HeidelbergCement — Q1 2017 Earnings Presentation
33 slides from HeidelbergCement's earnings presentation, May 10, 2017
Slide 1: HeidelbergCement 2017 First Quarter Results
HeidelbergCement 2017 First Quarter Results 10 May 2017 Dr. Bernd Scheifele, CEO and Dr. Lorenz Näger, CFO Aït Baha plant / Morocco Slide 1 – 2017 First Quarter Results – 10 May 2017
Slide 2: Contents
Contents Page 1. Overview and key figures 3 2. Results by Group areas 12 3. Financial report 20 4. Outlook 2017 28 5. Appendix 31 Slide 2 – 2017 First Quarter Results – 10 May 2017
Slide 3: Market and financial overview Q1 2017
Market and financial overview Q1 2017 Italcementi acquisition improves company figures significantly Values based on IFRS Cement volumes up +58%; Aggregates volumes up +23%; RMC volumes up +31% Revenue increases by 34%; Operating EBITDA increases by +19%; EPS increases by +7% Solid results despi
Slide 4: Key operational and financial figures
Key operational and financial figures Operational performance based on proforma figures: Q1 2016 Q1 2017 Variance Cons. Decons. Currency LfL Cement volume 27,815 27,816 1 0.0 % 37 0 0 -0.1 % Aggregate volume 56,384 60,855 4,471 7.9 % 3,898 -220 0 1.4 % Ready Mix volume 10,572 10,423 -149 -1.4 % 0 0
Slide 5: Group Sales Volumes
Group Sales Volumes Q1 2016 Q1 2017 North America Western & Southern Europe Asia - Pacific +1% +5% -2% 0% 21.5 21.7 17.5 18.3 8.7 8.7 9.4 9.2 +3% +4% -8% +4% -9% 6.2 6.3 2.6 3.9 4.0 2.4 3.0 3.1 1.4 1.3 CEM AGG RMC CEM AGG RMC CEM AGG RMC Northern & Eastern Europe Africa & Eastern Med. TOTAL GROUP +6
Slide 6: Q1 2017 Operating EBITDA Bridge
Q1 2017 Operating EBITDA Bridge Variable cost inflation nearly compensated by positive volume and price development Synergies help + 41 to stabilize -51 391 392 +3 fixed costs 378 383 1 5 -56 + 50 Q1 2016 Currency Q1 2016 Net volume Price Variable Fixed costs Synergies Q1 2017 Scope Q1 2017 Reported
Slide 7: Strong results in key mature markets
Strong results in key mature markets Operating EBITDA (m€) ASIA + AFRICA NAM + EUROPE + OVERHEAD 977 1,009 Market pressure in Indonesia* and 282 818 300 Ghana*, together with cost inflation puts pressure on results in EM. 336 391 383 677 727 300 250 483 90 133 Q1 2016 Q1 2017 Q2 2016 Q3 2016 Q4 2016
Slide 8: Energy cost outlook improves due to commodities trending down
Energy cost outlook improves due to commodities trending down Energy Cost Oil Brent - EU ($/bbl) Oil WTI - NAM ($/bbl) Q1 2017 vs. Q1 2016 * 70 70 60 60 50 50 4.2% 40 40 30 30 3.5% 20 20 2016 2017 2016 2017 2.5% Coal Indices ($/mt) Coal Indices ($/mt) 100 Europe 120 Australia (NewCastle) Africa 100
Slide 9: FTE reduction and synergies ahead of targets
FTE reduction and synergies ahead of targets FTE reduction faster than planned Synergies on track Increase in target Announced Target Q3 2016 Target synergy Actual realized as of Q1 2017 Already reached 2,110 m€ 175 FTE as of March ‘17 3,500 155 140 2,900 950 120 450 1,870 370 2,550 2,450 1,500 5
Slide 10: US Italcementi Assets: Significant improvement in efficiency
US Italcementi Assets: Significant improvement in efficiency Key KPIs of Italcementi plants Q1 2016 Q1 2017 Change Clinker production volume 313 kt 420 kt +34% Clinker daily rate 1,927 mtpd 2,445 mtpd +27% Reliability 1) 78% 92% +14% MTBF 2) 70 hours 162 hours +131% Operating EBITDA (m$): Clear impr
Slide 11: Contents
Contents Page 1. Overview and key figures 3 2. Results by Group areas 12 3. Financial report 20 4. Outlook 2017 28 5. Appendix 31 Slide 11 – 2017 First Quarter Results – 10 May 2017
Slide 12: North America
North America Clear improvement in ITC asset performance surpasses the negative weather impact US Overall strong demand despite the significant negative flood impact on the West Coast. Clear improvement in Italcementi assets performance drives strong result. Cement: Double digit volume increases bot
Slide 13: Western and Southern Europe
Western and Southern Europe Quarter impacted by weather and winter repair. Market recovery expected. Market continues to grow despite Brexit uncertainty; mostly positive price development. Cost inflation, together with UK timing of the maintenance shut-downs negatively impacted the result. We are in
Slide 14: West & South Europe: Market recovery is clearly visible
West & South Europe: Market recovery is clearly visible Quarter usually impacted by weather and shut-down timings: • Solid price and volume development • ~10m€ repair & maintenance timing impacts in UK and France despite a very hard comparison base • ~5m€ impact from bitumen cost increase 14 53 4 30
Slide 15: Northern and Eastern Europe-Central Asia
Northern and Eastern Europe-Central Asia Demand growth together with improved prices lead to significant result increase Strong sales volume development due to high building materials demand, especially in the housing sector Sweden Nordics and as a result of big infrastructure projects we are involv
Slide 16: Asia Pacific
Asia Pacific Markets are stabilizing in Indonesia and Thailand Positive price developments across most Australian states with continued uptrend expected. However, extreme Australia weather in NSW and cyclone Debbie in Queensland adversely affected volumes in Q1. Weaker than expected growth in domest
Slide 17: Africa - Eastern Mediterranean Basin
Africa - Eastern Mediterranean Basin Challenging market conditions in Q1 Lower demand which is mainly driven by lack of liquidity in the country. Solid pricing and efficiency improvements Egypt lead to increase in operational result. Energy shift will further improve the result in the upcoming quart
Slide 18: Group Services
Group Services Positive signs are emerging in the international sales • Export volume of former Italcementi plants increased by 40% compared to prior year Q1. • Abundant surplus generated from Asia region has partially dried up because of production cuts in China and healthy domestic demand in some
Slide 19: Contents
Contents Page 1. Overview and key figures 3 2. Results by Group areas 12 3. Financial report 20 4. Outlook 2017 28 5. Appendix 31 Slide 19 – 2017 First Quarter Results – 10 May 2017
Slide 20: Key financial messages Q1 2017
Key financial messages Q1 2017 Financial integration of ITC completed Central cash pooling implemented for all former ITC operating entities Disposal of idle and non business-related assets (land, buildings etc.) well on track Purchase price allocation stable and almost finalized Financial
Slide 21: Income Statement Q1 2017
Income Statement Q1 2017 January - March m€ 2016 2017 Variance Revenue 2.832 3.784 34% Result from joint ventures 31 30 -2% Result from current operations before depreciation and amortization 321 383 19% (RCOBD) Depreciation and amortization -183 -275 50% Result from current operations 138 108 -21%
Slide 22: Cash flow statement Q1 2017
Cash flow statement Q1 2017 January-March m€ 2016 2017 Variance Cash flow 202 167 -35 Changes in working capital -344 -575 -231 Decrease in provisions through cash payments -120 -74 46 Cash flow from operating activities - discontinued operations 0 -3 -3 Cash flow from operating activities -262 -485
Slide 23: Growth CapEx reduced; Operational debt payback increased
Growth CapEx reduced; Operational debt payback increased Usage of free cash flow Q1 2015 1) Q1 2016 Q1 2017 876 1,039 1,038 450 147 279 330 336 373 274 420 344 FCF 2) Growth CapEx Debt Payback Dividends +3,711 4,167 9,601 420 36 7,863 147 6,127 99 5,890 1,245 344 336 Net Debt Debt Proceeds Accountin
Slide 24: Group balance sheet
Group balance sheet March 2017 / December m€ 31.03.2016 31.12.2016 31.03.2017 2016 Variance (m€) Variance (%) Assets Intangible assets 10.171 12.320 12.327 7 0% Property, plant and equipment 9.601 13.965 13.893 -71 -1% Financial assets 1.747 2.387 2.389 1 0% Fixed assets 21.519 28.672 28.609 -63 0%
Slide 25: Net Debt development
Net Debt development Net Debt / RCOBD Strategic target (well in line with IG metrics) Net Debt (m€) 6.0 3.9 4.0 3.6 3.3 3.3 2.9 3.0 2.8 3.0 2.2 14,608 2.0 11,566 +3,711 8,999 9,601 8,423 8,146 7,770 7,047 7,307 6,957 5,286 5,890 2007 2008 2009 2010 2011 2012 2013 2014 2015* Q1 2016** Q1 2016 2017**
Slide 26: Debt maturity profile
Debt maturity profile As per 31 March 2017 (m€) Debt Instruments Syndicated Facilities Agreement Bonds 2,070 1,826 26 1,575 95 1,430 1,275 25 1,052 1,029 1,003 28 24 29 3 1,800 751 1,480 669 1 1,250 1,000 1,000 1,000 640 750 Average 2017 2018 2019 2020 2021 2022 2023 2024 2025 coupon rate : 6.9 % 7.
Slide 27: Contents
Contents Page 1. Overview and key figures 3 2. Results by Group areas 12 3. Financial report 20 4. Outlook 2017 28 5. Appendix 31 Slide 27 – 2017 First Quarter Results – 10 May 2017
Slide 28: Global cement demand outlook 2017
Global cement demand outlook 2017 Northern Europe: Solid growth North America: UK: +2% Solid growth in US; recovery in Western Canada Stagnant Russia & Kazakhstan: +1% Recovery +1% 0% Japan: Europe: +2%+2% Turkey: Slight increase Modest recovery China: 2% +2% Stagnant A slight decline +1% +4% +2% 0%
Slide 29: Targets 2017
Targets 2017 2017 Target Increase in all business Volumes lines Mid single to double digit Operating EBITDA organic growth CapEx €bn 1.4 Maintenance €m 700 Expansion €m 700 Energy cost per tonne of cement produced High single digit increase Current tax rate ~25 % Slide 29 – 2017 First Quarter Result
Slide 30: Contents
Contents Page 1. Overview and key figures 3 2. Results by Group areas 12 3. Financial report 20 4. Outlook 2017 28 5. Appendix 31 Slide 30 – 2017 First Quarter Results – 10 May 2017
Slide 31: Volume and price development
Volume and price development Domestic gray cement Aggregates Ready Mix Volume Price Volume Price Volume Price Total US - ++ ++ ++ -- + Canada + ++ -- ++ -- + Belgium + + -- -- -- ++ Netherlands ++ ++ -- ++ -- ++ Germany ++ - ++ + ++ + France -- - ++ -- ++ + Italy -- ++ ++ -- ++ -- Spain ++ - ++ ++ +
Slide 32: Contact information and event calendar
Contact information and event calendar Event calendar Contact information Investor Relations 01 August 2017 2017 half year results Mr. Ozan Kacar Phone: +49 (0) 6221 481 13925 08 November 2017 2017 third quarter results Fax: +49 (0) 6221 481 13217 Mr. Piotr Jelitto Phone: +49 (0) 6221 481 39568 Fax:
Slide 33: Disclaimer
Disclaimer This presentation contains forward-looking statements and information. Forward-looking statements and information are statements that are not historical facts, related to future, not past, events. They include statements about our believes and expectations and the assumptions underlying t