Holcim Canada an overview. Paul Ostrander CEO Holcim Canada St. Louis, September 15, 2010

Transcription

1 Holcim Canada an overview Paul Ostrander CEO Holcim Canada St. Louis, September 15, 2010

2 Executive Summary Holcim Canada Holcim Canada is structured to meet the needs of the markets in which it operates. Heavily urban areas normally demand a vertically integrated structure whereas cement and construction services move across the country Holcim Canada offers solutions to customers in a variety of approaches from direct supplier to design and build partnership relationships Holcim Canada is currently participating or looking forward to participating in over $35B of projects, most are directly in the core markets Holcim Canada has been moving forward in sustainable development to improve stakeholder relationships, reduce costs and provide innovative solutions to customers 2

3 Agenda 1 Holcim Canada in the marketplace 2 Operationalizing the Holcim Value Chain 3 Holcim solutions 4 Market opportunities & Holcim Canada brand 3

4 Holcim Canada will soon celebrate 60 years of operations in Canada with a history dotted with strategic acquisitions and growth Cement production begins in Quebec (1954) & Ontario (1956) Acquisition of Dufferin assets Acquisition of Joliette cement plant & Ontario concrete operators (Boehmers & Peninsula) Creation of strategic waste recycling committee (AFR at Joliette in 1994) Acquisition of TCG, Acton and Mosport. Launch of shared services Holcim Ltd. buyout of St. Lawrence Cement minority shareholders Atlas Realty (later St. Lawrence Cement) is incorporated by Holderbank (later Holcim) St. Lawrence Cement is listed on Montreal & Toronto Stock Exchanges Acquisition of 50% share in Quebec Ready-Mix & De- Mix Acquisition of cement plants in Catskill New York and Hagerstown Maryland Acquisition of NorthStar Cement (Nfld) and Gormley Aggregates Matured vertical integration strategy to focus on areas surrounding cement plants Installation of vertical roller mill & clinker cooler Acquisition of Ontario Redi-Mix & Beton Grilli & Lunick St. Lawrence Cement becomes Holcim Canada 4

5 Holcim Canada is a fully integrated player in the highly populated Greater Toronto (GTA) and Greater Montreal (GMA) markets GMA Cement Plant Aggregate (5) Ready-Mix (9) GMA GTA Fully integrated Cement & construction Construction only GTA Cement Plant Aggregate (8) Ready-Mix (20) 5

6 The Canadian economy is closely linked to that of the United States. As such there has been an economic impact but this impact has thus far been mitigated and there was a strong rebound in late 2009 and early 2010 GDP (% Change) Housing Starts (% Change) CAD US CAD US Cement Consumption (% Change) Total Construction (% Change) CAD US (incl. imports) CAD US Source: PCA 2010 Summer Forecasts for the US and Canada, August

7 Holcim Canada has a commitment to Sustainable Development with Corporate Objectives for OH&S, Environment and Social initiatives OH&S - LTIFR < ENVIRONMENT CO2 CO2 net / t cem % Reduction Target from 1990 Levels A 2007A 2008A 2009A LTIFR Target Annual CO2 COMMUNITY SPONSORSHIP CORPORATE SOCIAL RESPONSIBILITY Holcim Canada maintains Community Advisory Panels (CAPS) at all operating sites (proportional to site size) LTIFR Lost Time Incident Frequency Rate 7

8 Holcim Canada is well integrated into the Value Chain with a broad customer base ranging from product supply of cement to solutions providing construction services 8

9 Holcim Canada optimizes vertical integration in the value chain while improving delivery mechanisms for new product introduction & optimization of existing products 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 35% of cementitious volumes and 39% of aggregate volumes flowed through our vertically integrated channels in

10 Cementitious products are part of Holcim Canada s twin leg strategy NETWORK OPTIMIZATION Mississauga and Joliette are not only located within 50 km of large urban centers but they are also connected to a transportation network by ship, rail and truck Joliette s offering of an efficient logistics solution was key in securing Societe d energie de la Baie James (SEBJ) project INVESTMENTS Vertical roller mill (VRM) Slag cement for CO 2 reduction Selective non-catalytic reduction (SNCR) NO x emissions reduction Alternative fuel utilization Energy cost savings & SD Programs in pricing optimization Margin improvement through performance 10

11 Aggregates is critical to vertical integration and Holcim Canada not only has the closest aggregates to the GTA market but also has an award winning rehabilitation program 200 Useful Life Reserves & Resources (yrs) Greater Toronto Area 200 Useful Life Reserve & Resources (yrs) Greater Montreal Area RESERVES & RESOURCES GTA East GTA NW Hamilton 0 GMA North Shore Laval QUARRY REHABILITATION Winner of «Innovation in Sustainable Development» award from ACRGTQ (Quebec Construction Association) for progressive rehabilitation of the Laval quarry 11

12 Ready-Mix is the optimal Business Unit in the Holcim Value Chain for solutions delivery. Innovations in products and services have made the Ready-Mix Business Units into market leaders PERVIOUS CONCRETE Pervious concrete is a special type of high porosity concrete used where applications require water from precipitation and other sources to pass directly through. It helps reduce stormwater runoff, replenishes aquifers, protects streams and lakes and allows water and oxygen to reach tree roots. SPECIALTY CONCRETE Specialty concretes were almost 10% of Demix Beton s volumes in Flex concrete is a bending application used with City of Montreal as well as Montreal airport and ports. Self-Placing is fluid and homogeneous with minimal segregation and bleeding; used primarily for vertical applications. Anti-Corrosion concrete inhibits the corrosion of steel reinforcement. ENVIROGUARD In 2009, Dufferin Concrete won multiple awards for a system that ensures no chute wash water is released into the environment by returning the water used to clean the chute back into the truck s drum. The benefits are in cost savings and also a stronger job site environment scorecard which aids in LEEDS points. LEEDS: Leadership in Energy & Environmental Design 12

13 Construction, in addition to Ready-Mix, is highly competitive in Greater Toronto and Montreal markets. Providing solutions is how Dufferin and Demix Construction distinguish themselves from other market players RAPID BRIDGE REPLACEMENT Dufferin Construction, one of the leading highway contractors for the province of Ontario, has been low bidder on 3 RBRs in Ottawa and Hamilton. RBRs are the replacement of a highway bridge overpass over the course of a weekend where the entire bridge is removed and replaced with sectionals built in a nearby staging area. RBR is not only more economical but also offers solutions to the Municipalities in terms of less traffic congestion, a shorter construction cycle and benefits to the public. AGGREGATES RECYCLING Material recycling has been critical in allowing waste materials deposit sales and also in construction cost reduction. In 2009, Demix Aggregates sold 230kt of recycled aggregates primarily to Demix Construction s A-25 PPP project. Additional opportunities for asphalt recycling are being investigated to lower operating costs for construction and provide a potential revenue stream for aggregates. SNOW REMOVAL Since 1975, Dufferin Construction has been responsible for air-side snow removal at Pearson airport a 24hrs/day, 6months/year contract. 250 DCC personnel have Government of Canada security clearance and are available on 1 hour notice. The activity not only provides cash flow and operations during traditionally slow construction months but also ensure equipment utilization over the period. 13

14 Vertical Integration has also given Holcim Canada the opportunity to move into Solutions Provider roles in large scale projects. This allows the company the ability to optimize its product/service offerings COMMODITY SOLUTIONS SUPPLIER ALLIANCE BUILD Munro Concrete Products PARTNER DESIGN & BUILD Ministry of Transportation A-25 & SAB 407 ETR 14

15 A key area of growth for Holcim Canada is participation in Public- Private Partnerships in projects across Canada Public Private Partnerships (PPP) are an alternative method for governments to meet the public s infrastructure needs Through long-term PPP contracts that have design, build, finance and operate components, governments can access private sector expertise, technology and capital Government Service agreements Engineers/ consultants Proposed Montreal Hospital Shareholders agreement Concession (30 years) Equity provider Debt provider Loan agreement Special Purpose Vehicle (SPV) Service agreement Construction contract Service agreement Technical advisers/ consultants Service agreements Design Build Joint Venture Construction/ supply contracts Maintenance Operator Engineers/ consultants Subcontractors/ suppliers 407 ETR 15

16 Focusing on core strategies in Greater Toronto and Montreal markets as well as building HCA as a solutions provider will allow the company to gain full advantage from upcoming large scale projects Project Est. Project Value ($M CAD) M S Timeline Completed Highway 407 ETR 1, Toronto Airport (GTAA) 4, Hibernia Platform 6, James Bay (Eastmain 1) 2, Vancouver Airport 4, Current Sir Adam Beck Tunnel 1, James Bay (Sarcelle & Rupert) 5, MTO Highways 300 Ongoing MTQ Highways (A-25) 350 Ongoing Pending GMA Windsor Essex Parkway Calgary Airport 2, Legend: Fully integrated Cement & construction Construction only GTA 407 ETR East Future Churchill Falls Hebron Platform MetroLinx (York BRT, Sheppard LRT, Scar RT, Finch LRT, Eglington LRT) 1,000 8,000 6,000 9, PanAm Games 2, Turcott 2, Inco Smelter (Nfld) 2,

17 Holcim Canada has provided a level of consistency through a very turbulent economic period. Economic stimulus funding, a strong organizational structure and management expertise are principal factors NET SALES & EBITDA Canada has been able to weather the economic storm more effectively than other countries and Holcim Canada is well positioned in two metropolitan areas which are the main economic drivers for the country 2007A 2008A 2009A 2010F Sales EBITDA At the same time, Ontario and Quebec are more strongly focused on a manufacturing industry base, and thus the importance of cement product and construction services throughout the country offers risk mitigation 17

18 Holcim Canada maintains a clear focus on employees, particularly employee development including the movement of employees throughout the business segments to improve employee learning DIALOGUE Dialogue is a tool where employees develop, along with their supervisors, an individual development plan (IDP) to ensure the employee s development along a chosen career path. The tool is also used for employee performance management LEADERSHIP DEVELOPMENT Holcim Canada utilizes both in-house and Holcim Group Support programs for leadership development. Executive education, English and French language training and the introduction of key development roles for high potential employees ensure next generation leaders COACHING In 2010 Holcim Canada instituted an executive and senior management company objective in the area of coaching. In addition to development, the transference of knowledge is a key objective of this initiative 18

19 Holcim Canada is a strong vertically integrated player. Optimizing opportunities in customer loyalty, sustainable development and product and service solutions will ensure full advantage of upcoming opportunities Holcim Canada s Commitment to it s Community & Markets SUSTAINABLE DEVELOPMENT Operating by the Triple Bottom Line. Providing the right products & services for a balanced approach to growth economically, in our communities and respecting the environment STAKEHOLDER LOYALTY Responding to stakeholder (customer, community, regulator) needs with products & services (ready-mix designs, rapid bridge replacement) and changing procurement practices (PPP) HOLCIM SOLUTIONS Moving forward on innovative solutions (products / services) that fulfill our commitment to Sustainable Development and enhance our Customer Relationships Holcim Canada s Strategic Positioning in Holcim Group SUSTAINABLE DEVELOPMENT Capturing opportunities for developing a sustainable competitive advantage, improving relationships with stakeholders and capturing cost savings through efficiency gains VERTICAL INTEGRATION Utilizing a city-based strategy to optimize material flow through channels to market, primarily in core Toronto and Montreal markets EMPLOYEE DEVELOPMENT Continue to develop employees for the needs of the future with increasingly challenging opportunities (PPPs) as well as opportunities for development abroad 19

20 Contact information Bernhard A. Fuchs Marco Knuchel Binit Sanghvi Investor Relations Phone Fax Mailing list: 20

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 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. As part of Holcim's global commitment to compliance with competition laws, please note that this presentation has been comprehensively reviewed by counsel in both the United States and Switzerland. 21

22 Strength. Performance. Passion. 22