Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — HeidelbergCement — Q3 2019 Earnings Presentation
36 slides from Heidelberg Materials's earnings presentation, Nov 7, 2019
Slide 1: 2019 Third Quarter Results
HeidelbergCement 2019 Third Quarter Results 7 November 2019 Dr. Bernd Scheifele, CEO and Dr. Lorenz Näger, CFO Slide 1 – 2019 Third Quarter Results – 07 November 2019
Slide 2: Contents
Contents Page Overview 3 Results by Regions 13 Financial Report 21 Outlook 30 Appendix 32 Slide 2 – 2019 Third Quarter Results – 07 November 2019
Slide 3: HeidelbergCement continues to… Grow, Deliver, Improve, Strengthen
Overview HeidelbergCement continues to… Grow Deliver Improve Strengthen LfL: +1.2 % LfL: +29 bps +2.4% +11.5% +191 bps -1.1 Revenues chart 4.9 5.1 1.1 1.2 21.4% 23.3% 10.8 9.8 Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 Sep ’18 Sep ’19 Revenue Oper. EBITDA Margin Net debt (IFRS 16 adjusted) All
Slide 4: Overview Q3 2019
Overview Q3 2019 Solid result improvement and significant debt reduction LfL EBITDA increases +1.2% despite lower volumes and difficult comparison base. Strong margin improvements in Asia and Europe. Q3 marks a clear positive turn-back in Africa. North America impacted by lower land sales in the
Slide 5: Operational Overview
Operational Overview Operational result overview Sep 18 Sep 19 LfL % Q318 Q319 LfL % Cement volume (‘000 t) 97,170 94,546 -1.3% 35,305 33,521 -3.3% Aggregate volume (‘000 t) 232,913 233,282 -1.0% 87,740 87,678 -1.4% Ready Mix volume (‘000 m3) 35,820 37,951 3.2% 12,871 13,556 2.0% Asphalt volume (‘00
Slide 6: Revenue and EBITDA Overview
Revenue and EBITDA Overview Q3 2019 vs. Q3 2018 18.6% 15.6% 13.8% 6.3% 4.1% 1.8% 1.6% -1.6% -2.8% -4.2% North America West/South Europe North/East Europe Asia/Pacific Africa/Med. Basin Strong operating leverage in all regions. North America impacted by lower quarry gain, which will be reversed in 4t
Slide 7: September YtD Operating EBITDA Bridge
September YtD Operating EBITDA Bridge (m€) +3.6% 481 16 -358 236 14 2,626 -56 2,376 48 -7 2,293 2,253 Sep18 Currency Decons. Sep18 LfL Price Net Costs Other Sep19 LfL IFRS 16 Cons Sep19 Reported EBITDA volume EBITDA Reported EBITDA EBITDA Previous year figures are adjusted due to change in accountin
Slide 8: Q3 Operating EBITDA Bridge
Q3 Operating EBITDA Bridge (m€) +1.2% 164 -5 -70 85 4 1,180 -76 22 -3 1,077 1,090 1,058 Q318 Currency Decons. Q318 LfL Price Net Costs Other * Q319 LfL IFRS 16 Cons. Q319 Reported EBITDA volume EBITDA Reported EBITDA EBITDA * “Other” includes the net change in “other operating result” and “result fr
Slide 9: Energy cost inflation turns to be a tail-wind
Energy cost inflation turns to be a tail-wind. Trend is expected to continue in Q4. Year to date energy cost inflation at -1.4% m€ -1.4% 1,268 -29 m€ 1,239 Sep 2018 YtD Price inflation Volume impact Currency Sep 2019 YtD Driven mainly by fuel cost decrease, energy cost is below prior year Slide 9 –
Slide 10: Significant reduction of specific CO2 emissions 1990-2030
Significant reduction of specific CO2 emissions 1990-2030 Specific direct net kg CO2/t cementitious product We have already set up a CO2 reduction 749 750 -20% -30% master plan per plant. 700 Both top and local management teams 650 have aggressive 600 599 ~40% incentives to execute. ~40% ~20%
Slide 11: HeidelbergCement will be a structural winner of EU-ETS
HeidelbergCement will be a structural winner of EU-ETS Price of emission allowances Likely consequences of high prices 30 HeidelbergCement is long in carbon credits until the end of 2022. 25 Many local players have already run out of carbon rights. Hence, inefficient, 20 polluting cement plants
Slide 12: Contents
Contents Page Overview 3 Results by Regions 13 Financial Report 21 Outlook 30 Appendix 32 Slide 12 – 2019 Third Quarter Results – 07 November 2019
Slide 13: North America
North America Q318 Q319 Q3 Market overview Q3 Operational result (m€) Positive volume and price development in all LfL: +6.5% LfL: -9.0% LfL: -11.8% business lines. 1,487 412 412 336 Profitability impaired by lower demand of high margin 1,307 313 products in the Canadian Prairies, project delays
Slide 14: Western and Southern Europe
Western and Southern Europe Q318 Q319 Q3 Market overview Q3 Operational result (m€) Margin improvement continues despite lower LfL: +1.5% LfL: +17.5% LfL: +34.5% volumes in the quarter. 1,289 1,312 251 151 Pursuit of pricing strategy in competitive 194 113 market. Recovery of CO2 costs started.
Slide 15: Northern and Eastern Europe - Central Asia
Northern and Eastern Europe - Central Asia Q318 Q319 Q3 Market overview Q3 Operational result (m€) Strong pricing partly compensates weak volumes LfL: +0.7% LfL: -1.4% LfL: +0.4% and cost inflation. Margin improvement expected in Q4. 819 796 216 230 177 180 Eastern Europe volumes below prior yea
Slide 16: Asia Pacific
Asia Pacific Q318 Q319 Q3 Market overview Q3 Operational result (m€) Strong pricing strategies across the region LfL: -1.2% LfL: +3.3% LfL: +7.9% compensates for the weaker demand in the quarter. Clearly visible result recovery in Indonesia and 833 867 192 131 163 117 Thailand. Margin improvem
Slide 17: Africa - Eastern Mediterranean Basin
Africa - Eastern Mediterranean Basin Q318 Q319 Q3 Market overview Q3 Operational result (m€) Solid result improvement in all Sub-Saharan LfL: -0.7% LfL: +17.6% LfL: +34.4% countries more than compensates weakness in Egypt and Turkey. 417 424 106 79 86 Margins increase in all business lines despi
Slide 18: Group Services
Group Services Q318 Q319 Q3 Market overview Q3 Operational result (m€) Trading volume in the first 9 months reaches 24.7 LfL: -34.3% LfL: -85.7% LfL: -95.7% million tons. Oversupply in Mediterranean and Middle East- Indian Ocean regions remains high and continues to put pressure on international
Slide 19: Overview performance & programs
Overview performance & programs Portfolio Operations Savings Free cashflow optimisation SG&A Strong cash Solid saving target increased to generation and Disposals performance 130 m€. disciplined reach 393 m€, improves CapEx brings without any revenue, Initial target major impact net debt down EBITDA
Slide 20: Contents
Contents Page Overview 3 Results by Regions 13 Financial Report 21 Outlook 30 Appendix 32 Slide 20 – 2019 Third Quarter Results – 07 November 2019
Slide 21: Key financial messages September 2019
Key financial messages September 2019 Adjusted Group Share of Profit per September in-line with prior year Group Share of Profit, adjusted for AOR, increases to 827 m€ per September 2019. Additional ordinary result includes non-cash loss from the sale of Ukraine business in Q2 which is partly co
Slide 22: Income Statement as of September 2019
Income Statement as of September 2019 m€ Sep 181) Sep 19 Change Q3 181) Q3 19 Change Revenue 13,375 14,273 7% 4,943 5,061 2% Result from at-equity investments 177 213 20 % 82 87 6% Result from current operations before 2,253 2,626 17 % 1,058 1,180 12 % depreciation and amortization (RCOBD) Depreciat
Slide 23: Cash flow Statement as of September 2019
Cash flow Statement as of September 2019 m€ Sep 18 Sep 19 Q3 18 Q3 19 Comments Cash flow 1,716 2,132 934 1,038 Increase in cash flow (YTD Changes in working capital -980 -896 -126 22 +416 m€) based on strong Decrease in provisions through cash payments -241 -253 -86 -67 pricing and margin improvem
Slide 24: Portfolio optimization continues successfully in Q3
Portfolio optimization continues successfully in Q3 Disposal proceeds FY2018 – Sep 2019 Disposal proceeds per Sep 2019 m€ m€ 13 10 36 1,500 86 23 393 103 961 290 136 89 568 Shares in Ciments du Maroc, Morocco Cement plant El Minya, Egypt Ships UK Ukraine business Construction materials Dresden FY 20
Slide 25: Free Cash Flow rises to 1.7 bn€
Free Cash Flow rises to 1.7 bn€ Usage of free cash flow (m€) L12M Sep 2017 L12M Sep 2018 L12M Sep 2019 1,174 1,166 1,651 62 347 297 317 213 544 60 377 186 1,122 417 174 FCF Net Growth CapEx Debt Payback Dividends HCAG Dividend to minorities IFRS 16 Leasing net debt impact 10,830 118 1,122 1,312 974
Slide 26: Net debt development – Last 12 months
Net debt development – Last 12 months Million EUR -1,068 118 1,312 10,830 1,312 1,651 591 9,761 9,518 64 62 9,518 Net Debt IFRS 16 Net Debt Net FCF Net Growth Dividends FX / Net Debt Sep 2018 OB impact Sep 2018 additions CapEx Accounting Sep 2019 post of leasing IFRS 16 Slide 26 – 2019 Third Quarter
Slide 27: Net debt development and target update
Net debt development and target update Billion EUR 9.7 8.9 8.6 8.2 Net debt pre-IFRS 16 8.4 7.7 7.4 7.0 IFRS 16 impact 1.3 1.2 1.2 1.2 Dec 2018 Actual Initial target Updated target Mid-Term Dec 2019 Dec 2019 strategic Target Slide 27 – 2019 Third Quarter Results – 07 November 2019
Slide 28: Group balance sheet
Group balance sheet Sep 19 / Sep 18 m€ Sep 18 (*) Dec 18 Sep 19 Variance (m€) Variance (%) Assets Intangible assets 11,759 11,820 12,218 459 4% Property, plant and equipment 12,804 12,962 14,462 1,658 13 % Financial assets 2,229 2,107 2,212 -17 -1 % Fixed assets 26,793 26,889 28,893 2,100 8% Deferre
Slide 29: Contents
Contents Page Overview 3 Results by Regions 13 Financial Report 21 Outlook 30 Appendix 32 Slide 29 – 2019 Third Quarter Results – 07 November 2019
Slide 30: 2019 targets and outlook confirmed
2019 targets and outlook confirmed Operations • Volume increase in all business lines Performance • Margin improvement Result • Solid revenue, EBITDA, EPS growth Portfolio • 500 m€ disposal; net growth CapEx* below 0 Leverage • Net debt reduction to 7.4 billion EUR** * * Gross growth CapEx minus dis
Slide 31: Contents
Contents Page Overview 3 Results by Regions 13 Financial Report 21 Outlook 30 Appendix 32 Slide 31 – 2019 Third Quarter Results – 07 November 2019
Slide 32: Change in accounting (IFRS16-Leasing & Result from associates)
Change in accounting (IFRS16-Leasing & Result from associates) Q3 2019 Q3 2019 Q3 2019 IFRS16 – Leasing (m€) EBITDA Depreciation Opr. Income North America 18.2 -16.8 1.4 West / South Europe 26.8 -23.7 3.1 North / East Europe 17.6 -14.2 3.4 Asia Pacific 18.1 -15.5 2.6 Africa / Med. Basin 4.4 -4.1 0.3
Slide 33: Currency & Scope Impacts – September YtD
Currency & Scope Impacts – September YtD North America IFRS 16 Cons. Decon. Curr. Asia Pacific IFRS 16 Cons. Decon. Curr. Volume Volume Cement volume ('000 t) 3.3 -147.8 Cement volume ('000 t) 0.0 0.0 Aggregates volume ('000 t) 1,374.7 0.0 Aggregates volume ('000 t) 0.0 0.0 Ready mix volume ('000 m3
Slide 34: Sales volumes & revenues per business line
Sales volumes & revenues per business line Cement sales volumes (mt) Sep 18 Sep 19 Cement sales revenues (m€) Sep 18 Sep 19 North America 12,136 12,260 North America 1,301 1,410 West / South Europe 23,002 22,667 West / South Europe 1,890 1,967 North / East Europe 19,259 18,252 North / East Europe 1,
Slide 35: Contact information and event calendar
Contact information and event calendar Date Event Contact Information 19 March 2020 Full Year Results Mr. Christoph Beumelburg Director Communication & IR 7 May 2020 First Quarter Results Phone: +49 (0) 6221 481 13249 christoph.beumelburg@heidelbergcement.com 30 July 2020 Half Year Results 5 Novembe
Slide 36: Disclaimer
Disclaimer Unless otherwise indicated, the financial information provided herein has been prepared under International Financial Reporting Standards (IFRS). This presentation contains forward-looking statements and information. Forward-looking statements and information are statements that are not h