Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — HeidelbergCement — Investor Day (July 2014)
26 slides from Heidelberg Materials's investor day presentation, Jul 2, 2014
Slide 1: HeidelbergCement Capital Markets Day
HeidelbergCement Capital Markets Day 02 July 2014 / Cupertino, CA North America – Overview & Global Aggregates Dr. Dominik von Achten, Member of the Managing Board Slide 1 - Capital Markets Day – 02 July 2014
Slide 2: 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
Slide 3: Contents
Contents Page 1. North America Overview 4 2. Focus: Canada Region 8 3. Global Aggregates Review 14 4. Focus: Aggregates - North America 21 5. Summary 26 Slide 3 - Capital Markets Day – 02 July 2014
Slide 4: Clear profitability improvements – peaks not reached yet
Clear profitability improvements – peaks not reached yet North America - Financial Summary M€ OIBD 607 572 448 473 340 US industry volumes in 2013 vs. pre-crisis peak Cement: -35% 2009 2010 2011 2012 2013 (acc. to PCA1) Revenue 2,892 3,033 3,035 3,441 3,407 Aggregates: -31% (acc. to USGS2) OIBD
Slide 5: Long-term operating leverage exceeds 50%
Long-term operating leverage exceeds 50% North America - Operating Leverage Long-term Op. Leverage (2013 vs. 2009) Critical Drivers Delta (2013 vs. 2009) M€ 1• Pricing programs, e.g. ‒ PERFORM (CEM) ‒ CLIMB Commercial (AGG) Revenue +516 2• Cost discipline, e.g. ‒ FOX (Purchasing) ‒ WIN NAM (Overhead
Slide 6: Balanced footprint covering base and growth markets
Balanced footprint covering base and growth markets North America - Geographic Footprint % of rev. (’13) 24% 27% Canada Region North Region Cement plants 2 Cement plants 5 Aggregates sites 55 Aggregates sites 98 Ready-mix plants 62 Asphalt plants 25 Import terminals 1 Ready-mix plant
Slide 7: Contents
Contents Page 1. North America Overview 4 2. Focus: Canada Region 8 3. Global Aggregates Review 14 4. Focus: Aggregates - North America 21 5. Summary 26 Slide 7 - Capital Markets Day – 02 July 2014
Slide 8: Strong position in Western Canada and the Pacific NW
Strong position in Western Canada and the Pacific NW Region Canada - Footprint • Region Canada operates in the four Western Canada provinces and the state of Washington • Region Canada has consistently proven to be a financial stronghold of our North America operations • Strong outlook supported by
Slide 9: Region Canada forecast projects continued growth
Region Canada forecast projects continued growth Canada - Market and Outlook GDP / Unemployment Housing Starts Single Family Starts (millions) 3.7% Real GDP 5 Multi Family Starts (millions) Growth 0 CAGR 2% -5 227 228 211 214 215 190 194 190 189 194 202 208 10 149 7.3% Unemployment ’000 5 Rate 0 200
Slide 10: Western and Eastern Canada with different characteristics
Western and Eastern Canada with different characteristics Comparison - Western Canada vs. Eastern Canada Western Canada Eastern Canada Metric Metric GDP ‘13 C$ 590Bn GDP ‘13 C$ 981Bn (CAGR ’13-’18) (3.9%) (CAGR ’13-’18) (3.0%) Population 11.1M Population 24.1M (CAGR ’12/’13) (2.0%) (CAGR ’12/’13) (1
Slide 11: Strong, vertically integrated market positions
Strong, vertically integrated market positions Deep-dive (micro-market): Vancouver, British Columbia Footprint • Fully integrated position with top 3 market position in all three core business lines • Operates one of the largest sand and gravel mines in North America • Significant reserve bases for
Slide 12: Selected investments to improve cost position
Selected investments to improve cost position Deep-dive (Capex): Villeneuve Plant Consolidation Description • Combination of three plants (main crusher, asphalt crusher and portable wash plant) in one process Rationale • One plant was no longer needed (portable wash plant) • Power savings as consoli
Slide 13: Contents
Contents Page 1. North America Overview 4 2. Focus: Canada Region 8 3. Global Aggregates Review 14 4. Focus: Aggregates - North America 21 5. Summary 26 Slide 13 - Capital Markets Day – 02 July 2014
Slide 14: HeidelbergCement global #1 AGG company …
HeidelbergCement global #1 AGG company … Global AGG Market Position Annual shipments1 (2013, m tons) 242 193 168 162 155 132 116 Heidelberg Lafarge CRH Cemex Holcim Vulcan Martin Cement Marietta … remains highly competitive even after potential completion of LafargeHolcim. 1. For Cemex and CRH produ
Slide 15: Global AGG footprint with strength in North America
Global AGG footprint with strength in North America Global AGG Footprint Western and Northern Europe 2012 2013 Aggregates sales (m tons) 72.2 70.0 Eastern Europe- 2012 2013 Total aggregates reserves: 3.4 bn tons Central Asia Aggregates sales (m tons) 19.2 19.6 Total aggregates reserves: 0.9 bn tons
Slide 16: Delivered on promise to convert size into leading profitability
Delivered on promise to convert size into leading profitability Global AGG benchmark Operational excellence … M€ CLIMB (2011-2013) 135 … industry leading profitability 120 EBITDA margin (%) 2009 2011 +2.0% 2013 Target Actual -1.2% + -2.1% … and pricing focus lead to … 21.3% 23.3% 19.7% 18.5% 14.5% 1
Slide 17: CCM key driver of our global AGG efforts
CCM key driver of our global AGG efforts Competence Center Materials (CCM) Strategic initiatives Examples • Periodic strategic plant reviews Harmonized processes setting minimum standards • AGG Production Reporting (APR) Increased system support enhanced operational data • Global knowledge shari
Slide 18: East Guyong extends our reserves in a key market
East Guyong extends our reserves in a key market Deep-dive (Capex): East Guyong, Australia Description • Greenfield hard rock quarry with processing plant Rationale • Strong market position in local market (incl. Lithgow, Bathurst, Blue Mountains) • Smooth transition from nearly depleted Bathurst qu
Slide 19: Cimescaut acquisition allowed for improved footprint
Cimescaut acquisition allowed for improved footprint Deep-dive (Capex): Cimescaut, Belgium Description • Acquired Cimescaut’s Aggregates operations in early 2014 Rationale • Realize synergies with existing Aggregates operations in region • Improved transportation access to key markets in Benelux and
Slide 20: Contents
Contents Page 1. North America Overview 4 2. Focus: Canada Region 8 3. Global Aggregates Review 14 4. Focus: Aggregates - North America 21 5. Summary 26 Slide 20 - Capital Markets Day – 02 July 2014
Slide 21: US Infrastructure Funding Program progressing
US Infrastructure Funding Program progressing US Highway Funding Past Programs Current Status 2014- • Current program, Moving Ahead for ? Progress in the 21st Century (MAP-21), expires September 30, 2014 2013- MAP-21 • Currently discussed proposals differ in 2014 $ 105Bn length (4 vs. 6 years) and f
Slide 22: Steady growth anticipated for AGG market
Steady growth anticipated for AGG market US AGG - Demand Outlook Forecast Comments US Aggregates (bn tons) • Aggregates expected to show faster growth than overall economy CAGR 6% • Boost to be realized from multi-year 2.4 federal transportation program. State 2.2 2.3 2.0 2.1 budgets will continue t
Slide 23: US AGG business still with significant headroom
US AGG business still with significant headroom US AGG Outlook - by State Crushed stone volume (2013 vs. 2006) – for HC’s top 10 US states 1% -10% -31% -31% -30% -29% -32% -32% -41% -45% -58% GA NC IL PA IN CA US NY OH KY TX (Total) Note: Ordered by relative volume in 2013 vs. 2006. Slide 23 - Capit
Slide 24: Industry-leading profitability also in North America
Industry-leading profitability also in North America North America AGG Benchmark Volumes (CAGR) 2009-2011 3.7% 2011-2013 1.8% EBITDA Margin 1.0% 0.8% -0.8% -2.7% 2009 +7.1% 2011 HC Comp 1 Comp 2 2013 -5.0% -2.2% Pricing (CAGR) 27.3% 23.1% 20.2% 20.4% 18.2% 18.1% 2009-2011 2011-2013 4.0% 2.6% 1.8% 1.
Slide 25: Contents
Contents Page 1. North America Overview 4 2. Focus: Canada Region 8 3. Global Aggregates Review 14 4. Focus: Aggregates - North America 21 5. Summary 26 Slide 25 - Capital Markets Day – 02 July 2014
Slide 26: Summary
Summary Strategic Priorities – North America 1 Safe work environment: zero accidents! 2 Enhanced footprint: selected strategic additions 3 Cost leadership: continuous improvement culture 4 Customer excellence: build competitive advantage 5 Capex execution: show implementation strength Slide 26 - Cap