Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — HeidelbergCement — Commerzbank German Investment Seminar 2015
37 slides from Heidelberg Materials's conference presentation, Jan 12, 2015
Slide 1: HeidelbergCement – Commerzbank German Investment Seminar 2015
HeidelbergCement Commerzbank German Investment Seminar 2015 12 January 2015 Dr. Bernd Scheifele, Group CEO Slide 1 - Commerzbank German Investment Seminar 2015
Slide 2: Our successful business strategy
Our successful business strategy Strong asset base and excellent product portfolio – World market leader in aggregates: 19 billion tonnes of reserves in attractive markets – Very well balanced 128 million tonnes of cement capacity around the globe – Strong positions in fast growing metropolitan ma
Slide 3: Significant progress in disposal program
Significant progress in disposal program Building Products division disposed for 1.4 billion USD – In line with initially announced expectations – Strong USD currency further increases the value in EUR terms – Transaction to be finalised in the first quarter of 2015 Huge step towards Investment
Slide 4: Decreasing oil price: huge yet difficult to anticipate impact on world economy
Decreasing oil price: a further decrease of the oil price will have a huge – yet difficult to anticipate – impact on the world economy Potential impact of a further decrease of the oil price (Net) oil consumers (e. g. USA, Euro area, India, Turkey, Japan) A decrease of the oil • More private consump
Slide 5: Decreasing oil price: chances and risk for HC
Decreasing oil price: a low or even further decreasing oil price brings chances and risk for HC + HC can benefit in many respects from Lower energy costs a decreasing oil price… - … yet it brings also considerable risks Less projects in the oil industry • HC spends on energy ca. 1.5 bn € per year, •
Slide 6: Impact of oil price drop in HeidelbergCement countries
Impact of oil price drop in HeidelbergCement countries Estimated annual savings on net oil imports by an Estimated decrease of net oil exports by an oil price oil price reduction of USD 60 per barrel (USD bn) (*) reduction of USD 60 per barrel (USD bn) (*) USA 143 -187 Saudi Arabia China 122 -156 Ru
Slide 7: EUR weakness; impact on HeidelbergCement
EUR weakness; impact on HeidelbergCement HeidelbergCement generates 87% of revenues and 89% of EBITDA outside EUR zone 10 % depreciation of EUR would IDR 9% lead to (*): 17% USD 20% 19% 9% increase in EBITDA CAD 6% EAEU 9% 9% AUD 9% 11% 3% decrease in Net Debt SCA 7% 8% GDP 12% 6% 10% OTH 15%
Slide 8: Development of organization
Integrated market approach is the key value driver in our industry CEM AGG RMC Level 3 HIGH Mind-set; cross BL behavior; Business value chain approach integration Development of organization Level 2 Processes, Systems, Functions Process integration (Shared Service, LEO...) Level 1 Raw material Plant
Slide 9: Contents
Contents Page 1. Strengths 10 2. Dual strategy of deleveraging and growth 20 3. Q3 results 28 4. Outlook 2014 & management focus 34 Slide 9 - Commerzbank German Investment Seminar 2015
Slide 10: HeidelbergCement at a glance
HeidelbergCement at a glance One of the largest building materials companies worldwide with FY 2013: Revenues €13bn* Operating EBITDA €2.3bn* World number 1 in Aggregates Excellent footprint in Cement 19 billion ton reserves in more than 500 128 million ton cement capacity in 33 quarries cou
Slide 11: Benefitting from excellent footprint in the best micro markets
Benefitting from excellent footprint in the best micro markets Exposure to accelerating, growing mature markets …. Cement plant Aggregates Urban center Edmonton St. Petersburg Chicago Moscow Vancouver London Seattle Toronto Frankfurt San Francisco Los Angeles Dallas New York Istanbul San Diego Atlan
Slide 12: United States and United Kingdom recovery continues
United States and United Kingdom recovery continues U.S. recovery: HC uniquely positioned to U.K. recovery: HC with fully integrated take advantage market position 8% U.S. cement demand growth in 2014 and Very low cement consumption per capita CAGR of 9% 2014-17 forecasted by PCA (<200kg) for se
Slide 13: Usage of existing tax losses carried forward in the US and UK
Usage of existing tax losses carried forward in the US and UK is expected to improve our cash tax ratio in 2014 US / UK US / UK * Indonesia* Strong recovery in the US and ∆ OIBD 100 100 UK continues in 2014 No current tax payment due to - Current tax 0 - 25 high tax losses carried forward ~ 10
Slide 14: Benefitting from excellent footprint in the best micro markets
Benefitting from excellent footprint in the best micro markets Strong market position in fast growing emerging markets Cement plant Aggregates Urban center Edmonton St. Petersburg Chicago Moscow Vancouver London Seattle Toronto Frankfurt San Francisco Los Angeles Dallas New York Istanbul San Diego A
Slide 15: Indonesia – market dynamics
Indonesia – market dynamics Demand potential intact post elections Near term supply growth limited Worldwide 4th largest population (~ 250 M) -> Significant entry barriers for new players significant domestic demand Land ownership, permitting process GDP CAGR ~6% for 2014 - 2018 expected S
Slide 16: Strong presence in Sub-Saharan Africa
Strong presence in Sub-Saharan Africa Strong underlying fundamentals: 4 More than 900m people living in SSA (North Africa ~200m) 3 5 6 1 2 Cement consumption <100 kg per capita (N. Africa ~600kg) 7 Grinding 8 Attractive raw material reserves drive plant economic growth Clinker plant / integr
Slide 17: Past, present, future
Past, present, future What happened since the crisis €m 2,946 960 890 483 166 297 2,424 22 2008 EBITDA Volume Price Variable Cost Fixed Cost BP Contribution Other 2013 EBITDA Margin Where we stand now 23 mt more cement capacity; 15,000 less FTE €4bn lower Net Debt level Significantly improved
Slide 18: Improving operating performance became part of business
Improving operating performance became part of business 2009 2010 2011 2012 2013 2014 FOCUS • Operational improvements FITNESS • Business rightsizing • Capacity reduction • Further cost structure improvement FITNESS PLUS • Production optimization • Process engineering • Cement operational excellence
Slide 19: Contents
Contents Page 1. Strengths 10 2. Dual strategy of deleveraging and growth 20 3. Q3 results 28 4. Outlook 2014 & management focus 34 Slide 19 - Commerzbank German Investment Seminar 2015
Slide 20: Dual strategy of deleveraging and growth: usage of free cash flow
Dual strategy of deleveraging and growth: usage of free cash flow (1) FCF1 growth capex debt payback dividends LTM September 2012 LTM September 2013 LTM September 2014 2) 1,252 1,055 962 215 903 134 704 175 176 433 249 280 €m 8,499 903 7,872 161 249 163 196 7,629 7,563 6 2) 323 175 Net debt Debt Acc
Slide 21: Continued focus on deleveraging
Continued focus on deleveraging 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 3.7 3.8 3.7 3.6 3.7 12,389 12,292 3.5 3.4 3.4 12,155 12,076 3.3 3.3 3.3 -324 3.2 3.2 3.2 3.1 11,566 11,302 2.9 Strategic target: 2.8X 8,971 8,964 9,066 8,647 8,634 8,574 8,499 -
Slide 22: Debt maturity profile
Debt maturity profile as at 30 September 2014 in €m Syndicated Facility (SFA) Debt Instruments 2.000 Bond 1.500 142 600 1 253 0 1.000 10 5 14 1,300 1,124 1,050 500 1,000 980 1,000 894 500 0 2014 2015 2016 2017 2018 2019 2020 2021 -Excluding reconciliation adjustments with a total amount of €m 32.3 (
Slide 23: Active management of asset base supports deleveraging
Active management of asset base supports deleveraging Working capital Rolling average per quarter (€b) working capital (days) 5.0 80 -5 73 72 4.5 71 -6 69 68 68 70 65 -5 4.0 63 62 60 60 -9 58 57 60 3.5 54 52 50 -6 3.0 48 50 46 2.4 2.4 43 2.5 2.3 2.4 2.3 42 41 2.2 2.1 2.2 2.1 2.1 40 2.0 1.8 1.9 1.8 1
Slide 24: Continue to grow in most attractive markets of Sub-Saharan Africa
Continue to grow in most attractive markets of Sub-Saharan Africa Country Type Cap. Date Cost Brown 1 Liberia Field 0.5 mt 2013 22 €/t Brown 2 Ghana Field 1.0 mt 2013 15 €/t 6 Brown 5 3 Ghana 0.8 mt 2014 31 €/t 2 7 Field 1 3 Brown 4 Tanzania 0.7 mt 2014 33 €/t Field Green 5 Togo (clinker) 1.5 mt 201
Slide 25: Expanding in fast growing Asian markets
Expanding in fast growing Asian markets INDONESIA: Further improve our market leading position in Java with projects close to main market Existing capacity New capacity Type Cap. Date Cost Citeureup: 11.5mt Cirebon: 4.1mt Tarjun: 2.6mt Brown 1 Citeureup Field 1.9 mt 2014 48 €/t Sumatera 4 Kalimantan
Slide 26: Dividend: consistently increasing over the last years
Dividend: consistently increasing over the last years Target area: payout ratio of 30% to 35% Dividend / share in € 0.60 0.6 0.5 0.47 0.4 0.35 0.3 0.25 0.2 0.12 0.1 0.0 2009 2010 2011 2012 2013 mid-cycle target HC is gradually approaching its medium-term goal of a payout ratio of 30% to 35% Slide 26
Slide 27: Contents
Contents Page 1. Strengths 10 2. Dual strategy of deleveraging and growth 20 3. Q3 results 28 4. Outlook 2014 & management focus 34 Slide 27 - Commerzbank German Investment Seminar 2015
Slide 28: Market and financial overview Q3 2014
Market and financial overview Q3 2014 Best Q3 operational performance since 2008 financial crisis – Continued volume growth in all business lines – On LfL basis; revenue up +6%; operating EBITDA up +14%; operating income up +19% – 58% operating leverage on Group level driven by margin improvement
Slide 29: Key financials
Key financials €m September Year to Date Q3 2013 1) 2014 Variance L-f-L 2013 1) 2014 Variance L-f-L Volumes Cement (Mt) 59,627 62,872 5% 6% 22,376 23,113 3% 2% Aggregates (Mt) 172,335 180,755 5% 4% 70,349 72,141 3% 3% Ready-Mix Concrete (Mm3) 25,839 27,046 5% 5% 9,451 9,800 4% 4% Asphalt (Mt) 6,100
Slide 30: Like-for-Like EBITDA is up +14%
Like-for-Like EBITDA is up +14% 866 1 +14% 107 789 31 758 Q3 2013 Currency Q3 2013 Operating Scope Q3 2014 Reported EBITDA L-f-L EBITDA Reported EBITDA Significant organic growth driven by strong operational performance Slide 30 - Commerzbank German Investment Seminar 2015
Slide 31: Strong operational performance continues
Strong operational performance continues Superior geographical footprint 10th consecutive quarter with Realistic cost saving programmes Continuous growth in attractive markets positive organic EBITDA growth 45% Organic EBITDA growth vs. prior year same quarter (*) 14% 11% 8% 9% 9% 8% 5% 5% 4%
Slide 32: Strong operating leverage
Strong operating leverage Cement Aggregates Building Products Ready Mix EBITDA Margin EBITDA Margin EBITDA Margin EBITDA Margin +40 bps 28.1% +65 bps 28.9% +570 bps 19.8% +196 bps 4.4% 14.1% 27.6% 28.2% 2.5% Q3 2013 Q3 2014 Q3 2013 Q3 2014 Q3 2013 Q3 2014 Q3 2013 Q3 2014 Group Revenue Group EBITDA +
Slide 33: Contents
Contents Page 1. Strengths 10 2. Dual strategy of deleveraging and growth 20 3. Q3 results 28 4. Outlook 2014 & management focus 34 Slide 33 - Commerzbank German Investment Seminar 2015
Slide 34: Outlook 2014
Outlook 2014 Continued strong recovery in USA and UK Demand growth in Asia and Africa Strong Germany, Poland, and Russia; stabilisation in other European markets, especially in Benelux, Czech Republic, and Hungary Price increases in all markets supported by “PERFORM” and “CLIMB Commercial”
Slide 35: Targets 2014
Targets 2014 2014 Target CapEx* €bn 1.2 Maintenance ** €m 600 Expansion €m 600 Cost of gross debt 6.2 % Operational tax rate 22 % Mid-cycle targets unchanged Operating EBITDA €bn 3 Net debt / operating EBITDA below 2.8x; proforma 2.2x * Before any currency impacts ** Including improvement CapEx Slid
Slide 36: Management focus 2014
Management focus 2014 Deleveraging with clear goal to reach investment grade metrics Solid steps in disposal programme Margin improvement driven by announced programmes Targeted growth in Africa, Indonesia, and Kazakhstan Continued management focus on operational improvements, cost efficienc
Slide 37: Contact information and event calendar
Contact information and event calendar Event calendar Contact information Investor Relations 19 March 2015 2014 annual results Mr. Ozan Kacar Phone: +49 (0) 6221 481 13925 07 May 2015 2015 first quarter results Fax: +49 (0) 6221 481 13217 07 May 2015 2015 AGM Mr. Steffen Schebesta, CFA Phone: +49 (0
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