LafargeHolcim in the United States Dependent on the Waterway infrastructure. November 7, 2017 Mobile, AL Waterways Council Symposium

Transcription

1 LafargeHolcim in the United States Dependent on the Waterway infrastructure November 7, 2017 Mobile, AL Waterways Council Symposium

2 LafargeHolcim at a glance 90 countries 2,500 operations 32.6 billion CHF net sales 115,000 employees listed at SIX Swiss Exchange and Euronext Information as of July 2015

3 Well-balanced geographical portfolio North America Europe 11,735 5,625 24,657 8,053 Asia Pacific 12,039 Latin America 21,570 Africa & Middle East 44,102 10,048 3,863 5,772 Global presence of LafargeHolcim LafargeHolcim net sales in CHF million Employees per region Information as of July 2015

4 Reaching across the U.S. U.S. Headquarters: Chicago, IL 43 states 350 operations 6,000 employees

5 Largest cement producer servicing 80% of the US Market 4 cement plants in Canada can also serve the US markets Strengths #1 Cement Producer with 21 Mt capacity Unrivaled distribution network to provide uninterrupted supply to all key market, including 2Mt additional free capacity from Canada A unique range of product offerings Facilities Cement plant (13) Terminals (89) Slag facility (3) LafargeHolcim 2015

6 With our ACM division, LH offers a unique range of products bringing value to our customers 2015 ACM key figures AGG sold: 70 mt RMX sold: 6 m yd3 Asphalt sold: 4.5 m tons Employees: US ACM: Strategic positions to deliver integrated offers with additional margin Alpena Whitehall Ravena Paulding Contributing to Infrastructure projects Bridge: Tappan Zee Bridge Bridge: St. Croix Crossing Road: Environmental remediation Portable RMX plants: Pavecon partnership Joppa LafargeHolcim

7 Building Our World Did You Know? We deliver products and solutions throughout the U.S. helping to build everything from bridges to sidewalks to roads and beyond. The Transportation Expansion Project (T-REX), CO Perot Museum of Nature and Science Dallas, TX One World Trade Center New York, NY National Museum of the American Indian Washington, DC

8 US Project Examples 8

9 Text Slide, Headline is 24 pt and Consists of Two Lines Subtitle (22 pt)

10 Waterway Tonnage (~22 million tons) Inland Waterways Cement: 4 plants and 19 terminals Over 6 million tons Agg: 2 quarries 7 major markets - Over 5 million tons Lakes Cement: 2 plants and 15 terminals Over 2 million tons Agg: 4 quarries and 8 major markets Over 7 million tons East Coast: Cement: 2 plants 7 terminals Over 1.5 million tons Gulf Coast: Agg: 1 quarry Over 1 million tons

11 Cement 101 What is Cement Cement is a fine mineral powder manufactured with very precise processes. Mixed with water, this powder transforms into a paste that binds and hardens when submerged in water. Because the composition and fineness of the powder may vary, cement has different properties depending upon its makeup. Main Component in Concrete

12 Cement 101 Cement Concrete

13 Cement 101 Cement Concrete

14 Cement 101 Carries Cement Carries Concrete

15 Cement 101 Carries Cement Carries Concrete

16 Cement Consumption Performance Thousand Metric Tons Last 3 Months Average:1.8% 105, Average: 2.3% 100,000 Last 12 Months Average: 2.8% 95,000 90, Jan July Average 92.7 SAAR 2.3 % 85, ,000

17 Consumer Wealth Supports Spending. Housing and Financial Wealth

18 Housing Starts Single Family SAAR 1, Multifamily SAAR Mortgage to Rent Ratio: 2005: : : : : 1,719 thousand : 843 thousand % of past peak

19 Nonresidential Construction 25% 16.4% 20% 11.0% 2016: 8.6% 2017: 2.8% 2018: 2.5% 15% 8.6% 10% 5% 2.8% 0%

20 Recent Hindrances to Economic Growth. Fiscal Cliff & Uncertainty Sequestration European Debt Crisis China s & Global Growth Slowdown. Strong Dollar. Oil Price Plunge. a Policy Uncertainty 20

21 Public Construction 2016: -0.3% 2017: -1.6% 2018: 1.2% 10% 3.3% 5% 0% -1.1% -0.3% -5% -10% -1.6% -15%

22 Sector Data Revisions & Performance Billion Real $ $20 Public Sector Carries Large Cement Intensities and Amplifies the Impact on Cement Consumption New Residential $ Residential Impr Nonresidential Other Public $10 $5 $0 -$5 -$

23 States Feel Financial Strain a Governor's budgets for fiscal 2018 display significant degree of caution as states contend with slow revenue growth and increasing spending pressures coupled with federal uncertainty. Proposed 2018 budgets would increase 1.0 percent in fiscal 2018 the smallest spending increase since fiscal 2010 when states were in the depths of the Great Recession. Many states are also contending with limited budget flexibility, as spending requirement in less discretionary areas such as pension obligations and health care costs continue to rise faster than inflation and state revenues. Source: NASBO

24 Public Capital Investment Share of GDP 3.0% 2.5% State & Local capital investment in as a share of GDP has declined to a post WWII low State & Local 2.0% 1.5% Federal 1.0% 0.5% Capital investment based on structures, i.e. schools & roads. Excludes equipments & software 0.0% Source: BEA, PCA 24

25 a 25,060 Federal Debt Billion Nominal Dollars Federal Debt is now at nearly $20 trillion. Since the Budget Control Act of 2011, the debt increased 31.2%. 20,060 15,060 10,060 Even taking into consideration the potential revenue 5,060 gains associated with stronger economic activity tax reform may not be neutral and sets the stage for discussion of infrastructure 60 spending

26 15-18 Months Trump Infrastructure Assessments Pouring is not going to happen anytime soon. House & Senate Passage. Federal & State Paperwork Bid Letting & Review Contractor Award to Construction a Heightened concern about national debt will reduce the size of infrastructure spending bill. Assume $250 Billion over 5 years. Trillion $ is unlikely. Allocation versus spending reduces stimulus to cement consumption in early years of the program. Only 70% of the program allocated during the horizon and only 41% actually spent during the horizon. States may cut back expenditures on expectation of federal funding sterilizing the impact of infrastructure. Assumes a 20% sterilization

27 a Harbor, Dams & Levees Electric Grid 7% Trump Infrastructure Spending Scenario 9% 48% Safe Water Rail 9% 9% 2% 2% 9% Highway & Bridge State & Local Sterilization Assumption 20% Phased In by 2021 and only applied to highways. Airports Public Transit 27

28 a Rail Safe Water Harbor, Dams & Levees 3% 9% 2% Electric Grid Trump Infrastructure Cement Distribution Airports 4% 2% 1% 4% Public Transit Highway & Bridge 76% 28

29 The Wall : Cement Consumption Border length Natural Barrier Miles In Place Barriers * Length To be built Low Baseline High Cement Consumed Cement Consumed Metric Tons Cement Consumed Total 1, ,377 1,075,902 1,550,426 Texas 1, , , ,124 Arizona , , ,332 New Mexico , , ,276 California ,294 21,994 31,695 Annual consumption based on Four Year Build 150, , ,606 Other material adjustment (Percent Concrete) 50% 75% 90% Annual consumption based on Four Year Build, Material Risk 75, , ,846 Assumes existing barriers will not require replacement Low estimate based on a 20' tall wall 8" thick. High estimate based on a 60' tall wall 12" thick. * Excludes Vehicle Barriers

30 Stage II 140, , ,000 80,000 60,000 40,000 20,000 Portland Cement Consumption Thousand Metric Tons a 2016 = 2.4% 2017 = 2.6% 2018 = 2.8% 2019 = 5.4% 2020 = 6.8%

31 Questions LafargeHolcim