Davy Research

Saint-Gobain Group

Investor day highlights path to ambitious 2020 targets
Building products
Saint-Gobain Group

DAVY VIEW

Saint-Gobain (SGO) yesterday (May 17th) hosted an investor day in Paris where it revealed new and ambitious financial targets to 2020. Management struck a confident tone throughout, especially in relation to end-markets (France in particular). This improving volume outlook – combined with a positive price/cost spread, innovation and growth in emerging countries – leaves the group well positioned to deliver levered gains. In this respect, SGO highlighted the potential to reach a normalised group margin of c.10% versus the 2016 reported figure of 7.2%. That scenario, which is helped by an improved cost saving target (€1.2bn), is well ahead of estimates for the stock. Updates on capex, acquisitions and a new divestment target (€1bn) further reassured on financial discipline and cash flow. We continue to rate the stock ‘Outperform’.

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  • RATINGS AND PRICE CORRECT AT TIME OF ISSUE


  • Saint-Gobain Group

    Closing Price: 4964c

  • RATING 07/09/15

  • PREVIOUS RATING 03/09/14

    Neutral

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