Strength. Performance. Passion. © 2013 Holcim Bellevue Seminar 2013 – ROIC: Past - Present - Future Thomas Aebischer, CFO Holcim Ltd Bellevue meets Management Seminar January 2013 © 2013 Holcim © 2013 Holcim Agenda 2 Assessing our strategy and asset portfolio 7 The first eight months of the Holcim Leadership Journey 15 Identifying and capturing growth globally 20 ROIC: Past, Present, Future 24 Focus on safety and sustainability 3 Bellevue meets Management Seminar January 2013 © 2013 Holcim Safety is our first priority • Lost-Time Injury Frequency Rate (LTIFR) for own employees has dropped to 1.6 in 2011 • Puts us amongst the top per- formers in the industry for LTIFR • LTIFR YTD June 2012 was 1.4 which is within our current target of 1.5 • Aim to improve even further – Target: <1 by 2013 3 LTIFR 0 2 4 6 8 10 2004 2005 2006 2007 2008 2009 2010 2011 30. Sep 12 Actual Target 2010 Target 2012 Target 2013 Bellevue meets Management Seminar January 2013 © 2013 Holcim Broader stakeholder perspective: Sustainable Development (SD) is our “license to operate” Vision Our vision is to provide foundations for society's future Mission Our mission is to be the world's most respected and attractive company in our industry – creating value for all our stakeholders  Member of World Business Council for Sustainable Development (WBCSD)  Selected as an index component for the Dow Jones Sustainability World Index and the European Dow Jones STOXX Sustainability Index for seven years Creation of Value Mindsets Strategy Goal Base Product Focus Geographic Diversification Local Management Global Standards People Better Cost Management Permanent Marketing Innovation Human Resources Excellence Corporate Social Responsibility Sustainable Environmental Performance Creation of Value Mindsets Strategy Goal Base Product Focus Geographic Diversification Local Management Global Standards People Better Cost Management Permanent Marketing Innovation Human Resources Excellence Corporate Social Responsibility Sustainable Environmental Performance Triple bottom line Social progress Economic growth Environmental performance Holcim Strategy House Bellevue meets Management Seminar January 2013 4 © 2013 Holcim • 1990-2011:  2010 target reached ahead of schedule: net 1 CO2 emissions per tonne of cement down by 22% in 2011  Cement prod. increased 100% – absolute net CO2 by 55% • New target – 25% lower emissions per tonne of cement than 1990 baseline by 2015 Holcim met its CO 2 reduction target ahead of schedule – new ambitious target set for 2015 Specific CO 2 emissions (kg CO 2 / tonne cement Thermal substitution rate by alternative fuels (% of thermal energy from alternative fuels) Bellevue meets Management Seminar January 2013 5 © 2013 Holcim Agenda 6 Assessing our strategy and asset portfolio 7 The first eight months of the Holcim Leadership Journey 15 Identifying and capturing growth globally 20 ROIC: Past, Present, Future 24 Focus on safety and sustainability 3 Bellevue meets Management Seminar January 2013 © 2013 Holcim Building on a proven strategy… Creation of Value Mindsets Strategy Goal Base Product Focus Geographic Diversification Local Management Global Standards People Better Cost Management Permanent Marketing Innovation Human Resources Excellence Corporate Social Responsibility Sustainable Environmental Performance Bellevue meets Management Seminar January 2013 7 © 2013 Holcim …and increasing the focus on ROIC ROIC & HVA (Holcim Value Added) Outside view Market capitalization (incl. minority interests) + financial debt (Dividend paid + share price appreciation) / Share Price Company result after consideration of all costs of capital, incl. cost of equity Key operational indicator focused on cash-generation/ efficiency TSR (Total Shareholder Return) Op. EBITDA / Op. EBITDA - Margin ROIC & EV (Enterprise Value) - Credit Rating Internal view Value Creation Bellevue meets Management Seminar January 2013 8 © 2013 Holcim Sustainable growth through the execution of a 14.5 million tonne pipeline provides for cost leadership and returns Capital expansion investments (CHF m) Production capacity cement (mt) Bellevue meets Management Seminar January 2013 9 © 2013 Holcim Reported figures recorded significant currency fluctuations - total operating EBITDA impact of CHF 1.5 bn (2007- 9M 2012) Index at 100 (1.1.2007) Source: Datastream 10 -23% -25% -37% -1% -38% -36% Bellevue meets Management Seminar January 2013 [...]... and dividends payable Bellevue meets Management Seminar January 2013 © 2013 Holcim 13 Agenda Focus on safety and sustainability Assessing our strategy and asset portfolio The first eight months of the Holcim Leadership Journey Identifying and capturing growth globally ROIC: Past, Present, Future Bellevue meets Management Seminar January 2013 3 7 15 20 24 © 2013 Holcim 14 The Holcim Leadership Journey... 2012E 2013E 2014E 2015E 2016E Source: BMI Market Outlook, 2012 Bellevue meets Management Seminar January 2013 © 2013 Holcim 22 Agenda Focus on safety and sustainability Assessing our strategy and asset portfolio The first eight months of the Holcim Leadership Journey Identifying and capturing growth globally ROIC: Past, Present, Future Bellevue meets Management Seminar January 2013 3 7 15 20 24 © 2013 Holcim. .. Corresponds to a ROICBT of > 11.8% Bellevue meets Management Seminar January 2013 © 2013 Holcim 15 Driving ROIC based on strategy, people, execution ROIC* 2011 ROIC* 2014 Proven strategy < 8% Leadership Journey > 8% Dedicated people Building on competencies, focusing on execution * After tax Bellevue meets Management Seminar January 2013 © 2013 Holcim 16 Evolution of VALUE ADDED SOLUTION Differentiation... considerable increase of ROIC Bellevue meets Management Seminar January 2013 © 2013 Holcim 25 Conclusion • Holcim s strategy has proven successful in the past and will continue to do so going forward • The Holcim Leadership Journey will leverage the benefits of the strategy • Organizational changes at Holcim enable initiatives in the Holcim Leadership Journey • Discipline, incentive and performance management... Holcim 18 Agenda Focus on safety and sustainability Assessing our strategy and asset portfolio The first eight months of the Holcim Leadership Journey Identifying and capturing growth globally ROIC: Past, Present, Future Bellevue meets Management Seminar January 2013 3 7 15 20 24 © 2013 Holcim 19 Construction demand is linked to size and growth of GDP… Average Investment ratio (Investments / GDP) 40% 35%... February 27, 2013 Press and analyst conference on annual results for 2012 April 17, 2013 General meeting of shareholders Investor Relations Phone +41 58 858 87 87 Fax +41 58 858 80 09 investor.relations @holcim. com www .holcim. com/investors May 8, 2013 Results for the first quarter 2013 August 15, 2013 Half-year results for 2013 November 5, 2013 Press and analyst conference for the third quarter 2013 Mailing... improved returns • Holcim has high upside potential on cash flow generation and is well financed, with a balanced maturity profile, a strong cash position and access to a wide range of capital markets By 2014 Holcim will earn at least its ROICAT of 8%* based on its strategy, people and execution * Corresponds to a ROICBT of > 11.8% Bellevue meets Management Seminar January 2013 © 2013 Holcim 26 Contact... received, accrued interest payable and dividends payable Bellevue meets Management Seminar January 2013 © 2013 Holcim 24 Customer Excellence Internal Holcim Leadership Journey Growing ROIC through different levers Cost Leadership NWC improvement Selective divestments Investment efficiency External + ROIC Market growth Combining these three levers of growth Holcim is able to capture the market growth, the growth... development banks AUD 320 m bilateral loans Average interest rate of main financings concluded last 12 months: ~ 3.4% Bellevue meets Management Seminar January 2013 © 2013 Holcim 12 Holcim s ROIC has reached good levels on a pre-crisis level, while witnessing a softening thereafter ROIC before tax1: 16% 14.2% 14% 14.3% 14.6% 12.9% 12% 10.2% 10.2% 10% 9.1% 8.3% 8% 6.5% 6% 4% 2% 0% 2003 1 2004 2005 2006... concrete floors Holcim Canada offered the solutions for the Niagara Tunnel project in terms of innovative concrete types, the transportation and several additional process innovations – built to last for 100 years without maintenace Bellevue meets Management Seminar January 2013 Holcim Canada developed a special concrete for road repairs A high-early -strength concrete mix and the dedication of Holcim s crews . Strength. Performance. Passion. © 2013 Holcim Bellevue Seminar 2013 – ROIC: Past - Present - Future Thomas Aebischer, CFO Holcim Ltd Bellevue meets Management Seminar January 2013 © 2013. 20 ROIC: Past, Present, Future 24 Focus on safety and sustainability 3 Bellevue meets Management Seminar January 2013 © 2013 Holcim The Holcim Leadership Journey and its two pillars Holcim. Responsibility Sustainable Environmental Performance Bellevue meets Management Seminar January 2013 7 © 2013 Holcim …and increasing the focus on ROIC ROIC & HVA (Holcim Value Added) Outside