canadian fixed-income investor update 2014 michel r gerber senior investor relations officer swetlana iodko investor relations officer holcim ltd

Strength. Performance. Passion. © 2014 Holcim Ltd Canadian fixed-income investor update IFZ - MAS Corporate Finance 20_10 – Funding December 7, 2012, 14.10 – 17.50 Michel R. Gerber, Senior Investor Relations Officer Swetlana Iodko, Investor Relations Officer Canadian fixed-income investor update, 2014-05-26 © 2014 Holcim Ltd © 2014 Holcim Ltd Agenda 2 Canadian fixed-income investor update, 2014-05-26 Holcim at a glance Macro economic development and the impact for the cement industry First quarter 2014 results, Holcim Leadership Journey Financial positioning and financing Merger between Holcim and Lafarge Outlook 2014 - Conclusions © 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 Canadian fixed-income investor update, 2014-05-26 3 © 2014 Holcim Ltd Agenda 4 Canadian fixed-income investor update, 2014-05-26 Holcim at a glance Macro economic development and the impact for the cement industry First quarter 2014 results, Holcim Leadership Journey Financial positioning and financing Merger between Holcim and Lafarge Outlook 2014 - Conclusions © 2014 Holcim Ltd Fundamental trends support our business … The right place to be Population growth Continued urbanization Economic growth 5 Canadian fixed-income investor update, 2014-05-26 © 2014 Holcim Ltd 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 the US 6 Canadian fixed-income investor update, 2014-05-26 © 2014 Holcim Ltd 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 which is unique in the industry Well positioned to address growth in cement demand 7 Canadian fixed-income investor update, 2014-05-26 © 2014 Holcim Ltd • Global footprint - the result of organic and inorganic growth initiatives • Operating cash flow exceeds CAPEX and financial investments • Current cement capacities (incl. ongoing projects) sufficient to capture growth • Increasing capacity utilization of existing plants coupled with ongoing cost reduction initiatives resulting in higher ROIC Value creation from our existing asset base • 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 8 Canadian fixed-income investor update, 2014-05-26 © 2014 Holcim Ltd Agenda 9 Canadian fixed-income investor update, 2014-05-26 Holcim at a glance Macro economic development and the impact for the cement industry First quarter 2014 results, Holcim Leadership Journey Financial positioning and financing Merger between Holcim and Lafarge Outlook 2014 - Conclusions © 2014 Holcim Ltd • 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 Q1 2014 Milestones Canadian fixed-income investor update, 2014-05-26 10 [...]... operating margins in 2014 and beyond Canadian fixed-income investor update, 2014- 05-26 © 2014 Holcim Ltd 32 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 3, 2014 Press and analyst conference third quarter results for 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 list: www .holcim. com/subscribe Canadian fixed-income investor update, 2014- 05-26 © 2014 Holcim Ltd 33 Disclaimer Cautionary statement regarding forward-looking statements This presentation may contain certain forward-looking statements relating... offer Transaction closing expected in H1 2015 © 2014 Holcim Ltd 29 Agenda Holcim at a glance Macro economic development and the impact for the cement industry First quarter 2014 results, Holcim Leadership Journey Financial positioning and financing Merger between Holcim and Lafarge Outlook 2014 - Conclusions Canadian fixed-income investor update, 2014- 05-26 © 2014 Holcim Ltd 30 Outlook for 2014 • Holcim. .. 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 Shareholder approval and acceptances • After regulatory approvals:  Holcim EGM approvals... 39 70 © 2014 Holcim Ltd 22 Unique 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 © 2014 Holcim Ltd 23 Key transaction highlights Company name • LafargeHolcim Deal structure • • Merger of equals Company... having spent already CHF 239 million, no additional restructuring cash costs are foreseen at this stage 4) excluding CHF 16 million of restructuring costs in Europe (mainly Spain) Canadian fixed-income investor update, 2014- 05-26 © 2014 Holcim Ltd 15 Agenda Holcim at a glance Macro economic development and the impact for the cement industry First quarter 2014 results, Holcim Leadership Journey Financial... expected from the Holcim Leadership Journey will lead to a further expansion in operating margins Canadian fixed-income investor update, 2014- 05-26 © 2014 Holcim Ltd 31 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 without adding any significant new capacities • The proposed... proposition © 2014 Holcim Ltd 24 Best-in-class portfolio for growth Emerging markets • • • 60% of pro forma sales 13 countries out of our Top 20 with strong infrastructure needs2 6% CAGR for construction outputs expected until 20253 Portfolio breakdown (2013 sales)1 c 60% Emerging markets LatAm Africa/Middle East Eastern Europe Developed markets • • 40% of pro forma sales Significant recovery potential Asia/Pacific... Western Europe N America Diversification and balance • • Present in 90 countries No single country representing more than c 10% of sales c 40% Developed markets Capturing the recovery in developed markets while ensuring long-term sustainable growth in emerging markets 1 Pro forma of divestments 2 Ranked below 50 in the World Economic Forum Global Competitiveness index for quality of overall infrastructure... Switzerland Exchange ratio • Exchange ratio of 1 Holcim share for 1 Lafarge share Rebalanced portfolio • • • • 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 . Senior Investor Relations Officer Swetlana Iodko, Investor Relations Officer Canadian fixed-income investor update, 2014- 05-26 © 2014 Holcim Ltd © 2014 Holcim Ltd Agenda 2 Canadian fixed-income. Strength. Performance. Passion. © 2014 Holcim Ltd Canadian fixed-income investor update IFZ - MAS Corporate Finance 20_10 – Funding December 7, 2012, 14.10 – 17.50 Michel R. Gerber, Senior. comes from prioritization of CAPEX based on the speed of the returns (ROIC). Canadian fixed-income investor update, 2014- 05-26 15 © 2014 Holcim Ltd Agenda 16 Canadian fixed-income investor update,