baml building and infrastructure conference thomas aebischer cfo holcim group baml building and infrastructure conference october 9th 2012 holcim ltd strength performance passion

Strength. Performance. Passion.
© 2012 Holcim Ltd
BAML Building and Infrastructure Conference
Thomas Aebischer, CFO Holcim Group
BAML Building and Infrastructure Conference
© 2012 Holcim Ltd
October 9
th
, 2012
© 2012 Holcim Ltd
Agenda
2
BAML Building and Infrastructure Conference
Financial Overview 3
Holcim Leadership Journey
6
Driving towards better Processes
12
Growth and Performance Management
18
Conclusion
21
© 2012 Holcim Ltd
/ Mature
Emerging markets continue to grow, but a global recovery
remains elusive
9%
Net Sales, operating EBITDA (million CHF)
GDP growth
-3%
0%

3%
6%
12%
-
3'000
6'000
9'000
12'000
15'000
18'000
21'000
24'000
27'000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Net Sales
op. EBITDA
/ Emerging
GDP growth (IMF WEO 2010/2012)
1
:
3
BAML Building and Infrastructure Conference
1
IMF World Economic Outlook Databases as of April 2010 (thin line) resp. as of April 2012 (bold line)
3
© 2012 Holcim Ltd
The trough seems over: Since Q3 2011, there is a positive
trend on like-for-like operating EBITDA variance
4
‐250

‐200
‐150
‐100
‐50
0
50
100
150
Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212
Like-for-like quarterly operating EBITDA variance
1
:
(in million CHF)
1
Adjusted for CO
2
Turning point
BAML Building and Infrastructure Conference
© 2012 Holcim Ltd
Agenda
5
BAML Building and Infrastructure Conference
Financial Overview 3
Holcim Leadership Journey
6
Driving towards better Processes
12
Growth and Performance Management
18
Conclusion

21
© 2012 Holcim Ltd
Driving ROIC based on strategy, people, execution
6
< 8%
ROIC* 2011 ROIC* 2014
Building on competencies, focusing on execution
Proven
strategy
Leadership
Journey
Dedicated
people
> 8%
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* After tax
© 2012 Holcim Ltd
Streamlined organizational structure Holcim Group
Area Managers/
Corporate Functional
Managers
Line and functional
responsibility
Executive
Committee
Internal Audit
1
Governance, Nomination &
Compensation Committee
Board of Directors Holcim Ltd

Audit Committee
Bernard
Fontana
CEO
Paul
Hugentobler
Andreas Leu Roland Köhler Bernard Terver
Thomas
Aebischer
CFO
Javier
de Benito
Aidan Lynam
Onne
van der Weijde
Communications
Human
Resources
Investor
Relations
Legal
Occupational
Health & Safety
Strategy & Risk
Management
Aggregates
and Other
Construction
Materials
Cement

Manufacturing
Commercial &
Marketing
Innovation
Sustainable
Development
Controlling
Financing &
Treasury
Group
Structure & Tax
HGRS
Accounting &
Administration*
IT
Merger &
Acquisitions
Procurement
Ian
Thackwray
1
Internal Audit reports to the Chairman of the
Board of Directors
2
Excluding Philippines
3
Including Philippines
4
Excluding UK
* Ad interim

Status: September 1st, 2012
Europe
4
South Asia
ASEAN
2
East Asia
3
Oceania
Holcim Trading
Latin America North America
UK
Africa
Middle East
Urs Bleisch
Jacques
Bourgon
Urs
Fankhauser
Kaspar Wenger
Horia Adrian
7
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© 2012 Holcim Ltd
All figures in million CHF
2012 2013 2014
Customer Excellence (operating profit impact) 50-100 150-200 500
-Customer focus
-Value management
-Pricing policies

-Marketing and sales forces skills and motivation
Cost Leadership (operating profit impact) 100-200 400-500 > 1,000
-Energy and AFR > 300
-Logistics
> 250
-Procurement
> 250
-Fixed cost
> 200
Total increase in operating profit 150-300 550-700 > 1,500
Cash cost to achieve the savings (one-off) < 80 < 120
Additional CAPEX net
1)
0-40 100-180 100-180
1) Additional CAPEX net will come from prioritization of CAPEX based on the speed of the returns (ROIC).
Current energy fund of CHF 100 million will be maintained through the period 2012 - 2014
Holcim Leadership Journey:
Increase operating profit by CHF 1.5 billion until 2014
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© 2012 Holcim Ltd
• Base line: Operating Profit of 2011 adjusted
1
(CHF 2’308 million)
• Each work stream has its own set of performance measurement definition,
considering volume, price and cost according to the specific drivers of that
work stream:
Holcim Leadership Journey – Target Tracking
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9

1
Excluding one-off charges of CHF 375 million
Energy Fixed CostLogistics Procurement
Alternative
Fuels & Raw
Materials
Customer
Excellence
= Work stream specific definition of performance measurement, reflecting only that portion of volume,
price and cost effect that is attributable to the work stream itself
=> overall performance of Holcim Leadership Journey translating into
CHF 1.5 billion of additional operating profit in 2014
© 2012 Holcim Ltd
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In each work stream of Holcim Leadership Journey,
results are tracked per initiative
Holcim Leadership Journey
contribution
Price
Volume
Cost
2
Variation in operating profit compared to 2011 (illustrative example):
The overall result of the Holcim Leadership Journey will be a
bottom-up aggregation of the identified initiatives
Change not related to
Holcim Leadership Journey
1
CHF 2’308 million (base line of operating profit)

1
Including CIS and FX effect
2
Including depreciation
© 2012 Holcim Ltd
Agenda
11
BAML Building and Infrastructure Conference
Financial Overview 3
Holcim Leadership Journey
6
Driving towards better Processes
12
Growth and Performance Management
18
Conclusion
21
© 2012 Holcim Ltd
Information Technology
SynergiesSynergies
Exploit business intelligence synergies between financial reporting
and functional reporting areas
• Integrated dashboards for quicker decision making and actions
• Operational efficiencies
Global platform
& services
Global platform
& services
SourcingSourcing
Leverage established global platforms and services model further

Strengthen IT strategic sourcing in selected areas
12
ReplicationReplication
SupportSupport
Act as a platform for replication of best practices within the Group,
especially for new technologies
Provide IT solutions and processes to facilitate Holcim Leadership
Journey
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© 2012 Holcim Ltd
2005 2006 2007 2008 2009 2010 2011 2012
Implemented for
Holcim US and
Holcim Canada:
• Client Support
Service
• Book to Report
• Order to Cash
• Purchase to Pay
• Customer
Account
Reconcil-
iations
• Insourced
Customer
Invoice
Printing
• Payroll
• Buying
• Treasury

Support
• Logistics
Support
• Hire to
Retire
• Logistics
• Tax
Support
• Credit
Services
• HR
master
data
• IT
Service
Desk
Companies
added to the
Scope of
NABS:
• Aggregate
Industries
US
• Lattimore
Industries
North American Business Services is continuously centralizing and
standardizing the administrative and transactional services rendered to our
customers, suppliers and employees
Our Shared Service Center in North America is a model of
cost reduction and efficiency improvement

13
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© 2012 Holcim Ltd
Procurement
Global
procurement
Global
procurement
Increase spend at global level to benefit from higher purchasing
power of Holcim - categories to be sourced at Group level to be
increased from 6 with a total spend of CHF 600 million to 36 with a
total spend of CHF 4 billion
ProcessesProcesses
DiversificationDiversification
Improve procurement processes by
• integrated decision-making platforms & structures and
• bundling the relationship between Group companies and
suppliers
Diversify the supplier base and ensure competitive bid processes
14
Key drivers
for change
Key drivers
for change
• Ability to leverage larger spend across more Group companies
• A governance model and structure to support the goal
• An integrated cross functional approach with joint objectives
• Leveraging existing ERP functionalities to increase efficiency
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© 2012 Holcim Ltd

In our industry, companies that procure more efficiently will
have a cost and therefore a competitive advantage
Global
Categories
Regional
Categories
Local
Categories
Drivers of Leverage
•Pool demand requirements at
local level
•Drive service category
consolidation
•Process improvement at user
interface
•Drive transaction automation
gy
•Drive regional agreements and
bundling
•Leverage central skills for
equipment sourcing
•Drive service category
methodology
•Set global/regional strategies
•Global negotiation and volume
commitments
•Drive specific master data and
standardization
Spend categories
Slag, Gypsum, IT,

Services, Electricity
(deregulated), critical
spares & others, …
Fuels, Additives, Capex
Equipment, Grinding
Media, IT, Travel, Large
Capex, …
Regulated Electricity &
local Solid Fuels,
Aggregates, Blast &
Drilling services, Leasing
& Rental, Electrical
Installation, Maintenance
Services, …
30%
70%
Estimates based on addressable portion of spend as % of 2011 reported total spend
Total Spend
9%
91%
2011
Target
2014
–
15
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© 2012 Holcim Ltd
Americas
Asia PacificEurope, Middle East
and Africa

Americas
Sourcing Hub
Process excellence will pave the way for additional cost
savings through SSC and regional sourcing hubs
APAC-Beijing Supplier
Development Hub
NABS
APAC
Sourcing Hub
Sourcing Hubs
Shared
Service
Centres
Global/EMEA
Sourcing Hub
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Services
EMEA
Services Asia
Services
South Asia
LASER
Oceania IT Service
Center
© 2012 Holcim Ltd
Agenda
17
BAML Building and Infrastructure Conference
Financial Overview 3

Holcim Leadership Journey
6
Driving towards better Processes
12
Growth and Performance Management
18
Conclusion
21
© 2012 Holcim Ltd
Success factor – rigorous investment analysis and discipline
Product Focus
Geographic
Diversification
Local Management
Global Standards
• Strategic fit
• Position taking in line
with maturity profile of
the respective market
• Networking possibilities
and partnerships
• GDP growth
• Favourable demographics
• Deficit markets
• Substantial market share
• Networking
• Management and
manpower resources
• Resource management
• Local culture

embedment
Financials
• Value creation
• Financing in line with
Holcim policy
• Investment scorecard
• Accountability
Holcim investment criteria ensures
growth is value generating
18
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© 2012 Holcim Ltd
-20%
Freeing, generating, allocating and leveraging capital
growing the return on investments
Generate & free capital
Allocate capital Lever capital
Cost Leadership
Working capital
Selective divestments
Customer Excellence
Cost /
tonne
„more for less“
The continued focus on sources of capital offers the platform to allocate capital for value
enhancing investment opportunities that - levered optimally - grant “more returns for less
capital” => Reduce total cost of ownership
Identification
&
analysis

value enhancing
investment
opportunities
-20%
19
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© 2012 Holcim Ltd
Agenda
20
BAML Building and Infrastructure Conference
Financial Overview 3
Holcim Leadership Journey
6
Driving towards better Processes
12
Growth and Performance Management
18
Conclusion 21
© 2012 Holcim Ltd
• The trough seems over: Since Q3 2011, there is a positive
trend on like-for-like operating EBITDA variance
• Organizational changes at Holcim enable initiatives in the
Holcim Leadership Journey
• Discipline, incentive and performance management will ensure
growth and improved returns
• Holcim has high upside potential on cash flow generation and
is well financed, with a balanced maturity profile, a strong cash
position and access to a wide range of capital markets
Conclusion
BAML Building and Infrastructure Conference

21
In 2014 Holcim will earn at least its ROIC after tax of 8%
through the Holcim Leadership Journey
© 2012 Holcim Ltd
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.
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BAML Building and Infrastructure Conference