Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — FY2023 Earnings Presentation
38 slides from Heidelberg Materials's earnings presentation, Feb 22, 2024
Slide 1: 2023 Full Year Results
Q3 2023 2023 FullTrading Update Year Results 2 22November 2023 February 2024 DrDominik Dr Dominik von von Achten Achten – CEO – CEO René René Aldach Aldach – CFO - CFO
Slide 2: A strong run continues…
A strong run continues… • Record high year with solid growth: Full year revenue +4%; EBITDA +19%; RCO +29% * • EBITDA margin back to target corridor of 20% to 22% • Full year EPS increased by 23% to above 10 € • Very strong free cash flow generation of 2.2 €bn • New share buyback program announced w
Slide 3: Full year overview
Full year overview In our anniversary year we hit historically best levels in all KPIs Revenue RCO EPS ROIC Free cash Shareholder CO2 21.2 €bn 3.0 €bn €10.4 10.3% flow return 534 kg/tCM +4% LfL1) +29% LfL1) +23% (PY: 9.1%) €2.2 bn ~1 €bn -3% vs. PY Strong pricing Record high RCO, Solid Record ROIC,
Slide 4: Portfolio optimization continued – and will so going forward
Strategy Portfolio optimization continued – and will so going forward Acquisitions Spain UK Germany Germany Disposals Disposal of parts of Acquisition of Mick Acquisition of RWG I Acquisition of Spain (apart North) George (Recycling) (Recycling) SER Group (Recycling) Canada Acquisition of Green Drop
Slide 5: Cash allocation: Clear shift to shareholder return and growth
Strategy Cash allocation: Clear shift to shareholder return and growth Cash allocation 2018-2020 Cash allocation 2021 - 2023 Focus was mainly on debt payback Focus on shareholder return & growth Bolt-on & 21% growth CapEx * 30% 25% Shareholder return 39% 54% Debt payback 31% 2018-2020 2021-2023 * Gr
Slide 6: Operational result
Operational result
Slide 7: Q4 2023: Ending the year on a high note with solid result and margin increase
Operational result Q4 2024: Ending the year on a high note with solid result and margin increase Revenue [€m] Operating EBITDA [€m] Operating EBITDA Margin Operating EBIT (RCO) [€m] +371 €m -199 €m +100 €m +57 €m +93 €m +60 €m LfL: LfL: LfL: LfL: +46 bps +188 bps LfL: LfL: +9.9% 0% +13.6% +9.8% +19.
Slide 8: Full year 2023: Historically high revenue, EBITDA and RCO
Operational result Full year 2023: Historically high revenue, EBITDA and RCO Revenue [€m] Operating EBITDA [€m] Operating EBITDA Margin Operating EBIT (RCO) [€m] +2,458 €m +82 €m +383 €m +519 €m +408 €m +547 €m LfL: LfL: LfL: LfL: -59 bps +238 bps LfL: LfL: +16.5% +4.4% +12.2% +19.2% +19.8% +29.5% 2
Slide 9: Q4 2023 Operating EBIT (RCO) bridge
Operational result Q4 2023 Operating EBIT (RCO) bridge [€m] +96 €m (+15%) 218 0 757 -3 754 694 -33 660 -122 Q4 2022 RCO Currency Q4 2022 Net volume Price Depreciation Q4 2023 Scope Q4 2023 RCO LfL RCO over cost LfL RCO 9 22/02/2024 2023 Full Year Results | Dr Dominik von Achten, René Aldach
Slide 10: Full year 2023 Operating EBIT (RCO) bridge
Operational result Full year 2023 Operating EBIT (RCO) bridge [€m] +693 €m (+29%) 1.191 6 3,046 -23 3,022 2,476 -123 2,353 -503 FY 2022 RCO Currency FY 2022 Net volume Price Depreciation FY 2023 Scope FY 2023 RCO LfL RCO over cost LfL RCO 10 22/02/2024 2023 Full Year Results | Dr Dominik von Achten,
Slide 11: North America
Operational result North America FY FY FY 2021 2022 2023 +312 €m +156 €m +213 bps LfL: +8% LfL: +26% 4.907 5.219 856 15.9% 16.4% 4.551 722 700 14.3% Revenue [€m] RCO [€m] RCO Margin • Solid margin improvement driven by good pricing, despite softer residential demand • Infrastructure demand continues
Slide 12: Western & Southern Europe
Operational result Western & Southern Europe FY FY FY 2021 2022 2023 +128 €m +314 €m +471 bps LfL: +2% LfL: +59% 6.308 6.437 864 13.4% 5.557 10.1% 561 550 8.7% Revenue [€m] RCO [€m] RCO Margin • Effective cost management and disciplined pricing lead to outstanding result and margin improvement • Wea
Slide 13: Northern & Eastern Europe - Central Asia
Operational result Northern & Eastern Europe - Central Asia FY FY FY 2021 2022 2023 +17 €m +65 €m LfL: +5% LfL: +21% +173 bps 3.600 3.617 599 17.6% 16.6% 3.084 544 534 14.8% Revenue [€m] RCO [€m] RCO Margin • RCO improvement driven by continuing focus on cost management and positive pricing • Margin
Slide 14: Asia - Pacific
Operational result Asia - Pacific FY FY FY 2021 2022 2023 +72 €m +49 €m LfL: +9% LfL: +21% +114 bps 3.633 3.705 435 399 13.9% 3.126 350 10.8% 9.6% Revenue [€m] RCO [€m] RCO Margin • Result and margin improvement in the region, driven particularly by Australia and Indonesia • Moderating energy prices
Slide 15: Africa – Eastern Mediterranean Basin
Operational result Africa – Eastern Mediterranean Basin FY FY FY 2021 2022 2023 -252 €m +15 €m +309 bps LfL: +6% LfL: +21% 2.108 384 355 370 20.1% 19.9% 1.909 1.856 16.8% Revenue [€m] RCO [€m] RCO Margin • Margin improvement achieved after a depressed 2022, which was mainly impacted by currency deva
Slide 16: Financial highlights
Financial highlights
Slide 17: Key financial messages 2023
Key financial messages 2023 • Clean EPS at 10.4 € (vs. 9.5 € prior year) • Very strong FCF generation of 2.2 €bn. Cash conversion rate above 50% • Leverage at a very comfortable level with 1.2x • Record high ROIC at 10.3% • Focus on shareholder return continues: - New share buyback program announced
Slide 18: Adjusted EPS increases by 10%
Financial highlights Adjusted EPS increases by 10% Income Statement (€m) 2022 2023 Delta Special items below RCO Revenue 21,095 21,178 82 Additional ordinary result: RCOBD (Operating EBITDA) 3,739 4,258 519 • 2022: Impairment of Russian Assets (-100 €m) Depreciation and amortization -1,264 -1,236 28
Slide 19: Continuous EPS improvement with impressive 14.8% CAGR
Financial highlights Continuous EPS improvement with impressive 14.8% CAGR Clean EPS (€) * 10,4 9,5 +14.8% 7,9 6,9 6,4 5,2 2018 2019 2020 2021 2022 2023 * Clean EPS: Figures adjusted for additional ordinary result. In 2020 one-off deferred tax income related to impairments and for 2021 US West asset
Slide 20: Very strong free cash flow generation
Financial highlights Very strong free cash flow generation Free cash flow generation (€m) Net debt development (€m) Cash conversion rate: 51% -238 4.258 5.532 610 5.294 -163 298 579 -522 -205 437 2.163 -2,163 -1,042 -163 2023 Interest Tax Change in CapEx Other FCF Net debt FCF Net M&A Dividends Shar
Slide 21: Leverage at a very comfortable level with 1.2x
Financial highlights Leverage at a very comfortable level with 1.2x Net debt (€m) Leverage 2.35x 1.86x 1.48x 1.29x 1.24x 8.410 6.893 5.532 5.294 4.999 2019 2020 2021 2022 2023 21 22/02/2024 2023 Full Year Results | Dr Dominik von Achten, René Aldach
Slide 22: ROIC at historically high level at 10.3%
Financial highlights ROIC at historically high level at 10.3% Average Invested Capital (€m) ROIC 10.3% 9.3% 9.1% 7.9% 6.5% 26.228 23.822 23.023 21.257 22.078 2019 2020 2021 2022 2023 22 22/02/2024 2023 Full Year Results | Dr Dominik von Achten, René Aldach
Slide 23: Dividends & Share buyback: A clear priority in capital allocation policy
Financial highlights Dividends & Share buyback: A clear priority in capital allocation policy Progressive dividend increase New share buyback program of 1.2 €bn will continue in the (2024-2026) upcoming years 20% increase vs. previous program Share buyback Dividend per share (€) Dividend - Minoritie
Slide 24: Sustainability highlights
Sustainability highlights • Specific CO2 emissions reduced by more than 3%* to 534 kg CO2/t cementitious material in 2023 • Sustainable revenue (CEM) increased from 37.2% to 39.4% • Launch of new global brand for sustainable low-carbon and circular products: evoBuild® • The future of construction: L
Slide 25: Strong progress in all sustainability KPIs
Sustainability Strong progress in all sustainability KPIs Specific net CO2 emissions Alternative fuel rate [kg CO2/t cementitious material] [ -3.1% +120 bps 750 45.0% 551 534 29.9% 28.7% 400 2.9% 1990 Dec 2022 Dec 2023 ………... 2030 1990 Dec 2022 Dec 2023 ………... 2030 Clinker incorporation factor Susta
Slide 26: Our new global evoBuild product range is setting a new global standard
Sustainability Our new global evoBuild® product range is setting a new global standard Low carbon cement 30% 30% less CO2 vs. CEM I in 20201 Low carbon concrete 30% less CO2 vs. CEM I based 30% concrete in 20201 Applies to all business lines: cement, concrete, aggregates, asphalt Circular products:
Slide 27: evoZero: The world’s first carbon captured net-zero cement
Sustainability evoZero®: The world’s first carbon captured net-zero cement Applies to cement and concrete products • Globally unique product: CCS technology, applied for the first time at a large scale in Brevik, enables net-zero carbon footprint of evoZero® • Broadest product application combined w
Slide 28: Business Outlook & Guidance
Business Outlook & Guidance
Slide 29: 2024 market overview
Business Outlook & Guidance 2024 market overview North America: Europe: • Infrastructure Investment & Jobs • Demand decline expected to Act and Inflation Reduction Act stabilize at low levels, second half continue to support project expected to be better demand • Continued focus on price and strict
Slide 30: Guidance
Business Outlook & Guidance Guidance Original 2023 Target & Achievement 2024 Target Revenue LfL Growth * +4.4 % LfL Growth RCO 2.35 to 2.65 €bn 3.02 €bn 3.00 to 3.30 €bn ROIC At around 9% 10.3 % At around 10% CapEx Net Around 1.1 €bn 1.0 €bn Around 1.1 €bn In line with mid-term target: In line with
Slide 31: A strong run continues…
A strong run continues… • Record high year with solid growth: - Full year revenue +4%; EBITDA +19%; RCO +29% * • EBITDA margin back to target corridor of 20% to 22% • Full year EPS increased by 23% to above 10 € • Very strong free cash flow generation of 2.2 €bn • New share buyback program announced
Slide 32: Appendix
Appendix
Slide 33: Currency and scope impacts
Appendix Currency and scope impacts Operating EBITDA Operating EBIT (RCO) Scope & Currency Revenue (€m) (€m) (€m) Q4 2023 Scope Currency Scope Currency Scope Currency North America 31 -63 4 -15 -2 -10 West / South Europe 21 3 1 0 -1 0 North / East Europe 0 -46 -4 -15 -4 -12 Asia Pacific 9 -53 3 -11
Slide 34: Operational result
Appendix Operational result Operating Result Revenue Operating EBITDA Operating EBITDA Margin Operating EBIT (RCO) Quarter [€m] Q4 22 Q4 23 Change LfL Q4 22 Q3 23 Change LfL Q4 22 Q4 23 Change LfL Q4 22 Q4 23 Change LfL North America 1,226 1,263 3.0% 5.9% 306 325 6.1% 10.1% 25.0% 25.7% +75 bps +99 b
Slide 35: Significant carbon reduction through sector’s first CCS project already in 2024
Sustainability Significant carbon reduction through sector’s first CCS project already in 2024 2024 2025 2026 2028 2029 2030 CCS CC CCUS CCS CCUS CCS Brevik, Norway Germany Edmonton, Canada Padeswood, UK Antoing, Belgium Slite, Sweden Capacity: LEILAC 1: finalised Capacity: Capacity: Capacity: Capac
Slide 36: Financial Calendar & IR Contacts
Financial Calendar & IR Contacts Upcoming events: • 7 May 2024: First quarter trading update • 16 May 2024 : Annual General Meeting • 30 July 2024 : Half year results • 7 November 2024 : Third quarter trading update Contact: Investor Relations: ir-info@heidelbergmaterials.com +49 6221 481 13227 Pre
Slide 37: Disclaimer
Disclaimer •Unless otherwise indicated, the financial information provided herein has been prepared under International Financial Reporting Standards (IFRS). All the figures included in this presentation are preliminary, unaudited and subject to revision upon completion of the Company's closing and
Slide 38: Heidelberg Materials
Heidelberg Materials