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Strategic drivers for sustainable growth Sustainable differentiation through innovation and R&D

SUSTAINABLE DIFFERENTIATION 3. THROUGH INNOVATION AND R&D

Innovation as a pillar of the Group’s strategy 3.1 Research and Innovation are integral to Saint-Gobain’s strategy and key to increasing the share of sales of high value-added products and solutions in the most buoyant sectors. R&D programs that anticipate the 3.1.1 trends of tomorrow

Inventing innovative and high-performance products and solutions to improve construction and everyday life is integral to the Group’s strategy. It is a major responsibility and source of motivation for the Saint-Gobain research and development teams. These teams operate on the basis of individually managed projects. This method of operation allows it to conduct research and development activities with the greatest possible efficiency, assigning the appropriate resources and looking a long way upstream at considerations relating to markets, industrial property, production, respect for health and the environment. This organizational structure also means that Saint-Gobain can ensure a continuous flow of innovations, for market launch at the appropriate time. The main task of R&D is to provide active and proactive support for the Group’s numerous Activities through targeted research projects, yielding developments and innovations involving both processes and products or systems, thus strengthening the competitiveness of its Activities and serving Saint-Gobain’s current markets. New projects are initiated each year in every area, while others reach the point of production release or commercial launch. Its second task is to prepare the Group’s future through strategic, cross-functional R&D programs, by anticipating major changes in techniques and markets. These programs, linked to the focus areas for the marketing teams, allow Saint-Gobain to organize skills common to the Group’s various Activities and to improve its ability to develop key technologies.

Differentiation is one of the critical drivers of this strategy which is expressed at all stages of the value chain, from innovation and design of Saint-Gobain’s solutions in relation to its customers to the creation of tools and services. It specifically includes an ambitious approach to marketing aimed at better understanding, anticipating and formulating customer needs, supplemented by R&D developments directly involving these customers, to provide tailored solutions. R&D also contributes to improving industrial manufacturing processes, with regard to competitiveness, capability and environmental performance. R&D will continue its efforts in the next few years, in particular with regard to investments, to allow the Group to maintain and expand its leadership positions in its Activities and to maintain a high level of performance and operational excellence. In 2017, the Group invested €446 million in research and development, and 3,700 employees worked on nearly 900 research projects, resulting in applications for nearly 400 new patents. There is continued recognition for Saint-Gobain’s approach to innovation. For the seventh year running, Clarivate Analytics ranked Saint-Gobain among its Top 100 Global Innovators. Research and Development costs booked* (In EUR million ) 2014 395 2015 434 2016 438 2017 446

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