Diversification of financing

Transcription

1 Diversification of financing Markus Unternährer, Head Capital Markets Bank Relationship

2 Agenda Holcim in a snapshot Diversification of financing Case study MXN bonds Conclusions 2

3 Product focus two core segments and their channels Product segments 2012 Net sales per segment 2012 Cement Clinker Aggregates Other construction materials & services million tonnes production capacity 148 cement and grinding plants Sales: million tonnes 470 aggregates plants Sales: million tonnes 1,286 RMX plants 99 asphalt plants Sales of ready-mix concrete: 46.9 million m 3 Sales of asphalt: 9.1 million tonnes Net sales CHF 21.5 billion 31.6% 10.4% Cement Aggregates 58.0% Op. EBITDA per segment % 10.1% Op. EBITDA CHF 4.0 billion 86.5% Other Construction Materials and Services 3

4 Holcim well balanced global portfolio Sales volumes per region 2012 Net sales per region 2012 Asia Pacific (million t or m 3 ) Net sales CHF 21.5 billion Cement 79.2 Aggregates % 14.7% Ready-mix concrete 12.8 Latin America Cement 24.9 Aggregates 14.0 Ready-mix concrete % 4.3% 39.2% Europe North America Cement 26.3 Aggregates 74.3 Ready-mix concrete 14.7 Op. EBITDA per region 2012 Op. EBITDA CHF 4.0 billion 11.4% 14.9% Cement 12.0 Aggregates 41.3 Ready-mix concrete 8.1 Africa Middle East Cement 8.4 Aggregates 2.3 Ready-mix concrete % Asia Pacific North America Latin America 6.6% Africa Middle East Europe 44.4% 4

5 Key financial figures 9M 2013 Million CHF Full Year 9M +/- (if not otherwise stated) LFL CIS FX Total Net sales 21'160 15'908 14' % -3.2% -2.7% -6.1% Operating EBITDA 3'889 3'077 2' % -2.5% -2.6% -4.1% Operating profit 1'749 1'829 1' % -2.4% -3.3% -1.7% Net income shareholders of Holcim Ltd ' % Cash flow 2'643 1'088 1' % -4.3% -2.6% 7.8% Net financial debt 10'325 11'525 10' % Capex 1' ' % 5

6 Cement production a capital intensive business Capital expansion investments (CHF m) Production capacity cement (mt) 6

7 Financial debt, maturities and liquidity as of Maturity profile 1 (CHF million) 5'000 4'000 3'000 2'000 1'000 Loans Capital markets 0 <1y 1-2y 2-3y 3-4y 4-5y 5-6y 6-7y 7-8y 8-9y 9-10y >10y Liquidity summary Cash + marketable securities: CHF 3,115 million Cash + marketable securities + unused committed credit lines: CHF 7,795 million ST/LT ratings summary November 4, 2013 S&P Credit Rating: A-2 / BBB, outlook stable Fitch Credit Rating: F2 / BBB, outlook stable Moody s Credit Rating: P2 / Baa2, outlook stable Debt summary Current financial liabilities 1 : CHF 3,368 million Fixed to floating ratio: 54% fixed Capital markets 81%; Loans 19% Corporate vs. subsidiary debt: 81% Corporate Average maturity financial liabilities: 4.5 years CP borrowings: CHF 490 million No financial covenants in Corporate credit lines 1 After risk-related adjustments of CHF 540 million from current financial liabilities to long-term financial liabilities 7

8 Continuously accessing capital and loan markets around the world to cover funding requirements Recent financings CAD 300 m bond CAD 250 m RCF EUR 500 m bond USD 50 m bond CHF 450 m bond CHF 350 m RCF USD 235 m RCF USD 1 bn CP program USD 750 m bonds CHF 950 m multicurrency loans THB 1.5 bn bilateral loan NZD 150 m bilateral loans MXN 4 bn bonds BRL 1 bn capex financing AUD 700 m bonds AUD 200 m bilateral loans AUD 320 m club deal 8

9 Overall debt reduced by CHF 5.3 billion since 2008 bank debt replaced by capital market financing Financial liabilities CHF million 20'000 Share of capital market financing 100% 16'000 80% 12'000 60% 8'000 40% 4'000 20% Q % Loans Capital markets Share of capital market financing (r.h. scale) 9

10 Strong diversification allows continuous access to capital and bank markets CDS 1'000 bps 900 bps 800 bps 700 bps 600 bps 500 bps 400 bps 300 bps 200 bps 100 bps EUR (SSD) CHF 400 m CHF 2.1 bn EUR EUR GBP CHF CHF EUR AUD USD CHF THB Capital market financing Syndicated loan financing Equity financing CHF MXN EUR 2 bn AUD MXN CHF AUD EUR AUD CAD CHF 350 m USD USD 0 bps Jan-08 May-09 Sep-10 Feb-12 Jun-13 Share price 120 CHF 100 CHF 80 CHF 60 CHF 40 CHF 20 CHF 0 CHF 10

11 Financing programs complement other financings and provide flexibility and quick access to capital markets EUR CP program Capital markets funding distribution U.S. CP program EMTN program MXN bond program Capital markets funding distribution AUD bond program 11

12 Case study: MXN bond program What we did Set up a MXN 10 bn shelf program in Mexico to issue bonds guaranteed by Holcim Ltd Issued the first Mexican Holcim bonds in the amount of MXN 4.0 bn in 2012 The proceeds of the issuance were passed on to Holcim México our subsidiary in Mexico as an intercompany loan How we did it In-depth analysis of the peculiarities and requirements of the Mexican debt capital market over a long period of time A joint project team with dedicated people from the head office and the Mexican subsidiary was put together Close collaboration with local banks and lawyers Focused roadshow in Mexico City and investor calls Results we achieved Holcim can issue up to MXN 10 bn in local bonds which provides us with an alternative funding source for our Mexican operations Short term bank debt was replaced with long term debt which lengthens the average maturity Financing costs were substantially reduced 12

13 Holcim Mexican Peso bond program and drawdowns Sole issuer: Holcim Capital México, S.A. de C.V. Structure: Established in 2011 Program size MXN 10 bn Short-term and long-term notes Listed in Mexico S&P and Fitch ratings (mxaaa, AAA mex) 3 outstanding bonds Arrangers: BBVA, Citi, Santander Dealers: Dealers of the day to be appointed for specific transactions Drawdowns : MXN m TIIE 28d + 57 bps : MXN 800 m TIIE 28d + 67 bps : MXN m 7.0% Benefits: Funding program to issue notes on a regular basis Long tenors Diversification of investor base Flexible Typically lower financing costs than in local bank market 13

14 Financing structure Holcim Ltd Certificados Bursatiles Holcim Capital México, S.A. de C.V. Intercompany loans Holcim México Financing structure ensures Same international rating for MXN bonds as for Holcim Ltd Limited disclosure requirement for operating company Holcim México Minimum structural subordination of 70% Note: simplified structure 14

15 MXN bond program main difficulties Language all legal documentation had to be in Spanish. Tackled by project team familiar with the language and by translating main documents Transaction had to be postponed due to unfavorable capital market conditions in the beginning Mexican authorities sometimes unpredictable in their requests for additional documentation Transaction windows quite short due to regulatory approval process and closed periods 15

16 Conclusions Broad diversification of financing allows To optimize the currency mix of the balance sheet and cash flows (natural hedge) To tap the most favorable capital markets To access markets opportunistically To lower financing costs To broaden investor base To reduce counterparty risks (large investor base, no swaps) To reduce the risk that comes along with higher market volatility The MXN bond program allows us to finance our Mexican Peso needs in the local market at low costs Strong relationships to banks, investors and rating agencies are key in all markets 16

17 Contact information and event calendar Contact information Event calendar Corporate Finance & Treasury Phone February 26, 2014 April 29, 2014 Press and analyst conference on annual results for 2013 General meeting of shareholders Investor Relations Phone Fax Mailing list: 17

18 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. 18