canadian fixed-income investor update 2014 michel r gerber senior investor relations officer swetlana iodko investor relations officer holcim ltd

Strength. Performance. Passion.
© 2014 Holcim Ltd
Canadian fixed-income investor update
IFZ - MAS Corporate Finance 20_10 – Funding
December 7, 2012, 14.10 – 17.50
Michel R. Gerber, Senior Investor Relations Officer
Swetlana Iodko, Investor Relations Officer

Canadian fixed-income investor update, 2014-05-26
© 2014 Holcim Ltd
© 2014 Holcim Ltd
Agenda
2
Canadian fixed-income investor update, 2014-05-26
Holcim at a glance
Macro economic development and the impact for the cement industry
First quarter 2014 results, Holcim Leadership Journey
Financial positioning and financing
Merger between Holcim and Lafarge
Outlook 2014 - Conclusions

© 2014 Holcim Ltd
Holcim at a glance
130 cement plants
around 200 limestone quarries /
450 aggregates operations
1’150 RMX plants in the world
> 70’000 employees
over 5’000 own RMX trucks / more
than 3’000 subcontracted
over 1’600’000’000 cement bags sold

Presence on all five continents and in around 70 countries
2013 Net sales of CHF 19.7 bn and operating EBITDA of CHF 3.9 bn
Canadian fixed-income investor update, 2014-05-26
3
© 2014 Holcim Ltd
Agenda
4
Canadian fixed-income investor update, 2014-05-26
Holcim at a glance
Macro economic development and the impact for the cement industry
First quarter 2014 results, Holcim Leadership Journey
Financial positioning and financing
Merger between Holcim and Lafarge
Outlook 2014 - Conclusions

© 2014 Holcim Ltd
Fundamental trends support our business …
The right
place to be

Population
growth
Continued
urbanization
Economic growth
5
Canadian fixed-income investor update, 2014-05-26
© 2014 Holcim Ltd
Europe
37%

45%
55%
22%
78%
16%
84%
North
America
10%
Asia
Pacific
30%
Latin
America
8%
Africa Middle
East 14%
Europe
18%
North
America
6%
Latin
America
11%
Asia
Pacific
38%
Africa Middle
East 27%

Europe
13%
North
America
5%
Latin
America
10%
Asia
Pacific
42%
Africa Middle
East 29%
1990 2013E 2030E
1990: ~0.8 bn t 2013E: ~1.7 bn t 2030E: ~2.7 bn t
Cement demand split mature vs. emerging markets
Cement demand evolution by region (excl. China)
Mature Emerging
Source: BMI, National cement associations, Holcim estimates
… resulting in long-term cement consumption growth driven
by emerging markets and recovery in Europe and the US
6
Canadian fixed-income investor update, 2014-05-26
© 2014 Holcim Ltd
5
60
17
26
26
11

19
3
5
68*
4
12
7
11
Holcim cement capacity as of December 31, 2013: 206 Mt * China not consolidated
Over the past 10 years, Holcim invested about CHF 35 billion to establish a global
footprint which is unique in the industry
Well positioned to address growth in cement demand
7
Canadian fixed-income investor update, 2014-05-26
© 2014 Holcim Ltd
• Global footprint - the result of
organic and inorganic growth
initiatives
• Operating cash flow exceeds
CAPEX and financial
investments
• Current cement capacities (incl.
ongoing projects) sufficient to
capture growth
• Increasing capacity utilization of
existing plants coupled with
ongoing cost reduction initiatives
resulting in higher ROIC
Value creation from our existing asset base
• Add nice picture here

-500
500
1'500
2'500
3'500
4'500
5'500
6'500
Cash flow from operating activities CAPEX Financial (de)/investments
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
In CHF million
8
Canadian fixed-income investor update, 2014-05-26
© 2014 Holcim Ltd
Agenda
9
Canadian fixed-income investor update, 2014-05-26
Holcim at a glance
Macro economic development and the impact for the cement industry
First quarter 2014 results, Holcim Leadership Journey
Financial positioning and financing
Merger between Holcim and Lafarge
Outlook 2014 - Conclusions
© 2014 Holcim Ltd
• Like-for-like sales increase in all segments
• Strong momentum of Holcim Leadership Journey continues
• Significant increase in operating profit and further margin
improvement
• Substantial adverse exchange rate impact
• Improved cash flow from operating activities due to strong

operating EBITDA and further reduction in NWC
• Portfolio management in Europe received approval in the
Czech Republic
• Simplification of group structure in India close to completion
• Merger of equals with Lafarge announced – Creating the most
advanced Group in the building materials industry
Q1 2014 Milestones
Canadian fixed-income investor update, 2014-05-26
10
© 2014 Holcim Ltd
Key financial figures
F
Full year
2013 2013 2014
LFL CIS FX Total
Sales volumes
- Cement (mt)
138.9 32.1 33.0 4.4% -1.5% 2.9%
- Aggregates (mt)
154.5 28.6 29.2 3.5% -1.3% 2.2%
- Ready-mix (mm
3
)
39.5 8.4 8.2 1.1% -3.1% -2.0%
Net sales
19,719 4,323 4,088 7.8% -2.5% -10.7% -5.4%
Operating EBITDA
3,896 650 617 10.1% -2.0% -13.3% -5.1%
Operating profit
2,357 270 295 28.4% 1.9% -20.9% 9.3%

Net income
1,596 295 179 -39.5%
1,272 187 80 -57.5%
Cash flow from operating
activities
2,787 -323 -243 28.2% -6.0% 2.7% 24.9%
EPS in CHF
3.91 0.58 0.24 -58.6%
Million CHF
(if not otherwise stated)
1st Quarter
+/-
Net income - shareholders
of Holcim Ltd
Canadian fixed-income investor update, 2014-05-26
11
© 2014 Holcim Ltd
Net sales by region
2118
1984
1683
854
827
723
1161
1032
1184
478
441
444

239
203
206
Million CHF
∆ Q1 13 / Q1 14
LFL
Change in
structure
Currency Total
Asia Pacific
4.0% -3.8% -15.3% -15.1%
Latin America
2.3% 0.0% -14.8% -12.5%
Europe
17.2% -1.8% -0.6% 14.8%
North America 9.8% -1.5% -7.6% 0.7%
Africa Middle East
7.4% -3.5% -2.2% 1.7%
Total 7.8% -2.5% -10.7% -5.4%
Q1 2012
Q1 2013
Q1 2014
Canadian fixed-income investor update, 2014-05-26
12
© 2014 Holcim Ltd
Operating EBITDA by region
466
397
327
224

246
211
78
62
67
Million CHF
∆ Q1 13 / Q1 14
LFL
Change in
structure
Currency Total
Asia Pacific
0.4% -3.2% -14.8% -17.6%
Latin America
-2.6% 0.0% -11.8% -14.3%
Europe
228.9% 7.4% 2.4% 238.7%
North America 35.2% -1.8% 10.9% 44.2%
Africa Middle East
14.1% -4.5% -1.8% 7.8%
Total 10.1% -2.0% -13.3% -5.1%
20
29
99
-15
-18
-10
Q1 2012
Q1 2013
Q1 2014

Canadian fixed-income investor update, 2014-05-26
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© 2014 Holcim Ltd
The five areas of operating profit growth by 2014
Customer Excellence
CHF 500 million
Energy and AFR
> CHF 300 million
Logistics
> CHF 250 million
Procurement
> CHF 250 million
Fixed cost
> CHF 200 million
Operating Profit
> CHF 1,500 million
Canadian fixed-income investor update, 2014-05-26
14
© 2014 Holcim Ltd
Holcim Leadership Journey is on track
All figures in million CHF
Customer Excellence 31 135 118 284 500
Customer focus
Value management
Pricing policies
Marketing and sales forces skills and motivation
Cost Leadership 127 808 119 1’054 > 1'000
Energy and AFR 40 187 31 258 > 300
Logistics 0 162 25 187 > 250
Procurement 48 203 41 292 > 250

Fixed cost
4)
39 255 22 316 > 200
Total increase
1)
158 943 237 1’338 > 1'500
Cash cost to achieve the savings (one-off) 239
3)
0 0 0
Additional CAPEX net
2)
48 170 17 235 100-180
2014
cum. Target
achieved
cumulative since
2012
2012
2013
4) excluding CHF 16 million of restructuring costs in Europe (mainly Spain)
3) Original amount w as projected < CHF 120 million for 2013; having spent already CHF 239 million, no additional restructuring cash costs are foreseen at this stage
achieved
achieved
3M
1) The base line is the financial year 2011 amounting to CHF 2'308 million (excluding one-off charges 2011 of CHF 375 m and w ithout fluctuations in currency, changes
in scope of consolidation and similar market conditions). Adjusted for the sale of 25% of Cement Australia and Siam City Cement, the new base is CHF 2'193 million.
2) Additional CAPEX net comes from prioritization of CAPEX based on the speed of the returns (ROIC).
Canadian fixed-income investor update, 2014-05-26
15
© 2014 Holcim Ltd

Agenda
16
Canadian fixed-income investor update, 2014-05-26
Holcim at a glance
Macro economic development and the impact for the cement industry
First quarter 2014 results, Holcim Leadership Journey
Financial positioning and financing
Merger between Holcim and Lafarge
Outlook 2014 - Conclusions
© 2014 Holcim Ltd
0
500
1'000
1'500
2'000
2'500
3'000
<1y 1-2y 2-3y 3-4y 4-5y 5-6y 6-7y 7-8y 8-9y 9-10y>10y
Loans Capital markets
Financial debt, maturities and liquidity as of March 31, 2014
Maturity profile
1
(mCHF)

1
After risk-related adjustments of CHF 392 million from current financial
liabilities to long-term financial liabilities
Liquidity summary

• Cash + marketable securities: CHF 2,016 million

• Cash + marketable securities + unused committed
credit lines: CHF 6,558 million

Debt summary
• Current financial liabilities
1
: CHF 2,493 million
• Fixed to floating ratio: 58% to 42%
• Capital markets 79%; Loans 21%
• Corporate vs. subsidiary debt: 81% to 19%
• Ø total maturity: 5.2 years
• CP borrowings: CHF 466 million
• No financial covenants in Corporate credit lines

ST/LT ratings summary as of April 28, 2014
• S&P Credit Rating: A-2 / BBB, outlook stable
• Fitch Credit Rating: F2 / BBB, outlook stable
• Moody’s Credit Rating: P2 / Baa2, outlook negative
Canadian fixed-income investor update, 2014-05-26
17
© 2014 Holcim Ltd
Overall debt reduced by CHF 6.6 billion since 2008
Share of capital market financing at around 80%
Loans
Capital markets
Share of capital market financing (r.h. scale)
0%
20%
40%
60%

80%
100%
0
4'000
8'000
12'000
16'000
20'000
2008 2009 2010 2011 2012 2013 Q1 2014
Financial liabilities
CHF million
Share of capital market financing
Canadian fixed-income investor update, 2014-05-26
18
© 2014 Holcim Ltd
Access to a wide range of capital markets – only CHF 0.9 bn
of capital markets instruments maturing until year-end 2014
Capital markets funding distribution as per Q1 2014

Capital market maturities Q1 2014 – 2015

Date CHF m Currency
14 CRC 8.5 bn
146 USD 165 m
5 INR 320 m
732 EUR 600 m
306 AUD 250 m, MXN 1.5 bn
250 CHF 250 m
16 CRC 10 bn
33 THB 1.2 bn

163 MAD 1.5 bn
Corporate Holdings
Operating Company
May-14
Jul-14
Oct-14
Dec-14
Mar-15
Apr-15
Jul-15
Nov-15
Dec-15
Canadian fixed-income investor update, 2014-05-26
19
© 2014 Holcim Ltd
3.0
3.5
4.0
4.5
5.0
5.5
Q4
05
Q4
06
Q4
07
Q4
08
Q4

09
Q4
10
Q4
11
Q4
12
Q4
13
Average maturity substantially increased to 5.2 years with
long-dated bonds in USD, EUR and CHF
USD 50 m bond
(20 years)
USD 500 m bond
(10 years)
USD 250 m bond
(30 years)
Major capital market transactions since January 1, 2013
Average maturity of financial liabilities (in years)
CHF 250 m bond
(8.5 years)
EUR 500 m bond
(10 years)
Amendment and extension
EUR 2.0 bn Syndicated
Revolving Committed
Credit Facility
Target
Canadian fixed-income investor update, 2014-05-26
20

© 2014 Holcim Ltd
Agenda
21
Canadian fixed-income investor update, 2014-05-26
Holcim at a glance
Macro economic development and the impact for the cement industry
First quarter 2014 results, Holcim Leadership Journey
Financial positioning and financing
Merger between Holcim and Lafarge
Outlook 2014 - Conclusions
© 2014 Holcim Ltd
Geographical complimentarity of portfolios
22
Holcim sales (CHF)
Lafarge sales (CHF)
Global presence of Holcim and Lafarge
Lafarge Holcim Combined
Cement Capacity (mT) 221 206 427
Aggregates volume sold (mT) 193 155 348
RMC volume sold (mm
3
) 31 39 70
Emerging
markets
Developed
markets
Total
# of
countries
73 17 90

Note: pre-disposals, pre-group elimination, post regional elimination
Combined sales by region
(in billion)
3.8
3.2
North America
45%
55%
CHF 7.0 / EUR 5.7
5.4
5.6
Europe
51%
49%
CHF 11.0 / EUR 9.0
1.1
3.3
Latin America
76%
24%
CHF 4.4 / EUR 3.6
5.0
0.9
Africa & ME
85%
15%
CHF 5.9 / EUR 4.8
2.0
Pacific
100%

CHF 2.0 / EUR 1.7
3.3
5.2
Asia
61%
39%
CHF 8.6 / EUR 7.0
© 2014 Holcim Ltd
Unique value proposition for shareholders
23
• New best-in-class global portfolio
• Superior growth and operating profitability
• Significant synergies
• Strict capital allocation discipline and strong capital structure
• Attractive returns for shareholders


© 2014 Holcim Ltd
Deal structure
Company name
Key transaction highlights
24
• LafargeHolcim
• Merger of equals
• Company domiciled in Switzerland


• Capitalise on developed markets recovery
• Divestments of assets representing CHF 6bn / EUR 5bn of sales
• 60% exposure to emerging markets post divestments

• No country above c. 10% of sales
• Boards of both companies have unanimously approved the transaction
• Thomas Schmidheiny, GBL and NNS fully support the transaction
• Best growth platform in the industry and superior operating profitability
• CHF 1.7bn / EUR 1.4bn of run-rate synergies
• Strict capital allocation discipline and strong financial structure:
targeted solid Investment Grade credit ratings
• Attractive dividend payout policy
• Exchange ratio of 1 Holcim share for 1 Lafarge share
• Transaction closing expected in H1 2015
Exchange ratio
Rebalanced
portfolio
Value
proposition
Board &
shareholder
support
Timetable
© 2014 Holcim Ltd
Best-in-class portfolio for growth
25
Emerging
markets
• 60% of pro forma sales
• 13 countries out of our Top 20 with
strong infrastructure needs
2
• 6% CAGR for construction outputs
expected until 2025

3
Developed
markets
• 40% of pro forma sales
• Significant recovery potential
Diversification
and balance
• Present in 90 countries
• No single country representing
more than c. 10% of sales
Africa/Middle East
N. America
Asia/Pacific
LatAm
c. 60% Emerging
markets
Eastern
Europe
c. 40% Developed
markets
Western
Europe
Capturing the recovery in developed markets
while ensuring long-term sustainable growth in emerging markets
1 Pro forma of divestments
2 Ranked below 50 in the World Economic Forum Global Competitiveness index for quality of overall infrastructure 2012-2013
3 Global Construction 2025 - A global forecast for the construction industry to 2025
Portfolio breakdown (2013 sales)
1