Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — HeidelbergCement — Investor Day (September 2013)
33 slides from Heidelberg Materials's investor day presentation, Sep 19, 2013
Slide 1: Analyst Day 2013 – Update Financial Management
Analyst Day 2013 Update Financial Management Dr. Lorenz Näger Member of the Managing Board and Chief Financial Officer Heidelberg, 19 September 2013
Slide 2: Key financials: 2013 Half Year Results
Key financials: 2013 Half Year Results €m June Year to Date Q2 2012(1) 2013 Variance L-f-L 2012(1) 2013 Variance L-f-L Volumes Cement (Mt) 42,719 42,397 -1 % -2% 24,512 24,326 -1 % -2 % Aggregates (Mt) 114,104 107,545 -6 % -6% 67,109 65,628 -2 % -3 % Ready-Mix Concrete (Mm3) 18,512 18,804 2% 3% 10,4
Slide 3: Financial key messages: 2013 Half Year Results
Financial key messages: 2013 Half Year Results Significant increase in profit for the period and earnings per share – Significantly reduced net interest expenses of -126 m€ (Q2 2012: -145 m€); partly compensated by foreign exchange losses and decreasing other financial result – Final favorable Sup
Slide 4: Agenda
Agenda 1. Where is the cash gone? No change in strategy 2. Management of asset base - Fixed assets - Current assets 3. Some aspects of future financial policy - Generation and allocation of Free Cash Flow - Some remarks on our debt structure - Target: Investment grade metrics Slide 4 - Analyst Day 2
Slide 5: Net debt development
Net debt development Net Debt 6.0 Net Debt / EBITDA (LTM) €m 5.1 14,608 4.8 4.3 4.4 4.3 4.3 4.1 4.0 4.0 3.9 3.7 3.6 3.7 3.8 3.7 3.7 -0.2 12,389 3.5 12,155 12,292 3.3 12,076 -324 3.2 3.3 3.1 11,566 11,302 2.9 -493 -456 8,971 8,964 9,066 +82 8,647 8,634 8,574 8,499 8,423 8,386 8,146 8,117 8,199 7,770
Slide 6: No change in overall disciplined investment policy
No change in overall disciplined investment policy Acquisition of additional 25% of the Cement Australia share capital to balance respective interests in Cement Australia Increase of holding in the Russian CJSC “Construction Materials”, Sterlitamak cement company CJSC “Construction ~ThermoCem 400 m€
Slide 7: Compared to peers HC was able to reduce debt significantly without selling any core assets
Compared to peers HC was able to reduce debt significantly without selling any core assets HC’s strategy: Partially cutting debt by Deleveraging and growth divestment [m€] [%] [m€] [%] 17,000 105 17,000 105 16,000 100 16,000 100 95 95 15,000 15,000 90 90 14,000 +12% 14,000 85 85 13,000 13,000 80 80
Slide 8: Disposal of business unit – case study
Disposal of business unit – case study 2,514 Disposal of business 100 2,414 unit at EV/EBITDA net multiple of 9x OIBD OIBD reduction OIBD before disposal after disposal 8,199 Proceeds are used to buy back bonds and 900 7,299 hence to reduce debt Net debt Net disposal Net debt before disposal proceed
Slide 9: Agenda
Agenda 1. Where is the cash gone? No change in strategy 2. Management of asset base - Fixed assets - Current assets 3. Some aspects of future financial policy - Generation and allocation of Free Cash Flow - Some remarks on our debt structure - Target: Investment grade metrics Slide 9 - Analyst Day 2
Slide 10: OIBD as % of segment assets by Group Areas
OIBD as % of segment assets by Group Areas OIBD as % of segments assets* 2012 28% 26% 24% 22% 20% 18% 16% 14% 12% Ø 10% 8% 6% 4% 2% 0% Africa / Asia – Eastern Europe / Western/ North America Med. B Pacific Central Asia North Europe Share of Assets 3% 22% 32% 64% 100% Goodwill * Segment assets = prop
Slide 11: Strategic directions
Strategic directions 1 Cost leadership by continuous improvement of operational efficiency and margin improvement by sales excellence initiatives FOX 2013: 1,010 m€ cash savings in 3 years LEO: Target 150 m€ improvement in distribution & logistics related costs PERFORM: 230 m€ improvement in c
Slide 12: Successful reduction of asset base in the US and UK
Successful reduction of asset base in the US and UK without destroying our strong reserve position Development of Capital Employed since 2010 (Index: Base 2010=100%) [%] 100 97.6 95.4 95 94.4 94.8 90.0 90 Low CapEx 88.9 Disciplined working capital management 85 Disposal of idle assets Capital
Slide 13: Reduced employees in underperforming markets
Moreover, we have clearly reduced the number of employees in underperforming markets…. Average number of employees -5% 56,723 2,055 1,293 53,617 949 2,251 1,622 581 2009 North America UK Indonesia Africa CAS (incl. Other 2012 Russia) … and have grown in highly attractive markets in Asia, Africa and
Slide 14: Investment focus on Asia, Africa and Russia (2011-2013)
Investment focus on Asia, Africa and Russia (2011-2013) Russia: Tula/ CMC Sterlitamak Poland: Górazdze India: Damoh Ghana Liberia Bangladesh Tanzania Indonesia Cement Australia Continuous extension of capacities in important growth markets Slide 14 - Analyst Day 2013 – 19 September 2013
Slide 15: Clear investment focus on Asia, Africa and Russia in the last years
Clear investment focus on Asia, Africa and Russia in the last years Development of Capital Employed since 2010 [%] (Index: Base 2010=100%) 320 300 302 280 258 260 240 220 200 195 180 157 160 147 140 120 113 120 102 100 90 80 89 2010 2011 2012 2013 Target USA UK Indonesia Africa CAS incl. Russia Cont
Slide 16: Agenda
Agenda 1. Where is the cash gone? No change in strategy 2. Management of asset base - Fixed assets - Current assets 3. Some aspects of future financial policy - Generation and allocation of Free Cash Flow - Some remarks on our debt structure - Target: Investment grade metrics Slide 16 - Analyst Day
Slide 17: Successful working capital management
Successful working capital management Rolling average working capital (days) Working capital per quarter (€bn) 80 -22 73 72 4.5 71 69 68 68 70 4.0 65 63 62 3.5 60 60 58 60 57 54 3.0 53 51 2.5 2.4 2.4 2.4 2.3 50 2.3 2.2 2.1 2.1 2.2 2.1 2.0 1.9 1.9 1.9 1.7 1.8 1.7 40 1.5 1.0 30 0.5 0.0 20 Q4 09 Q4 10
Slide 18: Agenda
Agenda 1. Where is the cash gone? No change in strategy 2. Management of asset base - Fixed assets - Current assets 3. Some aspects of future financial policy - Generation and allocation of Free Cash Flow - Some remarks on our debt structure - Target: Investment grade metrics Slide 18 - Analyst Day
Slide 19: Financial Policy & Liquidity
Financial Policy & Liquidity 1 HC will continue its conservative financial policies – Continuous focus on deleveraging – Remaining Free Cash Flow is used for growth in attractive markets and moderate increase in dividend 2 HC will continue to secure adequate back-up liquidity at all times to cov
Slide 20: Agenda
Agenda 1. Where is the cash gone? No change in strategy 2. Management of asset base - Fixed assets - Current assets 3. Some aspects of future financial policy - Generation and allocation of Free Cash Flow - Some remarks on our debt structure - Target: Investment grade metrics Slide 20 - Analyst Day
Slide 21: Generation and usage of FCF (before growth CapEx and disposals)
Generation and usage of FCF (before growth CapEx and disposals) LTM Jun 11 LTM Jun 12 LTM Jun 13 (*) 681 1,124 910 309 264 108 308 684 132 627 104 179 FCF debt decrease €m growth capex dividends 9,066 264 8,574 228 8,199 8,117 104 25 161 684 227 Net debt Debt Accounting Net debt Debt Accounting Net
Slide 22: Continuous focus on deleveraging: net debt reduction of 300-500 m€ p.a.
Continuous focus on deleveraging: Proven track record of net debt reduction by 300 - 500 m€ p.a. Net Debt 6.0 Net Debt / EBITDA (LTM) €m 14,608 5.1 4.8 4.3 4.4 4.3 4.3 4.1 4.0 4.0 3.9 3.7 3.8 3.7 12,389 3.6 3.7 3.7 12,292 3.5 12,155 12,076 3.3 3.3 3.2 3.1 11,566 11,302 2.9 -324 Strategic target: Sta
Slide 23: Continuation of growth in attractive markets continue
Continuation of growth in attractive markets continue Conceptual framework of investment decisions Simulation and Review of Assumptions Investment Criteria Investment Calculation Macroeconomic data Hurdle and forecasts P&L 1 Group Net Profit CF Historical data and cross- Balance check with Hurdle Sh
Slide 24: 15 mt cement capacity in project pipeline
15 mt cement capacity in project pipeline Market chances for future returns Investments in new cement capacities1 Continuous extension of of about 330 m€ on an annual average cement capacity (Investment costs in m€ by year (New capacity in mt by year of commissioning) of commissioning) 20.4 15.8 Ø 3
Slide 25: Moderate increase in dividend in line with developments in the past
Moderate increase in dividend in line with developments in the past Dividend / share in € 0.50 0.47 0.45 0.40 0.35 0.35 0.30 0.25 0.25 0.20 0.15 0.12 0.10 0.05 0.00 2009 2010 2011 2012 HC is gradually approaching its medium-term goal of a payout ratio of 30% to 35% Slide 25 - Analyst Day 2013 – 19 S
Slide 26: Agenda
Agenda 1. Where is the cash gone? No change in strategy 2. Management of asset base - Fixed assets - Current assets 3. Some aspects of future financial policy - Generation and allocation of Free Cash Flow - Some remarks on our debt structure - Target: Investment grade metrics Slide 26 - Analyst Day
Slide 27: Debt structure – more than 90% of debt on parent level
Debt structure – more than 90% of debt on parent level as per 30 June 2013 in m€ Debt Bonds EUR 1,480 HeidelbergCement Finance B.V. EUR 173 EMTN Certificates Parent Level 100% Parent Guarantee Syndicated Debt Loan EUR 3,000 HeidelbergCement AG EUR 1,031 Certificates CP EMTN 100% Subsidiary Heidelber
Slide 28: Debt maturity profile
Debt maturity profile as per 30 June 2013 in €m Syndicated Facility (SFA) Debt Instruments Bond 2,000 1,500 1,081 14 122 1,000 16 2 1 7 10 42 1,122 500 951 1,000 980 750 650 650 1 576 500 375 300 85 44 44 210 108 0 7 3 8 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2019 2020 >2020 ’13 ’13 ’14
Slide 29: Agenda
Agenda 1. Where is the cash gone? No change in strategy 2. Management of asset base - Fixed assets - Current assets 3. Some aspects of future financial policy - Generation and allocation of Free Cash Flow - Some remarks on our debt structure - Target: Investment grade metrics Slide 29 - Analyst Day
Slide 30: Achievement of key financial targets makes us optimistic on mid-cycle targets
Achievement of our key financial targets in the past makes us look optimistically to our mid-cycle targets Mid-cycle 8,423 8,146 Net Debt 7,770 7,047 Stay below 6,500 Continuous focus on deleveraging m€ 2009 2010 2011 2012 Net Debt / EBITDA 4.0 3.6 Stay below 2.8 Significant improvement in 3.3 2.8 t
Slide 31: Continuation of our successful course will support goal to reach investment grade
Continuation of our successful course will clearly support our goal to reach investment grade metrics HeidelbergCement Fitch Moody’s Positive rating pressure if Debt/ EBITDA continues to drop sustainably Slide 31 - Analyst Day 2013 – 19 September 2013
Slide 32: Contact information and event calendar
Contact information and event calendar Event calendar Contact information Investor Relations 07 November 2013 2013 third quarter results Mr. Ozan Kacar Phone: +49 (0) 6221 481 13925 Fax: +49 (0) 6221 481 13217 Mr. Steffen Schebesta, CFA Phone: +49 (0) 6221 481 39568 Fax: +49 (0) 6221 481 13217 ir-in
Slide 33: Safe Harbour Statement
Safe Harbour Statement 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 th