Holcim Leadership Journey May 14, 2012

Transcription

1 Holcim Leadership Journey

2 Summary of the Holcim Leadership Journey Focus on health and safety strengthen the social dialog Development and generation of leaders and talents By 2014 Holcim will have additional operating profit of more than CHF 1.5 billion the base line is the financial year 2011 (excluding one-off charges 2011 of CHF 375 million and without fluctuations in currency, changes in scope of consolidation and similar market conditions) Customer excellence additional operating profit Cost leadership additional operating profit One-off cash costs to achieve savings CHF 500 million > CHF 1 billion < CHF 200 million Expansion CAPEX: Total Cost of Ownership per tonne of capacity to reduce by 20% for each new project Further Net Working Capital improvement and selective divestments 2

3 Operating Profit growth of > CHF 1.5 bn by 2014 CHF million 4,000 3,500 3,000 2,500 2,000 1,500 1,000,500,0 1) Operating Profit Customer Excellence Cost Leadership 1) Operating Profit 2011 (CHF 1,933 million) excluding one-off items (CHF 375 million) = 2,308 million 3

4 Where and by when? All figures in million CHF 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 > 250 -Procurement > 250 -Fixed cost > 200 Total increase in operating profit > 1,500 Cash cost to achieve the savings (one-off) < 80 < 120 Additional CAPEX net 1) ) 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

5 How? Customer Excellence CHF 500 million Definition and further systematic development of Holcim commercial and marketing performance indicators to measure the progress Margin and price management Price, cost and margin transparency per customer Market business intelligence tools to be further developed Highly trained workforce dedicated to price and margin management in all operating companies Systematic pricing policies covering all the elements of the pricing model Product and service innovation 5

6 How? Customer Excellence CHF 500 million cont. Customer Value Management Systematic processes to be implemented Profit generating tailor-made value proposition to existing and new customers Brand management Operational Net Promoter Score (NPS) program Marketing and selling prices Procedures and processes supporting tactical behaviours Tailored capability development programs Motivation and incentive systems Benchmark senior leadership knowledge and culture of marketing and sales Gap analysis Training 6

7 How? Energy and AFR > CHF 300 million Increased use of Alternative Fuel and Raw Materials (AFR) Improve energy efficiency through Grinding optimization Fan optimization and filters Burner updates and optimization Fuel mix optimization Increase usage of petcoke Increase usage of low rank coal Increase usage of natural gas where relevant Energy procurement Contract management and re-negotiation Capture opportunities on spot market Portfolio optimization Strategic initiatives 7

8 How? Logistics > CHF 250 million Reduce Ready-mix truck cycle and waiting times Dynamic optimization of the chosen routes based on real-time GPS equipment to minimize cost to market and selectively choose means of transport (road, rail, ship etc.) Optimize logistics and routes between sites (e.g. India) Review outsourcing options and re-negotiate 3rd party contracts and measure supplier performance Preliminary indication is that savings of at least 5% of logistics cost is achievable Each lever applies differently according to local configuration in order to deliver > CHF 250 million 8

9 How? Procurement > CHF 250 million Cross functional standardization and increased volume pooling Diversification of supplier base in all areas (e.g. China) Leverage global sourcing categories Change from local to regional / hub and From regional / hub to global sourcing where appropriate Local (re-)negotiation Overall savings through these measures with specialized procurement experts of > CHF 250 million Global / regional / local organization 9

10 How? Fixed Cost > CHF 200 million Support Process Cost (SPC) Benchmark levels for administrative functions and simplification of administrative processes Strengthen use of service centres Reduce external service and consultants Cost optimization of industrial footprint and right sizing Review of the entire asset base across all segments with low utilization levels Right-sizing of ready-mix supplies where appropriate 10

11 The five areas of operating profit growth by 2014 Customer Excellence CHF 500 million Fixed cost > CHF 200 million Operating Profit Energy and AFR > CHF 300 million > CHF 1,500 million Procurement > CHF 250 million Logistics > CHF 250 million 11

12 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. 12