investor presentation january 2010 holcim ltd

© Holcim Ltd 2010 Investor Presentation January 2010 Singapore 2 © Holcim Ltd 2010 January 2010 Investor Presentation Agenda 1 Strategy – successful execution 2 Positioning – capture future growth 3 Future growth – challenges to be addressed 4 Performance – sound track record 5 Conclusions 3 © Holcim Ltd 2010 January 2010 Investor Presentation Holcim strategy… …effective execution is the base for success 1 Reported as per 9M 2009 YTD Product Focus Geographic Diversification Local Management Global Standards  Two basic resources  Cement  Aggregates  Value-adding products and services  Ready-mix concrete  Asphalt  Concrete products  Truly global  Balanced between  regions  mature / emerging markets  Business – strongly anchored in local markets  Supported by global standards  Policies & directives  Exchange of know how & best practices / benchmarking 34% 16 % 16 % 6% 28% 27% 9% 22% 7% 35% Latin America Africa Middle East Asia Pacific Europe North America Net sales 1 Op. EBITDA 1 4 © Holcim Ltd 2010 January 2010 Investor Presentation Robust results and solid balance sheet despite economic downturn 2009 – a difficult economic environment  9 months year-to-date  Volume declines of up to 20%  Net sales and operating EBITDA like-for-like 10% and 7% below previous year  Swift reaction with capacity adjustment and strict cost management  Shut down ~10 million tonnes of cement capacity  Closed more than 100 aggregates, ready-mix concrete and asphalt plants  Target of CHF 600 million cost savings will be exceeded  Focus on cash flow, liquidity and refinancing 5 © Holcim Ltd 2010 January 2010 Investor Presentation Agenda 1 Strategy – successful execution 2 Positioning – capture future growth 3 Future growth – challenges to be addressed 4 Performance – sound track record 5 Conclusions 6 © Holcim Ltd 2010 January 2010 Investor Presentation Cement, aggregates and ready-mix concrete markets account for ~10% of global construction Source: Global Construction 2020, Global Construction Perspectives, Oxford Economics, November 2009, JPM Full Sector Note 2009, Global Cement Statistics, 18 year Database 1990 – 2008, Holcim Estimates Largest construction markets 2009E  Global cement demand ~3 billion tonnes  Global aggregates demand ~20 billion tonnes  Global ready-mix concrete demand ~1.6 billion m 3 Global construction market accounts for ~USD 7.5 trillion or ~13% of global GDP USD bn % USA 1,313 17% China 1,035 14% Japan 592 8% Germany 303 4% Spain 292 4% France 271 4% Italy 262 3% South Korea 248 3% India 247 3% UK 243 3% Canada 218 3% Brazil 173 2% Australia 157 2% Russia 154 2% Indonesia 138 2% Others 1,899 25% Total 7,542 100% 7 © Holcim Ltd 2010 January 2010 Investor Presentation Continuous growth in demand even in recessionary environments Global cement demand 1970 to 2009E (in million tonnes) Source: Cembureau, Global Cement Statistics, 18 year Database 1990 – 2008, Holcim estimates CAGR 1970 - 1980 4.2% 1980 - 1990 2.7% 1990 - 2000 3.6% 2000 - 2005 7.4% 2005 - 2008 5.8% Structurally we are in a growth industry 0 500 1000 1500 2000 2500 3000 3500 1970 1980 1990 2000 2010 Oil crisis 1973 Financial crisis 1981 Financial crisis 1990 Asian crisis 1997 Recession 2002 Financial crisis 2008 8 © Holcim Ltd 2010 January 2010 Investor Presentation 0 5 10 2050 1970 2000 2030 0 5 10 Emerging markets Mature markets 0 5 10 2050 1970 2000 2030 0 5 10 0 5 10 2050 1970 2000 2030 0 5 10 Emerging markets Mature markets Demand drivers – population growth and urbanization World population  Likely little or even no population growth in most developed countries while population growth in emerging countries will continue  In emerging and mature countries migration from rural areas into urban agglomerations will continue Source: United Nations, World Population Prospects, March 2009 – in billion Population in rural and urban areas 1970 2000 2030 2050 0 5 10 1.3 2.4 2.9 3.2 5.0 3.3 6.4 2.8 urban rural 1970 2000 2030 2050 0 5 10 1.3 2.4 2.9 3.2 5.0 3.3 6.4 2.8 urban rural 9 © Holcim Ltd 2010 January 2010 Investor Presentation Emergence of megacities … Holcim presence No immediate Holcim presence Rio de Janeiro São Paulo Buenos Aires Los Angeles Mexico City New York London Paris Lagos Moscow Cairo Tehran Tokyo Osaka Seoul Manila Jakarta Dhaka Kolkata Mumbai Delhi Karachi Istanbul Shanghai Guangzhou Beijing Source: Citipopulation 2008, Holcim … and Holcim is already today present in most of them 10 © Holcim Ltd 2010 January 2010 Investor Presentation 34% 66% Demand driver – GDP growth rates in emerging markets are expected to be higher Continued and growing importance of emerging countries – the place where best growth opportunities will be found World GDP growth (% per year) 44% 56% GDP share 2008 vs. 2020E Emerging markets Mature markets 2008 2020  Global GDP growth of 3.5 to 4% on average p.a. expected in the next decade Source: Global Construction 2020, Global Construction Perspectives, Oxford Economics, November 2009 2005 2010 2015 2020 Emerging markets Mature markets World 0 5 10 -5 2005 2010 2015 2020 Emerging markets Mature markets World 0 5 10 -5 [...]... May 4, 2010 Results for the first quarter 2010 Investor Relations Phone +41 58 858 87 87 Fax +41 58 858 80 09 investor. relations @holcim. com www .holcim. com/investors May 6, 2010 General meeting of shareholders August 19, 2010 Half-year results for 2010 November 10, 2010 Press and analyst conference for the third quarter 2010 Mailing list: www .holcim. com/subscribe 24 © Holcim Ltd 2010 Investor Presentation. .. 18 © Holcim Ltd 2010 Investor Presentation January 2010 Holcim – sizeable increase in key metrics (in bn CHF) 2002 2008 Net Sales 13.0 25.2 +94% Operating EBITDA 3.4 5.3 +56% Cash Flow 2.4 3.7 +54% 2.74 6.82 +149% 1.0 2.252 +125% Earnings per share1 Dividend1 Δ 1 As reported, in CHF Stock dividend Source: Holcim Annual Reports 2002 and 2008 2 © Holcim Ltd 2010 19 Investor Presentation January 2010. .. 2009) © Holcim Ltd 2010 Investor Presentation 13 January 2010 Agenda 1 Strategy – successful execution 2 Positioning – capture future growth 3 Future growth – challenges to be addressed 4 Performance – sound track record 5 Conclusions 14 © Holcim Ltd 2010 Investor Presentation January 2010 Capacity expansion underway – vast majority in emerging markets Focus on organic growth By the end of 2010 ~24... Global Construction Perspectives, Oxford Economics, November 2009, Holcim Estimates © Holcim Ltd 2010 Investor Presentation 12 January 2010 Holcim generates its EBITDA in countries with GDP growth above average GDP growth (in % excl China) 2009E 2010E 2011E 2012E GDP growth weighted with 2008 Holcim op EBITDA per country (in % excl China) 2008 Holcim op EBITDA split: Mature: 32% Emerging: 68% Source: Nominal... Return – Holcim generates substantial returns… TSR – 10 years back CAGR (as per December 31) Holcim share price / SMI / MSCI world % 15 Holcim SMI MSCI World Holcim SMI MSCI World 10 5 0 2003 2004 2005 2006 2007 2008 2009 Dividend policy – payout-ratio of one third of net income after minority interest …and outperforms benchmarks 20 Sources: datastream © Holcim Ltd 2010 Investor Presentation January 2010. .. 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 23 © Holcim Ltd 2010 Investor Presentation January 2010 Contact information and event calendar Contact information Event calendar Bernhard A Fuchs Marco Knuchel Binit Sanghvi March 3, 2010 Press and analyst conference... Russia UK Canada France Italy Indonesia Brazil Australia 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Holcim is very well positioned to capture growth opportunities Source: Global Construction 2020, Global Construction Perspectives, Oxford Economics, November 2009 © Holcim Ltd 2010 Investor Presentation 11 January 2010 Holcim exposure is geared towards emerging markets… Eastern Europe Mature markets (Western... management are identified and addressed as part of our long-term strategy Solid financial performance and sound track record Holcim – positioned for future growth! 22 © Holcim Ltd 2010 Investor Presentation January 2010 Disclaimer Cautionary statement regarding forward-looking statements This presentation may contain certain forward-looking statements relating to the Group’s future business, development and... financing of current business and future growth Challenges are addressed as part of our long-term strategy 1 16 AFR – Alternative Fuel and Raw Materials © Holcim Ltd 2010 Investor Presentation January 2010 Sustainable Development – „licence to operate“! Holcim kg CO2/tonne cement)1 800 Continuous emissions reduction Modern plants Usage of alternative fuels Reduction of clinker content 750 700 > 20% 650... responsible quarry management Leading CSR activities in sphere of influence Holcim – widely recognized for its achievements 1 Cement includes all cement products incl secondary materials such as blast furnace slag and fly ash, previous years restated due to changes in ownership in 2008 © Holcim Ltd 2010 Investor Presentation 17 January 2010 Agenda 1 Strategy – successful execution 2 Positioning – capture . © Holcim Ltd 2010 Investor Presentation January 2010 Singapore 2 © Holcim Ltd 2010 January 2010 Investor Presentation Agenda 1 Strategy – successful. 2050 0 5 10 1.3 2.4 2.9 3.2 5.0 3.3 6.4 2.8 urban rural 9 © Holcim Ltd 2010 January 2010 Investor Presentation Emergence of megacities … Holcim presence No immediate Holcim presence Rio de Janeiro São Paulo Buenos. York London Paris Lagos Moscow Cairo Tehran Tokyo Osaka Seoul Manila Jakarta Dhaka Kolkata Mumbai Delhi Karachi Istanbul Shanghai Guangzhou Beijing Source: Citipopulation 2008, Holcim … and Holcim is already today present in most of them 10 © Holcim Ltd 2010 January 2010 Investor Presentation 34% 66% Demand driver – GDP growth