DAVY VIEW

Saint-Gobain (SGO) has announced further disposals from its European Distribution network, this time in Spain and Italy. We estimate the group has now sold businesses representing c.20% of turnover in Distribution since 2018. More are likely, with the UK a possible candidate. SGO will report full-year results on February 25th. As results were pre-announced, we will be watching for (1) outlook comments and early trading in 2021; (2) debt levels and capital allocation plans; (3) any update on the CEO succession; and (4) an update on raw materials and energy costs, which are rising quickly. In that context, it will be interesting to see if management remains confident in its margin target of 8.7% for 2021.