Good afternoon to you all. We are four of the country's CEOs, and we are delighted to be kicking off the Capital Markets Day.
Hello everyone in the audience and online. I'm Carmen Bodden, President of CertainTeed Roofing Products Group in the U.S.A. In North America, we are building on our strong momentum. I actually had the pleasure of hosting some of you at our Norwood Roofing plant two years ago. Since then, we have grown our market share, cross-selling with siding, and adding GCP waterproofing membranes. We have invested in state-of-the-art technologies to support our customers. We take full ownership, and employee engagement is at a record high.
I'm Mike Chaldecott , the CEO for Saint-Gobain in the U.K. and Ireland. I also had the pleasure of welcoming a number of you to a rainy or sunny Manchester when you joined us to see what we were doing in terms of specifications and systems with our largest residential customers and commercial customers with co-developments. In the U.K., we are the leader in light construction. We are indeed at the forefront of innovation. We made the first plasterboard at our British Gibson factory with 100% recycled plasterboard. Performance and sustainability all in one.
Hello everyone. I am Joanna Piechowiak, CEO of Saint-Gobain in Poland and Ukraine. In Poland, we lead and win with one Saint-Gobain spirit. We increased our sales of high-value added products by 80% in four years, and we supplied our Saint-Gobain solutions to 29 large-scale iconic projects in just two years. We have the best offer to outperform our markets year after year.
Welcome everyone. I am Marco Corrales, CEO of Mexico, Central America, Colombia, and Ecuador. I led the acquisition of Cemix last year, and I'm happy to say that after nine months, we have a great integration and a very nice addition to the group. In Latin America, we move fast. Five new countries in the last three years, outperforming our markets and accelerating growth for Saint-Gobain. Back to you, Mike.
Thank you, Marco. You can see that we have everything it takes to lead and grow.
Construction needs are enormous in the residential, non-residential, and infrastructure markets. They come with the imperative climate adaptation and preserving our natural resources. Now, more than ever, it is vital for us to build differently, build faster, build better. Decarbonize, recycle, reuse. Rethink the way we design and renovate the places where we live, care for, work, learn, and travel, adapting them to make them more resilient. Where some see challenges, we see opportunities. Where others see obstacles, we see solutions. This has been our guiding philosophy for the last 360 years. It's our talented teams that drive us forward. We're giving ourselves five years to move forward fast, to accelerate our growth, and strengthen our leadership. To make this happen, we're committed to being a solutions-driven company and becoming the go-to partner for our customers, delivering outperformance in everything we do. Lead and grow.
More than a plan, this is our impetus, our drive towards making the world a better home.
Good afternoon. Thank you. Welcome. Welcome everyone to our Capital Markets Day. Today, it's all about our mid-term strategy for the next five years, not about 2025. I'm happy to say that we deliver well with a solid performance in 2025, which will be a good conclusion of our successful growth and impact plan. I confirm to you our full-year guidance, operating margin above 11%, and we will talk about our Q3 sales at the end of the month. You just heard from our top country CEOs what it means to drive the success of Saint-Gobain, today and tomorrow. I'm very confident to open a very exciting new chapter to accelerate profitable growth. Lead and grow. It's perfectly aligned with our purpose and our strategic vision. Saint-Gobain is today the world leader in light and sustainable construction.
We are in every single large geography, the number one in light building materials. We are leveraging the perfect governance by country that we have established, local for local, well adapted to our local construction markets, and very robust in the de-globalizing world of today. We have a unique ability to grow not only in mature markets, but also in emerging markets. With this strategic plan, we are truly leveraging our leadership to unleash the full growth potential of Saint-Gobain. By scaling an unmatched breadth of value and enhancing solutions for customers that we have built systematically and successfully over the last years of growth and impact. By expanding not only on the residential market, which we master, but also on non-residential and infrastructure markets where we are going to gain share.
By executing all this with strong local leaders, very strong country platforms that are compounding growth for Saint-Gobain and very well focused on execution. We are stepping up our financial targets, mid-single-digit sales growth, with a clear outperformance versus our markets, 15%- 18% EBITDA margin, all this being fueled with strong free cash flow conversion. We are ahead of vast growth opportunities, growing markets with untapped opportunities. Light and sustainable construction is at the crossroads of very powerful megatrends, be it population growth and urbanization, reshoring in some important markets. All the climate topics are even more salient than they were five years ago when you think of adaptation, resilience of buildings, and infrastructure against climate change, when you think of energy efficiency renovation. Let's hear some insights from experts.
Having greener, better, resilient cities depends on the built environment. We need buildings that are low emission, low carbon.
80% of our building stock will still be here for 2050. What we're really talking about is adaptability.
I think the construction sector is facing a lot of challenges. I think the rates at which we need to build is one of them.
The challenge there is adaptation. How do you adapt buildings for decarbonization, for energy efficiency?
Creating more certainty around what does risk mean is critical. Insurers need to understand what you're doing that's different, that's resilient, that's sustainable in order to better price it and to better underwrite it.
We know that the market values green building. In fact, since 2018, LEED-certified assets held over 21% higher average market sales price per square foot over non-LEED buildings. We see this play out as well with rentals, with green premiums in North America of over 7%, London almost 12%, and Asia almost 10%.
Through a circular economy, we can make sure that, as I said, we move away from the linear path so that every time there is a new cycle, a new building to be built, we can use or regenerate materials that are already existing.
What is important to us is that all these megatrends, they translate into vast local growth drivers region by region. You take Europe. We have ongoing market recovery to address a large housing crisis. As you know, we see green shoots in almost every single country. We have energy efficiency that brings green value for better buildings and is well adapted to climate change. We have the upcoming investment for infrastructure and defense. North America, a huge housing shortage, 4 million homes. We have this must-have renovation to adapt for climate change and extreme weather patterns, and all the investment for reshoring, including on infrastructure markets. Asia, high growth countries, emerging markets, large population growth, and big urbanization trend. Aspiration from a large middle-class population towards economic development and good quality buildings. Of course, all the infrastructure related to those urban development programs.
To answer these megatrends, Saint-Gobain is the only provider of comprehensive solutions that bring performance and sustainability for buildings and infrastructure. If you take the building envelope, we have everything it takes. It's simple. The roofing, the facade, cladding, glazing, the flooring, the partition, and all this with thermal comfort, acoustic performance, visual light, air quality, productivity on the job site. When you think of a building, we are with a crucial competitive advantage. Products in a building don't stand on their own. They are part of a system. They are part of a facade. They are part of the overall performance of the building. The fact that we have this unique ability to take everything and deliver that to our customers, measure the benefits, measure it to the architects, the occupants, the homeowners, the contractors, it's a crucial advantage for Saint-Gobain to take the most of those megatrends.
This comprehensive offer of solutions, we have a unique ability to leverage local leadership positions to push our competitive advantage and to gain market share across multiple product lines. Take the example of Mexico. You heard from Marco Corrales. We were very strong in glass exterior solutions years ago. We moved into interior solutions, plasterboard, and more recently, we accelerated on construction chemicals so that we have now a meaningful offer across all the envelope of the building. These solutions, our customers ask for it in the residential markets. More and more, we have broadened our access, our breadth of offer towards non-residential and infrastructure markets with all the moves, all the acquisitions we have done in the portfolio in the last years. Now that we have broadened our reach, we have addressable markets of EUR 500 billi
When you think of non-residential and infrastructure markets, where we have been historically a smaller player than residential, we make already EUR 15 billion of sales. We have a lot of room to gain market share with a relevant offer on education, on hospital buildings, on all the infrastructure. Everything we have done on construction chemicals was on purpose. It's a fantastic gateway to be meaningful, credible, necessary in the eyes of customers on infrastructure markets. Across all those segments, we have a lot of expansion and growth opportunities. I gave you the framework of the megatrends, how they will support our growth going forward. Let's look now at how we are steering the growth profile of the group. First, we do it by geography.
In Europe, we will take the most of the recovery, and we target 3%- 5% sales growth in the coming years, leveraging the strong positions in every single geography. Take our top country platforms and seize the European recovery, on which, again, we see that it has started everywhere. We will continue to prioritize our capital allocation towards country platforms in high-growth geographies to increase our exposure there. North America, Asia, emerging markets where we target mid to high single-digit growth. Already in 2025, we are ahead of the target that we did set in 2021 towards a target of 45% of our sales in those markets. We are close to 50% depending on the extent rate. Our long-term ambition is to be at 60% of our sales between North America, Asia, and high-growth geographies.
Beside the geographic exposure and evolution of how we steer the group, second is how we widen our reach to all construction end markets, notably increase our presence on non-residential and infrastructure markets where we target mid to high single-digit growth, gaining share on those markets where we are now a relevant, meaningful player. As I said, what we have built in terms of platform of construction chemicals, EUR 6.5 billion, is a fantastic gateway, notably into infrastructure. We target to be above EUR 9 billion by 2030 in construction chemicals with a good combination of bolt-on acquisitions, CapEx, and also leveraging the innovation of Saint-Gobain. By geography, by end market, everywhere we constantly want to enrich and continue to enrich our business profile in light and sustainable construction. To make sure that in every single country, we have the best solutions approach for our customers.
We'll continue to do that with a very strong focus on value creation, country by country, to constantly enrich and take a bigger share of roll-out for all our applications, customer by customer, country by country. We will be active steering the portfolio optimization of the group to strengthen our group profile. We target a bit more than 20% sales rotation by 2030. Continue to deliver a strong value creation, ROC above 13%, accelerate the mass of value creation of the group. Keep the same criteria that has proven to be very successful to the group, consolidating leadership positions, high-growth countries, and construction chemicals. On all the steering of the group portfolio, we will remain extremely focused on value creation and quality of execution.
You have seen the framework of the megatrends and the huge opportunities for growth, how we steer and we are going to steer the group profile in order to take the most and benefit the most from those megatrends. Now, day in, day out, in the field, on the ground, we are accelerating value and growth through solutions. Solutions is something that we have pioneered five, six years ago, and that we have systematically been ramping up since then. It's one of the three growth levers that we will be using to accelerate our growth to mid-single digit and outperforming the market. When you think of solutions, it's basically answering, even anticipating customer needs. On performance, again, the products don't stand by themselves. They are part of a system. They are part of a performance expected from the end user, from the contractors.
When you survey customers, contractors, and I know some of you have been doing that, a vast majority of them ask for a preferred partner delivering solutions, integrated systems. We will hear from one important customer. It's one of the largest customers of Saint-Gobain in the U.K., Barratt Redrow. It's a large home builder. They build 20,000 new homes per year. With them, we have built the largest of its kind in the world, climatic chamber, where on scale one, we can test all kinds of weather conditions and see and measure the benefits of the performance of the Saint-Gobain solutions. Let's hear from Baratt in the U.K. By the way, some of you with Mike , I think I visited this site in July 2024 in sunny Manchester.
The eHome2 is a critical project for the Barratt Redrow business. It really looks at the key drivers that are coming, whether that's unprecedented changes in regulations, reduction in skill shortages, a change in the types of materials that we want to use, and a change in the way that our customers use our homes. What the eHome2 has allowed us to do in partnership with Saint-Gobain is really look at how far that fabric can go. We're trying to bring those together, all backed by hard data, to make sure that both companies are making great decisions for the future. We've really taken this journey over the last five years from initial concept of what does a home of the future, a zero carbon home, look like, all the way through to now being on a site with customers and actually applying that technology.
What's critical about that at the end is those customers are making major investments. What we're confident about is that the hard data ourselves and Saint-Gobain have obtained together will ensure that the home that they move into has the best technology and the best solutions available. Here in Salford, we brought numerous Saint-Gobain brands together to provide a solution for Barratt Redrow delivered on site as a complete housing kit, hugely increasing the efficiency for our customers and the delivery of quality, sustainable homes for the future. Being able to scale that and bring a commercial offer to them is absolutely essential for the future. Working with clients like Barratt Redrow enabled us to really look at scale, repetition, and industrialization of off-site sustainable housing.
The work that we've done, the knowledge we've gained, has enabled us to take a step change from supplying components into the industrial to providing solutions to meet the demands both for today's market and for the future construction requirements.
Customers ask for performance. They also ask for sustainable solutions and sustainability, where we have been innovating a lot. We are pioneers with the full suite of connected products, low carbon, perfect for sustainability. When you take green buildings, corporate headquarters, on this one, we have two x more sales because we are unique on how we can differentiate and offer that to the customer, two x more than the average of a building. This is truly a differentiator on sustainability solutions. If I put myself in the shoes of a homeowner in France, willing to drop my energy bill, improve my purchasing power, and get more thermal comfort, with Saint-Gobain, I have the one-stop shop, the perfect solution for global renovation that brings value to me.
Value in terms of energy performance and therefore real estate value for my home, saving on the energy bill, a good payback, and trained, reliable contractors. If I move to Canada, with everything we have, we guarantee the quality. It's even our brand, quality made certain, satisfaction guaranteed. From the roof to the ground, we can provide the guaranteed solution so that the ceilings, the steel profile, the plasterboard, they don't point fingers at each other if they are three different providers. We are the go-to contact. By doing so, we have four x more sales than where we were five or ten years ago. Solutions bring a lot to customers. They bring a lot to Saint-Gobain. They increase our value, and they increase our share of roll-out. There are three metrics, three metrics with which we measure our solutions: cross-selling, up-selling, and specified sales.
Cross-selling, you take the example of Brazil, we doubled our sales towards the top 20 customers over the last years by cross-selling all the different products, all SKUs possible. Upscaling, up-selling, when we do it, we have on average, on the high added value products, eight points more margin. It's more a margin enhancement than sales growth like cross-selling. When we move towards more direct sales, specified sales, on average, if I take the example of France, we have 10 points of more added value products, therefore more margin. Those are the three metrics with which we track country by country our solutions. There are two ways on how to expand in each country through solutions approach. One is broadening and enriching our offer for the entire building envelope, do well what we know well, so low execution risk across the whole portfolio of Saint-Gobain.
Second, deploying our comprehensive solutions across all channels, all routes to market. If I take the first way, we do it country by country. Take the example of India, where we have broadened our offer, and of course, we will take this example, and we are taking this example to replicate it elsewhere. We started 10 years ago with two families of Saint-Gobain, glass and plasterboard. Since then, 85% through organic growth, leveraging the know-how of Saint-Gobain, investing on CapEx, 15% through bilateral transactions, we are now number one in every single of the solutions of Saint-Gobain. We have multiplied ourselves by four and our profit by six x. Low execution risk, we know it well, and we have a fantastic leadership in India. By country, and also we take our value-added products and we roll them out country by country.
You take exterior solutions, solar control, coated glass for solar control, which is very important in emerging markets. It's in Brazil, in Egypt, in India, in Mexico. It's a EUR 2 billion business, more than 20% EBITDA, and very strong growth. You take our full set of interior solutions, EUR 12 billion of sales, quite a strong presence of added value products, high added value products, HVVP, much higher than most of the peers that we benchmark, 20% EBITDA. You take construction chemicals, you know the platform, EUR 6.5 billion that we have built, 18% EBITDA, 15% growth in the last years. In just three years, we almost doubled our share of added value products, of admixtures, very innovative one, to help concrete and cement players decarbonize, which is their number one problem today, lower the carbon content.
That's also low execution risk, but adding a lot of value for Saint-Gobain on the solutions. Second way, as I said, deploying our solutions approach through all channels. On merchanting, historically, that was the major by far channel of Saint-Gobain. We do it in Indonesia, two x more points of sales in Indonesia with active actions on the ground versus five, six years ago. Retail, we are now, most of the time, the number one partner for the large retailers around the world. More direct sales with specification. You take this example of a residence in Dubai, 18 solutions of Saint-Gobain with cross-brand specification teams, direct sales specifying with the architect, and increase the share of roll-out of Saint-Gobain. You take digital. It's also a very important avenue for us in terms of how we promote our solutions, such as 35% in the Nordics.
We track all these solutions deployment country by country. Cross-selling, our best in class is North America, above 60%. That means in every single point of sales of our customers, we measure whether we have multiple SKUs from roofing to siding, from plasterboard to insulation, ceilings, etc. In Germany, we are below 40%. Upside potential for growth. You take up-selling, and some of you may have exchanged with our CEO for Italy during the lunch. We are above 50% of high added value products. In the Middle East, we are below 20%, 18% exactly. Here again, a good way to up-sell and improve and continue to enhance our margin. Specification, the best in class sticky specification, sticky margin is in the U.K. with Mike . Mike was on the stage to start our Capital Markets Day. In Australia, we are moving up.
In India as well, but again, we can learn from each other. In every single country, we have metrics to track our solutions and how we can continue to increase growth and increase margin. We are leveraging the same approach for differentiation and growth on industrial solutions. They are already best in class in terms of HVVP, added value products, in terms of specified sales. We leverage their innovation across all the group. Innovation on glass, coated glass, between mobility and buildings, chemistry, all the know-how that we have on polymer is very beneficial for construction chemicals and vice versa. Our ceramics, innovation and knowledge for process decarbonization, of course, that we use for Saint-Gobain. That's the first growth lever, the first leg on how we accelerate growth and value for Saint-Gobain, rolling out our solutions. The second is to expand and continue to expand in non-residential and infrastructure markets.
As I said, we are already a meaningful player, EUR 15 billion in sales, accelerated in the last years with our move in construction chemicals. The way we look at those markets, non-residential infrastructure, is very often we have what we call hero products. Products that are very specific, highly technical, not easy to replicate, and truly door openers for us to win in those projects. You take the example of this hotel in Dubai. We have the best in class in the world, fire safety glazing, very important in the high-rise buildings of Dubai. Thanks to these hero products, we have been able to leverage 25 other products of Saint-Gobain, with a full set of solutions. Not easy to replicate, big share of roll-out for Saint-Gobain. If I switch to another market, data center.
Data center, we have a lot of hero products, technical ceilings, the best admixtures for low carbon slabs, which is one of the critical components to decarbonize the buildings. We have a catalog for that, including our waterproofing membranes. According to external market study, 34% of the owners and contractors of data centers use Saint-Gobain products. This is two x more than any other building materials competitor. 20% of the cost, full cost, including IT hardware, etc., of data centers is related to the building envelope and building materials. Here again, hero products, and we are winning on those markets. Infrastructure markets, as I said, construction chemicals has been a fantastic accelerator in terms of gateway to the whole infrastructure market. Just to recap on how active we have been, 37 acquisitions over the last four years, 43 new lines and plants, very successful ones. We have the leading brands.
We have the leading experts in our teams, and some of you had a chance to interact with Frederic Gambal, Steve Williams, also during the lunch. We are very meaningful on areas and markets where 10 years ago, you would not expect Saint-Gobain. When we sell 10 solutions on a bridge close to the M5 in the U.K., 10 solutions on a metro tunnel in Doha or dam in India, we have a leadership thanks to, notably, construction chemicals on infrastructure markets. On those markets, we have put together the foundations to win them. What do I mean by that? We have dedicated catalogs by end markets, dedicated offer. Second, we have all the technical capabilities, the R&D, the building science of Saint-Gobain. We have also, commercially speaking, cross-brand specification teams, experts.
When we win this large airport in Vietnam, it's more than EUR 20 million of sales for us, 15 solutions from admixtures and construction fabrics on the runway, fire safety glass, solar control, acoustic partitions, flooring solutions, you name it. We are recognized and trusted on those flagship projects, snowballing effect, more to gain, more to grow, more market share. On those markets, we are also leveraging. They are demanding. We need to be sharp. We are leveraging our digital and AI capabilities along the value chain, starting with R&D to accelerate our time to market, analyzing with AI thousands of tenders on those non-residential infrastructure jobs, and also using IoT, for instance, for concrete monitoring on Verify and multiple other examples where AI, virtual reality, is a game changer and a differentiator for the solutions of Saint-Gobain. Let's hear now from one very iconic project.
This is the hospital in Nantes. I didn't pick it up because it's in France. It's because it's the largest project in terms of complexity and size of its kind in Europe. Let's hear from this hospital in Nantes.
[Foreign Language] Sur le chantier du CHU de Nantes, actuellement l'un des plus grands en Europe, une quinzaine de marques du groupe Saint-Gobain sont intervenues pour relever des défis considérables. Cela démontre que Saint-Gobain se positionne comme un acteur performant sur de très grands projets à forts enjeux, sur lesquels nous apportons bien plus que des produits ou des matériaux. Ce chantier du CHU de Nantes nous a permis de démontrer que nos innovations, un quart de nos produits vendus n'existaient pas il y a cinq ans, et nos méthodes permettent au groupe de se positionner comme l'un des leaders mondiaux sur le marché de la transition énergétique du bâtiment, où les besoins sont colossaux : écoles, hôpitaux, bâtiments publics, copropriétés. Sur ce marché, nous pouvons pleinement développer la stratégie du groupe, proposer des réponses intégrées très en amont sur l'isolation, l'acoustique, les économies d'énergie, l'économie circulaire.
[Foreign Language] Cette approche valorise pleinement l'innovation, l'éco-conception de nos produits, mais aussi les qualités de nos services. Parmi les plus innovantes, on peut citer Enveo, un système de façade légère, bas carbone, les solutions d'aménagement intérieur et d'isolation de Placo, Isover et Ecofonds, qui intègrent des matières premières recyclées et allient haute performance thermique et acoustique, essentielle en milieu hospitalier. Ce chantier est la preuve qu'en intervenant très en amont, Saint-Gobain est en capacité d'offrir aux maîtres d'ouvrage, aux maîtres d'œuvre et à l'ensemble des partenaires des solutions à la fois innovantes, bas carbone et économiques.
Expanding in those non-residential infrastructure markets, we target high single-digit growth. We have identified country-by-country growth opportunities. Of course, they are not the same depending on the country, be it transportation infrastructure, critical infrastructure on energy or data centers, hospitals, education. Every single one of our large country platforms has action plans, growth opportunities to gain market share and win on those non-residential and infrastructure markets. We have seen how we are accelerating through solutions, how we are expanding in non-residential infrastructure markets. All this is done by leveraging strong country platforms as growth compounders. You know our country-by-country model, well adapted to our markets, robust in a de-globalizing world, we have put in place six years ago. We have not been static in the last six years. We have nurtured it, optimized it, fine-tuned it. Our country platforms are designed to capture profitable growth.
They leverage deep local onboarding in terms of customer intimacy, agility with their teams. They leverage the group expertise. They own and optimize their resources and how they allocate to the best growing opportunities. Ultimately, it's a selling machine, a selling machine, full cylinders on the Saint-Gobain offer across all channels. A very interesting point, our country platform catalyzes growth with compounding M&A. What do I mean by that? They are very often the origination of our acquisitions. Out of the 126 acquisitions we made since 2021, 80% of them have been bilateral after years of discussions with family owners to join us because we have the right strategy by country with local leaders. This is what Marco Corrales did in Mexico and is doing it successfully in impact. It was a natural move and natural welcome for Cemix to join Saint-Gobain, not others.
On top of the origination advantage, they have execution advantage because they own the synergies on the ground, the streamlined integration. They deliver, they are in charge of delivering what they bought, of course, keeping the key managers. We have multiple examples. The General Manager of Cemix is with us. He's running all construction chemicals. We have seen that Thierry Bernard, that brought to us all the construction chemicals in 2021, is now leading France and Southern Europe. Retention of key managers is critical to Saint-Gobain. Execution, what does it mean? India, we bought insulation three years ago. We were not in insulation. We doubled the margin in just three years. Our country CEOs and platform, they also shape their market, leveraging the Saint-Gobain brand.
It starts with training of customers, big customers, small customers, advocacy on sustainable construction during national or international events, and also very pragmatic local campaigns on the ground, like the road shows of POINT.P, every single region in France. We shape and we lead the markets. Our country platform, they are driven by operational performance. They leverage, they are not alone. They leverage the group expertise on manufacturing excellence, CapEx, and world-class manufacturing to benchmark the plans on innovation, how they roll out and benefit from all the large regional centers we have in the U.S., France, Germany, India, Brazil, China, AI and digital technology platform at scale, and of course, commercial excellence for key accounts, sales KPIs, you name it. They also constantly strive for environmental best-in-class performance.
You know that we are a well-trusted, well-recognized leader and pioneer on sustainability, not only for the sustainable offer that I mentioned earlier on, but also on how we drive our own carbon footprint with world premiere on multiple processes. We set up new targets, more ambitious for 2035, since we have achieved already in 2024 the targets we had set up for 2030 on CO2 reduction. We continue to lead on circular economy to ensure the scarcity of resources. Ultimately, at the end of the day, our country platforms, it's a performance-based culture. Incentives totally align with shareholder value. 90% of our country CEOs, they are local from their country. They are empowered. They are accountable. 100% of their bonus is aligned to their country, their actions on the ground, EBITDA, ROC, cash.
Second, we have 3,000 managers with long-term incentives on value creation, ROC, share price outperformance versus the CAC 40. Long-term incentives aligned to shareholder value. For me, something which is extremely meaningful is the fact that we have more than 60,000 employees from 50 countries that own EUR 4.5 billion of Saint-Gobain shares. That means the efforts on the ground, the results, the shareholder value, the share price, all this is aligned. This performance-based culture, this is how we drive the success of Saint-Gobain today and tomorrow. I now leave the floor to Maud. We'll drive us through our financial performance.
Good afternoon to all of you. We have a plan. We have an exciting plan, and I'm very happy to share with you what it will mean, what Lead and Grow will mean in terms of financial performance. First, Lead and Grow is built on very solid foundations. We have made a step change in performance. Looking back since 2018, the group has increased operating income by 66%. We have multiplied recurring EPS by two, free cash flows by three, and return on capital employed has been increased by 360 basis points. In addition to that, we have delivered on every single CMD 2021 target, be it organic growth, be it operating margin, be it free cash flow conversion rate, or be it return on capital employed. We have also returned EUR 1.5 billion yearly on average to our shareholders through dividends and share buybacks.
This is the result of a disciplined execution and a result-oriented organization. Beyond those results, we have built an enhanced business profile for the group with more resilience and better quality of earnings. Starting with resilience, the group has improved its EBITDA margin by 150 basis points between 2021 and 2024, despite the difficult volume environment over those years. In addition to that, we have made a significant shift in the group mix of businesses. We no longer run significant businesses below 5% of EBITDA margins, but we have tripled the share of businesses running above 20% of EBITDA margin to reach 38%. Last but not least, we have a stronger growth profile with acquisitions, bringing on average four points of additional organic growth to the group. This is a structural shift for the group. We will not stop there. We are aiming higher.
We are aiming higher with Lead and Grow in terms of growth, targeting over the period 2026 to 2030 mid-single-digit sales growth with market outperformance of one to two points. We are also aiming higher in terms of profitability, targeting EBITDA margin of 15%- 18% over the period. We should note here that we are moving to an EBITDA target that will ease many aspects of us driving the business. EBITDA is the performance driver that we use when we make acquisitions. We also incentivize our managers on that particular driver, and we normalize our reporting with using EBITDA as a profitability metric. The step change in profitability, 15%- 18%, will translate in Europe in a 12%- 15% range of EBITDA margin, and in other high-growth regions, 17%- 20%.
You should remember here that in Europe, we are running businesses with significantly lower margins because they run at a lower capital intensivity, and therefore, they drive similar levels of returns as other manufacturing businesses. The step change in profitability has two legs. First leg is solutions that will drive share of wallet, mix, and pricing over the period. We will leverage the same playbook as we have in the past with managing price-cost spread, positive price-cost spread, as well as cost management. Second leg, of course, will be continuing steering the group's portfolio to enhance the margin, and all in all, delivering, when you add profitability, stronger profitability to stronger growth, strong growth in EPS. You remember that cash management has been crucial to the success of our previous plan. We will continue because cash management is deeply rooted within our culture.
We're talking here about 36,000 managers of the group and employees of the group trained to cash management. I'm not talking about people from the finance community. Of course, they are. I'm talking here about warehouse employees. I'm talking about sales reps. I'm talking about purchasing managers. They are all trained and drive day in, day out the cash performance of Saint-Gobain. I'm the first of them, of course, to be focused every day on the cash generation of Saint-Gobain. Going forward, we will generate, we will keep that free cash flow conversion rate above 50%, with non-operating costs below EUR 250 million, CapEx in the range of 4.5%- 5% of sales, starting from the low side of the range at the beginning of the plan, and operating working capital below 15 days.
We are driving the operating working capital with enhancement plans for our existing businesses and strict integration plans for our acquired businesses. Moving now to capital allocation. In terms of capital allocation, first is strong balance sheet and credit rating. We will maintain a net debt to EBITDA ratio of 1.5x- 2x EBITDA, ensuring a strong investment-grade credit rating that gives us attractive access to capital markets and gives us as well the flexibility of implementing and rolling out the strategy. Again, a strict commitment to that investment-grade credit rating. Looking at how we will allocate and what capital we will deploy over the period.
We will deploy around $20 billion through attractive and value-creative capital allocation, starting with returns to shareholders with around $6 billion allocated to dividends, sustainably growing over the period, and a $2 billion share buyback program that will be used as a value creation tool, enhancing EPS, obviously, and a regular benchmark for capital allocation versus our own trading multiple. We will then allocate a dedicated around $12 billion of growth to growth investment, either through gross CapEx or net M&A. We will prioritize those who bring higher growth and higher profitability, namely North America, Asia-Pacific, high-growth countries, and construction chemicals, while at the same time applying strictly our value creation criteria, meaning for M&A, a return on capital employed above WACC and value creation in year three, and for CapEx, gross CapEx, IRR above 20%.
Of course, all those gross investments will be in line with our group target return on capital employed of above 13%. If I zoom now on gross CapEx, we will allocate 2%- 2.5% of sales on gross CapEx, leveraging two main opportunities. First, offer enrichment country by country, and you have here a great example of offer enrichment in India with great returns, and leveraging existing footprint to implement new product lines on a given campus. Again, another example of Finland where we implemented a construction chemicals line on an insulation site, saving by there a few years of time to market for our construction activity. Now moving to M&A, where we track systematically the value creation of our M&A, and I know it's very important to you all. For acquisitions which were done more than three years ago, we have, as planned, created value.
Continental Building Products, where we doubled market share in gypsum in the U.S., has been a fantastic acquisition in terms of value creation of gross sales growth. We're talking about 10% sales CAGR. Even most importantly, it has been a platform for growth because it gave us access to major DIY to sell the full breadth of offer of Saint-Gobain. In construction chemicals, the combination of Chryso and GCP was the backbone for our construction chemicals platform, on which we have plugged our various acquisitions since then, and Cemix and FOSROC are two of them. We have there, again, created value with great sales CAGR over the period. Looking at acquisitions that we have performed more recently, we are on track for value creation with combined EBITDA in line with the group or above, and with synergies in line or above.
Going forward, obviously, we will continue having that discipline, leveraging on our growth compounder model to reach that target of 20% of sales rotation by 2030, with three criteria for acquisition: consolidating leadership positions, high-growth countries, and construction chemicals, value creation by year three, as I explained to you, keeping in mind that discipline on the price paid is non-negotiable, and we have no issue saying no to an acquisition that will not create value, and of course, synergies and cultural fit. We will be very selective, as we have been selective, knowing that we have 80% of M&A done through country platforms bilateral discussions. On the other hand, in terms of divestment, it is a routine, and it will remain a routine.
We will use three criteria: strategic alignment with the group and value and creation of synergies with the group, financial performance, and maximizing value creation in terms of timing for divestment. These are our targets. These are our figures for the plan. They are attractive targets. They are ambitious targets. You can be sure that beyond those targets is the commitment of all of the Saint-Gobain's management team. We have built those targets with the top 150 managers of the group. You can be sure that they will be all, we all will be dedicated to more profitability, more growth, more cash for more value creation for the shareholders. As a Group CFO, you can be sure that I will make sure that those targets remain in the minds and in the actions of everybody throughout the organization. I will now hand over to Benoit for the conclusion. Thank you.
Thank you, Maud. It's time to wrap up and conclude. We are delivering strong value creation for our shareholders. EPS has been doubled in the last years, 14% on average per year progression. We had a total shareholder return well above our peers and above the CAC 40. At the same time, our price earnings ratio improved, but we still have a nice significant upside versus our like-side building materials peers. Lead and Grow is the next growth ambition for Saint-Gobain, with strong value creation for all stakeholders. As I said, making the most of large growth opportunities supported by megatrends, even more salient than they were five or ten years ago. Compounding growth with our country platforms, very good on execution. They deliver value-enhancing solutions where we have been pioneers. We are leading versus any other peer.
We will continue to do that not only in residential markets, where historically we have been super strong, but expanding and gaining on non-residential and infrastructure markets. This is our growth ambition for the next years. We are supported by a very strong governance. Saint-Gobain has a new face. You have seen it in the last years. We have a new board. Almost all the board has been renewed in the last years to reflect the international presence of Saint-Gobain from North America to Asia to multiple countries in Europe. 100% of the board members are independent, including me, of course, and they have a wide expertise. A very solid board to move forward and succeed again in the future. I have around me a fantastic management team with strong credentials, deep experience. I'm, of course, biased, but I think we work extremely well together, extremely well.
We are all committed to the success of Saint-Gobain. In a minute, you will hear from our five region CEOs, Mark for North America, David and Thierry for Europe, Camille for Latin America, and Sreedhar for Asia-Pacific, what it means for them to drive profitable growth, take their attractive growth opportunities in every regional market, and truly lead and grow in their region. This plan, of course, we built it together as a team. It has been built bottom-up with our country CEOs some months ago. As Maud mentioned, we shared it at length with our top 150 managers three weeks ago. I know that all Saint-Gobain teams are with us. You know the engagement of the teams of Saint-Gobain to show you the journey went up 70%, seven-zero, versus where we started five, six years ago.
A lot of the teams and employees of Saint-Gobain, they want to show you their commitment. They want to show you that they are there to drive success, and they ask me if they want and if they could to show it to you live. Let's see. We have teams all over the world. That's Malvern in the U.S. Hello, U.S. That's U.S. Thank you, Carmen. They have been watching. I think we have a team in São Paulo, in Brazil, very São Paulo, in Brazil. Watching and wanting to show to you their commitment, their passion, and how they have built this plan. Thank you, São Paulo. I think we have a team in Aubervilliers. That's our research center in France. Hello, France. Bonjour. That's all the researchers. Thank you. You know ready to stand up for innovation and lead Saint-Gobain in the future.
After that, I think we have Spain. Hello, Spain. Where is Spain? Wow, the flag. Super. They are all. Hello, Spain. We have teams all over the world. I think we have a team in India, in Chennai, which is the largest manufacturing facility of Saint-Gobain. That's India. Hello, India. Teams around the world wanted to show you live their commitment. After that, we have a team in Poland, in East Lake, that's our large gypsum factory in the U.K., Johannesburg in South Africa. Hello, South Africa, and also Abu Dhabi in the UAE. That shows you because they ask, could we participate? Could we be there to show to everyone the commitment to drive the success of Saint-Gobain? I can tell you that we are all driven. I can tell you that from the Executive Committee to the Board to the teams on the ground, everyone wants to succeed.
We have built on a fantastic journey in the last years, and I know that with all these teams, everything is possible. Everything can be achieved to lead and grow. Thank you very much.
Thank you so much.
Thank you, Benoit. Thank you, Maud. This is the end of part one. Part two will be hearing from the regional leaders. Focus on regional markets: North America, Europe, Middle East and Africa, then Latin America, then Asia-Pacific. After a short break, we will get to the Q&A session, which will start around 4:45 P.M. Now, to start the regional market focus, I would like to invite to the stage Mark Rayfield, CEO of North America. Mark, the floor is yours.
Thank you, Beck. Thank you very much. Really excited to be here. Maybe not as excited as my team, but very excited to be here. I'm happy to be here. I've met some of you in your recent visit to North America a few years ago for our investor days. For others, I'll just offer maybe a brief introduction to myself. I've been in the group for 26 years, joining in 2019. For the first 20 years of my career, I've been a commercial manager. For the 13 years before I joined the group and the first seven years in the group, it's still core to me day in, day out. I want to get every order. I want to get every last order. I want to outperform the competition. It permeates through my team.
Those of you who are here live had a chance to see our booth, probably saw our team there and saw that sales DNA and that energy permeates through Carmen and Steve and everybody on the team. I've had the pleasure of having multiple general management roles in this organization, including four years in the U.K. and Ireland where I worked alongside Mike before coming to the U.S. back in 2019. Since 2019, I've been extremely proud to have led the execution of our growth strategy in North America, where we've taken the region from approximately $7 billion in sales and approximately 12% in EBITDA to over $11 billion in sales and greater than 20% in EBITDA.
This growth journey was driven by being intentional and focused from the very beginning on our SG&A costs to make sure they were sized correctly, on building an exterior product sales team that matched what our contractors and our distributors needed in the field, selling the full products that they used going forward, by having the proper back office for low cost to serve to our customers going forward, and most importantly as well, giving the tools to our teams in the field to understand what they did drove margin and let them grow profitably and grow our margin. This has built a solid foundation and the right teams to execute our growth strategy of outperformance in North America for the next five years. North America is well positioned for growth.
While there's some softness in new construction right now, the macro trends in residential and non-residential are for growth in the region. We have the platform. You've seen we have the team. We have the strategy, and we have the products to grow and win in North America. Our scale in North America, our deep commercial partnerships, and our breadth of product line cannot be easily duplicated. We are continuing to grow in the exciting area where we have runway to grow in non-residential. We have built a very solid platform to do smart M&A to complement our offering in all these categories. As I mentioned, the fundamentals in North America are very strong. If you take residential, which is 68% of our sales, we are deeply underbuilt in both the U.S. and Canada.
The need to build these homes will drive demand for our products in both renovation, remodeling, and new build. In renovation, we have an aging housing stock. The vast majority of homes, a large portion of homes built in the early 2000s, are greater than 25 years of age now. The average age of homes in North America is greater than 41 years. Renovation is driven by many, many different components, but repair, when your roof leaks, is nondiscretionary. When your roof leaks, you repair it. This is a big part of our market. In non-residential and infrastructure, which is about 32% of our business, the acceleration of onshoring and the investment in new manufacturing is requiring repair.
New infrastructure will be driven in our business. You see some numbers here, 20%- 25% growth in data centers, and over 10% of our civil projects driven at bridges and infrastructure. It is a huge market that is just going to continue to grow in North America. We are so lucky because our country platform brings the best solutions for our customers, and we have a nationwide presence. We are the only American manufacturer with a full breadth of solutions, and we have scale. We have 112 plants throughout the country that build products for our customers in the region where they need those products. That is why we have invested in new capacity in the Southeast, because that is where the growth is in North America. This gives us a low cost to serve and fantastic service to the customers. We also have scale in our product breadth.
We have a fantastic interior solutions offer, as you see here, and a robust best-in-class exterior solutions offer, and huge growth and opportunity in our construction chemicals offer, which is growing. In North America, we are also the brand of the pro. Why are we the brand of the pro? Because we focus on what makes our contractors and our distributors successful. We know that if we focus on them, if we make them successful, we become successful. How do we do that? Through training. There is massive turnover, I am sure, in every country, but massive turnover in the trades that work in construction. Nobody sells what they do not understand. You need to be constantly training the tradesmen on how to use our products, how to use our systems and solutions, how not just to sell shingles and siding, but how to sell the complete systems.
We do this with 12 dedicated training vehicles in the U.S. that focus on training our contractors on the job site and in distribution. We also have large bespoke training events called Building Business Workshops. We have over 300 contractors attend these each time we have them. We train them on installations and products and certification, but we also give them the business tools to succeed. We give them digital tools and affinity partners. We teach them on marketing tools and affinity partners, and we teach them on professional selling skills. We make them successful, and they come back year in and year out. Many of you know the channel to this market is distribution, and we have deep relationships with distributors from the top office all the way down the field. This distributor community has been consolidating over the last two decades. We've enabled and supported this consolidation.
This consolidation is a good thing. It gives us more sophisticated partners that deliver more value to both the contractor and the homeowner. It also gives us more multi-platform distributors that value our broad breadth of line. These large distributors need a supplier that can supply them regionally across the whole country. We fit all of those, which brings us to built to withstand. I think this is a fantastic metaphor for our business. We are built to profitably withstand the evolving markets. When you take a look at the markets in North America for exterior products, it's heavily driven by renovation and repair and remodel, which is the weather activity. You have increasingly severe storms taking place, so this is a growing part of the market. As I mentioned earlier, when you get to repair, it's non-discretionary.
Whether it's an aging roof from those homes that are 41 years old, or whether it's a roof that's been impacted by hail, when it starts to leak, you repair it. It's a large part of our market. It's why we focused on this segment of our market for the last two decades, and we have the lowest exposure of any of the manufacturers to new build. Renovation and remodeling values quality, values aesthetics, and is a higher margin market in general. It also values resilience. Resilience is not a one-size-fits-all. I happen to live in New England. If you live in New England, resilience means you have to have the products needed for snow, hail, ice. If you live in Florida, you need underground and above-ground waterproofing. We have the right resilient solutions for every territory, and we lead in these solutions.
We lead in the building science that designs these solutions, and most importantly, we're investing and expanding both. I met some of you at this display, and you probably could have told I could have spent all day there talking about this. I promised Benoit I wouldn't, so I'll be brief. When you look at this, we have the complete, most complete residential offer positioned to meet and really outperform the market. When you look at this left to right, a reinforced climate-resilient full home solution, there's a few things I want you to look at, mainly the revenue and margin numbers. As you go from left to right, your revenue goes 10 x up, and your margin 15 x up. It's an amazing example of what cross-selling and up-selling can do when you have the full portfolio.
This is not margin that we take and doesn't go to the distributor and contractor. They benefit from this margin as well. When they sell these systems, they get better margin. They make better profit as well. It is not linear for the homeowner. As I explained to some folks outside, when you look at reinforced climate-resilient, a lot of these type products are used when you do renovation, remodeling, and new build. They're often from multiple different manufacturers. They aren't designed to be used together. You aren't trained on how to install them together. They are piecemealed on the building, which is inefficient and takes a lot of time. With an integrated system that's meant to be used together, which is designed to be put together, you drop and create great ease of installation, and you drop the time of installation, and you improve the performance.
The time of installation is the number one cost when you're building a home or renovating a home. It doesn't drive extra costs to the homeowner. Let's hear some more from Carmen Bodden, our President of Roofing, who you saw earlier today.
America is built on innovation, technology, and forward-thinking growth. To make it here, you need to think fast and move faster than the competition. The U.S. housing landscape is just as dynamic. With a shortage of up to 4 million homes and a rapidly shifting weather and insurance environment, these are challenges Saint-Gobain is uniquely poised to address. We're moving fast to meet the moment. We aim to lead the country in resilient housing solutions, both in new construction and renovation.
Our One Precision Assembly system combines Saint-Gobain products into a prefabricated solution, accelerating modular construction to help address a shortage in the housing supply. It brings speed, precision, and resilience to new home construction, solving for weather, labor, and timeline challenges.
Our renovation remodel market is powered by more than 10,000 CertainTeed credentialed contractors, trained by experts who install with precision. With field education, loyalty programs, and comprehensive warranties, CertainTeed leads the nation in contractor credentialing. Because when our contractors succeed, so do we.
Using the Saint-Gobain products has been instrumental to us because I know that they are the best. Whatever you can imagine a construction company would need from a company, they've provided it. Generally, in very short order, whether it be pallets upon pallets of samples delivered right to my door, or the courtesy of coming down to meet with a customer to discuss something that the customer thinks may be a problem, I've always felt very well supported by Saint-Gobain in every aspect of my business.
CertainTeed is moving fast to redesign the future of the residential sector in North America with new construction solutions that make housing more accessible and affordable. Fast to build and resilient systems to address regionalized weather patterns and disasters. We are future-proofing the residential housing market and our business model, and we are making the world a better home.
I hope folks got to see that time-lapse film with that building being built. I mean, that's a full multi-bedroom home that's built in less than five days. Weatherproofed, sealed in, windows, doors, roof trusses put on top, roof systems put on top in less than five days. That person you saw looking at it was the wife of the owner of the building, who happens to be an architect. It's his design. He designed that home. It's his specifications. He can get it weatherproofed in five days. It's an amazing feature that we have. Our country platform also enables us to expand in the very exciting non-residential market. We have a significant opportunity in this market, and we are already quite sizable in this market, where we're $1.8 billion in turnover, almost $2 billion now, with a target of being greater than $3 billion by 2030.
We're committed to grow here, as we feel this is a market that has met more pathways to profitable growth in the region, is a market that values performance, as we mentioned before, and values systems. We see this when we work on our robust pipeline. When we focus on our target markets, like health care and data centers and education, where 60% of our pipeline is focused, we get in early with the contractor. We specify our products. We understand what the building needs and what we can do for the occupants. We end up with 70% of the products being value-added products. High value-added hero products, as Benoit Bazin mentioned, which are higher margin and have stickier specifications in the building. We focus our innovation and our investments to make sure we can grow here.
We already have a state-of-the-art acoustic lab in our North Pearl facility, R&D facility in Massachusetts. We will open a state-of-the-art fire lab there later this year. This allows us to design and test and build systems that are value-added for our customers going forward. This is also a segment where targeted M&A will help us accelerate and complete our systems. This is an example of how we bring those same solutions to life in non-residential. It's similar to what we showed you in residential, but it has a caveat that codes and complexity in non-residential building make them even more important. Systems provide real value for the end user and ensure your performance for the contractor putting them in. They're a margin enhancer, just like they were in residential for ourselves and the contractor. You see here, we have fire-resistant systems, moisture systems, acoustic systems.
All the systems we need, we're constantly developing more and more winning systems going forward using our fire lab and our acoustics lab. I'm excited because we have vast headroom to accelerate growth in infrastructure. We already have a comprehensive solution in North America in construction chemicals, and we are number one in cement additives and concrete admixtures. With 13 plants, two R&D centers, and eight application labs, this means in our construction chemicals business, we are designing products meant for the customer in the region that they reside, with the raw materials that they have that nobody can match.
It's an incredibly customer-centric model, created by Thierry Bernard and his team long ago, so I'm not going to take credit for it, but an incredible customer-centric model that has allowed us to gain significant market share in North America and makes us the number one partner for the large players in North America. We have the ability to use our massive global platform of GCP, FOSROC, Cemix, and Chryso to go into other territories, like waterproofing for bridge decks, where we can take the whole global portfolio and leverage that. We have the best-in-class digital tools with Verify, where we can verify that the product arrives on site as specified and will perform as specified, which eliminates all that product being shipped back that doesn't work, eliminates credits, claims, and all sorts of issues in the field, and gives confidence to the end user.
We have vast opportunity to grow in the underpenetrated but greatly growing Canadian market. Let's hear now from Steve Williams, who you might have met, who runs this business for us.
Commercial construction in the U.S. market is accelerating, fueled by investments in health care, hospitality, and data centers, making Saint-Gobain's leadership in the category essential. We make it easy to do business with Saint-Gobain from day one by being a single resource, from consulting through site preparation with systems designed to solve problems and perform, from waterproofing to fireproofing to construction chemicals and more.
I've been in the business 26 years. I installed GCP material for nine years. That's the only thing that we really use. There are some other things that we have to use for specs, but if it comes down to us having the choice on what to use, we will always use GCP and Saint-Gobain. It's premium material, premium products, and I don't think I get that with other manufacturers.
I had the pleasure to be the CEO for, I don't know, about 14 years now. In that time, we've made over 100 acquisitions and have grown to be the largest producer of concrete across the nation. We feel like we're really just getting started. We have a huge runway and huge opportunity in front of us to continue to grow our business. You can't do that without having the right people on your team. Saint-Gobain is one of those companies that I feel highly confident in. I feel highly confident in the team that they've put in place. I'm just overall very excited about the relationship and excited about the future and the future together.
A transformation is underway. The growing demand for infrastructure, including the booming construction of data centers, requires solutions that address resiliency and performance. Speed is critical to unlock new technologies that accelerate the evolution of industry nationwide. Saint-Gobain's unmatched portfolio of customer solutions and our agile sales organization, backed by our building science and technical expertise, are perfectly positioned to capitalize on this demand now and are key to unlocking market growth in these high-potential sectors.
Which brings us to Canada, where we've had an incredibly good track record of successful M&A that's delivering value in an unrivaled country platform for growth. We're number one in Canada, with over $2.4 billion in sales. With the addition of Bailey, we have the best-in-class interior products throughout the country. With the acquisitions we made in the exterior products, we are leading in exterior products in the country. We have huge headroom to grow in construction chemicals. Like the U.S., we have 42 plants located throughout Canada. Plants local to our customers, close to the needs, with a low cost to serve. Like the U.S., we have close and deep relationships in every single channel going to the market.
This offer that we bring to this channel is of huge value to them, the diversity of it, the breadth of it, and our integrated sales teams that allow them to have one point of contact and sell the whole solutions to their customers. We are truly the one-stop technical shop for what they need across the whole country. Which brings me to where I began. We have demonstrated that we have the people, we have the agility, and we have the drive to outperform the market profitably. Our strategy and diverse offer gives us single-family solutions that are unmatched and non-residential solutions that are leading edge. We will continue to leverage the global portfolio and know-how in infrastructure and non-residential to grow these segments. We will be practical and disciplined in external growth to support all this.
This will give us mid-single-digit growth and one to two points of profitable growth above the market. As you can tell, I'm excited and extremely confident for what's ahead as we lead and grow in North America. Thank you.
Many thanks, Mark.
Thank you.
Bingo, now from North America, we move to Europe, Middle East, and Africa together with two leaders in charge of this region: David Molho, who is Senior Vice President and CEO of Northern Europe, and Thierry Bernard, who is CEO of Southern Europe, Middle East, and Africa. Let's welcome David and Thierry to the stage.
Good afternoon, everyone. I'm David Mollo. I've been working in Saint-Gobain for 16 years with a truly international background. I've worked in Brazil. I've worked more than six years in the Nordic countries that I know well, being a citizen of Finland. In the past four years, I've led our High-Performance Solutions division, working hand in hand with Thierry. I'm very pleased that we share this presentation together today. Good afternoon to all of you. I'm Thierry Bernard. I joined the group a bit more recently, four years ago, at the time when the group acquired Chryso, which is a company I was leading for about 10 years, leading and growing it. Since then, I've accelerated, alongside with David, the development into construction chemicals, as you all know, with a few very sizable acquisitions, acquiring them, integrating them, and numerous bolt-on acquisitions.
I've done most of my career running businesses under private equity ownership. Today, I'm very excited to be part of a growth-driven value creation journey. Today, together with Thierry, we will illustrate how our strong country platforms allow us to accelerate growth in the non-residential. This is why we chose, as an introduction, this picture of a nearly zero energy consumption building from the University du Val d'Aoste, which includes nine Saint-Gobain solutions, from ceilings to facades and partitions. Saint-Gobain is uniquely positioned to benefit from the European construction market's recovery. Europe is EUR 29 billion sales, over 12% EBITDA margin, and leadership position in European countries. We are number one in France, number one in the U.K., number one in Poland as examples. These strong country platforms will allow us to benefit from the European construction market's recovery with a strong operating leverage, meaning overproportional EBITDA growth.
With Thierry, we will illustrate how these platforms allow us to accelerate growth in non-residential infrastructure markets, and we will also zoom on a couple of selected geographies. We are very confident in the European construction market's recovery. I start with residential. In residential, for new build, after years of downturn, the need is still there all across Europe. We see already some indicators that demonstrate that residential new build is picking up. Look at housing starts, +4% in France, +18% in the U.K., +34% in Poland. For renovation, which is a less cyclical, more resilient market driven by strong trends like energy efficiency, here again, it is picking up. Look at housing transactions, plus 10% in France, 20% in the U.K. We also see the confirmation of a price premium, sometimes very significant, like in France or in Germany, for energy-efficient buildings. Regulation investments will drive our markets.
We will also grow in non-residential and infrastructure. These markets already today represent 35% of our sales in Europe. We are confident we will grow in these markets because in each country growth plan, we have identified segments, be it hotels, hospitals, schools, offices, some industrial segments, including data centers, where we will leverage our platforms to bring unique solutions to our customers. Investments will drive our growth in non-residential and infrastructure. Look at the German infrastructure plan. Look at the plans in the U.K.. Look at the plans in Italy that have been driving our growth already over the past years. Investments, regulation to accelerate in non-residential and infrastructure. Most important, we will capture this growth with a strong operating leverage. Why? There are two main reasons for that.
First, over the past years, in the downturn x, our teams have done a significant job to adapt our footprint, to adapt our cost base, and we have rotated significantly our portfolio. As a result, with volumes down 13% over the past five years, our EBITDA margin has improved 270 basis points. Second reason, we do not need significant investment to capture market growth. We have available capacity, and this is what will drive overproportional EBITDA growth. Our teams are ready. They are led by empowered, accountable, and native country CEOs who know very well their markets, who know very well their customers, and are ready to capture growth. Look at our platforms in Europe. We have solid leadership positions in all European markets. We have a strong capability to deliver a comprehensive set of solutions to our customers. We still have room to enrich our offer.
Take the example of construction chemicals as an example. We have room to grow. We have the platforms. We have the teams. We have the innovation capabilities. It will be a lot, a lot about commercial activity to capture and accelerate growth. Now, together with Thierry, we will dive into the most important platforms, and we will start by the biggest one, France.
Yes, when I commented earlier how I joined the group, you've seen that we've worked hard to build a global leadership position in construction chemicals. Stepping into my new job during summertime, I must say that there is one place where I have found a genuine and undisputed leadership. This is in France. We have a tremendous, sizable, powerful business, around EUR 11 billion of sales, profitability at 11% at the trough of a market.
This business is made of very strong, iconic brands, beautiful awareness, leaders in their respective spaces. Thanks to them, we address more than 400,000 customers, ranging from industrial players in the glass industry, in the cement industry, in the concrete industry, to small craftsmen, but also large general contractors. We are intimate with the construction market in France. What does it give us? It gives us the capability to read what is happening in the market, to shape it. We have demonstrated, thanks to that, thanks to the scale, our capability to outperform the market dynamic at one point over the last couple of years. If I go a bit deeper into how we make the difference in France, let me illustrate three elements. First of all, innovation. Sustainable construction is a revolution.
This is a revolution because the way we will build in the next years to come, the way we are starting to build now, the way we renovate is totally new. This calls for inventing new solutions, answering unmet needs today from our customers. How do we make the difference here? Again, our capability to read every request from our large stakeholders in the construction market. We can co-develop solutions with our customers. Again, either it's about small craftsmen or large contractors. It is also going fast into the rolling out of these solutions into the market. Second aspect I'd like to highlight is circularity. Again, circularity is a strong, but emerging. It's an emerging, but strong lever coming from sustainable construction. In some projects, we are being asked to find solutions to reuse the demolished concrete to be reused for the new building.
This is requiring totally new types of solutions and additives or other types of solutions. We are leading the way in circularity. With Infinae, it's a range of plasterboard, which is using today, and we are the leader in that market of recycled gypsum. In Orae, we've been the first to reuse post-consumer collate to make this low-carbon glass. Finally, digital solutions, similarly to what Mark has commented to you, it's a way for our customers to have a seamless experience with us, ease of doing business. This is how we make the difference. We're also helping our customers to be more successful.
If I take the example of CapRenov, a suite, a solution that we have developed recently, that some of you can see in the exhibition just outdoor, we are helping our customers to make the right proposals for the homeowners for the energy renovation projects of their homes. It is part of a suite of more than 10 digital solutions to help our customers do a better job. Again, scale matters. Those solutions are costly, and this is how we make a difference. Let's hear now directly from Nicolas Godet, our CEO of POINT.P, and one of our customers, how we win and how we make the difference in France.
[Foreign Language] POINT.P is the leader in building materials in France with 1,000 sales outlets and 300,000 artisans as account holders. Through the Jeune Artisan pack and the Génération Artisan platform, which now brings together a community of 19,000 professionals, we are developing support tools and services that make artisans' daily lives easier by removing obstacles such as the lack of labor, the need for training, or administrative complexity. This comprehensive support for artisans is a win-win. It's a win for the artisans, of course, but it's also a win for POINT.P, because it brings us growth, up to four points of additional revenue growth for regular users of our services, like Mathieu, whom you can find at the POINT.P branch in Rouen.
[Foreign Language] Les logiciels mis à disposition par Génération Artisan et POINT.P, comme par exemple Soluplus, qui est un logiciel de chiffrage qui nous permet, pour une tâche définie, par exemple du Placo, du carrelage, de faire une liste de courses, une liste de matériaux et pouvoir l'importer sur un logiciel de devis et facturation. J'utilise aussi CapRenov, qui est un logiciel de rénovation énergétique. Les autres avantages avec Génération Artisan, c'est qu'on peut tester aussi de nouveaux produits, augmenter ma visibilité sur Internet. Donc, c'est vraiment des points qui sont mis en place par POINT.P et Génération Artisan qui permettent de grossir et d'exploser, on va dire, dans son entreprise.
[Foreign Language] Toutes ces initiatives se traduisent sur le terrain par une accélération significative de la rénovation énergétique en France. La force inégalée de Saint-Gobain, avec l'industrie et la distribution, c'est de pouvoir apporter une solution complète pour rénover un logement du sol au toit, avec à la clé plus d'efficacité énergétique, plus de confort et une réduction de la facture énergétique pouvant aller jusqu'à 70%. En tant que leader, nous contribuons à façonner le marché vers une construction plus durable en mobilisant tous les acteurs de la chaîne de valeur.
[Foreign Language] Allez, merci, au revoir.
Let's leave France now for a second and move a bit in the south direction and move into two of our very sizable countries, very successful. These are, we are talking about businesses of more than EUR 2.5 billion of sales. They have demonstrated their capability to outperform the market and to deliver overproportional EBITDA top-line growth. How did they do that? The way I'd like to explain it is the routine of our management practices in terms of commercial and marketing positioning. If I take the example of Spain, and Benoit Bazin has alluded to it earlier in the presentation, we talk about up-selling. Up-selling, again, our capability to go early stage with the stakeholders of projects. Here in particular, we will focus on projects where there is strong green value because this is areas where we believe we can make a better difference, a stronger difference.
That's how our Spanish team has built, has reinforced its positioning as the best go-to partner for demanding projects. Today, in the Madrid Nuevo Norte, which is going to be one of the largest urbanization transformations in Europe, we are talking early stage to all stakeholders from concrete to facade to energy efficiency renovation. Again, that's our scale in the country, which allows us to do that. If I take the example of Italy, here we talk about cross-selling, but I would like to highlight for you, over the last couple of years, we have had an educated, disciplined work of expanding our product ranges to our existing customers. That's, of course, increasing our share of wallet, but that's also the opportunity for our customers to sell better their solutions.
You see the transformation that we've been able to do in Italy over the last couple of years, and this is what has led to this stronger top-line growth, overproportional bottom-line growth.
If we move a bit north towards the U.K. and Ireland, we have a very robust platform. Some of you have experienced it last year in July 2024 with Michael DeCott, our CEO, when you could visit our U.K. facilities. It's a EUR 2 billion business running at 18% EBITDA. One of the key success factors of Saint-Gobain in the U.K. and Ireland is the strength of its specification. Our specification and commercial teams are organized by end market in order to deliver tailored solutions to our customers. In the U.K. and Ireland, we are already very strong in residential, and we are organized to accelerate in non-residential and infrastructure. How will we do that?
Through sticky specifications, full Saint-Gobain systems, tested and certified in our own nationally accredited facilities. That makes us unique. We will leverage the full offer of Saint-Gobain as an example to address the need for schools rebuilding with complete solutions, digital design optimization tools, and full certification. We will also grow fast in the data center segment. We are following currently a large number of projects, and we target up to EUR 80 million additional sales over the coming years. If I take a broader picture, through specification, we will win in the non-residential and the infrastructure markets by leveraging the full offer of Saint-Gobain. For each segment, we have identified specific needs.
Take acoustics for hospitals or schools, take low-carbon concrete or fire protection for data centers, take solar control for hotels, where we have in our offer hero products that allow us to enter very early into the project, get through the specifications, and then embark the whole offer of Saint-Gobain. This, together with our key account management organization, is how we will accelerate growth in non-residential and infrastructure.
Deepening on infrastructure, of course, with the strong development that we've had in construction chemicals, this is giving us an edge to accelerate it to construction chemicals. In Europe, Middle East, and Africa, we have a very sizable construction chemicals platform. Now it's over EUR 3.5 billion of sales. You know that construction chemicals, especially in the businesses that we've recently acquired, we are getting closer to infrastructure because we deal with concrete-related works in infrastructure, not only, but in particular.
You all know that this world of heavy building materials is faced with the major challenge of decarbonization. We have built a positioning to be the innovative partner for the heavy building materials industry, helping our cement customers, concrete customers, to decarbonize, and this is a major challenge for them. When I see these two examples here, the high-speed HS2 project, high-speed highway project in the U.K., we have accompanied the large general contractors, the concrete manufacturers, with multiple suites of solutions ranging from highly technical waterproofing to low-carbon concrete admixtures to concrete protection solutions. When I look at this onshore project in windmills, we are accompanying here with non-shrink high-performance growth, a global account doing business in Europe and South America. Construction chemicals is going to be at the forefront of our development into infrastructure.
Non-residential, infrastructure, and now we would like to zoom on two geographies that will drive our growth. I will start with Central and Eastern Europe, which is an area where Europe is currently investing massively. In Central and Eastern Europe, we have solid leadership positions. We are number one in Poland, number one in Czech Republic, number one in Romania, number three in Germany. We will grow with the German infrastructure plan. We will grow with the massive investment in infrastructure and defense. We will grow if and when the need for Ukraine reconstruction appears. You are aware of this EUR 500 billion stimulus plan in Germany. In this plan, EUR 20 billion per year are dedicated to housing and infrastructure. Our German organization, our renewed German organization, is fit to address this demand with key account managers already in place, with manufacturing capabilities already in place.
This will also have some spillover effect into the neighboring countries. We are also ready to attend the investments in defense and in infrastructure. In all Baltic countries, in the Nordic countries, we'll be there. In due time, we are ready, we are preparing to participate in the reconstruction of Ukraine. We already have a local presence in Ukraine. We already have contracts, especially for water supply. We are ready to deliver today from Romania, from Poland, from Czech Republic. This will drive our growth over the coming years.
If we move to a new geography, Turkey and the Middle East, this is an area where we have built over the last years a very solid platform. It's a EUR 1 billion business.
We believe in this region because there are strong fundamental tailwinds which are supporting the positioning that Saint-Gobain has in these countries: large population, growing population, urbanization that requires need for housing and infrastructure, and some economies like Saudi Arabia, which are transforming from oil and gas to new types of sectors such as tourism and hospitality, which are the segments we've commented earlier where we can make the difference. We have grown in this region through a combination of organic growth in investing in facilities, in glass, in gypsum board, in construction chemicals. We've also grown through major and bolt-on acquisitions to reinforce our local footprint. The most iconic acquisition we've done in the region recently is FOSROC, which you know was still a global construction chemicals business with a very strong footprint in the Middle East.
I'm happy to share with you, as Cook Mode has commented, that we are getting closer to the end of year one after completion, and our synergies are fully on track. Here again, Turkey and the Middle East are fast-growing areas where we have built a very strong position, well positioning us for long-term growth. Let's hear now from Ahmet Wafiq and one of our customers how we do business in this region.
Hello everyone. It's a pleasure to share with you a brief insight into Egypt's dynamic growth and how Saint-Gobain is strongly positioned to support and contribute to that development. Egypt is a country of boundless potential and opportunities, with a fast-growing population exceeding 110 million people. The nation is undergoing a transformative urban development plan, including major projects such as building 37 new cities, vast infrastructure projects, and new modernized transportations. At Saint-Gobain, Egypt, we are proud to play a pivotal role in this transformation. Our strong market position is built on our expertise, innovation, and commitment to sustainability. Our journey started two decades ago. Today, we leverage our strong leadership position in glass, which we are further reinforcing with a new float glass capacity. We are expanding in construction chemicals and interior solutions with an investment in a new plasterboard plant.
These projects will enable us to offer more comprehensive solutions to our customers. In conclusion, with the rise of the country's smart urbanization, we contribute to building a better and more sustainable Egypt for the new generations to come.
At WSP, we're one of the world's leading professional services firms. With over 3,400 professionals in the region and 73,000 colleagues worldwide, our teams help to deliver some of the most iconic and technically complex projects, from cultural landmarks to high-performance, high-technology towers to future-ready infrastructure networks. Our work with Saint-Gobain spans a range of very complex projects, ranging from hydrothermal to acoustics to fire safety. What we value is how they collaborate with us to co-develop solutions tailored to specific project needs, where performance and sustainability remain central.
Let's wrap it up now with David. These are the targets that we have set with our teams. We are confident that we will make those numbers. The targets are 3%- 5% growth of sales on average for the years to come. More importantly, we are confident that we will outperform the markets in which we will operate, by more than one point over the next years. We are confident that we will lead and grow in Europe because we have a fantastic setup. We are the largest building materials producer, light and sustainable construction offering in the market. We are confident that we will outperform the market with a strong operating leverage that will transform into overproportional bottom-line growth. We have built the plans operationally to seize all the opportunities in commercial buildings and in infrastructure for the years to come. Thank you very much.
Thank you, Thierry. Thank you, David. We are halfway through the regional focus, and we move now to Latin America. I'd like to welcome to the stage CEO of Latin America, Camille Arissar.
Boa tarde. Buenas tardes. Good afternoon, everyone. I'm Camille Arissar. I joined the group Saint-Gobain 10 years ago, first working on strategy, leading the Transform and Grow program. Building on my commercial background, I was then the Head of the largest distribution region in France. Following my second passion, I moved to São Paulo more than three years ago, leading some businesses in South America. Since that July, I've had the privilege to be the CEO of Latin America. I'm very proud to lead such a fantastic team in a strong, profitable growth platform for Saint-Gobain. I'm very excited to share now with you our growth opportunities ahead. I'd like to start with one figure: 90%. 90% will be the urbanization rate in Latin America by 2050. It means 600 million people living in cities, driving a huge need for high-rises, buildings, and infrastructure.
At Saint-Gobain, we are the number one construction player in the region, ready to capture this opportunity. Historically, we have a strong local team and strong presence with more than 100 plants. Over the last five years, we had a strong growth agenda with more than 20 major CapEx and 11 acquisitions. We are number one in Brazil, in Argentina, in Peru, in Chile with strong partnerships, and now in Mexico with new positions in Uruguay, in Ecuador, and in Central America. This strategy has already delivered more than 9% growth at 18% margin. We have action plans to continue to grow in each country platform and expand in non-residential infrastructure. Today, I will focus on two of them: Brazil, which is our number one country platform in the region, and Mexico, where we are replicating our successful Brazilian success model. Let's start with Brazil.
The strength of our model lies in the largest portfolio of solutions, with innovation at our local R&D center in Capivari, close to São Paulo, a unique footprint of 56 plants, which means in a country which is the size of a continent, a plant close to any of our 40,000 customers, and well-recognized brands, which are clear leaders in their market. At the last DynamoCo Prize, which is kind of the Oscar for construction in Brazil, where we are representing more than 100,000 points of sales, we were recognized as the number one supplier across 10 product lines. Clearly, the first one, the first supplier, showing the recognition of our customers as the go-to partner in construction. We have plans to continue to grow. First, through cross-selling and specification. Since 2019, our sales team is organized between retail and projects.
In retail, with our cross-brand team, we already increase our share of wallet, on average 40% when we sell more than two brands. We already reached 50% of our sales in cross-selling, with further potential as we see examples in Italy, now that we have the full portfolio, especially in construction chemicals. In specified projects, we deliver integrated solutions. I'd like to illustrate with this example at Parque Global, which is an ongoing project in São Paulo, where we deliver for residential buildings, the shopping mall, the university, and the hospital. There, we started specifying as the architect one of our hero products, which is solar-controlled glass. We then specified to the contractor who was looking for a solution for the overall performance of the building, the facade, the lightweight facade, which also allowed him to divide his contractor time by two.
In the end, we provided more than 50 products on this project. This one-stop solution approach is really increasingly making a difference at project specifiers, architects, and engineers. Our objective is to double our specified sales by 2030. We're taking a larger share on the value chain, positioning Saint-Gobain as the thought partner to shape the construction market. We sit at the table of policymakers to advocate on building performance, safety, and sustainability. Next month, we will be present at the COP 13 Belém to present our action paper on sustainable construction. We also advocate and engage in our solutions. Saint-Gobain will be the first one to prepare and to show the light and sustainable construction at the first fair on the topic in São Paulo next month, engaging all stakeholders on these solutions. We engage with architects. Our ADUS Prize last year attracted more than 2,000 projects.
In the end, we massively train thousands of applicators on our solution. You'll see in the next video how we do that in an original and impactful way.
In the last decades, Brazil has been facing a transformation in the construction industry, seeking innovative approaches for productivity, comfort, and sustainability. In this context, lightweight and sustainable construction has been establishing itself as a strategic solution. From 2010 to 2019, the plasterboard market doubled in size. From 2020 to 2024, the same growth was achieved in just five years. To turn this potential into reality, the installer is a key protagonist, not only ensuring high-quality installation, but also influencing the entire value chain through their expertise. That's why we invest in two key pillars: knowledge and recognition. For all the professionals, one example in Brazil is Master of a Drywall Placo, the first live construction reality show in Brazil, 22 million views last year on YouTube, broadcasting on national television for eight weeks. In 2025...
Para mim, foi uma honra ter participado desse reality show, e creio que isso vai inspirar também muitos jovens.
This recognition is also reflected in a strong commitment to workforce development. Seventeen Saint-Gobain academies and also 150 online courses, training more than 6,000 installers per year. Additionally, we work very closely with our customers and partners, such as Espaço Smart.
Espaço Smart believes that training is building the future. Since 2012, we have trained over 12,000 professionals. Saint-Gobain is with us in this journey, providing and promoting complete solutions. Thank you, Saint-Gobain, for this partnership. Espaço Smart has grown by 700% since 2019, with over 43 stores throughout the country.
By standing alongside these key players, we generate value and move confidently toward making the world a better home.
This approach, advocating, engaging, and training is really paying off. We can see the impact with two tangible examples here. The first one in Mortas, where we significantly raised the standard for technical solutions in the market. This product allows quicker application with half the quantity of product. With this differentiated portfolio, we capture a 40% price mix premium in the market, where we are the clear leader. The second example is on plasterboards, which allow building two to three x quicker than traditional construction. We are number one on this growing segment. We are taking market share, growing even faster. When we look at the adoption rate of Brazil, which is seven x lower than France or 10 x lower than in the U.S., we see that we have a huge potential ahead of growth.
In a nutshell, we see that Brazil has proven the effectiveness of its growth model, that we are now replicating across all country platforms, like in Mexico. Mexico is now our second country platform. Over the last five years, we doubled the sales to EUR 1.2 billion. Through acquisition, we went from a strong position in glass solutions to the full envelope and internal solutions with plasterboards. We built the most expanding construction chemicals platform in the country in residential, counting on waterproofing with Impact, admixture and additive of GCP, and recently mortar and facade vendor at Cemix. We are successfully integrating those companies. We saw impact with value creation in the first year. Cemix, in its first year, is already delivering synergies and growth above the plan, with further potential already identified for the next two years.
Beyond the number, we also benefit from the strong expertise of this team, which is now unified under the leadership of Cemix CEO. The sales synergies are really powerful. They're creating a spillover effect in cross-selling, as we can see in this example of one of the largest retailers in Mexico, where we are adding more products under the Saint-Gobain umbrella. Thanks to Cemix's acquisition, we also gained access to Central America. We are now rolling out the full Saint-Gobain portfolio in the countries where we are present, in Honduras, Salvador, and Guatemala. We have a plan to accelerate in this region through CapEx and M&A. In Mexico, our high-value solutions, technical mortars and waterproofing, light construction systems, and summer comfort solutions, they're growing as well two to three x faster than the market.
When we combine this compelling offer with specification and building science, we really enter into a specified project. We'll hear how we can differentiate with this compelling value proposition in one of Mexico's fastest-growing market, hotels.
In Latin America, we have pursued a clear strategy: integrating solutions to offer a comprehensive value proposition, always prioritizing energy efficiency, sustainability, and improved project life cycles. Cross-selling across the different business units we have in the region to respond to the specific needs of the projects. An example in the hospitality segment is the world of Astoria Cancun Hotels. We have achieved unprecedented integrations of our solutions: high-performance glass for aesthetics and energy efficiency, Placo lightweight construction systems for high-quality facades, common areas, and interior finishes, fiberglass and Isover insulation for acoustic and thermal comfort, TechBond sealing solutions for improved permeability, Cemix flooring adhesive, Impact waterproofing, and more. All of them work together to enhance the end-user experience. For similar projects, our building science department conducts energy and solutions feasibility analysis that guarantees a successful implementation.
We analyze building orientations, energy efficiency, and electricity savings, giving the customer the opportunity to decide the best option. Another example is the AC Marriott Hotel, where our recommendations resulted in a 40% energy consumption reduction.
[Foreign Language] Este es un proyecto de un hotel con 117 habitaciones en el que buscamos, a través del franquiciatario, ofrecer un servicio de confort y calidad en la estancia de clientes, principalmente de negocios. Construir un proyecto de esta magnitud requiere de un gran esfuerzo de equipo. La ventaja de trabajar con el equipo de Especificaciones de Saint-Gobain nos permitió tomar decisiones acertadas para los materiales que estarán a la vanguardia de la construcción ligera y sostenible.
Integrating always more of our solutions to offer a comprehensive value proposition to our clients has proven a very successful strategy. No doubt it will prove successful in the future as well.
We see in these videos how we can expand in new high-potential markets. First, in residential, in this example in Mexican hotels, we see how this market drives a huge demand in terms of energy efficiency, acoustic comfort, and thermal performance. It's a perfect fit for our engineering and key account management approach. We also target infrastructure, thanks to our expanding construction chemicals platform. We are now organized to serve new markets: tunnels in Peru and Chile. In Chile, mining is 40% of all investment in the country. We also have a strong pipeline of projects in transportation and energy, especially windmills in Brazil. Our approach includes a tailored offer and engineering expertise per specific market. It's crucial for this kind of project. Clearly, a clear growth area for Latin America in non-residential infrastructure for the next five years.
To conclude, in Latin America, our ambition is to continue to outperform the market by a minimum of two points of growth each year, innovating and rolling out our full portfolio of solutions across every country platform, leveraging cross-selling and up-selling through specification, and expanding into new markets. We know how to do it. We have a proven model in Brazil that we are now replicating in each country platform, in Mexico, in Argentina, in Chile, in Peru, in Uruguay, in Ecuador, in Colombia, and in Central America. I have confidence in our foundation, in our action plan, detailed action plan, and especially in the fantastic team I had the chance to work with. I can tell you that we are already organized and highly motivated to lead and grow in Latin America. Thank you.
Thank you so much, Camille. Thank you. The fourth and the final region that we will be hearing from is Asia-Pacific, together with Sreedhar N, Senior Vice President and CEO of Asia-Pacific and India. Let's welcome Sreedhar to the stage.
What a pleasure to be back here, genuinely, because this is something I started missing. It's now six months I'm in my new role. I've spent a lot of my time on the ground, meeting the customers, visiting the project sites, and spending time with the team on the ground. I can tell you that my conviction, the fact that Saint-Gobain has a huge opportunity to accelerate the profitable growth, has significantly gone up. This region, you will see the construction market will continue to grow, particularly India, Australia, and Southeast Asia. We have a huge opportunity to shape the market towards light and sustainable construction, leveraging the strong country platform that we have built over a period of time.
will continue to deepen the reach, enrich the offer, and leverage the construction chemicals platform that we have built to penetrate the infrastructure market. We have EUR 5.3 billion sales in the region, 17% margin, and we are No. 1 in India, No. 1 in Australia, and No. 1 in Southeast Asian countries. We have been growing at the rate of 7% in the last few years. You will see in this region the growth of population, and the growth of population will lead to also a significant investment in the infrastructure market. We will also see the enhanced purchasing power, given the fact that the middle-class population is growing in this region.
We have a significant opportunity for light and sustainable construction, given the new construction code that has been introduced in Australia, and the fact that the adoption of light and sustainable construction is at a very early stage in this region. This is going to be the single largest huge potential for us to penetrate the market. I have spoken to all of you many x about the fact that India is an outstanding country platform that Saint-Gobain has built over the years. Saint-Gobain is the top brand in the country in the construction market. We are No. 1 in every single product line. We have an unrivaled footprint in the country, 82 plants in all major states. This is the single largest differentiating factor because when you are there in all the major states, your ability to serve the customer significantly goes up.
Having an innovation center in India makes a huge impact on our ability to adapt the solution to the Indian market. We are the reference for sustainable construction in the country. If you have to see how we can further level up India's strong growth story, we have two clear levers. One is to deepen the reach in Tier 2 and Tier 3 cities by significantly increasing the point of sales and also the network of influencers. We will leverage the construction chemicals platform that we have in the country, and India will see a significant investment in infrastructure. With the acquisition of FOSROC, we have a leadership position and a comprehensive solution to offer to the market. FOSROC has got credibility in the market, the ability to give technical solutions. Let's look at one example where FOSROC has contributed immensely in an iconic project in Northeast India.
Infrastructure lies at the heart of India's ambitious development goals. It represents significant growth opportunities for Saint-Gobain, notably in the construction chemicals business. With FOSROC, in the remote and rugged hills of Northeast India, the Jansiri-Kohima-Purugauj railway line will bring rail connectivity to Nagaland's capital, Kohima, for the first time. A true milestone for the region. This unprecedented project includes an impressive number of major and minor bridges, roads, and subways all across extremely challenging topography, mandating construction material that will stand the test of time. It is here FOSROC's range of world-class, comprehensive construction solutions played a significant role. Fast setting, dependable performance, every step of the way. Even with low-impact local aggregates, FOSROC admixtures enabled concrete to remain reliable through every season. A 25 million metric ton inventory at the plant and seamless collaboration across teams ensured uninterrupted operations in one of the country's most inaccessible zones.
This project tested every part of our engineering process: terrain, weather, supply chains. What helped us move forward was FastRock's ability to give us comprehensive solutions. The technical and delivery support made a real difference. In a project of this scale, having FastRock as a partner wasn't just helpful, it was vital toward progress.
The Jansiri-Kohima railway line is not just an impressive infrastructure, it is a symbol of growth, innovation, and long-term collaboration.
Let's look at the second country platform in the form of Australia. After the acquisition of CSR, Saint-Gobain has got a leadership position in the country. The brand CSR, the name CSR, is an iconic name. It has got a credibility of more than 170 years of serving the construction market in the country. Once again, Saint-Gobain in Australia, through CSR, has got a significant state-of-the-art footprint, both in terms of manufacturing as well as the distribution and logistics hub. CSR is known for its ability to sell solutions. They have a very strong reputation of system selling. More than 60% of their sales, if you look at the customer profile, they buy more than three products on average. It's a fantastic acquisition, a great addition to the Saint-Gobain family. I'm super convinced the way we are progressing on integration.
I think this is one thing which is very clear that we will be on track, we are on track to create value from this acquisition. If you have to capture further growth, profitable growth in Australia, there are again two areas where we can really make a significant impact. One is to increase our presence in high-potential markets and segments in the new solutions. We have identified certain product lines where we can significantly increase the market share. Also, benefit from the fact that we are CSR as part of Saint-Gobain, we have an enriched offer for the Australian market. One clear example is the construction chemicals CSR did not have in their profile, in their portfolio.
CSR, with its ability and the credibility in the market to sell the solutions, they are able to have more than 40% of their sales, which is high value added and solution sales. Insulation is going to be one single largest growth driver for CSR, given the fact that they have very compelling solutions. They have been able to demonstrate that you can reduce 80% of the heat loss using the Saint-Gobain CSR solutions in Australia. They are very good in specification selling. They are very good in every single market segment, residential, non-residential. Let's hear Paul Dalton, the CEO of CSR. He's talking about one of the iconic projects where we participated in the health sector, and you'll see the impact that CSR brought to this project.
Hospitals remain a growth segment for CSR and Saint-Gobain in the Australian market. Population growth and land availability mean that hospital construction is expected to increase through to 2030, with many of these hospitals to be new builds. Architects and builders working on hospital projects have a requirement for high-performance, trusted solutions in areas such as acoustics, fire, and hygiene. There is also the need for good design aesthetics to enhance visual comfort. CSR is an iconic brand with 170 years of credibility in the Australian market and is well-positioned to partner at every stage of these projects.
Footscray Hospital is a great example of this type of partnership. CSR worked closely with the architects at the design stage, specifying trusted systems through the Red Book. We then worked closely with the builders, Multiplex, and the lead contractors, ExpoConti, to ensure that they had the products and the technical services and support that they needed.
For ExpoConti, it is important that our suppliers are reliable and responsive. We know we can trust CSR systems and brands like Chiprock and Bradford. CSR was a great partner right throughout the Footscray Hospital build.
Saint-Gobain is uniquely positioned through CSR in the Australian market with our broad product offer, state-of-the-art industrial footprint, and reach to provide innovative internal and external solutions for any health project. We offer high-performing, compliant internal systems and Saint-Gobain's Ecophon range of acoustic solutions, including Ecophon Hygiene. We also offer flexible facade solutions, and we are leveraging the Saint-Gobain product offer in the Australian market to provide innovative solutions such as GlassRock X. All of this combined with our strong technical expertise and support makes CSR a true partner in the Australian market.
Let's look at the third country platform in the form of Southeast Asia. This is a steep growth trajectory we have seen in the past, and this is clearly one single another area where we have a growth accelerator. We have a leadership position in these countries. We have a broad industrial footprint, and also our ability to provide innovative solutions to the customers. We have more than 40% of the sales coming from high value added products. If you have to look at the single largest growth potential and outperformance in the market of Southeast Asia, it is product offer enrichment. We have identified clear areas where we can significantly increase our market share: high value added glass, coated glass, insulation products, and acoustic solutions, and a full range of construction chemicals, especially with all the acquisitions we have done in the recent past.
Our ability to serve the market has gone up significantly in this market. Coming to China, it's a very different strategy. We have made a conscious decision to be only in an attractive and niche market segment. We have $1.2 billion sales, but more than 50% of the sales are in the industrial market, and more than 80% of the sales are for the domestic market. We have 41 plants across the 30 locations. We have an R&D center in Shanghai, which helps us to keep developing new products and solutions. One important thing in China, which is very nice, is the best-in-class digital service. We have actually invested significantly in the digital tools. In China, we respond to our customers within 70 seconds using chatbots. This is just one example.
I can tell you everywhere in all the countries in the region, we have a strong influence on the distribution network because of the digital tool that we use and our ability to track the products, the movements, where exactly what's happening, our ability to engage the different stakeholders in the whole value chain, is very, very powerful. I am excited in my new job because I have a committed team. I have an engaged team willing to go the extra mile, get for an additional deliver profitable growth. In addition, I have a leadership team which is native and local with a deep expertise in the construction market. This is one single differentiating factor as compared to what you see in the marketplace. To conclude, I am confident to accelerate the profitable growth in Asia-Pacific and outperform the market at least by two points.
By leveraging the strong and proven country platform that you have seen, enhance the reach of Saint-Gobain's comprehensive solution to all end markets, doubling the sales in the construction chemicals market, and continue to invest value, creative investment to support growth in the region. Thank you.
Thank you and bravo, Mark, David, Thierry, Camille, and Sreedhar. Now you have gone around the world of Saint-Gobain on those very large growth opportunities and megatrends. I think more importantly, you have seen and touched how aligned we are together on our actions, on the strategy forward, how we leverage and accelerate value and growth through our solutions, how we expand on non-residential and infrastructure markets, and we are a meaningful player. It's something that we are going to start. It's already there. You have seen movies, examples, customer testimony from hotels in Mexico, from construction chemicals in the U.S., also Australia, all around the world expanding in those markets. We are extremely driven by this alignment on solutions, residential, non-residential, and infrastructure markets. At the end of the day, it's all about execution. 5% is the strategy, 95% is the execution.
You have seen our commitment on execution in the last years. You can touch and feel the commitment, the drive of our region CEOs to execute well going forward. You had some examples of our country platforms. This is where we drive the success of Saint-Gobain. I have every confidence that we will lead and grow for the coming years, that it will bring a lot of value for our shareholders and a lot of value for all our stakeholders. We'll stop there because you have been patient, passionate, I think, about all the presentations. We'll take a short break. We come back at sharp 4:50 P.M., five zeros, so 10 to 5 for the Q&A. Thank you. Short break, and we come back also online.
America is built on innovation, technology, and forward-thinking growth. To make it here, you need to think fast and move faster than the competition. The U.S. housing landscape is just as dynamic. With a shortage of up to 4 million homes and a rapidly shifting weather and insurance environment, these are challenges Saint-Gobain is uniquely poised to address. We're moving fast to meet the moment. We aim to lead the country in resilient housing solutions, both in new construction and renovation.
Our One Precision Assembly system combines Saint-Gobain products into a prefabricated solution, accelerating modular construction to help address a shortage in the housing supply. It brings speed, precision, and resilience to new home construction, solving for weather, labor, and timeline challenges.
Our renovation remodel market is powered by more than 10,000 CertainTeed credentialed contractors trained by experts who install with precision. With field education, loyalty programs, and comprehensive warranties, CertainTeed leads the nation in contractor credentialing because when our contractors succeed, so do we.
Using the Saint-Gobain products has been instrumental to us because I know that they are the best. Whatever you can imagine a construction company would need from a company, they've provided it, and generally in very short order, whether it be pallets upon pallets of samples delivered right to my door or the courtesy of coming down to meet with a customer to discuss something that the customer thinks may be a problem. I've always felt very well supported by Saint-Gobain in every aspect of my business.
CertainTeed is moving fast to redesign the future of the residential sector in North America with new construction solutions that make housing more accessible and affordable, fast to build, and resilient systems to address regionalized weather patterns and disasters. We are future-proofing the residential housing market and our business model, and we are making the world a better home.
[Foreign Language] POINT.P is the leader in building materials in France with 1,000 sales outlets and 300,000 artisans as account holders. Through the Jeune Artisan pack and the Génération Artisan platform, which now brings together a community of 19,000 professionals, we are developing support tools and services that make artisans' daily lives easier by removing obstacles such as the lack of labor, the need for training, or administrative complexity. This comprehensive support for artisans is a win-win. It's a win for the artisans, of course, but it's also a win for POINT.P, because it brings us growth, up to four points of additional revenue growth for regular users of our services, like Mathieu, whom you can find at the POINT.P branch in Rouen.
[Foreign Language] Les logiciels mis à disposition par Génération Artisan et POINT.P, comme par exemple Soluplus, qui est un logiciel de chiffrage qui nous permet, pour une tâche définie, par exemple du Placo, du carrelage, de faire une liste de courses, une liste de matériaux et pouvoir l'importer sur un logiciel de devis et facturation. J'utilise aussi CapRénov, qui est un logiciel de rénovation énergétique. Les autres avantages avec Génération Artisan, c'est qu'on peut tester aussi de nouveaux produits, augmenter ma visibilité sur Internet. Donc, c'est vraiment des points qui sont mis en place par POINT.P et Génération Artisan qui permettent de grossir et d'exploser, on va dire, dans son entreprise.
[Foreign Language] Toutes ces initiatives se traduisent sur le terrain par une accélération significative de la rénovation énergétique en France. La force inégalée de Saint-Gobain avec l'industrie et la distribution, c'est de pouvoir apporter une solution complète pour rénover un logement du sol au toit, avec à la clé plus d'efficacité énergétique, plus de confort et une réduction de la facture énergétique pouvant aller jusqu'à 70%. En tant que leader, nous contribuons à façonner le marché vers une construction plus durable en mobilisant tous les acteurs de la chaîne de valeur.
In the last decades, Brazil has been facing a transformation in the construction industry, seeking innovative approaches for productivity, comfort, and sustainability. In this context, lightweight and sustainable construction has been establishing itself as a strategic solution. From 2010- 2019, the plasterboard market doubled in size, and from 2020- 2024, the same growth was achieved in just five years. To turn this potential into reality, the installer is a key protagonist, not only ensuring high-quality installation, but also influencing the entire value chain through their expertise. That's why we invest in two key pillars: knowledge and recognition. For all the professionals, one example in Brazil is Master of a Drywall Placo, the first live construction reality show in Brazil, 22 million views last year on YouTube, broadcasting on national television for eight weeks. In 2025.
Para mim, foi uma honra ter participado desse reality show, e creio que isso vai inspirar também muitos jovens.
This recognition is also reflected in a strong commitment to workforce development, 17 Saint-Gobain academies, and also 150 online courses, training more than 6,000 installers per year. Additionally, we work very closely with our customers and partners, such as Espaço Smart.
Espaço Smart believes that training is building the future. Since 2012, we have trained over 12,000 professionals. Saint-Gobain is with us in this journey, providing and promoting complete solutions. Thanks Saint-Gobain for this partnership. Espaço Smart has grown by 700% since 2019, with over 43 stores through the country.
By standing alongside these key players, we generate value and move confidently toward making the world a better home.
Infrastructure lies at the heart of India's ambitious development goals. It represents significant growth opportunities for Saint-Gobain, notably in the construction chemicals business. With FastRock, in the remote and rugged hills of Northeast India, the Jansiri-Kohima-Purugauj railway line will bring rail connectivity to Nagaland's capital, Kohima, for the first time, a true milestone for the region. This unprecedented project includes an impressive number of major and minor bridges, roads, and subways all across extremely challenging topography, mandating construction material that will stand the test of time. It is here FastRock's range of world-class, comprehensive construction solutions played a significant role. Fast setting, dependable performance every step of the way. Even with low-impact local aggregates, FastRock admixtures enabled concrete to remain reliable through every season. A 25 million ton inventory at the plant and seamless collaboration across teams ensured uninterrupted operations in one of the country's most inaccessible zones.
This project tested every part of our engineering process: terrain, weather, supply chains. What helped us move forward was FastRock's ability to give us comprehensive solutions. Their technical and delivery support made a real difference. In a project of this scale, having FastRock as a partner wasn't just helpful, it was vital to our progress.
The Jansiri-Kohima railway line is not just an impressive infrastructure, it is a symbol of growth, innovation, and long-term collaboration.
Commercial construction in the U.S. market is accelerating, fueled by investments in healthcare, hospitality, and data centers, making Saint-Gobain's leadership in the category essential. We make it easy to do business with Saint-Gobain from day one by being a single resource, from consulting through site preparation with systems designed to solve problems and perform, from waterproofing to fireproofing to construction chemicals and more.
I've been in the business 26 years. I installed GCP material for nine years. That's the only thing that we really use. There are some other things that we have to use for specs, but if it comes down to us having the choice on what to use, we will always use GCP and Saint-Gobain. It's premium material, premium products, and I don't think I get that with other manufacturers.
I had the pleasure to be the CEO for, I don't know, about 14 years now. In that time, we've made over 100 acquisitions and have grown to be the largest producer of concrete across the nation. We feel like we're really just getting started. We have a huge runway and huge opportunity in front of us to continue to grow our business. You can't do that without having the right people on your team. Saint-Gobain is one of those companies that I feel highly confident in. I feel highly confident in the team that they've put in place. I'm just overall very excited about the relationship and excited about the future and the future together.
A transformation is underway. The growing demand for infrastructure, including the booming construction of data centers, requires solutions that address resiliency and performance. Speed is critical to unlock new technologies that accelerate the evolution of industry nationwide. Saint-Gobain's unmatched portfolio of customer solutions and our agile sales organization, backed by our building science and technical expertise, are perfectly positioned to capitalize on this demand now and are key to unlocking market growth in these high-potential sectors.
Hello, everyone. It's a pleasure to share with you a brief insight into Asia-Pacific's dynamic growth and how Saint-Gobain is strongly positioned to support and contribute to that development. Asia-Pacific is a region of boundless potential and opportunities, with a fast-growing population exceeding 110 million people. The region is undergoing a transformative urban development plan, including major projects such as building 37 new cities, vast infrastructure projects, and new modernized transportations. At Saint-Gobain Egypt, we are proud to play a pivotal role in this transformation. Our strong market position is built on our expertise, innovation, and commitment to sustainability. Our journey started two decades ago. Today, we leverage our strong leadership position in glass, which we are further reinforcing with the new float glass capacity. We are expanding in construction chemicals and interior solutions with an investment in a new plasterboard plant.
These projects would enable us to offer more comprehensive solutions to our customers. In conclusion, with the rise of the Country Smart Urbanization, we contribute to building a better and more sustainable Egypt for the new generations to come.
At WSP, we're one of the world's leading professional services firms. With over 3,400 professionals in the region and 73,000 colleagues worldwide, our teams help to deliver some of the most iconic and technically complex projects, from cultural landmarks to high-performance, high-technology towers to future-ready infrastructure networks. Our work with Saint-Gobain spans a range of very complex projects, ranging from hydrothermal to acoustics to fire safety. What we value is how they collaborate with us to co-develop solutions tailored to specific project needs, where performance and sustainability remain central.
In Latin America, we have pursued a clear strategy integrating solutions to offer a comprehensive value proposition, always prioritizing energy efficiency, sustainability, and improved project lifecycles. Cross-selling across the different business units we have in the region to respond to the specific needs of the projects. An example in the hospitality segment is the world of Astoria Cancun Hotel. We have achieved an unprecedented integration of our solutions: high-performance glass for aesthetics and energy efficiency, black and lightweight construction system for high-quality facades, common areas, and interior finishes, fiberglass Isover insulation for acoustic and thermal comfort, TecBond sealing solution for improved permeability, semi-flooring adhesive, impact, waterproofing, and more. All of them work together to enhance the end-user experience. For similar projects, our building science department conducts energy and solutions feasibility analysis that guarantees a successful implementation.
We analyze building orientations, energy efficiency, and electricity savings, giving the customer the opportunity to decide the best option. Another example is the AC Marriott Hotel, where our recommendations resulted in a 40% energy consumption reduction.
[Foreign Language] Este es un proyecto de un hotel con 117 habitaciones en el que buscamos, a través del franquiciatario, ofrecer un servicio de confort y calidad en la estancia de clientes, principalmente de negocios. Construir un proyecto de esta magnitud requiere de un gran esfuerzo de equipo. La ventaja de trabajar con el equipo de especificaciones de Saint-Gobain nos permitió tomar decisiones acertadas para los materiales que estarán a la vanguardia de la construcción ligera y sostenible.
Integrating always more of our solutions to offer a comprehensive value proposition to our clients has proven a very successful strategy. No doubt it will prove successful in the future as well.
Hospitals remain a growth segment for CSR and Saint-Gobain in the Australian market. Population growth and land availability mean that hospital construction is expected to increase through to 2030, with many of these hospitals to be new builds. Architects and builders working on hospital projects have a requirement for high-performance, trusted solutions in areas such as acoustics, fire, and hygiene. There is also the need for good design aesthetics to enhance visual comfort. CSR is an iconic brand with 170 years of credibility in the Australian market and is well-positioned to partner at every stage of these projects.
Footscray Hospital is a great example of this type of partnership. CSR worked closely with the architects at the design stage, specifying trusted systems through the Red Book. We then worked closely with the builders, Multiplex, and the lead contractors, ExpoConti, to ensure that they had the products and the technical services and support that they needed.
For ExpoConti, it is important that our suppliers are reliable and responsive. We know we can trust CSR systems and brands like Chiprock and Bradford. CSR was a great partner right throughout the Footscray Hospital build.
Saint-Gobain is uniquely positioned through CSR in the Australian market with our broad product offer, state-of-the-art industrial footprint, and reach to provide innovative internal and external solutions for any health project. We offer high-performing, compliant internal systems and Saint-Gobain's Ecophon range of acoustic solutions, including Ecophon Hygiene. We also offer flexible facade solutions, and we are leveraging the Saint-Gobain product offer in the Australian market to provide innovative solutions such as GlassRock X. All of this combined with our strong technical expertise and support makes CSR a true partner in the Australian market.
Welcome to the future of Canadian commercial construction, a market ripe with opportunity and innovation. We are leading the way in zero-carbon manufacturing of drywall with the opening of a Montreal hydropower plant, providing a low-carbon drywall offering to the market. Our innovative recycling programs are tackling the challenges of job site waste, a formidable challenge in which local execution is critical. These commitments to circularity and decarbonization are not only good for the planet, they are good for business in a notably progressive code and regulation landscape that is driving fast adoption of sustainable construction materials.
Saint-Gobain's strategic acquisition of the Bailey family of companies creates new opportunities and customer benefits. By integrating Bailey Metal Framing with our full portfolio, including the renowned GlassRock exterior shading, we offer an unparalleled suite of solutions. GlassRock, known for its superior performance, now benefits from the synergy with Bailey's metal framing, as do other commercial offerings, providing a comprehensive solution for modern construction needs backed by one trusted manufacturer.
Bailey is very easy to do business with, especially their order desk. We are fortunate enough that we do direct ordering. It's something we value very highly at Select Drywall. It's a legacy relationship, and we feel they are superior when it comes to delivering their products on time and just in time. Trust is paid forward. If we can trust Bailey and we can trust Saint-Gobain, then our customers can trust us.
Saint-Gobain's innovative solution and commitment to sustainability make us the ideal partner for the future of Canadian commercial construction. With the power of our full portfolio, we are framing the future of the construction projects.
Back now to the questions. Vivien will be the moderator for the questions in the audience. After that, we will have some questions on not the internet, but the app that you have been using. Vivien, I leave you the floor. Who wants to, wow, multiple questions.
The Q&A is open.
Yeah, your choice.
At the same time, five hands. We're going to start with Siddharth Ekblam right behind, then Arnaud Pinatel, and then Elodie Rahl in the same order.
Thanks very much. Siddharth Ekblam from Morgan Stanley. I've got two questions on the North American business. The last margin you delivered in the Americas was north of 20%. For that region, Asia-Pacific and Americas combined, you're guiding to 17% to 20% going forward. I think there's a lot of focus in the market around the margin improvement in that region and whether you are over-earning, particularly in the context of new capacity being added in roofing. Could you help us understand how we should think about that North American margin going forward and whether this is a signal that you actually think the margin needs to fall? The second question is linked. Can you talk about how you see the distribution landscape in the roofing market in the U.S. shifting?
QXO is obviously talking about trying to lift margins, and one of the levers that they're talking to is getting their OEM suppliers to give them some margin. I'd like to hear what your take is on that. Thank you.
I will start, but I think it's a lot for Mark. At least the second question, Mark, you will be able to come on the podium. We are very ambitious on the margin everywhere. What we wanted to give you is 17% to 20% as the average margin for the three categories: Latin America, Asia-Pacific, and North America. You know that North America is slightly over that. Asia-Pacific is at 17%, Latin America 18%. We are on the best margin in North America. We'll continue to stay ambitious, and after that, Latin America and Asia-Pacific can continue to improve. Yes, the margin in North America will remain best in class for Saint-Gobain going forward. To highlight also what we have done recently on some investment in North America, it's modern plants. It is very important because it helps us to lower the cost to serve our customers.
It's roughly 2% addition in terms of capacity on the total market. If I take roofing, which was saturated, you know we were on allocation of capacity for the last two years. It's a minimal addition, and for us, not only is it the best cost to serve, but it's in the best location in the Southeast. I'm not worried. We have this must-have renovation going forward. We have this housing shortage. North America margin is going to remain best in class. No pressure for Mark, but clearly, we are driven by profitability. This consolidation of the market that happened in the last years, be it on roofing, be it on gypsum, is something which is essential to us. Mark, a few insights on distribution and how they partner. You know, you heard from Mark, when they are a national player, they need a national manufacturer like Saint-Gobain.
Absolutely. As I mentioned, Commercial Manager for most of my life, there's not been a year where there aren't distributors looking for extra margin from suppliers. That's just the way the world works. We do have solutions that are driven by contractor engagement and homeowner engagement. It's not a commodity product. The products we sell through distribution have great stickiness at the contractor and the homeowner who want the right aesthetics and the right performance, and we support that. We also have salespeople in the field that support those contractors and partner with their distributors to make sure we pull that product through distribution. We do that with our distributor partners that partner with us in each region.
As I mentioned earlier when we talked, the distributor landscape has evolved, but the roofing and exterior product distributor landscape has been 75% to 80% consolidated for the last five or six years. With QXO acquiring what they have, it's still 70% to 85% consolidated with no change in share of QXO. It's the same as Beacon was when they acquired it. My answer is we'll continue to focus on partnering with distributors, making them successful through driving contractor engagement and stickiness of the homeowners. They will not be the first and the last or not the first to ask for discounts based on their size.
When you look at other players, you know the fact that Home Depot bought SRS and GMS, we are their number one partner. GMS was the largest customer of our gypsum interior solutions. We are now even more relevant for this kind of consolidation. The same with Lowe's and FBM. It makes us unique. You take other roofing players, they don't have gypsum, they don't have ceilings. You take some gypsum player, they don't have roofing nor siding. We are the unique true partner across these channels in North America.
Second question from Arnaud Pinatel, raising his hand.
Thank you very much. First of all, if I remember well, when you took the role as CEO, your share price was at $29. Today it's at $92. So we had great success and congratulations for that. It was all about a turnaround story, repositioning the group, savings, restructuring. Today, if I understood well, we are entering into a growth story. My first question is, do we need really to value Saint-Gobain no more as a cyclical stock, but as a growth stock within the building material sector? How convinced are you about that? My second question, I was very interested by your metrics where we had these different colors, blue colors. This $12 billion of CapEx M&A, you have not disclosed what is the part which is CapEx, which is the part M&A. I don't know if you will guide us on that.
Is it fair to understand or to believe that you are going to try to complete this metrics, regional and country, and make it blue, dark blue everywhere? This is the growth story? It's a very simple question.
Short answer is yes. The second part of the short answer, you have understood that it's a low execution risk because we know every single of those product lines. It happened that in some countries, you take Mexico, we were not in construction chemicals five years ago, but we know how to play with construction chemicals in Brazil, in Argentina. Camille did not describe Argentina, but we have other platforms, Peru, Chile, et cetera. We know how to replicate with strong leaders like Marco Corless to take glass, gypsum, and construction chemicals. Yes, we want the blue to become darker.
We had a prior version with the exact market share, but we thought it was better to have light blue, medium blue, dark blue. In principle, we want to make dark blue everywhere because then you even increase further your competitive advantage and your share of weather with the customer. That's the rollout of our offer within the spectrum of offer we know well. We are in the Saint-Gobain tower, 82 products. Not all the countries of Saint-Gobain have 82 products with 30%, 35%, 40% market share. Dark, dark blue in India. On the CapEx and M&A, I will let Maud answer. I will take the first one. I can even tell you that when we gathered our top 150 managers three weeks ago, we gave ourselves the target of the share price. If we do all this well, I'm going to keep it for me. It's ambitious.
We are all driven to make sure that we beat and we deliver on this. You know, in the last year, it was not only what you call the turnaround story. It was truly implement the country platform organization. Then each of them, they had to either turn around the business, exit, improve, et cetera. Fundamentally, it was we turned the organization by country because it's absolutely the best model for the local country markets. It happens to be very robust in the world of today, the globalizing world. It was first this cultural shift towards country-driven, performance-driven alignment, incentives, share value creation. After that, yes, we have done the heavy lifting of the poor businesses or the businesses way far from the strategy that Maud has highlighted in terms of quality of earnings. Yes, we are turning into a growth mode. We don't start from October 6.
We have started systematically with this in mind to complement the portfolio. When we bought Australia, it was a growth story. We knew that they were super strong on plasterboard and insulation. Sreedhar, with Paul Dalton, is going to add construction chemicals. He's going to add Ecophon ceiling. We knew what we have prepared on the construction chemicals platform in the Middle East, the investment in Mexico, in India was already putting the pieces of the puzzle so that at some point, we would be ready to lead and grow. Yes, you should think of Saint-Gobain in a different way, not look at the past, look at how well we have executed also in the last years and now the growth story while delivering good value creation for the shareholders. Maybe on.
Yes, sure, with pleasure. On the $12 billion of gross investment, you should account about maybe $1 billion per year on gross CapEx and the rest on M&A, keeping in mind, of course, how disciplined we will be in terms of allocation. There will be no surprise on allocation in terms of returns and also prioritizing on the right areas where growth will be, obviously.
Next question for Elodie Rahl.
Thank you very much. I understood the rationale to switching to EBITDA margins in terms of targets versus operating margin. With CapEx expected to increase as a percentage of sales, I was wondering if that is also signaling an increase in D&A as a percentage of sales. Basically, what I'm trying to get is where does this EBITDA margin translate in terms of operating margin targets? Is that 11% to 14%, 10% to 13%? A bit of guidance would be helpful there. Second, I was wondering if you could help us break down your targets in terms of like-for-like growth versus M&A in that mid-single-digit local currency growth, including with regard to the margin accretion that you expect to come from acquisitions versus organic growth. Lastly, on that 20% portfolio rotation, how much divestment would you expect to contribute and where would they be targeted? Thank you.
Okay, you take the first one, maybe?
Yeah, sure. EBITDA, the story is really about aligning our reporting to how we are going to drive or how we are driving the business. Incentives of the managers are already in EBITDA. When we do acquisitions, we do it through EBITDA multiples. Of course, we are not going to increase the depreciation. When I said 4.5% to 5% of CapEx over sales, I said that we would start at the low range at around 4.5% of CapEx, which is where we are today. No increase in the short term, but we have the opportunity to increase as we roll out the plan, basically. Nothing hidden in terms of depreciation with the move to EBITDA, for sure. You should look at having that equivalent of 11% to 14% in terms of operating income.
On your second question, we have a one-ish type of M&A acquisition in the mid-single-digit growth. In principle, all our acquisitions are margin accretive. Now that we run at a healthy margin level, it's not as big as it used to be five years ago. You have seen the impact on additional growth and margin from Maud. That one-ish percent in the mid-single digit is coming from acquisitions on average for the next years. 20% sales rotation, at least, is to show that we are committed to continue to make meaningful divestitures and acquisitions. I'm not going to give you precise figures. Otherwise, you will start guessing the candidates. We have highlighted some of the slides in terms of end markets, in terms of the evolution of certain regions and businesses. You can cross-check what it could be. All this is driven by value creation.
Timing is of the essence, and we will continue to do that. We want to tell you that, yes, we are going to be active on the portfolio evolution to always steer the group to make it even stronger in terms of profit and in terms of growth towards light and sustainable construction.
Next question for.
I think more meaningful, Elodie, than the two small divestitures of last week in Belgium and Brazil, if it's behind your question.
Next question for Ephrem Ravi, just close to you, please.
Hi, Ephrem Ravi from the Citi. Three questions. Firstly, two questions following up on Elodie's question. In terms of the 20% rotation, obviously, industrial and distribution kind of goes down as a percentage of sales. Would it be fair to say that the bulk of that 20% asset rotation would come from those two parts of the market within the next five years, or would you have a significant industrial exposure at all in five years? That would be the first question. Secondly, on your addressable market of $250 billion, only about $70 billion is infrastructure. Asia itself has got about $3 trillion of infrastructure spend per year. If I do very simple global calculations, you are defining your addressable infrastructure market as about 1% or 1.5% of global infrastructure spend.
Does that just take into account your current product suite, or would you expand that industrial addressable spend with more acquisitions in adjacent areas in the future? It seems to me that that's one place where you are probably underselling yourself a little bit. The third, sorry, is on the EBITDA margin. If I take the 15% to 18% EBITDA margin and look at your current return on capital employed, the step-up doesn't look proportional. It looks like the capital employed goes up a little bit more than the margin increase. Is that a wrong impression, or are you just being conservative with your return on capital employed targets? Thank you.
Thank you for your three questions. Maybe Maud, you will take the third one. You have a good guess on what could be the candidates for divestitures going forward. There will be a lot of acquisitions, and the net will be positive. There is no taboo within Saint-Gobain. Yes, we will assess the merits of all the businesses, country by country, and what they bring to Saint-Gobain in terms of innovation, in terms of synergies, in terms of financial performance, along with the criteria that Maud highlighted. On your second question, yes, we have been very precise, not underselling. We want to over-deliver maybe and under-promise. It's because those non-residential and infrastructure markets and targets and action plans have been defined bottom-up with our existing portfolio of know-how and expertise. We don't want to be in asphalt. We don't want to be in cement.
We provide all the additives to decarbonize cement. We don't want to be in aggregates. We don't want to be in China, which is a big market, but commodity and no margin. Yes, this is the addressable market where we already win, and we want to increase our market share. Maybe in five years down the road, we will have a bit more adjacencies in terms of product offer. This is how we consider the addressable market as of today and where we want to win. You take the.
Yes, sure. In terms of return on capital employed, we have increased the low range. You remember we were at 12%- 15%, and we are now above 13%. We remain ambitious on that element of value creation. At 13%, we are creating value, obviously, and we are creating a good amount of value. The purpose is really to steer the group's profile, enhance the quality of earnings, as Benoit Bazin just said. To do that, we are going to maintain and be into that ambition of growing the return on capital employed, but ensuring as well that we acquire businesses with good EBITDA margins, and we divest, we continue to divest and rotate the portfolio. Doing that, for sure, you know when you acquire, you create value in year one, two, three. When you divest, you could also divest activities which have been already depreciated.
You have some kind of effect on the return on capital employed. That is why you could have that kind of curiosity when you compare our EBITDA ambition versus our return on capital ambition. To be sure that we remain ambitious on both targets.
We give you a floor, not a ceiling. Who is next?
Next question. Ibrahim, just there.
Oh, sorry. You had the mic, so it could have been easier. Yeah. Didn't see it. I thought I put this aside. Hello. Thank you for taking my question, Ibrahim Omani. CIC, I have two questions, if I may. The first one is about data centers. A lot of your comps are talking a lot and communicating a lot on data centers. You said that you are maybe one of the leaders in this sector. What's your market share? Are you maybe the part of your sales generated in this segment? My second question is on your added value products. What's the part of added value products in your actual sales and in your targets, what you target in terms of added value products?
Data centers, it's several hundred million euros of sales. Sometimes it's direct versus indirect through distribution.
As you have seen from this external survey, I think it's the best proof of the pudding. We are a meaningful player. We are a meaningful player because, again, we address multiple functions, be it fire safety, be it low-carbon concrete, be it technical ceilings, et cetera, et cetera. We are ramping up. If you take Spain, for instance, we are very successful in Spain. You heard it from Thierry Bernard. All the EUR 70 billion of data centers spent in Spain, today they are in the spec. They have not been built. That's more to come. Sometimes we read big, big numbers about data centers. It's in the project side, not yet in terms of sales, but it's ramping up very actively. I forgot your second question, sorry. Added value products, yeah. We don't look at it at the total group. We look at it country by country.
I wanted to share with you the metrics that we are using on cross-selling, up-selling, and specification-driven sales. Some countries, you heard it from, you have seen it from Italy, it's already above 50%. We gave also the granularity of the different product lines. You take gypsum and insulation, it's 30%. We have some competitors in the U.S. at 3%. That means we are addressing different markets that they cannot address. This is the way we drive it by product line and by country. We know that if you take glass, we can be above 50%. If you take plasterboard, we know that if countries are 10, they should be at 30%, if not above, because when the average is at 30%, that means others are at 40%, 50%. This is a fantastic way for us to grow our sales and grow our margin.
On average, when we have more added value products, I give you the average for the group, it's eight points of additional margin.
The next question from Chris Neilon on the right.
Thank you. This one's for Maud. I wanted to go back to a question he was asking earlier, a little different about the ROIC. Given your expectation for faster growth, better margins, some modest improvements in your working capital, why is your free cash flow conversion still staying at just 50%? A follow-up to that is, how do you expect that to kind of evolve over the period? I think you've guided for capital intensity to increase. Should we see kind of an inverse experience of the free cash flow for that?
will answer on the return on capital employed and you complement on the free cash flow. You know, the return on capital employed, again, selling some depreciated assets and buying a bit of goodwill where you create value year two, year three. After that, the positive impact on the return on capital employed is the growth. Clearly, accelerating growth will help continue to grow the return on capital employed. Maybe on the free cash flow?
Yeah, on the free cash flow. The conversion rate here, you should maybe have in mind that we are, when you look at our conversion rate over recurring net income, you would be around 100%. That could be a little bit misleading, but I'm sure you have that in mind. Going forward, we kept the same metric because what we intend to do is really accelerate the growth, making sure that we enable, we dimension our working capital to serve well our customers. We feel that, you know, we will continue to work on operating working capital. We will continue to enhance the performance, but we will have also effect of the acquisitions. At some point, you reach a level where you are approximately stable and you get some incremental improvements, but you reach the point where you best serve your customer that way.
We will remain ambitious on cash, trying to optimize, and that's what we are doing every day. In terms of working operating working capital, that's where we guided around 15 days, below 15 days. In terms of cash, mass of cash, obviously growth will help us grow the free cash flows over the period for sure.
Yeah, I was just going to ask one follow-up. I didn't know if maybe there was any segments that are growing that you expect to be maybe more negative to the free cash flow relationship.
No, no, no, that's not the case.
Next question from Pujarini in the middle.
Hi, and congrats and thanks for sharing this presentation with us. My first question is on your revenue growth guidance, and you've given us two ways of looking at that target. I quite like the fact that you've given the outperformance over your underlying markets. Could you give us your rationale for providing those two targets? Is there a possibility that if your expectations of how the underlying markets grow or progress from here on, if that diverges from your expectations, would that lead to some confusion as time progresses, as you go towards 2030? Lastly, on the same topic, basically, you know, what are you expecting or how should we think about how you calculate the underlying market growth so it's a bit easier outside in?
For us, the outperformance is very important because when we differentiate with solutions, when we know we can increase our market share and push our competitive advantage in non-RSE and infrastructure, that's our outperformance. We have proven that in the last years, in India, in the U.S., in France, in the U.K., we have delivered in Brazil outperformance. We want to continue to step a bit up from the one point to one to two points. We have delivered on average one point, a bit below one point in the last years, and now we target one to two points. I think that's the way we manage our teams. Regardless of the market performance, you need to outperform. We measure it through market data. We have statistics in roofing in the U.S., in gypsum in the U.S., we have statistics in France.
We want the teams to have this winning mindset. We benchmark against our peers. We have done it on cotton clay and chemicals over the years, and we showed to you what we have done. That's the way we want to deliver very well on what we can control. If your market grows by 5% in India, okay, we deliver 10%. That's five points of outperformance. That's the way we drive the market. We are confident with all the megatrends that we have shown that, okay, it's a bit on the short term, a bit chaotic here and there around the world, but we have huge opportunities for growth everywhere. Recovery in Europe, housing shortage in North America, urbanization and population growth in Asia, emerging markets. We are confident we will drive on this journey to mid-single-digit growth.
Next question in front of you, Ben Rader, please.
Right, thanks very much. It's Ben Rader Martin from Goldman Sachs. I just had two, please. My first is on the divestment portfolio. You had a useful slide in the deck talking about businesses that were below 5% margins, and I noted that that's kind of gone to zero now. Is it right to think that the divestment strategy pivots more to businesses that might not be a big strategic fit rather than purely being an underperformer on a financial basis? The second question would just be around construction chemicals. You know, you provide some good disclosure on geographic skew for that segment. Some of the regions that were a little bit underweight there, being North America and Europe, are those the areas that you'd be looking to bolster through inorganic M&A? Thank you.
Very good. First, rest assured that 5%—it's my job to raise to 6% to 7% to 10%. We will continue to emulate, and we are already above that threshold. Yes, your guess is right that, again, all the heavy lifting or the blazing businesses or whatever, you know, from five, six years ago, all that is gone. It is more the strategic fit towards light and sensible construction, which is one of the main criteria. On top of growth also, because you have sometimes some good cash-out business. If they don't grow, what's the point? At some point, you could have some trade-offs. On construction chemicals, we have a very solid position in Europe. Across multiple countries, we have a very solid position in the Middle East that Thierry Bernard highlighted in India.
In North America, we are number one already in cement additives and concrete and mixtures, and Steve Williams, who has done a fantastic job to gain market share with innovation, etc., over the years, is there. We are a wide open space in Canada, and we made the very first acquisition, Interstar, a few months ago. We are confident that we can grow in Canada from the CA$2.4 billion platform that we have in Canada. Yes, overall, construction chemicals is a wide space in North America. Also, the non-RSE infrastructure markets are a big opportunity for us to grow in Canada, in North America. Mark showed to you that, you know, from $1.6 billion to $3 billion in the coming years. Yes, that's one area of growth.
Also, outside of India, Asia-Pacific, if I take, you know, Southeast Asia, Australia, we have large opportunities. Sreedhar N highlighted that we want to double our presence on construction chemicals there. Yes, we have multiple pockets to grow further in construction chemicals. Camille Arissar highlighted some ideas around Mexico, Central America that we are working on. Yes, multiple growth in terms of technology, market share, country by country, and construction chemicals.
Julian Redlinger in the middle.
Thank you very much. Two questions. First of all, you made it quite clear in this presentation that you want to grow faster in non-Res and infrastructure than in residential. Yet, in Western Europe and North America, residential is by far the most depressed end market. Does that growth outlook say something about how you're thinking about residential compared to the other end markets? Are you particularly cautious despite the market being so far down, or should we interpret that differently? Secondly, you said earlier that the share buyback will be used as a value creation tool, but also a benchmark for capital allocation versus the Saint-Gobain trading multiple. Can you explain what that means exactly? Thank you.
Sure. The main topic on your first question is that we are very confident about the recovery in Europe on the residential, new, and also renovation. As we said, we have seen David highlight all the green shoots in terms of housing transaction, in terms of housing starts, etc., across Europe. On average, if we forget about the recovery that will happen, on average, residential in mature markets is growing 3%- 5%. Within non-residential and infrastructure, it's more a market share gain that is behind our ambition. It's more this market share. There is not much market share, not massive in Europe, to win versus what we can do in non-residential and infrastructure. It's not so much a reflection on the merits or the benefits of those two sets of markets, but more the opportunity for us to expand naturally because now we have the perfect portfolio for that.
On the buybacks, what we highlighted is that we look at the share price, the Saint-Gobain multiple, when we think of an acquisition. You know, Australia was 11x, 12 x, 6.5 x EBITDA after three years. We say, wow, Saint-Gobain stock is at 8 x. It makes sense to have this acquisition in Australia to build the platform. It's always a benchmark for shareholder value creation to look at, okay, acquisitions, how do we allocate the capital versus acquisition and buyback? We are committed to that, the $2 billion. In the last five years, we did even a bit more. Until and unless the multiple of Saint-Gobain is at a higher multiple, and I'm confident we'll get there at some point, it's for me to drive and work hard with all the teams for that. It's for you to know what's the best appropriate multiple for Saint-Gobain.
Since that, we use that benchmark to say, hey, on capital allocation, is it worth making this acquisition or not versus buying back shares? That's the way we use it and with the support of the board, of course.
Next question from Jean-Christophe Lefèvre-Moulin.
Bonsoir. Hi. I have two questions regarding the new construction chemicals platform. First, you have shown a slide with 20%, maybe the margin, both for Chryso and also GCP. I guess that GCP is still lower than 20%, maybe the margin, isn't it? Secondly, could we have more color regarding the setup of this new business line? Currently, you have four different entities: Chryso, FOSROC, GCP, and Faber. Will you merge them or will you keep them independently?
No, we run everything by country. It's already done. We had it and we had organized like that when we bought FOSROC. In all the geographies where Chryso, GCP, FOSROC were together—Middle East, India, Asia-Pacific—since last fall, it was already like that to prepare the integration country by country on those multiple technologies and brands. With the deepening of the organization, 100% by country that I announced and put in place on July 1, everything is by country. You have one construction chemicals head in France reporting to Thierry Bernard. You have one in Germany. You have one in India reporting to Sreedhar N, covering all the different segments and applications. After that, depending on the customer, the technology, making the best use, FOSROC is by far the leading head of India. Chryso is in France. GCP has a lot of know-how and presence in North America.
We use both different brands, but under one umbrella. Steve Williams is our only leader taking care of all construction chemicals for U.S. and Canada. It's already organized like that. We leverage the different technologies.
Chryso is the umbrella in France.
It is.
Indeed.
Okay. It is, indeed. Leveraging, you know, under Chryso umbrella and brand, the technologies, the chemistry, the know-how of some FOSROC applications. If you take some specific end market, for instance, we have and we bought with GCP, Stirling Lloyd. It's the number one leader on waterproofing for high-end bridges.
Okay.
It's also the best bonding waterproofing for tunnel under the sea. It's Stirling Lloyd, well known around the world in terms of iconic reputation, and we keep this brand. It's a worldwide team that takes the big bridges in one country and goes around the world, pulled by the countries when there is a project. We have all this agility across our multiple technologies and brands and presence country by country to leverage all construction chemicals. On your question, yes, we have done a very good job to improve the margins of both GCP and Chryso. You know that Chryso has been the brand, the backbone of everything we added to our former construction chemicals business, which was more vendors, tile fixing, and concrete flooring applications. With additives and mixtures, technical waterproofing, Chryso has been, I would say, the leading avenue for that.
All the leaders, you know, Thierry Bernard, Steve Williams came from Chryso, but we have inherited since then, if I take India, the leader of our construction chemicals business in India is the former Fosroc manager. We take the best of the different worlds, but yes, Chryso has been leading the way to this EBITDA margin.
It's still doing very well. GCP is below.
You know, it's less and less comparable because we have merged. At some point, Jean-Christophe, I will not be able to answer your question. What is important is the margin of Chryso in France versus Chryso in Spain versus our GCP/Chryso business in North America. For instance, we gain share in North America. You have heard from the largest concrete player, SRM. It's the combination of forces and the combination of technologies. At the end of the day, what is making sense is how do we outperform each and every player locally across the different technologies and brands.
Okay, thanks.
Next question, very close to the end, right behind you.
Vous voyez ça jusqu'à la rapide, là, ils sont... On va déjà rester là.
Right behind there.
Il faut le faire.
It will be Harry Gold on the left.
Thank you, Sven Edelfelt Odo. Thank you for the presentation. The first one would be just a clarification on Elodie's question on switch to EBITDA. Can you confirm that the PPA are excluded from your definition on EBITDA? The second one would be on your dividend policy. Can you maybe perhaps clarify your strategy here? Because when you look at the $6 billion dedicated to dividend, it means a growth of less than 5%. It seems to me that your net profit will outpace this growth by far. That's the first, the second one. The third one, I don't know if you would answer, but I'll try. Coming back on the 20% asset rotation, you mentioned, Benoit, some sizable business. Beyond Pont à Mousson, would it be taboo to mention DAL, your Scandinavian distribution business, as a candidate for disposal?
I appreciate the level of volume now in Scandinavia, so disposal would not be for tomorrow.
I will start with the last one because I show you that there is no taboo. Any question is relevant. You know, in the Nordics, no surprise, the market is down. We suffer a bit across the board in the Nordics, and I don't think we are the only one. All the different players on building materials, be it on the sanitary side or elsewhere, are a bit below expectation in the Nordics. We have a sizable business, which is structurally a good business. We are happy to benefit from any recovery that we start to see, be it in Norway or a bit in Sweden. I'm confident that this business will improve. After that, we always assess on the mid-term or the long-term all the merits of having all those businesses together. There is no taboo, but clearly, today, the Nordic market is one of the toughest in Europe.
On the dividend policy, what we want to do is to grow consistently the dividend year after year. If we can do more than what you highlighted, we will do it. What is important is we will have this overall proportional growth from sales to EBITDA to EPS, and we will grow the dividend accordingly to show you that Saint-Gobain is consistent in terms of delivery. On the first one, on the...
Yeah, sure. PPA is excluded, but EBITDA includes the non-operating costs, restructuring costs, etc., so that enables to have a clear view of the operating performance.
Harry Goode on the left, please.
Thank you. Yeah, Harry Goode from Berenberg. I have another question on distribution, please. I think you've spoken in the past of one of the benefits of distribution assets is the benefits it brings to the product offering. Can you give us a little bit more color on what you actually mean by that? Are we talking market share? Are we talking margins? The supplementary is, you know, does every distribution asset you own fit that criteria today? Thank you.
I think you heard from Thierry Bernard what we do in France in terms of overall outperformance, leveraging everything. It's an integrated business from building science to manufacturing to distribution to digital services to the craftsmen to recycling services. Maybe you had a chance to interact with Nicolas Gaudé, our head of POINT.P, but we do all this together in France, and we clearly outperform the market across the board. After that, as we have done in the last five, six years, again, country by country, and it's true for any business line of Saint-Gobain in any country. Years ago, it was in 2020, we sold glass in Korea. We have sold a lot of glass solution businesses, so there is no taboo to sell a glass business.
There is no taboo to sell a distribution business like we did last week in Benelux because we had a low market share, therefore not adding to the rest of our construction chemicals, interior solutions in Benelux. That's the way we look country by country at every single product line, whether they add to each other, whether the connected product lines make the perfect suite of solutions or not. If not, we sell. That's what we have been doing. Distribution is part of it. In France, we are six x bigger than the second player, so we beat them not only on growth, but also on margin, and it's overall beneficial for Saint-Gobain, including on our manufacturing businesses. That's the way we look at it. It's true today. Will it be true in 10 years, in 5 years?
We are super pragmatic to constantly assess that, but in France, I'm very, very confident that we truly outperform the market and we own the space thanks to all that.
One question here from Alison Sentis.
Hi, good afternoon, Alison from Bank of America. Just one question from my side. Your missing goal digit sales growth target, can you quantify or maybe roughly what's a split between organic versus merger acquisition impact? Thank you.
As I said, we expect 1% of acquisitions and the rest will be organic. Keeping in mind that we have delivered on the low side of that in the last years, mostly on price, if not anything to a price. We expect the pricing environment to normalize. That's what we are seeing as we speak. Therefore, acceleration on volumes. 1% on M&A and the rest on organic.
Question at the top of the room, Will Jones, please.
Thanks, yeah, Will Jones from Redburn. The first was just back on construction chemicals and probably really an extension of the previous questions, but are there any particular product areas you'd highlight to us where you're really underweight, where you want to be, and do any of those products lend themselves more to the solutions approach than others? The second was maybe if you could just update us on the annual efficiency program, how you're feeling about your overhead ratios generally. Do you still see good opportunities on world-class manufacturing? Is it still the target to broadly offset overhead inflation overall?
On construction chemicals, yes, we have been moving a lot on all the technical aspects and applications of construction chemicals. Technical waterproofing is of interest for us, notably for non-residential and infrastructure. We have ample opportunities still on mixtures and additives in some Latin America, in some Asia, in Canada, as I said. There is a space of adhesives where we are EUR 300 million, EUR 400 million of adhesives, a bit in China, a bit in Southeast Asia, a bit in Brazil. That's one space where if and when there is the right opportunity, we could grow. It works well together in terms of bonding, in terms of filling, in terms of we sell a lot of that through some of our merchanting arms in France.
That's one space within the whole construction chemicals portfolio where today we are almost non-represented, where if and when it makes sense with the right value creation, etc., we could have meaningful synergies. In principle, it's a lot around concrete repair, tunnels, high-end applications, bridges, technical waterproofing, and then the additives and concrete and mixtures. On the annual savings, yes, we are constantly working on efficiency within Saint-Gobain. I think it's not easy to compare apple to apple if you were to look at Saint-Gobain 10 years ago versus today because the mix of businesses has changed. When you sell towards specification-driven sales, non-residential infrastructure, you have those technical teams. You tend to sell more added value products, higher margin, but a bit more SG&A. Of course, we make sure it's not too much and we streamline all this.
We have ongoing actions everywhere it's needed because of the volumes or the current environment to drop headcount. I think I mentioned that, but I don't want to make the highlights. In the last three years in Europe, we dropped more than 4,000 heads. It has been meaningful to adapt versus the difficult volume environment. We constantly work on that on the SG&A. When we regionalized all the organization, 100%, of course, the former High-Performance Solutions businesses, all their back offices are getting merged within the different countries. That's a source of benefits. We will continue to drive all the world-class manufacturing actions to benchmark the plants, make sure that we optimize the CapEx. Maintenance CapEx has been dropped in the last five, six years, and we'll continue to have all these efficiency programs around the world.
It is a great way for a great source of synergies when you do acquisitions. If you look at CSR, one of the big areas of synergies is actually implementing within CSR all our WCM programs that just deliver great savings in terms of manufacturing savings and better efficiency on the market. It is also enhancing our M&A strategy.
Glinis.
Any further question in the room?
No, Glynis has one.
Emmerich Mele in front.
Oh, Glinis had already said that.
Oh, Glynis, sorry. Yes, Glynis. And then Emmerich.
I've got a strong thinking at Jeffries. A question in Europe, actually, I'm surprised no one's asked you. Just in terms of your margin, your target is 12%- 15%. You're currently at 12%. How do we think about that uptick? Is it about, or how much is the recovery? How much is potentially taking at cost? Now you've integrated the HPS into Europe. How much is mix?
You are talking specifically about Europe, sorry, because...
Europe is the target.
As David Mollo and Thierry Bernard mentioned, we are very lean in Europe because we have done all those cost savings actions. A lot of the margin improvement will come from the operating leverage, stay very lean and very sharp on cost and benefiting from the volume recovery that we start to see and that we expect in the coming years. That's the bulk of the margin improvement coming for Europe without any particular M&A. It's mostly organic operating leverage from volume recovery.
Next question, the second row, Emmerich Mele please.
Thank you very much for the presentation. Just a clarification question on the $250 million restructuring costs. Is it within the EBITDA margin or is it below the EBITDA margin?
It's within the EBITDA margin, yes. Thank you.
Any further questions from the room? Ephrem Ravi on the left, please.
Yeah, sorry, a follow-up question. Solution strategy, you give a very useful framework on cross-selling, up-selling, services, and specifications. You give examples of improvements. If you were to kind of try to calculate it for the group as a whole, would you say those examples are at the top end of what you can achieve? Can we consider that as representative of what you can achieve? For example, you said 50% of Germany is solutions or thereabouts, and then say cross-selling can double sales 8%.
We have been ramping up this solution journey. There is much more to come across all end markets. I highlighted to you the countries which are already best in class in one of the three metrics. Of course, sometimes they are not best in class in every single one of them. The goal is to raise the bar for everyone on the three metrics. I'm confident that, and it's not only in the next five years, on this solution journey, which is again truly what customers expect. I see now a lot of competitors jumping into that. They don't have the same breadth of offer, and we started five, six years ago. It's truly a journey that will capture value growth for Saint-Gobain for multiple years to come, for the next 10 years. It's something which is meaningful, and we are only at the beginning of that journey.
When North America is at 61% cross-selling, to be extremely precise, why not 62% and 65%? Why not increase even more our share with a DIY partner? That's something we'll continue to push across those three metrics, country by country.
If you are tracking it on a regular basis, country by country, is it a way to kind of incorporate in your targets? For example, you've put the chart as a conceptual chart as to how much solution selling can increase your margins by. For, you know, for self-ad analysts, spoon feeding would be useful on exactly how much that you expect from that.
Unless you want to join Saint-Gobain, I consider it's my job to drive this metric. We are doing it. It's in the incentives of the country's CEOs. What is important for you is that you see this impact on the financials of Saint-Gobain. After that, I think I consider with humility that it's my job to push the CEO in Italy versus the CEO of Spain and to know how to drive it country by country, application by application.
Is there any further question in the room? Otherwise, we shall turn to the internet.
You will post the question on the screen, Vivien, and maybe I read them. A question from Paul Roger from Exxon. Are there opportunities to do more deals in U.S. construction products, or does your market position cap M&A in this market? No, the answer is yes. There are opportunities for more deals, not only in the commercial space and infrastructure markets, where again we are not yet a very large player, but also in residential. You know, when you add the GCP membrane with the underlayment of roofing that Carmen Bodden mentioned, that came from an acquisition, and it's a perfect system sale. Yes, there are opportunities, and I know Mark is ambitious and eager to grow in the U.S. going forward. We have the teams, we have the platforms, we have the know-how, we have the brand reputation, and we have the ask also from the large distributors.
I meet with them, Mark meets with them very regularly. I meet with the top of them at least once a year, and they ask us to help them grow because they need national players. When we invested $7 billion in the U.S. in the last five years, they know we are committed to grow in North America, and that's the kind of magnitude they need for them to grow successfully across the region. Yes, that's an area for opportunity going forward, Paul. A second question from Paul Roger from Exxon. Does a new player entering the U.S. shingles market pose a risk to record high margins in this business? I think Mark highlighted it very clearly, and maybe Mark could complement, but you need to be a meaningful player. We have 20 roofing plants in North America. Adding one plant in the middle of nowhere, sorry for my U.S.
colleagues, in Oklahoma or in Kansas City, the big distributors, they have already three brands on roofing. They don't need a fourth one or a fifth one for just 50 branches around Kansas City or around a city in Oklahoma. They need meaningful national players. There is no risk that we expect from any new player that could come to the market. Maybe back to the question that Seda asked also, there is no new capacity addition before late 2026, early 2027 from existing players in roofing in North America.
If there is a new one coming with one plant in one state, okay, we will see, good luck, but it's not an ask from the current distributors as long as we invest on our side to new products, competitive state-of-the-art facilities, and that's the best loyalty partnership that you can create when you ask those big distributors to visit what you have invested in Peachtree City or in Oxford, Carolina. That's the commitment we take to them and they take to us. Matthias Volkert from DT Bank. What gives you the confidence to clone Brazil's success into other different Latin regional markets? First, I have to be extremely cautious because I'm not sure that Marco Corrales would like to be a clone of Brazil. Marco Corrales is a Mexican manager, and you know, they are proud, and they should be. We have already done that in multiple countries.
Camille didn't present to you Argentina, where we have all the platform across the board and number one position, Peru, Chile, where we do it with some partners. We are confident because we have the right people. We have Mariano Bull in Argentina. We have Marco Corrales in Mexico. We have Nicolas, who is Peruvian, in Peru. We know all those product lines. We have the teams. We have some leading position. In low execution, we roll it out like we did in Brazil in the past, in India as a success, in the Middle East recently, in Mexico, from glass to gypsum to construction chemicals. Those family businesses that we buy, they're happy to join us because of Marco Corrales, because of five years of discussion, because of local decision-making process, local for local, making the world a better home in Mexico with Mexican teams for Mexican customers.
It's not a clone, but because we adapt, we are smart in each market. Yes, I'm extremely confident. That's for you, shareholders, again, a low execution risk for Saint-Gobain because we know how to do it. All the teams, maybe I should have highlighted that even more, our teams, country by country, they have been tested. They have been tested in a not-so-easy environment in the last years, and they have proven that they deliver. Martin Bensing from Balchiani. What kind of insulation do you sell into data centers? The technical insulation and sandwich panels all need to be fire-safe. Is it all stonewool? A good majority of sandwich panels is indeed stonewool that we manufacture. We manufacture the stone wool and also in some countries, the sandwich panels. We have also some elastomeric foam for pipes. We have also some glass wool insulation in the U.S.
It varies depending on the different markets and the different specs. Yes, we have the full spectrum of insulation offer for data centers if it's specific to insulation. The next one.
We have no further questions.
Any additional last-minute questions from the room? If not, thank you. Again, I'm extremely confident about the way forward for Saint-Gobain. We have an ambition growth plan. We are rolling out things we know well, our solutions, and we give you a lot of granularity on the solutions, on the product lines, on what it means delivering solutions on the ground. We have this fantastic avenue for market share gain and growth on non-residential and infrastructure markets. We are going to stay dynamic on the sales rotation, on the portfolio rotation. You know that we have done it. We are committed to do it. There is no taboo. Execution is key, and value creation on that is key.
At the end of the day, the delivery of Saint-Gobain is done by fantastic country platforms, fantastic CEOs led by the five regional CEOs that I think highlighted a lot of impressive thoughts, experience, and credentials. I have every confidence that lead and grow will be a fantastic, exciting, successful new journey for Saint-GobaiCompanyn. Thank you very much. Safe to be back, and thank you for your attention and your time.