Slide 1: Half-Year 2019 Results
HALF-YEAR 2019 RESULTS Jan Jenisch, CEO Géraldine Picaud, CFO July 31, 2019 © LafargeHolcim Ltd 2015
Slide 2: Highlights and Key Developments
01 HIGHLIGHTS AND KEY DEVELOPMENTS Jan Jenisch, Chief Executive Officer © LafargeHolcim Ltd 2015
Slide 3: H1 2019 Highlights: Strong First Half of the Year
H1 2019 HIGHLIGHTS STRONG FIRST HALF OF THE YEAR Net Sales up 3.5%, Recurring EBITDA1 up 10.8% LFL in H1 Net Sales up 1.2%, Recurring EBITDA1 up 7.1% LFL in Q2 Fourth consecutive quarter of over-proportional growth of Recurring EBITDA1 over Net Sales Profitability increase in all business segments i
Slide 4: Consistently Delivering on Strategy 2022
STRATEGY 2022 – BUILDING FOR GROWTH CONSISTENTLY DELIVERING ON STRATEGY 2022 Strong growth in H1 2019 with Net Sales up 3.5% LFL All 4 business segments growing Bolt-on acquisitions accelerating with 6 transactions signed to date SG&A cost savings program completed and delivering the CHF 400
Slide 5: Bolt-on Acquisitions: Further Progress and More in the Pipeline
BOLT-ON ACQUISITIONS FURTHER PROGRESS AND MORE IN THE PIPELINE Donmix, Australia (Q1) Alfons Greten, Germany (Q1) Transit Mix, US (Q1) RMX Precast & RMX RMX Colorado River Concrete, US (Q1) Bedrock Redi-Mix, Canada (Q2) Somaco, Romania (Q2) AGG & RMX RMX Precast 5
Slide 6: Close the Gap to Best-in-Class Performance in Aggregates
CLOSE THE GAP TO BEST-IN-CLASS PERFORMANCE IN AGGREGATES SIGNIFICANT PROGRESS MADE, REC EBITDA MARGIN UP 1.0 PP AGG Recurring EBITDA1 / Recurring EBITDA margin CHF m 17.2% 16.2% 14.1% 328.7 310.4 253.2 H1 2017 H1 2018 H1 2019 6 1 Pre-IFRS 16
Slide 7: Close the Gap to Best-in-Class Performance in RMX
CLOSE THE GAP TO BEST-IN-CLASS PERFORMANCE IN RMX STRONG PROGRESS MADE, REC EBITDA MARGIN UP 1.7 PP RMX Recurring EBITDA1 / Recurring EBITDA margin CHF m 3.5% 1.8% 1.4% 91.6 47.1 34.3 H1 2017 H1 2018 H1 2019 7 1 Pre-IFRS 16
Slide 8: Half-Year 2019 Financial Results
02 HALF-YEAR 2019 FINANCIAL RESULTS Géraldine Picaud, Chief Financial Officer © LafargeHolcim Ltd 2015
Slide 9: Performance Highlights: Strong Set of Results
H1 2019 PERFORMANCE HIGHLIGHTS STRONG SET OF RESULTS Recurring Net Sales EPS 3 Free cash flow 2 EBITDA 2 CHF 1 1 +3.5% +10.8% +108% +735 m vs 2018 CHF 13’059 m CHF 2’662 m CHF 1.30 per share CHF 262 m Q2 2019 Q2 2019 1 1 +1.2% +7.1% 1 Variance on a Like for like basis 2 Pre-IFRS 16 3 Before impairme
Slide 10: Four Consecutive Quarters of Over-Proportional Growth
H1 2019 PERFORMANCE FOUR CONSECUTIVE QUARTERS OF OVER-PROPORTIONAL GROWTH Rec EBITDA1 +10.8% LFL 20.6% 8.1% 7.1% 6.5% 6.4% 5.8% 5.1% 1.2% Q3 2018 Q4 2018 Q1 2019 Q2 2019 Net Sales LFL growth Recurring EBITDA1 LFL growth 1 Pre-IFRS 16 10
Slide 11: Volumes Development: Good Cement Volume Growth in Mature Markets
H1 2019 VOLUMES DEVELOPMENT GOOD CEMENT VOLUME GROWTH IN MATURE MARKETS M ton Europe M m3 North America -3% +6% LFL +2% 57.2 45.7 22.5 +3% +4% Asia Pacific 9.0 -7% 9.6 -3% 4.4 CEM AGG RMX CEM AGG RMX 38.9 -12% Middle East Africa -1% Group -2% Latin America 13.3 -2% 17.6 5.2 +1% -4% 121.7 103.8 CEM A
Slide 12: Net Sales Bridge
H1 2019 NET SALES BRIDGE NET SALES UP 3.5% LFL CHF m +3.5% LFL 13’272 +449 -356 13’059 -307 H1 2018 Scope LFL FX H1 2019 -1.6% 12
Slide 13: Recurring EBITDA Bridge
H1 2019 RECURRING EBITDA BRIDGE OVER-PROPORTIONAL RECURRING EBITDA GROWTH OF 10.8% LFL CHF m +10.8% LFL 2’878 +216 -71 2'662 +315 2’484 -19 -48 H1 2018 Scope Volume Price FX H1 2019 IFRS 16 H1 2019 (pre-IFRS 16) over cost (pre-IFRS 16) Impact (post-IFRS 16) +7.2% 13
Slide 14: Net Sales and Recurring EBITDA by Segment
H1 2019 NET SALES AND RECURRING EBITDA BY SEGMENT PROFITABILITY INCREASE IN ALL BUSINESS SEGMENTS Cement Aggregates RMX Solutions & Products +5.2% -0.4% 8’783 2’595 +1.5% 1‘907 +8.7% +1.1% +7.7% 996 2’173 +83.7% 329 +52.9% 92 69 25% Rec. EBITDA 17% Rec. EBITDA 4% Rec. EBITDA 7% Rec. EBITDA margin (+
Slide 15: Regional Performance
H1 2019 REGIONAL PERFORMANCE NET SALES GROWTH IN ALL REGIONS North America Latin America Europe Middle East Africa Asia Pacific +7.2% +2.1% +17.4% +2.8% 3’796 3’417 +17.1% +0.3% 860 2’645 +3.1% +1.0% 678 1’476 1’331 -4.1% 495 -6.6% 446 327 Net Sales (CHF m) Recurring EBITDA pre-IFRS 16 (CHF m) % LFL
Slide 16: North America: Resilient Quarter
NORTH AMERICA RESILIENT QUARTER CHF m Q2 2019 H1 2019 Net Sales1 1’694 2’645 LFL Growth +2.1% +2.8% Recurring EBITDA pre-IFRS 16 480 495 LFL Growth +0.3% +1.0% Recurring EBITDA post-IFRS 16 515 560 Volumes growth in cement and aggregates Weather impact in the US offset by improvement in Canada and f
Slide 17: Latin America: Softer Market Environment
LATIN AMERICA SOFTER MARKET ENVIRONMENT CHF m Q2 2019 H1 2019 Net Sales1 695 1’331 LFL Growth +2.5% +3.1% Recurring EBITDA pre-IFRS 16 226 446 LFL Growth -6.4% -4.1% Recurring EBITDA post-IFRS 16 234 461 Softer cement demand in Mexico and Ecuador Good performance in Colombia Effective cost and price
Slide 18: Europe: Another Strong Quarter
EUROPE ANOTHER STRONG QUARTER CHF m Q2 2019 H1 2019 Net Sales1 2’093 3’796 LFL Growth +1.2% +7.2% Recurring EBITDA pre-IFRS 16 523 678 LFL Growth +6.6% +17.1% Recurring EBITDA post-IFRS 16 554 742 Good markets across the region Volumes impacted by fewer working days Margin growth further supported b
Slide 19: Middle East Africa: Turnaround Achieved, Positive Q2
MIDDLE EAST AFRICA TURNAROUND ACHIEVED, POSITIVE Q2 CHF m Q2 2019 H1 2019 Net Sales1 741 1’476 LFL Growth +2.9% +0.3% Recurring EBITDA2 pre-IFRS 16 177 327 LFL Growth +1.9% -6.6% Recurring EBITDA2 post-IFRS 16 197 367 Turnaround plans delivering visible results Stabilizing Algeria Good market dynami
Slide 20: Asia Pacific: Strong Recurring EBITDA Growth
ASIA PACIFIC STRONG RECURRING EBITDA GROWTH CHF m Q2 2019 H1 2019 Net Sales1 1’672 3’417 LFL Growth -0.3% +2.1% Recurring EBITDA2 pre-IFRS 16 520 860 LFL Growth +14.3% +17.4% Recurring EBITDA2 post-IFRS 16 529 885 Strong price improvement and restructuring driving margin improvement in India Higher
Slide 21: SG&A Savings Program Completed, CHF 400 m Run Rate
CHF 400 M SG&A SAVINGS PROGRAM COMPLETED AND RUN RATE OF CHF 400 M ACHIEVED Recurring SG&A1 Costs CHF m CHF m >400 205 391 186 Net savings Net savings Cumulated net Annualized 2018 vs 2017 YTD vs 2018 savings vs 2017 run-rate vs 2017 1 Recurring SG&A = Fixed Costs related to Administrative, Marketin
Slide 22: Financial Performance: EPS Up 108% to CHF 1.30
H1 2019 FINANCIAL PERFORMANCE EARNINGS PER SHARE1 UP 108% TO CHF 1.30 H1 2019 H1 2018 CHF m before impairment & divestm. before impairment & Variation and IFRS 16 divestm. Net Sales 13’059 13’272 -214 Recurring EBITDA 2’662 2’484 178 +7% Depreciation & Amortization -1’018 -1’104 86 Restructuring, li
Slide 23: Free Cash Flow Generation of CHF 262 m
H1 2019 FREE CASH FLOW CHF 262 M OF FREE CASH FLOW1 GENERATION CHF m CHF +735 m 461 262 +199 +63 +128 -473 +216 -80 +230 +178 FCF Rec. EBITDA Change Capex Income Financial Others FCF IFRS 16 FCF H1 2018 in NWC Net taxes paid expenses H1 2019 Impact H1 2019 (pre-IFRS 16) (post-IFRS 16) 1 Pre-IFRS 16
Slide 24: Significant Reduction of Net Financial Debt
H1 2019 NET FINANCIAL DEBT SIGNIFICANT REDUCTION OF NET FINANCIAL DEBT CHF m 13’518 -262 12’650 -1’747 +75 11’955 +322 +49 -57 +1’310 -558 11’340 NFD* FCF Disposals / Group Non-controlling Others NFD June 2019 Holcim Hybrid NFD June 2019 IFRS 16 NFD June 2019 Dec 2018 Pre-IFRS 16 acquisitions shareh
Slide 25: Outlook and Targets 2019
03 OUTLOOK AND TARGETS 2019 Jan Jenisch, Chief Executive Officer © LafargeHolcim Ltd 2015
Slide 26: Outlook 2019: Solid Global Market Demand Expected to Continue
OUTLOOK 2019 SOLID GLOBAL MARKET DEMAND EXPECTED TO CONTINUE NORTH AMERICA Continued market growth LATIN AMERICA Softer but stabilizing cement demand EUROPE Continued demand growth across most countries MIDDLE EAST AFRICA Stabilizing market conditions ASIA PACIFIC Continued demand growth 26
Slide 27: Targets 2019 Confirmed
TARGETS 2019 TARGETS 2019 CONFIRMED Net Sales growth of 3% to 5% LFL, delivering target of Strategy 2022 Recurring EBITDA growth1 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 20192 Continue improv
Slide 28: Upcoming Events 2019
UPCOMING EVENTS 2019 October 25, 2019: Q3 2019 trading update February 27, 2020: Full year 2019 earnings release 28
Slide 29: 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.
Slide 30: Confidential – Not to be distributed
Confidential – Not to be distributed
Slide 31: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES H1 2019 Impairments H1 2019 IFRS 16 pre-IFRS 16, CHF m and Reported impact impairment and divestments divestments Recurring EBITDA 2’878 216 - 2’662 Depreciation, Amortization & Impairment -1’225 -193 -14 -1’018 Restructuring, litigation and others1 -71 - - -71 Op