Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — HeidelbergCement — Investor Day (July 2014)
28 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 Markets & Strategy Dr. Bernd Scheifele, Group CEO 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. HeidelbergCement at a glance 4 2. Market update 7 3. Past, present, future 12 4. Sector consolidation 27 Slide 3 - Capital Markets Day – 02 July 2014
Slide 4: HeidelbergCement at a glance
HeidelbergCement at a glance World number 1 in Aggregates Excellent footprint in Cement Fully integrated RMC business 19 billion ton reserves in more than 500 128 million ton cement capacity in 33 quarries countries World’s 2nd biggest RMC operations with more than 1,300 plants around the glob
Slide 5: Local business and entrepreneurship in a global company
Local business and entrepreneurship in a global company We operate with local brands... under a global international company. Local entrepreneurship Global corporate culture Customer oriented local management Performance and result orientation Efficient and rapid decision taking Sustaina
Slide 6: Contents
Contents Page 1. HeidelbergCement at a glance 4 2. Market update 7 3. Past, present, future 12 4. Sector consolidation 27 Slide 6 - Capital Markets Day – 02 July 2014
Slide 7: Outlook for cement demand 2014 (global)
Outlook for cement demand 2014 (global) Europe North America Russia Weak demand in the South; strong markets in Growing demand the UK, Northern Europe and Germany Stable demand on high level +4% +2% +6% +5% +4%+8% +8% -2% +4% -5% -5% -5% +7% +7% North Africa +7% +3% +5% Strong growth +5% +7% +5% +8%
Slide 8: Domestic cement price trends (global) 2014
Domestic cement price trends (global) 2014 Europe North America Moderate price development Russia Prices recovering Solid price trend +1% +5% China +3% +3% Solid price +1% trend +2% +3% +5% +5% +6% +5% +2% +5% Mediterranean 0% +6% +7% +5% Increasing prices 0% +5% +5% +2% 0% +5% +4% +8% 0% 0% India S
Slide 9: Export Clinker Price 2014 versus 2013
Export Clinker Price 2014 versus 2013 FOB Northern Europe Exporters Increase FOB Korea Stable $38/t ($37/t) $37/t ($36/t) $48/t ($46/t) $48/t $39/t FOB Japan & China ($43/t) ($38/t) Increase FOB Spain Increase FOB East Med. Increase due to $46.5/t $40/t local market & ($45/t) ($37/t) FOB Vietnam Egy
Slide 10: Coal Prices 2014 versus 2013
Coal Prices 2014 versus 2013 Coal producers FOB Russia 1 Decrease $72,85/t ($75,62/t) CFR South China 2 $71,09/t Decrease ($81,82/t) FOB Indonesia Decrease FOB Colombia $76,02 /t $64,17/t Stable ($82,42/t) ($66,43/t) FOB South Africa Decrease FOB Australia $74,20/t $71,98/t Decrease ($77,72/t) ($82,
Slide 11: Contents
Contents Page 1. HeidelbergCement at a glance 4 2. Market update 7 3. Past, present, future 12 4. Sector consolidation 27 Slide 11 - Capital Markets Day – 02 July 2014
Slide 12: Past, present, future
Past, present, future What happened since the crisis 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 4 b€ lower Net Debt level Significantly improved ope
Slide 13: Continuous improvement
Continuous improvement -9,763 Average number of 62,926 employees 56,723 54,655 53,889 53,617 53,163 +23 Cement capacity (mt) 105 106 116 118 122 128 2008 2009 2010 2011 2012 2013 LfL Revenue Growth (change vs. prior year) LfL Operating Income Growth (change vs. prior year) 10.7% 6.1% 3.2% 4.2% 5.6%
Slide 14: Quality beats quantity
Quality beats quantity HeidelbergCement Peer 1 Peer 2 2013 realized savings / efficiency improvements 124 m€ 670 m€ 942 mCHF as % of 2013 Revenues 1% 4% 5% as % of 2013 EBITDA (*) 5% 22 % 24 % +0.5% -0.6% +0.4% 17.2% 20.8% 19.6% EBITDA margin 16.7% 20.2% 19.2% development (*) 2012 2013 2012 2013 201
Slide 15: 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 16: Continuous Improvement Program (CIP)
Continuous Improvement Program (CIP) Goals • Secure the efficiency gains from our previous projects • Further improve our production processes systematically • Reach world class performance and production sites • Stimulate out-of-the-box thinking and creativity • Strengthen local entrepreneurial thi
Slide 17: Customer Excellence Program (CEP)
Customer Excellence Program (CEP) Currently on-going CEP customer focused programs Customer Excellence Fact-based learn of PERFORM “what’s of value” Focus on cement Align the entire organization to act, develop and CLIMB COMMERCIAL implement Focus on aggregates Be the supplier of choice for the
Slide 18: Locally focused, effective and flexible energy strategies
Locally focused, effective and flexible energy strategies Focus on each commodity Constant check of most Best strategy defined based for each country efficient option on internal discussions (Example API 2) Clear focus on local power International Coal Price Indices and fuel markets 115 The Boar
Slide 19: Excellent local asset base with a superior global footprint
Excellent local asset base with a superior global footprint Key positions in fastest growing markets which outperforms US average US demand growth (California, Texas..) Superior position in London area; strong benefit from Help-to-Buy UK program Main market West Java; most populated area with highes
Slide 20: What does latest Euroconstruct Forecast mean for HC
What does latest Euroconstruct Forecast mean for HC Euroconstruct June 2014 Forecast – Construction Growth 2014-2016 HC Countries 27.5% Total Construction Growth 2014 - 2016 HeidelbergCement countries (*) 8.1 % 18.1% Total Euroconstruct countries 5.5 % 12.1% 9.9% 9.9% 7.7% 7.7% 7.6% 6.6% 6.0% 5.1% 4
Slide 21: UK – Recovery mood on
UK – Recovery mood on Total Construction Output in billion € (*) -0.9% +4% +3.0% -10.4% 190 +4.7% 190 188 +2.0% -8.4% +6.0% 184 182 +4.4% 178 176 +1.2% 168 169 167 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E HeidelbergCement will benefit significantly Strong operations in key local market
Slide 22: Poland – strong market growth supported by solid economy
Poland – strong market growth supported by solid economy Solid economic growth is expected Construction activities supported by EU budget Total construction output (m€) GDP Growth Unemployement rate Residential Non-residential Infrastructure Building 10.4% 10.2% 10.0% 9.5% +5% 77.7 82.2 70.7 73.2 12
Slide 23: Indonesia continues to be a solid market
Indonesia continues to be a solid market Stable demand growth Consolidated & rationale market Strong cement sales in May (*) Top 3 players represent ~90% of total market share (*) Regaining market share since 10.3% Semen Indonesia Indocement Holcim Indonesia commissioning of 1.9 mt capacity 7.7% 44.
Slide 24: Java is the main growing market in Indonesia
Java is the main growing market in Indonesia Indocement Holcim Indocement Holcim Holcim Semen Indo. Cement capacity mt 13.1 mt 4.6 mt 4.2 mt 4.1 mt 1.6 mt 14.0 mt Current capacity 42.1 Expansion by existing players 14.3 New entrants 20.4 Holcim Total capacity by 2019 75.4 2014: 0.6 mt Indocement 201
Slide 25: Africa – Solid growth in selective markets
Africa – Solid growth in selective markets Well-balanced geographical portfolio in Sub-Sahara Experienced teams in all countries Continuous growth Strong operating leverage driven by saving programs HC is ready for future Intensified marketing efforts by local teams Already initiated strat
Slide 26: Contents
Contents Page 1. HeidelbergCement at a glance 4 2. Market update 7 3. Past, present, future 12 4. Sector consolidation 27 Slide 26 - Capital Markets Day – 02 July 2014
Slide 27: Potential merger of Lafarge and Holcim
Potential merger of Lafarge and Holcim Merger of Lafarge and Holcim… … with opportunities and risks for HC Announcement of potential merger Lafarge/Holcim would be by far the largest player 4 April 2014: Lafarge and Holcim Merged company would be present in around 90 announce a „merger of equals
Slide 28: We are well-positioned for future
We are well-positioned for future Excellent footprint with unique asset base in local markets Strong performance driven by local entrepreneurship in a global group Market leading operating leverage as a result of continuous improvement programs Solid liquidity and well-balanced debt profile Best mar