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Kepler – Swiss Seminar 2010
Bernhard A. Fuchs – Head Investor Relations
Marco Knuchel – Investor Relations
March 24, 2010
St. Genevieve plant
© Holcim Ltd 2010
Agenda
1 Results 2009 and outlook 2010
2 Strategy geared to growth areas
3 Value-driven investment criteria
4 Attractiveness of Holcim’s capex program
5 Conclusions
2
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
Results 2009
• Full market impact from the economic crises; volume loss in
all main products in Europe and North America > -20%
• Geographical positioning mitigated cement volume reduction
to only -7%
• Prices held up well in all segments
• Significant efforts on fixed cost reductions CHF 857 million
• Op. EBITDA like for like (lfl) -5.1%, margin up +1.2 pp
• Strong cash flow (lfl +12%) and lower CAPEX allowed to
reduce NFD by 1.2 bn, while maturity was extended
• Dividend payout ratio one third maintained; CHF 1.50 per
share
3
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
Key financial figures – 2009
Million CHF
(if not otherwise stated)
Sales volumes
- Cement (mt)
- Aggregates (mt)
- Ready-mix (mm3)
Net sales
Operating EBITDA
Operating profit
+/-
2007
2008
2009
LFL
CIS
149.6
187.9
45.2
143.4
167.7
48.5
131.9
-6.8%
143.4 -19.6%
41.8 -17.5%
-1.2%
5.1%
3.7%
-8.0%
-14.5%
-13.8%
27,052
6,930
5,024
25,157
5,333
3,360
21,132 -10.0%
4,630
-5.1%
2,781
-7.3%
0.8%
-0.7%
-2.1%
-6.8% -16.0%
-7.4% -13.2%
-7.8% -17.2%
FX
Total
Net income before
minorities
4,545
1
2,226
1,958
-5.8%
-1.0%
-5.2% -12.0%
Net income attr. to
Holcim shareholders
Cash flow
3,865
5,323
1
1,782
3,703
1,471 -11.2%
3,888 12.0%
-1.7%
1.6%
-4.6% -17.5%
-8.6%
5.0%
EPS CHF3
Dividend/share CHF
9.21
3.30
2
6.27
2.25
4
4.93
1.50
5
-21.4%
-33.3%
1
Includes a capital gain on the sale of a stake in Holcim South Africa of CHF 1,110 million and a special dividend of CHF 150 million, net
Includes a special dividend of CHF 150 million, net related to the sale of a stake in Holcim South Africa
3 Calculated on the weighted average number of shares outstanding retrospectively restated in accordance with IAS 33
4 Paid as a stock dividend
5 Proposed by the Board of Directors
2
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
4
March 2010
Outlook 2010
• Europe: the markets will only recover slowly
• North America: no rapid recovery on the
construction market
• Latin America: construction industry will remain solid
• Africa Middle East: a stable economic environment
• Asia Pacific: markets will continue to grow
• Acquisition in Australia will make a solid contribution
• The cost advantages realized will be retained
• Focus remains on process efficiency and strengthening
competitiveness
• Holcim will start the next upturn from a stronger position
5
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
Agenda
1 Results 2009 and outlook 2010
2 Strategy geared to growth areas
3 Value-driven investment criteria
4 Attractiveness of Holcim’s capex program
5 Conclusions
6
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
Holcim strategy…
Product Focus
• Two basic resources
• Cement
• Aggregates
• Value-adding products
and services
• Ready-mix concrete
• Asphalt
• Concrete products
Geographic
Diversification
Local Management
Global Standards
• Business – strongly
anchored in local
markets
• Truly global
• Balanced between
• regions
• mature / emerging markets
Net sales1
Op. EBITDA1
25%
29%
34%
37%
8%
6%
15 %
16 %
Europe
North America
8%
22%
Latin America
Africa Middle East
Asia Pacific
• Supported by
global standards
• Policies &
directives
• Exchange of
know how &
best practices /
benchmarking
…effective execution is the base for success
1
7
Reported as per 12M 2009 YTD
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
Demand drivers – population growth and
urbanization
World population
Population in rural and urban areas
10
10
10
urban
rural
6.4
55
5
Emerging
markets
5.0
3.2
2.4
Mature
markets
00
1970
2000
0
2030
2050
3.3
2.8
2.9
1.3
1970
2000
2030
2050
• 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
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
8
March 2010
Demand driver – GDP growth rates in emerging
markets are expected to be higher
GDP share 2008 vs. 2020E
World GDP growth (% per year)
10
2008
2020
34%
5
44%
56%
66%
0
2005
2010
2015
2020
Emerging markets
Mature markets
World
-5
Emerging markets
Mature markets
• Global GDP growth of 3.5 to 4% on average p.a. expected in the next
decade
Continued and growing importance of emerging countries – the
place where best growth opportunities will be found
Source: Global Construction 2020, Global Construction Perspectives, Oxford Economics, November 2009
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
9
March 2010
Global construction outlook
Largest construction markets 2009E
Largest construction markets 2020E
Global ranking
USA
China
Japan
Germany
Spain
France
Italy
South Korea
India
UK
Canada
Brazil
Australia
Russia
Indonesia
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Global ranking
China
USA
India
Japan
South Korea
Germany
Spain
Russia
UK
Canada
France
Italy
Indonesia
Brazil
Australia
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Holcim – very well positioned to capture growth opportunities
Source: Global Construction 2020, Global Construction Perspectives, Oxford Economics, November 2009
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
10
March 2010
Agenda
1 Results 2009 and outlook 2010
2 Strategy geared to growth areas
3 Value-driven investment criteria
4 Attractiveness of Holcim’s capex program
5 Conclusions
11
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
Holcim investment criteria –
set to secure long-term above average returns
Product Focus
• Strategic fit
• Position taking in line
with maturity profile of
the market:
• Cement
• Aggregates
• OCMS1
Geographic
Diversification
Local Management
Global Standards
• GDP growth
• Management
• Favourable demographics • Resources
• Deficit markets
• Local culture
embedment
• Substantial market share
• Networking
Financials
• Hurdle rate concept
• Financing in line with
Holcim policy
• Investment scorecard
• Accountability
Success factor – rigorous investment analysis and discipline
1
12
Other Construction Materials and Services
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
Agenda
1 Results 2009 and outlook 2010
2 Strategy geared to growth areas
3 Value-driven investment criteria
4 Attractiveness of Holcim’s capex program
5 Conclusions
13
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
We invested at the right time
Holcim expansion capex vs. consolidated capacity
(in CHF million)
(Mtpa)
Expansion capital expenditures
Cement Capacity
• Expansion capital expenditure peaked in 2008 while commissioning
of cement capacity is peaking now
The capacity expansion adds 28 million tonnes between 2007
to 2011 and will generate additional > CHF 900m
14
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
Holcim exposure is geared towards emerging
markets which account for ~70% of op. EBITDA
Eastern Europe
Mature markets (Western Europe,
North America, Australia, New Zealand)
op. EBITDA (% of Group):
Capacity expansion 2007/2011:
op. EBITDA (% of Group):
Capacity expansion 2007/2011:
~8%
6.6 Mt
~30%
4.7 Mt
Asia Pacific (w/o AUS, NZL)
op. EBITDA (% of Group):
Capacity expansion 2007/2011:
~32%
12.3 Mt
Latin America
Construction output
forecast CAGR 2010/2020
op. EBITDA (% of Group):
Capacity expansion 2007/2011:
~22%
4.1 Mt
0% to <2%
2% to <4%
4% to <6%
6% to < 8%
>8%
no forecast
dd
Africa Middle East
op. EBITDA (% of Group):
Reported op. EBITDA as per 12M 2009 YTD, China not consolidated
Source: Global Construction 2020, Oxford Economics, November 2009, Holcim Estimates
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
~8%
15
March 2010
The acquisition in Australia demonstrates
investment discipline in practice
• The only major transaction done
in the industry in 2009
• One of the only mature markets
not to enter a recession
• Major presence in all three
segments across Australia
Cement and clinker
•
•
•
•
1
4 cement plants
1 grinding plants
Sales 2008: 5 million tonnes
Other: fly ash, slag and lime
Aggregates
• 83 plants
• Sales 2008: 30 million tonnes
Other construction
materials & services
• 249 plants
• Sales 2008: 6.3 million m3
• 16 pipe and precast plants
Australia will generate an additional > CHF 400m op. EBITDA
1
Cement Australia is a joint venture owned 75% by Holcim and 25% by HeidelbergCement
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
16
March 2010
We are well positioned to capitalize on the recovery
Cement volumes sold
Aggregates volumes sold
Ready-mix volumes sold
(Mt)
(Mt)
(Mm3)
200
50
140
-10 Mt
175
-56 Mt
150
120
40
125
100
-7 Mm3
142
132
100
199
143
2007
Actual1
2009
Actual
49
42
2007
Actual1
2009
Actual
75
80
30
50
2007
Actual1
2009
Actual
• Prime asset base and locations with solid long term demand drivers
• High quality aggregates with over 70 years of reserves
Existing assets can generate an additional CHF 1bn
op. EBITDA on a like-for-like basis
1 Adjusted
for change in structure to show like-for-like comparison
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
17
March 2010
Agenda
1 Results 2009 and outlook 2010
2 Strategy geared to growth areas
3 Value-driven investment criteria
4 Attractiveness of Holcim’s capex program
5 Conclusions
18
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
Conclusions
• Solid results in 2009 given the challenging environment
• Sound strategy and effective execution are the prerequisites
for success and value creation
• Expansion activities and acquisitions have positioned
Holcim in the fastest growing emerging and resilient mature
markets
• Stringent investment criteria are the cornerstone for our
capital allocation
Holcim’s investments will generate an estimated
CHF 2.3bn in additional op. EBITDA
19
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 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 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.
20
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010
Contact information and event calendar
Contact information
Event calendar
Bernhard A. Fuchs
Marco Knuchel
Binit Sanghvi
May 4, 2010
Results for the first quarter 2010
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
March 2, 2011
Press and analyst conference for
the annual results for 2010
Investor Relations
Phone +41 58 858 87 87
Fax
+41 58 858 80 09
[email protected]
www.holcim.com/investors
Mailing list:
www.holcim.com/subscribe
21
© Holcim Ltd 2010
Kepler – Swiss Seminar 2010
March 2010