total 1,080 1,156 +7.0% 5.4% 5.9%
By geographic area:
France 107 90 -15.9% 2.0% 1.7%
Other Western European 393 465 +18.3% 4.6% 5.4%
countries
North America (a) 200 226 +13.0% 7.3% 8.5%
Emerging countries and Asia 380 375 -1.3% 9.0% 9.5%
Group Total 1,080 1,156 +7.0% 5.4% 5.9%
(a) after asbestos-related charge (before tax) of EUR45m in H1 2016 and in H1 2015
Change on H1 H1
H1 H1 an actual 2015 2016
2015 2016 structure (in % of (in % of
(in EUR m) (in EUR m) basis sales) sales)
IV. CASH FLOW
By sector and division:
Innovative Materials 465 502 +8.0% 9.4% 10.2%
Flat Glass 221 254 +14.9% 8.4% 9.6%
High-Performance Materials 244 248 +1.6% 10.6% 11.0%
Construction Products 415 420 +1.2% 6.8% 7.0%
Building Distribution 188 191 +1.6% 2.0% 2.1%
Misc. (a) 127 147 n.m. n.m. n.m.
Group Total 1,195 1,260 +5.4% 6.0% 6.4%
By geographic area:
France 90 89 -1.1% 1.7% 1.7%
Other Western European 470 505 +7.4% 5.5% 5.8%
countries
North America (a) 200 211 +5.5% 7.3% 7.9%
Emerging countries and Asia 435 455 +4.6% 10.3% 11.5%
Group Total 1,195 1,260 +5.4% 6.0% 6.4%
(a) after asbestos-related charge (after tax) of EUR27m in H1 2016 and in H1 2015
Change on H1 H1
H1 H1 an actual 2015 2016
2015 2016 structure (in % of (in % of
(in EUR m) (in EUR m) basis sales) sales)
V. CAPITAL EXPENDITURE
By sector and division:
Innovative Materials 165 176 +6.7% 3.4% 3.6%
Flat Glass 91 102 +12.1% 3.5% 3.8%
High-Performance Materials 74 74 +0.0% 3.2% 3.3%
Construction Products 183 164 -10.4% 3.0% 2.7%
Interior Solutions 110 111 +0.9% 3.4% 3.4%
Exterior Solutions 73 53 -27.4% 2.5% 1.9%
Building Distribution 82 69 -15.9% 0.9% 0.8%
Misc. 27 19 n.m. n.m. n.m.
Group Total 457 428 -6.3% 2.3% 2.2%
By geographic area:
France 69 81 +17.4% 1.3% 1.5%
Other Western European 107 108 +0.9% 1.2% 1.2%
countries
North America 119 81 -31.9% 4.3% 3.0%
Emerging countries and Asia 162 158 -2.5% 3.8% 4.0%
Group Total 457 428 -6.3% 2.3% 2.2%
Change on H1 H1
H1 H1 an actual 2015 2016
2015 2016 structure (in % of (in % of
VI. EBITDA (in EUR m) (in EUR m) basis sales) sales)
By sector and division:
Innovative Materials 731 768 +5.1% 14.9% 15.6%
Flat Glass 347 369 +6.3% 13.2% 13.9%
High-Performance Materials 384 399 +3.9% 16.7% 17.6%
Construction Products 765 795 +3.9% 12.6% 13.2%
Interior Solutions 448 491 +9.6% 14.0% 14.9%
Exterior Solutions 317 304 -4.1% 10.9% 11.0%
Building Distribution 374 380 +1.6% 4.0% 4.2%
Misc. 16 14 n.m. n.m. n.m.
Group Total 1,886 1,957 +3.8% 9.5% 10.0%
By geographic area:
France 287 265 -7.7% 5.4% 5.0%
Other Western European 650 697 +7.2% 7.6% 8.0%
countries
North America 349 399 +14.3% 12.7% 14.9%
Emerging countries and Asia 600 596 -0.7% 14.2% 15.1%
Group Total 1,886 1,957 +3.8% 9.5% 10.0%
Appendix 2: Sales by business sector and geographic area - Second Quarter
Change on a
comparable
Change on Change on a structure
an actual comparable and
Q2 2015 Q2 2016 structure structure currency
(in EUR m) (in EUR m) basis basis basis
SALES
By sector and division:
Innovative Materials [1] 2,537 2,516 -0.8% -0.9% +4.5%
Flat Glass 1,348 1,380 +2.4% +2.2% +8.0%
High-Performance Materials 1,193 1,141 -4.4% -4.5% +0.4%
Construction Products [1] 3,246 3,211 -1.1% -1.9% +2.4%
Interior Solutions 1,656 1,688 +1.9% +0.9% +4.8%
Exterior Solutions 1,606 1,545 -3.8% -4.4% +0.1%
Building Distribution 5,023 4,934 -1.8% +1.8% +4.6%
Internal sales and misc. -255 -248 n.m. n.m. n.m.
Group Total 10,551 10,413 -1.3% -0.1% +3.8%
[1] including intra-sector eliminations
By geographic area:
France 2,743 2,756 +0.5% +1.3% +1.3%
Other Western European 4,584 4,684 +2.2% +2.8% +6.3%
countries
North America 1,493 1,429 -4.3% +1.7% +4.3%
Emerging countries and Asia 2,215 2,072 -6.5% -6.2% +3.9%
Internal sales -484 -528 n.m. n.m. n.m.
Group Total 10,551 10,413 -1.3% -0.1% +3.8%
Appendix 3: Consolidated balance sheet
June 30, 2016 Dec 31, 2015
in EUR million
Assets
Goodwill 10,457 10,683
Other intangible assets 2,641 2,748
Property, plant and equipment 11,373 11,587
Investments in associates 331 319
Deferred tax assets 1,548 1,337
Other non-current assets 660 635
Non-current assets 27,010 27,309
Inventories 5,964 5,715
Trade accounts receivable 5,906 4,751
Current tax receivable 264 296
Other accounts receivable 1,522 1,405
Cash and cash equivalents 2,900 5,380
Current assets 16,556 17,547
Total assets 43,566 44,856
Liabilities and Shareholders' equity
Capital stock 2,219 2,244
Additional paid-in capital and legal reserve 6,081 6,341
Retained earnings and net income for the year 10,591 10,805
Cumulative translation adjustments -913 -528
Fair value reserves 147 181
Treasury stock -78 -87
Shareholders' equity 18,047 18,956
Minority interests 360 364
Total equity 18,407 19,320
Long-term debt 5,829 7,330
Provisions for pensions and other employee benefits 4,082 3,849
Deferred tax liabilities 474 466
Provisions for other liabilities and charges 1,298 1,276
Non-current liabilities 11,683 12,921
Current portion of long-term debt 2,933 2,231
Current portion of provisions for other
liabilities and charges 428 454
Trade accounts payable 5,699 5,716
Current tax liabilities 167 150
Other accounts payable 3,487 3,448
Short-term debt and bank overdrafts 762 616
Current liabilities 13,476 12,615
Total equity and liabilities 43,566 44,856
Appendix 4: Consolidated cash flow statement
H1 H1
(in EUR million) 2015 2016
Net income of continuing operations attributable to equity holders of the
parent 493 596
Minority interests in net income 23 14
Share in net income of associates, net of dividends received (12) (8)
Depreciation, amortization and impairment of assets 633 608
Gains and losses on disposals of assets 10 9
Unrealized gains and losses arising from changes in fair value
and share-based payments 21 34
Changes in inventories (250) (300)
Changes in trade accounts receivable and payable, and other accounts
receivable and payable (1,128) (1,081)
Changes in tax receivable and payable 24 55
Changes in deferred taxes and provisions for other liabilities and charges 43 (29)
Net cash from operating activities of continuing operations (143) (102)
Net cash from operating activities of discontinued operations 61 0
Net cash from operating activities (82) (102)
Acquisitions of property, plant and equipment [ H1 2015: (457),
H1 2016: (428)] and intangible assets (511) (480)
Acquisitions of property, plant and equipment in finance leases (8) (9)
Increase (decrease) in amounts due to suppliers of fixed assets (135) (111)
Acquisitions of shares in consolidated companies [ H1 2015: (85), H1 2016:
(56) ], net of debt acquired (86) (64)
Acquisitions of other investments (7) (12)
Increase in investment-related liabilities 4 2
Decrease in investment-related liabilities (14) (2)
Investments (757) (676)
Disposals of property, plant and equipment and intangible assets 73 31
Disposals of shares in consolidated companies, net of net debt divested 7 25
Disposals of other investments 0 1
Divestments 80 57
Increase in loans, deposits and short-term loans (84) (72)
Decrease in loans, deposits and short-term loans 33 36
Net cash from (used in) investment and divestment activities of continuing
operations (728) (655)
Net cash from (used in) investment and divestment activities of discontinued
operations (107) 0
Net cash from (used in) investment and divestment activities (835) (655)
Issues of capital stock 394 137
Minority interests' share in capital increases of subsidiaries 12 0
(Increase) decrease in treasury stock (104) (416)
Dividends paid (695) (681)
Increase (decrease) in dividends payable 455 2
Dividends paid to minority shareholders by consolidated companies (34) (29)
Net cash from (used in) financing activities of continuing operations 28 (987)
Net cash from (used in) financing activities of discontinued operations (1) 0
Net Cash from (used in) financing activities 27 (987)
Increase (decrease) in net debt (890) (1,744)
Net effect of exchange rate changes on net debt (13) 1
Net effect from changes in fair value on net debt 33 (84)
Net effect of exchange rate changes on net debt of discontinued operations (3) 0
Transfer of net debt in assets and liabilities of discontinued operations 99 0
Net debt at beginning of period (7,221) (4,797)
Net debt at end of period (7,995) (6,624)
Appendix 5: Debt at June 30, 2016
Amounts in EURbn Comments
Amount and structure of net debt EURbn
At end of June 2016, 77% of gross debt
was at fixed interest rates and the
Gross debt 9.5 average cost of gross debt was 3.9%
Cash & cash equivalents 2.9
Net debt 6.6
Breakdown of gross debt 9.5
Bond debt and perpetual notes 7.7
September 2016 0.5
December 2016 0.4 (GBP 0.3bn)
April 2017 0.1 (YEN 5bn)
April 2017 1.2
June 2017 0.2
March 2018 0.1 (NOK 0.8bn)
October 2018 0.7
September 2019 0.9
June 2021 0.7
After 2021 2.9
Other long-term debt 0.5 (including EUR 0.2bn long-term
securitization)
Short-term debt 1.3 (excluding bonds)
NEU CP (Negotiable European
Commercial Paper < 3 month) 0.0 Maximum amount of bond issue: EUR3bn
Securitization 0.6 (EUR 0.3bn equivalent in USD + EUR 0.3bn)
Local debt and accrued interest 0.7 Annual rollover; several hundreds of
different sources of financing
Credit lines, cash & cash equivalents 6.9
Cash and cash equivalents 2.9
Back-up credit-lines 4.0 See breakdown below
Breakdown of back-up credit lines 4.0
All lines are confirmed and undrawn, with no Material Adverse Change (MAC) clause
Expiry Covenants
Syndicated line: EUR2.5bn December 2020 None
Syndicated line: EUR1.5bn December 2018 None
Analyst/Investor relations
Gaetano Terrasini +33 1 47 62 32 52
Vivien Dardel +33 1 47 62 44 29
Florent Nouveau +33 1 47 62 30 93
Press relations
Charles Hufnagel +33 1 47 62 30 10
Susanne Trabitzsch +33 1 47 62 43 25
SOURCE Saint-Gobain
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