vontobel summer conference bernhard a fuchs head investor relations holcim ltd

© 2014 Vontobel Summer Conference Bernhard A. Fuchs, Head Investor Relations © 2014 Agenda 2 Vontobel Summer Conference – June11/12, 2014 Holcim at a Glance Macro Economic Development and the impact for the cement industry Merger between Holcim and Lafarge First quarter 2014 results Outlook 2014 – Conclusions © 2014 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 Vontobel Summer Conference – June11/12, 2014 © 2014 Agenda 4 Holcim at a Glance Macro Economic Development and the impact for the cement industry Merger between Holcim and Lafarge First quarter 2014 results Outlook 2014 – Conclusions Vontobel Summer Conference – June11/12, 2014 © 2014 -6 -4 -2 0 2 4 6 8 10 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 World Advanced economies Emerging economies GDP at constant prices [annual % change] Forecast Slightly better economic recovery expected, although uncertainty remains, … • Global economic growth is expected to accelerate slowly from 3.0% in 2013 to 3.6% in 2014 and 3.9% in 2015 (IMF April 2014) • Major developed countries to expand simultaneously for the first time in several years • Emerging markets, on balance, should perform better in 2014 5 Source: IMF World Economic Outlook April 2014 Change in GDP Forecast [January '14 to April'14] ‐0.6 ‐0.5 ‐‐ 0.1 ‐0.1 ‐‐ 0.4 ‐0.2 ‐0.2 ‐‐ 0.1 ‐0.1 ‐ ‐ 0.3 2014 2015 [annual %change] Vontobel Summer Conference – June11/12, 2014 © 2014 fundamental trends support our business … The right place to be Population growth Continued urbanization Economic growth 6 Vontobel Summer Conference – June11/12, 2014 © 2014 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 … resulting in long-term cement consumption growth driven by emerging markets and recovery in Europe and US 7 Vontobel Summer Conference – June11/12, 2014 © 2014 Regional Construction Market Growth Forecast [CAGR] 7.1% 1.7% 6.5% 5.6% 4.9% 2.1% 6.6% 8.3% 8.7% 6.0% 5.9% 6.0% 1.4% 4.9% 4.2% 3.7% 0.9% 5.3% 7.2% 7.5% 4.9% 5.0% Total WesternEu rop e EasternEu rope NorthAmerica South&Cen tralAmerica As iaPacific('developed') As iaPacific('emerging ' w/o India&Chi na)) Chi na India MiddleEast&NorthAfrica Sub‐SaharanAfrica Prev iousFC[C AGR2010‐2020] CurrentFC[CAG R2013‐2025] ‐1.1% ‐0.3% ‐1.5% ‐1.4% ‐1.2% ‐1.1% ‐1.3% ‐1.1% ‐0.9% No te:PreviousFCbasedonUSD 2010prices&Curre ntFCbasedonUSD2012pri ces Change ‐1.1% ‐1.2% • Long term growth prospects remain positive for the majority of the regional construction sectors, driven by sound fundamentals and mega-trends • Following the pattern of expected slower GDP growth, growth projections for the sector are still strong • The compounded annual growth rate (CAGR) in construction spend is expected to be 6% for the period from 2013 to 2025 Oxford Economics remains positive on the long term prospects of the global construction sector Source: Oxford Economics - Global Construction Perspectives 2020 (March 2011) and 2025 (July 2013) 8 Vontobel Summer Conference – June11/12, 2014 © 2014 China and North America will attract most of the additional construction spend, followed by Emerging Asia and India • In nominal dollar terms, China, North America, Emerging Asia and India are expected to attract more than two thirds of global construction spend • China is a growth driver with more than a third of 2013- 2025 value growth potential [36% TOT] • North America is expected to regain momentum driven by economic recovery and population growth [15% TOT] • New Asian Tigers (Indonesia, South Korea, Vietnam and Philippines) is expected see significant growth over the period - Indonesia is expected to become the worlds third largest housing market [12% TOT] • India considerable growth potential [9% of TOT] • Latin America (excl. Mexico) will grow at a relatively low rate [6% of TOT] • Weak economic fundamentals in Western Europe and stagnant population will result in low but stable growth [5% TOT] • Eastern Europe (driven by Russia and Turkey) is expected to grow almost as much as India [8% TOT] • Africa with significant growth rates, however small overall Source: Oxford Economics - Global Construction Perspectives 2025 (July 2013) Global Construction Market [2013-2025] 2'182 914 746 566 489 353 340 314 125 95 China North America AsiaPacific ('e m erging' w/oIndia&China)) India Easte rn Europe South& CentralAme rica MiddleEa st &NorthAfrica We st ern Europe AsiaPacific (' de ve loped' ) Sub‐Saharan Afric a 2013‐2025 Change in U SD bn No te: FCba sedonUSD2012pri ces 36% 15% 12% 9% 8% 6% 6% 5% 2% 2% %‐sharein Globalgrowth USD bn in2013 1'677 1'442 783 409 628 650 6% 1'711 1'050 118 9 Vontobel Summer Conference – June11/12, 2014 © 2014 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 CHF 35 billion to establish a global footprint unmatched in the industry Well positioned to address growth in cement demand 10 Vontobel Summer Conference – June11/12, 2014 [...]... initiated in all relevant jurisdictions shortly Shareholder Approval and Acceptances • After regulatory approvals:  Holcim EGM approvals  Launch public exchange offer Transaction Closing expected in H1 2015 Vontobel Summer Conference – June11/12, 2014 © 2014 20 Agenda Holcim at a Glance Macro Economic Development and the impact for the cement industry Merger between Holcim and Lafarge First quarter 2014... Contact information and event calendar Contact information Event calendar Bernhard A Fuchs Michel R Gerber Swetlana Iodko July 30, 2014 Half-year results for 2014 November 3, 2014 Press and analyst conference for the third quarter 2014 November 18, 2014 Investor Day in Zurich Investor Relations Phone +41 58 858 87 87 Fax +41 58 858 80 09 investor. relations@ holcim. com www .holcim. com/investors Mailing... 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 Value proposition Vontobel Summer Conference. .. Capex Synergies Implementation Costs Working Capital Savings © 2014 19 Key Steps to Closing 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... North America CHF 2.0 / EUR 1.7 CHF 4.4 / EUR 3.6 76% 24% 3.3 1.1 Latin America Global presence of Holcim and Lafarge Holcim sales (CHF) Lafarge sales (CHF) Note: pre-disposals, pre-group elimination, post regional elimination Vontobel Summer Conference – June11/12, 2014 CHF 5.9 / EUR 4.8 100% 0.9 15% 85% 2.0 Pacific 5.0 Africa & ME Lafarge Holcim Combined Cement Capacity (mT) 221 206 427 Aggregates volume... Value Proposition for Shareholders • • • • • New best-in-class global portfolio Superior growth and operating profitability Significant synergies Strict capital allocation discipline and strong capital structure Attractive returns for shareholders Vontobel Summer Conference – June11/12, 2014 © 2014 14 Key Transaction Highlights Company name • LafargeHolcim Deal structure • • Merger of equals Company... stakeholders • The unmatched global footprint of the combination between Holcim and Lafarge will lead to less additional capital for expansion and therefore even more attractive returns to shareholders • 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 in 2014 and beyond Vontobel Summer Conference. .. 2014 27 Agenda Holcim at a Glance Macro Economic Development and the impact for the cement industry Merger between Holcim and Lafarge First quarter 2014 results Outlook 2014 – Conclusions Vontobel Summer Conference – June11/12, 2014 © 2014 28 Outlook for 2014 • Holcim expects cement volumes to increase in all Group regions • Aggregates volumes expected to remain flat overall as increases in Asia Pacific,... North America, and Africa Middle East are offset by negative volumes in Latin America • Ready-mix concrete volumes also expected to increase in most regions with the exception of Europe and Latin America • Holcim expects that organic growth in operating profit can be achieved in 2014 • The ongoing focus on the cost base coupled with all the benefits expected from the Holcim Leadership Journey will lead... Logistics Total increase 1) Cash cost to achieve the savings (one-off) Additional CAPEX net 2) 239 48 3) 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 w ithout fluctuations in currency, changes in scope of consolidation and similar market conditions) Adjusted for the sale of 25% of Cement Australia and Siam City Cement, . Vontobel Summer Conference Bernhard A. Fuchs, Head Investor Relations © 2014 Agenda 2 Vontobel Summer Conference – June11/12, 2014 Holcim at a Glance Macro Economic Development and the impact. 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. [CAGR] 7.1% 1.7% 6.5% 5.6% 4.9% 2.1% 6.6% 8.3% 8.7% 6.0% 5.9% 6.0% 1.4% 4.9% 4.2% 3.7% 0.9% 5.3% 7.2% 7.5% 4.9% 5.0% Total WesternEu rop e EasternEu rope NorthAmerica South&Cen tralAmerica As iaPacific('developed') As iaPacific('emerging ' w/o India&Chi na)) Chi na India MiddleEast&NorthAfrica Sub‐SaharanAfrica Prev