Holcim Ltd · SIX:HOLN
Holcim — LafargeHolcim — Investor Day (2016)
14 slides from Holcim's investor day presentation, 2016
Slide 1: Capital Markets Day: Operational Excellence
Capital Markets Day Operational Excellence Urs Bleisch, Performance & Cost © LafargeHolcim Ltd 2015
Slide 2: Our objective: Sustainable competitive cost base while driving investment costs down
Our objective: Sustainable competitive cost base while driving investment costs down Cost Leadership Asset Light % of Total Cost of Goods Sold ~14% Energy Capex to develop ~19% Distribution ~31% Other Operating Investments variable cost costs SG&A ~11% Fixed CAPEX to maintain costs ~25% © 2016 Lafar
Slide 3: Substantial cost reduction through synergies, ahead of plan
Substantial cost reduction through synergies, ahead of plan CHF m EBITDA synergies, Completion as run rate YE 2017 of Q3 2016 Selected actions Operational • Logistics network optimization of Northeast Cement operation in the US 200 >100% Performance • Ball Mill, Fan & Clinker Optimization initiative
Slide 4: Energy: Lower energy costs driven by lower consumption and fuel mix optimizations
Energy: Lower Energy costs driven by lower consumption and fuel mix optimizations, supported by favorable fuel market prices Fuel Mix Optimization Consumption Optimization • Cross-Function Fuel Mix Optimization Initiative (FMOI), • Technical optimizations in selected high potential plants started ea
Slide 5: Energy: Looking ahead, further implementing our fuel strategy
Energy: Looking ahead, further implementing our fuel strategy to optimize energy costs Effective Fuel Mix strategy to drive energy costs expected Fuel Strategy above 2016 level, though below market forecasts • Enhance production flexibility • Capture market opportunities through agility and Coal Pri
Slide 6: AFR: From focus on cost reduction to waste management as a business
AFR: From focus on cost reduction to waste management as a business Leverage more on Alternative Fuels Waste management • Average Alternative Fuel cost significantly cheaper than the average Traditional Fuel cost • Manage waste as a business Traditional and Alternative Fuel Cost evolution CHF/GJ • A
Slide 7: Distribution: Major on-going and new initiatives to drive performance
Distribution: Major on-going and new initiatives to drive performance Sourcing Operational Optimization Initiatives • Supplier consolidation Network Optimization • Transportation capacity development in • Design and optimize most profitable product flow from plants to customers challenging markets •
Slide 8: Procurement: Good progress on category management and digitalization
Procurement: Good progress on category management and digitalization 100% Third Party Spend Management Value Generation Electronic Source-to-Pay Standardization Electronic Automation Focus on Simplicity Increased Efficiency Clear Specifications Input Output Fewer Suppliers Sourcing Buying Discipline
Slide 9: SG&A: Large number of cost reduction initiatives ongoing
SG&A: Large number of cost reduction initiatives ongoing, on track to reach our target of 7% SG&A as a % of sales SG&A Key cost reduction initiatives Benefits realized from restructuring HEADCOUNT • Direct merger related in overlap countries REDUCTION • Redesign and strong focus in all countries Fro
Slide 10: Lower capex level sustainable given realized increase in equipment efficiency
Lower capex level sustainable given realized increase in equipment efficiency and smart expansion capex CHF 3.5 bn CAPEX envelope for 2016-17, Sufficient to ensure asset maintenance and replacement run rate <CHF 2 bn reflected in continuous increase of overall equipment efficiency Average net Operat
Slide 11: Optimal footprint after merger allows to over deliver on capex synergies
Optimal footprint after merger allows to over deliver on capex synergies Historic average CAPEX spend of CHF 2.8 to 2.9 Annual CAPEX synergy benefits in mCHF billion per year successfully reduced to annual run-rate below CHF 2bn by: • Global footprint enabled to postpone or avoid legacy strategic ex
Slide 12: Systematic strive for asset light solutions across our business
Systematic strive for asset light solutions across our business Growing under Asset Light Asset Light Optimization • Positioning in strategic advantageous locations, markets Transforming a capital-intensive business • Leverage on trading within given constraints • Growing downstream, integrating cha
Slide 13: Our basis for operational excellence and sustainable continuous performance improvement
Our basis for operational excellence and sustainable continuous performance improvement Transparent data benchmarking Forward-looking action pipeline Full cost transparency ~10,000 initiatives and actions identified to Internal plant productivity and cost drive continuous performance benchmark
Slide 14: Operational excellence – Concluding remarks
Operational excellence – Concluding remarks • Operational excellence is key to drive sustainable growth in margins • Synergies are being delivered ahead of schedule • Significant cost improvements were achieved in 2016 and are planned for 2017 • On track to reach our target of 7% SG&A as a % of sale