Slide 1: Third Quarter 2016 Results
Third Quarter 2016 Results Eric Olsen, CEO and Ron Wirahadiraksa, CFO November 4, 2016 © LafargeHolcim Ltd 2015
Slide 2: Overview of Q3 2016 Results
01 Overview of Q3 2016 Results Eric Olsen, Chief Executive Officer © 2016 LafargeHolcim 2
Slide 3: Delivering on our commitments
Delivering on our commitments Strong earnings growth momentum sustained in Q3 driven by pricing strategy and disciplined cost management Adjusted operating EBITDA up 10.5% like-for-like in Q3 Margins continued to improve; adjusted operating EBITDA margin up 290 bps in Q3 Operating EBITDA syn
Slide 4: Solid support to earnings momentum
Solid support to earnings momentum In India, prices continued to improve despite strong Monsoon season In Nigeria, actions to reduce dependence on gas and to increase prices underpins results growth potential for the coming quarters Solid price trends and cost management continue to drive soli
Slide 5: On track to achieve our objectives
On track to achieve our objectives 2016 will be a year of solid progress towards our 2018 targets • At least high single digit like-for-like improvement in adjusted operating EBITDA Net debt reduction and cash flow improvement in line with our commitment to a solid investment grade rating • Net
Slide 6: Q3 2016 results and Performance analysis
02 Q3 2016 results and Performance analysis Ron Wirahadiraksa, Chief Financial Officer © 2016 LafargeHolcim 6
Slide 7: Key financial figures
Key financial figures CHF m Q3 2016 Q3 2015 Like-for-like 9M 2016 9M 2015 Like-for-like Volumes Cement (Mt) 57.9 65.5 -11.6% -4.2% 177.2 189.4 -6.4% -1.5% Aggregates (Mt) 83.4 86.8 -3.9% -2.8% 213.6 216.3 -1.3% 0.2% Ready-mix (Mm³) 14.4 15.3 -5.9% -5.5% 41.9 42.6 -1.5% -1.4% Net Sales 7'036 7'824 -1
Slide 8: Net Sales and adjusted operating EBITDA by Region – Q3 2016
Net Sales and adjusted operating EBITDA1) by Region – Q3 2016 North Net Sales America Operating EBITDA adj. 25% North 32% America Asia Pacific 19% Middle East Africa 12% 26% Asia Pacific Middle East 13% 10% Africa Latin 23% 13% America 26% Europe Latin Europe America CHF m Q3 2016 Q3 2015 Like-for-l
Slide 9: Asia Pacific
Asia Pacific CHF m Q3 2016 Q3 2015 Like-for-like Net Sales 1'894 2'136 -11.3% -5.9% Operating EBITDA adj. 1) 338 350 -3.4% 6.7% Operating EBITDA margin adj. 1) 17.8% 16.4% 147bp 211bp Cash flow from Op activities 152 204 -25.6% -19.9% Capex Net -79 -134 -41.4% 1) Excluding merger, restructuring and
Slide 10: Europe
Europe CHF m Q3 2016 Q3 2015 Like-for-like Net Sales 1'890 1'999 -5.5% -1.6% Operating EBITDA adj. 1) 418 376 11.3% 16.3% Operating EBITDA margin adj. 1) 22.1% 18.8% 333bp 342bp Cash flow from Op activities 431 238 80.8% 85.3% Capex Net -59 -87 -32.1% 1) Excluding merger, restructuring and other one
Slide 11: Latin America
Latin America CHF m Q3 2016 Q3 2015 Like-for-like Net Sales 716 842 -14.9% -7.4% Operating EBITDA adj. 1) 234 240 -2.4% 7.5% Operating EBITDA margin adj. 1) 32.7% 28.5% 417bp 462bp Cash flow from Op activities 120 100 20.7% 37.9% Capex Net -28 -50 -44.1% 1) Excluding merger, restructuring and other
Slide 12: Middle East Africa
Middle East Africa CHF m Q3 2016 Q3 2015 Like-for-like Net Sales 882 1'065 -17.2% 1.4% Operating EBITDA adj. 1) 240 309 -22.6% -5.1% Operating EBITDA margin adj. 1) 27.2% 29.1% -188bp -179bp Cash flow from Op activities 163 190 -14.6% 0.9% Capex Net -77 -149 -48.1% 1) Excluding merger, restructuring
Slide 13: North America
North America CHF m Q3 2016 Q3 2015 Like-for-like Net Sales 1'801 1'892 -4.8% -6.0% Operating EBITDA adj. 1) 574 519 10.6% 9.2% Operating EBITDA margin adj. 1) 31.9% 27.4% 444bp 442bp Cash flow from Op activities 354 353 0.3% -1.5% Capex Net -154 -144 6.6% 1) Excluding merger, restructuring and othe
Slide 14: Adjusted operating EBITDA Q3 2016
Adjusted operating EBITDA1) Q3 2016 CHF m +10.5 % LFL -52 183 -73 52 -161 91 1'737 1'685 1'645 1'572 Op. EBITDA adj. 2015 Scope Op. EBITDA adj. 2015 Volume Price Costs & others Synergies LFL Op. EBITDA adj. 2016 FX Op. EBITDA adj. 2016 Excl. Scope 1) Excluding merger, restructuring and other one-off
Slide 15: Quarter-on-quarter price trend
Quarter-on-quarter price trend Cement price slightly up in the quarter, 0.3% above Q2 2016, and 2.1% above Q3 15 price level › Effective price increases 2.1% in Mexico, Argentina, India, Nigeria and North America… › …compensated declines in Brazil, Indonesia and Malaysia 1) Sequential QoQ price de
Slide 16: A significant contribution from our Joint Ventures
A significant contribution from our Joint Ventures Reported after impact of Joint Reported after CHFm Reported Impact of Joint Ventures 1) Ventures Reported impact of JVs Q3 16 Q3 15 Q3 16 Q3 15 Q3 16 Q3 15 Net sales 7’036 7’824 195 110 7’231 7’934 -10.1% -8.9% Operating EBITDA adj. 1’685 1’645 79 3
Slide 17: Acceleration of synergies delivery in Q3 2016
Acceleration of synergies delivery in Q3 2016 CHF m 2015 Operational optimisation / best practice 44 122 46 212 H1 2016 Q3 2016 220 Target Total synergies Procurement 38 44 47 129 380 SG&A 36 70 51 157 280 Growth & innovation 12 38 39 89 220 Total 130 274 183 587 * 1'100 Implementation costs 502 116
Slide 18: Operating EBITDA to Net Income
Operating EBITDA to Net Income CHF m Q3 2016 Q3 2015 9M 2016 9M 2015 Operating EBITDA 1'594 1'309 21.8% 3'947 3'655 8.0% Depreciation & Amortization -534 -646 17.3% -1'673 -1'880 11.0% Operating Profit 1'060 665 59.4% 2'274 1'776 28.0% Other Income 473 620 -23.7% 496 609 -18.6% Share of profit of as
Slide 19: Operating Free Cash Flow variance Q3 2016 vs. Q3 2015
Operating Free Cash Flow variance Q3 2016 vs. Q3 2015 CHF m 1) 241 179 856 121 285 30 Q3 2015 Op. EBITDA Net Working Capital Capex Net Others Q3 2016 1) Including lower cash payments for financial expenses (CHF 162m) and income taxes (CHF 210m) © 2016 LafargeHolcim 19
Slide 20: Net Financial Debt December 2015 to September 2016
Net Financial Debt December 2015 to September 2016 CHF m -1’687 1) -1'516 -233 189 1'199 -1'342 -171 1'105 17'266 16'497 Dec. 2015 CF from operating PPA adjustment Capex Net Disposals Dividends FX Others Sep. 2016 activities 1) Includes CHF 68m cash premium paid on bonds buy-back, CHF 372m merger-re
Slide 21: CHF 3.5bn divestment program exceeded
CHF 3.5bn divestment program exceeded Cement Scope Impact (closing to Dec)* Scope Impact (full year)* EV Announced divestments (closing dates) Capacities Net Sales Op EBITDA adj Net Sales Op EBITDA adj @ 100% • South Korea (Q2) • Saudi Arabia (Q2, equity accounted) • Sri Lanka (Q3) • Lafarge India (
Slide 22: Maturity profile and cost of debt
Maturity profile and cost of debt Sept. 2016 Dec. 2015 CHF m 5’547 CHF m 4’977 Average Average maturity maturity 3’726 3’191 5.6 y 3’276 4.2 y 2’527 2’715 2’460 2’287 2’226 2’015 Average Average 1’402 cost of 1’288 cost of 720 538 570 779 703 536 540 1 debt 150 debt <1y 1-2y 2-3y 3-4y 4-5y 5-6y 6-7y
Slide 23: Outlook
03 Outlook Ron Wirahadiraksa, Chief Financial Officer © 2016 LafargeHolcim 23
Slide 24: Outlook for 2016
Outlook for 2016 Cement demand outlook 2016: overall global demand in the range of 1-3 per cent Other expectations for 2016 remain unchanged › Capex below CHF 2.0 billion › Incremental operating EBITDA synergies of at least CHF 550 million › Pricing recovery actions and commercial excellence ini
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Slide 26: Appendix
04 Appendix © 2016 LafargeHolcim 26
Slide 27: Adjusted operating EBITDA 9M 2016
Adjusted operating EBITDA1) 9M 2016 CHF m +2.0% LFL -95 -134 -202 457 -88 -80 4'356 4'348 4'261 4'214 Op. EBITDA adj. 2015 Scope Op. EBITDA adj. 2015 Volume Price Costs & others Synergies LFL Op. EBITDA adj. FX Op. EBITDA adj. 2016 Excl. Scope 2016 1) Excluding merger, restructuring and other one-of
Slide 28: Net Sales and adjusted operating EBITDA by Region – 9M 2016
Net Sales and adjusted operating EBITDA1) by Region – 9M 2016 North North Net Sales Operating EBITDA adj. America America Middle East 21% 20% Africa Middle East 14% Asia Africa Asia 18% 25% Pacific Pacific 30% Latin 10% America Latin 14% America 22% 26% Europe Europe CHF m 9M 2016 9M 2015 Like-for-l
Slide 29: Cement and Aggregates sales volumes by region
Cement and Aggregates sales volumes by region Cement sales volumes Mt Q3 2016 Q3 2015 Scope Like-for-like 9M 2016 9M 2015 Scope Like-for-like Asia Pacific 26 30 -12.7% -9.0% -4.9% 86 90 -4.1% -4.6% 0.3% Europe 12 12 -0.8% 0.0% -0.8% 32 32 -2.0% -2.0% Latin America 6 7 -15.2% 0.0% -15.2% 18 21 -13.9%
Slide 30: Net Sales and adjusted operating EBITDA by region
Net Sales and adjusted operating EBITDA by region Net Sales CHF m Q3 2016 Q3 2015 Scope FX Like-for-like 9M 2016 9M 2015 Scope FX Like-for-like Asia Pacific 1'894 2'136 -11.3% -6.8% 0.5% -5.9% 6'236 6'685 -6.7% -3.8% -1.6% -1.5% Europe 1'890 1'999 -5.5% -0.1% -3.7% -1.6% 5'355 5'573 -3.9% -0.1% -1.1
Slide 31: Net Sales and adjusted operating EBITDA – Cement
Net Sales and adjusted operating EBITDA – Cement 2) CHF m 2016 2015 3) 3) Net Sales Q1 Q2 Q3 Q1 Q2 Q3 Q4 FY 2015 Asia Pacific 1'742 1'739 1'457 1'794 1'893 1'692 1'920 7'299 Europe 619 910 879 650 939 889 793 3'271 Latin America 582 580 615 690 688 721 664 2'764 Middle East Africa 937 951 764 1'052
Slide 32: Net Sales and adjusted operating EBITDA – Aggregates
Net Sales and adjusted operating EBITDA – Aggregates 2) CHF m 2016 2015 3) 3) Net Sales Q1 Q2 Q3 Q1 Q2 Q3 Q4 FY 2015 Asia Pacific 114 135 134 123 130 134 141 528 Europe 396 502 492 403 501 511 463 1'879 Latin America 12 11 12 16 16 15 14 60 Middle East Africa 26 31 31 30 32 31 29 123 North America 2
Slide 33: Net Sales and adjusted operating EBITDA – Other
Net Sales and adjusted operating EBITDA – Other 2) CHF m 2016 2015 3) 3) Net Sales Q1 Q2 Q3 Q1 Q2 Q3 Q4 FY 2015 Asia Pacific 292 320 304 299 311 309 303 1'222 Europe 482 556 519 499 581 599 527 2'206 Latin America 88 93 89 103 104 104 106 417 Middle East Africa 86 99 87 83 92 82 85 342 North America
Slide 34: Operating Free Cash Flow
Operating Free Cash Flow CHF m Q3 2016 Q3 2015 9M 2016 9M 2015 Operating EBITDA 1'594 1'309 21.8% 3'947 3'655 8.0% Total other non cash items 76 270 -71.9% 250 382 -34.6% Change in net working capital -194 -315 38.4% -1'438 -1'312 -9.6% Financial expenses paid net -172 -334 48.5% -613 -822 25.4% Inc
Slide 35: Net Financial Debt September 2015 to September 2016
Net Financial Debt September 2015 to September 2016 CHF m -3’316 1) -3'076 134 -451 -1'477 1'186 2'112 18'309 -240 16'497 September 2015 CF from operating PPA step-up on financial Capex Net Disposals Dividends FX Others September 2016 activities debt 1) Includes CHF 85m cash premium paid on buy-back
Slide 36: Net Financial Debt
Net Financial Debt Net Financial Debt (per Sep 30, 2016, in CHF m) Liquidity summary 363 › Cash + marketable securities: CHF 4’589m › Cash + marketable securities + unused committed 16’497 credit lines: CHF 10’632m 16’134 Debt summary › Current financial liabilities1: CHF 4’977m Incl. Fair Value Exc
Slide 37: Condensed Statement of Financial Position
Condensed Statement of Financial Position CHF m Sep 30, 2016 Dec 31, 2015 Sep 30, 2016 Dec 31, 2015 Invested Capital 51’495 55’290 Equity 33’721 35’722 Out of which: Out of which: Goodwill 16’027 16’490 Equity attributable to the LH 29’752 31’365 Prop, Plant & Equipment 33’075 36’747 shareholders In
Slide 38: Volume and Price development Cement – 9M 2016 vs. 9M 2015
Volume and Price development Cement – 9M 2016 vs. 9M 2015 Volume Price & Other Volume Price & Other Volume Price & Other Volume Price & Other Asia Pacific 0.3% -2.3% Latin America -13.9% 13.0% Europe -2.0% -1.1% Middle East Africa 1.0% -6.9% Bangladesh 5.8% -8.4% Argentina -12.5% 39.9% Azerbaijan -2
Slide 39: Volume and Price development Aggregates – 9M 2016 vs. 9M 2015
Volume and Price development Aggregates – 9M 2016 vs. 9M 2015 Volume Price & Other Volume Price & Other Volume Price & Other Volume Price & Other Asia Pacific 6.3% -1.1% Latin America -15.6% -0.5% Europe 1.4% -3.3% Middle East Africa 7.2% 3.9% Australia 0.6% 3.8% Brazil -24.9% -11.8% Belgium 5.7% 3.
Slide 40: 2016 Outlook – Cement Market Overview by Region
2016 Outlook – Cement Market Overview by Region Volumes Highlights Asia Pacific* 3% to 5% Market growth across the region supported by an acceleration in India; China adjustment to continue Europe -3% to -1% Stable markets in most countries; declines in Russia, Azerbaijan, Spain and Italy Latin Amer
Slide 41: 2016 Outlook – Cement Market Overview by Selected Countries
2016 Outlook – Cement Market Overview by Selected Countries Market volumes % Market volumes % Market volumes % Market volumes % 1) Asia Pacific 3 to 5 Latin America -6 to -4 Europe -3 to -1 Middle East Africa 3 to 4 2) China -3 to -1 Argentina -14 to -12 France 0 to 2 Algeria 0 to 2 India 4 to 6 Bra
Slide 42: Contact information and event calendar
Contact information and event calendar Contact information Event calendar Corporate Communications November 18, 2016 Capital Markets Day Phone +41 58 858 87 10 March 2, 2017 Q4 2016 Results Fax +41 58 858 87 19 communications@lafargeholcim.com Investor Relations Phone +41 58 858 87 87 investor.relat
Slide 43: Disclaimer
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