© Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim Canada – an overview Paul Ostrander – CEO Holcim Canada St. Louis, September 15, 2010 2 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Executive Summary Holcim Canada • Holcim Canada is structured to meet the needs of the markets in which it operates. Heavily urban areas normally demand a vertically integrated structure whereas cement and construction services move across the country • Holcim Canada offers solutions to customers in a variety of approaches from direct supplier to design and build partnership relationships • Holcim Canada is currently participating or looking forward to participating in over $35B of projects, most are directly in the core markets • Holcim Canada has been moving forward in sustainable development to improve stakeholder relationships, reduce costs and provide innovative solutions to customers 3 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Agenda 1 Holcim Canada in the marketplace 2 Operationalizing the Holcim Value Chain 3 Holcim solutions 4 Market opportunities & Holcim Canada brand 4 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim Canada will soon celebrate 60 years of operations in Canada with a history dotted with strategic acquisitions and growth Atlas Realty (later St. Lawrence Cement) is incorporated by Holderbank (later Holcim) Cement production begins in Quebec (1954) & Ontario (1956) St. Lawrence Cement is listed on Montreal & Toronto Stock Exchanges Acquisition of Dufferin assets Acquisition of 50% share in Quebec Ready-Mix & De- Mix Acquisition of Joliette cement plant & Ontario concrete operators (Boehmers & Peninsula) Acquisition of cement plants in Catskill New York and Hagerstown Maryland Creation of strategic waste recycling committee (AFR at Joliette in 1994) Acquisition of NorthStar Cement (Nfld) and Gormley Aggregates Acquisition of TCG, Acton and Mosport. Launch of shared services Installation of vertical roller mill & clinker cooler Acquisition of Ontario Redi-Mix & Beton Grilli & Lunick St. Lawrence Cement becomes Holcim Canada 1951 1954-56 1961 1965 1973-76 1984-85 1990 1997 2001 2007 2009 Holcim Ltd. buyout of St. Lawrence Cement minority shareholders Matured vertical integration strategy to focus on areas surrounding cement plants 5 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Fully integrated Cement & construction Construction only Holcim Canada is a fully integrated player in the highly populated Greater Toronto (GTA) and Greater Montreal (GMA) markets GTA GMA GMA GTA Cement Plant Aggregate (8) Ready-Mix (20) Cement Plant Aggregate (5) Ready-Mix (9) 6 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 The Canadian economy is closely linked to that of the United States. As such there has been an economic impact but this impact has thus far been mitigated and there was a strong rebound in late 2009 and early 2010 GDP (% Change) -4 -2 0 2 4 2005 2006 2007 2008 2009 2010 2011 CAD US Total Construction (% Change) -20 -10 0 10 20 2005 2006 2007 2008 2009 2010 2011 CAD US Cement Consumption (% Change) -30 -20 -10 0 10 20 2005 2006 2007 2008 2009 2010 2011 CAD US (incl. imports) Housing Starts (% Change) -50 -25 0 25 2005 2006 2007 2008 2009 2010 2011 CAD US Source: PCA 2010 Summer Forecasts for the US and Canada, August 2010 7 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim Canada has a commitment to Sustainable Development with Corporate Objectives for OH&S, Environment and Social initiatives 3.2 2.2 2.3 0.6 4.2 1.1 7.1 5.6 3.9 2.7 < 2.0 0 2 4 6 8 2005 2006 2007 2008 2009 2010 LTIFR Target 850 652 610 607 0 100 200 300 400 500 600 700 800 900 1990A 2007A 2008A 2009A CO2 net / t cem Annual CO2 25% Reduction Target from 1990 Levels OH&S - LTIFR ENVIRONMENT – CO2 CORPORATE SOCIAL RESPONSIBILITY Holcim Canada maintains Community Advisory Panels (CAPS) at all operating sites (proportional to site size) COMMUNITY SPONSORSHIP LTIFR – Lost Time Incident Frequency Rate 8 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim Canada is well integrated into the Value Chain with a broad customer base ranging from product supply of cement to solutions providing construction services 9 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim Canada optimizes vertical integration in the value chain while improving delivery mechanisms for new product introduction & optimization of existing products 35% of cementitious volumes and 39% of aggregate volumes flowed through our vertically integrated channels in 2009 Transactional Mortars Ready-mix Concrete Asphalt Concrete Products Direct Sales Direct Sales Traders Wholesalers Retailers Traders Wholesalers Retailers End-users General Contractors Civil Engineering Channels Transformational Masons Self -builders Cementitious Materials (cement, mineral components) Supply Basic Materials Processing Aggregates (sand, gravel, stone, recycled aggregates) Infrastructure Commercial / Industrial Building Housing Demand A p p l i c a t i o n s Applications and Construction Fields 10 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Cementitious products are part of Holcim Canada’s twin leg strategy • Vertical roller mill (VRM) Slag cement for CO 2 reduction • Selective non-catalytic reduction (SNCR) NO x emissions reduction • Alternative fuel utilization Energy cost savings & SD • Programs in pricing optimization Margin improvement through performance • Mississauga and Joliette are not only located within 50 km of large urban centers but they are also connected to a transportation network by ship, rail and truck • Joliette’s offering of an efficient logistics solution was key in securing Societe d’energie de la Baie James (SEBJ) project NETWORK OPTIMIZATION INVESTMENTS [...]... 2013 16 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim Canada has provided a level of consistency through a very turbulent economic period Economic stimulus funding, a strong organizational structure and management expertise are principal factors NET SALES & EBITDA 2007A 2008A Sales 2009A EBITDA 2010F • Canada has been able to weather the economic storm more effectively than other... countries and Holcim Canada is well positioned in two metropolitan areas which are the main economic drivers for the country • At the same time, Ontario and Quebec are more strongly focused on a manufacturing industry base, and thus the importance of cement product and construction services throughout the country offers risk mitigation 17 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim. .. transference of knowledge is a key objective of this initiative 18 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim Canada is a strong vertically integrated player Optimizing opportunities in customer loyalty, sustainable development and product and service solutions will ensure full advantage of upcoming opportunities Holcim Canada s Commitment to it’s Community & Markets SUSTAINABLE... employee performance management Holcim Canada utilizes both in-house and Holcim Group Support LEADERSHIP DEVELOPMENT programs for leadership development Executive education, English and French language training and the introduction of key development roles for high potential employees ensure next generation leaders In 2010 Holcim Canada instituted an executive and senior management COACHING company objective... 858 80 09 investor.relations @holcim. com www .holcim. com/investors Mailing list: www .holcim. com/subscribe 20 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Disclaimer Cautionary statement regarding forward-looking statements This presentation may contain certain forward-looking statements relating to the Group’s future business, development and economic performance Such statements may... commitment to Sustainable Development and enhance our Customer Relationships Holcim Canada s Strategic Positioning in Holcim Group SUSTAINABLE DEVELOPMENT VERTICAL INTEGRATION EMPLOYEE DEVELOPMENT Capturing opportunities for developing a sustainable competitive advantage, improving relationships with stakeholders and capturing cost savings through efficiency gains Utilizing a city-based strategy to optimize... competition laws, please note that this presentation has been comprehensively reviewed by counsel in both the United States and Switzerland 21 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Strength Performance Passion 22 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 ... This allows the company the ability to optimize its product/service offerings COMMODITY SOLUTIONS SUPPLIER ALLIANCE BUILD PARTNER DESIGN & BUILD Munro Concrete Products Ministry of Transportation A-25 & SAB 407 ETR 14 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 A key area of growth for Holcim Canada is participation in PublicPrivate Partnerships in projects across Canada • Public Private... (SPV) Loan agreement Debt provider Service agreement Construction contract Technical advisers/ consultants Design Build Joint Venture Service agreements Engineers/ consultants Service agreement Maintenance Operator Construction/ supply contracts Subcontractors/ suppliers 407 ETR 15 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Focusing on core strategies in Greater Toronto and Montreal... 250 DCC personnel have Government of Canada security clearance and are available on 1 hour notice The activity not only provides cash flow and operations during traditionally slow construction months but also ensure equipment utilization over the period 13 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Vertical Integration has also given Holcim Canada the opportunity to move into Solutions . © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim Canada – an overview Paul Ostrander – CEO Holcim Canada St. Louis, September 15, 2010 2 © Holcim Ltd 2010 Investor / Analyst. US Source: PCA 2010 Summer Forecasts for the US and Canada, August 2010 7 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim Canada has a commitment to Sustainable Development. marketplace 2 Operationalizing the Holcim Value Chain 3 Holcim solutions 4 Market opportunities & Holcim Canada brand 4 © Holcim Ltd 2010 Investor / Analyst Capital Markets Event 2010 Holcim Canada will soon