kepler cheuvreux 15th swiss seminar bernard fontana ceo zurich april 2 2014 holcim strength performance passion
Strength. Performance. Passion. Kepler Cheuvreux 15 th Swiss Seminar Bernard Fontana, CEO Zurich, April 2, 2014 © 2014 Holcim Ltd Agenda Holcim at a Glance – 2013 Milestones Holcim strategy and positioning based on long term growth Outlook 2014 – Conclusions Holcim Leadership Journey Kepler Cheuvreux 15th Swiss Seminar © 2014 Holcim Ltd 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 3 Kepler Cheuvreux 15th Swiss Seminar © 2014 Holcim Ltd • Solid financial results • Holcim Leadership Journey – strong cost reductions • Strategic portfolio management continued • Simplification of group structure in India initiated • Expansions on track • Group management streamlined with continued focus on new talents • Strong cash flow generation • Payout proposal of CHF 1.30 per share 2013 Milestones 4 Kepler Cheuvreux 15th Swiss Seminar © 2014 Holcim Ltd Agenda Holcim at a Glance – 2013 Milestones Holcim strategy and positioning based on long term growth Outlook 2014 – Conclusions Holcim Leadership Journey Kepler Cheuvreux 15th Swiss Seminar © 2014 Holcim Ltd Rapid urbanization: In 2010, for the first time in history urban population exceeded rural population São Paulo 6 Kepler Cheuvreux 15th Swiss Seminar © 2014 Holcim Ltd Growing demand for housing and infrastructure Shanghai 7 Kepler Cheuvreux 15th Swiss Seminar © 2014 Holcim Ltd 8 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 Long-term cement consumption growth is driven by emerging markets and recovery in Europe and US Kepler Cheuvreux 15th Swiss Seminar © 2014 Holcim Ltd 9 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 USD 30 billion to establish a global footprint unmatched in the industry Kepler Cheuvreux 15th Swiss Seminar Well positioned to address growth in cement demand © 2014 Holcim Ltd • Global footprint - the result of organic and inorganic growth initiatives • Operating cash flow more than sufficient to cover CAPEX and financial investments • Current cement capacities incl. ongoing projects sufficient for growth without major new investments • Increasing capacity utilization of existing plants coupled with ongoing cost reductions to vastly improve ROIC • Substantial free cash flow generation expected for coming years Value creation from our existing asset base 10 • Add nice picture here -500 500 1'500 2'500 3'500 4'500 5'500 6'500 Cash flow from operating activities CAPEX Financial (de)/investments 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 In CHF million Kepler Cheuvreux 15th Swiss Seminar [...]... increase of at least CHF 1.5 bn* by 20 14 * in similar markets conditions Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd 12 Holcim Leadership Journey is on track All figures in million CHF 20 12 Target Customer Excellence (operating profit impact) 20 13 achieved Target 20 14 12M 50-100 31 150 -20 0 135 500 100 -20 0 127 400-500 808 > 1,000 187 1 62 203 25 5 > 300 > 25 0 > 25 0 > 20 0 943 > 1,500 -Customer focus... Cross Cross Functional Team Members Regional Category Teams Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd 20 Agenda Holcim at a Glance – 20 13 Milestones Holcim strategy and positioning based on long term growth Holcim Leadership Journey Outlook 20 14 – Conclusions Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd Outlook for 20 14 • Holcim expects cement volumes to increase in all Group regions... America • Holcim expects that organic growth in operating profit can be achieved in 20 14 • 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 Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd 22 Cost and CAPEX guidance for 20 14 • Energy costs per tonne of cement produced slightly above 20 13...Agenda Holcim at a Glance – 20 13 Milestones Holcim strategy and positioning based on long term growth Holcim Leadership Journey Outlook 20 14 – Conclusions Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd The Holcim Leadership Journey and a focused capital allocation to increase short and long term returns Holcim Leadership Journey Customer Excellence Cost... returns (ROIC) Current energy fund of CHF 100 million will be maintained through the period 20 12 – 20 14 Original amount was projected < CHF 120 million for 20 13; having spent already CHF 23 9 million, no additional restructuring cash costs are foreseen at this stage Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd 13 Holcim Leadership Journey in action – example projects • OH&S: Laying the foundation... reduced on average by 25 % • Better capacity planning for Holcim, stronger reputation as a reliable supplier and increased customer loyalty Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd 15 Customer Excellence Holcim Switzerland – Roche Tower New Roche headquarters: • Highest building in Switzerland with 41 floors and a height of 175 meters; construction period between 20 10 to 20 15 Project challenges... without adding any significant new capacities • Self help measures remain an important part of earnings improvement; Holcim Leadership Journey well on track • Initiatives from the Holcim Leadership Journey will go far beyond 20 14 Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd 24 ... at Holcim Ecuador Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd 14 Customer Excellence Holcim Philippines – Enhanced Cement Withdrawal System Initial situation: • Peak season demand for bagged cement exceeds supply • Dealers and retailers struggle to maintain sufficient stock levels to adequately service their customers • Long waiting times at Holcim plants lead to increased transport costs Holcim. .. Average interest rate unchanged at 4.8 percent • Long term expected tax rate of 27 percent • Maintenance CAPEX of CHF 0.8 billion net • Expansion CAPEX of CHF 1.1 billion Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd 23 Conclusions • Cement consumption growth driven by emerging markets and recovery in Europe and US • Holcim with current footprint well positioned to address growth in cement demand... protection Holcim s fuel needs partly solved through coprocessing • Projected to add some USD 100 million in gross value added in Asia alone over the next few years Pictures on the right: Geocycle Philippines, Lugait bio mass feedsystem commissioned February 20 14 with 16 tph biomass capacity (rice husk, saw dust) storage and dosing facility in Lugait Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd . Strength. Performance. Passion. Kepler Cheuvreux 15 th Swiss Seminar Bernard Fontana, CEO Zurich, April 2, 20 14 © 20 14 Holcim Ltd Agenda Holcim at a Glance – 20 13 Milestones Holcim. São Paulo 6 Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd Growing demand for housing and infrastructure Shanghai 7 Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd 8 Europe. conditions 12 Kepler Cheuvreux 15th Swiss Seminar © 20 14 Holcim Ltd Holcim Leadership Journey is on track All figures in million CHF 20 12 2013 20 14 Target achieved Target 12M