Bellevue Meets Management Seminar Thomas Aebischer, CFO

Transcription

1 Strength. Performance. Passion. Bellevue Meets Management Seminar Thomas Aebischer, CFO Bellevue Meets Management Seminar 2015 Holcim Ltd

2 Agenda Global Macro and Industry trends Holcim Strategic Priorities Holcim Leadership Journey and beyond Update on Holcim Lafarge Merger Guidance 2015 and Use of Cash Conclusion Bellevue Meets Management Seminar 2015 Holcim Ltd 2

3 Challenging economic environment for our industry. GDP, Constant prices [annual % change] Forecast World Advanced economies Emerging economie s Change in GDP Forecast [October '13 to October '14] [annual % change] Source: IMF WEO October 2013/ October 2014; EIU Global Forecast September FC YOY % GDP Growth in 2014 Variance 2014: GDP forecast 10/13 for 2014 vs forecast 10/14 for 2014 Variance 2015: GDP forecast 10/13 for 2015 vs forecast 10/14 for 2015 Global economic growth is expected to accelerate slowly: 3% in 2013, 3.3% in 2014, 3.8% in 2015 European optimism temporarily tempered in view of slower recovery and deflation risk in the Euro area Major developed countries are expanding simultaneously for the first time in several years, albeit at a moderate pace Emerging markets, on balance, perform slightly better than in 2013, however, with growth rates below the post crisis peak of and the decade before Political situation in CIS/Caspian and Middle East impacts regional economies and international trade After several quarters of headwinds, Holcim footprint favorable for tailwinds in 2015: USA, Mexico, India, Indonesia and UK Bellevue Meets Management Seminar 2015 Holcim Ltd 3

4 ... and bright spots in markets where Holcim is particularly strong Real GDP Growth [annual % change] EBITDA India; 14% CAGR Australia; 8% Indonesia; 7% United States; 6% Canada; 6% United Kingdom; 4% Philippines; 5% Mexico; 5% E 2015FC 2016FC 2017FC 2018FC 2019FC Production and logistics network allows to adapt to regional demand growth differences Asset base is new and low cost Limited increase of fixed costs expected (operating leverage) Bellevue Meets Management Seminar 2015 Holcim Ltd 4

5 Agenda Global Macro and Industry trends Holcim Strategic Priorities Holcim Leadership Journey and beyond Update on Holcim Lafarge Merger Guidance 2015 and Use of Cash Conclusion Bellevue Meets Management Seminar 2015 Holcim Ltd 5

6 Holcim Strategic Priorities Value Creation from existing from assets existing and focus assets on returns and focus on returns Capital Allocation Discipline Discipline (expansion and (expansion maintenance) and maintenance) Cost Discipline Customer Excellence Excellence People Development Occupational Health Health & Safety & Safety 7 Sustainable Development Bellevue Meets Management Seminar 2015 Holcim Ltd 6

7 1 We focus on value creation from our existing asset base Global footprint - the result of organic and inorganic growth initiatives Capacities sufficient for growth without major new investments Higher capacity utilization and ongoing cost focus increase margins CAPEX discipline Global CAPEX allocation Reference Value Model for maintenance ROIC improvement Substantial free cash flow generation expected for coming years In CHF million 6'500 5'500 4'500 3'500 2'500 1' Cash flow from operating activities CAPEX Financial (de)/investments Bellevue Meets Management Seminar 2015 Holcim Ltd 7

8 1 2 Clear mapping of portfolio in areas of growth to prioritize capital allocation along strategic opportunities Growth Value Restructure Minority > 10% Bellevue Meets Management Seminar 2015 Holcim Ltd 8

9 2 Holcim s unique footprint and market network enables to leverage trading opportunities and lower capex Bangkok Ho Chi Minh City Singapore Jakarta Manila Production and consumption imbalances allow for intra-regional trade flows of clinker and cement to best serve customers and support market growth Imports will allow for flexible and low investment supply of strong market positions Holcim is uniquely positioned to seize intra-regional trading opportunities S<D < -2Mt S<D > -2Mt S>D < 4Mt S>D > 4Mt Sydney Wellington Supply < Demand Supply > Demand Bellevue Meets Management Seminar 2015 Holcim Ltd 9

10 3 4 Cost discipline and portfolio management to increase short and long term returns Customer Excellence Holcim Leadership Journey Cost Leadership How we do it Customer focus Energy and AFR Occupational Health & Safety Value management Logistics Compliance Pricing policies Procurement Skills and Leadership Development Marketing and sales CHF 500 m Fixed cost Capex per ton - 20% > CHF 1 bn Portfolio Management 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% Bellevue Meets Management Seminar 2015 Holcim Ltd 10

11 5 6 Holcim Values and behavior - Safety is our priority number 1 Our Values Strength. Performance. Passion are demonstrated through our behavior Integrity Drive for results Developing self and others Customer Excellence Change / inspirational leadership Collaboration Safety is our priority number 1. A safe business is a performing business Holcim Vision: Zero Harm to people Holcim Target: prevent fatalities and injuries Mapping the risks: in all units Holcim Priorities: reducing risks and controlling unacceptable hazards as outlined by the Fatality Prevention Elements Focus on the people most exposed: working with all our employees, their representatives and contractors Bellevue Meets Management Seminar 2015 Holcim Ltd 11

12 7 Sustainable Development Ambition 2030: 3 focus areas Bellevue Meets Management Seminar 2015 Holcim Ltd 12

13 Agenda Global Macro and Industry trends Holcim Strategic Priorities Holcim Leadership Journey and beyond Update on Holcim Lafarge Merger Guidance 2015 and Use of Cash Conclusion Bellevue Meets Management Seminar 2015 Holcim Ltd 13

14 While most work streams delivered ahead of the target... Base line: Operating Profit 2011 of CHF million 1) Each work stream has its own set of performance measurement definition, considering volume, price and cost according to the specific drivers of that work stream: Customer Excellence Energy and Alternative Fuels & Raw Materials Logistics Procurement Fixed Cost Target 500 Achieved 380 Target 300 Achieved 318 Target 250 Achieved 237 Target 250 Achieved 392 Target 200 Achieved 363 Cultural success of the Holcim Leadership Journey mirrored by financial achievement of CHF 1.7 billion by 9M ) Excluding one-off charges of CHF 375 million in 2011 and adjusted for the sale of 25% of Cement Australia and Siam City Cement Bellevue Meets Management Seminar 2015 Holcim Ltd 14

15 ... the Holcim Journey continues beyond 2014: continuous performance improvement 1. Structural and strategic direction 2. Operational efficiency 3. Organization and Processes Proactive portfolio management Shift to asset lighter supply strategies (e.g. New Zealand import business model) Continue to optimize footprint in concrete and aggregates Continue waste management as business Continue Sustainable Development ambition Continuous performance improvement program on cost leadership and customer excellence Focus on existing operational projects and initiatives, initiating only limited new projects Continue global talent and succession management Continue drive of values and behaviors Standardization of processes (e.g procurement, maintenance) Alignment in organizational structures (e.g. corporate, Business Shared Service Centers) Structured and aligned performance management approach Bellevue Meets Management Seminar 2015 Holcim Ltd 15

16 Agenda Global Macro and Industry trends Holcim Strategic Priorities Holcim Leadership Journey and beyond Update on Holcim Lafarge Merger Guidance 2015 and Use of Cash Conclusion Bellevue Meets Management Seminar 2015 Holcim Ltd 16

17 Holcim stand-alone performance to be amplified: a transformational deal offers more opportunities Holcim Stand-alone Best footprint Focus on performance Superior growth opportunities with existing assets Disciplined capital allocation Cash flow generation and improved shareholder returns Customer focus Aggregates and RMX creating value Trading and Waste Management as businesses Commitment to Sustainable Development Strong talent pipeline T r a n s f o r m a t i o n a l D e a l NewCo New best-in-class global portfolio Focus on performance Superior growth and operating profitability Significant synergies Strict capital allocation discipline and strong capital structure Strong cash flow generation Attractive returns for shareholders Customer focus and innovation Aggregates and RMX creating value Further opportunities in trading and waste management Commitment to Sustainable Development Strong talent pipeline Bellevue Meets Management Seminar 2015 Holcim Ltd 17

18 Divestments and deal execution Major achievements across work-streams Regulatory process on track Filed in all jurisdictions: EU, US, Canada, Brazil, India, China, Ecuador, Mexico, Morocco, COMESA, Tanzania, Serbia, Russia, Ukraine, Turkey, Kenya, Mauritius, Singapore, South Africa, Indonesia. No filing required in Vietnam Clearances received in 13 jurisdictions: Russia, Ukraine, Turkey, Kenya, Singapore, Morocco, South Africa, COMESA, China, Brazil, EC, Tanzania and Serbia Other clearances expected by end of February 2015 Disposal and bidder process well underway with high market interest from industrial as well as Private Equity investors Divestment processes kicked-off end of July 2014 Teaser packages released to about 120 potential buyers beginning of August 2014 Approx. 100 potential buyers invited to Phase I, Information Memoranda distributed Selection of bidders for Phase II completed and process well advanced Engagement with European Works Councils started in collaborative manner Bellevue Meets Management Seminar 2015 Holcim Ltd 18

19 Sales / Bidder process Divestment perimeters Canada Cement Leading cement producer in central Canada Capacity: 3.3 mtpa Integrated plants: 2 Aggregates Quarries and pits: 15 (2) RMX Plants: 41 (3) Other businesses Construction and paving Asphalt Brazil Cement 4th largest producer by capacity in Southeast Brazil Capacity 3.6 mtpa Integrated plants: 3 Grinding stations: 2 RMX Plants: 2 CANADA BRAZIL Minnesota Michigan Ontario Ohio Focus on South-East region Sao Paulo Quebec New York Minas Gerais Rio de Janeiro Espirito Santo EUROPE France PHILIPPINES Germany Mindanao Integrated plant Grinding station Cement terminal Aggregate quarries UK Luzon Slovakia Visayas Hungary Serbia Romania Europe Operations in 7 countries 4th largest producer in Europe by revenues and 5th largest by installed cement capacity Cement Capacity: 23.8 mtpa Integrated plants: 15 Grinding stations: 6 Aggregates Quarries: 211 RMX Plants: 270 Other businesses Contracting, asphalt and other Philippines Cement 2nd largest producer by cement capacity in the Philippines Capacity: 5.9 mtpa Integrated plants: 4 Grinding station: 1 Bellevue Meets Management Seminar 2015 Holcim Ltd 19

20 M&A process milestones and outlook The envisaged steps and timing of the M&A process Initial filing for relevant countries/ address info requests Done/Ongoing Information Memorandum sent out to interested buyers Sep 2014 Indicative bids from interested buyers received Oct 2014 Admission to 2 nd round for potential buyers Oct 2014 In-depth Due Diligence (DD) and SPA negotiations Nov/Dec 2014 Final bids Jan 2015 Overall transaction expected to close within H1, 2015 Bellevue Meets Management Seminar 2015 Holcim Ltd 20

21 Integration preparation well advanced Preparation of the integration is progressing well Detailed vision and strategy white book for future company developed and approved by Integration Committee at the end of 2014 Operating model and organization reference material finalized at year end 2014 Dedicated functional work streams are now in charge to prepare the ground for day 1 after the completion of the merger Management selection on track with announcement of new Executive Committee on December 23, 2014 Assessments of next management levels underway Decisions on all critical business and organizational aspects expected by beginning of Q Bellevue Meets Management Seminar 2015 Holcim Ltd 21

22 Executive Committee LafargeHolcim Bruno Lafont, CEO Picture Thomas Aebischer, CFO Jean-Jacques Gauthier, Integration, Organization & HR North America Europe Picture Urs Bleisch, Performance and Cost Gerard Kuperfarb, Growth and Innovation Roland Köhler Alain Bourguignon Middle-East Africa Asia Pacific Latin America Eric Olsen Ian Thackwray Saâd Sebbar Bellevue Meets Management Seminar 2015 Holcim Ltd 22

23 Agenda Global Macro and Industry trends Holcim Strategic Priorities Holcim Leadership Journey and beyond Update on Holcim Lafarge Merger Guidance 2015 and Use of Cash Conclusion Bellevue Meets Management Seminar 2015 Holcim Ltd 23

24 Guidance Assumptions Leading indicators point to a gradual recovery of the global economy Stronger growth of advanced economies driven by US and UK Global GDP growth of 3.8% vs. 3.3% in Key drivers remain moderating fiscal consolidation and supportive monetary policies Downside risks include worsening of geopolitical tensions World cement consumption outside China is expected to increase by ~5% Capacity utilization to increase in the US, and to a lesser extend in Europe; emerging market consumption growth more than offset by additional capacity General cost inflation expected to remain between 3-4% 1 Source: IMF, World Economic Outlook October 2014 Bellevue Meets Management Seminar 2015 Holcim Ltd 24

25 Substantial improvement of 2015 results 3'000 2'800 2'600 2'400 2'200 2' * 2012* Operating Profit Operating profit margin Holcim expects 2015 to be a solid year Like-for-like operating profit excluding merger related costs expected to be between 2.7 to 2.9 billion Swiss franc India, Indonesia, USA, UK and Mexico to be the main growth drivers Higher operating profit margin Better pricing and ongoing cost savings to more than offset cost inflation ROIC AT to further improve towards 8% CAPEX expected to come down to CHF 1.5 billion Free cash flow generation to reflect improved earnings and lower CAPEX requirements Portfolio management to continue * adjusted for restructuring (2011, 2012) and merger related costs (2014) Bellevue Meets Management Seminar 2015 Holcim Ltd 25

26 Use of cash cash generation supportive of balance sheet Strong free cash flow generation following conclusion of current expansion program in 2015 Capex profile to be further reduced from 2015 levels: Sustainable expansion Capex of about CHF million Maintenance capex of about CHF million Four priorities for use of cash Strengthening of balance sheet to become solid BBB rated company Disciplined organic growth initiatives Value enhancing inorganic growth ambitions Cash return to shareholder, predominantly through a progressive dividend Bellevue Meets Management Seminar 2015 Holcim Ltd 26

27 Agenda Global Macro and Industry trends Holcim Strategic Priorities Holcim Leadership Journey and beyond Update on Holcim Lafarge Merger Guidance 2015 and Use of Cash Conclusion Bellevue Meets Management Seminar 2015 Holcim Ltd 27

28 Conclusion Holcim operates in an industry with attractive long-term growth perspectives Holcim s footprint is best positioned to capture both the recovery in mature (US and UK) as well as opportunities in emerging economies (India, Indonesia, Philippines and Mexico) Holcim Leadership Journey mindset firmly embedded and continues beyond 2014 Focus on extracting value from existing assets and generating returns Disciplined capital allocation on strategic priorities Continuous performance improvement an element of Holcim identity Holcim s potential will be amplified by the merger: unmatched global footprint of the combination between Holcim and Lafarge will generate superior profitability and more attractive returns for shareholders Bellevue Meets Management Seminar 2015 Holcim Ltd 28

29 Backup slides Bellevue Meets Management Seminar 2015 Holcim Ltd 29

30 Strong economic recovery in US and robust growth in Canada USA Cement demand in US to grow by over 5% p.a. over next years Continued strong residential demand First signs of non-residential recovery National and state infrastructure programs to support construction materials and cement market Minimum investments in new capacity expected after NESHAP environmental compliance upgrades Canada Cement demand to grow by 2-3% p.a. in Canada driven by PPP projects 2013 Key Figures Cement capacity 22.0 mt Cement sales 11.7 mt Aggregates sales 42.8 mt RMX sold 7.5 mm 3 FTEs 6,791 Net Sales CHF 3.2 bn Op. EBITDA CHF 494 mio Op. Profit CHF 199 mio Integrated plant Grinding station Terminal Aggregates Holcim to benefit significantly from: Leveraging the cost performing asset base Further improving profitability through customer excellence Capitalizing on construction expertise Further participating in PPP projects in Canada Bellevue Meets Management Seminar 2015 Holcim Ltd 30

31 2015 Holcim Ltd Asia Pacific recovering from temporary slowdown Strong volume growth expected over next years India troughed in 2014; new government taking the right steps to stimulate GDP growth Strong fundamentals in Indonesia and the Philippines to support acceleration of growth Australia in transition from resource sector boom, infrastructure and residential to compensate over time Robust cement demand growth in China Holcim with leading asset base: National cement footprint in India Streamlining shareholding structure in India Further improving profitability through customer excellence and continued focus on cost Cement capacity 90.3 mt Cement sales 70.3 mt Aggregates sales 25.2 mt RMX sold 10.9 mm 3 FTEs 34,080 Net Sales CHF 7.3 bn Op. EBITDA CHF 1,473 mio Op. Profit CHF 1,030 mio 2013 Key Figures Holcim Integrated plant Grinding station Terminal Aggregates Associate Bellevue Meets Management Seminar 31

32 Stable volume growth in Latin America Integrated plant Grinding station Terminal Aggregates Holcim Associate Cement demand in the region to grow by 2-3% over the next years mainly driven by Colombia and Mexico Mexico picking up with cement demand growth of 2.5-3% over next years Infrastructure spend to increase significantly, among top priorities for several governments Brazil expected to gradually rebound from current lower growth environment 2013 Key Figures Cement capacity 35.3 mt Cement sales 25.0 mt Aggregates sales 10.2 mt RMX sold 8.0 mm 3 FTEs 11,181 Net Sales CHF 3.3 bn Op. EBITDA CHF 938 mio Op. Profit CHF 722 mio Holcim well positioned to address future growth: National cement footprint in Mexico with capacity reserves in promising Northern part Reduced cost base as a result of footprint optimization in prior years, improving margins Focus on price over volume while targeting capacity additions with brownfield projects and/or acquisitions in selected countries Successful Business Shared Service Center (CREST) implementation with demonstrated benefits Bellevue Meets Management Seminar 2015 Holcim Ltd 32

33 Europe expected to show signs of recovery 2013 Key Figures Integrated plant Grinding station Terminal Aggregates Cement capacity 47.7 mt Cement sales 26.7 mt Aggregates sales 74.1 mt RMX sold 12.3 mm 3 FTEs 15,868 Net Sales CHF 5.6 bn Op. EBITDA CHF 946 mio Op. Profit CHF 436 mio Modest growth path for the region Differing market conditions for EU area, stable growth in Central Eastern Europe and CIS, solid recovery in UK Cement supply and demand situation to stabilize and slowly improve in line with economic recovery Ongoing geopolitical tensions in Eastern Europe Holcim well adapted to new market conditions: Restructuring of cement and aggregates businesses bearing fruits Value creation through series of transactions (e.g. with Cemex) Leveraging of performing assets in Russia (e.g. Moscow region) Further improving profitability through customer excellence and continued focus on cost Business Shared Service Center Bellevue Meets Management Seminar 2015 Holcim Ltd 33

34 Short term uncertainty, however a lot of opportunities in Africa Middle East Significant growth potential in Sub-Saharan Africa Cement consumption to stagnate in Morocco as a result of reduced government spending and real estate funding restrictions Large investment project boosting cement consumption in the Middle East Lebanon cement demand remains high despite the political turmoil in the region Holcim to capture future opportunities through: 2013 Key Figures Cement capacity 11.0 mt Cement sales 7.9 mt Aggregates sales 2.2 mt RMX sold 0.8 mm 3 FTEs 2,128 Net Sales CHF 0.9 bn Op. EBITDA CHF 283 mio Op. Profit CHF 216 mio Integrated plant Grinding station Terminal Aggregates Holcim Associate Strong retail franchising network supporting Holcim Morocco s position and price strategy Holcim Reunion awarded with the supply for several of the project slots of Nouvelle Route de Littoral Investment projects to capture market growth Good asset footprint in Madagascar giving competitive advantage to supply major markets Bellevue Meets Management Seminar 2015 Holcim Ltd 34

35 Key financial figures 9M 2014 Million CHF (if not otherwise stated) Full year 9M +/ LFL CIS FX Total Sales volumes - Cement (mt) % -0.5% 1.6% - Aggregates (mt) % -0.6% -1.0% - Ready-mix (mm 3 ) % -1.6% -5.7% Net sales 19,719 14,941 14, % -1.0% -7.0% -4.7% Operating EBITDA 3,896 2,951 2, % -0.5% -7.4% -7.1% Operating profit 2,357 1,798 1, % 1.3% -8.4% -4.4% Net income 1,596 1,277 1, % Net income - shareholders of Holcim Ltd 1,272 1, % Cash flow from operating activities 2,787 1,172 1, % -0.5% -6.2% -10.6% 1 EPS in CHF % 1 Calculated on the weighted average number of shares outstanding Bellevue Meets Management Seminar 2015 Holcim Ltd 35

36 Operating profit bridge Million CHF ) 238 1' '719 Op Profit 9M 2013 Volume Price Fixed Costs Variable Costs CO2 Other CIS FX Op Profit 9M including restructuring (CHF 37 million) and merger related costs (CHF 54 million) Bellevue Meets Management Seminar 2015 Holcim Ltd 36

37 Operating profit by region Million CHF 1 9M M M M 13 / 9M 14 LFL Change in structure Currency Total Asia Pacific -1.9% -0.7% -9.8% -12.4% Latin America -6.2% 0.0% -8.6% -14.9% Europe 19.0% 8.1% -1.3% 25.8% North America 56.7% 0.6% -10.3% 47.0% Africa Middle East 11.0% -3.2% -2.4% 5.5% Total 2.8% 1.3% -8.4% -4.4% Bellevue Meets Management Seminar 2015 Holcim Ltd 37

38 Outlook for 2014 Holcim expects cement volumes to increase in all Group regions in 2014 with the exception of Europe Despite positive development in North America, aggregates volumes are expected to decline Ready-mix concrete volumes are expected to decline in all regions driven by restructuring and divestments Holcim expects that organic growth in operating profit can be achieved in 2014 The ongoing focus on the cost base coupled with all the benefits expected from the Holcim Leadership Journey will lead to a further expansion in operating margins in 2014 Bellevue Meets Management Seminar 2015 Holcim Ltd 38

39 Cost and capex guidance for 2014 Energy costs per tonne of cement produced slightly above 2013 level Average interest rate unchanged at 4.8 percent Long term expected tax rate of 27 percent Maintenance capex of CHF 0.8 billion net Expansion capex of CHF 1.1 billion Bellevue Meets Management Seminar 2015 Holcim Ltd 39

40 HVA - performance measure with a focus on operating profit considering risk-adjusted cost of capital HVA = (ROIC - WACC) x Average Invested Capital HVA = NOPAT - WACC x Average Invested Capital Main characteristics of updated definitions No consideration of interest earned on cash and cash equivalents Adjustment of extraordinary effects which have no link to the current operating performance Consideration of calculative tax expenses taking the tax deductibility of financial expenses into account Application of a long-term and sustainable Group WACC of 7.0% Reduction of long-term WACC of 8.0% due to lower sustainable interest rate level Application of country specific WACCs taking the respective local inflation level into account No consideration of cash & cash equivalents No consideration of tax assets and liabilities (current and deferred) Calculation of average based on balances at the beginning and the end of the respective period Bellevue Meets Management Seminar 2015 Holcim Ltd 40

41 Long-term and sustainable Group WACC of 7.0% The main difference compared to the existing long-term WACC of 8.0% is the lower sustainable interest rate level. Taking the historical development of the interest rate level into account this adjustment would have been already justified in the last few years. Long-Term WACC for Holcim Group in CHF Risk-free rate 3.5% Beta unlevered 0.65 Comments Long-term risk-free rate based on sustainable real interest rate level of 2.0% and a long-term inflation forecast for Switzerland of 1.5%. Sustainable unlevered beta for Holcim Group which is in line with current and historical betas of Holcim and the appropriate peer group companies. Beta levered 0.97 Beta unlevered x (1+ Debt / Equity) Market risk premium 4.5% Long-term and sustainable market risk premium of a mature capital market. Same market risk premium as in the Impairment WACC. Cost of equity 7.9% Risk-free rate 3.5% Credit spread 150bps Sustainable credit spread for Holcim based on the analysis of secondary bond spreads of Holcim in different currencies, credit default spreads of Holcim and general spreads of companies with the same credit rating. No tax-adjustment because tax shield of interest expenses are considered in the calculation of NOPAT. Cost of debt 5.0% Equity share 67.0% Debt share 33.0% Target capital structure on group level. WACC (rounded) 7.0% Bellevue Meets Management Seminar 2015 Holcim Ltd 41

42 Based on the refined definition Holcim realized a ROIC of 7.3% in Calculation of NOPAT 2013 (CHF billion) (0.12) 0.05 (0.55) Net income before taxes Financial expenses (2.24) (0.47) Interests on cash and cash equivalents Adjustment 1) on EBIT 2 Standard 2) taxes NOPAT 1 EBIT Calculation of Invested Capital 2013 (CHF billion) (5.81) 0.05 ROIC 7.3% Total assets Cash and cash equivalents 3) Tax assets Non-interest 4) bearing liabilities 3 Adjustment on EBIT Invested Capital Extraordinary effects 1 (EBIT financial expenses) x standard tax rate. On group level a standard tax rate of 27.0% is applied. 2 Current tax receivables and deferred tax assets. 3 Excl. current and deferred tax liabilities Invested Capital 2012 Average Invested Capital 2013 Bellevue Meets Management Seminar 2015 Holcim Ltd 42

43 In 4 of the last 6 years Holcim could realize a ROIC above its adequate long-term WACC of 7% ROIC after tax of Holcim Group 9.0% 8.6% 8.5% 8.0% 8.0% 7.5% 7.6% 7.2% 7.3% 7.0% 7.0% 6.5% 6.9% 6.2% 6.0% Long-term WACC ROIC Target ROIC after tax We are on track to reach our mid-term ROIC target of 8% Bellevue Meets Management Seminar 2015 Holcim Ltd 43

44 Within the Holcim Leadership Journey we focus on all value drivers 200 HVA after tax of Holcim Group since 2011 with focus on value drivers Values in CHF million (272) HVA 2011 (120) Impact on HVA due to growth 278 Impact on HVA due to cost efficiency 215 Impact on HVA due to capital efficiency 101 HVA 2013 Growth Cost efficiency Capital efficiency Outstanding global portfolio Strong growth expected in India, Indonesia, US and Mexico Customer excellence Value management Pricing policies Marketing and sales forces skills and motivation Holcim Leadership Journey Energy and alternative fuel and raw material Logistics Procurement Fixed cost Net working capital management Portfolio adjustments Strict capital allocation Increasing capacity utilization Optimized balance sheet structure Bellevue Meets Management Seminar 2015 Holcim Ltd 44

45 Contact information and event calendar Contact information Event calendar Michel R. Gerber Swetlana Iodko February 23, 2015 April 13, 2015 Press and analyst conference on annual results for 2014 General meeting of shareholders Investor Relations Phone Fax May 5, 2015 Results for the first quarter 2015 Mailing list: Bellevue Meets Management Seminar 2015 Holcim Ltd 45

46 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. Bellevue Meets Management Seminar 2015 Holcim Ltd 46