Saint-Gobain // Universal Registration Document 2021

Financial and accounting information 2021 Consolidated Financial Statements

Other contingent liabilities 9.2.4 Grenfell Tower fire in the United Kingdom

Limited (which respectively held the Celotex business until or after December 31, 2015) and a number of other defendants – who are also core participants in the Public Inquiry – have been issued and are stayed prior to the service of full pleadings. No figure has yet been put on the quantum claimed. The extent to which Celotex may incur civil or criminal liability in connection with the production, marketing, supply or use of its products is currently unclear and Celotex Limited and Saint-Gobain Construction Products UK are currently unable to make a reliable estimate of their potential liability in this respect. Other proceedings and disputes 9.2.5 Some of the Group’s companies may also be the subject of other claims made by their employees or by the tax authorities, or in the context of the enforcement of seller’s warranties granted by the Group to the buyers of divested businesses (see note 5.5.2). Apart from the proceedings and litigation described above, to the best of the Company’s knowledge, no other government, court or arbitration proceedings exist (including pending proceedings or proceedings where the Company and/or the Group might be threatened) which could have or have had, in the last 12 months, a significant impact on the financial position or profitability of the Company and/or Group. Short-term debt is composed of borrowings under Negotiable European Commercial Paper (NEU CP), and occasionally Euro Commercial Paper and US Commercial Paper, but also includes receivables securitization programs and bank financing. The Group also has factoring programs. Financial assets comprise marketable securities and cash and cash equivalents. Compagnie de Saint-Gobain’s liquidity position is secured by confirmed syndicated lines of credit. A breakdown of long- and short-term debt by type and maturity is provided in note 10.3, which also details the main characteristics of the Group’s financing programs and confirmed credit lines. Saint-Gobain’s long-term debt issues have been rated BBB with a stable outlook by Standard & Poor’s since April 30, 2014 and Baa2 with a stable outlook by Moody’s since June 2, 2014. There is no guarantee that the Company will be in a position to maintain its credit risk ratings at current levels. Any deterioration in the Group’s credit risk rating could limit its capacity to raise funds and could lead to higher rates of interest on future borrowings. 10.1.1.2 Liquidity risk on investments Short-term investments consist of bank deposits and mutual fund units. To reduce liquidity and high volatility risks, the Group invests in money market funds and/or bonds whenever possible.

Celotex provides insulation materials for specific applications for the building and construction industry. Insulation materials from two Celotex ranges were purchased via distributors and used in refurbishing Grenfell Tower, London in 2015/2016, including as one component of the rainscreen cladding system designed and installed (by third parties) on the tower’s external facade. Following the Grenfell Tower fire on June 14, 2017, a Public Inquiry is underway, which is considering, among other things, the modifications made to the building as part of the refurbishment, the role played by the various construction professionals, and the information provided by the manufacturers of the products used. The Inquiry is conducting its work in two phases: its phase 1 report was published on October 30, 2019, phase 2 commenced in January 2020 – public hearings are expected to continue until July 2022, with a final report to follow some time thereafter. A criminal investigation into the circumstances of the fire is also in progress. There are a large number of issues and circumstances that need to be explored and the implications for Celotex are unlikely to be known for some time. Civil proceedings in connection with Grenfell Tower brought against Celotex Limited and/or Saint-Gobain Construction Products UK In a crisis environment, the Group might be unable to raise the financing or refinancing needed to cover its investment plans on the credit or capital markets, or to obtain such financing or refinancing on acceptable terms. The Group’s overall exposure to liquidity risk on its net debt is managed by the Treasury and Financing Department of Compagnie de Saint-Gobain, the Group’s parent company. The subsidiaries generally enter into short- or long-term financing arrangements with Compagnie de Saint-Gobain or with the regional cash pools. The Group’s policy is to ensure that the Group’s financing will be rolled over at maturity and to optimize borrowing costs. Long-term debt therefore systematically represents a high percentage of overall debt. At the same time, the maturity schedules of long-term debt are set in such a way that replacement capital market issues are spread over time. The Group’s main source of long-term financing is constituted by bonds, which are generally issued under the Medium Term Notes program. The Group also uses lease financing, perpetual bonds, participating securities, a long-term securitization program and bank borrowings. Financial risks 10.1 Liquidity risk 10.1.1 10.1.1.1 Liquidity risk on financing

Financing and financial instruments NOTE 10

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