sain t-gobain annu al report 2008 annual report

Saint-Gobain:
a Solid Group
2
Saint-Gobain’s 2008 results were in line with our forecasts. Consolidated net sales rose
3.7% over the year, while operating income and recurring net income saw single-digit
decreases of 9.1% and 9.5% respectively. Most of the decline came in the second half and
especially the fourth quarter, reflecting the impact of the global economic crisis.
The current recession is unprecedented in its breadth—affecting all economic sectors and
all countries—and its depth. 2009 is likely to be even more difficult, shaped by a gradual
turnaround in the European building markets and shrinking demand in the world’s main
industrial markets.
In response to this situation, Saint-Gobain proactively deployed a program to cut costs,
rightsize production capacity and sharply reduce capital spending and investment in the
second half of 2008. These measures will be expanded in 2009. We have already launched
a wide-ranging plan that makes use of all operating and financial levers—including a €1.5
billion capital increase—to guide us through the current financial turbulence and help us
emerge even stronger than before.
At the same time, we intend to continue implementing our strategic vision. Thanks to our
global leadership in energy efficiency solutions for buildings—a market that accounts for
a third of our business—and our broad exposure to the more resilient building renovation
market in Europe (36% of consolidated sales), we are well positioned to reap the full
benefits of the stimulus plans being rolled out by the major Western nations. We also
remain fully committed to research and innovation and to targeted expansion in emerging
economies.
In a time of poor visibility, Saint-Gobain is a solid enterprise with a detailed roadmap for
the short term and a carefully considered vision for the long-term. We have what it takes
to make the difference and to pull even farther ahead of our competitors.
In light of the Group’s solid fundamentals and the action plans implemented in all our
business sectors, we are more confident than ever in Saint-Gobain’s future. We are certain
that Saint-Gobain stands to benefit greatly when the economy recovers.
Saint-Gobain - 2008 Annual Report