Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — HeidelbergCement — FY2021 Earnings Presentation
34 slides from Heidelberg Materials's earnings presentation, Feb 24, 2022
Slide 1: 2021 Full Year Results
2021 Full Year Results 24 February 2022 Dr. Dominik von Achten – Group CEO René Aldach – Group CFO Golden Ears Bridge, Canada
Slide 2: Key Messages 2021
Key Messages 2021 ▪ Very strong results 2021 – Revenue +8%, EBITDA +6%, RCO +12% (all like-for-like) ▪ Successfully implemented price hikes and fixed cost management lead to excellent Q4 result ▪ Record return on invested capital (ROIC) of 9.3% ▪ High focus on shareholder returns – Almost 1 billion
Slide 3: Overview
Overview Financial Highlights Sustainability Outlook & Key Takeaways Appendix SR520 Swimming Bridge, Washington
Slide 4: 2021 achievements vs. 2025 targets
2021 achievements vs. 2025 targets EBITDA margin ROIC Leverage ratio Clearly +300 bps >8% 1.5-2.0x vs 2019 Sustainability Digital transformation CO2 reduction <525 kg target accelerated by 5 years: >75% of global sales CO2/t cementitious -30% vs 1990 volumes covered by HConnect
Slide 5: Q4 2021 – Successful price increases ease margin pressure
OPERATIONAL PERFORMANCE Q4 2021 – Successful price increases ease margin pressure Revenue (m€) Operating EBITDA (m€) Operating EBITDA Margin Operating EBIT (RCO) (m€) +3.2% +1.1% +9.6% LfL: +9.4% LfL: +5.6% LfL: +14.5% +5.8% +0.3% -43 bps +2.0% LfL: +6.7% LfL: -0.3% LfL: +1.8% -113 bps 4,578 4,466 4
Slide 6: FY 2021 – Strong operating EBITDA growth
OPERATIONAL PERFORMANCE FY 2021 – Strong operating EBITDA growth Revenue (m€) Operating EBITDA (m€) Operating EBITDA Margin Operating EBIT (RCO) (m€) -0.7% +8.2% +19.6% LfL: +3.0% LfL: +12.4% LfL: +24.5% +6.3% +4.5% +171 bps +10.6% LfL: +8.0% LfL: +5.9% LfL: +12.0% -36 bps 18,851 17,606 18,720 3,707
Slide 7: Q4 2021 – Regional overview
OPERATIONAL PERFORMANCE Q4 2021 – Regional overview ’21 vs ’20 Significant increase in energy costs and high freight rates partly compensated by Volumes Q4 19 Q4 20 Q4 21 LfL price increases and operational efficiency improvements Cement sales volume (mt) 31.4 31.9 30.8 -1.0% North America Aggregate
Slide 8: Q4 2021 – Operating EBITDA bridge
OPERATIONAL PERFORMANCE Q4 2021 – Operating EBITDA bridge (m€) -0.3% 94 -97 26 1,002 999 -20 976 979 Q4 2020 EBITDA Currency Q4 2020 Net volume Price over cost Q4 2021 Scope Q4 2021 EBITDA LfL EBITDA LfL EBITDA 8 2021 Full Year Results | 24 February 2022
Slide 9: FY 2021 – Operating EBITDA bridge
OPERATIONAL PERFORMANCE FY 2021 – Operating EBITDA bridge (m€) +5.9% 470 -254 3,899 -24 3,875 3,707 -24 3,683 FY 2020 EBITDA Currency FY 2020 Net volume Price over cost FY 2021 Scope FY 2021 EBITDA LfL EBITDA LfL EBITDA 9 2021 Full Year Results | 24 February 2022
Slide 10: Regional operating EBITDA margins
OPERATIONAL PERFORMANCE Regional operating EBITDA margins North America Western & Southern Europe North & Eastern Europe – Central Asia +45 bps +109 bps +163 bps -127 bps +84 bps -45 bps 21.8% 22.1% 22.9% 15.2% 17.3% 16.9% 23.5% 25.2% 23.9% FY 2019 FY 2020 FY 2021 FY 2019 FY 2020 FY 2021 FY 2019 FY
Slide 11: Portfolio optimization continues
OPERATIONAL PERFORMANCE Portfolio optimization continues US North East Spain UK Italy Greece Acquisition of Brant Disposal of AGG & RMC Acquisition of A1 Acquisition of 12 RMC Disposal of AGG & RMC Concrete (RMC) business in 4 clusters Services (recycling) plants in Northern Italy business US Pacifi
Slide 12: Commercial excellence program kicks-off strongly in 2022
OPERATIONAL PERFORMANCE Commercial excellence program kicks-off strongly in 2022 Price over cost (m€) Domestic cement sales price development Price increase vs. PY same period 13.3% -97 8.8% Significant improvement 5.5% -175 supported by price increases and 4.2% good cost management. Trend continues
Slide 13: Financial Highlights
Operational Performance Financial Highlights Sustainability Outlook & Key Takeaways Appendix SR520 Swimming Bridge, Washington
Slide 14: Good improvement in all key financial KPIs
FINANCIAL HIGHLIGHTS Good improvement in all key financial KPIs Revenue EBITDA Clean EPS Leverage ROIC 18.7 billion 3.9 billion 7.9 EUR 1.3x 9.3 % +8% LfL +6% LfL +15% -0.6x +1.4 % Solid pricing and Strong EBITDA growth Further improvement Strong cash Record high ROIC demand growth despite significa
Slide 15: Shareholder return – 1 billion EUR spent on dividends and share buybacks in 2021
FINANCIAL HIGHLIGHTS Shareholder return – 1 billion EUR spent on dividends and share buybacks in 2021 Shareholder return (m€) Share buyback 968 Dividend - Minorities Dividend - HCAG 350 565 586 529 169 181 188 211 334 323 90 417 204 437 377 318 244 119 2016 2017 2018 2019 2020 2021 15 2021 Full Year
Slide 16: Record high ROIC driven by solid performance and portfolio optimization
FINANCIAL HIGHLIGHTS Record high ROIC driven by solid performance and portfolio optimization ROIC (excluding US West assets disposal impact, mainly tax expenses as included in tax rate calculation) ROIC (as reported) 9.9% Invested Capital (m€) 7.9% 9.3% 7.1% 7.2% 6.5% 5.9% 26,215 24,674 26,471 24,21
Slide 17: Net debt below 5 billion EUR – Leverage ratio at 1.3x
FINANCIAL HIGHLIGHTS Net debt below 5 billion EUR – Leverage ratio at 1.3x Free cash flow generation (m€) Net debt development (m€) Cash conversion rate: 40% -1,895 3,875 6,893 -180 -399 -1,187 350 54 4,999 -207 618 -1,208 1,568 -1,729 -312 1,187 -306 -75 2021 Interest Tax Change CapEx Other FCF US
Slide 18: Adjusted EPS increases by 15%
FINANCIAL HIGHLIGHTS Adjusted EPS increases by 15% Income Statement (m€) 2020 2021 Delta Key developments Revenue 17,606 18,720 1,114 ▪ Additional ordinary result: RCOBD (Operating EBITDA) 3,707 3,875 168 o 2021: +466 m€ net gain from sale of US West assets Depreciation and amortization -1,344 -1,26
Slide 19: Sustainability
Operating Performance Financial Highlights Sustainability Outlook & Key Takeaways Appendix SR520 Swimming Bridge, Washington
Slide 20: Accelerating our CO2 roadmap – Reducing our specific CO2 emissions by 2% in 2021
SUSTAINABILITY Accelerating our CO2 roadmap – Reducing our specific CO2 emissions by 2% in 2021 Specific net CO2 emissions Clinker incorporation factor Alternative fuels rate [kg CO2/t cementitious material] -25% -33% 750 +4,010 bps +2,350 bps -910 bps -1,200 bps -2% 82.0% 43.0% +70 bps 576 565 -140
Slide 21: We target up to 10mt of CO2 reduction with our current CCU/S projects until 2030
SUSTAINABILITY We target up to 10mt* of CO2 reduction with our current CCU/S projects until 2030 Capacity: 400kt CO2 p.a. Start: 2024 Capacity: 800kt CO2 p.a. Start: 2028 Brevik Well on track: first industrial-scale project in the cement industry by 2024 Edmonton Project could be in service as early
Slide 22: EcoCrete – Sustainable and recyclable concrete with a significant lower CO2-footprint
SUSTAINABILITY EcoCrete® – Sustainable and recyclable concrete with a significant lower CO2-footprint EcoCrete® characteristics The EcoCrete® concept ▪ Min. 30% and currently up to 66% Up to ▪ CO2 reduction* Recycled aggregates content* 30-66% less CO2 Circular economy 66% less CO2 ▪ 100% green ener
Slide 23: Continuously improving ESG ratings and state-of-the-art reporting standards
SUSTAINABILITY Continuously improving ESG ratings and state-of-the-art reporting standards Ratings MSCI Sustainalytics VigeoEiris CDP ISS ESG AA: Stable rating for the 28.6 Medium Risk 63 points up from 46 Top grade A Prime Status C+ 4th consecutive time improved from 29.3 (out of 100 points) “Clima
Slide 24: Outlook & Key Takeaways
Operating Performance Financial Highlights Sustainability Outlook & Key Takeaways Appendix SR520 Swimming Bridge, Washington
Slide 25: Clear focus on pricing and cost efficiency to drive further growth
OUTLOOK & KEY TAKEAWAYS Clear focus on pricing and cost efficiency to drive further growth Business outlook 2022 Guidance 2022 Demand increase in all business lines Strong increase in LfL revenue, slight driven by infrastructure projects and increase in operating EBITDA and RCO ongoing residential g
Slide 26: Key Messages 2021
Key Messages 2021 ▪ Very strong results 2021 – Revenue +8%, EBITDA +6%, RCO +12% (all like-for-like) ▪ Successfully implemented price hikes and fixed cost management lead to excellent Q4 result ▪ Record return on invested capital (ROIC) of 9.3% ▪ High focus on shareholder returns – Almost 1 billion
Slide 27: Slide 27
Slide 28: Appendix
Operating Performance Financial Highlights Sustainability Outlook & Key Takeaways Appendix SR520 Swimming Bridge, Washington
Slide 29: Sales volumes
APPENDIX Sales volumes Sales Volumes Cement (‘000 t) Aggregates (‘000 t) Ready Mix (‘000 m3) Asphalt (‘000 t) QUARTER Q4 20 Q4 21 Change LfL Q4 20 Q4 21 Change LfL Q4 20 Q4 21 Change LfL Q4 20 Q4 21 Change LfL North America 3,942 3,447 -495 2.0% 31,103 30,678 -425 8.1% 1,947 1,423 -524 -5.6% 1,222 5
Slide 30: Operating result
APPENDIX Operating result Operating Result Revenues (m€) Operating EBITDA (m€) Operating EBIT / RCO (m€) EBITDA Margin QUARTER Q4 20 Q4 21 Change LfL Q4 20 Q4 21 Change LfL Q4 20 Q4 21 Change LfL Q4 20 Q4 21 Change LfL North America 1,104 1,042 -5.6% 5.5% 263 262 -0.6% 3.6% 177 184 3.6% 8.0% 23.8% 2
Slide 31: 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 -574 -2,942 -415 -640 -181 56 -23 11 -15 7 West / South Europe 0 0 0 0 16 18 3 2 0 1 North / E
Slide 32: Increasing our ESG activities in 2021 – More to come…
SUSTAINABILITY Increasing our ESG activities in 2021 – More to come… Building the world’s first HyNet North West carbon-neutral cement Joining HyNet, project receives plant at our Slite plant in the world’s first low- Signing Business Ambition for 1.5°C government funding Sweden Germany: carbon indu
Slide 33: Contact information and financial calendar
FINANCIAL CALENDAR Contact information and financial calendar Date Events Contact Information 12 May 2022 Annual General Meeting Christoph Beumelburg 12 May 2022 First Quarter Results Director Group Communication & Investor Relations Phone: +49 (0) 6221 481 13249 24 May 2022 Capital Markets Day 2022
Slide 34: Disclaimer
Disclaimer Unless otherwise indicated, the financial information provided herein has been prepared liquidity crises; the outcome of pending investigations and legal proceedings and actions under International Financial Reporting Standards (IFRS). resulting from the findings of these investigations;