Good morning, everybody. I'm very happy to welcome you in our new a new auditorium, which is, I think, it is the first time we are using it, and I hope, can accommodate more people than are present today, but with the progressive improvement of the health situation, I hope it will be the case. In the future. And so we are going to present with Benoit Vaza, our COO and and Sreedhar, our CFO, for the results for the first half of twenty twenty and the outlook. I will give you a few highlights, then, Benoit will explain to you how we have managed through this crisis.
Sreedhar will give more details on the results, and I will come back on the outlook. So you have seen in our press release, our main the main figures for the first half. So our sales are down 18.1% in actual terms and 12.3 on a like for like basis at 1000000000. The operating income is halved -49.2 percent on a like for like basis with a 290 basis point based in our operating margin. The EBITDA is decreasing less 32% with a 2 points decrease.
The recurring net income is positive at 1,000,000, but down 71% and a very strong improvement in the net debt, which is reduced by 1,000,000,000 compared to June last year at 1,000,000,000. So the main highlights of the first half, of course, Saint Gobain has been hit by the pandemic with sales down 12.2% like for like. The important thing, though, is a dynamic within the first half. And after a low point in the end of March April, and we recovered with a very strong recovery and June, in fact, is higher than last year, both in sales and in operating profits. Benoit will tell you what have been our priorities in terms of the management of the crisis.
I just want to stress one point. I think that our new organ has helped a lot, being local when you have to manage surgical crisis was really the very appropriate and it delivered a very strong agility. You will see that on the way we are it on cost, on cash, so I think a good management of the crisis. Overall, our cost savings in the first half amount to nearly 1000000 with different components that Benoit Sreedhar will explain. A very strong point of this first half is a very significant increase in the cash, which was one of our main CapEx and working capital.
And I would say on all elements of cash with a strong conversion rate, We also had a very good linked with that, a very good decrease in our debt through the which was helpful source for a minute. We disposed of the Ticashire, but at the same time, we bought Continental. So the net debt reduced by investment in Sika, a significant part has not been this gain has not been through the P and L. But directly into equity. So now I'll leave the floor to Benoit.
We'll tell you how we navigated this crisis.
Thank you, Pierre Andre. Good morning, everyone. My main message for you to take away is that we have managed the crisis with a very key effect of priorities and towards one goal, which is to emerge stronger from the crisis. So for priorities, 1st, protect the health of all, all our employees, 2nd, preserve our cash, 3rd act, fast on our cost and 4th, make sure that we position ourselves in a very good position to make the most of the recovery. Have demonstrated an exceptional mobilization and commitment.
So I feel confident that going forward, we are in good shape to capture like we have seen in June, an improvement in sales and profit. Starting on health. From day 1, we have put health as the number one priority, health and safety for our teams, but also our suppliers and customers coming to our facilities. We'll continue, of course, to do so and focus heavily on health because we know for sure that the COVID virus is still around us for some time. On health, like on many other topics, people, cash customers, etcetera, our new organization that we have put in place in early 2019 has proven to be extremely solid, extremely reactive in order to overcome the COVID crisis and to some extent, these COVID crises were the asset test of the newborn organization.
First, because on all local decisions, they were taken locally in real time by our country CEOs that are strongly empowered to take decision, as you know, on all their relevant local topics. On top of that, of this local setup, we have also managed an excellent international worldwide coordination in order to share and anticipate the experience from one country to the other on all kinds of issues, sanitary measures, how we were shutting down the reopening plans, distribution outlets, supply chain service, cash, etcetera. So again, our teams have shown an exceptional commitment and solidarity. I don't mention the dozens of examples beyond business in the way we have produced in real time face shields and sanitizers, mask also delivered materials and partitions temporary hospitals and a lot of other very good examples. 2nd priority on cash.
And here also, we are back very fast on two fronts. First, we have launched with Shreedhar, mid March, a daily cash monitoring by country on top of our ongoing actions to optimize working capital. This has delivered, as we have seen, a very strong and solid impact. We have also reduced our CapEx by 35% in the first half, optimizing maintenance CapEx, While we have kept most of our plan growth CapEx, notably on Construction Industry, Fasad And Productivity Solutions Emerging Markets, Mexico, India, China and life sciences. By the end of 2020, we should have decreased overall CapEx by more than 1000000 versus 2019.
All in all, we have delivered, as you have seen, a very strong free cash flow. Second area on cash, we have secured quickly during the crisis, additional financing, and we acted decisively to sell our Sika shares. So thanks to these essential actions on cash, we have strongly reinforced our balance sheet, which is appropriate considering the overall uncertainty that we have been facing since the outbreak of the COVID crisis and Freedhar will give you more flavor and figures around all this later on. 3rd priority on costs. We have been very active with clear cut actions and let me describe the 4 areas of actions.
First, of course, we have continued our ongoing efforts on world class manufacturing where we had an impact of 1,000,000 in H1. As you know, this impact doesn't show up as a net savings in the P and L since they more or less offset salary and other fixed cost inflation. The second area, which you see on the left side of the slide, In order to mitigate the impact of the health crisis during the lockdown period, we have acted with temporary reduction first on discretionary expenses travels, customer marketing events, bringing 1,000,000 of net savings in the first half. We have also used all local employment measures such as partial unemployment or share low, with 1,000,000 of savings in the first half net of the additional extra cost related to the pandemic. Based on the recovery in terms of business that we saw in June, we have exited partial unemployment at the end of the first half.
So this million plus 95 of savings have been temporary in H1 during the acute phase of the COVID crisis and we don't expect to repeat them again in the second half. 3rd area of actions on cost, we have analyzed the businesses that are not going to bounce back soon up to a normal level. This is notably the case for some of our local businesses, such as distribution in the UK, some of our initial markets within high performance solutions, also our mobility market and its related manufacturing setup. There, we have announced additional measures, structural cost measures and will continue to do so in the second half. These measures will reduce our costs by 1,000,000 in H2 2020, an additional million in 2021, so 1,000,000 in full year savings by 2021.
This is not going to be a net profit gain since these businesses will continue to suffer from lower activity, but clearly, our actions will mitigate the profit deterioration of those businesses and lower the break even point of these businesses. And 4th area, finally, Transform and Grow Savings, our country and market CEOs took the opportunity to land all their local actions even faster and pushed deeper to overcome the COVID crisis. Therefore, we land 1,000,000 of net savings in 2020, 1,000,000, which has been done already in the first half and additional 1,000,000 in the second half. With that, we'll have delivered our million total Transformango savings that we announced end of 2018 1 year earlier than anticipated and now we have all our solid and lean organizations in place everywhere. Remember that the organization, the synergies, we are the 1st pillar of Transform and Grow The second pillar is making sure that we optimize the group portfolio of Saint Gobain.
On divestitures, we are committed to continue beyond the 1,000,000,000 of turnover divested in 2019. Because of the crisis we have put, however, on hold, some of the things we were doing at the beginning of the year and depending on the evolution of the different markets, will progressively resume our actions and continue optimizing our portfolio when conditions permit. One word on the right side of the chart on the integration of acquisitions, particularly, the big one, Continental Building Products. I'm very happy to say that our U. S.
Teams have done a very good job even during the crisis to continue to push fast on integration despite, again, all the sensory situation. It's going very well on many fronts. Remember that I told you in the February that the teams were already in place. We have acted fast on SG and A with some restructuring on purchasing savings also All that is progressing very well. The brand transition is happening as we speak right now.
IT integration is planned for the
end of the year.
So all these is progressing very well. And on top of that, we have, as we speak, very strong volumes right now. So we'll get at least 1,000,000 of synergies in 2020. We had roughly 3 in the first half and additional 12 in second half. Better than planned.
We announced 1,000,000, more than 1,000,000 in February. We'll get 15 in 2020, and we are very confident that we'll create value by year 3 as planned. 1st priority, making sure that we make the most of the recovery. First, by accelerating on digital. If I take front of our platform business, distribution business in France, we have a full omni channel solution with, of course, online ordering for our customers, but also we have put in place very quickly SMS interaction with salespeople via in supply, also online real time payment with Patrick.
And after a huge peak in April and May, almost ten times what we had before, digital sales in our French distribution business, in June is two times higher. We can say that June is a normal month. It 2x higher than what was the case in June 2019 as a percentage of sales. So I take another example in our Danish distribution business, we have Very quickly put in place a self scan application, allowing our customers to scan their products and leave the store without interaction with our staff. So digital, clearly accelerating and helping us in our business.
And second, making sure that we have preserved our skills, our people, and we have to make sure that we have also this local proximity with all our customers, delivering excellent customer service. One example on the chart, which shows the kind of consistent performance over the market that some of our distribution networks have delivered in France gaining share month after month and gaining a lot of new customers. So as a conclusion on this part, how we manage the crisis, I can tell you that we have done in a very tight way with a small set of priority, the 4 I mentioned, being very agile, being very decisive also to adapt ourselves to a very fast local changing environment, sometime by the day, by the hour or by the week. So thanks to all this, We have delivered sales and profit growth versus June 'nineteen in June 'twenty, and this bodes well for our short term and mid term perspective that Pierre Andre will present to you later on. Thank you, and I'm now leaving the floor Sreedhar will drive you through all our results.
Thank you, Benoit. Good morning, everyone. Let me give you some more details about our results of H1. 2020. So starting with the sales bridge, sales decreased 18.1% as reported and by 12.3% like for like.
The like for like decline was driven by the weaker Q2 volumes as a result of coronavirus pandemic. We saw a negative exchange rate impact coming mainly from the deposition of Nordic Krona, the Brazilian real and other emerging country related currencies. The structural impact was negative due to the divestment we made as part of the Transform and Grow initiative in 2019, partly offset by the acquisition of Continental, which was integrated in February 2020. If you look at the breakup of, volume and price. Here we can see how after a very good start to the year in January February, Q2 volumes were hit as we saw the effects of the pandemic spread beyond China to the rest of the world from March.
With a very different trend by country and market. Like for like sales hit a low in April, at around 60% level but improved sharply in June, up 3.7% also benefiting from 2 additional working days. For Q2 as a whole, there was no calendar effect. Prices held up up 0.4% in H1 in a slightly deflationary environment. By enlarge, we were able to hold on to our price levels.
In at operating income, there's a sharp decrease in volumes, as you know, in Q2. Usually, the most important quarter for the first half led to a like for like decrease of 49.2 percent in operating income. The operating margin has decreased by 2.9% however, 34th of the group activity resisted well with a very limited impact on the margin decrease. Main drop came from the UK, Mobility, certain industrial markets, and floor glass operations which serve the automotive market. Overall, we had a positive price cost spread with around 50,000,000 net benefit.
Now let me give you some more details about 1,000,000 savings in the first half which P and Andre and Benoit mentioned. So we have the one time discretionary savings related to the pandemic of 1000000. Then we have the additional savings of Transform and Grow, which 1,000,000 in the first half, 1,000,000 in the first half, which will be a recurring net savings. And the savings of 1,000,000 from our usual operational excellence program that enabled us to offset the Saudi and fixed cost inflation. So here, you see business income and EBITDA.
So we have recorded business loss of 1,000,000, resulting from the lower operating income and also the asset write downs. This asset write rise down consisted mainly of 1,000,000 write down of intangible assets in the UK distribution business due to the tougher environment post coronavirus and ahead of Brexit. We have launched several cost reduction initiatives including shutting down the lease profitable outlets. EBITDA decreased less than the operating income with stable depreciation and lower non operating costs. Remember that we no longer have the 45,000,000 impact of USS as the source, which we had in June 2019 first half results.
Coming to the recurring income, you see here, the details you have, the net financial expenses, excluding Zika dividend, was slightly lower. Compared to the last year and the average cost of borrowing came down to 2%. And the net recurring net income was down by 71%. So now coming to the free cash flow Free cash flow is up 143% in spite of the drop in EBITDA and the conversion ratio is up to 129% from 33% which we had last year in June. Cash has come become a clear priority for all the country CEOs during the last 3 months The daily cash in cash out was reviewed and we see its impact on the working capital management.
This is where our effort on cash throughout the organization is really paying off. In addition to the good working capital management, please remember, there is also an impact from the lower activity level in the last quarter. It was also helped by lower maintenance CapEx. We had already planned to reduce the overall CapEx spend for 2020. And once the pandemic hit, we increase the reduction target to more than 1,000,000 for the year.
So finally, turning to the net debt, we have seen a significant decrease in our net debt with a reduction of 1,000,000,000 compared to the end of June last year. This is mainly due to the proceeds of divestments, net of acquisitions, for around 1,000,000,000, along with the reduction in working capital requirements and capital expenditure. Overall, our balance sheet and credit metrics remain very strong. Now let me get into the details of results by reporting segment. Starting with High Performance Solutions, like for like sales in high performance solutions fell 18% over the first half with a sharp reduction in April and May before a gradual improvement in June.
Mobility was particularly hard hit. As you can see from the figures here, even though we continue to outperform our market. In Q2, mobility sales were down nearly half. Particularly in Europe with only China seeing growth. However, things are improving and due saw activity at around 80 the wider slowdown, but construction industry held up better and life sciences continued to see growth.
The operating margin for the segment decreased to 7.4%, again hit by the lower Q2 volumes especially in the automotive market. Now Northern Europe, like for like sales in Northern Europe fell 8% over the first half with a steep decline in the UK in Q2. However, June saw a tier improvement with the sales up 5% like for like for the region. The Nordics showed growth over the first half, especially in the distribution where we gained market share. Thanks to our strong digital investments and logistics capabilities following the past investments we did.
Sales were even up in Q2 and saw a strong June, supported by a strong renovation market. Germany and Eastern Europe held up relatively well. Over the first half, despite a greater impact in volumes and price in Q2 in the float glass plants, which were affected by the reduced capacity utilization linked to the low volumes in the automotive market. The UK saw by far the most significant impact and its sales were nearly divided by 2 in Q2. All operations were at virtually sandal throughout April before restarting slowly in May and progressively improving in June.
Despite a positive spread, pricecost spread in the region, the operating margin decreased for the region only due to the coming to the Southern Europe, you have the like for like sales decreased 16% over the staff with a good start to the year, but a steep decrease in Qutout. However, June sales were up 7% like for like. The recovery was driven by France, which improved shortly towards the end of the period. After coming to a very low point at end of March. Trading was 50% mid April, more than 80% in May and virtually back to normal levels in June at the comparable number of working days.
Distribution benefited from the past investments in digital and from the good momentum coming back to growth. Spain, Italy, the Middle East and Africa also improved in June after being hit harder than the average of showing how different things can be by country. 1st half tradings in Netherlands was relatively unaffected by Coronavirus pandemic. The operating margin for the region decreased to 1.7% and this was due to the volume decreases in most countries for several weeks in Q2, which usually the most important quarter for the first half profits. Despite a positive pass price spread.
Now Americas despite a good start to the year, like for like sales in the Americas decreased 6.5% in June. With the region up 7 were pulled lower by volumes and lockdown measures in certain states in April, which impacted trading. However, the sales improved in June, driven by exterior solutions and gypsum, which delivered double digit growth volume helped by the sustainable, a good successful integration of Continental. Latin America was hit by several disrupted construction markets in March April generally prevented the construction industry from operating. Sales hit a low of 40% mid April but rebounded strongly with growth in June.
Brazil continued to outperform the market thanks to the sales synergies linked to the new organization, which is by channel, particularly gypsum, which actually reported a double digit growth in first half. The Americas operating margin decreased to 7.1% hit by the tough trading environment in Latin America. North America, in fact, reported an increase in its operating margin. Again, like for like, driven by productivity improvements and a positive So Asia Pacific sales fell 17.5 percent like for like in H1. And saw a progressive improvement in June with a double digit growth in China.
Stabilization in Southeast Asia and relatively smaller decrease in India. China growth in Q2 was particular driven by gypsum with our new Plaster plant opened last year now running at full capacity. After a good start to the year, India has been severely hit by strict lockdown measures, which continue to be present in many state. In June, trading was at around 70% of twenty nineteen levels. With a clear week on week improvements and market share gains.
The situation in other Asian countries varies by country. Disruptions were very limited in Japan, but more important in Thailand, for example, and then Vietnam reported above market growth, thanks to the success of our local strategy. The operating margin for the region decreased 7% affected by the sharp downward in India in Q2 and excluding India, the margin would have in fact increased significantly. So in a nutshell, even though the first half results were impacted by COVID, Recent trends are encouraging. You saw Saint Gobain taking decisive steps to adjust the cost structure wherever necessary.
There is a strong focus on cash and also the commitment to keep the balance sheet strong. And we are clearly prepared to bounce back very strongly. Now I hand over the floor to Pierre Andre who will talk about the outlook. Thank
you, Shreedhar. Talking about the outlook in such volatile environment is not easy. I would, I would distinguish 3 time horizons. The first one we have some good visibility, I would say, is of 3rd quarter, where I am, I think we'll have a good 3rd quarter I can tell you that the trading in July is very good, is above the trend that we have seen in June, and we have good visibility for the month of August and relatively for the month of September. But the fourth quarter, we are still there are still uncertainties both from sanitary standpoint and its impact on the or not impact on the economy.
At the moment, I would say that when I look at what's going on in Brazil, where we are the very strong June, there is a disconnect between sanitary situation and economic situation Is this going to continue after the summer? Today, we don't know. So, and also the impact of the macroeconomic situation globally on our sector So if I combine those 2 horizons, it means that for the second half, we anticipate a very significant improvement on the first half, but it's difficult to quantify the magnitude of this improvement. The 3rd horizon, which is I would say the world, when we get out of this crisis, the world post COVID, I think, is very favorable to Saint Gobain. I think the Saint Gobain growth profile post COVID will be better than the Saint Gobain pre COVID.
If I look, why? If I look at the trends that are going on and how I see the world after COVID, I would say this world will be more local, more digital and more sustainable. And the strategy and the axis of direction of Saint Gobaf that pre existed is going to be favored by those trends. So more local, more than 80% of our businesses is local, and we are stake heated and fragile worldwide supply chains. So and our organization has reacted very well.
So I think we are going to be in a world will be more local. For Saint Gobain, it is an environment in which we will feel very well. More digital, this trend existed before, but I think in the construction world, the trends of digital have been lower than other words, they have accelerated, and we have, in the area of e commerce, for instance, Benoit mentioned that, but it's interesting to see that they are accelerating that they will not be only digital sales. I would like to come back to examples that Benoit said. If you take the our platform sales.
They are back to 10%. They were at 5% and they went to 75% or 90%. So you can see both ways. First, we it's not going to be online. And I think that's very, well fitted to our model where our customers want to have physical contacts in our stores.
But on the other hand, it will be omni channel, and the digital will play a role we have double. If I look at what's happening with our employees, I think, and the relation with our customers on many fronts, whether it training, with many examples, I think this crisis has made us because we have the tools ready, and we invested a lot in that before, making 3 months of progress, we would have made in 3 years, 2 or 3 years. So a big step because of digital. And this is we are well prepared and ahead of the game and that in our sector. The third point, of course, is, I think, the post COVID world will be more sustainable.
During this crisis, public opinion and governments have made a strong link between health, well-being and production the planet. And I think this is going to stay. The recovery plan, which are launched, especially in Europe, but not only in Europe, I think in the future will be based on an acceleration on the energy transition. And providing sustainable solutions, is at the core of the business model of Sagoba as well as having sustainable operations. And this is I'm compiling our CSR road map, where you can see here with that we monitor a number of KPIs in many direction.
There are just a few here, which has allowed us to get a number of awards, and I think our leadership position in the way the specialist agencies look at us. There is one I would just mention one that you see some of them on the right, which I am very proud that we are on the CDP A list. Just to mention a few items, business ethics is, of course, at the and compliance, which is from our all our stakeholders is very, very strong in Saint Gobain, health and safety, where have in the last 10 years, we have reduced by a factor of 3.5 our incident rate. And we are achieving a good level in 2019, and we are still going to to continue to improve. We have launched, last September, a program overall for Saint Gobain employees, a care program, which provides a floor in terms of all benefits, climate change, of course, and secular economies, which are very much linked where we are working out at the moment to establish a road map to the the 2050 agenda to be a net 0 carbon that we committed last 4.
There is a huge enthusiasm within the Saint Gobain employees on this on this agenda, and we don't start from scratch. And you see that from, if I take an absolute reduction of we have reduced, 14% in the last 10 years and 14% if we look at at a constant level of productions. So we are on our way for 20 25, but we will establish other objectives to put us in the good way to 2050. And also, we have in terms of inclusion and diversity, very strong programs that we continue to to strengthen every year. Sustainability is also at the heart of the solution that we offer.
Around 60% of the solution that Saint Gobain is putting on the market are contributing to CO2 emission. And our biggest market is renovation, and renovation when it happens more and more, and I think it will be even more the case in the future will have an improvement on the energy efficiency of the buildings. We our if I look, mobility, our growth is fueled and we are we have performed the market. It's growth on the fact that we are delivering solutions, which go with the electrical vehicle and where we play an important role. You see a few examples on this slide of some new launches that are products that have the clear impact when they are put in place by our customers.
If I want to drill down a little bit to what's going on presently, especially in Europe, the recovery plan, which are being designed, are emphasizing very strongly in Europe, what they call a green deal, but it will encompass a renovation wave in September, where there will be given detail. And many Countries, like France, are they are developing programs based on a significant improvement on energy renovation, the money at stake is very significant and the growth rate it will imply for Saint Gobain is quite important And it's not just topic, in terms of for governments. It's local job creation, and it's improvement on the energy consumption of the country and it helps the country to go in the direction of their objectives in terms of climate change. So a lot of money is going to help them, and I think it will foster very significant energy and renovation, and Saint Gobain is uniquely positioned to get the benefit from that. If I take just the European Union, we have 1,000,000,000 of sales which are linked with this topic.
And I give you, I show you here an example of, in France of a building and you see that with our different brands and product solutions, we cover most of the items which are needed to have and solutions which are needed to have a renovation given very good performance from an energy standpoint. So I think and Sagoba is unique from that standpoint. And I think we are going to demonstrate in the next few years our strength from that standpoint. So if I wrap up, our priorities for the rest of the year. 1st, continue to ensure the health and safety of all in a health environment, which remains uncertain.
2nd, based on what Benoit told you, we are going to continue to implement our adaptation measures and continue our focus on free cash flow, attention to price cost spread in an environment, which is in terms of, of the cost, more favorable. Acceleration of the cost savings and the realization of our objectives in terms of CapEx. The 3rd priority is to have a very strong balance sheet. It has improved significantly, but based on the situation at the end of June and the outlook that we see, especially for the 3rd quarter. We have the board has decided that we anticipate our medium term objective to get to 5 30,000,000 shares and we will do that by the end of this year.
And for sports opportunity, of course, to position ourselves in the best in the best manner to take advantage of this recovery program that are going to be launched And I think they are going to be significant. In France, it will be announced in September, but I have very good confidence and have been working on these topics that we will have good measures being taken and we are constantly looking at strengthening our portfolio of solutions, which help us to improve the energy consumption of building. So I think we have Coming out of this crisis, the prospects for Saint Gobain in the medium term are reinforced, and we will improve our growth profile. That's the message of this, of this first half results and outlook. And now with Benoit, and Sreedhar, I'm at your disposal for any questions you may have.
Thank you. I think you have to, if you don't mind. The Mico is not going to you, you have to go to the mic.
Good morning. I'm very happy to see you again. I have two questions mainly. First, a commercial question in your current organization, the construction product are in majority sold to the distribution in house or to competitors to San Diego Building distribution do you try maybe to increase the share of the construction product directly sold to contractors, maybe? First question.
Secondly, if we look at the presentation, we have a collapse of distribution margin over the first half. Is that due only to U. K? Can we have more a flavor to split maybe between France, UK and Nordics? And maybe a follow-up question on distribution.
Where do we stand with the logistic improvement in Nordics and also in France, many things. Benoit? Yes, I can take those questions. No, we don't favor. As you know, we have arm lines relationship between our distribution network and our manufacturing, our consulting products.
So we have a lot of exchange in terms of market knowledge, in terms of marketing actions, etcetera, but we continue to be independent. And now depending on the situations on the job site, you could have a bit more direct, you could have some movements in the routes to market, but there is no major move and we don't we play with what the customers ask. So, our distribution business has been extremely efficient during the lockdown, our platform remained open all the time, so it was a good weight market when some of the big job sites were closed, the small craftsmen from the small job sites, they were buying a platform, which was delivered by our construction products business. So there is no big move in terms of food to market and we continue to be amylance. 2nd, on the distribution margin, the good news is that we have improved our margins in the Nordics.
Throughout the first half. Our margins, it's up in France when you exclude the months of mid March to mid April because when you actually down, the margin can improve. But if you exclude the short term impact, we improve our margin in France for the main reason behind the negative impact of the margin is 1, the short term stop, I would say, in France, when you shutdown for some days and larger to 20, 25 percent activity. Cannot improve the margin and the U. K.
Because in the U. K, it's the more severe lockdown we have seen around the world. Where not only there was a total lockdown, but you have to be on essential activity, even the craftsman in order to work at the defense of France where all the job sites, the small job site of renovation were open in the UK, if the small job sites. We are not related to essential activity for hospitals, for provisions. You could not work.
So the impact in the UK as the shared asset has been half of the sales all together in Q2, which is two, three times more than what we have seen in any country around the world. And therefore, the vast majority of the margin drop is clearly in the UK because in the Nordics, we are up and in France, excluding the peak of the sanitary crisis, we are up again. And 3rd, the portion was on LAPPEAR, that was On logistics, we continue
to invest in the Nordics.
In the Nordics, we continue to invest. We have a very, very strong setup in the Nordics. On logistics, same in France, and we have invested a lot over the years in France. We have a very good setup. In the Nordics, we are well placed with distribution centers in Norway in Denmark in Finland.
We continue to expand that. We have a, you know, best in class service, which allowed us, I think, to gain market share during the conference. And on top of that, as I said, we have invested a lot in DG tool. We have some, Salesscan tools so that you don't have any physical interaction. It's helpful at the time of lockdown.
So the Nordics distribution has a very good set up, both in terms of center, digital, network of, and we continue to make some, some small add on acquisitions in the distribution in Arctic. Sorry, Lucas. There was a CV lockdown because it was B2C activities. So for 6 weeks, we decided to close the Lapeyre store. We have a huge ramp up of Lapeyre orders in the last 8 weeks, well above last year, and we may actually be on par with last year end of July.
So catch up in just June July, what we have lost for 8 weeks between mid March and mid May. So there is a very strong catch up, which means that people have been confined. They haven't spent their money on restaurants, on concerts or travel, and they spent to renew it residential. They have worked on home office. Maybe they have relied that promo fees is not fantastic in terms of acoustic in terms of place.
And Tippo has been a lot on residential in the U. S. And in France, so Lapeyre is benefiting from that. And also, we might, depending on the market conditions, you know, continue to make progress on the strategic evolution of flat pay in the second half. Interesting enough.
It's too early to know, but interesting enough, we might be on the profit side end of July on par with the end of July last year on Lapea. So offsetting the 8 weeks of slowdown.
So the next question is from Eve Broomhead on the phone.
Hopefully, you can hear me well. I had a few questions. I'll pick them 1 by 1. My first question is on free cash flow. You published a 1,000,000,000 increase with a significant reduction in working capital, which given the zoneality of working cap is quite extraordinary.
So as you mentioned in your outlook, as trends are recovering, should we take quite the opposite in H2 and maybe you're building some working capital need leading to a nonflow in H2. So just color on what to expect here would be really useful. And then I'll take my next question after that.
Yes. So, the working capital, you're right, that we have a seasonality impact. So we, if you just take the numbers, we have 1,100,000,000 improvement in working capital. And out of that, 400,000,000 is coming out of inventory management. And the rest is between the receivables and payables.
So in theory, again, I'm saying in theory because it's not it's a very particular situation we are going through. In theory, normally, the receivables and payables are directly linked to the activity. And then you have working of anything to do with the inventory management is really the management's effort, management's focus And I would consider that. It is clearly, it's a discipline that should continue to be there. There is also one element because the June was significantly a good month for us.
So there will also be some impact of that and the inventory. But Overall, in the free cash flow, I would again insist that there is a strong focus You have seen that consistently, in the last 18 months, we have delivered consistent improvement I don't see any reason as I mentioned during the crisis, the countries to look that cash on a daily basis. So the cash review, cash focus has become part of the DNA on a day to day basis, day to day operations. So I remain confident in terms of focus on cash flow.
Thank you. My second question is on pricing. In Q2 2020, we look at the pricing in the High Performance Solutions division, it has deteriorated. Could you comment on what you're seeing here. And if you could split this between HPM and the auto glass, that would be really helpful.
Right. So, yes, pricing has been certainly tough in automotive building mobility segment. Otherwise, industrial segments could hold on the prices life science continues to remain in good shape. So it's the impact is coming mainly from the mobility, mobility part of the high performance solutions.
Okay. And my last question is on the 530,000,000 share count at the end of the year, which is about 400,000,000 of buyback at today's price. Just wanted to reflect on that. You mentioned before in Q1 that you would update the market on shareholder return policy. Is this one of them?
Can there be more? Any color on that would be really appreciated?
No. What we, what we, the objective we have is for this year. So we said we would review our shareholder return policy in November given the situation of on June, we have anticipated that.
This is the shareholder return update or can there be another one again in November on, for example, dividends
in November, we will update on our dividend policy. Next question?
Chad. Please go ahead.
Yes, hello, good morning, gentlemen. I understood most of the question I want to work in August. So given the good dynamic going into Q3, shouldn't we expect a double digit growth in volume in construction that we for this quarter or to free now? Is it in your view realistic? That's the first question.
The second one, can we add an update on the point of action? I believe you're going into a legal organization on a regional basis, does that mean leasing is no longer an option on your planning a break upsell
So I will answer the first one. Yes, you, as heard me, I am I think we are going to have a good third quarter. I am not I am not able to give you precise figure yet for the month of August. I just want to say on your comment that August is usually a low month. So we expect to have a much better August than than usual, but August in well, in Southern Europe, in Northern Europe, is generally July.
And July in Northern Europe has been, quite, quite good. So So yes, we are going to have a good summer, and I will not quantify more, but I think It's going to be a good summer. On the pipe activity, Benoit.
And August is a bit of a French story historically.
So in €1000. In €1000. In €1000.
Let me have reorganized our team to make sure that we have teams ready to serve customers in August. On pipe, the legal reorganization we have done, to have Asia, Latin America, Europe, and our Southern German businesses separate legally. It's something we wanted to do to have clarity on the profitability and the management entities of each of those different sections, which internal reorganization of pipe, there is not much to read beyond that.
Next?
Thank you very much. Next question from Robert Gardner from Davy. Please go ahead.
Good morning. It's 2 from me. Just wondering, one on your additional cost savings for 200 I'm just wondering what kind of longer term assumptions you're making about places like U. K. Distribution.
And if the measures you're taking
in ability in other industrial businesses that capacity closures or what that is there. And you mentioned as well a number of benefits you had in H1 from kind of temporary savings, government schemes. I'm just wondering to what extent they unwind in to including tax deferrals, for example. Thank you.
No, if I take, for instance, the mobility market, you can read a lot of different assumptions. Whether it's going to come back to 90%. It varies by geography. And clearly, we don't expect that to come back to 100% in the next 12 to 18 months. What we are doing for instance in this market is to accelerate our positioning on electrical vehicles.
Where we have a kind of double digit, strong double digit growth. But clearly, we don't expect to come back 100% on mobility anytime soon. In the U. K, there still this uncertainty around the Brexit, we think that some of the non residential investment in the UK could be delayed. So We don't take for granted that we are going to come back to 100% but a bit below that could be a new single digit below that in the next 12 to 18 months.
And then on the temporary savings, as I said, we exited the partial unemployment measures exceptional measures that we have put in place end of June. So we don't expect to capture that going forward. Now on discretionary expenses, I take just travel, by definition, we are not going to travel extensively in the second half. So there might be a bit of that again in the second half, but so far, it's not the same magnitude of what have seen for sure in the first half. And there is no tax deferral or things like that.
We have paid all that on time and we didn't capture those kind of additional extra benefits. So it's it was a cost savings based on unemployment or internal expenses that we have delayed Next
question?
From Judith Puja from Kepler Cheuvreux. Please go ahead.
Yes, hello. I have two questions the first one is a follow-up for Sreedhar on the working capital please, are you suggesting that by theendoftheyear even that inventory is something that you manage yourself, that it will be the working capital positive, a positive change. Also, if on that, you could give please the days of sales that working capital or inventory, what you prefer, represented in at the end of H1 2020 compared to H 1, 2019. It's good for us to see these figures. And my second question is on these renovation in the stimulus packages around energy efficiency and so on.
Do you think that it's different this time that it's more powerful than ever or it's some think that has been quite regular in the past in a lot of countries. And if yes, sorry. If yes, are you I would say happy with your portfolio or would you like to reinforce in some areas or go to new areas. I don't know whether you talk also about digital and I can that electrification will also be a trend, an important trend there.
So it should be around this first question and I will answer the second.
Yes. So those have, the focus on working capital will remain, and I'm, again, I say that I'm very confident that the fact that the country CEOs are looking at on a daily basis, there is a lot of focus, rigor, and it's happening at the grassroots level. It has it gives you a lot of confidence that the working is being managed. Now coming to your question on what is the number of days? If you just look at end of June, it's not the right reference because we are talking of 90s improvement, which just means no because we are talking at a different volume level and there is So I don't want to even claim that this 8 days or 9 days of improvement is something which is going to sustain.
That's why I said that you have to keep that in mind in your working capital that the part of inventory, which is $400,000,000 improvement, and that something we should see improvement and not again to 400 in the same sense because there is also some impact of the June sales, which was very good. So I expect inventory should be certainly better. And at the least, I would expect at the end of the year is the number of days we should see at least in line with the last year and or maybe better than that. I mean, I don't see any reason why there should be any deterioration and working capital in number of days, even at the end of the year?
Concerning the programs on renovation, I think that If you look at the programs that have existed in the past, there was, and successfully so, a lot of focus on new buildings. And I think in Europe, we have had in the last 10 years, coming from Brussels and then implemented in the various countries, a big improvement, which has on the way buildings, new buildings are done. In terms of renovation, we have had much less emphasis. So I think there is a very strong new focus and it's different from what has happened. That's the first point.
The second point is that and for Saint Gobain, more than percent of our, I say, well, around 50% of our sales are in an innovation. So it's a much bigger part. The second point is that I think that the climate issue, which was not present the same way, I would say, 10 years ago, it was more a reducing energy span. It is still a very important element. That thing contribute to the CO2 reduction is going to be seen by many consumers as something which are interested to do.
When I look at the young generation, they are very interested in this topics, and they want to give a contribution. So I think that these if they are subsidies or help the number of innovation which are going to be implemented will be more significant, the impact will be more significant compared to the amount of public money than it was before. The third point I want to make is that we are focusing a lot on Europe on that because that's where the announcements have been the most visible. But I would say that despite what's going on at the federal level in the US, the US is there are a lot of local states, government cities, which are implementing programs in that area. So I think this topic is going to be important also in the U S, where we have, at the moment, a good dynamic.
So I think it's really going to be a powerful engine of growth for Saint Gobain in the next few years.
And sorry, I'm changing your portfolio.
Yeah, we are you have seen on the slide, I presented that in France, but in France, we have also a very strong distribution. We cover a lot of things either through manufacturing and distribution and our distribution activities is also a good way to see what are the areas where we could also be interested in terms of metrics. So yes, we are looking we are constantly looking at optimizing our portfolio I think one topic, as you know, we have an interest in construction chemicals. We have also been interested in, I think, there's a growing theme that we see is driving a big growth in our distribution in Sanjorie Plumbing And Heating is the equality. So another trend, which is growing, is and it is driven by also by the efficiency and the secular economy to be more efficient with the material is the off-site manufacturing, which is also helping to to address one of the issues that we have had in our sector for customer standpoint, which is the labor, which was not always available.
I with this crisis, it's going to be less of a problem. And I think it's important also governments are working on that to make this sector more attractive from a because there is a need to in that area, but I think also to address the shortfalls in skills and to be more efficient also in terms of resource use of resources of site manufacturing is growing and we are it's different country by country, but we are also look at all that is maybe a small, small moves, to complement our portfolio in that direction. We've done that in the UK, 2 years ago and we have, we have other ideas in this direction.
Thank you.
Thank you. Next question from Arnaud Lehman from Bank of America. Please go ahead.
Thank you. Good morning, gentlemen. I have three questions, if I may. Firstly, maybe for Pierre Andre, what's your view of the outlook for Housing And Commercial Industrial Construction for Europe and the U. S?
Guess, in the mean term, in the medium term, there's a few that maybe housing is recovering nicely, but potentially non residential construction as downside risk into 2021. So what's your view of this? Secondly, maybe a word on Asia Pacific think you mentioned that it was still down in June, driven by India. I believe could you give us a bit of color on that and when you would expect the Asia Pacific Regions to be back to growth if possible, maybe back end of the year. And lastly, regarding your cash position, I think you have about 1,000,000,000 of cash in the balance sheet at the end of June, which is obviously very comfortable, but it's now meaningfully higher than your kind of usual cash position of 1,000,000,000 to 1,000,000,000.
I guess maybe some buybacks are possible this year, but what would you expect to do with cash once the business conditions normalize? Thank you.
So on the first question, I think it's probably different from a housing and from non residential. You have to there are 2 different on housing, I am, I am, overall, optimistic about the outlook. There may be some e caps because of some slowdowns in the delivery of, of authorization of permits during it varies by country, but there are some countries where we have some hiccups where there is, there may be a slowdown in of issuance of Permian, a slowdown of issuance of Permian, clearly in France for 2, 3 months. So is it going to have an impact? I, it's too early to know, What I think is that for housing, the trend emerging from COVID is To some extent, and I don't know whether it would be huge, but I think it's going to be existing at least there is a short term trend, which is important, of going back to individual housing versus living in a flat confinement being in a in a flat for a lot of people in large cities, you see a movement toward a toward a desire to have, to have a small garden.
And I think that for housing, I see a trend towards individual housing is going to, to be in my view, a positive, in a period in the U. S. And I see that also in the number of countries around the world. Non residential on the other hand, maybe, depending more on the macroeconomic and the speed of the recovery, But maybe, if I take the 3 components, renovation, which is going to be bullish in my view, new housing, which was meant to be to be okay and good. I think non residential, which is, for us, the smaller segment, I think it's less it's around 10%.
This is I don't I am not very optimistic about the growth of these segments in the next 18 months. That's the way I would describe it. And Asia Pacific is very contracting between India and China. Maybe you want to give some color on the north
and just to add on on the U. S. I don't know if you take the home sales right now, it's very
hot. Yeah.
The housing market right now
is very high. Why I said that, yeah.
And we have double digit growth some of our product lines as we speak with very strong backlog of orders. So it's a very hot residential market in the U. S, which is good for volumes and prices going forward. On Asia Pacific, it's truly linked to India, because if you take Asia Pacific outside of India, we were down only 2% on volumes on the overall Q2 and up in June, we were up double digit in China, up double digit in Vietnam, as you know, the sanitary situation in Southeast Asia has been quite complex between Singapore and Malaysia, Indonesia, but they are smaller countries. So feel very confident that we'll be up in the second half in Asia Pacific outside of India in India, which is a large country, the lockdown and the saturation is complex.
And we don't expect to come back to a normal level in India before the end of the year. So unfortunately, We were running at 70% in June. Shreedhar is, of course, the specialist of India, but it was 70% in June. And we don't anticipate to have this should contribute to come back to normal before the
end of the year, but
the rest of Asia is already strongly up and might offset depending on how fast India does catch up might offset, India and be coming back to normal in the second with
a good growth in China.
Very good. Very good. So,
cash standpoint, the the goal is to, is to have, as I said, a stronger balance sheet and to reduce the debt. So, I don't know. You don't need to give more detail. You want to
give the
initial comment on India?
No, India, I mean, I think that the fundamentals are very strong and I remain extremely bullish on NBI, it is just a question of, managing this transition of the crisis. Otherwise, Singapore is so strong think it will bounce back very strong manner.
Thank you. Next question from Navin Ahmed from Barclays. Please go ahead.
Taking my questions. Can you provide some idea on what would be the implementation cost of the new saving initiative the reorganization you mentioned. And maybe related to that, your head a year ahead, in terms of reaching your target on transforming growth. Have you identified new saving initiatives you seen pleased with the new organization and the way it's progressing. Are there potentially new initiative savings initiative related to transforming growth.
The second question, I was wondering if you could elaborate a little bit on the U. S. Roofing outlook, how do you see the second part of the year? Any specific storm activity that could impact the business and also wondering if you could comment on pricecost in asphalt roofing and how you see the margin going forward? And lastly, broadly similar question about the U.
S. Gypsum market, if you could comment on the outlook, what pricing has done following the CPP line last year and how the CPP integration is going.
Okay. We are trying our best to forecast the economic outlook, but I don't think we have any competence in terms of forecast storms, but Benoit will try his best. On the cost of the additional
So the cost of the additional program, in the first half, we had 40,000,000, around 40,000,000. I would expect it to be much bigger in the second half or close to 100,000,000 in the second half. So but just keep in mind that The costs related to transform and grow would be a half the level of what we had last year, even slightly even less than half. So So that's overall, I think the restructuring cost, I expect it to be less than 400,000,000. Last year, it was $1,000,000.
And the transform and grow?
Maybe other one. As you have heard, you know, it's transformed and grew. So the now that we have the organization in place, I don't expect additional savings. Of course, each country CEO will continue to optimize the team, the customer service, the ticket cost to sales or that, but I would say it's day by day and it's execution in the details in normal life. Our ambition now is to grow.
I've shown you very good examples on how we capture additional market share in our distribution business in France. I could have shown you our double digit growth in gypsum in Brazil. We have a lot of commercial synergies that are capturing a lot of growth for this for sure. It takes a bit more time than the hard savings. But it's transformed and grow to our ambition with the solutions of Saint Gobain to capture the renovation, to capture new solutions on many areas and all the richness of the portfolio is to truly leverage the richness of Saint Gobain within each country with our CEO.
So that's the growth part which I'm very confident on. And now that's the ambition of each of the country. On the U. S. Yeah.
On the U. S. Roofing is very as we speak, a bit more storms indeed than last year.
What is good, we have one of the highest backlog of orders as
in the recent history. So that's good. And we are going to announce some price increase in the coming weeks. Think it has already been announced by some of our distributors. So that's good news.
And the price cost spread should remain favorable in the second half So it's a good momentum in roofing and clearly the question as we speak is to make sure we can deliver the products based on all the secondary constraints up and down country by country state by state, sorry, in the U. S. On gypsum, also strong volumes, double digit in June, double digit in July, It's a very good integration with, Continental Building Products. We have kept the senior leadership on manufacturing and the former CEO of Continental. So the integration is doing very well.
Transition of brands is happening as we said. So we optimize now the individual setup to make sure that we have the lower cost to save from each plan to customers, reactions from customers had been good. So I would say the starts are aligned, and we should have a very good second half in gypsum and the prices have been slightly down in the first half. Roughly 3%, but we have also seen some of our gypsum dealers announcing price increase to the home dealers going forward. That should support a better pricing environment in the second half.
Thank you. And same question from Gregor Kupelich from UBS. Please go ahead.
Hi, good Good morning. Thanks for taking my questions. I've got 2 questions. 1 is short term ones with longer term. So the short term question is, since July, you said you're up I think 3%, 4% with trading days, you probably are still down.
I don't know if you could care to quantify it. So I was interested in your comment that July has continued to be solid or strong. I don't know exactly what word you used. So I want to understand, do you see that it's a sequential improvement? And if you can give us sort of a directional big, I don't know if it's up 5% growth or something of that order of magnitude in July could help us to quantify that because for me, obviously, the trading day impact is quite material actually in June.
So I just want to get a sense of the underlying trend. The second question I've got is on renovation. So you quantified your exposure to EU renovation at 1,000,000,000. So that give or take, I think, a quarter of the company. And then you said you expect meaningful growth contribution from that.
Now I guess it's obviously difficult for you to quantify precisely, but if you can give us some sense based on what European Union has announced what do you think the growth for this part of your business could be if all of those things to fruition, and I appreciate there's a big uncertainty around that.
So on the, on the the current trading, yes, the number of days was unfavorable in May, favorable in June and overall in July. Overall, it matches. So there is a clear recovery if you take out the number of days. And I and I would say at constant number on this, July is, is significantly I don't have the I have the number up to 2, 3 days ago. So I don't have the full numbers for July, but the training of July will so I cannot quantify exactly will be significantly above the level we had in June.
So there is a constant recovery. Having in mind that in June, we were at a constant number of days, we are very close to last year if you take out HBS, So that's and HPS is continuing to be a drag to a lesser extent because automotive is also picking up at the moment nicely, but I don't think we will reach the level of last year in the second half as was said in mobility. The second question, I I what I said is that we had around 1,000,000,000 of sales, which showing to renovation, how is and which speed and what is going to the impact on on our work sales, from the money injected at the European Union level or in the countries, it's, it's, today, it's still guessing. So I'm not going to give a number, but I think over the next 3, 4 years, it's going to be significant. Especially because I think the money the question is what is the multiplier on the from the money on the work done And that's because the individual owner of Ham is going to do renovation it has a renovation when there is a move or it's not necessarily for only energy goals.
So the idea is that when there is a renovation, it is taking on the energy component, the energy efficiently component that the multiplier between what he can get as subsidies or grants or tax and the amount of work is not necessarily known in advance. My belief is that this multiplier is going to be better than what it has been because the general environment is supportive of everybody working in those environments and contributing to a climate change, especially the young generation. The young generation is that I changed the subject, but it's quite important to have that in mind. For me, I cannot hire somebody in the young generation without them asking questions about what Saint Gobain is doing on those topics. And I think you would find that across the board everywhere.
So I think the sensitivity of the young generation, which are the one we are going to invest is very significant. So the multiplier is going to grow.
Thank you. Next question from Tobias Turner from MainFirst. Please go ahead.
Questions. 2 questions, if I may. Number 1, in your industrial businesses, can
you give us a bit of
a flavor maybe in terms of the momentum of the book to bill ratio. I suspect that rebounded quite strongly from the trough, but what is the late momentum from June into July. Is that slowing or is that, is that still accelerating? The second question is about the price cost spread, which you talked about, you, for the total whole group.
If you could give us a
bit of a flavor there, particularly the price component. And as far as your view is for the second half pricing situation for for the wider group and maybe also some flavor across the divisions. And then just lastly, energy costs, as part of the price cost spread, what you make above Thank you very much.
So the first question, Tobias, I am not sure. It was on PSPS or on all the industrial activities? Okay. I I I I start with the with the, I start with globally in Saint Gobain, you know, we don't have, we are in businesses where there are not long, long orders in most of our businesses. If I within HPS, we have the ceramic part where we are generally long lead time.
And I would say the situation has been globally improving. It was It was low at the end of last year. It was low entering in the crisis. I think it's globally improving. Automotive, we don't have a huge order book, but clearly in automotive, there is a significant improvement in July versus June.
And we are but from lower standpoint, but there is a significant improvement. The rest of our activities in non construction related markets, I think the are all improving they are behind construction on the construction side. There's not a lot of other books, but you won't be, yeah,
I would we monitor very closely what was restocking of distributors, whether it was for Abraxis and all kinds of construction, manufacturing businesses. And I think we are beyond that So the improvement we see across the board from July to June is now a normal sustainable improvement. And as I said, in some of our businesses from Centene, the U. S. Or even in France, right now.
The goal is to deliver the products. So it's clearly stronger order book for the next weeks now, as Pierre said, in Q4, we don't know. But in Q3, yes, the book to bill is accelerating and we are beyond what was kind of exceptional restocking from some distributor.
And the cost spread is still there?
Yes. So on the cost spread, as we said, $50,000,000 is the impact of the spread for the first half. And the large part of this is coming because of the decrease in the gas price. Keep in mind that in our energy bill, electricity is quite a significant amount. If you just take the bill, eligible for the first half, which was 550,000,000 and 55% was electricity.
So, and electricity still saw some inflation. So all in all, the spread is positive. And if this trend continues, what we see now, I would be, I would expect that we should continue to have some deflation and deflationary trend should continue. Again, nobody can make an assertive statement because it remains quite volatile. And if that continues, I don't see any reason why we should still not see some tailwind, But again, at the end of the day, the spread is the right way to ask because you also asked about what is our expectation on price and, we would continue to push price, as Benoit also said, we have tier, actions in North America.
We have actions in glass price to push. So this is something which we'll keep doing it. I think we'll focus on spread and having a positive spread will remain the top most priority for us.
And we have a lot of actions also on purchasing as we speak in a volatile environment. It's good to renegotiate month after month's trying to leverage the current situation.
But I would say that globally, we enter the second half with a better feel on that than the first half. So we should have some tail additional tailwind on this price cost to spread in the second half.
Thank you very much.
Next question?
Thank you. Next question from Sarah Abraham from Morgan Stanley. Please go ahead.
Thanks very much. Hi, gentlemen. I've just got a question on the fraction costs and your plans to make more permanent restructuring in the UK and in your mobility segment. And you've guided to a little less than 400,000,000 restructuring costs this year. But how do we think about the restructuring costs for next year associated with that 200,000,000 Europe program.
And then, a second question, what would motivate you to extend the review of assets beyond those 2 that you've earmarked for more permanent rightsizing. Are there any assets potentially which could be next? Thank you. You.
So, Sreedhar, I'm not sure I got
understood completely. No, understood. One first question was on U. K. The second was the,
no, the first question was on the restructuring cost. All the actions will have been launched already end of the first half and will have been launched end of 2020 So you should not expect additional restructuring cost for that in 2021. That's the first question. The second is no, we looked at the markets or the businesses where we don't expect them to bounce back to normal. So beyond mobility, we have a very small business on aerospace, our space will take some time.
So we take actions there also, but beyond mobility and the U. K. As of today, we don't see the other businesses are down the back to
I would say, no, we should have, in fact, for growth next year. When I look at the prospects and we are, we are revisiting like every year, our CapEx plan and for in terms of growth, as Benoit said, very shortly, where our July and August, our priorities to deliver our customers, on time, and, and, we like to be in situation, and we are satisfying our customers, but it's pretty tight at the moment.
Okay. And then just one follow-up. So the assets that you are rightsizing the UK and the mobility business, can we assume that the sales associated with those businesses is roughly equal to the restructuring costs? Just to try and work up
the facts in mean, the savings are more or less in line with the restructuring costs. We try to have a payback of roughly
2 years, 1 to 3 on those actions.
So Depends the country.
Depending on the country and in the UK, it's a very quick payback. When we restructure our distribution network in the U. K. It's less than 1 year payback. So, but on average, between 1 2 years
in mobility industry in the sales
and the restructuring cost?
There is no relation to sales, yes.
Yes. Okay. Thanks very much.
Then I have the question on the Internet. I have to ask you, I have to read them. Yes. No. I mean I am Eno D'Aral from JPMorgan.
Can you confirm that you have 3 different cost savings program going place at the moment operational excellence, 1000000 expected in H2 completed or to go. Transform and go 50,000,000 H2 completed or not to go. A new COVID itself explained 50,000,000 in H2 and a total of 200,000,000. Yes, all that is correct. And, and, on operational the difference is that operational an experience.
Yes. I think, this is, we will have, it's it's a life. We will have we will have more on that, in the coming years. Transform and Grow Benoit answered, no, it's finished, and now we are on grow. And the new COVID related savings plan, which is a plan which is rated to the activity, which are being hurt and will be hurt for a while.
It's also a comprehensive plan. So yes, your your detail is correct. That does that mean that you have 240,000,000 $245,000,000 savings plan for H2 versus $395,000,000 in H1. Is that correct?
No. One mistake is that in H2, we'll have the 1,000,000 that is on the slide related to the business which suffer Mobility U. K. 2nd, you will have an additional 50 of Transform 3rd on Transform on World Cup Manufacturing, sorry, on average, we have 1,000,000 a year. So we have 155,000,000 in the first half.
We should have around 150 in the second half. So if I add up all that, it's 250.
That's what she said? No, no, so you agree with EBITDA. Okay, very clear. 3 of the question, oh, and then what is the reason for having 3 different programs running and same time and do how do you measure the success failure of each of one of them? And you really what I think the answer is, obviously, there are very different programs, I mean, of one go is linked was linked to the organization, and it's mostly SG and A program.
The new COVID rating is really addressing specific businesses where we consider the prospects are below what they were before, the COVID crisis. And the operational excellence program, I would say, is a manufacturing, so that's very different from Francois Mango. How do you measure the success failure for each or one of them individually? I can tell you, Shreedhar has put in place a lot of, measures at a much more detailed level for each each action plan. So there are business plans where we expected savings linked with restructuring money.
This is followed extremely, closely. Second question, from, in Oderall, the EU recovery deal will naturally benefit Saint Gobain but can you talk about when you expect ground to be broken and how soon you expect the announced stimulus measures to positively impact performance? Can you remind us of your portfolio of efficiency solutions, please. I think if I look at the portfolio energy solutions, you have a good description on the slide, I gave when I on this house in France, so the we don't have exactly all solutions in all countries the same way, but the basic ones are there. And when is it going to land?
I think in The European part will not eat the ground this year. It's probably more next year. The, different plans by country, I can tell you the French program, I think may have an impact in the fourth quarter, start to have an impact on the fourth quarter. Because there have been already things that have been announced in terms of individual housing, and I think this will, trigger more thing in the second half. So I think on the the French brand, there is going to be also a significant part to on public buildings, schools and hospitals, which is, by the way, a very important element of the European program, and yes, by the way, this is going to to to balance a little bit my answer to, Arnaud Lehman's question.
Is that the non residential? I was thinking about, you know, more building and office school and hospitals are going to be, to be growing significantly. It is really a single out at the European level. And I think that The various countries will adjust to that. That's clearly what the French government is doing at the moment.
They are going to spend in France in my view of 1,000,000,000 to 1,000,000,000 in that and that will be public money in public buildings that I think is not going to materialize in 2020, but should start, in, in 2020, in 2021. Then I have questions from, yes, Centuri and Arnaud Pinnato. Could you give us more colors on pricing in distribution and margin distribution, will pricing be positively impacted by lower and year rebates given a volume environment, will purchasing prices be positively impacted by lower, end of year rebates That's the same question. New reports, it was pricing and purchasing, yes, on rebates. New reports suggest that there has been some COVID related description along the distribution supply chain as this created services for some products that could translate into better seeing power.
You want to give some color on that, Benoit?
As you know, we always have a pricing spreads slightly positive on distribution to make sure we manage our margin. And as I said, if you think of the Nordics of France, We have been improving our margin in the first half and including in the second quarter. There is always this rebate negotiation we did say that in 2000 and 9 and 10 during the last financial crisis. And in those times, usually, we managed to actually increased slightly the percentage of rebates in our distribution businesses. Why?
Because the suppliers are hungry to get some volumes and we are steady, reliable better with no credit risk. So that's the way we manage. And as we speak, that's what the teams have done successfully so far. So I feel confident about the rebate In percentage, of course, in volumes, you don't get exactly the same if you have less volumes. And you are right that, we have seen for some suppliers, some stock outs.
So here again, being a reliable distributor means that you have a better inventory and you have a better service to your end customer but some products have been stocked out. We manage on our side on manufacturing. That's our number one challenge, like Pierre Andre said, is to make sure that we deliver all the products whether it's in the U. S. Or in Europe, in France.
So yes, the challenge of some of the building products manufacturers today is to make sure that they are not running out of stock of inventory, which in general is a good support for pricing.
And last question from, the same yes, Centuri and Arun Pinah. Tell you what level of public support do you expect for construction and renovation in Europe and the U. K. In the context of the Grinding and recent announcement by government I think I answered already those questions on the on having in mind that in France, I think it's pretty clear we are going to get now. It will be announced at the end of August, but there have been some elements.
So I think it will be, significant. And in the U. K. There have been a, so announcement recently. So if I am correct, this ends the question.
So I thank you for your participation. And I wish you a good summer. Stay safe. And, and I'm looking forward to a good second half and see you in February.