Strength Performance Passion Fixed-income investor update Christof Hässig – Head Corporate Finance & Treasury, M&A and Insurance Dominik Liebi – Capital Markets Bank Relationship Manager IFZ - MAS Corporate Finance 20_10 – Funding December 7, 2012, 14.10 – 17.50 Fixed-income investor update May 2014 © 2014 Holcim Ltd Agenda Holcim at a glance First quarter 2014 results, outlook and Holcim Leadership Journey Financial positioning and financing Merger of equals between Holcim and Lafarge Fixed-income investor update May 2014 © 2014 Holcim Ltd Holcim at a glance > 70’000 employees 130 cement plants around 200 limestone quarries / 450 aggregates operations 1’150 RMX plants in the world 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 Fixed-income investor update May 2014 © 2014 Holcim Ltd Agenda Holcim at a glance First quarter 2014 results, outlook and Holcim Leadership Journey Financial positioning and financing Merger of equals between Holcim and Lafarge Fixed-income investor update May 2014 © 2014 Holcim Ltd Q1 2014 Milestones • Like-for-like sales increase in all segments • Strong momentum of Holcim Leadership Journey continues • Significant increase in operating profit and further margin improvement • Substantial adverse exchange rate impact • Improved cash flow from operating activities due to strong operating EBITDA and further reduction in NWC • Portfolio management in Europe received approval in the Czech Republic • Simplification of group structure in India close to completion • Merger of equals with Lafarge announced – Creating the most advanced Group in the building materials industry Fixed-income investor update May 2014 © 2014 Holcim Ltd Key financial figures Million CHF Full year 2013 (if not otherwise stated) Sales volumes - Cement (mt) - Aggregates (mt) - Ready-mix (mm3) Net sales Operating EBITDA Operating profit Net income Net income - shareholders of Holcim Ltd Cash flow from operating activities 1st Quarter 2013 2014 +/LFL CIS -1.5% -1.3% -3.1% 138.9 154.5 39.5 32.1 28.6 8.4 33.0 29.2 8.2 4.4% 3.5% 1.1% 19,719 3,896 2,357 1,596 4,323 650 270 295 4,088 617 295 179 7.8% 10.1% 28.4% 1,272 187 80 2,787 -323 -243 3.91 0.58 0.24 FX EPS in CHF Fixed-income investor update May 2014 Total 2.9% 2.2% -2.0% -2.5% -10.7% -2.0% -13.3% 1.9% -20.9% -5.4% -5.1% 9.3% -39.5% -57.5% 28.2% -6.0% 2.7% 24.9% -58.6% © 2014 Holcim Ltd Net sales by region Q1 2012 Q1 2013 Q1 2014 Million CHF 1161 478 441 1032 1184 444 2118 1984 1683 239 854 827 723 203 ∆ Q1 13 / Q1 14 Asia Pacific Latin America Europe North America Africa Middle East Total Fixed-income investor update May 2014 206 LFL Change in structure 4.0% -3.8% 2.3% 0.0% 17.2% -1.8% 9.8% -1.5% 7.4% -3.5% 7.8% -2.5% Currency Total -15.3% -14.8% -0.6% -7.6% -2.2% -10.7% -15.1% -12.5% 14.8% 0.7% 1.7% -5.4% © 2014 Holcim Ltd Cement – Sales volumes by region Million t Total Group 4.5 2.1 2.0 5.2 19.4 2.0 2.2 5.9 4.4 5.9 6.0 1.8 18.6 33.7 32.1 33.0 18.5 2.0 ∆ Q1 13 / Q1 14 Asia Pacific Latin America Europe North America Africa Middle East Total 2012 2013 2014 LFL 1.7% 1.5% 20.1% 2.5% 13.4% 4.4% Change in structure -2.4% 0.0% 0.0% 0.0% -1.6% -1.5% Total -0.7% 1.5% 20.1% 2.5% 11.8% 2.9% The percentage change like-for-like adjusted for internal trading volumes eliminated in “Corporate/Eliminations” amounts to +2.9 Fixed-income investor update May 2014 © 2014 Holcim Ltd Aggregates – Sales volumes by region Million t 15.1 14.4 Total Group 15.7 2012 2013 2014 5.9 5.2 5.0 6.3 0.5 3.5 31.3 28.6 29.2 2.7 2.1 0.5 6.0 0.4 ∆ Q1 13 / Q1 14 Asia Pacific Latin America Europe North America Africa Middle East Total Fixed-income investor update May 2014 5.8 LFL 3.8% -22.0% 10.3% -1.5% -8.0% 3.5% Change in structure 0.0% 0.0% -1.6% -2.7% 0.0% -1.3% Total 3.8% -22.0% 8.7% -4.2% -8.0% 2.2% © 2014 Holcim Ltd Ready-mix concrete and asphalt – Sales volumes by region Million m3/t Total Ready-mix 3.0 1.2 1.4 1.3 0.2 2012 2013 2014 2.7 2.3 1.3 1.0 10.0 8.4 8.2 1.2 0.1 0.1 2.7 0.3 0.2 2.5 2.5 0.2 2.6 2.1 Total Asphalt 2012 2013 2014 1.4 1.1 1.4 1.7 ∆ Q1 13 / Q1 14 * LFL Asia Pacific Latin America Europe North America Africa Middle East Total 2.4% -20.0% 24.2% -6.1% -10.4% 1.1% Change in structure -1.0% 0.0% -7.1% -5.5% 0.0% -3.1% Total 1.5% -20.0% 17.1% -11.6% -10.4% -2.0% * Ready-mix concrete only Fixed-income investor update May 2014 © 2014 Holcim Ltd 10 Overall debt reduced by CHF 6.6 billion since 2008 Share of capital market financing at around 80% Financial liabilities CHF million Share of capital market financing 20'000 100% 16'000 80% 12'000 60% 8'000 40% 4'000 20% 0% 2008 2009 2010 2011 2012 2013 Q1 2014 Loans Capital markets Share of capital market financing (r.h scale) Fixed-income investor update May 2014 © 2014 Holcim Ltd 18 Access to a wide range of capital markets – only CHF 0.9 bn of capital markets instruments maturing until year-end 2014 Capital markets funding distribution as per Q1 2014 Capital market maturities Q1 2014 – 2015 Date CHF m Currency May-14 Jul-14 Oct-14 Dec-14 14 146 732 CRC 8.5 bn USD 165 m INR 320 m EUR 600 m Mar-15 Apr-15 Jul-15 Nov-15 Dec-15 306 250 16 33 163 AUD 250 m, MXN 1.5 bn CHF 250 m CRC 10 bn THB 1.2 bn MAD 1.5 bn Corporate Holdings Operating Company Fixed-income investor update May 2014 © 2014 Holcim Ltd 19 Average maturity substantially increased to 5.2 years with long-dated bonds in USD, EUR and CHF Major capital market transactions since January 1, 2013 USD 500 m bond (10 years) USD 250 m bond (30 years) USD 50 m bond (20 years) EUR 500 m bond (10 years) CHF 250 m bond (8.5 years) Average maturity of financial liabilities (in years) 5.5 5.0 4.5 4.0 Target 3.5 3.0 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 05 06 07 08 09 10 11 12 13 Fixed-income investor update May 2014 Amendment and extension EUR 2.0 bn Syndicated Revolving Committed Credit Facility © 2014 Holcim Ltd 20 Agenda Holcim at a glance First quarter 2014 results, outlook and Holcim Leadership Journey Financial positioning and financing Merger of equals between Holcim and Lafarge Fixed-income investor update May 2014 © 2014 Holcim Ltd 21 KEY TRANSACTION HIGHLIGHTS COMPANY NAME » LafargeHolcim DEAL STRUCTURE » » Merger of equals Company domiciled in Switzerland EXCHANGE RATIO » Exchange ratio of Holcim share for Lafarge share » » » » » » » » Capitalise on developed markets recovery Divestments of assets representing CHF 6bn / EUR 5bn of sales 60% exposure to emerging markets post divestments No country above c 10% of sales Best growth platform in the industry and superior operating profitability CHF 1.7bn / EUR 1.4bn of run-rate synergies Strict capital allocation discipline and strong financial structure: targeted solid Investment Grade credit ratings Attractive dividend payout policy BOARD & SHAREHOLDER SUPPORT » » Boards of both companies have unanimously approved the transaction Thomas Schmidheiny, GBL and NNS fully support the transaction TIMETABLE » Transaction closing expected in H1 2015 REBALANCED PORTFOLIO VALUE PROPOSITION 22 A MERGER OF EQUALS BALANCED GOVERNANCE AND LEADERSHIP BOARD OF DIRECTORS MANAGEMENT INTEGRATION COMMITTEE » » Chairman: Wolfgang Reitzle Equally composed Board with members from Holcim and members from Lafarge » » » CEO: Bruno Lafont CFO: Thomas Aebischer CIO: Jean-Jacques Gauthier » PRO FORMA SHAREHOLDING STRUCTURE Co-Chaired by Holcim and Lafarge OTHER LAFARGE SHAREHOLDERS 30% OTHER HOLCIM SHAREHOLDERS 42% NNS SHARE LISTING CENTRAL CORPORATE FUNCTIONS » » SIX (Zurich) Euronext (Paris) 7% GBL 10% THOMAS SCHMIDHEINY 11% » Balanced allocation across Zurich and Paris COMBINED MARKET CAP CHF 48.8 bn / EUR 39.9 bn 1 Combined market cap based on closing share prices on April 2014 23 A COMBINATION OF TWO SUCCESSFUL GROUPS ILLUSTRATIVE COMBINED DISPOSALS SYNERGIES1 ILLUSTRATIVE PRO FORMA2 COUNTRIES 90 2013 SALES (CHF / EUR bn) CHF 38.6 / EUR 31.6 c CHF (6) / EUR (5) CHF 0.5 / EUR 0.4 c CHF 33 / EUR 27 2013 EBITDA (CHF / EUR bn) CHF 7.8 / EUR 6.4 c CHF (1) / EUR (0.8) CHF 1.2 / EUR 1.0 c CHF / EUR 6.6 90 Notes: Full run-rate Excluding implementation costs 24 GEOGRAPHICAL COMPLEMENTARITY OF PORTFOLIOS Combined sales by region Emerging markets (in billion) 49% Total 73 17 90 # of countries CHF 11.0 / EUR 9.0 51% Developed markets 5.6 CHF 8.6 / EUR 7.0 5.4 CHF 7.0 / EUR 5.7 5.2 Europe 3.2 61% 45% 55% 39% 3.8 3.3 Asia North America CHF 5.9 / EUR 4.8 CHF 2.0 / EUR 1.7 0.9 CHF 4.4 / EUR 3.6 76% 3.3 24% 1.1 15% 85% 100% 5.0 2.0 Pacific Africa & ME Latin America Holcim Combined Cement Capacity (mT) 221 206 427 Aggregates volume sold (mT) 193 155 348 RMC volume sold (mm3) Global presence of Holcim and Lafarge Holcim sales (CHF) Lafarge sales (CHF) Lafarge 31 39 70 Note: pre-disposals, pre-group elimination, post regional elimination 25 STRATEGIC PORTFOLIO OPTIMISATION Selected divestments in Developed markets DEVELOPED MARKETS c CHF bn / EUR bn Revenues c CHF 0.5 bn / EUR 0.4 bn EBITDA 10% to 15% of combined EBITDA Limited divestments in Emerging markets EMERGING MARKETS c CHF bn / EUR 1.5 bn Revenues c CHF 0.4 bn / EUR 0.3 bn EBITDA STRATEGIC PORTFOLIO OPTIMISATION WHILST ANTICIPATING REGULATORY REQUIREMENTS STRONG CAPITAL STRUCTURE AFTER DIVESTMENTS DIVESTMENT COMMITTEE IS BEING FORMED 26 OPERATIONAL SYNERGIES • SOURCE » • ESTIMATED EBITDA RUN-RATE SYNERGIES Operational optimisation / best practices » E.g logistics, distribution, IT, energy consumption CHF 240 m / EUR 200 m Procurement Savings in overlapping countries Economies of scale in centralized procurement for selected categories » Selling, General and Administrative » CHF 410 m / EUR 340 m CHF 300 m / EUR 250 m Innovation deployed on a larger scale Cross-fertilization of value-added product portfolios TOTAL SYNERGIES AT EBITDA LEVEL CHF 240 m / EUR 200 m CHF 1.2 bn / EUR 1.0 bn 27 FINANCING & CASH-FLOW SYNERGIES • • SOURCE » Financing savings » ESTIMATED RUN-RATE SYNERGIES CHF 120 m / EUR 100 m (from end of year 1) Up to CHF 240 m / EUR 200 m (over time) Capital expenditures Best practice on maintenance capex Higher efficiency on expansion capex TOTAL SYNERGIES » Working capital savings CHF 250 m / EUR 200 m CHF 1.7 bn / EUR 1.4 bn CHF 500 m / EUR 410 m (over years) Sharing of best practices 28 KEY STEPS TO CLOSING MAJOR STEPS DESCRIPTION WORKS COUNCIL CONSULTATIONS » Lafarge and Holcim Works Council consultations initiated immediately DIVESTMENTS » Process to start immediately INTEGRATION PREPARATION » Prepare an integration plan for implementation straight after closing of the transaction REGULATORY APPROVALS » Regulatory proceedings initiated in all relevant jurisdictions shortly » After regulatory approvals: Holcim EGM approvals Launch public exchange offer SHAREHOLDER APPROVAL AND ACCEPTANCES TRANSACTION CLOSING EXPECTED IN H1 2015 29 Contact information and event calendar Contact information Event calendar Corporate Finance & Treasury Phone +41 58 858 87 20 treasury-hts@holcim.com www.holcim.com/bondholders July 30, 2014 Half-year results for 2014 November 4, 2014 Press and analyst conference third quarter results for 2014 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 Fixed-income investor update May 2014 © 2014 Holcim Ltd 30 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 be subject to a number of risks, uncertainties and other important factors, such as but not limited to (1) competitive pressures; (2) legislative and regulatory developments; (3) global, macroeconomic and political trends; (4) fluctuations in currency 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 a result of new information, future events or otherwise Fixed-income investor update May 2014 © 2014 Holcim Ltd 31 ... 2012 2013 Q1 2014 Loans Capital markets Share of capital market financing (r.h scale) Fixed- income investor update May 2014 © 2014 Holcim Ltd 18 Access to a wide range of capital markets – only... Holcim Leadership Journey Financial positioning and financing Merger of equals between Holcim and Lafarge Fixed- income investor update May 2014 © 2014 Holcim Ltd 16 Financial debt, maturities and. .. bn Fixed- income investor update May 2014 © 2014 Holcim Ltd Agenda Holcim at a glance First quarter 2014 results, outlook and Holcim Leadership Journey Financial positioning and financing Merger