Davy Industrials Conference New York, September 10, Holcim Ltd

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1 Davy Industrials Conference New York, September 10, Holcim Ltd

2 Agenda Holcim at a glance Holcim s Strategy House base for value creation Holcim Leadership Journey Proactive Asset Management recently announced transactions Key financial figures H and outlook 2013 Holcim Ltd

3 Product focus two core segments and their channels Cement Clinker Aggregates Product segments 2012 Net sales per segment 2012 Other construction materials & services million tonnes production capacity 147 cement and grinding plants Sales: million tonnes 470 aggregates plants Sales: million tonnes 1,286 RMX plants 99 asphalt plants Sales of ready-mix concrete: 46.9 million m 3 Sales of asphalt: 9.1 million tonnes Net sales CHF 21.5 billion 31.6% 10.4% Cement Aggregates 58.0% Op. EBITDA per segment % 10.1% Op. EBITDA CHF 4.0 billion 86.5% Other Construction Materials and Services Davy Industrials Conference Holcim Ltd 3

4 Holcim well balanced global portfolio Sales volumes per region 2012 Net sales per region 2012 Asia Pacific (million t or m 3 ) Net sales CHF 21.5 billion Cement 79.2 Aggregates % 14.7% Ready-mix concrete 12.8 Latin America Cement 24.9 Aggregates 14.0 Ready-mix concrete % 4.3% 39.2% Europe North America Cement 26.3 Aggregates 74.3 Ready-mix concrete 14.7 Op. EBITDA per region 2012 Op. EBITDA CHF 4.0 billion 11.4% 14.9% Cement 12.0 Aggregates 41.3 Ready-mix concrete 8.1 Africa Middle East Cement 8.4 Aggregates 2.3 Ready-mix concrete % Asia Pacific North America Latin America 6.6% Africa Middle East Europe 44.4% Davy Industrials Conference Holcim Ltd 4

6 Holcim s Strategy House base for value creation Goal Creation of Value Strategy Product Focus Geographic Diversification Local Management Global Standards Mindsets Sustainable Environmental Performance Better Cost Management Permanent Marketing Innovation Human Resources Excellence Corporate Social Responsibility Base People Davy Industrials Conference Holcim Ltd 6

7 Holcim Value Chain Supply Basic Materials Processing Channels Transactional Transformational End - users Demand Applications and Construction Fields Cementitious Materials (cement, mineral components) Aggregates (sand, gravel, stone, recycled aggregates) Direct Sales Traders Wholesalers Retailers Direct Sales Ready -mix Concrete Concrete Products Mortars Asphalt General Contractors Self - builders Masons Civil Engineering A p p l i c a t i o n s Housing Commercial / Industrial Building Infrastructure Davy Industrials Conference Holcim Ltd 7

8 Market maturity defines investment focus Added value through business integration N. America, UK Eastern Europe France, Spain Value Added Businesses Mexico Aggregates India Ready-mix Concrete Cement Emerging markets Transition markets Mature markets Market maturity Davy Industrials Conference Holcim Ltd 8

9 Positioning Holcim s cement market portfolio Cumulated population Growth E 12% 10% 8% 6% 4% 2% 0% -2% Oceania 4.8 Mt North America 22.0 Mt Asia Pacific excl. India, Oceania, China 43.5 Mt Western Europe 25.9 Mt Africa Middle East 23.2 Mt Eastern Europe 23.3 Mt Mature markets Emerging markets Size of circles represents influenced capacity 2012 Latin America 35.5 Mt India 60.5 Mt China 60.0 Mt Demand growth -4% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% GDP per capita (at PPP) CAGR E Sources: Holcim, US Census Bureau, Datastream IMF: World Economic Outlook, January 2013 Davy Industrials Conference Holcim Ltd 9

10 Positioning Holcim s aggregates market portfolio Cumulated population Growth E 12% 10% 8% 6% 4% 2% 0% -2% North America 41.3 Mt Oceania 23.9 Mt Western Europe 64.8 Mt Asia excl. Oceania 3.8 Mt Latin America 14.0 Mt Mature markets Africa Middle East 2.3 Mt Emerging markets Size of circles represents consolidated sales volumes 2012 Eastern Europe 9.5 Mt Demand growth -4% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% GDP per capita (at PPP) CAGR E Sources: Holcim, US Census Bureau, Datastream IMF: World Economic Outlook, January 2013 Davy Industrials Conference Holcim Ltd 10

12 The Holcim Leadership Journey and a focused capital allocation to increase short and long term returns Customer Excellence Holcim Leadership Journey Cost Leadership Customer focus Energy and AFR Value management Logistics Pricing policies Procurement Marketing and sales Fixed cost Capture demand through advice & service CHF 500 m Optimization of cost base > CHF 1 bn Operating profit increase of at least CHF 1.5 bn and ROIC AT > 8%* by 2014 In similar markets conditions. Corresponds to a ROIC BT of > 11.8% Davy Industrials Conference Holcim Ltd 12

13 Holcim Leadership Journey is on track All figures in million CHF Target achieved Target 6M Customer Excellence (operating profit impact) Customer focus -Value management -Pricing policies -Marketing and sales forces skills and motivation Cost Leadership (operating profit impact) > 1,000 -Energy and AFR > 300 -Logistics 0 52 > 250 -Procurement > 250 -Fixed cost > 200 Total increase in operating profit 1) > 1,500 Cash cost to achieve the savings (one-off) < ) 0 3) 0 Additional CAPEX net 2) ) The base line is the financial year 2011 amounting to CHF 2,308 million (excluding one-off charges 2011 of CHF 375 m and without fluctuations in currency, changes in scope of consolidation and similar market conditions) 2) 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 ) Original amount was projected < CHF 120 million for 2013; having spent already CHF 239 million, no additional restructuring cash costs are foreseen at this stage Davy Industrials Conference Holcim Ltd 13

15 Value creative portfolio adjustments in Europe 2013 Holcim Ltd

16 Acquisition of Cemex West Germany and sale of Holcim Česko Asset combination in Spain with 25% shareholding by Holcim + Laegerdorf Beckum-Kollenbach Hoever Dotternhausen Ruedersdorf Prachovice Morata de Jalón Legend Castillejo Buñol Alcanar Lloseta + Integrated Cement Plant Grinding Station Slag Granulator Jerez Gador Alican te Carboneras Davy Industrials Conference Holcim Ltd 16

17 Transaction with synergies and strategic relevance driven by strong geographical focus Holcim to optimize its portfolio in Europe through a series of interlinked transactions with Cemex in Germany, Spain and the Czech Republic Strengthen European footprint for the future and adjust to new economic reality Create value through stronger geographic footprint in North-Western Germany and connect current Northern Germany and France Benelux operations Additional operating EBITDA and synergies expected to be at least EUR 20 million p.a. Combine operations in Spain to add value and benefit from expected synergies Closing expected in Q4 2013, subject to due diligence, regulatory and other approvals Davy Industrials Conference Holcim Ltd 17

18 Strengthening geographic footprint in Germany and value creative combination in Spain Germany Holcim to acquire Cemex s operations in West Germany, consisting of 1 cement plant and 2 grinding stations (total cement capacity of 2.5 million tons), 22 aggregates locations, 79 ready-mix plants and 1 slag granulator Strong German economy Strengthened aggregates position Access to stable slag supply in Germany West German assets will be integrated with our existing Northern German operations and fully consolidated Czech Republic Holcim to sell Holcim Česko including 1 cement plant (cement capacity 1.1 million tons), 4 aggregates locations and 17 ready-mix plants to Cemex Holcim to serve customers in the Czech Republic from the Rohoznik plant in Slovakia Holcim to de-consolidate Holcim Česko Spain Holcim and Cemex to combine their entire operations in Spain: cement, ready-mix and aggregates Holcim will hold 25% shareholding of the combined operations and equity account the investment going forward Substantial synergies through higher asset utilization in Spain Value creative option benefiting from synergies and potential economic upturn Holcim to remain shareholder of the combined entity for at least 5 years Holcim Cemex Integrated cement plants (#) 3 6 Grinding stations (#) 1 2 Cement Capacity (Mt) Aggregates quarries (#) Ready-Mix plants (#) as of August 2013 Davy Industrials Conference Holcim Ltd 18

19 Unlocking Synergies Deriving Further Value from the India Platform 2013 Holcim Ltd

20 ACL acquires Holcim s 50.01% equity stake in ACC Evolution of current to target shareholder structure Interlinked transaction steps Step I: Acquire 24% in Holcim India Step II: Merge Holcim India into ACL Target Structure 40.79% 0.29% Holcim 40.79% 0.29% Holcim Holcim 0.29% 24% 76% Holcim India 9.76% 50.01% 24% 76% Holcim India 9.76% 50.01% ACL 61.39% 50.01% ACL ACC ACL ACC ACC Holcim India value of INR 14,584 crore (USD ~2.4 bn) consists of 50.01% stake in ACC for INR 11,727 crore (USD ~2.0 bn) and 9.76% stake in ACL for INR 2,857 crore (USD ~0.4 bn) Two step transaction for a total deal value of INR 11,727 crore (USD ~2 bn) Step I: ACL acquires 24% of Holcim India for INR 3,500 core (USD ~0.6 bn) Step II: ACL issues net 434 mio equity shares for a total value of INR 8,226 crore (USD ~1.4 bn) to Holcim post cancellation of Holcim India s 9.76% stake in ACL upon merger The transaction steps are inter-linked and subject to requisite approvals Davy Industrials Conference Holcim Ltd 20

21 Value creation opportunity Improve Structure Unlock Synergies Get Scale Maintain Front-end Commit to India Group More efficient capital structure & EPS accretive Re-investment of cash into business Collaboration under India Management structure Synergy potential of approximately INR 900 crore (USD 150 mio) through supply chain and fixed cost optimisation Consolidated pan-india footprint with 58 mio tpa capacity Confirmed >10 mio tpa capacity expansion underway in both companies; additional projects in planning (e.g. ACC Ametha) Strong and debt free balance sheet; cash flow diversification Complementary premium brands will continue to exist Independent go-to-market strategy with strong dealer networks / distribution in respective markets Investment in Marwar Mundwa Intent to increase economic ownership in ACC over time ACC is a perfect fit, being a Holcim Group company already Davy Industrials Conference Holcim Ltd 21

22 The five key take-aways for minority shareholders 1 Unique opportunity to acquire ACC at attractive price of USD 115 per ton (EV/ Ton) Below ACC historic implied price range of USD per ton (1) Major Indian cement companies trade at USD per ton 2 Economically, most favourable deal structure proposed to minorities for approval Cash / equity structure improves deal fundamentals more EPS accretive, lower dilution Strong corporate governance with minorities given the opportunity to decide also on cash 3 Synergy potential of 150 mio will further improve EPS and dividend prospects Focus on back-end cost related synergies; less exposed to exogenous factors Supply chain optimisation reduces cost-to-serve by USD mio at lower lead and higher service levels Increased productivity and efficiency through USD mio savings in fixed cost, procurement and shared services 4 Solid all-india footprint, debt-free balance sheet and cash flow generation brings ACL ahead with sufficient funds to support its investments 5 Interim step focus on cost synergies and performance delivery first (1) Source: NSE. Based on volume weighted average price for a period of 3 years and 5 years preceding July 23, 2013 based on NSE prices. Davy Industrials Conference Holcim Ltd 22

24 Key financial figures H Million CHF (if not otherwise stated) Full Year 6M +/ LFL CIS FX Total Sales volumes - Cement (mt) % -0.7% -3.7% - Aggregates (mt) % -1.0% -7.2% - Ready-mix (mm 3 ) % -5.6% -15.0% Net sales 21,160 10,166 9, % -2.9% -0.7% -5.1% Operating EBITDA 3,889 1,884 1, % -2.1% -0.7% -3.4% Operating profit 1,749 1,082 1, % -2.2% -1.2% -3.3% Net income 1, % Net income - shareholders of Holcim Ltd % Cash flow 2, % -3.2% -2.6% 41.8% EPS in CHF % 1 Calculated on the weighted average number of shares outstanding Note: Due to the changes in accounting policies explained in note 2 of the interim financial statements, the comparative information for the first half and full year 2012 has been restated for each financial statement line item Davy Industrials Conference Holcim Ltd 24

25 Outlook for 2013 Asia Pacific: Positive development in Asia, stable cement demand in Pacific Rim Latin America: Higher demand for construction materials Europe: Only slight decrease in sales volumes; positive development of construction activity in Russia and Azerbaijan North America: Cement sales volumes similar to previous year Africa Middle East: Muted demand at previous year s level Turning to operating EBITDA and operating profit, the Board of Directors and Executive Committee expect a further improvement of margins. The Holcim Leadership Journey, which gains further momentum, will contribute to this development. Under similar market conditions, organic growth in operating EBITDA and operating profit should be achieved in Davy Industrials Conference Holcim Ltd 25

26 Cost and capex guidance for 2013 Energy costs of around CHF 16 per ton of cement produced Fixed costs to benefit from the measures taken by the Holcim Leadership Journey program Average interest rate slightly above the 4.8 percent level recorded in 2012 Long term expected tax rate of 27 percent Maintenance capex of CHF 0.9 billion net Expansion capex of CHF 1.5 billion Davy Industrials Conference Holcim Ltd 26

27 Financial debt, maturities and liquidity as of June 30, 2013 Maturity profile 1 (CHF million) 5'000 Loans Capital markets 4'000 3'000 2'000 1'000 0 <1y 1-2y 2-3y 3-4y 4-5y 5-6y 6-7y 7-8y 8-9y 9-10y >10y Liquidity summary Cash + marketable securities: CHF 2,642 million Cash + marketable securities + unused committed credit lines: CHF 7,198 million Debt summary Current financial liabilities 1 : CHF 3,631 million Fixed to floating ratio: 50% fixed Capital markets 77%; Loans 23% Corporate vs. subsidiary debt: 77% Corporate Ø total maturity: 4.0 years CP borrowings: CHF 536 million No financial covenants in Corporate credit lines ST/LT ratings summary as of July 16, 2013 S&P Credit Rating: A-2 / BBB, outlook stable Fitch Credit Rating: F2 / BBB, outlook stable Moody s Credit Rating: P2 / Baa2, outlook stable 1 After risk-related adjustments of CHF 540 million from current financial liabilities to long-term financial liabilities Davy Industrials Conference Holcim Ltd 27

28 Cement Price/volume variances per region Domestic cement prices 6M 12/6M 13 * Domestic clinker and cement volumes 6M 12/6M 13 Asia Pacific 1 1.4% -2.2% India -2.6% -2.5% Sri Lanka 18.7% -9.3% Bangladesh 0.8% -3.5% Vietnam -0.4% -4.4% Malaysia -5.4% 4.3% Indonesia 8.0% -1.4% Philippines 9.4% 0.8% Australia 0.3% 1.2% 2 New Zealand -1.4% -9.9% * If not otherwise indicated calculation based on local currencies 1 Weighted average like-for-like 2 Adjusted for sale of 25% in Cement Australia as of March 28, 2013 Davy Industrials Conference Holcim Ltd 28

29 Cement Price/volume variances per region Domestic cement prices Domestic clinker and cement volumes 6M 12/6M 13 * 6M 12/6M 13 Latin America 1 3.4% 1.4% Mexico -5.1% -8.7% El Salvador 3.0% 2-3.0% Costa Rica 19.1% % Nicaragua 6.1% 2-2.1% Colombia 7.3% -2.3% Ecuador 3.5% % Brazil 4.1% -2.6% Chile 0.5% -3.1% Argentina 15.9% 3.9% * If not otherwise indicated calculation based on local currencies 1 Weighted average like-for-like 2 Calculation in USD Davy Industrials Conference Holcim Ltd 29

30 Cement Price/volume variances per region Domestic cement prices 6M 12/6M 13 * Domestic clinker and cement volumes 6M 12/6M 13 Europe 1-2.1% -1.5% Belgium -6.9% -6.7% France 2.2% -13.2% Germany 1.3% -15.5% Switzerland -2.6% -1.3% Italy -0.3% -11.1% Hungary 3.9% -20.3% Czech Republic -3.6% -17.0% Slovakia -3.5% 26.1% Croatia -8.1% -0.7% Romania 3.1% -0.7% Bulgaria -2.8% 6.4% Serbia -2.0% -14.2% Russia -6.8% 10.7% Azerbaijan 0.1% 26.9% Spain -3.3% -11.9% * If not otherwise indicated calculation based on local currencies 1 Weighted average like-for-like Davy Industrials Conference Holcim Ltd 30

31 Cement Price/volume variances per region Domestic cement prices Domestic clinker and cement volumes 6M 12/6M 13 * 6M 12/6M 13 North America 1 2.9% -7.0% Canada 2.5% -15.0% USA 6.2% -5.6% Africa Middle East 1 2.6% -13.1% Morocco 2 4.9% -24.0% Lebanon 2 0.4% -1.5% Indian Ocean 1.7% -4.7% Ivory Coast 0.4% -6.3% Guinea -14.3% -36.1% Group 1 1.8% -2.9% * If not otherwise indicated calculation based on local currencies 1 Weighted average like-for-like 2 Locally not published yet Davy Industrials Conference Holcim Ltd 31

32 Aggregates Price/volume variances per region Domestic aggregates Domestic aggregates prices volumes 6M 12/6M 13 * 6M 12/6M 13 Asia Pacific 1 3.9% -10.1% Indonesia 20.5% -4.7% Australia 3.9% -10.4% Latin America 1 8.8% -21.8% Mexico 4.5% -17.1% Brazil 4.3% 5.8% * If not otherwise indicated calculation based on local currencies 1 Weighted average like-for-like Davy Industrials Conference Holcim Ltd 32

33 Aggregates Price/volume variances per region Domestic aggregates Domestic aggregates prices volumes 6M 12/6M 13 * 6M 12/6M 13 Europe 1 2.0% -0.2% United Kingdom 0.2% 2.1% Belgium 0.9% -5.7% France -3.6% 26.1% Germany 0.4% -26.0% Switzerland -8.5% 12.2% Italy -21.0% 5.8% Romania -15.8% -27.7% Bulgaria -2.5% 13.8% Spain 0.1% -35.4% North America 1 3.0% -9.2% Canada -0.5% -8.5% United States 5.2% -10.0% * If not otherwise indicated calculation based on local currencies 1 Weighted average like-for-like Davy Industrials Conference Holcim Ltd 33

34 Positions in Europe Cement plant Grinding plant/ terminal Aggregates Participation: Cement plant 1 Under construction Cement capacity*: 47.9 Mt * as of June 30, 2013 Davy Industrials Conference Holcim Ltd 34

35 Positions in North America Cement capacity*: 22.0 Mt Cement plant Grinding plant/ terminal Aggregates * as of June 30, 2013 Davy Industrials Conference Holcim Ltd 35

36 Positions in Latin America Cement plant Grinding plant/terminal Aggregates Participation: Cement plant Grinding plant/terminal 1 Aggregates 1 Under construction Cement capacity*: 35.2 Mt * as of June 30, 2013 Davy Industrials Conference Holcim Ltd 36

37 Positions in Africa Middle East 1 1 Cement plant Grinding plant/terminal Aggregates Participation: Cement plant Grinding plant/terminal Aggregates Cement capacity*: 10.7 Mt; further 12.5 Mt with partners * as of June 30, 2013 Davy Industrials Conference Holcim Ltd 37

38 Positions in Asia Pacific Cement plant Grinding plant/terminal Aggregates Participation: Cement plant Grinding plant/terminal Under construction Cement capacity*: 90.6 Mt; further 81.5 Mt with partners * as of June 30, Davy Industrials Conference Holcim Ltd 38

39 Positions in India ACL and ACC Cement plant Grinding plant / terminal 1 Under construction Delhi Market share Mumbai 1 Calcutta Others 44% ACL/ACC 19% Aditya Birla Group 19% Madras India, JP and Shree Cements 5-6% each Davy Industrials Conference Holcim Ltd 39

40 Positions in China Jiangsu Shaanxi Henan Anhui Sichuan Hubei Shanghai Shanghai Wuhan Hunan Jiangxi Zhejiang Participation: Plant Grinding station / Terminal City Davy Industrials Conference Holcim Ltd 40

41 Contact information and event calendar Contact information Event calendar Bernhard A. Fuchs Michel R. Gerber Swetlana Iodko Investor Relations Phone Fax November 5, 2013 February 26, 2014 April 29, 2014 Press and analyst conference for the third quarter 2013 Press and analyst conference on annual results for 2013 General meeting of shareholders Mailing list: Holcim Ltd

42 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 Holcim Ltd