Exane BNP paribas 11th european seminar markus akermann CEO june 11 2009 holcim ltd

© Holcim Ltd 2009
Exane BNP Paribas – 11
th
European Seminar
Markus Akermann – CEO
June 11, 2009
© Herzog & de Meuron
2
© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Agenda
1
Attractiveness of the industry
2
Challenges and management priorities
3
Conclusions
3
© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Attractiveness of the heavy-side building materials
 Housing and infrastructure are basic needs
 Diverse customer base include private and public sector
 Sustainable Development is our “license to operate”
 Concrete is an attractive, eco-friendly product

The demand drivers and characteristics of our products
provide for continued growth and profitability
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
The industry invests in physical assets
 No process obsolescence risk
 Products are not affected by short-term life-cycles
 Limited substitution potential
 Own raw material reserves
 Inflation hedge (real value)
 Plant and distribution network
Investments in real assets offer long term value
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
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European Seminar
Infrastructure and
public works
Commercial and
industrial
Housing and
residential
~ 33%
~ 33%

~ 33%
~ 20%
~ 20%
~ 60%
Approx % share by market
Mature Emerging
Application by end markets
Applications vary between mature and emerging
markets
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
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European Seminar
Announced stimulus programs of > USD 2.5 trillion
will generate demand
Europe (in USD bn)
Total stimulus 750
Thereof infrastructure 145
Asia Pacific (in USD bn)
Total stimulus 1.010
Thereof infrastructure 670
Countries with announced
stimulus programs
Holcim position
Latin America (in USD bn)
Total stimulus 210
Thereof infrastructure 200
North America (in USD bn)

Total stimulus 820
Thereof infrastructure 130
Large portion dedicated to infrastructure > USD 1 trillion
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Housing markets are less dependent on financial
markets and policies
 Rural market demand is impacted by agricultural
productivity gains, crop yields and weather
 Decreasing size of the average household
 Rising income levels
 Strong local brands
Rural and housing markets offer sound growth prospects
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
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European Seminar
-4%
-2%
0%
2%
4%
6%
8%

10%
12%
1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11%
Sources: Holcim, US Census Bureau, Economist Intelligence Unit
GDP per capita (at PPP) CAGR 08-13E
Cumulated population
growth 08-13E
Mature markets Emerging markets
Size of circles represents influenced capacity 2008
Western
Europe
25.9 Mt
Eastern
Europe
23.1 Mt
Africa
Middle East
23.6 Mt
North
America
21.3 Mt
India
44.6 Mt
China
38.5 Mt
Asia Pacific
excl. India
and China
51.6 Mt
Latin

America
39.0 Mt
Cement – market positioning to capture growth
Demand
growth
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11%
Cumulated population
growth 08-13E
Western Europe
86.1 Mt
Africa
Middle East
2.7 Mt
Latin
America

13.4 Mt
North
America
49.3 Mt
Asia
4.7 Mt
GDP per capita (at PPP) CAGR 08-13E
Mature markets Emerging markets
Size of circles represents consolidated sales volumes 2008
Sources: Holcim, US Census Bureau, Economist Intelligence Unit
Eastern
Europe
11.5 Mt
Aggregates – counterweight in mature markets
Demand
growth
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Holcim has the most global and focused portfolio
Cement
Aggregates
OCMS
1
1
OCMS – Other Construction Materials and Services
Estimated replacement cost / tonne of approximately CHF 300

 151 plants with a total capacity of 194 million tonnes
 Product sales volume of 143 million tonnes
 Segment revenue of CHF 16.2 billion
 415 operations
 Product sales volume of 168 million tonnes
 Segment revenue of CHF 2.5 billion
 1,217 ready-mix concrete plants
 Product sales volume of 48 million m
3
of ready-mix and
13 million tonnes of asphalt
 Segment revenue of CHF 9.4 billion
Full year consolidation 2008
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Agenda
1
Attractiveness of the industry
2
Challenges and management priorities
3
Conclusions
12
© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11

th
European Seminar
Current global
business
environment
Challenge – the current global recession and
economic cycle
 The first global economic contraction since WWII
Holcim will benefit from both resilience in the emerging market
as well as infrastructure spending from the stimulus packages
 Declining volumes in mature markets
 Slowing growth rates in emerging markets
Short term
impact
Mitigants &
Opportunities
for Holcim
 Cost cutting initiatives in all segments and regions
 Impact from stimulus programs within the next two years
 Geographic diversification strategy proving its strength
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
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European Seminar
-8.0
-6.0
-4.0
-2.0

0.0
2.0
4.0
6.0
8.0
10.0
UK Germany Spain US Russia Mexico Brazil India China
2008 2009 2010
Annual GDP growth in percentage points
 Relative to previous crises and slowdowns, the economies of Asia,
Latin America, Africa and the Middle East are better positioned to
return to growth
Source: IMF World Economic Outlook Update April 2009
Not all countries are equally affected by the
downturn
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Holcim generates its EBITDA in countries with
GDP growth above average
Source: Nominal GDP per Capita (at PPP) in USD: International Monetary Fund - World Economic Outlook Database (April 2009), US Census Bureau
-1.7%
-2.9%
-0.1%
GDP Growth [%] (excl. China)
World
Mature

Market
Emerging
Market
2009
1.3%
0.1%
2.7%
3.7%
2.9%
4.9%
5.2%
4.2%
6.3%
2010 2011 2012
Holcim
EBITDA 2008
split:
Mature: 32%
Emerging: 68%
-0.4%
-2.3%
2.3%
Holcim World
Mature
Market
Emerging
Market
GDP Growth weighted with Holcim EBITDA 2008 per country [%] (excl. China)
2.0%
0.1%

4.4%
4.6%
3.3%
6.4%
6.1%
4.5%
8.1%
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Challenge – regional overcapacity and global
trade
Holcim is streamlining its asset base and building new plants in
high growth markets in order to capture future growth
 Industry expansion combined with lower volume growth
 Local overcapacities combined with low freight rates
 Capacity adjustments and expansion delays occurring
across the industry and the world
 New capacity is in markets with sound growth rates
 Introducing environmentally friendly state-of-the-art plants
Current global
business
environment
Short term
impact
Mitigants &
Opportunities

for Holcim
 Temporary oversupply in some regional markets
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
 Minimize maintenance investments (net) to CHF 400
million in 2009 compared to CHF 1.1bn in 2008
 Capacity expansion program 2009 – 2011 largely
continued as planned
 No new expansion projects
 Take out capacity and idle production in relation to demand
 CHF 375 million in total cost cutting initiated of which CHF
100 million was realized in 1st quarter 2009
 Workforce reduced by 5,380 compared to Q1 08
Management has reacted quickly to the changed
environment
Taken actions which are leading to a more cost-efficient and
environmentally-friendly operation
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Holcim closed or mothballed > 10 million tonnes of
its capacities since the beginning of the crisis
USA:

 Closing 2 cement plants
 Mothballed 3 kiln lines
 Closing 67 ready-mix,
aggregates, asphalt &
concrete product plants
Asia Pacific:
 Mothballed 4 kiln lines
Note: Select cost and capacity initiatives in progress – highlighted using estimated numbers
Sample of initiatives in execution
Latin America:
 Mothballed 5 kiln lines
 Closing 23 ready-mix plants
Europe:
 Closing 1 cement plant
 Mothballed 5 kiln lines
 Closing 43 ready-mix, asphalt
and aggregates plants
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Challenge – financial market volatility and crisis
 Borrowing and capital markets are impaired by the
financial crisis
 Holcim continues to successfully participate in the capital
and credit markets across currencies and regions
 No financial covenants at the corporate level
 Conservative balance sheet and low leverage

More than CHF 2.5 bn in financing raised in Q1 2009
Current global
business
environment
Short term
impact
Mitigants &
Opportunities
for Holcim
 Lack of available funds for the industry
 Increases the cost to refinance in certain currencies
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
,0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
<1y2y3y4y5y6y7y8y9y10y>10y
Loans
Capital markets
Maturity profile (CHF million)
1

Liquidity summary
 Liquidity II
2
: CHF 4.2 billion
 Liquidity III
3
: CHF 5.8 billion
Debt summary
 Fixed to floating ratio: 32% fixed
 Capital markets 44%; Loans 56%
 Corporate vs. subsidiary debt: 79% corporate
 Ø total maturity: 3.6 years
 CP borrowings: EUR 147 million
 No financial covenants at corporate level
ST/LT ratings summary as of May 4, 2009
 S&P Credit Rating: A-2 / BBB, outlook stable
 Fitch Credit Rating: F2 / BBB, outlook negative
 Moody’s Credit Rating: P-2 / Baa2, outlook stable
1
Current financial liabilities adjusted for short-term drawings
under long-term committed credit lines
2
Liquidity II =Cash + marketable securities
3
Liquidity III =Liquidity II + unused committed credit lines
Strong balance sheet and liquidity position as of
March 31, 2009
,0
1,000
2,000

3,000
4,000
5,000
6,000
7,000
AMJ JASONDJ FMAMJ J ASONDJFM
Loans
Capital markets
2009 2010
2011
0
0
No major debt maturities in the next 12 months
20
© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Agenda
1
Attractiveness of the industry
2
Challenges and management priorities
3
Conclusions
21
© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11

th
European Seminar
Conclusions
 The heavyside building materials industry is attractive for
investments
 Large-scale, real value investments
 Basic needs with limited substitution
 Not all of Holcim’s markets are affected equally by the
economic crisis – infrastructure programs support demand
 Holcim is well positioned to weather the current challenging
business environment, which also offers opportunities
 Crisis-proven management at corporate and regional level
took strong and decisive measures – anticipating the crisis
development is a continuous management task
 Balance sheet strength continues to be an enabling factor
Holcim will emerge from the crisis as a stronger company
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© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
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.
23
© Holcim Ltd 2009
May 13, 2009
Exane BNP Paribas – 11
th
European Seminar
Contact information and event calendar
Contact information
Bernhard A. Fuchs
Marco Knuchel
Binit Sanghvi
Investor Relations
Phone +41 58 858 87 87
Fax +41 58 858 80 09

www.holcim.com/investors
Mailing list:
www.holcim.com/subscribe
Event calendar
August 20, 2009 Half-year results 2009
November 11, 2009 Results for the third quarter 2009
Press and analyst conference

March 3, 2010 Annual results 2009
Press and analyst conference
May 5, 2010 Results for the first quarter 2010
May 6, 2010 General meeting of the shareholders