© 2014 BZ Bank Investors Dinner 14 May 2014 Thomas Aebischer – CFO Holcim Ltd © 2014 Agenda Holcim at a Glance Macro Economic Development and the impact for the cement industry Outlook 2014 – Conclusions Merger between Holcim and Lafarge BZ Bank Investors Dinner - May 14, 2014 2 © 2014 Holcim at a glance 130 cement plants around 200 limestone quarries / 450 aggregates operations 1’150 RMX plants in the world > 70’000 employees over 5’000 own RMX trucks / more than 3’000 subcontracted over 1’600’000’000 cement bags sold Presence on all five continents and in around 70 countries 2013 Net sales of CHF 19.7 bn and operating EBITDA of CHF 3.9 bn BZ Bank Investors Dinner - May 14, 2014 3 © 2014 Agenda Holcim at a Glance Macro Economic Development and the impact for the cement industry Outlook 2014 – Conclusions Merger between Holcim and Lafarge BZ Bank Investors Dinner - May 14, 2014 4 © 2014 -6 -4 -2 0 2 4 6 8 10 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 World Advanced economies Emerging economies GDP at constant prices [annual % change] Forecast Slightly better economic recovery expected, although uncertainty remains, … • Global economic growth is poised to accelerate slowly from 3.0% in 2013 to 3.6% in 2014 and 3.9% in 2015 (IMF April 2014) • Major developed countries to expand simultaneously for the first time in several years • Emerging markets, on balance, should perform better in 2014 BZ Bank Investors Dinner - May 14, 2014 5 Source: IMF World Economic Outlook April 2014 Change in GDP Forecast [January '14 to April'14] ‐0.6 ‐0.5 ‐‐ 0.1 ‐0.1 ‐‐ 0.4 ‐0.2 ‐0.2 ‐‐ 0.1 ‐0.1 ‐ ‐ 0.3 2014 2015 [annual %change] © 2014 fundamental trends support our business … The right place to be Population growth Continued urbanization Economic growth BZ Bank Investors Dinner - May 14, 2014 6 © 2014 Europe 37% 45% 55% 22% 78% 16% 84% North America 10% Asia Pacific 30% Latin America 8% Africa Middle East 14% Europe 18% North America 6% Latin America 11% Asia Pacific 38% Africa Middle East 27% Europe 13% North America 5% Latin America 10% Asia Pacific 42% Africa Middle East 29% 1990 2013E 2030E 1990: ~0.8 Bn t 2013E: ~1.7 Bn t 2030E: ~2.7 Bn t Cement demand Split Mature vs. Emerging markets Cement demand evolution by region, excl. China Mature Emerging *Source: BMI, National cement associations, Holcim estimates … resulting in long-term cement consumption growth driven by emerging markets and recovery in Europe and US BZ Bank Investors Dinner - May 14, 2014 7 © 2014 Regional Construction Market Growth Forecast [CAGR] 7.1% 1.7% 6.5% 5.6% 4.9% 2.1% 6.6% 8.3% 8.7% 6.0% 5.9% 6.0% 1.4% 4.9% 4.2% 3.7% 0.9% 5.3% 7.2% 7.5% 4.9% 5.0% Total Wester nEu rop e EasternEu rope NorthAmerica South&Central America As ia Pacif ic('developed') As ia Pacif ic('emerging' w/o India&Chi na)) China India Middl eEa st&NorthAfrica Sub‐SaharanAfrica PreviousFC[C AGR2010‐2020] CurrentFC[CAGR 2013‐2025] ‐1.1% ‐0.3% ‐1.5% ‐1.4% ‐1.2% ‐1.1% ‐1.3% ‐1.1% ‐0.9% No te: Previ ousFCbasedonUS D 2010prices&Curre ntFCbasedonUSD2012pri ces Change ‐1.1% ‐1.2% • Long term growth prospects remain positive for the majority of the regional construction sectors, driven by sound fundamentals and mega-trends • Following the pattern of expected slower GDP growth, growth projections for the sector are still strong • The compounded annual growth rate (CAGR) in construction spend is expected to be 6% for the period from 2013 to 2025 Oxford Economics remains positive on the long term prospects of the global construction sector Source: Oxford Economics - Global Construction Perspectives 2020 (March 2011) and 2025 (July 2013) BZ Bank Investors Dinner - May 14, 2014 8 © 2014 China and North America will attract most of the additional construction spend, followed by Emerging Asia and India • In nominal dollar terms, China, North America, Emerging Asia and India are expected to attract more than two thirds of global construction spend • China is a growth driver with more than a third of 2013- 2025 value growth potential [36% TOT] • North America is expected to regain momentum driven by economic recovery and population growth [15% TOT] • New Asian Tigers (Indonesia, South Korea, Vietnam and Philippines) is expected see significant growth over the period - Indonesia is expected to become the worlds third largest housing market [12% TOT] • India considerable growth potential [9% of TOT] • Latin America (excl. Mexico) will grow at a relatively low rate [6% of TOT] • Weak economic fundamentals in Western Europe and stagnant population will result in low but stable growth [5% TOT] • Eastern Europe (driven by Russia and Turkey) is expected to grow almost as much as India [8% TOT] • Africa with significant growth rates, however small overall Source: Oxford Economics - Global Construction Perspectives 2025 (July 2013) Global Construction Market [2013-2025] 2'182 914 746 566 489 353 340 314 125 95 China North America AsiaPacifi c ('em erging' w/oIndia&Ch ina)) India Eastern Europe South& CentralAmerica MiddleEast &NorthAfrica We stern Europe AsiaPacific (' de velope d' ) Sub‐Saharan Afric a 2013‐20 25 Change in USD bn No te: FCba sedonUS D2012pri ces 36% 15% 12% 9% 8% 6% 6% 5% 2% 2% %‐share in Globalgrowth USD bn in2013 1'677 1'442 783 409 628 650 6% 1'711 1'050 118 BZ Bank Investors Dinner - May 14, 2014 9 © 2014 5 60 17 26 26 11 19 3 5 68 4 12 7 11 Holcim cement capacity as of December 31, 2013: 206 Mt * China not consolidated Over the past 10 years Holcim invested about CHF 35 billion to establish a global footprint unmatched in the industry Well positioned to address growth in cement demand BZ Bank Investors Dinner - May 14, 2014 10 [...]... 30, 2 014 Half-year results for 2 014 November 4, 2 014 Press and analyst conference for the third quarter 2 014 November 18, 2 014 Investor Day in Zurich Investor Relations Phone +41 58 858 87 87 Fax +41 58 858 80 09 investor.relations @holcim. com www .holcim. com /investors Mailing list: www .holcim. com/subscribe BZ Bank Investors Dinner - May 14, 2 014 © 2 014 24 Backup Slides BZ Bank Investors Dinner - May 14, ... picture here • Substantial free cash flow generation expected for coming years BZ Bank Investors Dinner - May 14, 2 014 © 2 014 11 Agenda Holcim at a Glance Macro Economic Development and the impact for the cement industry Merger between Holcim and Lafarge Outlook 2 014 – Conclusions BZ Bank Investors Dinner - May 14, 2 014 © 2 014 12 GEOGRAPHICAL COMPLEMENTARITY OF PORTFOLIOS Combined sales by region Emerging... Volume Q1 2013 Price BZ Bank Investors Dinner - May 14, 2 014 Fixed Costs Variable Costs CO2 Other CIS FX Op Profit Q1 2 014 © 2 014 34 Operating profit by region Q1 2012 Q1 2013 Q1 2 014 Million CHF 1 -87 -90 -106 -71 66 171 192 -94 48 -9 345 280 234 54 167 ∆ Q1 13 / Q1 14 Asia Pacific Latin America Europe North America Africa Middle East Total BZ Bank Investors Dinner - May 14, 2 014 LFL Change in structure... APPROVALS SHAREHOLDER APPROVAL AND ACCEPTANCES TRANSACTION CLOSING EXPECTED IN H1 2015 20 Agenda Holcim at a Glance Macro Economic Development and the impact for the cement industry Merger between Holcim and Lafarge Outlook 2 014 – Conclusions BZ Bank Investors Dinner - May 14, 2 014 © 2 014 21 Outlook for 2 014 • Holcim expects cement volumes to increase in all Group regions • Aggregates volumes expected... 2013 Q1 2 014 Million CHF 20 -15 -18 466 -10 78 224 29 99 246 62 327 67 211 ∆ Q1 13 / Q1 14 Asia Pacific Latin America Europe North America Africa Middle East Total BZ Bank Investors Dinner - May 14, 2 014 397 LFL Change in structure 0.4% -3.2% -2.6% 0.0% 228.9% 7.4% 35.2% -1.8% 14. 1% -4.5% 10.1% -2.0% Currency Total -14. 8% -11.8% 2.4% 10.9% -1.8% -13.3% -17.6% -14. 3% 238.7% 44.2% 7.8% -5.1% © 2 014 33... Q1 2 014 Million CHF 1161 478 441 1184 444 2118 239 854 1032 827 723 203 ∆ Q1 13 / Q1 14 Asia Pacific Latin America Europe North America Africa Middle East Total BZ Bank Investors Dinner - May 14, 2 014 1984 1683 206 LFL Change in structure 4.0% -3.8% 2.3% 0.0% 17.2% -1.8% 9.8% -1.5% 7.4% -3.5% 7.8% -2.5% Currency Total -15.3% -14. 8% -0.6% -7.6% -2.2% -10.7% -15.1% -12.5% 14. 8% 0.7% 1.7% -5.4% © 2 014. .. America • Holcim expects that organic growth in operating profit can be achieved in 2 014 • The ongoing focus on the cost base coupled with all the benefits expected from the Holcim Leadership Journey will lead to a further expansion in operating margins BZ Bank Investors Dinner - May 14, 2 014 © 2 014 22 Conclusions • Cement consumption growth driven by emerging markets and recovery in Europe and US • Holcim. .. million w ill be maintained through the period 2012 - 2 014 3) Original amount w as projected < CHF 120 million for 2013; having spent already CHF 239 million, no additional restructuring cash costs are foreseen at this stage BZ Bank Investors Dinner - May 14, 2 014 © 2 014 27 Streamlined organizational structure Holcim Group* Board of Directors Holcim Ltd Governance & Strategy Committee Audit Committee... the combination between Holcim and Lafarge will lead to less additional capital for expansion and therefore even more attractive returns to shareholders • The ongoing focus on the cost base coupled with all the benefits expected from the Holcim Leadership Journey will lead to a further expansion in operating margins in 2 014 and beyond BZ Bank Investors Dinner - May 14, 2 014 © 2 014 23 Contact information... Management 4 Corporate Functional Manager Jacques Bourgon as advisor to the CEO 5 Logistics Aidan Lynam to remain member of senior management of Holcim Ltd Alternative Fuels & Resources * Effective as of January 1, 2 014 BZ Bank Investors Dinner - May 14, 2 014 © 2 014 28 Financial indicators 2011 20121 2013 RONOA (%) Funds from operations/Net financial debt (%) Net financial debt/EBITDA (X) EBITDA net interest . © 2 014 BZ Bank Investors Dinner 14 May 2 014 Thomas Aebischer – CFO Holcim Ltd © 2 014 Agenda Holcim at a Glance Macro Economic Development and the impact for the cement industry Outlook 2 014. bn BZ Bank Investors Dinner - May 14, 2 014 3 © 2 014 Agenda Holcim at a Glance Macro Economic Development and the impact for the cement industry Outlook 2 014 – Conclusions Merger between Holcim. million BZ Bank Investors Dinner - May 14, 2 014 11 © 2 014 Agenda Holcim at a Glance Macro Economic Development and the impact for the cement industry Outlook 2 014 – Conclusions Merger between Holcim