SAINT_GOBAIN_REGISTRATION_DOCUMENT_2017

3

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

In 2017, the Construction Products Sector continued its teams to develop appropriate products and solutions, which development of R&D projects for wellbeing in buildings by may then be rolled out to other geographic areas.

covering a number of areas (acoustic insulation, air quality, visual appeal, environmental sustainability, and recycling) with the aim of providing even easier installation for its trade customers and greater everyday comfort for end users. Its approach to innovation is based on identifying local needs, followed by collaboration between local and worldwide R&D

The Building Distribution Sector has relied on the research teams for a number of years for matters to do with optimizing logistics, processing sales data and for developing new digital services. In 2017, these teams were involved in supporting the development of the Homly You intermediation platform.

An open approach to innovation 3.2 Saint-Gobain’s development strategy and the gradual transformation taking place in the construction markets place the Group in an outward-looking position of attentiveness to its customers’ needs. To respond to current needs and anticipate future needs, Saint-Gobain is very open to a culture of partnership and co-development.

life sciences; „ advanced materials and processing. „

In addition to that approach, the Group has created a partnership arrangement with the world of start-ups. All around the world, notably in Europe, the US, Brazil and China, official partnership agreements were signed with start-up incubators providing the Group’s Activities with direct access to start-ups offering innovative services, either to direct clients, or more generally to relevant ecosystems (construction, automotive, civil engineering, healthcare, etc.). This open innovation program also provides the opportunity to share the Group’s missions and issues with an audience of entrepreneurs and future professionals. Business challenges were organized to further refine this approach, taking the form of competitions involving start-ups and/or teams of students looking at a well-defined market issue. Partnerships with start-up incubators, and business challenges, are set to become more prevalent in the Group’s main countries over the next few years. The Saint-Gobain Business Challenge Launched in 2016, this competition takes place in four countries and is expected to be extended in 2018. It involves inviting start-ups (and, in some countries, students) to find solutions, especially digital solutions, to a situation that is problematic for the Group’s customers. The theme for France in 2017 was “How can we support building professionals in their renovation work?” Fifty-six start-up teams and 115 teams of students from 91 business, engineering and software engineering schools took part in this second edition. In the USA, Saint-Gobain thus extended its partnership up to 2019 with Greentown Labs, the largest start-up incubator on the continent specializing in clean technologies. In Brazil, Saint-Gobain has formed part of the Cubo Coworking incubator of the Brazilian bank Itaú since 2016 and is increasing partnerships with an ecosystem of more than 400 start-ups. In China, Saint-Gobain inaugurated its Open Innovation Projects Incubator in 2017, situated on the premises of the Shanghai Innovation Park. Saint-Gobain has also pursued its policy of developing innovation through SUN, its international network of universities. These long-term academic collaborations provide it with access to the most recent scientific progress in the fields of interest to the Group and to a breeding ground of young talent.

Attentiveness to customer needs 3.2.1 First and foremost, innovation at Saint-Gobain involves customer attentiveness. Such attentiveness is crucial for: understanding their needs and the challenges they face, so „ as to develop appropriate solutions with them and for them; evaluating their level of satisfaction, and the areas where „ improvements are needed to provide better service, remain competitive, etc. These two approaches are both separate and complementary. Various methodologies are used today to better tap into customers’ desires and requirements. Over the last few years, the Performance Plastics Activity has been using a methodology based on structured interviews: the new blue printing opportunity. The cross-sectional research centers incorporate industrial designers and sociologists into their teams, which allows these approaches to be adopted. Open innovation 3.2.2 For many years, Saint-Gobain has implemented an External Venturing unit, named NOVA with the objective of create partnership with start-ups. Since its creation, NOVA has already studied 3,400 start-ups and signed more than 80 partnerships. To accelerate again the process of identification of potential partnerships with the more innovative start-ups, NOVA team has defined a new approach in focusing the evaluations on strategic and transversal topics: Multi-Comfort and energy efficiency; „ virtual and augmented reality; „ digital customer journey; „ sensors and connected objects; „ exoskeletons and robotics; „

60 SAINT-GOBAIN - REGISTRATION DOCUMENT 2017