heidelbergcement - group presentation

March 20171 - Group Communication & IR

HeidelbergCementGroup presentation

Matera cement plant. Italy


HeidelbergCement: history and development

Founded in 1873,today, leading market positions in aggregates, cement, and ready-mixed concrete

g

1873

1977

1989

1993

1995/96

ss

1999

2001

2005/06

Lehigh, USA

Foundation

Central and Eastern Europe

CBR

China, Turkey

Indocement, Indonesia

Kazakhstan, India, Georgia

2007

2010 Democratic Republic Congo

2015

2016 Italcementi

Sale of building products North America & UK

Hanson

Scancem


HeidelbergCement in the world – in around 60 countriesNumber 1 in aggregates, number 2 in cement,and number 3 in ready-mixed concrete


HeidelbergCement in figures 60,000 employees Core business

– Aggregates– Cement– Downstream activities: ready-mixed concrete and asphalt

3,030 locations in around 60 countries (incl. joint ventures)– 595 production sites for sand, gravel, and crushed rock– 160 cement and grinding plants– 1,723 ready-mixed concrete plants– 115 asphalt plants

Cement capacity 194 million tonnes (incl. joint ventures) Aggregates reserves and resources 20 billion tonnes


Managing Board

Dr. Albert ScheuerNorthern and Eastern Europe-Central Asia

Hakan GurdalAfrica-Eastern

Mediterranean Basin

Jon MorrishNorth America

Kevin GluskieAsia-Pacific

Dr. Bernd ScheifeleChairman of theManaging Board

Dr. Lorenz NägerChief Financial Officer

Dr. Dominik v. AchtenDeputy Chairman and Western and Southern Europe


2016 – accelerated growth and improved creditworthiness Result significantly increased and premium on cost of capital earned

– Revenue up 13% to €15.2 billion– Earnings per share, ajusted1) for non-recurring effects, rose by 23% to €5.34– Premium on cost of capital earned: HeidelbergCement continued its profitable

growth after the acquisition of Italcementi– Investment grade classification by the rating agencies S&P Global Ratings,

Moody‘s Investors Service, and Fitch Ratings Integration of Italcementi: realisation of synergies ahead of plan Outlook for 2017

– Rise in sales volumes in all business lines on a pro forma basis2)

– Moderate increase in revenue and result from current operations on a comparable pro forma basis3)

– Significant rise in profit for the financial year excluding non-recurring effects

1) Excluding no-recurring expenses resulting from the Italcementi acquisition2) Including Italcementi for the whole year of 20163) Including Italcementi for the whole year of 2016 and adjusted for currency and consolidation effects


81

104

2015

+28%

2016

+9%

2016

272

2015

249

37 43

+16%

20162015

9 9

+3%

20162015

Sales volumes (Italcementi included since 1 July 2016)

January–December

Ready-mixed concrete (mm3)

Cement (mt) Aggregates (mt) Asphalt (mt)


+3%

2016

125

2015

122

+3%

2016

287

2015

278

4847

+1%

20162015

9 9

+3%

20162015

Pro forma sales volumes1) January–December

Ready-mixed concrete (mm3)

Cement (mt) Aggregates (mt) Asphalt (mt)

1) Including Italcementi in 2015 and the whole year of 2016


500

400

300

200

100

0

1.000

900

800

700

600

-9%

2016

896

2015

983

14,000

12,000

10,000

8,000

6,000

4,000

2,000

16,000

0

+13%*

2016

15,166

2015

13,465

2,000

1,500

1,000

500

0

+7%*

2016

1,984

2015

1,846

11

Revenue Result from current operations1)

Profit for the financial year

Key figures (Italcementi included since 1 July 2016)(€m)

* Adjusted for consolidation and exchange rate effects: revenue -2% and result from current operations +3%

1) The result from current operations (RCO) corresponds to operating income (OI) reported in previous years. The name was changed due to the application of an ESMA directive (European Securities and Markets Authority).


8,000

6,000

16,000

14,000

10,000

12,000

2,000

4,000

0

18,000-1%*

17,331

2015

17,084

20160

2,500

500

1,000

2,000

1,500

2015

2,0732,037

2016

+2%*

11

Revenue Result from currentoperations2)

Pro forma key figures1) (€m)

1) Including Italcementi in 2015 and the whole year of 2016

* Adjusted for consolidation and exchange rate effects: revenue -1% and result from current operations +6%

2) The result from current operations (RCO) corresponds to operating income (OI) reported in previous years. The name was changed due to the application of an ESMA directive (European Securities and Markets Authority).


Split of the Group areas

North America

(Jon Morrish)

Western and Southern Europe(Dr. Dominik von Achten)

Northern and Eastern Europe-Central Asia(Dr. Albert Scheuer)

Africa-EasternMediterranean Basin(Hakan Gurdal)

Asia-Pacific

(Kevin Gluskie)


Group areas and countries

Western and Southern Europe

Belgium, France, Germany, Italy, Netherlands, Spain, United Kingdom

Northern and Eastern Europe-Central Asia

Denmark, Estonia, Iceland, Latvia, Lithuania, Norway, Sweden; Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Czechia, Georgia, Greece, Hungary, Kazakhstan, Poland, Romania, Russia, Slovakia, Ukraine

Africa-Eastern Mediterranean Basin

Benin, Burkina Faso, DR Congo, Egypt, Gambia, Ghana, Liberia, Mauritania, Morocco, Mozambique, Sierra Leone, Tanzania, Togo; Israel, Turkey

Asia-Pacific

Bangladesh, Brunei, China (incl. Hong Kong), India, Indonesia, Malaysia, Singapore, Sri Lanka, Thailand; Australia

North America

Canada, USA (incl. Puerto Rico)

Group Services


High aggregates reserves and resources of 20 bnt: focus on mature markets

North America bnt

Aggregates reserves 4.3

Aggregates resources 7.9

Total 12.2


bnt



Total 3.6


bnt



Total 1.4

Africa-EasternMediterranean Basin

bnt



Total 0.1

Asia-Pacific bnt



Total 2.8


Cement capacity of 194 mt (incl. joint ventures)

North America mt

Cement capacity 17.4


mt

Cement capacity 47.1Northern and Eastern Europe-Central Asia

mt


Africa-EasternMediterranean Basin

mt


Asia-Pacific mt



Production sites in 7 countries – mature markets In most countries we are the market leader in

cement Dense network of production sites for

aggregates and ready-mixed concrete The United Kingdom, France, and Germany are

the largest market regions in the Group area


Production sites Total

Cement/grinding/GGBS 52

Cement terminals 18

Aggregates 201

Aggregates terminals 92

Ready-mixed concrete 773

Asphalt 42

Concrete products 23


Production sites in 21 countries – mature and emerging markets

We are either the market leader or hold leading market positions in cement in most countries

Dense network of ready-mixed concreteplants in Northern and Eastern Europe; expansion of aggregates extraction



Cement/grinding 32

Cement terminals 79

Aggregates 98



Concrete products 20


North America Leading positions in aggregates, cement,

ready-mixed concrete, and asphalt Production sites mainly in the eastern part of the

USA, Texas, the Gulf Coast, the Pacific Coast as well as western and eastern Canada

Integrated market approach for cement, aggregates, asphalt, and ready-mixed concretein four regions: North, South, West, and Canada


Cement/grinding/GGBS 24

Cement terminals 69

Aggregates 189



Asphalt 51

Concrete products 3


Asia-Pacific Asia

– Activities in 9 countries: Bangladesh, Brunei, China, India, Indonesia, Malaysia, Singapore, Thailand, andSri Lanka

– Strong market position in ready-mixed concrete and aggregates in Malaysia, Indonesia, Hong Kong, and Thailand

Australia– Mainly production of aggregates and ready-mixed

concrete– Production sites on the east coast, Tasmania, and

in the southwest– Joint venture in four cement plants


Cement/grinding 25

Cement terminals 17

Aggregates 99


Asphalt 20

Concrete products 2


Africa-Eastern Mediterranean Basin Africa

– Production sites in 13 countries: Benin, Burkina Faso, DR Congo, Egypt, Gambia, Ghana,

Liberia, Mauritania, Morocco, Mozambique, Sierra Leone, Tanzania und Togo

– In Egypt and Morocco we are among the market leaders in the cement business; strong positions in ready-mixed concrete

– Mainly cement production in sub-Saharan countries; market leader in most countries

Eastern Mediterranean Basin– Turkey: leading position in cement and ready-mixed

concrete; production of aggregates– Israel: ready-mixed concrete, aggregates, and asphalt– Palestine: installation of a local building materials business


Cement/grinding 27

Cement terminals 10

Aggregates 8



Asphalt 2


Group Services International trading activities of HeidelbergCement

– HC Trading is one of the largest cement and clinker trading companies in the world

– Deliveries via sea routes to own locations and other cement companies 16.5 mt of cement, clinker, and other building products in 2016 7.4 mt of coal and petroleum coke in 2016 One third of all deliveries within the Group and two thirds go to other

companies


HeidelbergCement strategy Strategic priorities 2015-2019

‒ Attractive rate of return for shareholders‒ Continuous growth in mature and emerging countries

Vertical integration in urban centers Maintenance of cost leadership

‒ Continuous improvement in the cement and aggregates business lines Performance and result-oriented corporate culture Proximity to operating business Increasing customer satisfaction due to proximity to the markets and

the customers Openness and fairness as soft factors of success


Building on sustainability Economy

– Long-term prospects to everyone connected with our economic activities

Ecology– Climate protection, saving natural resources,

minimising environmental impacts Social responsibility towards our employees and

communities– Opportunities for personal and professional

development– Open dialogue with local communities– Involvement in numerous local social

activities


21.0%

5.5%

1990 2016

600783

1990 2016

-22.6%

Biodiversity andnatural resources

Alternative fuel rate(in % of fuel mix)

Cement with lowerclinker content

Recyclable products Innovative products:

e.g. TioCem®

Occupational health and safety

Sustainability at HC

Using waste as a resource

Protection of climate and environment

Sustainableconstruction

Zero accidents mentality Policies introduced Compliance

Conservation of resources Restoration of quarries Promotion of biodiversity Dialogue with stakeholders

Reduction of specific CO2 emissions (kg CO2/t cement)

Long-term commitment for sustainability

Sustainability at HC


Research and innovation at HeidelbergCement

R&D and product innovation in the cement, aggregates, and ready-mixed concrete business lines are concentrated in two research centers

– Leimen: focus on reduction of CO2 emissions, resource efficiency, decrease in production costs, and value added concrete solutions

– Bergamo: focus on product innovations, development of high-endconcrete applications, and new market opportunities

All projects are defined and implemented by the teams at both centersin close coordination with the operating companies

– The close collaboration from the start of the project facilitates the efficient implementation of the development results and a quick market launch


Conclusion

HeidelbergCement is a company with– excellent market positions and attractive product portfolio– strong corporate culture with strict focus on costs

HeidelbergCement focuses on‒ attractive rate of return for shareholders ‒ continuous growth in mature and emerging countries

Success factors of HeidelbergCement’sbusiness strategy:

Cost Leadership, Customer Satisfaction,

and Operational Excellence


for better building

heidelbergcement - group presentation

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