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7
RISKS AND CONTROL
1. Risk factors
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growth in sales of the products manufactured using the rights
proceedings may give rise to significant costs and hamper
develop other technologies that do not use the disputed
concerned, or force the Group to incur additional expenses to
parties suspected of breaching its rights. Any such
The Group may be forced to take legal action against third
technology.
supply of raw materials
Risks associated with the cost and
1.1.5
market conditions and practices. If the Group’s ability to
increases to its customers depends to a large extent on
immediately and/or fully pass on increases in raw materials
of energy, may be affected by a significant increase in prices
The Group’s businesses, some of which are heavy consumers
energy (such as natural gas). Its ability to pass on these cost
and difficulties in obtaining a supply of raw materials and/or
adverse effect on its businesses, financial position or results.
and/or energy costs were limited, this could have a material
Industrial and environmental risks
1.1.6
present or future industrial sites.
to environmental liabilities as a result of its operation of past,
The Group could incur significant expenses and be exposed
The industrial and environmental risks arising from the
certain hazardous substances.
operation of some sites primarily relate to the storage of
As at December 31, 2016, three sites were classified under
regulations and close supervision by the competent
“Seveso III”. These industrial sites are subject to specific
Department.
authorities and the Group’s Environment, Health and Safety
hazards involving dangerous substances, known as
Directive 2012/18/EU on the control of major-accident
Seveso III Directive: the Balsta (Gypsum) in Sweden, which
One of these facilities is classified as “lower-tier” under the
“upper-tier”: Bagneaux-sur-Loing (Flat Glass) in France, which
stores liquid natural gas. Two other facilities are classified as
stores arsenic (AS2O3) and Carrascal del Río (Flat Glass) in
(HF).
Spain, which stores, among other things, hydrofluoric acid
potential impact on the environment, preventive measures
listed above. After identifying accident risks and their
were implemented at these facilities, covering the design and
of technological and natural risks and the remediation of
In France, under the Law of July 30, 2003 on the prevention
policies have been implemented at all of the French sites
contaminated sites, specific risk prevention and safety
compensation payments to victims would be organized
facility. In the event of a technological accident,
the current Group civil liability insurance program, except for
may arise by accident from plant operations are covered by
specific policy subscribed by the joint venture operating the
the Bagneaux-sur-Loing plant, which is insured under a
they are used and maintained. Internal contingency plans
construction of storage areas, as well as the manner in which
consequences of personal injury and damage to property that
have been developed to respond to incidents. The financial
insurer.
jointly by the joint venture, the insurance broker and the
installations as defined by Directive 2010/75/EU on industrial
environment. 70 Group sites are classified as “IED”
and control regulations.
emissions, and are subject to integrated pollution prevention
The Saint-Gobain Group also has to deal with risks relating to
expenses to restore industrial sites or clean up the
chronic pollution, and could therefore be required to incur
Breach of these regulations could result in fines or other civil,
question to continue operations.
withdrawal of permits and licenses needed for the activities in
administrative or criminal penalties, specifically the
expenses and/or investments.
chapter 7) could cause the Group to incur significant
Lastly, changes in environmental regulations, including their
sections 2.3.2 c) and 2.3.6 of chapter 4 and section 3 of
interpretation, and consideration of climate change risks (see
Risks associated with external growth
1.1.7
The Group’s strategy is based, in part, on external growth, in
integration of the activities of the acquired companies, and
depend, in part, on the realization of expected synergies and
on relationships with other participants in the joint ventures.
be able to identify attractive targets or enter into transactions
establish or strengthen itself. The Group may, however, not
expected benefits of these external growth operations
at the optimal time and/or under satisfactory conditions. The
particular by acquiring businesses or assets, taking equity
lines and in geographic regions where the Group seeks to
interests or establishing joint ventures in the Group’s business
if not fulfilled within the expected timeframes and at the
The Group gives no guarantees as to these objectives, which,
results and outlook.
expected levels, could affect the Group’s financial position,
systems
Risks associated with information
1.1.8
the proper functioning of all technical infrastructure and
processes, particularly in its Distribution activities, requires
conduct of its commercial, industrial and accounting
Daily management of the Group’s activities, specifically the
computer applications. The risk of system malfunction or
(computer viruses or hacking, service providers’ defaults,
shutdown, which may be external or internal in origin
error, etc.) cannot be underestimated.
blackouts or network shutdowns, natural disasters, human