Saint Gobain - Registration document 2016

9 FINANCIAL AND ACCOUNTING INFORMATION 1. 2016 Consolidated Financial Statements

Performance indicators 3.4 EBITDA 3.4.1

Cash flow from operations 3.4.4

and deferred taxes. Cash flow from operations is adjusted for the effect of material non-recurring provision charges. from operating activities before the impact of changes in working capital requirements, changes in current taxes and changes in provisions for pensions and other employee benefit obligations as well as for other liabilities and charges Cash flow from operations corresponds to net cash generated losses and non-recurring provisions corresponds to cash flow from operations less the tax effect of asset disposals, asset impairment and non-recurring provisions. Cash flow from operations before tax on disposal gains and These amounts are calculated as follows: in 2016 (€2,562 million in 2015) and cash flow from operations excluding income tax on disposal gains and losses and non-recurring provisions from continuing operations amounted to €2,628 million in 2016 (€2,321 million in 2015). Cash flow from continuing operations totaled €2,749 million

intangible assets. and amortization of property, plant and equipment and EBITDA corresponds to operating income plus depreciation EBITDA amounted to €3,998 million in 2016 (€3,844 million in 2015), calculated as follows:

2016

2015

(in € millions)

Operating income

2,818

2,636

and equipment and intangible assets Depreciation/amortization of property, plant

1,180

1,208

EBITDA

3,998

3,844

3.4.2 Return on capital employed

and equipment, working capital, net goodwill and other intangible assets, but exclude deferred tax assets arising on non-amortizable brands and land. Return on capital employed (ROCE) corresponds to annualized operating income adjusted for changes in the scope of consolidation, expressed as a percentage of total assets at year-end. Total assets include net property, plant tax and minority interests. Recurring net income corresponds to income after tax and minority interests but before disposal gains or losses, asset impairment, material non-recurring provisions and the related Recurring net income from continuing operations totaled €1,398 million in 2016 (€1,165 million in 2015). Based on the weighted average number of shares outstanding at December 31 and 562,001,188 shares in 2015), recurring earnings per share amounted to €2.52 in 2016 and €2.07 in 2015. The difference between net income and recurring net income corresponds to the following items: (554,624,285 shares in 2016 Recurring net income 3.4.3

2016

2015

(in € millions)

GROUP SHARE OF NET INCOME FROM CONTINUING OPERATIONS

1,311

374

Minority interests in net income

41

43

Share in net income of equity-accounted companies, net of dividends received

(20)

(29)

Amortization and impairment of assets

1,369

2,085

Gains and losses on disposals of assets

2

70

other non-recurring provisions Changes in provision for anti-trust litigation and Unrealized gains and losses arising from changes in fair value and share-based payments CASH FLOW FROM OPERATIONS OF CONTINUING OPERATIONS Tax on disposal gains and losses, asset impairment and non-recurring charges to provisions CASH FLOW FROM OPERATIONS BEFORE TAX ON DISPOSAL GAINS AND LOSSES AND NON-RECURRING PROVISIONS OF CONTINUING OPERATIONS

4

34

42

(15)

2,749

2,562

(121)

(241)

2,628

2,321

2016

2015

(in € millions)

Working capital 3.5 Inventories 3.5.1

GROUP SHARE OF NET INCOME FROM CONTINUING OPERATIONS Less: Gains and losses on disposals of assets Impairment of assets and acquisition fees incurred in connection with business

1,311

374

(2)

(70)

include the transfer from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of raw materials. Net realizable value is the selling price in the ordinary course of business, less estimated completion and weighted-average cost method, and in some cases the First-In-First-Out (FIFO) method. Inventory costs may also condition. Cost is generally determined using the Inventories are stated at the lower of cost and net realizable value. The cost of inventories includes purchase costs (net of supplier discounts), processing costs and other costs incurred in bringing the inventories to their present location and selling costs. No account is taken in the inventory valuation process of the impact of below-normal capacity utilization rates.

combinations

(201)

(928)

Changes in provision for anti-trust litigation and other non-recurring provisions

(4)

(34)

Impact of minority interests

(1)

0

Tax on disposal gains and losses, asset impairment and non-recurring charges to provisions GROUP SHARE OF RECURRING NET INCOME FROM CONTINUING OPERATIONS

121

241

9

1,398

1,165

219

SAINT-GOBAIN - REGISTRATION DOCUMENT 2016