2004 annual results and outlook for 2005 holcim ltd

2004 annual results and outlook for 2005
1
2004 annual results
Key facts at a glance
 World economy gained momentum
 Construction activity strong – even buoyant in some places
 Solid internal growth in all Group regions/segments
 Improved EBITDA margin despite higher energy costs
 Further increase in operating profit and Group net income
 Higher earnings per share
 Renewed proposal for dividend increase
 2004 capital increase allowed buyout of minority shareholders
 Cement company taken over in El Salvador
 January 2005: announcement of strategic Group expansion
2
2004 annual results
Europe
 Upswing in construction activity
 Housebuilding and infrastructure
support economic growth
 Rising demand above all in Spain
and Italy
 EU expansion stimulates growth in
eastern and southeastern Europe
3
2004 annual results
Operations in Europe
Cement plant
Grinding plant
Terminal
Participation:

Cement plant
Cement capacity Group (Europe): 45.3 million t; further 1.0 million t with partners
4
2004 annual results
Facts on Europe
 Stronger presence in key markets ensuring rise in volumes
across all segments
 In western Europe very sound results achieved in Spain,
Italy and Switzerland
 Slight price recovery in Germany
 Substantial progress made by Group companies in southeastern
Europe
 Practically all Group companies posted higher operating results
 In Europe consolidated operating profit was up by 37.3 percent
to CHF 662 million
5
2004 annual results
North America
 Robust economic growth
 Strong increase in private
residential and industrial
construction
 Capacity of US cement industry
fully utilized
6
2004 annual results
Operations in North America
Cement plant
Grinding station
Terminal

Cement plant
(project)
Cement capacity Group (North America): 22.0 million t
7
2004 annual results
Facts on North America
 Holcim US stepped up own output
 Capacity considerations prompted concentration on key
customers
 In Canada deliveries were up in all segments
 St. Lawrence Cement’s sales down marginally in the northeast of
the USA
 Capacity renewal and strict cost management had positive
impact
 In North America operating profit rose by 19 percent to
CHF 325 million
8
2004 annual results
Latin America
 Generally positive year for region’s
economies
 Accelerated growth in Mexico and
Brazil
 Rising oil revenues
 Building activity shored up by
housing construction and
infrastructure improvement projects
9
2004 annual results
Operations in Latin America

Cement plant
Grinding station
Terminal
Participation:
Cement plant
Grinding station
Terminal
Cement capacity Group (Latin America): 34.5 million t; further 7.8 million t with partners
10
2004 annual results
Facts on Latin America
 Cement sales lifted in all segments
 Solid performance by Group companies in Mexico
and Central America
 Strong sales increases in Argentina, Ecuador, Venezuela and
Colombia
 Holcim Apasco again the main contributor to the Group’s
success in Latin America
 Holcim Brazil was unable to repeat the previous year’s result
due to demand and price developments
 Programs to increase efficiency and strict cost control paid off
 In Latin America operating profit saw an increase in local
currency of 2.3 percent
11
2004 annual results
Africa Middle East
 Construction sector generally solid
 Housebuilding, infrastructure
expansion and tourism lifted
cement consumption

 Building activity lively in Morocco
and South Africa
12
2004 annual results
Operations in Africa Middle East
Cement plant
Grinding station
Terminal
Cement plant
(project)
Participation:
Grinding station
Cement capacity Group (Africa Middle East): 14.9 million t; further 4.6 million t with partners
13
2004 annual results
Facts on Africa Middle East
 All Group companies registered higher sales volumes
 Holcim Lebanon posted a sizable increase in deliveries of
cement due to a pick-up in exports
 Dam construction work and exports supported sales at Egyptian
Cement
 Holcim South Africa saw substantial sales growth in all segments
 Better market prices and high productivity bolstered local results
 Practically all Group companies improved operating results
 In Africa Middle East operating profit grew by 28.9 percent to
CHF 370 million
14
2004 annual results
Asia Pacific
 Accelerated growth

 Strong economic upswing in
Thailand and Vietnam
 Major local projects and
residential construction stimulated
demand for cement
15
2004 annual results
Operations in Asia Pacific
Cement plant
Grinding station
Terminal
Participation:
Cement plant
Grinding station
Cement capacity Group (Asia Pacific): 37.4 million t; further 20.3 million t with partners
16
2004 annual results
Facts on Asia Pacific
 Sales up significantly
 Growth in cement delivery volumes highest in Thailand, Vietnam,
Indonesia, Sri Lanka and New Zealand
 Strong rise in ready-mix concrete sales
 Prices picked up on the Philippines
 Thailand, the Philippines, Vietnam, Australia and New Zealand
made significant contributions to operating result
 Consolidated operating profit increased by 10.6 percent to
CHF 219 million in Group region Asia Pacific
17
2004 annual results
Committed to sustainability

 Holcim included in the Dow Jones Sustainability Index and
the FTSE4Good Index
 ISO certification for quality and environment completed
 Holcim Foundation for Sustainable Construction and ETH
Zurich organized international forum
 Foundation also launched global competition for sustainable
building projects
 We provided immediate help after tsunami disaster
18
2004 annual results
Key strategic expansion moves
 In mature markets Holcim aims to operate increasingly as an
integrated supplier of building materials
 Reserves of raw materials and aggregates gaining in
significance
 Aggregate Industries expands our product range in the USA and
gives us access to the attractive UK aggregates market
 In the cement sector Holcim is focusing on growth markets
 With a capacity of 20 million tonnes of cement Holcim would be
India’s second largest supplier of cement
19
2004 annual results
Market maturity defines investment focus
Added value through
business integration
Market
maturity
Ready-mix concrete
Aggregates
Cement

India
Thailand
Eastern Europe
France, Spain
N. America, UK
Aggregates
Downstream
Emerging markets Transition markets Mature markets
20
2004 annual results
Key financial figures
in CHF in loc. curr.
Net sales 13'010 12'600 13'215 4.9% 8.0%
Operating EBITDA 3'341 3'311 3'588 8.4% 12.2%
Operating profit 1'903 1'925 2'251 16.9% 21.2%
Group net income
after minorit
y
interests
506 686 914 33.2% 37.8%
Cash flow from
operating activities 2'388 2'619 2'622 0.1% 3.3%
EPS in CHF 2.59 3.51 4.32 23.1% 27.4%
Cash EPS
1
in CHF
4.14 4.96 5.95 20.0% 23.5%
Dividend per share in CHF 1.00 1.15 1.25
2
8.7%

Dividend payment
195.2 224.6 278.9
2
24.2%
+/-
Million CHF 2002 2003 2004
1
Excludes the amortization of goodwill and other intangible assets
2
Proposal of the Board of Directors
21
2004 annual results
Major changes in the scope of consolidation
Effective as at
Cement
capacity
+ Proportionate consolidation of Cement
Australia (integration of Queensland Cement)
June 1, 2003 not significant
– Eternit AG, Switzerland November 10, 2003 –
+ Alpha Cement, Russia December 31, 2003 4.3 million t
+ Rohrbach Zement / – Geisingen January 1, 2004 –
+ Plevenski Cement, Bulgaria May 1, 2004 0.7 million t
+ Cemento de El Salvador, El Salvador December 31, 2004 1.7 million t
+/– Various smaller companies
22
2004 annual results
Exchange rates
Statement of income
avera

g
e exchan
g
e rates in CHF
2002 2003 2004 +/-
1 EUR 1.47 1.52 1.54 1.3%
1 USD 1.55 1.34 1.24 -7.5%
1 African Basket (EGP, ZAR, MAD)
1
0.97 1.00 1.02 2.0%
1 Asian Basket (AUD, NZD, THB, PHP)
1
1.06 1.00 0.98 -2.0%
Balance sheet
exchan
g
e rates in CHF
31.12.02 31.12.03 31.12.04 +/-
1 EUR 1.45 1.56 1.55 -0.6%
1 USD 1.39 1.24 1.14 -8.1%
1 African Basket (EGP, ZAR, MAD)
1
0.99 1.00 1.05 5.0%
1 Asian Basket (AUD, NZD, THB, PHP)
1
0.99 1.00 0.95 -5.0%
1
weighted by net sales full year 2003
23
2004 annual results

Currency exposure and sensitivity
Other
30%
EUR
31%
USD
34%
CHF
5%
Sales Operating Profit
USD sensitivity
Million CHF
USD/CHF
at 1.24
USD/CHF
at 1.23
+/-
Net sales 13'215 13'178 -37
Operating profit 2'251 2'244 -7
Group net income after minority interests 914 911 -3
Cash flow from operating activities 2'622 2'613 -9
Other
31%
EUR
23%
USD
42%
CHF
4%
24

2004 annual results
Cement and clinker sales volumes by region
Million t
2002
2003
2004
∆
2003/2004 Volume Change in
structure
Total
Europe 1.1% 15.1% 16.2%
North America 1.7% 0.0% 1.7%
Latin America 6.7% 0.0% 6.7%
Africa Middle East 9.1% 0.3% 9.4%
Asia Pacific 11.0% 0.2% 11.2%
Total 4.0% 4.3% 8.3%
30.8
26.5
25.3
17.5
17.2
16.5
20.6
19.3
18.8
14.0
12.8
11.7
25.8
23.2

22.9