Slide 1: Second Quarter 2017 Results
Second Quarter 2017 Results Beat Hess, Chairman and Interim CEO Roland Köhler, Interim COO and Regional Head of Europe, Australia/NZ & Trading Ron Wirahadiraksa, CFO July 26, 2017 © LafargeHolcim Ltd 2015
Slide 2: Overview of Q2 2017 Results
01 Overview of Q2 2017 Results Beat Hess, Chairman and Interim CEO Roland Köhler, Interim COO and regional head of Europe, Australia/NZ & Trading © 2017 LafargeHolcim 2
Slide 3: Introduction
Introduction Continued earnings growth achieved in Q2 2017 Strategy delivering on the basis of strengths of our balanced portfolio; Execution on track Guidance confirmed for 2017 Group CEO Jan Jenisch to start September 1st, 2017 © 2017 LafargeHolcim 3
Slide 4: Continued good performance in Q2
Continued good performance in Q2 Further growth in earnings LFL net sales +3.6% supported by sustained pricing momentum and slight growth in cement volumes Operating EBITDA adj. up 10.1% LFL driven by double-digit growth in Latin America, North America and Middle East Africa; +150 bps margin i
Slide 5: On track to achieve our full year guidance
On track to achieve our full year guidance Q2 performance in key countries affirms our confidence in 2017 guidance US, Nigeria and Mexico delivering strong results India recovering post demonetization Slight earnings decline in Europe, positive underlying trends Challenges in selected mark
Slide 6: Guidance confirmed for 2017
Guidance confirmed for 2017 Cement demand in markets where we operate is expected to increase by 1 to 3% In 2017, we expect to deliver strong growth in Operating EBITDA adjusted and recurring EPS Double-digit LFL growth in Operating EBITDA adjusted over 2016 Significant growth in recurring E
Slide 7: Regional results and Performance analysis
02 Regional results and Performance analysis Ron Wirahadiraksa, Chief Financial Officer 7
Slide 8: Key financial figures
Key financial figures CHF m Q2 2017 Q2 2016 Like-for-like 6M 2017 6M 2016 Like-for-like Volumes Cement (Mt) 53.9 62.8 -14.1% 0.7% 102.0 119.3 -14.5% 0.4% Aggregates (Mt) 76.3 78.6 -2.9% -2.1% 128.0 130.2 -1.7% 0.2% Ready-mix (Mm³) 13.0 14.9 -13.2% -6.9% 24.4 27.5 -11.5% -4.6% Net Sales 6'850 7'280 -
Slide 9: Operating EBITDA adjusted Q2 2017
Operating EBITDA adjusted Q2 2017 +10.1% CHF m LFL -40 -154 121 -119 265 -69 1'776 1'732 1'735 1'613 Op. EBITDA adj. Scope LFL Op. EBITDA adj. Volume Price Costs & others Synergies LFL Op. EBITDA adj. FX Op. EBITDA adj. Q2 2016 Q2 2016 Q2 2017 Q2 2017 © 2016 LafargeHolcim 9
Slide 10: Net Sales and Operating EBITDA adjusted by Region – Q2 2017
Net Sales and Operating EBITDA adjusted by Region – Q2 2017 North North Net Sales America Operating EBITDA adj. America 22% 25% Middle East Asia Africa 12% 20% Pacific 27% Asia Middle East Pacific Africa 17% Latin 11% America 14% 24% 28% Latin Europe Europe America CHF m Q2 2017 Q2 2016 Like-for-lik
Slide 11: North America
North America Q2 2017 CHF m Sales volumes Q2 2016 Q2 2017 Q2 2016 Like-for-like 30.4 32.3 LFL Net Sales 1'497 1'538 -2.7% -3.2% Operating EBITDA adj. 465 394 18.0% 16.5% -3% -6% 1) -4% Operating EBITDA adj. margin 31.0% 25.6% 540bp 520bp Cash flow from Op activities 51 52 -1.2% -7.1% 5.2 2.3 2.4 5.3
Slide 12: Europe
Europe Sales volumes Q2 2017 CHF m Q2 2017 Q2 2016 Like-for-like Q2 2016 33.4 33.7 LFL Net Sales 1'925 1'968 -2.2% 0.8% +0% -1% -3% Operating EBITDA adj. 435 459 -5.2% -2.1% Operating EBITDA adj. margin 22.6% 23.3% -70bp -70bp 11.9 11.9 Cash flow from Op activities 284 337 -15.4% -13.0% 4.9 5.0 Cape
Slide 13: Asia Pacific
Asia Pacific Q2 2017 CHF m Sales volumes Q2 2017 Q2 2016 Like-for-like Q2 2016 LFL 30.6 Net Sales 1'906 2'194 -13.1% 4.1% 23.2 Operating EBITDA adj. 1) 367 448 -18.1% -5.0% +11% -5% Operating EBITDA adj. margin 19.3% 20.4% -120bp -180bp +2% Cash flow from Op activities 197 368 -46.6% -35.3% 8.5 8.6
Slide 14: Latin America
Latin America Q2 2017 CHF m Sales volumes Q2 2016 Q2 2017 Q2 2016 Like-for-like LFL 6.0 5.8 Net Sales 766 684 12.0% 12.3% +4% -17% -11% Operating EBITDA adj. 262 211 24.5% 25.6% Operating EBITDA adj. margin 34.2% 30.8% 340bp 370bp 1.5 1.7 Cash flow from Op activities 79 8 939.0% 903.2% 1.2 1.6 Capex
Slide 15: Middle East Africa
Middle East Africa Q2 2017 CHF m Sales volumes Q2 2016 Q2 2017 Q2 2016 Like-for-like 10.9 LFL Net Sales 869 1'081 -19.6% 5.2% 9.1 1) 317 345 -8.2% 20.3% -5% -6% -24% Operating EBITDA adj. Operating EBITDA adj. margin 36.4% 31.9% 450bp 440bp Cash flow from Op activities -15 153 -110.0% -143.0% 2.8 2.
Slide 16: Synergy delivery ahead of schedule
Synergy delivery ahead of schedule Total synergies realized until Q2 2017 x Q2 2017 CHF m Target run rate 2017 realized synergies Operational 330 30 optimization 200 204 Procurement 16 340 244 SG&A 26 260 Growth & 205 Innovation 200 49 982 Total 121 1’000 Implementation 797 cost 1’100 22 © 2017 Lafa
Slide 17: Operating EBITDA to Net Income
Operating EBITDA to Net Income CHF m Q2 2017 Q2 2016 6M 2017 6M 2016 Operating EBITDA adj. 1'735 1'732 0.1% 2'536 2'573 -1.5% 1) 2) Merger, restructuring and other one-offs 58 -126 145.6% -38 -176 78.2% Operating EBITDA 1'793 1'606 11.6% 2'497 2'397 4.2% Depreciation & Amortization -581 -591 1.7% -1
Slide 18: Operating Free Cash Flow variance Q2 2017 vs. Q2 2016
Operating Free Cash Flow variance Q2 2017 vs. Q2 2016 CHF m -37 186 -295 241 174 79 Q2 2016 Op. EBITDA Change in Operating Net Working Capex Net Others Q2 2017 Capital © 2017 LafargeHolcim 18
Slide 19: Net Financial Debt June 2016 to June 2017
Net Financial Debt June 2016 to June 2017 CHF m -3’052 1) -2'896 1'359 2) 601 -156 -2'853 71 -58 1'420 18'141 15'745 Jun. 2016 CF from operating PPA adjustment Capex Net Disposals Dividends Share buy-back FX Others Jun. 2017 activities 1) Includes CHF 22m cash premium paid on bonds buy-back 2) Inclu
Slide 20: Financial ratios
Financial ratios Outlook FY 6M 2017 (LTM) 6M 2016 (LTM) 2017 Net financial debt / 2.7 3.2 Improving Op. EBITDA adj. Cash Flow from operating activities / 18.4% 13.4% Improving Net financial debt © 2017 LafargeHolcim 20
Slide 21: Guidance confirmed for 2017
Guidance confirmed for 2017 Cement demand in markets where we operate is expected to increase by 1 to 3% In 2017, we expect to deliver strong growth in Operating EBITDA adj. and recurring EPS Double-digit LFL growth in Operating EBITDA adj. over 2016 Recurring EPS growing by more than 20%
Slide 22: LafargeHolcim
Li LafargeHolcim
Slide 23: Appendix
Appendix Li LafargeHolcim
Slide 24: Operating EBITDA adjusted H1 2017
Operating EBITDA adjusted H1 2017 +11.5% CHF m LFL -372 -115 550 215 -194 -121 2'573 2'651 2'536 2'379 Op. EBITDA adj. Scope LFL Op. EBITDA adj. Volume Price Costs & others Synergies LFL Op. EBITDA adj. FX Op. EBITDA adj. H1 2016 H1 2016 H1 2017 H1 2017 © 2016 LafargeHolcim 24
Slide 25: Net Sales and Operating EBITDA adjusted by Region – H1 2017
Net Sales and Operating EBITDA adjusted by Region – H1 2017 North North Net Sales America Operating EBITDA adj. America 19% 17% Middle East Africa Middle East 14% 22% Asia Africa 23% Asia 29% Pacific Pacific Latin 11% America 18% 20% 27% Latin America Europe Europe CHF m 6M 2017 6M 2016 Like-for-lik
Slide 26: Cement and Aggregates sales volumes by region
Cement and Aggregates sales volumes by region Cement sales volumes Mt Q2 2017 Q2 2016 Scope Like-for-like 6M 2017 6M 2016 Scope Like-for-like Asia Pacific 23.2 30.6 -24.1% -7.9 2.2% 46.2 60.7 -23.8% -15.0 1.1% Europe 11.9 11.9 -0.1% 0.0 -0.2% 20.1 19.6 2.5% 0.0 2.4% Latin America 6.0 5.8 3.7% 0.0 3.
Slide 27: Net Sales and Operating EBITDA adjusted by region
Net Sales and Operating EBITDA adjusted by region Net Sales CHF m Q2 2017 Q2 2016 Scope FX Like-for-like 6M 2017 6M 2016 Scope FX Like-for-like Asia Pacific 1'906 2'194 -13.1% -395 34 4.1% 3'696 4'341 -14.9% -766 53 1.9% Europe 1'925 1'968 -2.2% -11 -48 0.8% 3'405 3'465 -1.7% -18 -121 2.3% Latin Ame
Slide 28: Net Sales and Operating EBITDA adjusted by segment
Net Sales and Operating EBITDA adjusted by segment Cement Aggregates CHF m 2017 2016 2017 2016 Net Sales Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Asia Pacific 1'394 1'462 1'742 1'739 125 149 114 135 Europe 645 918 619 910 385 477 396 502 Latin America 601 672 582 580 9 10 12 11 Middle East Africa 778 769 937 951 26
Slide 29: Operating Free Cash Flow
Operating Free Cash Flow CHF m Q2 2017 Q2 2016 6M 2017 6M 2016 Operating EBITDA 1'793 1'606 11.6% 2'497 2'397 4.2% Total other non cash items -77 89 -186.5% -23 174 -113.2% Change in net working capital -763 -549 -39.0% -1'651 -1'244 -32.7% Share of profit of JVs -37 -28 -32.1% -66 -44 -50.0% Divide
Slide 30: Net Financial Debt
Net Financial Debt Net Financial Debt (per June 30, 2017) Liquidity summary 15’745 252 › Cash + marketable securities: CHF 3’604m › Cash + marketable securities + unused committed 15’493 credit lines: CHF 9’312m Debt summary › Current financial liabilities1: CHF 3’620m Incl. Fair Value adj. Excl. Fa
Slide 31: Maturity profile and cost of debt
Maturity profile and cost of debt Jun. 30, 2017 Dec. 31, 2016 CHF m 4’781 CHF m Average Average maturity maturity 3’542 3’279 6.0 y 5.9 y 2’570 2’634 2’286 1’976 1’834 2’265 2’014 2’052 1’726 1’979 1’432 Average 1’590 Average 597 cost of 901 534 cost of 151 416 442 debt 150 debt H2 2018 2019 2020 20
Slide 32: Condensed Statement of Financial Position
Condensed Statement of Financial Position CHF m Jun 30, 2017 Dec 31, 2016 Jun 30, 2017 Dec 31, 2016 Invested Capital 46’807 46’641 Equity 33’185 34’747 Out of which: Out of which: Goodwill 15’884 16’247 Equity attributable to the LH 29’341 30’822 Prop, Plant & Equipment 30’843 32’052 shareholders In
Slide 33: Operating Free Cash Flow variance 6M 2017 vs. 6M 2016
Operating Free Cash Flow variance 6M 2017 vs. 6M 2016 CHF m -539 -661 100 -60 -438 276 6M 2016 Op. EBITDA Change in Operating Net Working Capex Net Others 6M 2017 Capital © 2017 LafargeHolcim 33
Slide 34: Net Financial Debt December 2016 to June 2017
Net Financial Debt December 2016 to June 2017 CHF m 71 -184 125 82 523 1'272 -868 15'745 138 -56 14'724 Dec. 2016 CF from operating PPA adjustment Capex Net Disposals Dividends Share buy-back FX Others Jun. 2017 activities © 2017 LafargeHolcim 34
Slide 35: Volume and Price development Cement – 6M 2017 vs. 6M 2016
Volume and Price1) development Cement – 6M 2017 vs. 6M 2016 Volume Price & Other Volume Price & Other Volume Price & Other Volume Price & Other Asia Pacific 1.1% 1.5% Latin America 0.0% 6.7% Europe 2.4% 2.3% Middle East Africa -4.5% 16.6% China 4.4% 12.8% Argentina 2) Azerbaijan 11.8% 16.0% Algeria
Slide 36: Volume and Price development Aggregates – 6M 2017 vs. 6M 2016
Volume and Price development Aggregates – 6M 2017 vs. 6M 2016 Volume Price & Other Volume Price & Other Volume Price & Other Volume Price & Other Asia Pacific 10.4% -1.7% Latin America -25.4% 17.9% Europe 2.0% -0.4% Middle East Africa -7.0% 7.8% Australia 14.2% -1.9% Brazil -39.1% -6.4% Belgium 7.9%
Slide 37: Other elements of guidance for 2017
Other elements of guidance for 2017 Exceeding CHF 1bn synergies target by end 2017 › Incremental synergies of CHF 400 million of operating EBITDA Capex below CHF 1.8bn Increase in energy prices by c.10% 3.2% to 3.4% cost inflation excl. energy Average nominal interest rate on gross debt at
Slide 38: 2017 Outlook – Cement Market Overview by Region
2017 Outlook – Cement Market Overview by Region Volumes Highlights Asia Pacific1) 1% to 3% Market growth supported by India post demonetization Europe 0% to 2% Overall positive sentiment in Europe driving confidence Latin America 1% to 3% Improvement expected in 2017 mainly driven by Argentina and g
Slide 39: 2017 Outlook – Cement Market Overview by Selected Countries
2017 Outlook – Cement Market Overview by Selected Countries Market volumes % Market volumes % Market volumes % Market volumes % Asia Pacific 1) 1 to 3% Latin America 1 to 3% Europe 0 to 2% Middle East Africa -1 to 1% China 2) 0 to 2% Argentina 6 to 8% France 1 to 3% Algeria 3 to 5% India 4 to 6% Bra
Slide 40: Contact information and event calendar
Contact information and event calendar Contact information Event calendar Corporate Communications October 27, 2017 Q3 2017 Results Phone +41 58 858 87 10 Fax +41 58 858 87 19 communications@lafargeholcim.com Investor Relations Phone +41 58 858 87 87 investor.relations@lafargeholcim.com www.lafargeh
Slide 41: 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 42: LafargeHolcim
Li LafargeHolcim