Investor presentation january 2009 holcim ltd 2009

© Holcim Ltd 2009 Investor Presentation January 2009 2 © Holcim Ltd 2009 January 2009 Investor Presentation Agenda 1 An attractive industry 2 Holcim is the strongest player in the industry 3 Our priorities in the difficult environment 4 Conclusion 3 © Holcim Ltd 2009 January 2009 Investor Presentation 0 500 1000 1500 2000 2500 3000 3500 1973 1978 1983 1988 1993 1998 2003 2008 World [Mt] World w/o China [Mt] Recession Asian Crisis RecessionRecessionOil Crisis Recession Even during recessionary periods, cement demand has historically held up well and recovered quickly Assumption: China grew by 10% per annum before 1990 Source: Cembureau, The Global Cement Report 7th Edition, Holcim Estimates Demand (CAGR) 2001-2003  World: +7.7%  Americas: -0.3%  West Europe: +1.5%  Asia (incl. CN): +10.2% Demand (CAGR) 1997-1998  World: +0.5%  Americas: +4.8%  West Europe: +5.6%  Asia (incl. CN): -2.1% Demand (CAGR) 1989-1991  World: +0.5%  Americas: -2.4%  West Europe: -3.3%  Asia (incl. CN): 7.3% Demand (CAGR) 1981-1983  World: +1.8%  Americas: -4.2%  West Europe: -2.2%  Asia (incl. CN): 7.9% Demand (CAGR) 1973-1975  World: -0.1%  Americas: -4.8%  West Europe: -2.8%  Asia (incl. CN): 1.4%  CAGR 1973-2007 (World): 4.1%  CAGR 1973-2007 (World w/o China): 2.3% Cement Demand (Mt) 4 © Holcim Ltd 2009 January 2009 Investor Presentation Attractiveness of the heavy-side building materials  The basis of cement and aggregates investments are large scale  Hedge against inflation (real value)  No technical obsolescence  Cement and aggregates do not go out of fashion  Raw material reserves for decades  Distribution, logistics and transportation network requirements  Limited substitution potential  Relative demand inelasticity  Housing and infrastructure requirements are basic needs  Concrete is the second most used commodity after water and is an eco-friendly building material 5 © Holcim Ltd 2009 January 2009 Investor Presentation Asian Crisis Recession Recession Construction material has lower volatility compared to other industries Source: Datastream Industrial Stock Indices Evolution 1995 - 2008 50 250 450 650 01.95 01.97 01.99 01.01 01.03 01.05 01.07 MSCI World Constr. Mat. MSCI World Energy MSCI World Health Care MSCI World Financials MSCI World IT 6 © Holcim Ltd 2009 January 2009 Investor Presentation 50 60 70 80 90 100 110 07.07 08.07 09.07 10.07 11.07 12.07 01.08 02.08 03.08 04.08 05.08 06.08 07.08 08.08 MSCI World Constr. Mat. MSCI World  The building material industry is hurt first when talking about cooling down of the economy The industry is hurt first in difficult times, but… MSCI Construction vs. MSCI World (15 July 2007 – 15 September 2008) Source: Datastream 7 © Holcim Ltd 2009 January 2009 Investor Presentation Barrack Obama announcement of infrastructure plan China's announcement of infrastructure spending 30 40 50 60 70 80 90 100 110 01.10.08 01.11.08 01.12.08 01.01.09 Major US Basic Build. Mat. supplier (Index)* Holcim Construction Spending Programme announced by Barrack Obama 0 20 40 60 80 100 120 140 160 01.10.08 01.11.08 01.12.08 01.01.09 MSCI China Huaxin China's cabinet announces infrastructure and housing spending * Holcim, Cemex, Lafarge, Vulcan, Martin Marietta … stands first in line to profit from proposed government stimulation programs Source: Datastream, Bloomberg, Economist 1 The Economist Dec. 11, 2008, recent discussions indicate much more  “Single largest new investment” since the Eisenhower Administration (US$ 300bn/y 1 [2% of GDP] expected)  Construction spending in roads, bridges and public buildings  to lift the sagging economy and create jobs  Government announcement of stimulus plan of ~US$ 600bn (most already committed) 8 © Holcim Ltd 2009 January 2009 Investor Presentation Massive fiscal stimulus initiatives have been announced, and more are potentially in the making No stimulus or not known Expected soon Announced stimulus Stimulus estimated at US$ 1.8-2.3 trillion or 3.5% of world GDP 200 200 170 50 4 100 200 200 200 200 200 200 24 100 132 33 62 30 8 USD billions, known status January 12th, 2009 Note: Includes only major countries and excludes EU package (additional announced packages account for up to 8.2% of world GDP) Source: Reuters, Bloomberg, Economist, plus miscellaneous other media sources, GDP data IMF October 2008 World GDP 2008 US$ 62 trillion 14 50 9 © Holcim Ltd 2009 January 2009 Investor Presentation Stimulus initiatives would significantly help economies maintain or regain growth  Packages are significant – estimated country GDP impact varies from 0.1% to 8.1% per annum  Key mature and emerging markets show the power and initiative to implement fiscal stimulus and manage their economy  Important will be the real implementation rate, response speed  Infrastructure is a key part of many stimulus programs  Potential multiplier effect would add further stimulus 2 1 Calculated on IMF October 2008 GDP forecast, simulation with 40% spent in 2009 and 60% spent in 2010. 2 Keynes “Multiplier effect” has not been simulated – however in theory this mechanic should add further economic stimulus. Source: Reuters, Bloomberg, Economist, plus miscellaneous other media sources, IMF October 2008 (GDP data) Holcim is positioned well to gain from the stimulus initiatives Potential estimated 1 impact on GDP growth (assumption split 40% in 2009 and 60% in 2010) 2.9% 0.4% 5.4% 0.4% 1.4% 0.1% 1.7% 0.5% 2.2% 1.5% 2.8% 4.3% 0.6% 8.1% 0.7% 2.1% 0.2% 2.5% 0.8% 3.4% 2.2% 4.2% Argentina Britan China France Germany India Italy Mexico Russia Spain USA 2009 2010 10 © Holcim Ltd 2009 January 2009 Investor Presentation Construction: stimulus projects add up to ~US$ 430-680bn, mainly focused on infrastructure ? ? ? 1 Construction market in OECD countries is between 4% and 7% of GDP. Assumed to be an average of 6% of world GDP equaling US$3.7trillions, assumption calculated for implementation of US$ 430-680 bn during one year 2 Range of construction stimulus projects in the US; as of Jan. 09. 2009 (Goldman Sachs and others) 3 Mostly consumed nationally, therefore impacting export Source: Reuters, Bloomberg, Economist, plus other sources, IMF Oct. 2008 (GDP data), OECD Dec. 2008 (Construction % share) ? = infrastructure or construction stimulus announced = expected to announce (further) infrastructure stimulus = Holcim Group presence Known stimulus projects as of January 12th, 2009 US$ ~150-350bn 2 US$ ~30bn US$ ~100bn 3 Projects equal approx. 12%-18% 1 of world construction market [...]... Suppliers 0 Industry Average 40 Holcim Average 60 Best 80 Average 100 Holcim 19 Source: Dow Jones Sustainability Indexes © Holcim Ltd 2009 20 Investor Presentation January 2009 Agenda 1 An attractive industry 2 Holcim is the strongest player in the industry 3 Our priorities in the difficult environment 4 Conclusion 20 © Holcim Ltd 2009 Investor Presentation January 2009 Holcim is well prepared for challenging... 6, 2009 First quarter results 2009 May 7, 2009 Annual General Meeting May 12, 2009 Dividend payment (ex date) August 20, 2009 Half-year results 2009 November 11, 2009 Third quarter results 2009 Conferences for press and analysts 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 29 © Holcim Ltd 2009. .. market sold predominantly in bags Reliance on do-it-yourself (DIY) market 12 © Holcim Ltd 2009 Investor Presentation January 2009 Agenda 1 An attractive industry 2 Holcim is the strongest player in the industry 3 Our priorities in the difficult environment 4 Conclusion 13 © Holcim Ltd 2009 Investor Presentation January 2009 Holcim targets to be one of the top 3 players in its core markets Mature Markets... marketable securities Liquidity III =Liquidity II + unused committed credit lines © Holcim Ltd 2009 Investor Presentation 24 January 2009 Agenda 1 An attractive industry 2 Holcim is the strongest player in the industry 3 Our priorities in the difficult environment 4 Conclusion 25 © Holcim Ltd 2009 Investor Presentation January 2009 Conclusions  The cement industry is attractive even during recessionary... estimates, current actual shortfall is approximately 40 million units expected to grow by 3% p.a until 2025 Source: Internal estimates © Holcim Ltd 2009 Investor Presentation 15 January 2009 Example of a low cost housing in India 16 © Holcim Ltd 2009 Investor Presentation January 2009 The resulting cement portfolio is well balanced Cumulated population growth 08-13E 12% Mature markets 10% Asia Pacific excl... from the statements made in this presentation Holcim assumes no obligation to update or alter forward-looking statements whether as a result of new information, future events or otherwise 28 © Holcim Ltd 2009 Investor Presentation January 2009 Contact information and event calendar Contact information Event calendar Bernhard A Fuchs Marco Knuchel Binit Sanghvi March 4, 2009 Annual results 2008 Conferences... housing  Stimulus packages will provide the basis for building material demand over the next two to three years Holcim is well prepared for the challenging times ahead 27 © Holcim Ltd 2009 Investor Presentation January 2009 Disclaimer Cautionary statement regarding forward-looking statements This presentation may contain certain forward-looking statements relating to the Group’s future business, development... 450 Thailand:  Mothballed 2 kiln lines  Reduction-in-force of 280 Holcim is responding fast to the economic challenge Note: Select cost and capacity initiatives – largely completed in 2008 as communicated with Q3 2008 (November 12, 2008) – are highlighted using estimated numbers © Holcim Ltd 2009 Investor Presentation 22 January 2009 Holcim has a solid balance sheet and adequate liquidity (prerequisites... -4% 1% 2% 3% 4% 5% 6% 7% 8% GDP per capita (at PPP) CAGR 08-13E 9% 10% 11% 1 Incl 5 months of South Africa (aggregates sales of 3.6 Mt) Sources: Holcim, US Census Bureau, Economist Intelligence Unit © Holcim Ltd 2009 Investor Presentation 18 January 2009 Holcim 4 times leader (‘05-’08) in the Dow Jones Sustainability Index for Building Mat & Fixtures 2008 Results [% ] Corporate Governance Economic... Markets others 15% Emerging Markets others 4% # three 13% # one 20% # one 18% # two 17% # three 48% # two 65%  EBITDA contribution where Holcim holds a number one, two or three position based on cement volumes 14 © Holcim Ltd 2009 Investor Presentation January 2009 Emerging markets offer significant growth potential – Example India  In India, more than 72% of population is rural Individual Home Builder . © Holcim Ltd 2009 Investor Presentation January 2009 2 © Holcim Ltd 2009 January 2009 Investor Presentation Agenda 1 An attractive industry 2 Holcim is the strongest player. Internal estimates 16 © Holcim Ltd 2009 January 2009 Investor Presentation Example of a low cost housing in India 17 © Holcim Ltd 2009 January 2009 Investor Presentation Sources: Holcim, US Census. environment 4 Conclusion 14 © Holcim Ltd 2009 January 2009 Investor Presentation  EBITDA contribution where Holcim holds a number one, two or three position based on cement volumes Mature Markets Emerging Markets Holcim