Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — HeidelbergCement — Investor Day (September 2013)
40 slides from Heidelberg Materials's investor day presentation, Sep 19, 2013
Slide 1: Analyst Day 2013 – Update Strategy & Markets
HeidelbergCement Analyst Day 2013 Heidelberg, September 19 Update Strategy & Markets Dr. Bernd Scheifele, Group CEO “Bergheim Mill” in Heidelberg, 1873. First cement plant of HeidelbergCement. Slide 1 - Analyst Day 2013 – 19 September 2013
Slide 2: Contents
Contents Page 1. Update Strengths & Strategy 3 2. Market update 19 3. Outlook 2013 36 Slide 2 - Analyst Day 2013 – 19 September 2013
Slide 3: Our successful business strategy
Our successful business strategy 1 Strong asset base and excellent product portfolio – World market leader in aggregates: 19 billion tonnes of reserves in attractive markets – Very well balanced 122 million tonnes of cement capacity around the globe – Strong positions in fast growing metropolitan
Slide 4: Global market leader for aggregates
1 Global market leader for aggregates Top 3 global market positions in cement and ready-mixed concrete Financial Key Figures HeidelbergCement €m 0% 1H 2012 6,580 6,560 1H 2013 +5% +7% 907 953 505 540 Revenue Operating EBITDA Operating income Aggregates Cement1 Ready-mixed concrete #1 (2012 sales vol
Slide 5: Strong reserve base for raw materials cement and aggregates
1 Strong reserve base for raw materials cement and aggregates Cement Aggregates Focus on growth markets Focus on mature markets and 122 mt capacity worldwide markets in industrialisation 63% of capacity in emerging 19 bnt reserves markets 86% of reserves in mature markets 11% of capaci
Slide 6: Benefitting from excellent footprint in attractive Micromarkets
1 Benefitting from excellent footprint in attractive Micromarkets Cement plant Aggregates Urban center Edmonton St. Petersburg Chicago Moscow Vancouver London Seattle Toronto Frankfurt San Francisco Los Angeles Dallas New York Istanbul San Diego Atlanta Delhi Guangzhou Houston Hong Kong Mumbai Banga
Slide 7: Low exposure to crisis countries and political trouble spots
1 Low exposure to crisis countries and political trouble spots Not represented in EU debt crisis states: – Portugal, Ireland, Italy, Greece, and Spain* Not represented in: – Iran, Irak, Syria, Egypt, Nigeria, Sudan, Libya, Tunisia, and North Korea * Spain with <0.5% of Group revenue Slide 7 - An
Slide 8: Successful track record of timely implemented optimization programs
2 Successful track record of timely implemented optimization programs Project Key points Target Reorganization and FTE efficiency 2006 “win Europe” IT standardization and country SSCs 88 €m 170% 37% G&A FTE reduction > 500 integration projects worldwide 2007 Hanson Synergy areas: Market, S
Slide 9: Consistent framework of performance improvement
2 Consistent framework of performance improvement HC Group programs Margin Cost cutting Cash savings improvement Rightsizing / Operational Process Cash Sales focus Restructuring Efficiency improvements optimization Win OpEx (CEM) LEO (all BLs) PERFORM (CEM) FOX 2013 Hanson integration CLIMB Ops. (AG
Slide 10: CLIMB Commercial is showing results
2 CLIMB Commercial is showing results Program scope and target Results Focus on price niches in aggregates AGG price increase in the US June 2013 YtD Focus on unprofitable/small customers 6.2% Improved interaction of production and sales 4.1% Pricing according to product costing 3.2% Target:
Slide 11: PERFORM – Overall pricing success in demanding environment
2 PERFORM – Overall pricing success in demanding environment All running according to plan Strong market is supporting price increases NORWAY Forecast positive 01.01.2013 SWEDEN ESTONIA Targets can be reached 01.01.2013 Long winter and weak economical 01.01.2013 environment UK (Prices about 2% lower
Slide 12: Further price increases announced in North America
Further price increases announced in North America Cement price increases WA CANADA 01.01.2013 Aggregates price increases 01.01.2013 01.01.2013 01.02.2013 01.04.2013 01.04.2013 01.01.2013 price increase stick 01.05.2013 01.07.2013 01.06.2013 01.07.2013 NY, MA, PA, VA OR 01.01.2013 01.01.2013 01.04.2
Slide 13: Successful program execution is reflected in OIBD margin
Successful program execution is reflected in OIBD margin CEM AGG LTM OIBD-margin LTM OIBD-margin in %* in %* 30 28.7 30 28 28 25.8 26 27.2 24.9 26 24.0 24 24.6 24 22.4 22.0 21.4 22 22 20.7 20 20 21.2 20.1 18 18 19.1 ** 16 16 14.9 15.1 14 14 13.0 12.4 12 12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 1
Slide 14: Efficiency improvement at HeidelbergCement continues
2 Efficiency improvement at HeidelbergCement continues 2013 14.0 €b (**) 2009 Group revenues 11.1 €b 123mt Cement capacity 106mt 56,723 54,655 Number of 53,889 53,617 employees (*) 53,154 2009 2010 2011 2012 2013 H1 35% increase in “revenue per employee” compared to 2009 (*)Yearly average number of
Slide 15: Strong operating leverage in North America
2 Strong operating leverage in North America €m June 2013 YtD 13.9% June 2012 YtD Operating 10.7% EBITDA Margin (*) 1,554 +16 Revenue 1,538 (+1 %) +52 (+32 %) 217 Operating EBITDA (*) 165 June 2012 YtD June 2013 YtD Significant operating leverage as a result of positive pricing, timely implemented c
Slide 16: CapEx in Asia and Africa is delivering returns
3 CapEx in Asia and Africa is delivering returns Substantial recovery potential in North America and Europe Western - Northern Europe North America Africa - Med. Basin Eastern Europe - Central Asia Asia - Pacific Reconciliation & Other Cement sales volume (mt) Operating EBITDA (€m) 0 -469 89 89 2,94
Slide 17: Solid performance without destroying business portfolio
3 Solid performance without destroying business portfolio 3,000 Operating EBITDA 2,477 2,239 2,321 Superior footprint and well 2,102 managed programs €m 2009 2010 2011 2012 Mid-cycle 8,423 8,146 Net Debt 7,770 7,047 Stay below 6,500 Continuous focus on deleveraging €m 2009 2010 2011 2012 Mid-cycle N
Slide 18: Contents
Contents Page 1. Update Strength & Strategy 3 2. Market update 19 3. Outlook 2013 36 Slide 18 - Analyst Day 2013 – 19 September 2013
Slide 19: Recent economic and market trends
Recent economic and market trends North America: recovery continues after adverse weather in the North Germany and Northern Europe: stable with positive price development Benelux: some catch-up and stabilization but still challenging market conditions UK: increasing indications of a recovery
Slide 20: Outlook is positive in our major markets
Outlook is positive in our major markets Group revenue breakdown per country Strong market development United Kingdom Positive Indonesia 10% Outlook 11% Australia 10% Germany North America 7% 24% Africa, Turkey, Israel 9% Nordics Europe Rest Asia 8% 14% Rest Hungary 4% 0% Spain 0% China India 1% 2%
Slide 21: North America: recovery continues
North America: recovery continues Market recovery impacted by weather / HC operating in fastest growing fundamentals for recovery intact metropolitan areas Correction by PCA weather related NAM – 2012 revenue breakdown (*) Strong pickup in residential demand and Vancouver, Calgary, house prices
Slide 22: North America: pent-up demand release supporting recovery
North America: pent-up demand release supporting recovery Large pent-up demand waiting for release Pent-up housing assessment by PCA (thousands of starts) US debt service level ratio reached 18 year low Nonfinancial corporate businesses have $15.5 trillion in total financial (+20% vs prior to th
Slide 23: Europe: growth and recovery potential
Europe: growth and recovery potential HeidelbergCement located in markets with growth and recovery potential HC exposure (as % of 2012 Group revenue) Northern Balanced footprint of strong and Europe 2% 7% stable Northern European and Moscow Oslo, Stockholm German markets and recovery potential in
Slide 24: Germany: solid construction demand
Germany: solid construction demand German construction demand driven by housing and infrastructure – Housing permits1 up 9.8% July 2013 YtD in Germany overall – Southern German states2 constitute 47% of building permits with a North-Rhine Westfalia growth of 12.3% July 2013 YtD – High-speed train
Slide 25: Northern Europe: attractive and stable growth market
Northern Europe: attractive and stable growth market High and stable construction output growth in Norway, Sweden and Denmark 3.9% 3.0% 3.2% 2013 2014 2015 Stockholm Source: Euroconstruct, June 2013. Oslo Large infrastructure projects to drive demand: Kopen - Norway: railway upgrade, metro, ener
Slide 26: UK: construction recovery visible
UK: construction recovery visible Residential demand driving short-term recovery 12% yoy increase in LTM construction new orders in Q2 UK bricks market grew 23% in three month period ending July 2013 House prices increased 5.4% yoy in August 2013 Major infrastructure projects drive mid-ter
Slide 27: UK: HC is benefitting from improved operating leverage in the upturn
UK: HC is benefitting from improved operating leverage in the upturn Revenues Fixed Costs Headcount -31% -35% -29% FY 2008 FY 2012 FY 2008 FY 2012 FY 2008 FY 2012 Note: Headcount denotes average number of employees for the year; Revenues and fixed costs in local currency Slide 27 - Analyst Day 2013
Slide 28: Eastern Europe: markets stabilize after long winter
Eastern Europe: markets stabilize after long winter Market environment and HeidelbergCement with strong potential integrated positions Long and cold winter impacted Market leading positions in cement construction activity and aggregates in Poland, Czech Republic and Romania Budget cuts as part
Slide 29: Indonesia: one of the most attractive markets in the world
Indonesia: one of the most attractive markets in the world Significant mid- and long-term Highly concentrated market with cement growth potential high entry barriers Worldwide 4th largest population ( ~ 250 Top 3 suppliers account for 90% market share million) -> significant domestic demand Li
Slide 30: Indonesia: Demand and Supply balanced until at least 2016
Indonesia: Demand and Supply balanced until at least 2016 -> Residential & infrastructure drive demand 90 -> Imports and new capacities 83.7 mt 80 Export market 70.6 mt 66.0 mt 77.6 mt 70 59.3 mt 60.9 mt 70.5 mt 54.3 mt 64,1 mt 60 52.9 mt 64.2 mt 67.5 mt 48.0 mt 61.2 mt 46.2 mt 58.3 mt 50 55.0 mt 48
Slide 31: Indonesia: INDOCEMENT located in strongest growth regions
Indonesia: INDOCEMENT located in strongest growth regions Cirebon Factory Tarjun Factory 2 plants with production 1 plant with production capacity of 4.1mt capacity of 2.6mt Samarinda Terminal Jakarta Tj. Priok Terminal Citeureup Factory Banyuwangi Terminal Surabaya Terminal 9 plants with production
Slide 32: Indocement perfectly positioned to capture infrastructure growth
Indocement perfectly positioned to capture infrastructure growth Early invest in mixer trucks and batching plants Significant sales growth in urban Jakarta Benefitting from increasing infrastructure works 000m3 3.700 3.517 3.400 3.100 2.785 2.800 2.429 2.500 2.200 1.900 1.600 1.221 1.300 930 9
Slide 33: Australia: improved setup in a profitable market
Australia: improved setup in a profitable market Economic environment & Country overview: market outlook strong footprint near urban centers Change in government expected to improve business environment & consumer sentiment Brisbane Weaker currency positive for tourism and manufacturing Invest
Slide 34: Sub-Saharan Africa: significant growth potential
Sub-Saharan Africa: significant growth potential Substantial growth drivers More than 800 million people living in Sub- Saharan Africa (North Africa: < 200 million) Cement consumption less than 100 kg per capita (North Africa ~600kg per capita) Attractive raw material reserves driving economic
Slide 35: Contents
Contents Page 1. Update Strength & Strategy 3 2. Market update 19 3. Outlook 2013 36 Slide 35 - Analyst Day 2013 – 19 September 2013
Slide 36: Outlook 2013 unchanged
Outlook 2013 unchanged Continued recovery in the USA with a strong momentum in Sunbelt states. Demand growth in Asia and Africa Positive development in UK, Germany and Northern Europe Benelux and Eastern Europe weak; positive trend in July / August; good demand but some competitive pressure
Slide 37: Targets 2013
Targets 2013 2013 Target Cash savings €m 240 CapEx * ~ €m 1,100 Maintenance ** ~ €m 525 Expansion ~ €m 575 Cost of gross debt ~ 6.4 % Operational tax rate *** 18% - 20% Mid cycle targets unchanged Operating EBITDA €3 billion Stay below 2.8x; Net debt / operating EBITDA proforma 2.2x Based on the inc
Slide 38: Management priorities 2013
Management priorities 2013 1. Top line growth: Pricing - PERFORM : Pricing excellence and margin improvement in cement - CLIMB Commercial: Pricing excellence and margin improvement in aggregates 2. Operational Excellence - FOX 2013 : 240€m cash savings in 2013 - LEO: Save costs and optimise transpor
Slide 39: Contact information and event calendar
Contact information and event calendar Event calendar Contact information Investor Relations 07 November 2013 2013 third quarter results Mr. Ozan Kacar Phone: +49 (0) 6221 481 13925 Fax: +49 (0) 6221 481 13217 Mr. Steffen Schebesta, CFA Phone: +49 (0) 6221 481 39568 Fax: +49 (0) 6221 481 13217 ir-in
Slide 40: Safe Harbour Statement
Safe Harbour Statement Unless otherwise indicated, the financial information provided herein has been prepared under International Financial Reporting Standards (IFRS). This presentation contains forward-looking statements and information. Forward-looking statements and information are statements th