Slide 1: Fourth Quarter and Full Year 2016 Results
Fourth Quarter and Full Year 2016 Results Eric Olsen, CEO and Ron Wirahadiraksa, CFO March 2, 2017 © LafargeHolcim Ltd 2015
Slide 2: Overview of Q4 and FY 2016 Results
01 Overview of Q4 and FY 2016 Results Eric Olsen, Chief Executive Officer © 2017 LafargeHolcim 2
Slide 3: Building on accelerated 2016 earnings momentum
Building on accelerated 2016 earnings momentum Strong operational performance driven by pricing, synergies and cost management Q4 adjusted operating EBITDA up +30.5% like-for-like 2016 target for adjusted operating EBITDA achieved: up +8.7% like-for-like Adjusted operating EBITDA margin up ~
Slide 4: Delivering higher cash return to our shareholders
Delivering higher cash return to our shareholders Disciplined capital allocation Operating Free Cash Flow of CHF 1.7bn; increase of CHF 1.8bn over 2015 Capex of CHF 1.6bn, in line with our 2016-2017 target of CHF 3.5bn Net debt reduction by CHF 2.5bn to CHF 14.7bn, despite differed closing o
Slide 5: Key countries driving EBITDA growth in 2017
Key countries driving EBITDA growth in 2017 Key countries / regions driving the growth in 2017 Countries with mid-term recovery potential North America US sustained cement India market growth, Market recovery driven by headroom in RMX fundamental growth and AGG business momentum West Canada Malaysia
Slide 6: Focus on US: Significant margin growth, strong upside potential
Focus on US: Significant margin growth, strong upside potential Trailing 12 months adj. Operating EBITDA margin • Overview OVERVIEW • N°1 cement player in the US, with >20 Mt capacity, a modernized and flexible asset base and an unrivalled network • Adj. Op. EBITDA margin up c.390 bps in FY, with su
Slide 7: Focus on Europe: Proven resilience, well poised for recovery
Focus on Europe: Proven resilience, well poised for recovery Trailing 12 months adj. Operating EBITDA margin • Overview OVERVIEW • Adj. Op. EBITDA margin up by c.170 bps in FY despite reduced demand in a number of markets (e.g. Spain, Russia, Romania, Italy). Improved performance largely driven by c
Slide 8: Focus on India: On-going turnaround, strong potential ahead
Focus on India: On-going turnaround, strong potential ahead Trailing 12 months adj. Operating EBITDA margin • Overview OVERVIEW • On-going business turnaround translating into adj. Op. EBITDA margin up by c.190 bps in FY, in a context of efficient cost and pricing management • Outstanding industrial
Slide 9: Focus on Nigeria: Impressive catch-up, ongoing turnaround
Focus on Nigeria: Impressive catch-up, ongoing turnaround Trailing 12 months adj. Operating EBITDA margin • Overview OVERVIEW • Business impacted by external factors in 2016; Turn around plan implemented delivering strong results with adj. Op. EBITDA margin more than trebling in Q4 16 • Strong price
Slide 10: Nigeria: Turnaround plan in progress
Nigeria: Turnaround plan in progress A particularly difficult On-going turnaround plan environment in 2016 Increased fuel flexibility: Unfavorable economic background: Reduced exposure to gas and fuel oil: use of • Strong Naira devaluation petcoke and alternative fuels with significant potential i
Slide 11: 2017: Well positioned to benefit from steady improvement of global cement demand
2017: Well positioned to benefit from steady improvement of global cement demand in emerging and mature markets Cement demand expected between 2 to 4% in 2017: ~4,000 Mt CHF 5.8bn Asia Pacific: Market growth supported by India Developing 32% +3-5% post demonetization and the Philippines 46% Euro
Slide 12: Transformation and self-help to further support growth
Transformation and self-help to further support growth Focusing on Growth & Innovation Improving market segmentation Reducing costs & optimizing CAPEX • Price and margin management • Selective raw materials • Infrastructure • Customer experience management • Logistic optimization • Retail • Offer ra
Slide 13: Outlook and vision for 2017
Outlook and vision for 2017 Overall global demand expected to increase by 2 to 4% In 2017, we expect to deliver strong growth in Adj. Op. EBITDA and in recurring EPS Double-digit LFL growth in Adj. Operating EBITDA over 2016 Significant growth in recurring EPS In 2017, the Group will be re
Slide 14: Regional results and Performance analysis
02 Regional results and Performance analysis Ron Wirahadiraksa, Chief Financial Officer 14
Slide 15: Key financial figures
Key financial figures CHF m Q4 2016 Q4 2015 Like-for-like 12M 2016 12M 2015 Like-for-like Volumes Cement (Mt) 55.9 66.5 -15.9% -5.8% 233.2 255.7 -8.8% -2.5% Aggregates (Mt) 71.2 75.8 -6.1% -4.3% 282.7 292.2 -3.2% -1.7% Ready-mix (Mm³) 13.1 14.3 -8.4% -3.3% 55.0 56.8 -3.3% -1.8% Net Sales 6'526 7'441
Slide 16: Adjusted operating EBITDA Q4 2016
Adjusted operating EBITDA1) Q4 2016 CHF m +30.5% LFL -95 181 142 -87 288 -212 1'707 1'611 1'395 1'308 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-of
Slide 17: Adjusted operating EBITDA 12M 2016
Adjusted operating EBITDA1) 12M 2016 CHF m +8.7% LFL -228 638 -181 -417 63 200 6'054 5'751 5'825 5'570 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-o
Slide 18: Net Sales and adjusted operating EBITDA by Region – 12M 2016
Net Sales and adjusted operating EBITDA1) by Region – 12M 2016 North North Net Sales America Operating EBITDA adj. America 20% 21% Middle East Africa Middle East 14% Africa Asia 19% 24% Asia 30% Pacific Pacific Latin 10% America 14% Latin 26% 21% America Europe Europe CHF m 12M 2016 12M 2015 Like-fo
Slide 19: Net Sales and adjusted operating EBITDA by Region – Q4 2016
Net Sales and adjusted operating EBITDA1) by Region – Q4 2016 North North Net Sales America Operating EBITDA adj. America 21% 21% Middle East Africa Asia Pacific 13% Middle East 24% 30% Asia Pacific 22% Africa 10% Latin America 14% 25% 20% Latin Europe Europe America CHF m Q4 2016 Q4 2015 Like-for-l
Slide 20: North America
North America Q4 2016 CHF m Sales volumes Q4 2016 Q4 2015 Like-for-like Q4 2015 LFL Net Sales 1'380 1'501 -8.1% -8.8% 30.7 27.5 1) 1) Operating EBITDA adj. 359 326 10.2% 9.3% -11% -10% -10% Operating EBITDA margin adj. 1) 26.0% 21.7% 434bp 431bp Cash flow from Op activities 547 555 -1.5% -2.2% 2.1 2
Slide 21: Europe
Europe Sales volumes Q4 2016 Q4 2015 CHF m Q4 2016 Q4 2015 Like-for-like LFL 30.9 30.9 Net Sales 1'668 1'783 -6.5% -0.4% 0% 0% -2% Operating EBITDA adj. 1) 337 304 10.8% 17.7% Operating EBITDA margin adj. 1) 20.2% 17.0% 314bp 311bp 9.9 10.2 Cash flow from Op activities 334 228 46.3% 57.0% 4.6 4.7 CE
Slide 22: Asia Pacific
Asia Pacific Q4 2016 Sales volumes Q4 2015 CHF m Q4 2016 Q4 2015 Like-for-like 33.0 LFL Net Sales 1'990 2'363 -15.8% -3.6% 27.3 Operating EBITDA adj. 1) 411 400 2.7% 13.4% -5% +2% +2% Operating EBITDA margin adj. 1) 20.6% 16.9% 371bp 306bp 8.5 9.4 Cash flow from Op activities 483 495 -2.4% 24.4% 3.5
Slide 23: Latin America
Latin America Q4 2016 Sales volumes Q4 2015 CHF m Q4 2016 Q4 2015 Like-for-like 6.7 LFL 6.0 Net Sales 691 784 -11.9% -2.2% -12% -46% -14% Operating EBITDA adj. 1) 230 217 5.9% 20.0% Operating EBITDA margin adj. 1) 33.3% 27.6% 567bp 629bp 2.0 1.5 1.8 Cash flow from Op activities 216 96 125.9% 160.7%
Slide 24: Middle East Africa
Middle East Africa Q4 2016 Sales volumes CHF m 11.3 Q4 2015 Q4 2016 Q4 2015 Like-for-like LFL 9.1 Net Sales 888 1'077 -17.5% 6.1% -9% +24% +4% Operating EBITDA adj. 1) 370 271 36.5% 87.8% Operating EBITDA margin adj. 1) 41.7% 25.2% 1644bp 1789bp 3.3 2.8 Cash flow from Op activities 318 320 -0.5% 24.
Slide 25: Quarter-on-quarter price trend
Quarter-on-quarter price trend Cement price up in the quarter, 1.1% above Q3 2016, and 5.0% above Q4 2015 price level 5.0% › Price improvement mainly driven by Nigeria, Egypt, Mexico and China… › …compensating declines Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 mostly in Brazil and Malaysia 2
Slide 26: A significant contribution from our Joint Ventures
A significant contribution from our Joint Ventures CHFm Reported after impact of Joint Reported after Reported Impact of Joint Ventures 1) Reported Ventures impact of JVs FY 16 FY 15 FY 16 FY 15 FY 16 FY 15 Net sales 26’904 29’483 601 367 27’505 29’850 -8.7% -7.9% Operating EBITDA adj. 5’825 5’751 2
Slide 27: Acceleration of synergies delivery in 2016
Acceleration of synergies delivery in 2016 Total synergies realized until Dec 2016 x FY 2016 CHFm Target run rate 2017 realized synergies Operational 274 230 optimization 200 176 Procurement 138 340 189 SG&A 153 260 Growth & 129 Innovation 200 117 767 Total 638 1’000 Implementation 744 cost 1’100 24
Slide 28: Progress on SG&A and on track to reach the target of 7%
Progress on SG&A and on track to reach the target of 7% Percentage of Net Sales Synergies of CHF 189m delivered2 Selected actions Further SG&A optimization • Group headquarter and central functions right-sizing • Site consolidation in overlapping countries (e.g., US) 9.4% 8.5% • Integration of manag
Slide 29: One-offs
One-offs CHFm 1’106 › Lower one-off costs in 2016 vs 2015 Merger related cost 278 › Additional restructuring cost of ~CHF 120 m related to identified cost Restructuring and savings initiatives and other one-offs not 326 583 restructuring in various related to the merger geographies (not linked to sy
Slide 30: Operating EBITDA to Net Income
Operating EBITDA to Net Income CHF m Q4 2016 Q4 2015 12M 2016 12M 2015 Operating EBITDA 1'296 988 31.1% 5'242 4'645 12.9% Depreciation & Amortization -733 -3'112 76.4% -2'405 -4'991 51.8% Operating Profit 563 -2'122 126.5% 2'837 -347 917.6% Other Income 260 -237 209.7% 756 372 103.2% Share of profit
Slide 31: Operating Free Cash Flow variance 12M 2016 vs. 12M 2015
Operating Free Cash Flow variance 12M 2016 vs. 12M 2015 CHF m -4 965 1‘660 152 597 -51 12M 2015 Op. EBITDA Change in Operating Net Capex Net Others 12M 2016 Working Capital © 2017 LafargeHolcim 31
Slide 32: Capex split per region
Capex split per region Capex by type Capex by region CHFm 12M 2016, % North America 2’600 32% Asia Pacific 1'452 22% 1’635 Expansion 638 Maintenance net 23% Middle 17% 1'148 East Africa 997 6% Europe Latin 2015 2016 America © 2017 LafargeHolcim 32
Slide 33: Management focused on cash conversion
Management focused on cash conversion Cash Flow from Operations / Adjusted op EBITDA › Less one-off costs › Lower net interest paid 64% › Lower net working capital impact 57% -20pp 44% +13pp 1 2 2014 2015 2016 1) Holcim standalone 2) LafargeHolcim combined proforma © 2017 LafargeHolcim 33
Slide 34: Net Financial Debt December 2015 to December 2016
Net Financial Debt December 2015 to December 2016 CHF m -3’523 1) -3'295 1'635 621 -228 84 -2'516 17'266 1'158 14'724 Dec. 2015 CF from operating PPA adjustment Capex Net Disposals Dividends FX Others* Dec. 2016 activities 1) Includes CHF 90m cash premium paid on bonds buy-back, CHF 430m merger-rela
Slide 35: Maturity profile and cost of debt
Maturity profile and cost of debt Dec 31, 2016 Dec 31, 2015 4’781 CHF m 5’547 CHF m Average Average maturity maturity 3’279 3’726 5.9 y 3’276 4.2 y 2’286 2’052 1’979 2’287 2’226 1’726 1’590 Average Average 901 cost of 1’288 cost of 534 779 703 442 536 540 150 debt 150 debt 2017 2018 2019 2020 2021 2
Slide 36: Improvement in financial ratios
Improvement in financial ratios FY 2015 FY 2016 Outlook Net financial debt / 3.0 2.5 Improving adj. operating EBITDA1 Cash Flow from operating activities / 14.8% 22.4% Improving Net financial debt1 1) Based on reported numbers © 2017 LafargeHolcim 36
Slide 37: Outlook and guidance for 2017
Outlook and guidance for 2017 Overall global demand is expected to increase by 2 to 4% In 2017, we expect to deliver strong growth in Adj. Op. EBITDA and recurring EPS Double-digit LFL growth in Adj. Operating EBITDA over 2016 Recurring EPS growing by more than 20% Targeted net debt / Adj.
Slide 38: Other elements of guidance for 2017
Other elements of guidance for 2017 Exceeding CHF 1bn synergies target by end 2017 › Incremental synergies of CHF 400 million of operating EBITDA Capex below CHF 1.8bn Increase in energy costs by c.10% › 3% cost inflation excl. energy Average nominal interest rate on gross debt at around 4.7
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Slide 40: Appendix
Appendix Li LafargeHolcim
Slide 41: Cement and Aggregates sales volumes by region
Cement and Aggregates sales volumes by region Cement sales volumes Mt Q4 2016 Q4 2015 Scope Like-for-like 12M 2016 12M 2015 Scope Like-for-like Asia Pacific 27 33 -17.4% -15.3% -4.7% 114 123 -7.7% -7.2% -1.0% Europe 10 10 -2.5% 0.0% 0.4% 42 42 -1.4% 0.0% -1.4% Latin America 6 7 -11.0% 0.0% -12.3% 24
Slide 42: Net Sales and adjusted operating EBITDA by region
Net Sales and adjusted operating EBITDA by region Net Sales CHF m Q4 2016 Q4 2015 Scope FX Like-for-like 12M 2016 12M 2015 Scope FX Like-for-like Asia Pacific 1'990 2'363 -15.8% -14.4% -0.1% -3.6% 8'226 9'048 -9.1% -6.4% -1.3% -2.0% Europe 1'668 1'783 -6.5% -0.1% -5.9% -0.4% 7'023 7'356 -4.5% -0.1%
Slide 43: Net Sales and adjusted operating EBITDA – Cement
Net Sales and adjusted operating EBITDA – Cement CHF m 2016 2015 2) 3) 3) Net Sales Q1 Q2 Q3 Q4 FY 2016 Q1 Q2 Q3 Q4 FY 2015 Asia Pacific 1'742 1'739 1'457 1'551 6'488 1'794 1'893 1'692 1'920 7'299 Europe 619 910 879 753 3'161 650 939 889 793 3'271 Latin America 582 580 615 599 2'376 690 688 721 664
Slide 44: Net Sales and adjusted operating EBITDA – Aggregates
Net Sales and adjusted operating EBITDA – Aggregates CHF m 2016 2015 2) 3) 3) Net Sales Q1 Q2 Q3 Q4 FY 2016 Q1 Q2 Q3 Q4 FY 2015 Asia Pacific 114 135 134 144 527 123 130 134 141 528 Europe 396 502 492 432 1'822 403 501 511 463 1'879 Latin America 12 11 12 9 44 16 16 15 14 60 Middle East Africa 26 31
Slide 45: Net Sales and adjusted operating EBITDA – Other
Net Sales and adjusted operating EBITDA – Other CHF m 2016 2015 2) 3) 3) Net Sales Q1 Q2 Q3 Q4 FY 2016 Q1 Q2 Q3 Q4 FY 2015 Asia Pacific 292 320 304 295 1'211 299 311 309 303 1'222 Europe 482 556 519 483 2'040 499 581 599 527 2'206 Latin America 88 93 89 83 354 103 104 104 106 417 Middle East Africa
Slide 46: Operating Free Cash Flow variance Q4 2016 vs. Q4 2015
Operating Free Cash Flow variance Q4 2016 vs. Q4 2015 CHF m 177 476 306 -263 1'342 647 Q4 2015 Op. EBITDA Change in Operating Net Capex Net Others Q4 2016 Working Capital © 2017 LafargeHolcim 46
Slide 47: Operating Free Cash Flow
Operating Free Cash Flow CHF m Q4 2016 Q4 2015 12M 2016 12M 2015 Operating EBITDA 1'296 988 31.1% 5'242 4'645 12.9% Total other non cash items 198 175 13.1% 448 557 -19.6% Change in net working capital 744 983 -24.3% -694 -420 -65.2% Financial expenses paid net -245 -319 23.2% -859 -1'095 21.6% Inco
Slide 48: Contribution from our Joint Ventures by quarter
Contribution from our Joint Ventures by quarter CHF m Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 Net Sales 6'062 7'280 7'036 6'526 26'904 Result from JV 17 29 31 50 127 Operating EBITDA adj incl JV 841 1'734 1'716 1'661 5'952 One-offs -50 -126 -91 -315 -583 Operating EBITDA incl JV 791 1'608 1'625 1'34
Slide 49: Net Financial Debt
Net Financial Debt Net Financial Debt (per Dec 31, 2016, in CHF m) Liquidity summary 319 › Cash + marketable securities: CHF 4’923 m 14’724 › Cash + marketable securities + unused committed credit lines: CHF 11’179 m 14’405 Debt summary › Current financial liabilities1: CHF 4’781 m Incl. Fair Value
Slide 50: Condensed Statement of Financial Position
Condensed Statement of Financial Position CHF m Dec 31, 2016 Dec 31, 2015 Dec 31, 2016 Dec 31, 2015 Invested Capital 46’576 50’886 Equity 34’747 35’722 Out of which: Out of which: Goodwill 16’247 16’490 Equity attributable to the LH 30’822 31’365 Prop, Plant & Equipment 32’052 36’747 shareholders In
Slide 51: Volume and Price development Cement – 12M 2016 vs. 12M 2015
Volume and Price development Cement – 12M 2016 vs. 12M 2015 Volum e Price & Other Volum e Price & Other Volum e Price & Other Volum e Price & Other Asia Pacific -1.0% -2.0% Latin America -13.5% 11.7% Europe -1.4% -1.3% Middle East Africa -1.5% -2.4% Bangladesh 4.2% -7.5% Argentina 1) -11.7% 39.3% Az
Slide 52: Volume and Price development Aggregates – 12M 2016 vs. 12M 2015
Volume and Price development Aggregates – 12M 2016 vs. 12M 2015 Volum e Price & Other Volum e Price & Other Volum e Price & Other Volum e Price & Other Asia Pacific 5.2% 0.0% Latin America -23.2% 4.5% Europe 1.0% -1.3% Middle East Africa 11.2% 0.2% Australia -0.4% 4.9% Brazil -32.5% -8.8% Belgium 5.
Slide 53: 2017 Outlook – Cement Market Overview by Selected Countries
2017 Outlook – Cement Market Overview by Selected Countries Market volum es Market volum es Market volum es Market volum es % % % % Asia Pacific 1) 3 to 5 Latin America 1 to 3 Europe 0 to 2 Middle East Africa 0 to 2 China 2) 0 to 2 Argentina 9 to 11 France 1 to 3 Algeria -1 to +1 India 4 to 6 Brazil
Slide 54: Restructuring: CHF 3.5bn divestment program exceeded
CHF 3.5bn divestment program exceeded Impact 20161) Impact 20172) Closed transactions Closing date • South Korea • Q2 2016 • Saudi Arabia • Q3 2016 • Sri Lanka • Q3 2016 Net Sales: CHF 0.7bn Net Sales: ~CHF 0.7bn • Lafarge India • Q4 2016 Op EBITDA: CHF 171m Op EBITDA: ~CHF 140m • Morocco • Q2 201
Slide 55: Overview of LafargeHolcim listed associates
Overview of LafargeHolcim listed associates in CHF1) +/-% since 5-Aug Company Stake Stake value 20162) LafargeHolcim Maroc 32.4% CHF1.9bn +20.6% Huaxin Cement Co. 41.8% CHF0.5bn +24.8% Total CHF2.4bn Breakdown of LafargeHolcim equity stakes in listed associates (as of 27-Feb 2017) 20% Huaxin Cement
Slide 56: Contact information and event calendar
Contact information and event calendar Contact information Event calendar Corporate Communications May 3, 2017 Annual General Meeting of shareholders Phone +41 58 858 87 10 Fax +41 58 858 87 19 May 3, 2017 Q1 2017 Results communications@lafargeholcim.com May 8, 2017 Ex date Investor Relations Phone
Slide 57: Disclaimer
Disclaimer These materials are being provided to you on a confidential basis, may not be distributed to the press or to any other persons, may not be redistributed or passed on, directly or indirectly, to any person, or published or reproduced, in whole or in part, by any medium or for any purpose.
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