Saint-Gobain // Universal Registration Document 2021

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Risks and control Risk factors

Risk factors 1. The Saint-Gobain Group conducts its affairs in a constantly evolving environment. It is therefore exposed to risks, the occurrence of which could have a material adverse effect on its businesses, financial position, results and outlook. This chapter presents the main risks to which the Group believes it is exposed, as of the date of this Universal Registration Document. Due to the Group’s multiple geographic locations, the diversity of its markets and product ranges, as well as its development, the Saint-Gobain Group is exposed to different categories of risks. Pursuant to the provisions of Article 16 of Regulation (EU) 2017/1129 of the European Parliament and of the Council, the most important risk factors (identified with an asterisk), at the date of this 1.1.1 Most of the Group’s markets are cyclical in nature. A significant portion of the Group’s activities are linked to investment in the construction sector, namely the renovation (46 % (1) of 2021 sales), new residential construction (22 % (1) of 2021 sales) and non-residential construction (12 % (1) of 2021 sales) markets, which generally follow the cyclical nature of the economic climate. Consequently, the Group’s results are sensitive to the macroeconomic conditions of the geographic zones, both at regional and local levels, where the Group is active. Since the Group is established in 75 countries around the world (particularly in Northern Europe, Southern Europe, the Middle East, Sub-Saharan Africa, North America, Latin America and Asia-Pacific), a deterioration in the global economic environment due, for example, to a severe economic downturn or a major recession in any of these geographic regions is likely to have a negative impact on the consumption of the Group’s products in the regions concerned, which could have a material adverse effect on the Group’s sales, results, free cash-flow generation and outlook. international activities* The Group is active worldwide, including outside Western Europe and North America. It is present in particular in Eastern Europe, the Middle East, Africa, Asia-Pacific, and Latin America, particularly in Brazil. About 21 % of the Group’s consolidated sales were generated in these areas in 2021. Generally speaking, the Group’s activities in these regions carry higher risks than in Western European countries and North America, due to the existence of greater economic and political instability, as well as greater exposure to social and infrastructure disruptions than in more mature markets. Thus, the direct and indirect consequences of political instability or of an unstable economic or regulatory 1.1 Risks related to economic cycles* Risks related to the Group’s 1.1.2

Universal Registration Document, are mentioned in the first place within each of the risk categories mentioned below, in line with an evaluation based on their impact and likelihood. Saint-Gobain’s evaluation of the impact of the risks may be modified at any time, particularly if new internal or external events occur. It should be noted that there are other risks which may exist or arise, of which the Group is not aware as of the date of this Universal Registration Document, or the occurrence of which has not been considered as of that date as being likely to have a material adverse effect on the Group, its businesses, financial position, results and outlook.

Risks specific to the Group and its business sector

environment in which the Group operates, in a country in which the Group is active or markets its products, could have a material adverse impact on investment levels in that country’s construction sector, and consequently on the Group’s businesses, financial position, results or outlook. In this respect, the conflict between Russia and Ukraine, which is a factor of economic uncertainty likely to affect economic activity and world trade, may have an adverse effect on the Group's activities even though the Group's economic exposure to Russia is not significant (approximately 0.5% of the Group's consolidated sales in 2021 and approximately 1,850 employees, including approximately 1,000 in the Group's eight plants). In addition, whilst the consequences of the current Covid-19 pandemic on the Group’s results were strongly mitigated from the second half of 2020 (see press release of February 25, 2021), with the operating income reaching a record level of €2,376 million in the first half of 2021, the implementation, in the context of new waves of the pandemic, of new restrictive measures, could lead to further economic slowdowns in the markets in which the Group operates, or affect global production chains, local supply or transport, or more generally could affect the global economy again. This could have an adverse impact on the Group’s financial position, results or outlook (see Chapter 4, Section 1.5). However, most of the Group’s activities are local, with products manufactured and sold locally, and largely local sourcing. Moreover, legal or regulatory changes applicable to the Group’s activities (involving, among other things, taxation, restrictions on capital transfers, customs duties, intellectual property and import and export licenses, the employment system or health, safety or the environment) could significantly increase the Group’s costs in the various countries in which it is active, or limit its ability to freely transfer its capital, and consequently have a material adverse impact on its businesses, financial position, results and outlook.

(1) Saint-Gobain end-market estimate.

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