Holcim Ltd · SIX:HOLN
Holcim — FY2005 Earnings Presentation
49 slides from Holcim's earnings presentation, Mar 1, 2006
Slide 1: 2005 annual results and outlook for 2006
2005 annual results and outlook for 2006
Slide 2: Dynamic development of the Group
Dynamic development of the Group Dynamic growth marks Group results Internal operating EBITDA growth of 10.5 percent Acquisitions totaling CHF 5.2 billion Foundations laid for creation of value in the future Solid Group net income permits dividend increase 1 2005 annual results
Slide 3: Pleasing development of existing portfolio
Pleasing development of existing portfolio Group profited fully from its strengths in a favorable economic environment Predominantly friendly price environment and good capacity utilization Impressive performance in all Group regions Stringent cost management and price increases absorb highe
Slide 4: Group strengthened by significant acquisitions
Group strengthened by significant acquisitions Holcim makes the largest acquisitions in the company’s history Thanks to a strong balance sheet, the acquisitions could be financed almost exclusively from borrowed capital With India and El Salvador the focus of investment in cement is in growth
Slide 5: Europe
Europe Construction industry largely solid Housebuilding and infrastructure projects trigger strong demand Strong increase in consumption widespread, especially in Switzerland 4 2005 annual results
Slide 6: Operations in Europe
Operations in Europe Cement plant Grinding plant/ terminal Aggregates Participation: Cement plant 5 2005 annual results
Slide 7: Facts on Europe
Facts on Europe Marked increase in deliveries of aggregates and ready-mix concrete; cement sales gratifying Thanks to its excellent market positions, Aggregate Industries UK lifts sales of aggregates, concrete and asphalt All Group companies see improvement in operating result, in particular i
Slide 8: North America
North America Robust market development in North America US cement capacity fully utilized and cement imports at record level Construction activity solid in Canada, but second half weaker 7 2005 annual results
Slide 9: Operations in North America
Operations in North America 1 Cement plant (1under construction) Grinding plant/terminal Aggregates 8 2005 annual results
Slide 10: Facts on North America
Facts on North America Major expansion in aggregates, ready-mix concrete and asphalt operations thanks to Aggregate Industries US Further increase in cement sales and very good capacity utilization Earnings at St. Lawrence Cement nearly offset weaker demand on US East Coast Holcim US is prof
Slide 11: Latin America
Latin America Economy firms in year under review Construction activity remained at a generally high level Housebuilding, infrastructure projects and tourism stimulate demand for building materials 10 2005 annual results
Slide 12: Operations in Latin America
Operations in Latin America Cement plant Grinding plant/terminal Aggregates Participation: Cement plant Grinding plant/terminal 11 2005 annual results
Slide 13: Facts on Latin America
Facts on Latin America Higher sales volumes of cement and ready-mix concrete Strong improvements in sales and results at almost all Group companies Mexico, Ecuador, Argentina and first-time consolidated Cemento de El Salvador all make sizable contributions Pressure on prices impairs financia
Slide 14: Africa Middle East
Africa Middle East Generally positive economic climate Private and public investments boost demand for construction materials Very robust development in South Africa and Morocco 13 2005 annual results
Slide 15: Operations in Africa Middle East
Operations in Africa Middle East 1 1 Cement plant Grinding plant/terminal Aggregates Participation: Grinding plant/terminal 1 Under construction 14 2005 annual results
Slide 16: Facts on Africa Middle East
Facts on Africa Middle East All Group companies profiting from friendly market Sales increases across all segments; strong rise in deliveries of ready-mix concrete in South Africa Improved market prices and higher capacity utilization underpinned local results Holcim Lebanon profits from add
Slide 17: Asia Pacific
Asia Pacific Growing construction activity Main stimuli coming from housebuilding and infrastructure projects Strong increase in cement consumption 16 2005 annual results
Slide 18: Operations in Asia Pacific
Operations in Asia Pacific Cement plant Grinding plant/terminal Aggregates Participation: Cement plant Grinding plant/terminal 17 2005 annual results
Slide 19: Facts on Asia Pacific
Facts on Asia Pacific All big Group companies post increase in cement sales Significantly higher volumes of ready-mix concrete delivered Substantial contributions to results from the Philippines, Thailand, Vietnam and Indonesia A sound market plus efficiency increases produce attractive resu
Slide 20: Key financial figures
Key financial figures +/- Million CHF 2003 1 2004 1 2005 LFL CIS FX in CHF Net sales 12,600 13,215 18,468 10.1% 28.2% 1.5% 39.8% Operating EBITDA 3,311 3,588 4,627 10.5% 16.9% 1.6% 29.0% Operating profit 1,925 2,251 3,316 29.4% 16.1% 1.8% 47.3% Net income 928 1,120 1,818 2.3% 62.3% Cash flow from op
Slide 21: Major changes in the scope of consolidation
Major changes in the scope of consolidation Cement Effective as at capacity + Cemento de El Salvador December 31, 2004 1.7 million t + Aggregate Industries March 21, 2005 – + Ambuja Cement Eastern April 11, 2005 2.0 million t +/– Various smaller companies 20 2005 annual results
Slide 22: Exchange rates
Exchange rates Statement of income 2003 2004 2005 +/- average exchange rates in CHF 1 EUR 1.52 1.54 1.55 0.6% 1 USD 1.34 1.24 1.25 0.8% 1 African Basket (EGP, ZAR, MAD) * 0.98 1.00 1.02 2.0% 1 Asian Basket (AUD, NZD, THB, PHP) * 1.02 1.00 1.03 3.0% Balance sheet 31/12/03 31/12/04 31/12/05 +/- exchan
Slide 23: Exchange rates – Translation gains / losses
Exchange rates – Translation gains / losses Million CHF 2003 2004 2005 Net sales -727 -392 189 Operating EBITDA -257 -127 55 Operating profit -162 -82 42 Net income - equity holders of Holcim Ltd -51 -31 25 Cash flow from operating activities -184 -83 38 Total shareholders' equity -564 -543 1,364 Ne
Slide 24: Currency sensitivity
Currency sensitivity USD sensitivity USD/CHF USD/CHF Million CHF at 1.25 at 1.24 +/- Net sales 18'468 18'438 -30 Operating EBITDA 4'627 4'618 -9 Net income 1'818 1'815 -3 Cash flow from operating activities 3'405 3'400 -5 Euro sensitivity Euro/CHF Euro/CHF Million CHF at 1.55 at 1.54 +/- Net sales 1
Slide 25: Sales volumes cement by region
Sales volumes cement by region Million t 30.8 31.8 Total Group 26.5 2003 94.3 2004 102.1 17.2 17.5 18.2 2005 110.6 28.9 25.8 23.3 14.0 14.8 12.8 ∆ 2004/2005 LFL Change in Total 23.7 20.6 structure 19.3 Europe 3.0% 0.2% 3.2% North America 4.0% 0.0% 4.0% Latin America 9.0% 6.0% 15.0% Africa Middle Eas
Slide 26: Sales volumes aggregates and ready-mix concrete
Sales volumes aggregates and ready-mix concrete Aggregates in million t Ready-mix concrete in million m3 169.3 + 62.5% 104.2 95.9 + 8.7% + 4.1% 38.2 27.0 29.3 + 6.7% + 8.5% + 30.4% 2003 2004 2005 25 2005 annual results
Slide 27: Net sales
Net sales Million CHF 18'468 13'215 12'600 Like-for-Like (LFL) 270 2.1% 908 7.2% 1,329 10.1% Change in structure 47 0.3% 99 0.8% 3,735 28.2% Forex movements -727 -5.6% -392 -3.1% 189 1.5% Total change -410 -3.2% 615 4.9% 5,253 39.8% 2003 2004 2005 26 2005 annual results
Slide 28: Net sales by region
Net sales by region Million CHF 7037 2003 2004 4704 4744 2005 4441 2507 2630 2288 1873 1760 1945 1280 1540 ∆ 2004/2005 LFL Change in Currency Total 3158 structure 2842 2785 Europe 9.2% 38.7% 0.4% 48.3% North America 11.7% 62.8% 4.4% 78.9% Latin America 7.2% 5.7% 0.5% 13.4% Africa Middle East 20.5% 1
Slide 29: Net sales by region
Net sales by region Net sales 2005 Europe North America 36.9% 24.7% Asia Pacific 12.0% Latin America Africa Middle East 16.6% 9.8% 28 2005 annual results
Slide 30: Operating EBITDA
Operating EBITDA Million CHF Margin 26.3% 27.2% 27.3%* 25.1% 4'627 3'588 3'311 Like-for-Like (LFL) 177 5.3% 376 11.4% 377 10.5% Change in structure 50 1.5% 28 0.8% 607 16.9% Forex movements -257 -7.7% -127 -3.8% 55 1.6% Total change -30 -0.9% 277 8.4% 1,039 29.0% 2003 2004 2005 * operating EBITDA ma
Slide 31: Energy cost development
Energy cost development % of net sales Yearly Ø 12% Brent Oil Price (USD) Total energy cost 10.4% 50 10% 9.2% 40 8% Electricity expenses 30 5.7% 6% 20 4.6% 4% 4.6% 4.7% 10 Fuel expenses 2% 0 2001 2002 2003 2004 2005 30 2005 annual results
Slide 32: Operating EBITDA margin target
Operating EBITDA margin target 1 USD = 1.6893 Holcim Indonesia Group Cemento de Aggregate Industries 1 USD = 1.2491 1 EGP = 0.4181 Holcim Serbia Russia El Salvador Group India 1 EGP = 0.2154 32% Total energy cost in % of net sales = 10.4% Operating EBITDA margin target 30% 29.4% FX and CIS adjusted
Slide 33: Operating EBITDA by region
Operating EBITDA by region Million CHF 2003 * 1605 2004 * 928 1202 2005 1052 485 551 614 570 483 449 465 384 1124 1095 1126 ∆ 2004/2005 LFL Change in Currency Total structure Europe 10.6% 22.5% 0.4% 33.5% North America 21.4% 43.6% 3.4% 68.4% Latin America -4.0% 6.3% 0.5% 2.8% Africa Middle East 22.2
Slide 34: Operating profit
Operating profit Margin Million CHF 18.2%* 17.0% 18.0% 15.3% 3'316 2'251 1'925 Like-for-Like (LFL) 151 7.9% 388 20.2% 401 17.8% Goodwill amortization 260 11.6% Change in structure 33 1.7% 20 1.0% 362 16.1% Forex movements -162 -8.5% -82 -4.3% 42 1.8% Total change 22 1.2% 326 16.9% 1,065 47.3% 2003 2
Slide 35: Operating profit by region
Operating profit by region Million CHF 2003 * 1125 2004 * 639 2005 726 305 358 530 524 393 362 866 297 791 781 210 233 ∆ 2004/2005 LFL Goodwill Change in Currency Total amort. structure Europe 15.8% 17.1% 21.5% 0.6% 55.0% North America 34.8% 2.2% 37.9% 3.6% 78.5% Latin America -5.6% 8.7% 7.3% 0.5% 1
Slide 36: Group net income
Group net income Million CHF Net income 1,818 + 62.3% Net income - equity holders of Holcim Ltd 1,540 + 74.8% 1,120 928 + 20.7% 881 + 12.3% 682 + 29.2% 27.5 % 2003 * 2004 * 2005 * restated in line with new and revised IFRS, effective January 1, 2005 35 2005 annual results
Slide 37: Cash flow from operating activities
Cash flow from operating activities Margin Million CHF 20.8% 19.8% 19.7%* 18.4% 3'405 2'619 2'622 Like-for-Like (LFL) 399 16.7% 62 2.4% 244 9.3% Change in structure 16 0.7% 24 0.9% 501 19.2% Forex movements -184 -7.7% -83 -3.2% 38 1.4% Total change 231 9.7% 3 0.1% 783 29.9% 2003 2004 2005 * margin o
Slide 38: Cash flow statement
Cash flow statement Million CHF 2003 2004 2005 +/- Cash flow from operating activities 2'619 2'622 3'405 29.9% Net investments to maintain productive capacity and to secure competitiveness -802 -755 -879 16.4% Free cash flow 1'817 1'867 2'526 35.3% Expansion investments -490 -368 -607 64.9% Financia
Slide 39: Financing
Financing Million CHF 2003 2004 2005 +/- Financing requirement 517 -172 -3'492 1930.2% Share capital paid-in 26 1'456 – Capital paid-in by minority interests – 2 21 Movements of treasury shares net 4 -40 435 In(De)crease in financial liabilities -676 74 2'424 Decrease in marketable securities 30 20
Slide 40: Financial position
Financial position Million CHF 111.7% 111.9% 98.5% 89.1% 14,365 13,669 13,466 14,250 13,027 12,835 12,693 11,659 10,661 64.2% 6,846 31/12/2004 * 31/03/2005 30/06/2005 30/09/2005 31/12/2005 Total shareholders' equity Net financial debt Gearing * restated in line with new and revised IFRS, effective J
Slide 41: Financial indicators
Financial indicators 2003 * 2004 * 2005 Target Operating EBITDA margin (%) 26.3 27.2 27.3 1 30 ROE (%) 10.2 11.5 15.4 13-15 RONOA (%) 12.2 14.1 15.7 15-18 Gearing (%) 88.0 64.2 89.1 80-100 Funds from operations/ 28.5 37.5 24.9 > 25 Net financial debt (%) EBITDA net interest coverage 6.8 6.8 6.0 >5 E
Slide 42: Holcim Value Added (HVA)
Holcim Value Added (HVA) HVA CHF million (pre-tax) ROE 800 20% 600 15% 400 10% 200 5% 0 0% -200 -5% -400 -10% -600 -15% -800 -20% 1992 1993 1994 1995 1996* 1997 1998 1999 2000 2001 2002 2003 2004 2005 Strong ROE and HVA trend reversed after 2002 * before extraordinary restructuring charges 41 2005 a
Slide 43: Price/volume variances per region
Price/volume variances per region Domestic cement prices Domestic cement volumes +/- 2004/2005 * +/- 2004/2005 Europe Belgium -1.1% -2.3% France 3.3% 3.9% Germany 24.3% -13.0% Switzerland 1.5% 7.8% Italy -6.1% 2.4% Hungary -2.8% 7.7% Czech Republic 0.7% 8.2% Slovakia -6.7% 7.2% Croatia 5.2% -13.0% R
Slide 44: Price/volume variances per region
Price/volume variances per region Domestic cement prices Domestic cement volumes +/- 2004/2005 * +/- 2004/2005 North America Canada 4.2% -3.9% USA 14.4% 5.2% Latin America Mexico 1.5% 1 4.9% Costa Rica 7.2% 1 4.2% Nicaragua 5.1% 1 -3.2% Panama 3.8% 1 2.4% Venezuela -3.4% 1 12.9% Colombia -46.7% 1 34
Slide 45: Price/volume variances per region
Price/volume variances per region Domestic cement prices Domestic cement volumes +/- 2004/2005 * +/- 2004/2005 Africa Middle East Morocco 3.0% 8.6% Egypt 4.3% 26.3% Lebanon 1 2 Indian Ocean 16.3% -10.1% South Africa 6.9% 10.9% * if not otherwise indicated calculation based on local currencies 1 loca
Slide 46: Price/volume variances per region
Price/volume variances per region Domestic cement prices Domestic cement volumes +/- 2004/2005 * +/- 2004/2005 Asia Pacific Azerbaijan 17.9% -3.4% Sri Lanka 26.1% 7.9% Bangladesh 16.2% 17.1% Thailand -6.3% 9.9% Vietnam 2.5% 1 12.5% Malaysia -2.4% -12.3% Indonesia 8.9% 1 7.0% Philippines 13.6% -11.4%
Slide 47: Outlook for 2006
Outlook for 2006 Economic environment unlike to see any fundamental change in 2006 Holcim expects existing and newly consolidated companies to show a robust development Rising energy costs can be offset by price adjustments and efficient energy management. Internal operating EBITDA growth wi
Slide 48: Strength. Performance. Passion.
Strength. Performance. Passion.
Slide 49: Contact information and event calendar
Contact information and event calendar Contact information Event calendar Corporate Communications March 1, 2006 Annual results 2005 Phone +41 58 858 87 10 Conferences for press and analysts Fax +41 58 858 87 19 May 11, 2006 First quarter results 2006 communications@holcim.com May 12, 2006 Annual Ge