baml building and infrastructure conference thomas aebischer cfo holcim group baml building and infrastructure conference october 9th 2012 holcim ltd strength performance passion

Strength. Performance. Passion. © 2012 Holcim Ltd BAML Building and Infrastructure Conference Thomas Aebischer, CFO Holcim Group BAML Building and Infrastructure Conference © 2012 Holcim Ltd October 9 th , 2012 © 2012 Holcim Ltd Agenda 2 BAML Building and Infrastructure Conference Financial Overview 3 Holcim Leadership Journey 6 Driving towards better Processes 12 Growth and Performance Management 18 Conclusion 21 © 2012 Holcim Ltd / Mature Emerging markets continue to grow, but a global recovery remains elusive 9% Net Sales, operating EBITDA (million CHF) GDP growth -3% 0% 3% 6% 12% - 3'000 6'000 9'000 12'000 15'000 18'000 21'000 24'000 27'000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Net Sales op. EBITDA / Emerging GDP growth (IMF WEO 2010/2012) 1 : 3 BAML Building and Infrastructure Conference 1 IMF World Economic Outlook Databases as of April 2010 (thin line) resp. as of April 2012 (bold line) 3 © 2012 Holcim Ltd The trough seems over: Since Q3 2011, there is a positive trend on like-for-like operating EBITDA variance 4 ‐250 ‐200 ‐150 ‐100 ‐50 0 50 100 150 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Like-for-like quarterly operating EBITDA variance 1 : (in million CHF) 1 Adjusted for CO 2 Turning point BAML Building and Infrastructure Conference © 2012 Holcim Ltd Agenda 5 BAML Building and Infrastructure Conference Financial Overview 3 Holcim Leadership Journey 6 Driving towards better Processes 12 Growth and Performance Management 18 Conclusion 21 © 2012 Holcim Ltd Driving ROIC based on strategy, people, execution 6 < 8% ROIC* 2011 ROIC* 2014 Building on competencies, focusing on execution Proven strategy Leadership Journey Dedicated people > 8% BAML Building and Infrastructure Conference * After tax © 2012 Holcim Ltd Streamlined organizational structure Holcim Group Area Managers/ Corporate Functional Managers Line and functional responsibility Executive Committee Internal Audit 1 Governance, Nomination & Compensation Committee Board of Directors Holcim Ltd Audit Committee Bernard Fontana CEO Paul Hugentobler Andreas Leu Roland Köhler Bernard Terver Thomas Aebischer CFO Javier de Benito Aidan Lynam Onne van der Weijde Communications Human Resources Investor Relations Legal Occupational Health & Safety Strategy & Risk Management Aggregates and Other Construction Materials Cement Manufacturing Commercial & Marketing Innovation Sustainable Development Controlling Financing & Treasury Group Structure & Tax HGRS Accounting & Administration* IT Merger & Acquisitions Procurement Ian Thackwray 1 Internal Audit reports to the Chairman of the Board of Directors 2 Excluding Philippines 3 Including Philippines 4 Excluding UK * Ad interim Status: September 1st, 2012 Europe 4 South Asia ASEAN 2 East Asia 3 Oceania Holcim Trading Latin America North America UK Africa Middle East Urs Bleisch Jacques Bourgon Urs Fankhauser Kaspar Wenger Horia Adrian 7 BAML Building and Infrastructure Conference © 2012 Holcim Ltd All figures in million CHF 2012 2013 2014 Customer Excellence (operating profit impact) 50-100 150-200 500 -Customer focus -Value management -Pricing policies -Marketing and sales forces skills and motivation Cost Leadership (operating profit impact) 100-200 400-500 > 1,000 -Energy and AFR > 300 -Logistics > 250 -Procurement > 250 -Fixed cost > 200 Total increase in operating profit 150-300 550-700 > 1,500 Cash cost to achieve the savings (one-off) < 80 < 120 Additional CAPEX net 1) 0-40 100-180 100-180 1) 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 Holcim Leadership Journey: Increase operating profit by CHF 1.5 billion until 2014 8 BAML Building and Infrastructure Conference © 2012 Holcim Ltd • Base line: Operating Profit of 2011 adjusted 1 (CHF 2’308 million) • Each work stream has its own set of performance measurement definition, considering volume, price and cost according to the specific drivers of that work stream: Holcim Leadership Journey – Target Tracking BAML Building and Infrastructure Conference 9 1 Excluding one-off charges of CHF 375 million Energy Fixed CostLogistics Procurement Alternative Fuels & Raw Materials Customer Excellence = Work stream specific definition of performance measurement, reflecting only that portion of volume, price and cost effect that is attributable to the work stream itself => overall performance of Holcim Leadership Journey translating into CHF 1.5 billion of additional operating profit in 2014 © 2012 Holcim Ltd 10 BAML Building and Infrastructure Conference In each work stream of Holcim Leadership Journey, results are tracked per initiative Holcim Leadership Journey contribution Price Volume Cost 2 Variation in operating profit compared to 2011 (illustrative example): The overall result of the Holcim Leadership Journey will be a bottom-up aggregation of the identified initiatives Change not related to Holcim Leadership Journey 1 CHF 2’308 million (base line of operating profit) 1 Including CIS and FX effect 2 Including depreciation [...]... grant “more returns for less capital” => Reduce total cost of ownership BAML Building and Infrastructure Conference © 2012 Holcim Ltd 19 Agenda Financial Overview Holcim Leadership Journey Driving towards better Processes Growth and Performance Management Conclusion BAML Building and Infrastructure Conference 3 6 12 18 21 © 2012 Holcim Ltd 20 Conclusion • The trough seems over: Since Q3 2011, there is a... Business Services is continuously centralizing and standardizing the administrative and transactional services rendered to our customers, suppliers and employees BAML Building and Infrastructure Conference © 2012 Holcim Ltd 13 Procurement Global procurement Increase spend at global level to benefit from higher purchasing power of Holcim - categories to be sourced at Group level to be increased from 6 with... Financial Overview Holcim Leadership Journey Driving towards better Processes Growth and Performance Management Conclusion BAML Building and Infrastructure Conference 3 6 12 18 21 © 2012 Holcim Ltd 11 Information Technology Synergies Exploit business intelligence synergies between financial reporting and functional reporting areas • Integrated dashboards for quicker decision making and actions • Operational... Processes Growth and Performance Management Conclusion BAML Building and Infrastructure Conference 3 6 12 18 21 © 2012 Holcim Ltd 17 Holcim investment criteria ensures growth is value generating Product Focus • Strategic fit • Position taking in line with maturity profile of the respective market • Networking possibilities and partnerships Geographic Diversification Local Management Global Standards • GDP... established global platforms and services model further & services Sourcing Strengthen IT strategic sourcing in selected areas Replication Act as a platform for replication of best practices within the Group, especially for new technologies Support Provide IT solutions and processes to facilitate Holcim Leadership Journey BAML Building and Infrastructure Conference © 2012 Holcim Ltd 12 Our Shared Service... 8% through the Holcim Leadership Journey BAML Building and Infrastructure Conference © 2012 Holcim Ltd 21 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... share • Networking • Management and manpower resources • Resource management • Local culture embedment Financials • Value creation • Financing in line with Holcim policy • Investment scorecard • Accountability Success factor – rigorous investment analysis and discipline BAML Building and Infrastructure Conference © 2012 Holcim Ltd 18 Freeing, generating, allocating and leveraging capital growing the... •Pool demand requirements at local level •Drive service category consolidation •Process improvement at user interface •Drive transaction automation Global Categories 30% 70% Estimates based on addressable portion of spend as % of 2011 reported total spend BAML Building and Infrastructure Conference © 2012 Holcim Ltd 15 Process excellence will pave the way for additional cost savings through SSC and regional... Americas NABS Europe, Middle East and Africa Asia Pacific Global/EMEA Sourcing Hub APAC-Beijing Supplier Development Hub Americas Sourcing Hub Services EMEA BAML Building and Infrastructure Conference Services Asia APAC Sourcing Hub Sourcing Hubs Shared Service Centres Services South Asia LASER Oceania IT Service Center © 2012 Holcim Ltd 16 Agenda Financial Overview Holcim Leadership Journey Driving... to increase efficiency BAML Building and Infrastructure Conference © 2012 Holcim Ltd 14 In our industry, companies that procure more efficiently will have a cost and therefore a competitive advantage Total Spend 9% 91% Target 2014 Drivers of Leverage Fuels, Additives, Capex Equipment, Grinding Media, IT, Travel, Large Capex, … •Set global/regional strategies •Global negotiation and volume commitments . Passion. © 2012 Holcim Ltd BAML Building and Infrastructure Conference Thomas Aebischer, CFO Holcim Group BAML Building and Infrastructure Conference © 2012 Holcim Ltd October 9 th , 2012 © 2012 Holcim. CHF) 1 Adjusted for CO 2 Turning point BAML Building and Infrastructure Conference © 2012 Holcim Ltd Agenda 5 BAML Building and Infrastructure Conference Financial Overview 3 Holcim Leadership Journey 6 Driving. enhancing investment opportunities -20% 19 BAML Building and Infrastructure Conference © 2012 Holcim Ltd Agenda 20 BAML Building and Infrastructure Conference Financial Overview 3 Holcim Leadership Journey 6 Driving