Strength. Performance. Passion. © 2012 Holcim (Schweiz) AG Holcim Switzerland Leadership Journey Kaspar E.A. Wenger, Area Manager Central Europe Investor and Analyst Day 2012 © 2012 Holcim (Schweiz) AG Agenda Holcim Switzerland at a glance 3 Holcim Switzerland Leadership Journey 6 11 17 Commercial excellence: Solution provider for Ceneri Tunnel 22 Cost Leadership and environmental performance: AFR business Neue Plastrec: attractive AFR business model Investor and Analyst Day 2012 2 © 2012 Holcim (Schweiz) AG Headoffice CEM plant RMX plant AGG plant Holcim is the leading building materials producer in Switzerland… • 40 RMX plants ~1.8 mm 3 /y Market share ~14% 1 • 20 Aggregates sites ~7.5 mpta Market share ~15% 1 • 3 Cement plants ~2.9 mpta Market share ~53% 1 Investor and Analyst Day 2012 Source: Cemsuisse, Estimates Holcim (Schweiz) AG 1) 2011 data 3 © 2012 Holcim (Schweiz) AG …with a strong customer focus and on-site presence • Every year more than 150’000 on-site deliveries in time • More than 2’000 working hours for site visits or technical customer seminars • Every year 380’000 tonnes-kilometers transported by rail Investor and Analyst Day 2012 4 © 2012 Holcim (Schweiz) AG Agenda Holcim Switzerland at a glance 3 Holcim Switzerland Leadership Journey 6 11 17 Commercial excellence: Solution provider for Ceneri Tunnel 22 Cost Leadership and environmental performance: AFR business Neue Plastrec: attractive AFR business model Investor and Analyst Day 2012 5 © 2012 Holcim (Schweiz) AG The regional strategy of Holcim in Central Europe remains… Positions along the value chain / business portfolio Mortars Ready - mix Concrete Asphalt Concrete Products Direct Sales Direct Sales Traders Wholesalers Retailers Traders Wholesalers Retailers General Contractors Civil Engineering Masons Self - builders Cementitious Materials (cement, mineral components) Aggregates (sand, gravel, stone, recycled aggregates) Infrastructure Commercial / Industrial Building Housing A p p l i c a t i o n s Strategic directions Cement Production and Logistic Network Competitive Energy Sourcing Secured Channel to Markets Aggregates Geographic Expansion Leading premium brand position as solution provider Investor and Analyst Day 2012 6 © 2012 Holcim (Schweiz) AG …but is focused along the key challenges and opportunities of the current moment Market & industry • Current volume drop and low visibility on future development • Continuously strong market pressure due to overcapacity in Italy and Germany and price differential with Switzerland Cost leadership • Volume drop negatively impacting network capacity utilization • Fuels and power cost increase trends generally above inflation Legal and regulations • Permits renewals for some aggregates sites required within next 5 years • Future CO2 regulation: major uncertainty as regime may be revisited in context of current market failure (very low EUA price) OH&S • Ongoing improvement but “zero harm to people” objective not yet reached Product portfolio • Opportunity to further reduce clinker factor, mitigating CO2 risks, optimizing network and fostering sustainability People • Development and generation of leaders and talents despite financial restrictions Source: Holcim Central Europe BRM and RMT discussions Macro environment • Economic development dampened by debt crisis in several countries, also negatively impacting GDP growth in Switzerland Investor and Analyst Day 2012 7 © 2012 Holcim (Schweiz) AG Decrease / stagnation of domestic cement demand and ongoing imports impacting cement market in Switzerland Source: Market development according estimates Holcim based on Eurconstruct and forecast association, Market development Switzerland • 2012 market volumes expected to decrease by 4% compared to the peak year 2011 and develop in line with population growth thereafter (stable per capita consumption) • Market pressure expected to remain due to overcapacity in neighbouring countries and as price differential with Switzerland remains substantial 0,7% 2016F 5,1 2015F 5,1 2014F 5,0 2013F 5,0 2012F 5,0 2011 5,2 2010 5,0 Cement market volume (mt) Investor and Analyst Day 2012 8 © 2012 Holcim (Schweiz) AG Until 2014, strategic guidance and targets are set by the Holcim Leadership Journey Leadership Journey action fields ROIC Commercial excellence • Price above cost increases Cost leadership • Energy and other production costs • Logistic cost • SPC Op. profit Invest cap. Assets, Capex & Cash • Cement capacity utilization • Right-sizing of Aggregates / Ready-mix concrete • Maintenance Capex • Net Working Capital OH&S - Journey to Zero Harm to people People - Development and generation of leaders and talents Investor and Analyst Day 2012 9 © 2012 Holcim (Schweiz) AG Agenda Holcim Switzerland at a glance 3 Holcim Switzerland Leadership Journey 6 11 17 Commercial excellence: Solution provider for Ceneri Tunnel 22 Cost Leadership and environmental performance: AFR business Neue Plastrec: attractive AFR business model Investor and Analyst Day 2012 10 [...]... and Analyst Day 2012 © 2012 Holcim (Schweiz) AG 20 Agenda Holcim Switzerland at a glance Holcim Switzerland Leadership Journey Commercial excellence: Solution provider for Ceneri Tunnel Cost Leadership and environmental performance: AFR business Neue Plastrec: attractive AFR business model Investor and Analyst Day 2012 3 6 11 17 22 © 2012 Holcim (Schweiz) AG 21 Main elements of the Holcim AFR business... capabilities • …giving Holcim a competitive advantage over offers for separate portions Integrated solutions are an attractive approach to both customers and Holcim Switzerland Investor and Analyst Day 2012 © 2012 Holcim (Schweiz) AG 15 Agenda Holcim Switzerland at a glance Holcim Switzerland Leadership Journey Commercial excellence: Solution provider for Ceneri Tunnel Cost Leadership and environmental... inertia • Continuous emission monitoring equipment (installed at all Holcim plants) For further explanations see: http://en.wikipedia.org/wiki/Co-processing 18 Investor and Analyst Day 2012 © 2012 Holcim (Schweiz) AG 18 Holcim (Switzerland) is a national leader in waste coprocessing Siggenthal Eclépens Untervaz In 2011, Holcim (Switzerland) co-processed over 270’000 tonnes waste in 3 cement plants…... C25/30 • Early strength • Fire resistance at the portals • Floor: In situ concrete • • • • Strength class C25/30 Early strength Fire resistance AAR resistance Strength class C20/25 Pervious Early strength Chemical resistance • Bench: In situ concrete 2m • Strength class C20/25 • Early strength • Frost resistance Source: Holcim Investor and Analyst Day 2012 © 2012 Holcim (Schweiz) AG 12 Work scope and Holcim. .. environment • Providing durable RMX Holcim awarded almost full scope1 representing CHF 162 m net sales Source: HCHE contract Investor and Analyst Day 2012 1) except above-ground RMX and RMX transport © 2012 Holcim (Schweiz) AG 13 Solution implementation Investor and Analyst Day 2012 © 2012 Holcim (Schweiz) AG 14 Conclusion • Unique selling proposition through customer value creation • Integrated solution... solution for sewage sludge treatment Sewage sludge Investor and Analyst Day 2012 © 2012 Holcim (Schweiz) AG 22 AFR business model Neue Plastrec AG (NPAG) in Siggenthal: Cooperation with professional waste management partners Coprocessing 33% Preprocessing Collection & Marketing Waste Generation Investor and Analyst Day 2012 33% 33% 50% Plastrec GmbH 50% customers © 2012 Holcim (Schweiz) AG 23 NPAG pre-processes... for sewage sludge (STRAG) • No Holcim CAPEX involvement and no operation of non-core assets • Access to 5-7kt/a of sewage sludge • Holcim offers access to waste heat and treatment security of dried product • • Innovative approach to dry sewage sludge with waste heat from clinker cooler Utilization of local synergies (minimization of logistics cost, availability of waste heat, etc.) • Ecologically and... incinerators Source: BAFU Investor and Analyst Day 2012 © 2012 Holcim (Schweiz) AG 19 In 2011 Holcim (Switzerland) co-processed 270’000 tonnes alternative fuels and raw materials amounting to 41% TSR* Alternative Fuels and Raw Materials (‘000 t) Thermal Energy (%) 107 Contaminated soil 10.5% Plastic 34 Dried sewage sludge 34 20.5% Solvents 27 59% Animal meal 22 18 Old tires 11 CSS Others 10% 7 Fossil Fuels... burner material: 0 – 25mm „high“ Cl content *Cl content = chlorine content Investor and Analyst Day 2012 © 2012 Holcim (Schweiz) AG 24 During the plant visit we will see the three examples contaminated soils storage hall, STRAG and NPAG Contaminated soils storage hall Investor and Analyst Day 2012 © 2012 Holcim (Schweiz) AG 25 Disclaimer Cautionary statement regarding forward-looking statements This presentation... Member of World Business Council for Sustainable Development (WBCSD) Selected as an index component for the Dow Jones Sustainability World Index and the European Dow Jones STOXX Sustainability Index for seven years Base Investor and Analyst Day 2012 Creation of Value Product Focus Geographic Diversification Local Management Global Standards Triple Sustainable Better Permanent bottom Human Environmental . © 2012 Holcim (Schweiz) AG Holcim Switzerland Leadership Journey Kaspar E.A. Wenger, Area Manager Central Europe Investor and Analyst Day 2012 © 2012 Holcim (Schweiz) AG Agenda Holcim Switzerland. both customers and Holcim Switzerland Investor and Analyst Day 2012 15 © 2012 Holcim (Schweiz) AG Agenda Holcim Switzerland at a glance 3 Holcim Switzerland Leadership Journey 6 11 17. year 380’000 tonnes-kilometers transported by rail Investor and Analyst Day 2012 4 © 2012 Holcim (Schweiz) AG Agenda Holcim Switzerland at a glance 3 Holcim Switzerland Leadership Journey