Slide 1: Full-year 2018 Results
Full-year 2018 Results Jan Jenisch, CEO Géraldine Picaud, CFO March 7, 2019 © LafargeHolcim Ltd 2015
Slide 2: Agenda
Agenda 01 Highlights and Key Developments 02 Full-year 2018 financial results 03 Outlook 2019 2
Slide 3: Highlights and Key Developments
01 Highlights and Key Developments Jan Jenisch, Chief Executive Officer 3
Slide 4: Highlights and Key Developments
Highlights and Key Developments Strong Sales growth and over-proportional profitability increase in Q4 › Q4 Net Sales up 5.1% LFL, Recurring EBITDA up 6.5% LFL › 2018 Net Sales up 5.1% LFL, Recurring EBITDA up 3.6% LFL › Over-proportional increase of Net Income* (+10.8%) and EPS* (+11.9%) › CHF 400
Slide 5: Strategy 2022 – Building for Growth
Strategy 2022 – “Building for Growth” Successful strategy execution delivering results Strong growth in FY 2018 with Net Sales up 5.1% LFL All 4 business segments growing Bolt-on acquisitions accelerating with 8 transactions signed to date Simplification Closure of 4 corporate offices comple
Slide 6: Bolt-on Acquisitions
Bolt-on Acquisitions Bolt-on acquisitions accelerating with 8 transactions signed to date The Kendall Group, UK Tarrant Concrete, US Metro Mix, US Vritz, France AGG & RMX RMX RMX AGG reserve Donmix, Australia Alfons Greten, Germany Transit Mix, US Colorado River Concrete, US RMX Precast & RMX RMX AG
Slide 7: Close the gap to best-in-class performance in Aggregates
Close the gap to best-in-class performance in Aggregates Significant progress made, Recurring EBITDA margin up 2.3pp CHF m Rec. EBITDA +15.1% LFL 4'091 21.8% 3'925 19.5% +2.3pp › Net Sales growth of 4.5% LFL › Price improvement by +3.3% LFL 893 › Over-proportional growth of 15.1% LFL in Recurring EB
Slide 8: Close the gap to best-in-class performance in RMX
Close the gap to best-in-class performance in RMX Strong progress made, Recurring EBITDA margin up 1.4 pp CHF m Rec. EBITDA +54.1% LFL 5'481 4.2% 5'263 2.8% +1.4pp › Net Sales growth of 3.8% LFL › Price improvement by +3.2% LFL 232 › Over-proportional growth of 54.1% LFL in Recurring EBITDA › P&L le
Slide 9: Health & Safety
Health & Safety Significant improvement of safety performance Lost Time Incidents Frequency Rate Key initiatives 2018: -23% › “One Team, One Program” - a leaner Health & Safety structure established to support Ambition “0” strategy, focused on 1.03 implementation at country level 0.91 0.79 › Launche
Slide 10: Performance Highlights
Performance Highlights Progressing towards our Strategy 2022 targets Net Sales Recurring EBITDA CHF m 3-5% LFL CHF m >5% LFL annually annually +5.1% +3.6% 27'466 6'016 27'021 5'990 2017* 2018 … 2022 2017 2018 … 2022 Cash Conversion ROIC % % >40% >8% +0.2pp +0.7pp 28.3% 6.5% 28.1% 5.8% 2017 2018 … 20
Slide 11: Full-year 2018 financial results
02 Full-year 2018 financial results Géraldine Picaud, Chief Financial Officer 11
Slide 12: 2018 Performance
2018 Performance Progressing towards Strategy 2022 targets Recurring Net Sales EPS 3) Free cash flow EBITDA 2) CHF 1) 1) +5.1% +3.6% +11.9% +1’703 m CHF 27’466 m CHF 6’016 m CHF 2.63 per share Cash conversion 28% Q4 2018 Q4 2018 1) 1) +5.1% +6.5% 1) Variance on a Like for like basis 2) Variance calc
Slide 13: 2018 Net Sales and Recurring EBITDA growth
2018 Net Sales and Recurring EBITDA growth Over-proportional growth of Recurring EBITDA in second half of 2018 H1 H2 Rec. EBITDA margin 19% Rec. EBITDA margin 25% 8.1% 6.2% 6.5% 5.8% 5.1% 3.1% 1.5% Q1 2018 Q2 2018 Q3 2018 Q4 2018 -7.7% Net Sales = +4.8% LFL Net Sales = +5.5% LFL Recurring EBITDA = -
Slide 14: 2018 Volumes development
2018 Volumes development Volumes growth across all business segments M ton Mm3 Europe North America LFL +2% +5% +2% +3% 109.6 45.3 120.4 +5% 19.8 19.3 -3% Asia Pacific 9.4 +5% -1% CEM AGG RMX CEM AGG RMX 89.7 -2% 31.4 Group Middle East Africa 12.5 Latin America 0% +4% +1% CEM AGG RMX +4% 25.1 273.8
Slide 15: 2018 Net Sales bridge
2018 Net Sales bridge Net Sales growth of 5.1% LFL CHF m +1.6% +5.1% LFL -2.4% -1.0% +1'366 28'109 27’021* -645 27'466 -278 26'743 FY 2017 Scope FY 2017 LFL LFL FY 2018 LFL FX FY 2018 * Net Sales FY 2017 restated by CHF 893 million due to the reporting of gross sales from Trading activities, followi
Slide 16: 2018 Recurring EBITDA bridge
2018 Recurring EBITDA bridge Solid Recurring EBITDA growth, in line with guidance CHF m +0.4% +3.6% LFL -2.5% +272 -59 6'165 -149 -0.6% 5’990 6’016 -38 5'952 FY 2017 Scope FY 2017 LFL Volume Price / cost FY 2018 LFL FX FY 2018 16
Slide 17: 2018 Net Sales and Recurring EBITDA by segment
2018 Net Sales and Recurring EBITDA by segment Net Sales growth across all business segments Cement Aggregates RMX Solutions & Products +6.0% +3.8% +4.5% 18’052 5’481 +1.7% 4’091 +2.7% 4'688 2’396 +15.1% 893 +54.1% -24.3% 232 203 26% Rec. EBITDA 22% Rec. EBITDA 4% Rec. EBITDA 8% Rec. EBITDA margin (
Slide 18: 2018 Regional Performance
2018 Regional Performance Strong momentum overall, challenges in Middle East Africa North America Latin America Europe Middle East Africa Asia Pacific +5.0% +8.3% +3.0% 7‘554 7'446 +22.5% 5'875 +2.7% +5.0% -4.3% 1'609 1'523 +9.4% 1'499 3'080 2'731 -1.5% 959 -28.2% 734 Net Sales to external customers
Slide 19: North America
North America Strong contribution, good progress on strategy execution CHF m Q4 2018 FY 2018 Net Sales1) 1’509 5’875 LFL growth +2.1% +3.0% Reported growth +2.7% +3.7% Recurring EBITDA 410 1’523 LFL growth +3.1% +2.7% › Continuation of positive market growth › Strong contribution driven by growth st
Slide 20: Latin America
Latin America Resilient performance despite softening cement demand CHF m Q4 2018 FY 2018 Net Sales1) 605 2’731 LFL growth +4.5% +9.4% Reported growth -17.9% -7.2% Recurring EBITDA 220 959 LFL growth -9.2% -1.5% › Cement demand recovery in Brazil and Colombia › Challenging market conditions in Mexic
Slide 21: Europe
Europe Strong performance in positive market environment CHF m Q4 2018 FY 2018 Net Sales1) 1’862 7’554 LFL growth +6.2% +5.0% Reported growth +3.5% +7.8% Recurring EBITDA 420 1’499 LFL growth +11.0% +5.0% › Strong demand in most key markets driven by construction and residential sector as well as in
Slide 22: Middle East Africa
Middle East Africa Challenging market conditions in several countries CHF m Q4 2018 FY 2018 Net Sales1) 774 3’080 LFL growth -0.5% -4.3% Reported growth -4.7% -8.1% Recurring EBITDA2) 169 734 LFL growth -32.4% -28.2% › Shift in supply & demand balance in Algeria and Egypt › Overall, stable cement vo
Slide 23: Asia Pacific
Asia Pacific Strong Net Sales and Recurring EBITDA growth CHF m Q4 2018 FY 2018 Net Sales1) 1’870 7’446 LFL growth +7.3% +8.3% Reported growth -3.6% +0.6% Recurring EBITDA2) 457 1’609 LFL growth +22.4% +22.5% › Favorable market conditions in most countries › China contribution driven by pricing and
Slide 24: SG&A cost savings program
SG&A cost savings program CHF 400 m SG&A cost savings program delivering results ahead of target Recurring SG&A* Costs (CHF m) 80 -266 Inflation -74 Key initiatives 2018: Gross savings CIS & FX › Cost reduction at corporate and countries › Restructuring of IT & Shared Service 2’701 Centers 2’441 › O
Slide 25: Financial Performance 2018
Financial Performance 2018 EPS before impairment and divestments up 11.9%, to CHF 2.63 CHF m 2018 2017 Variation before impairment & divestments before impairment & divestments Net Sales 27'466 27'021 445 Recurring EBITDA 6'016 5'990 26 Depreciation & Amortization -2'235 -2'300 65 1) -476 -461 -15 R
Slide 26: Free Cash Flow
Free Cash Flow CHF 1’703 million of Free Cash flow generation CHF m 70 99 -226 -34 26 83 1'685 1'703 1'703 FCF 2017 Rec. EBITDA Change in NWC Capex Share of profit of JVs Income taxes paid Others FCF 2018 Net net of div. received 26
Slide 27: Net Financial Debt Dec 2017 to Dec 2018
Net Financial Debt Dec 2017 to Dec 2018 Successful de-leveraging with NFD / Recurring EBITDA at 2.2x CHF m 156 -301 -356 1’192 184 -2’988 1’285 14’346 13'874 13’874 13'518 13’518 NFD CFFO CAPEX Bolt-on acquisitions Group Non-controlling Others NFD 2018 Holcim NFD Dec 2017 Net shareholders interest b
Slide 28: Leverage improvement
Leverage improvement On track to reach 2019 objective NFD / Recurring EBITDA 2.4x › Close debt monitoring and discontinuation of the share buy-back program in 2018 2.2x 2.0x or › Divestment of Holcim Indonesia closed in less January 2019 further reducing NFD / Recurring EBITDA ratio 2017 2018 2019*
Slide 29: Return on Invested Capital
Return on Invested Capital Continuous improvement of performance ROIC >8% 5.8% 6.5% › Improvement of operational performance 5.2% through cost savings and manufacturing performance › CAPEX at optimized cost 2016 2017 2018 … 2022* › Bolt-ons with significant synergies * Before application of IFRS 16,
Slide 30: Continue with attractive dividend per share
Continue with attractive dividend per share CHF 2.0 dividend per share proposal Dividend per share (CHF) 2.0 2.0 2.0 › 2018 dividend of CHF 2.0 per share proposed at 1.5 AGM on May 15th, 2019 › For the first time, option for the shareholders to receive a scrip dividend: • Choice of getting the divid
Slide 31: Outlook 2019
03 Outlook 2019 Jan Jenisch, Chief Executive Officer 31
Slide 32: Outlook 2019
Outlook 2019 Solid global market demand expected to continue in 2019 NORTH AMERICA › Continued market growth LATIN AMERICA › Softer but stabilizing cement demand EUROPE › Continued demand growth across most countries MIDDLE EAST AFRICA › Challenging but stabilizing market conditions ASIA PACIFIC › C
Slide 33: Targets 2019
Targets 2019 Positive momentum to continue in 2019 › Net Sales growth of 3% to 5% LFL, delivering target of Strategy 2022 › Recurring EBITDA growth of at least 5% LFL, delivering target of Strategy 2022 › Accelerate deleveraging, achieve 2 times or less Net Debt to Recurring EBITDA ratio by end of 2
Slide 34: Upcoming Events 2019
Upcoming Events 2019 › May 15, 2019: Annual General Meeting and Q1 2019 trading update › July 31, 2019: Earnings release half year 2019 › October 25, 2019: Trading update Q3 2019 34
Slide 35: Disclaimer
Disclaimer These materials are being provided to you on a confidential basis, may not be distributed to the press or to any other persons, may not be redistributed or passed on, directly or indirectly, to any person, or published or reproduced, in whole or in part, by any medium or for any purpose.
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Slide 37: Net income reconciliation
Net income reconciliation GAAP to non-GAAP Impairment & 2018 CHF m 2018 Divestments before impairment & divestments Net Sales 27'466 27'466 Recurring EBITDA 6'016 6'016 Depreciation & Amortization -2'235 -2'235 Impairments 6 -6 1) Restructuring, litigation and others -476 -476 Operating Profit 3'312