2 Strategy The action: a strategic plan based on six priorities SAINT-GOBAIN UNIVERSAL REGISTRATION DOCUMENT 2021 55 On the North American markets (10.8% of the Group’s revenue, with more than 16,000 employees and more than 60 plants), there is a structural demand for more housing, fueled by demographic trends and new end-user expectations, resulting in a current deficit of nearly four million housing units (1). This powerful, long-term trend has a very strong impact on the market, given that almost half of construction sales in the region concern light residential construction products and systems. The segment for the construction of a new single-family house, in which Saint-Gobain offers the largest range of systems (24 products and services in total) on the continent, is therefore of particular importance in the context of the Group’s “solutions-oriented” approach (see chapter 3, section 3.4.4). In a context of near full employment, this trend is leading to labor shortages for nearly 40% of employers in the sector, which greatly increases the demand and attractiveness of light, intuitive and easy-to-install construction solutions, thus enabling these companies to save time and improve their productivity. Saint-Gobain’s stated objective is to leverage its leading position in this key market (more than $5 billion in revenue for the Group in 2021) (2) to exploit its full growth potential, in particular by relying on the very strong recognition of its brands (CertainTeed is the preferred brand of builders and private individuals), or on the strengthening of its capacities in gypsum, with the acquisition of the Continental Building Products brand in 2020 (3). The acquisition of Chryso in 2021 is a significant step forward, enabling Saint-Gobain to consolidate its leading position in this region (see chapter 1, section 3.1). 42.5% between 2019 and 2021. The Group is continuing its development strategy to strengthen its positions on the continent, with the construction of a new plasterboard production line in Brazil, or with the acquisition of a leading player in the construction chemicals market in Mexico. In the Americas as a whole, for the period 2021-2025 the Group is targeting an increase of 4 to 6% in its organic growth and by 13 to 15% in its operating margin over the period. In Latin America (more than 13,000 Saint-Gobain employees and 55 plants in nine countries), demand is not weakening, particularly in the residential market for the middle classes, whether in terms of new construction or renovation, with increasing expectations regarding the decarbonization of the sector and more generally regarding responsible offerings: nearly the half of consumers on the continent are ready to pay a higher price in exchange for sustainable solutions (4). Thanks to the systematization of synergies throughout the region, and the commitment of the teams to the reorientation of the Group as a solution provider (notably through the consolidation of logistics flows, the creation of multi-brand sales teams, and the launch of integrated offers for vertical markets such as schools, hospitals and offices), Saint-Gobain continues to make strong progress on the continent, with estimated organic revenue growth of Asia-Pacific (more than 17,000 Saint-Gobain employees, with 72 plants in 11 countries), for its part, is particularly influenced by megatrends linked to demography (60% of the world population), urbanization (over 50% of the total population live in cities) and the average rise in living standards: the continent is now home to the largest middle class in the world. It is also a massively digitalized continent with a forecast for 2025 of nearly three billion mobile Internet users and an e-commerce market of two trillion dollars. In this demanding context of growth, in a region also marked by often difficult weather conditions (and in particular a high average humidity level), and by shortages of qualified labor, expectations regarding the construction market essentially focus on two elements: speed and quality of execution. In this market, the Group deploys its integrated solutions for the construction of new offices, as well as for individual or collective residential buildings, and on the digitalization of its offering. Operational excellence delivered by its teams (see chapter 3, section 3) maximizes its contribution to the creation of value for its customers (with, for example, a 76% reduction in installation time during construction, nearly 2,000 hours of on-site training provided, an average gain in luminosity of over 25% for office buildings) while reducing the impact on the entire value chain (nearly 14 kt of CO2 equivalent emission prevented over 50 years). In the case of India alone, the deployment of shared data collection and processing solutions, the creation of a strong digital resource platform (for example with 1,400 employees in the IT Department alone), and the opening of nearly 30 new plants between 2001 and 2021 (notably in China, with a new plasterboard plant, and in Malaysia, with its 28th plant in South-East Asia), have enabled Saint-Gobain to achieve brand awareness of nearly 70% and a market share of over 50% in glass and gypsum. The Group aims to achieve organic growth of 8 to 10% and an increase of 13 to 15% in its operating margin between 2021 and 2025 for the entire region. (1) Freddie Mac, 2021 report, https://www.freddiemac.com/perspectives/sam-khater/20210415-single-family-shortage. (2) On a rolling 12-month basis, calculated at the end of June 2021. (3) Saint-Gobain, Group press release, https://www.Saint-Gobain.com/sites/Saint-Gobain.com/files/20200130_continental_vf.pdf. (4) Nielsen, https://www.nielsen.com/wp-content/uploads/sites/3/2019/04/latam-pockets-of-growth-report-june-2017.pdf.
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