Saint-Gobain // Universal Registration Document 2021

Financial and accounting information Compagnie de Saint-Gobain 2021 annual financial statements (parent company)

Where appropriate, a provision for contingencies and charges is recognized in respect of these plans, corresponding to the outflow of resources expected by the Company. This is calculated based on the number of shares likely to be delivered to the beneficiaries and the acquisition cost of the shares at the date they are allocated to the plan or the likely cost of repurchasing the shares as measured at the reporting date. The provision is recognized on a pro rata basis over the vesting period. Receivables Receivables are stated at nominal value. A provision is set aside for impairment when their realizable value is less than their book value. Marketable securities Marketable securities mainly include units in money market funds (OPCVM and FCP) and are stated at the lower of acquisition cost and market value at year-end. Treasury shares other than those classified as financial investments are also classified as marketable securities (see “Treasury shares” above). Foreign currency transactions Income and expenses in foreign currencies are recorded at the euro exchange rate prevailing on the transaction date. Receivables, payables and bank balances in foreign currencies are translated at the year-end exchange rate, along with the related hedging instruments, and differences arising on translation are recorded under translation gains or losses. Provisions are booked for any exceptional unrealized translation losses that are not hedged. Risk management/Financial instruments Liquidity risk is managed with the main objective of ensuring the timely rollover of the Group’s financing at an optimal cost. Long-term debt therefore systematically represents a high proportion 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. Currency, interest rate and commodity (energy and raw material price) risks arising from the Group’s international operations are hedged by Compagnie de Saint-Gobain, mainly on behalf of subsidiaries. Currency risk is primarily hedged through forward purchase and sale contracts and currency options, while interest rate risk is hedged mainly through swaps and cross-currency swaps. Compagnie de Saint-Gobain applies regulation no. 2015-05 of July 2, 2015 issued by the French accounting standards-setter ( Autorité des normes comptables – ANC) on forward financial instruments and hedging operations. Pension obligations The Company’s obligations under supplementary pension plans and retirement bonuses are measured by independent actuaries using the projected unit credit method (based on final salary and benefit obligations as determined at the measurement date). Pension obligations are included within provisions for contingencies and charges. Actuarial gains and losses arising in the year under defined-benefit retirement plans are recognized immediately and in full in the income statement. Tax consolidation agreements Compagnie de Saint-Gobain is the parent company of a tax consolidation group under the group relief regime provided for in Articles 223 A et seq. of the French Tax Code. The tax consolidation agreements between Compagnie de Saint-Gobain and its subsidiaries provide for tax neutrality for consolidated subsidiaries. In their relationship with Compagnie de Saint-Gobain, the consolidating parent company, the subsidiaries discharge their taxes as if they had been taxed on a stand-alone basis. When loss-making companies leave the Group, they are not, in principle, entitled to any payments for losses transferred to the consolidating parent company during the consolidation period.

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Operating income/(loss) NOTE 2

The operating loss improved by €19 million compared to 2020, due mainly to a reduction in pension and other employee benefit costs.

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