First quarter interim report 2010 holcim ltd strength performance passion

The Group sold more cement, aggregates and ready-mix concrete, achieved higher net sales and better operating marginsMarch saw significant progress in terms of volumes and operating resu

First Quarter Interim Report 2010 Holcim Ltd

Annual cement production capacity million t 207.4 202.91 +2.2 +2.2

Net (loss) income – shareholders of Holcim Ltd million CHF (68) 74 –191.9 –154.1

Principal key figures in USD (illustrative) 4

Net (loss) income – shareholders of Holcim Ltd million USD (64) 64 –200.0

Principal key figures in EUR (illustrative) 4

Net (loss) income – shareholders of Holcim Ltd million EUR (47) 49 –195.9

1 As of December 31, 2009.

2 Net financial debt divided by total shareholders’ equity.

3 EPS calculation based on net income attribut- able to share- holders of Holcim Ltd weighted

by the average number of shares Based on IAS 33, the weighted average number of shares outstanding was retrospectively increased by 5 per- cent to reflect the 1:20 ratio of the stock dividend of the previous year and by an additional 3.6 percent to reflect the discount for existing share- holders in the previous year’s rights issue for the comparative period.

4 Statement of income figures translated at average rate; statement of financial position figures at closing rate.

The Group sold more cement, aggregates and ready-mix concrete, achieved higher net sales and better operating margins

March saw significant progress in terms of volumes and operating results

Emerging markets, particularly in Asia, remained on track for growth; however, heavy snowfall and a weak economy curbed construction activity in Europe and North America

The consolidated result was supported by a strong presence in the emerging markets, the expansion in Australia and rigorous cost-cutting

The non-recurring cash-neutral tax charge in connection with the restructuring of the Group’s interests in North America reduced net income

Group Jan–March Jan–March ±% ±%

Net (loss) income – shareholders of Holcim Ltd –

Cash flow from operating activities in million CHF (257) (161) –59.6 –72.7

Dear Shareholder

It was a mixed picture in the global construction markets during the first quarter of 2010 While most emerging

markets continued to grow, heavy snowfall and a weak economy further restrained construction activity in

Europe and North America

Holcim performed well and achieved organic growth In March in particular, the Group produced significantly

better results than in 2009 and also improved its margins There are several reasons for this:

The Group benefited from its strong presence in growth markets and primarily from brisk demand for building

materials in Asia In India in particular, the market is booming and it is here that Holcim is engaged in the

largest number of projects to expand capacity

A substantial contribution came from Australia Holcim Australia is a wholly-owned subsidiary of the Group

since October 1, and Cement Australia has been fully consolidated since this date as well Holcim Australia is

one of the continent’s leading suppliers of aggregates, ready-mix concrete and concrete elements In the first

quarter, Australia contributed an additional operating EBITDA of CHF 37 million

* Factoring out changes in the scope of consolidation and currency translation effects.

1 Including a non-recurring cash-neutral tax charge of CHF 182 million in connection with the restructuring of the Group’s interests in

North America.

Consolidated cement sales grew by 4.4 percent to 31 million tonnes Deliveries of aggregates and ready-mixconcrete increased substantially – by 17.5 percent to 29.5 million tonnes and 9.2 percent to 9.5 million cubicmeters respectively The increases in volumes are largely a consequence of the new consolidation of HolcimAustralia In the aggregates segment, several Group companies also contributed to the volume growth, includ-ing Aggregate Industries UK as well as Group companies in Switzerland, Canada and Brazil There was a sharpdecline in sales of aggregates in Eastern Europe Nearly half of the Group companies managed to increase theirsales of ready-mix concrete However, Europe in particular saw a decline in the concrete business Overall, pricelevels remained stable, with few exceptions.

Consolidated net sales increased by 4.8 percent to CHF 4.7 billion, mainly as a result of acquisitions, andoperating EBITDA rose by 19.1 percent to CHF 909 million The related margin increased by 2.3 percentagepoints to 19.2 percent Holcim made improvements in the regions Europe, North America and Africa MiddleEast As expected, in Group region Asia Pacific, average operating EBITDA margin decreased because HolcimAustralia does not operate in the high-margin cement segment Like-for-like operating EBITDA margin in thisregion improved Internal operating EBITDA growth of the Group came to an impressive 12.7 percent The ongoingcost-cutting program had a positive impact on the quarterly financial statement As in the previous year’squarter, cash flow from operating activities was negative at CHF –257 million due to seasonal factors

Net income declined 66.2 percent to CHF 66 million, and the share attributable to shareholders of Holcim Ltddecreased by 191.9 percent to CHF –68 million The lower earnings primarily reflect the non-recurring cash-neutral tax charge of CHF 182 million which had already been announced in connection with the restructuring

of the Group’s interests in North America Without this restructuring, net income would have increased by27.2 percent

Hard winter and slack demand in Europe

Large parts of Europe were affected by cold temperatures and heavy snowfall until mid-March This mised construction activity in many markets, and particularly in the UK and Southern and Eastern Europe,including Russia, the impact was compounded by weak conditions in the construction sector

Despite the sluggish start to the year, Aggregate Industries UK saw sales of aggregates increase in comparison

with the previous year However, sales of ready-mix concrete declined

In France, Holcim sold more cement, while deliveries decreased in Belgium Shipments of aggregates decreased,

and sales of ready-mix concrete remained stable The acquisition of a terminal near Nantes enabled Holcim to

strengthen its market presence in Western France Holcim Germany saw a decrease in shipments across all

seg-ments The shortage of new construction projects was a factor here The trend of business was more positive

for the sister company in Southern Germany, and in Switzerland, the order situation in the construction sector

remained solid Deliveries of cement, aggregates and ready-mix concrete increased

The market in Southern Europe remained difficult At least, major infrastructure projects in the Greater Milan

area led to a rise in deliveries of ready-mix concrete Holcim Spain continued to see declining volumes in all

regions and product groups Based on a new partnership, Corporación Turia’s grinding station near Valencia will

be supplied in the future with clinker by Holcim Spain

In Eastern and Southeastern Europe, the winter months were marked by prolonged periods of frost and a

pronounced mood of caution in the construction sector Despite an improvement in demand toward the end

of the quarter, this only compensated for the delivery cancellations to a limited extent The pressure on prices

persisted Thanks to two major projects, Slovakia reported volume growth in the cement segment, but the

other Group companies were unable to match the previous year’s quarter, with Bulgaria, Romania, Serbia and

Croatia seeing the highest percentage declines in volumes Although major transport projects are underway,

there was also a marked decline in volumes of aggregates and ready-mix concrete

While construction activity was muted in Russia, cement sales of Alpha Cement gained some support from

moderate construction activity in Moscow Yet, the volumes shipped were down on the previous year’s quarter

In Azerbaijan, demand for construction materials was significantly better Despite import pressure, the cement

deliveries of Garadagh Cement were up on the previous year

On a consolidated basis, cement sales in Europe declined by 15.7 percent to 4.3 million tonnes Deliveries of

aggregates fell by 3.1 percent to 15.7 million tonnes, and sales of ready-mix concrete declined by 16.2 percent

to 3.1 million cubic meters Asphalt deliveries increased by 7.7 percent to 1.4 million tonnes

Operating EBITDA of Group region Europe increased by 15.1 percent to CHF 137 million The consolidated result

includes CHF 65 million from the sale of CO2 emission certificates After factoring out this additional income,

European Group companies fared worse overall than the previous year The systematic continuation of

cost-cutting programs had a positive impact Internal operating EBITDA growth reached 14.3 percent

North America – difficult market environment particularly in the US

While the US construction sector made no significant progress, the situation in Canada was better withpositive weather impact Here, cement consumption in the first quarter was up on the previous year almosteverywhere – particularly in the provinces of Ontario and Quebec, which are especially important for Holcim

Holcim US posted weak cement sales in all sales regions, with construction activity hampered by heavysnowfall in the north east of the country and prolonged rain in Texas

Aggregate Industries US was also affected by the unfavorable weather conditions for construction An tional factor was the general shortage of private construction projects, particularly in the commercial sector.This reduced sales of aggregates, ready-mix concrete and asphalt

addi-Holcim Canada sold significantly more cement, aggregates and ready-mix concrete Due to the Canadiangovernment’s stimulus programs, the construction sector shows increased signs of recovery

Cement shipments in Group region North America fell by 5.6 percent to 1.7 million tonnes, and deliveries ofaggregates also decreased by 2.2 percent to 4.4 million tonnes Sales of ready-mix concrete rose by 12.5 percent

to 0.9 million cubic meters

The operating EBITDA of Group region North America remained negative at CHF –29 million; however, comparedwith the first quarter of 2009, all Group companies improved their result, especially as a result of betterbusiness conditions in March Systematically implemented cost-cutting programs and lower production costsdue to the new cement plant Ste Genevieve also contributed to the result Internal operating EBITDA growthreached 40.7 percent

* Factoring out changes in the scope of consolidation and currency translation effects.

Unequal demand development in Latin America

In Latin America, developments in the construction sector differed from region to region Whereas Mexico

and the Central American countries were under pressure, most South American countries benefited from

a solid economy and high demand for building materials Especially in Brazil, demand on the construction

markets continued to rise

Holcim Apasco in Mexico felt the impact of restrained investment in the private and public sectors The start-up

of many projects was delayed which resulted in a decline in domestic cement sales Moreover, there were

virtually no export opportunities However, shipments of aggregates and ready-mix concrete increased Work

on the new cement plant in Hermosillo continued according to plan The plant, which will have an annual

capacity of 1.6 million tonnes, is due to start producing cement in the second half of the year

El Salvador’s construction sector was, on top of the crisis, depressed by an increasingly difficult access to credit

which limited the cement sales of Holcim El Salvador Clinker exports to neighboring countries came to a halt

Progress on the Pirris dam project enabled Holcim Costa Rica to increase its cement volumes However, after

February’s presidential elections, the construction sector lacked essential stimuli

Holcim Colombia was able to increase its cement deliveries in a fiercely competitive market, but saw a decline

in sales of aggregates and ready-mix concrete Rapid progress was made on the expansion of cement grinding

capacity at the Nobsa plant Holcim Ecuador sold slightly less cement than the previous year Delays in road

building projects led to temporary declines in volumes of aggregates and ready-mix concrete

In Brazil, Holcim significantly increased its sales of cement and aggregates, mainly because of higher demand

for building materials in the infrastructure sector Sales of ready-mix concrete were also higher At Minetti in

Argentina, the positive trend in deliveries of cement and ready-mix concrete continued, while in Chile, sales at

Cemento Polpaico suffered a temporary setback in the wake of the major earthquake there with heavy damage

to the country’s transport infrastructure The production facilities largely escaped without damage and the

employees are all well The Group company will do its utmost to provide its customers and markets with the

best possible service as the reconstruction process gets underway

Cement deliveries in Group region Latin America remained stable at 5.5 million tonnes Sales of aggregates

decreased 3.4 percent to 2.8 million tonnes In ready-mix concrete, volumes equalized previous year’s 2.4 million

cubic meters

* Factoring out changes in the scope of consolidation and currency translation effects.

Operating EBITDA of Group region Latin America decreased by 2 percent to CHF 248 million The improvedresults from Brazil and Argentina virtually cancelled out the decline in Mexico and the Central Americanmarkets Thanks to the efforts made on the cost front and a predominantly stable price level, internal operatingEBITDA development was only slightly negative at –2.4 percent.

The arbitration proceedings in connection with the nationalization of Holcim Venezuela are still pendingbefore the International Centre for Settlement of Investment Disputes (ICSID) in Washington D.C

Group region Africa Middle East holding up well

The markets supplied by Holcim in this region have held up well In Morocco and Lebanon in particular, theconstruction sector benefited from brisk investment activity

In Morocco, high demand for building materials for infrastructure projects and residential construction led togood capacity utilization levels in the construction sector Holcim sold more cement and increased its sales ofaggregates, despite a stagnating general market Deliveries of ready-mix concrete declined

In Lebanon, there was particularly brisk private house building activity, and Holcim Lebanon sold more cementand ready-mix concrete The Group company largely discontinued exports of cement in response to strongdomestic demand

The West African group of countries, managed by Holcim Trading, maintained its position in a challengingeconomic and political environment The market conditions for the Group companies in the Indian Ocean regionwere mixed, with sales in line with the previous year in Madagascar but declining in La Réunion due to weakinvestment activity

In Group region Africa Middle East, both cement sales of 2.1 million tonnes and sales of ready-mix concrete of0.2 million cubic meters were stable Deliveries of aggregates increased by 25 percent to 0.5 million tonnes due

to the additional production volumes in Morocco

Group region Africa Middle East’s operating EBITDA rose by 16.7 percent to CHF 91 million Apart from HolcimOutre-Mer, all Group companies posted better results, reflecting a stable price situation and the successfulcommissioning of two grinding stations in the Gulf region At 28.2 percent, internal operating EBITDA growthwas also positive

* Factoring out changes in the scope of consolidation and currency translation effects.

Dynamic construction sector in Asia Pacific

Group region Asia Pacific got off to a flying start at the beginning of the year, with virtually all Group companies

increasing their deliveries In India in particular, the drive to make progress on infrastructure projects and rural

housing boosted demand for building materials The construction sector also remained on track for growth in

Vietnam, the Philippines and Indonesia

In India, ACC saw a temporary dip in cement shipments owing to production bottlenecks, limited rail freight

capacity and a shortage of granulated blast furnace slag By contrast, Ambuja Cements increased its domestic

sales significantly In the first quarter of 2010, new cement and clinker grinding capacity was commissioned at

three production sites and more new capacity will be added during the course of the year This means that the

Indian companies are ideally equipped for the predicted market growth

The cement shipments of Holcim Lanka benefited from pre-election government investment and reached

double-digit growth rates, as did the shipments of Holcim Bangladesh Cement sales also increased in Malaysia

and Thailand Siam City Cement was able to export more cement to neighboring countries as well Holcim

Vietnam sold larger volumes of cement and ready-mix concrete despite the emergence of new competitors

In Singapore, Holcim increased its stake in Jurong Cement, which operates in the city state’s ready-mix concrete

sector, to 88 percent

The Group companies in the Philippines and Indonesia significantly increased their domestic sales and had to

reduce exports of clinker and cement Whereas in the Philippines government infrastructure investment ahead

of elections was strong, in Indonesia an increase in demand for building materials was driven by the favorable

regional economic climate

Cement Australia’s shipments of cement were adversely affected by heavy rains, particularly in Queensland,

and sales volumes declined as a result The volumes of aggregates and ready-mix concrete of Holcim Australia,

which has been fully consolidated since October 2009, developed in line with expectations

Cement shipments in Group region Asia Pacific climbed by 8.3 percent to 18.2 million tonnes Almost all Group

companies played a part in this increase in volumes The sales of Cement Australia were also fully consolidated

In the first quarter of 2009, they had only been 50 percent consolidated Sales of aggregates increased by

454.5 percent to 6.1 million tonnes, and ready-mix concrete sales rose by 81.3 percent to 2.9 million cubic meters

These marked rates of increase are explained by the acquisition of Holcim Australia as of October 1, 2009

* Factoring out changes in the scope of consolidation and currency translation effects.

Rolf Soiron Markus AkermannChairman of the Board of Directors Chief Executive Officer

In Asia, Latin America and Russia, Holcim will commission cement and grinding plants with an annual capacity

of around 8 million tonnes before the end of the year

In 2010, the Group will benefit from the cost advantages gained last year and further strengthen the efficiency

of its processes and competitiveness

Consolidated statement of income of Group Holcim

Earnings per share in CHF

and by an additional 3.6 percent to reflect the discount for existing shareholders in the previous year’s rights issue for the comparative period.

2 Operating profit CHF 460 million (2009: 343) before depreciation, amortization and impairment of operating assets CHF 449 million (2009: 420).

3 Net income CHF 66 million (2009: 195) before interest earned on cash and marketable securities CHF 17 million (2009: 25), financial expenses

Consolidated statement of comprehensive earnings of Group Holcim

Other comprehensive earnings

Available-for-sale securities

– Tax expense

Cash flow hedges

– Realized gain through statement of income

– Tax expense

Net investment hedges

– Change in fair value

– Tax expense

Attributable to: