Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — HeidelbergCement — H1 2020 Earnings Presentation
23 slides from Heidelberg Materials's earnings presentation, Jul 30, 2020
Slide 1: 2020 Half Year Results
2020 Half Year Results 30 July 2020 Dr. Dominik von Achten – Group CEO Dr. Lorenz Näger – Group CFO
Slide 2: Key Messages Q2 2020
Key Messages Q2 2020 ▪ Solid result in unprecedented challenging environment ▪ Margin improvement despite significant demand pressure ▪ COPE action plan with high cost savings and preservation of liquidity ▪ 1.4 b€ net debt reduction driven by very strong free cash flow generation ▪ Solid start into
Slide 3: 2020 Half Year Results agenda
2020 Half Year Results Financial Highlights Sustainability Update Key Takeaways Appendix
Slide 4: Margin improvement despite volume driven revenue decline
2020 HALF YEAR RESULTS Margin improvement despite volume driven revenue decline Revenue (m€) Operating EBITDA (m€) Operating EBITDA Margin Operating EBIT (RCO) (m€) Lfl: -10% Lfl: -2% Lfl: -5% +205 bps Lfl: -6% -10% -2% -6% Lfl: -4% -7% Lfl: -12% 9,212 -5% 1,438 1,404 23.1% +139 bps 754 8,254 21.0%
Slide 5: COPE action plan with strong contribution
2020 HALF YEAR RESULTS COPE action plan with strong contribution Q2 Operating EBITDA Bridge (m€) -4.0% 1,046 -6 1,040 -193 152 999 0 998 Q2 2019 EBITDA Currency Q2 2019 Net volume Price over cost 1) Q2 2020 Scope Q2 2020 EBITDA LfL EBITDA LfL EBITDA 1) Includes COPE cost savings of 158m€ 5 2020 Half
Slide 6: Stable EBITDA in a challenging market environment
2020 HALF YEAR RESULTS Stable EBITDA in a challenging market environment H1 Operating EBITDA Bridge (m€) -2.2% 1,438 -8 1,430 -236 205 1,399 5 1,404 H1 2019 EBITDA Currency H1 2019 Net volume Price over cost 1) H1 2020 Scope H1 2020 EBITDA LfL EBITDA LfL EBITDA 1) Includes COPE cost savings of 183m€
Slide 7: COPE action plan on track despite much higher revenue than anticipated
2020 HALF YEAR RESULTS COPE action plan on track despite much higher revenue than anticipated COPE cash savings as of June 2020 (m€) Proactive and successfully implimented action plan 1,000 ▪ Cope action plan already initiated in February ▪ Minimization of all non-essential expenses and reduction of
Slide 8: Covid-19 leads to demand decline in all business lines
2020 HALF YEAR RESULTS Covid-19 leads to demand decline in all business lines Sales volumes Development in key markets CEMENT (mt) 2019 2020 Change LfL North America Q2 32.4 28.7 -3.8 -10.9% ▪ COPE savings and positive pricing minimizes the negative impact from significant decline in volumes Half ye
Slide 9: Q2 2020 EBITDA growth in NEECA and Africa – Eastern Mediterranean
2020 HALF YEAR RESULTS Q2 2020 EBITDA growth in NEECA and Africa – Eastern Mediterranean North America Western & Southern Europe North & Eastern Europe – Central Asia m€ m€ m€ -26m +28m -28m -8% +14% -10% 315 288 272 244 231 203 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Asia Pacific Africa – E
Slide 10: Sustainability Report 2019 published
SUSTAINABILITY UPDATE Sustainability Report 2019 pubished 11th SR of HeidelbergCement published on 25 June 2020 ▪ Focus on climate protection and reduction of CO2 emissions ▪ Thorough coverage of human rights and compliance as well as occupational health and safety ▪ Further key topics: Social respo
Slide 11: Key Financial Messages June 2020
Key Financial Messages June 2020 ▪ Revaluation of the asset portfolio leads to impairment of goodwill and other assets of ~3.4 billion EUR ▪ Adjusted for the additional ordinary result, Group Share of Profit increases by 5% to 356 million EUR per June 2020 ▪ Strong free cash flow generation – High c
Slide 12: Adjusted Group share of profit increased by 5%
FINANCIAL HIGHLIGHTS Adjusted Group share of profit increased by 5% Income Statement per June (m€) 2019 1) 2020 Delta Key developments Revenue 9,212 8,254 -957 ▪ Revaluation of asset portfolio leads to impairment of RCOBD (Operating EBITDA) 1,438 1,404 -34 goodwill and other assets of 3.4 bn€ in AOR
Slide 13: Portfolio revaluation led to goodwill and asset impairment of 3.4 bn€
FINANCIAL HIGHLIGHTS Portfolio revaluation led to goodwill and asset impairment of 3.4 bn€ Split by geography Split by line item Reasons for revaluation ▪ Corona pandemic as triggering Financial fixed event UK WSE (excl. UK) assets / JVs Other fixed 0.4% assets ▪ Original business expectations have
Slide 14: Strong free cashflow and significant net debt reduction
FINANCIAL HIGHLIGHTS Strong free cashflow and significant net debt reduction Free cash flow1) generation (m€) Net debt development (m€) Cash conversion rate: 53% 3,546 -1,443 10,437 128 -307 -350 293 149 8,994 1,883 -904 -230 -1,883 -2 Jun 2020 Interest Tax Change in Sustaining Other FCF Net debt FC
Slide 15: Key Messages Q2 2020
Key Messages Q2 2020 ▪ Solid result in unprecedented challenging environment ▪ Margin improvement despite significant demand pressure ▪ COPE action plan with high cost savings and preservation of liquidity ▪ 1.4 b€ net debt reduction driven by very strong free cash flow generation ▪ Solid start into
Slide 16: Capital Market Day Beyond 2020
September i. 2020 Capital Maren bey — BEYOND 2020
Slide 17: Sales volumes
APPENDIX Sales volumes Sales Volumes Cement (‘000 t) Aggregates (‘000 t) Ready Mix (‘000 m3) Asphalt (‘000 t) QUARTER Q2 19 Q2 20 Change LfL Q2 19 Q2 20 Change LfL Q2 19 Q2 20 Change LfL Q2 19 Q2 20 Change LfL North America 4,443 3,847 -595 -13.4% 34,924 33,711 -1,213 -3.5% 2,099 1,952 -147 -7.0% 1,
Slide 18: Operating result
APPENDIX Operating result Operating Result Revenues (m€) Operating EBITDA (m€) Operating EBIT / RCO (m€) EBITDA Margin QUARTER Q2 19 Q2 20 Change LfL Q2 19 Q2 20 Change LfL Q2 19 Q2 20 Change LfL Q2 19 Q2 20 Change LfL North America 1,297 1,216 -6.2% -7.9% 315 288 -8.4% -10.2% 225 191 -15.4% -17.3%
Slide 19: Scope and currency impacts
APPENDIX Scope and currency impacts Scope & Currency Scope Impact on Volumes Revenue Operating EBITDA Operating EBIT (RCO) QUARTER CEM AGG RMC ASP Scope Currency Scope Currency Scope Currency North America 0 0 0 0 0 23 0 7 0 5 West / South Europe -123 300 44 0 1 -5 1 0 1 0 North / East Europe -104 -
Slide 20: Strong operating cash flow development in the first half of 2020
FINANCIAL HIGHLIGHTS Strong operating cash flow development in the first half of 2020 Consolidated statement of cash flows Jan – June (m€) 2019 1) 2020 Variance − Clear improvement in operating cash flow: Cash flow 1,093 1,094 1 strict working capital management and Changes in working capital -919 -
Slide 21: Balance sheet materially impacted by impairment
APPENDIX Balance sheet materially impacted by impairment Consolidated balance sheet June 2020 (m€) June 2019 Dec 2019 June 2020 Variance vs. prior year Assets Intangible assets 11,916 12,155 9,377 -2,539 -21 % Property, plant and equipment 14,232 14,529 13,235 -997 -7 % Financial assets 2,124 2,128
Slide 22: Contact information and financial reporting calendar
APPENDIX Contact information and financial reporting calendar Date Event Contact Information 16 September 2020 Capital Market Day (virtual) Christoph Beumelburg Director Communication & Investor Relations 5 November 2020 Third Quarter Results Phone: +49 (0) 6221 481 13249 christoph.beumelburg@heidel
Slide 23: Disclaimer
Disclaimer Unless otherwise indicated, the financial information provided herein has been prepared credit business and, in particular, additional uncertainties arising out of the subprime, under International Financial Reporting Standards (IFRS). financial market and liquidity crises; the outcome of