exane bnp paribas 13th european seminar thomas aebischer cfo june 9th 2011 holcim ltd

Exane BNP Paribas 13th European Seminar Thomas Aebischer – CFO June 9th, 2011 © Holcim Ltd 2011 Agenda Risk management – core to our strategy Talent – people make the difference Growth – only with discipline will it create value Conclusion © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Clear directives and managing risks are a core part of strategy execution • Holcim steadfastly applies governance  Essential to our model of global standards & local management  Manage risks and stay ahead of the curve • Clear and consistent global rules – most valuable where law is weak  Gain respect and build reputation with our stakeholders  Attract and retain the best talent • Customer focus  Allows undivided attention on value creating activities  Win business on reliability, sustainability and values People Establish Long term Strategy Execute Strategy and Manage Risks Ensure Compliance with Policies and Values © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Staying “ahead of the curve” of regulation requires a proactive view and defined corporate values – a competitive advantage Asset renewal timeline – Holcim (US) 1996 2000 2001 2002 2003 2009 2009 2009 2011 Plant renewal, expansion and rationalization Mothball Mothball Ste Expansion Expansion Camden and Expansion Expansion Close Birmingham of Portland of Holly Genevieve Catskill Clarksville Artesia of Devil's of and Mason greenfield plant plant Slide plant Midlothian Hill plant and City plants Dundee plant plants Challenge Holcim’s Initiative Current status • Initiated an asset renewal • Average kiln age of our strategy in 1996 proposed regulatory U.S operations is 15 years standards on the industry • Invested more than $3 vs >30 years for the industry billion in new or refurbished • National Emission capacity • Leading performance on Standards for Hazardous energy, cost and emissions Air Pollutants (NESHAP) – • Introduced state of the art, compliance required in cost and environmentally • Competitive advantage 2013 efficient production with forthcoming regulation • Several existing and © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Managing risk and being a valued member of the community is how to execute on growth Nationwide presence – capturing growth opportunities Ropar Bathinda Gagal Darlaghat G RoNalagarh Darla ag Bath pa ghat Roorkee al inda r Ropar Dadri P Rabriyawas a li Sanand Surat Kodinar Mumbai Tikaria Tik ari Sindri a Ky Kymore mor Chaibasa e Bhata Jamul Bar Ja Bargarh para Chanda gar m Bhatapara Cha h Chand ul nda Chandrapur rapur Lakheri Lak her i Wadi W a di Indicates limestone cluster Madukkarai Maduk karai Bathinda Farakka Damodar Si Sankrail nd ri Dadri Integrated Plant Grinding Station Import TerminalLakheri P Lak Rabriyawas ACC a her ACLli i Sanand Product flows Surat Kodinar Challenge Gagal Darlaghat G RoNalagarh Darla ag Bath pa ghat Roorkee al inda r Tikaria Tik ari Sindri a Ky Kymore mor Chaibasa e Bhata Jamul Bar Ja Bargarh para Chanda gar m Bhatapara Cha h Chand ul nda Chandrapur rapur Holcim’s Initiative Mumbai • Added approximately 13 mt W in cement Wadi capacity since and project execution a 2008 di • Market demand of 212 mt • Centered in areas with growing at – 10% p.a long-term reserves • 75% of limestone reserves Madukkarai • Water, land and resource Maduk centered in four states karai management initiatives • Increasing coal costs, wages and limited railcars • Resource management Damodar Si Sankrail nd ri Current status • Positioned strategically • Introduced blended cements • Hub and spoke strategy • Captive power plants ã Conservation of nonrenewable resources â Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Thermal fuel initiatives continue to focus on the reduction of energy intensity and optimization of fuel mix Quarrying and raw material preparation 14% Clinker production Thermal substitution rate by alternative fuels Cement grinding and distribution 90% 12% 85% 10% 80% 8% 75% 6% 70% 4% Clinker factor 65% 2% 60% 90 … 00 … 07 08 09 10 90 … 00 … 07 08 09 10 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 The energy cost evolution demonstrates our success in managing the volatility of fuel and electricity costs Crude Oil-Brent per FOB1 USD / BBL WEFA Steam Coal ARA index USD /Metric t In CHF per tonne cement produced 25 250 20 200 Total energy expenses 15 150 Fuel expenses Coal Electricity expenses 10 100 50 Crude Oil 2005 * Energy 2006 expenses stated quarterly © Holcim Ltd 2011 2007 2008 2009 2010 Free on board - shipping point (excluding freight cost) Exane BNP Paribas 13th European Seminar 2011 June 9, 2011 Agenda Risk management – core to our strategy Talent – people make the difference Growth – only with discipline will it create value Conclusion © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Talent – Ensure we have the best people in the right jobs • Attract the best talent and promote from within • Hire for attitude and leverage diversity to maximize potential • Provide constructive quality feedback • Invest in training, leadership and management education • Active succession planning enhances performance Strength Performance Passion © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 The Holcim Academy is a model for how to identify and develop skills that impact the business • Technical training focuses on building expertise based on operational performance indicators • Leadership and training modules focus on practical business impact on the performance of the middle manager Holcim programs & focused development Talent management and development Leadership / management development Functional & organizational performance improvement training Retention New talent Selection, recruitment and induction Basic vocational & new graduate training (IT, English, safety, leadership & personal effectiveness 10 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 The management of talent potential translates into performance • A formal process of succession management creates a supply of the best people for key roles • Ongoing management task to develop talent • Renewal of senior management level in the last three years • Over 20 new local top-level executives appointed in the last 18 months • Succession planning for senior management positions is a regular Board agenda item 11 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Holcim Indonesia has demonstrated that targeted leadership development has a direct link on performance • Established the Holcim Academy which has three pillars: Learning & Development, Organizational Performance Improvement and Talent Management 1997: Process Engineer Cement Australia 2001: Technical Manager Narogong 2007: Holcim Academy Technical Training Head 2009: Holcim Academy Zai Zainuddin Head 2011: Regional Learning & Development Manager 12 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Agenda Risk management – core to our strategy Talent – people make the difference Growth – only with discipline will it create value Conclusion 13 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 As in previous growth cycles, commodities lead to products and services demand resulting in housing and construction Building materials sector growth Commodities Boom Demand for Energy, Mining and Oil Manufacturing Growth Consumer and Banking Expansion Demand for Capital Goods and Equipment Demand for Retail Products and Services Time © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar Heavy and Lightside Building Materials Demand for Housing and Construction 14 June 9, 2011 Long term growth in the building materials is certain as construction will outpace world GDP in the next decade • We expect global construction to grow by 67% from $7.2 trillion today to $12 trillion in 2020 • Growth in China, India and the US will generate 54% of the $4.8 trillion increase in global construction output • Emerging markets will account for 55% of global construction (46% today) • $100 trillion will be spent on construction globally during the next decade • By 2020 construction will account for 13.2% of world GDP (11% today) @ growth rate of 5.2% per annum Sources: Oxford Economics, March 2011 © Holcim Ltd 2011 Photo: Proposed Beijing Z15 supertall skyscraper Exane BNP Paribas 13th European Seminar 15 June 9, 2011 Our expansion program has created a growth portfolio of highly efficient, low-cost, environmentally friendly capacity Capacity expansions* Completed Under construction or planned * As per end of April 2011 21.7 million of additional cement capacity has come on stream since 2008 Further 7.8 million tonnes by 2013 16 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Holcim investment criteria – rigorous investment analysis and discipline is a success factor 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 growth • Management and • Favourable demographics manpower resources • Resource management • Deficit markets • Substantial market share • Local culture embedment • Networking Financials • Value creation • Financing in line with Holcim policy ã Investment scorecard ã Accountability 17 â Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Agenda Risk management – core to our strategy Talent – people make the difference Growth – only with discipline will it create value Conclusion 18 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Conclusions • Clear directives and managing risk are a core part of our strategy execution Win customers and business based on reliability, sustainability, trust and values  Clear and consistent global standards are a competitive advantage  Targeted leadership development has a direct link to performance  Attracting and managing the best talent makes the difference • We are uniquely positioned for global construction dynamics    We have the motivated teams of people and financial means to execute on potential projects and opportunities The decision to Greenfield or make acquisitions is one of: timing – capability – opportunity 19 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 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 20 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Contact information and event calendar Contact information Bernhard A Fuchs Binit B Sanghvi John M Feigl Investor Relations Phone +41 58 858 87 87 Fax +41 58 858 80 09 investor.relations@holcim.com www.holcim.com/investors Event calendar August 18, 2011 Half-year results for 2011 November 9, 2011 Press and analyst conference for the third quarter 2011 February 29, 2012 Press and analyst conference on annual results for 2011 April 17, 2012 General meeting of shareholders May 9, 2012 Results for the first quarter 2012 Mailing list: www.holcim.com/subscribe 21 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Strength Performance Passion 22 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 ... 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Strength Performance Passion 22 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 ... April 2011 21.7 million of additional cement capacity has come on stream since 2008 Further 7.8 million tonnes by 2013 16 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June 9, 2011 Holcim. .. 2007: Holcim Academy Technical Training Head 2009: Holcim Academy Zai Zainuddin Head ? ?2011: Regional Learning & Development Manager 12 © Holcim Ltd 2011 Exane BNP Paribas 13th European Seminar June