© 2013 Holcim Ltd Goldman Sachs Industrials Conference Bernhard A. Fuchs / Swetlana Iodko London, December 3, 2013 © 2013 Holcim Ltd © 2013 Holcim Ltd Industrials Conference 2013 – Goldman Sachs Agenda 2 Holcim Strategy and Positioning - base for value creation Holcim Leadership Journey Proactive Asset Management - recently announced transactions Regional overview Conclusions © 2013 Holcim Ltd Industrials Conference 2013 – Goldman Sachs Europe (mature) Asia Pacific (mature) North America 0 1'000 2'000 3'000 4'000 5'000 6'000 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E -6% 0% -1% 7% 8% 6% 16% 4% 12% 3% 11% 8% 1% 10% Asia Pacific (emerging) Europe (emerging) Global construction growth is driven by emerging markets and recovery in Europe and US Construction Industry Value Outlook until 2017E (USD bn) Source: BMI Market Outlook, 2013 Share of market 2008 2017E - Emerging markets 29% 48% - Developed markets 71% 52% Africa / Middle East Latin America CAGR ‘13-’17: 7% CAGR ‘08-’12: 3% 3 © 2013 Holcim Ltd Industrials Conference 2013 – Goldman Sachs Holcim’s Strategy House – base for value creation Creation of Value Mindsets Strategy Goal Base Product Focus Geographic Diversification Local Management Global Standards People Better Cost Management Permanent Marketing Innovation Human Resources Excellence Corporate Social Responsibility Sustainable Environmental Performance 4 © 2013 Holcim Ltd Industrials Conference 2013 – Goldman Sachs Positioning – Holcim’s cement market portfolio Cumulated population Growth 2012 - 2017E -4% -2% 0% 2% 4% 6% 8% 10% 12% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% GDP per capita (at PPP) CAGR 2012 - 2017E Western Europe 25.9 Mt Eastern Europe 23.3 Mt Africa Middle East 23.2 Mt Mature markets Emerging markets Size of circles represents influenced capacity 2012 North America 22.0 Mt India 60.5 Mt China 60.0 Mt Asia Pacific excl. India, Oceania, China 43.5 Mt Latin America 35.5 Mt Demand growth Oceania 4.8 Mt Sources: Holcim, US Census Bureau, Datastream – IMF: World Economic Outlook, January 2013 5 © 2013 Holcim Ltd Industrials Conference 2013 – Goldman Sachs Positioning – Holcim’s aggregates market portfolio -4% -2% 0% 2% 4% 6% 8% 10% 12% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% Western Europe 64.8 Mt Africa Middle East 2.3 Mt Latin America 14.0 Mt North America 41.3 Mt Asia excl. Oceania 3.8 Mt Mature markets Emerging markets Size of circles represents consolidated sales volumes 2012 Eastern Europe 9.5 Mt Demand growth GDP per capita (at PPP) CAGR 2012 - 2017E Cumulated population Growth 2012 - 2017E Oceania 23.9 Mt Sources: Holcim, US Census Bureau, Datastream – IMF: World Economic Outlook, January 2013 6 © 2013 Holcim Ltd Industrials Conference 2013 – Goldman Sachs Agenda 7 Holcim Strategy and Positioning - base for value creation Holcim Leadership Journey Proactive Asset Management - recently announced transactions Regional overview Conclusions © 2013 Holcim Ltd Industrials Conference 2013 – Goldman Sachs The Holcim Leadership Journey and a focused capital allocation to increase short and long term returns Holcim Leadership Journey Operating profit increase of at least CHF 1.5 bn and ROIC AT > 8%* by 2014 Customer Excellence Cost Leadership CHF 500 m > CHF 1 bn Capture demand through advice & service Optimization of cost base Customer focus Value management Pricing policies Marketing and sales Energy and AFR Logistics Procurement Fixed cost * In similar markets conditions. Corresponds to a ROIC BT of > 11.8% 8 © 2013 Holcim Ltd Industrials Conference 2013 – Goldman Sachs Holcim Leadership Journey is on track All figures in million CHF 2012 2013 2014 Target achieved Target 9M Customer Excellence (operating profit impact) 50-100 31 150-200 95 500 -Customer focus -Value management -Pricing policies -Marketing and sales forces skills and motivation Cost Leadership (operating profit impact) 100-200 127 400-500 531 > 1,000 -Energy and AFR 40 146 > 300 -Logistics 0 104 > 250 -Procurement 48 131 > 250 -Fixed cost 39 151 > 200 Total increase in operating profit 1) 150-300 158 550-700 626 > 1,500 Cash cost to achieve the savings (one-off) < 80 239 3) 0 3) 0 Additional CAPEX net 2) 0-40 48 100-180 105 100-180 1) The base line is the financial year 2011 amounting to CHF 2,308 million (excluding one-off charges 2011 of CHF 375 m and without fluctuations in currency, changes in scope of consolidation and similar market conditions) 2) Additional CAPEX net will come from prioritization of CAPEX based on the speed of the returns (ROIC). Current energy fund of CHF 100 million will be maintained through the period 2012 – 2014 3) Original amount was projected < CHF 120 million for 2013; having spent already CHF 239 million, no additional restructuring cash costs are foreseen at this stage 9 © 2013 Holcim Ltd Industrials Conference 2013 – Goldman Sachs Agenda 10 Holcim Strategy and Positioning - base for value creation Holcim Leadership Journey Proactive Asset Management - recently announced transactions Regional overview Conclusions [...]... 20 13 Holcim expects on a like-for-like basis growth in operating EBITDA and operating profit coupled with a further improvement in margins Industrials Conference 20 13 – Goldman Sachs © 20 13 Holcim Ltd 24 Contact information and event calendar Contact information Event calendar Bernhard A Fuchs Michel R Gerber Swetlana Iodko February 26, 2014 Press and analyst conference on annual results for 20 13 April,... Court approval (Delhi and Gujarat) on the scheme of amalgamation under Sec 39 1 -39 4 of the Companies Act, 1956 (regulatory process) • Clearance from Foreign Investment Promotion Board (FIPB) • Transaction expected to be closed in Q2 / Q3 2014 Industrials Conference 20 13 – Goldman Sachs © 20 13 Holcim Ltd 16 Agenda Holcim Strategy and Positioning - base for value creation Holcim Leadership Journey Proactive... Proactive Asset Management - recently announced transactions Regional overview Conclusions Industrials Conference 20 13 – Goldman Sachs © 20 13 Holcim Ltd 17 Asia Pacific affected by fall in demand in India • Growth in the construction industry remained solid • Drop in sales in all segments: in cement primarily due to harsher economic situation in India and in aggregates due to Holcim Australia • Holcim. .. Dotternhausen • Closing expected in H1 2014, subject to due diligence, regulatory and other approvals Morata de Jalón Alcanar Lloseta Buñol Castillejo Integrated Cement Plant Grinding Station + Slag Granulator Jerez Industrials Conference 20 13 – Goldman Sachs Gador Alican te Carboneras © 20 13 Holcim Ltd 11 Transaction with synergies and strategic relevance driven... internal trading volumes eliminated in “Corporate/Eliminations” amounts to -0.6% Industrials Conference 20 13 – Goldman Sachs © 20 13 Holcim Ltd 19 Europe making further headway • European construction markets still lacked economic stimuli • Shipments of cement increased primarily due to the CIS/Caspian region • Sales volumes of aggregates as well as ready-mix concrete decreased • Capacity adjustments and... sold more aggregates and readymix concrete • Holcim Canada was unable to compensate weather-related setbacks • Improved performances in the US led to solid organic growth 1 Industrials Conference 20 13 – Goldman Sachs Restated due to changes in accounting policies © 20 13 Holcim Ltd 21 Subdued economic situation in Africa Middle East • Demand remained strong in Lebanon despite the turmoil in Syria • Reduction... Industrials Conference 20 13 – Goldman Sachs © 20 13 Holcim Ltd 13 ACL acquires Holcim s 50.01% equity stake in ACC Evolution of current to target shareholder structure Interlinked transaction steps Step I: Acquire 24% in Holcim India 40.79% 0.29% Holcim Step II: Merge Holcim India into ACL 40.79% 76% 24% 76% 24% Holcim India 9.76% ACL 0.29% Holcim ACC ACL Holcim 0.29% 61 .39 % Holcim India 9.76% 50.01% Target... Reduction in sales volumes in all segments, primarily due to Morocco • Grinding stations in West Africa and Gulf region delivered less cement • Declining sales volumes in Indian Ocean region • Operating EBITDA was down mainly due to the weaker performance in Morocco 1 Industrials Conference 20 13 – Goldman Sachs Restated due to changes in accounting policies © 20 13 Holcim Ltd 22 Agenda Holcim Strategy and Positioning... equity shares for a total value of INR 8,226 crore (USD ~1.4 bn) to Holcim post cancellation of Holcim India’s 9.76% stake in ACL upon merger • The transaction steps are inter-linked and subject to requisite approvals Industrials Conference 20 13 – Goldman Sachs © 20 13 Holcim Ltd 14 Value creation opportunity Improve Structure • More efficient capital structure & EPS accretive • Re-investment of cash into... exchange rates and general financial market conditions; (5) delay or inability in obtaining approvals from authorities; (6) technical developments; (7) litigation; (8) adverse publicity and news coverage, which could cause actual development and results to differ materially from the statements made in this presentation Holcim assumes no obligation to update or alter forward-looking statements whether as . © 20 13 Holcim Ltd Goldman Sachs Industrials Conference Bernhard A. Fuchs / Swetlana Iodko London, December 3, 20 13 © 20 13 Holcim Ltd © 20 13 Holcim Ltd Industrials Conference 20 13 – Goldman Sachs Agenda 2 Holcim. Bureau, Datastream – IMF: World Economic Outlook, January 20 13 6 © 20 13 Holcim Ltd Industrials Conference 20 13 – Goldman Sachs Agenda 7 Holcim Strategy and Positioning - base for value creation Holcim. Middle East Latin America CAGR ‘ 13- ’17: 7% CAGR ‘08-’12: 3% 3 © 20 13 Holcim Ltd Industrials Conference 20 13 – Goldman Sachs Holcim s Strategy House – base for value creation Creation of Value Mindsets Strategy Goal Base Product