Slide 1: Full-Year 2019 Results
FULL-YEAR 2019 RESULTS Jan Jenisch, CEO Géraldine Picaud, CFO February 27, 2020 © LafargeHolcim Ltd 2015
Slide 2: Agenda
AGENDA 01 Highlights and Key Developments 02 Full-year 2019 financial results 03 Outlook 2020 2
Slide 3: Highlights and Key Developments
01 HIGHLIGHTS AND KEY DEVELOPMENTS Jan Jenisch, Chief Executive Officer All numbers in this section are pre IFRS 16, reconciliations with IFRS numbers are in the appendix of this presentation © LafargeHolcim Ltd 2015
Slide 4: Record Performance Ahead of Targets 2022
FY 2019 HIGHLIGHTS AND KEY DEVELOPMENTS RECORD PERFORMANCE AHEAD OF TARGETS 2022 Net Sales up 3.1% and over-proportional Recurring EBITDA growth of 6.5% LFL Record Net Income1 of CHF 2’072 m (+32%), EPS1 up 29% Record free cash flow of CHF 3’047 m (+79%) with cash conversion at 49.5% (from 28.3% in
Slide 5: Strategy 2022 – Building for Growth
STRATEGY 2022 – BUILDING FOR GROWTH RECORD PERFORMANCE AHEAD OF TARGETS 2022 Net Sales up 3.1% and over-proportional Recurring EBITDA growth of 6.5% LFL 8 bolt-on acquisitions in 2019 Disciplined investments for future growth SG&A cost savings program over-achieved with total net savings1 of
Slide 6: 8 Bolt-on Acquisitions in Aggregates & Ready Mix Concrete
BOLT-ON ACQUISITIONS 8 BOLT-ON ACQUISITIONS IN AGGREGATES & READY MIX CONCRETE Maxi Readymix Concrete Alfons Greten UK Germany RMX Precast & RMX (Q3 2019) (Q1 2019) Bedrock Redi-Mix Canada RMX (Q2 2019) Somaco Romania Precast (Q2 2019) Colorado River Concrete Texas Sibelco Transit Mix AGG & RMX Aust
Slide 7: Strengthening Our Leadership in Sustainability
LEADERSHIP IN SUSTAINABILITY STRENGTHENING OUR LEADERSHIP IN SUSTAINABILITY Launch of carbon neutral RMX concrete (EvoPact, EcoPact) in Switzerland and Germany 5 carbon capture projects launched in Europe, US and Canada LH CO2 reduction targets validated by Science Based Targets initiative (SBTi) Ap
Slide 8: Good Progress Towards Our 2022 Targets
LEADERSHIP IN SUSTAINABILITY GOOD PROGRESS TOWARDS OUR 2022 TARGETS CLIMATE CIRCULAR ENVIRONMENT COMMUNITY Sustainability & ENERGY ECONOMY pillars CO2 WASTE WATER VALUE Lead metric Reduced Re-used Saved Shared [kg CO2/t cementitious] [ Mt ] [ l fresh water / tcem ] [ M total beneficiaries ] Performa
Slide 9: Our CO2 Reduction Target and Roadmap
LEADERSHIP IN SUSTAINABILITY OUR CO2 REDUCTION TARGET AND ROADMAP Largest contribution in next decade expected from construction value chain 5 Carbon capture & storage or use Enhancement of cement efficiency in concrete 4 Differentiated use of concrete in construction including new binders based on
Slide 10: Further Improvement of Safety Performance
HEALTH & SAFETY FURTHER IMPROVEMENT OF SAFETY PERFORMANCE Lost Time Incidents Frequency Rate -26% 0.91 0.79 0.67 2017 2018 2019 10 10
Slide 11: Record Performance Ahead of Targets 2022
PERFORMANCE HIGHLIGHTS RECORD PERFORMANCE AHEAD OF TARGETS 2022 Net Sales Recurring EBITDA CHF m 3-5% LFL CHF m >5% LFL annually annually +5.1% +6.5% +3.1% +3.6% 27’021 27’466 6’153 26’722 5’990 6’016 2017* 2018 2019 … 2022 2017 2018 2019 … 2022 Free Cash Flow & Cash Conversion ROIC CHF m >40% >8% 2
Slide 12: Full-Year 2019 Financial Results
02 FULL-YEAR 2019 FINANCIAL RESULTS Géraldine Picaud, Chief Financial Officer All numbers in this section are pre IFRS 16, reconciliations with IFRS numbers are in the appendix of this presentation © LafargeHolcim Ltd 2015
Slide 13: Record Performance Ahead of Targets 2022
2019 PERFORMANCE RECORD PERFORMANCE AHEAD OF TARGETS 2022 Recurring Net Sales EPS 2 Free cash flow EBITDA CHF 1 1 +3.1% +6.5% +29% 3’047m CHF 26’722 m CHF 6’153 m CHF 3.40 per share Cash conversion: 49.5% 1 Variance on a Like for like basis 13 13 2 Before impairment and divestments 13
Slide 14: Growth in Cement Volumes in North America and Europe
2019 VOLUMES DEVELOPMENT GROWTH IN CEMENT VOLUMES IN NORTH AMERICA AND EUROPE M ton M m3 North America Europe LFL +3% -2% 113.5 118.7 +2% +5% +2% 46.3 +0% 10.2 Asia Pacific 20.8 Group1 19.3 CEM AGG RMX CEM AGG RMX -0% -0.3% 73.5 -0% +0.5% 269.9 Middle East Africa -0% 27.3 9.6 207.9 -1% -28% CEM AGG
Slide 15: Net Sales Up 3.1% LFL
2019 NET SALES BRIDGE NET SALES UP 3.1% LFL CHF m +3.1% LFL 27’466 * 26’722 -894 +832 -682 FY 2018 Scope LFL FX FY 2019 -2.7% 15 * Including divestments of Indonesia, Malaysia and Singapore
Slide 16: Over-Proportional Rec EBITDA Growth of 6.5% LFL
2019 RECURRING EBITDA BRIDGE OVER-PROPORTIONAL REC EBITDA GROWTH OF 6.5% LFL CHF m +6.5% LFL -165 6’153 6’016 -84 1 +398 -12 FY 2018 Scope Volume Price FX FY 2019 (pre-IFRS 16) over cost (pre-IFRS 16) +2.3% 16 1 Including divestments of Indonesia, Malaysia and Singapore
Slide 17: Rec EBITDA Growth in All Business Segments
2019 NET SALES AND RECURRING EBITDA BY SEGMENT REC EBITDA GROWTH IN ALL BUSINESS SEGMENTS Cement Aggregates RMX Solutions & Products +4.0% 17’498 -0.2% +6.1% +3.5% 5’289 4’759 4’125 +3.0% +0.2% 902 2’248 +18.0% +20.0% 276 217 27% Rec. EBITDA 22% Rec. EBITDA 5% Rec. EBITDA 10% Rec. EBITDA margin (+1.
Slide 18: Net Sales Growth in 4 out of 5 Regions
2019 REGIONAL PERFORMANCE NET SALES GROWTH IN 4 OUT OF 5 REGIONS North America Latin America Europe Middle East Africa Asia Pacific +4.9% +2.5% +4.9% +14.2% +4.4% 7’670 +10.2% 6’491 6’311 +3.6% -0.8% 1’596 1’694 1’621 2’903 2’620 -1.7% -5.1% 887 656 Net Sales to external customers (CHF m) Recurring
Slide 19: North America: Solid Performance Delivered
NORTH AMERICA SOLID PERFORMANCE DELIVERED CHF m Q4 2019 FY 2019 Net Sales1 1’557 6’311 LFL Growth +2.7% +4.9% Recurring EBITDA pre-IFRS 16 428 1’621 LFL Growth +4.3% +4.4% Strong volumes growth in all business segments in the US Softer environment in Canada Over-proportional Recurring EBITDA growth
Slide 20: Latin America: Resilient Performance
LATIN AMERICA RESILIENT PERFORMANCE CHF m Q4 2019 FY 2019 Net Sales1 647 2’620 LFL Growth +0.8% +3.6% Recurring EBITDA pre-IFRS 16 217 887 LFL Growth -1.8% -1.7% Softer markets in Mexico and Ecuador Good performance in Colombia, cement demand recovery in Brazil Effective cost and price management ac
Slide 21: Europe: Strong and Over-Proportional Rec EBITDA Growth
EUROPE STRONG AND OVER-PROPORTIONAL REC EBITDA GROWTH CHF m Q4 2019 FY 2019 Net Sales1 1’834 7’670 LFL Growth +0.4% +4.9% Recurring EBITDA pre-IFRS 16 426 1’596 LFL Growth +4.0% +10.2% Solid market demand across the region Effective price management in all business segments Strong margin improvement
Slide 22: Middle East Africa: Further Progress Towards Stabilization
MIDDLE EAST AFRICA FURTHER PROGRESS TOWARDS STABILIZATION CHF m Q4 2019 FY 2019 Net Sales1 714 2’903 LFL Growth -6.0% -0.8% Recurring EBITDA2 pre-IFRS 16 166 656 LFL Growth +0.1% -5.1% Price pressure in oversupplied markets Robust cement demand in Iraq and several countries in Eastern Africa Good pr
Slide 23: Asia Pacific: Strong Improvement in Rec EBITDA
ASIA PACIFIC STRONG IMPROVEMENT IN REC EBITDA CHF m Q4 2019 FY 2019 Net Sales1 1’613 6’491 LFL Growth +5.4% +2.5% Recurring EBITDA2 pre-IFRS 16 440 1’694 LFL Growth +5.7% +14.2% Strong improvement of Recurring EBITDA in India Turnaround initiatives in Australia offsetting current market slowdown Sol
Slide 24: Record Performance in Net Income and EPS
FINANCIAL PERFORMANCE 2019 RECORD PERFORMANCE IN NET INCOME AND EPS CHF m 2018 2019 Change before impairment & divestments before impairment & divestments Net Sales 27'466 26'722 -744 Recurring EBITDA 6'016 6'153 137 Depreciation & Amortization -2'235 -2'096 139 Restructuring, litigation and others
Slide 25: Record FCF of CHF 3'047 m, Cash Conversion at 49.5%
FREE CASH FLOW RECORD FCF OF CHF 3’047 M, CASH CONVERSION AT 49.5% CHF m 2018 2019 Change Recurring EBITDA 6'016 6'153 137 Change in net working capital -537 266 803 Income taxes paid -787 -711 76 Net financial expenses paid & FX -863 -488 375 Share of profit of JVs, net of dividends received -209 -
Slide 26: Net Debt Reduced from CHF 13.5 bn to CHF 8.8 bn
NET FINANCIAL DEBT NET DEBT REDUCED FROM CHF 13.5 BN TO CHF 8.8 BN (-35%) CHF m Net debt reduction of 13’518 CHF 4’707 m (-35%) -3’047 +123 -1’664 +322 +114 8’811 -555 NFD 1 FCF Disposals / acquisitions Group Non-controlling Others Hybrid NFD Dec 2019 Dec 2018 (Pre-IFRS 16) shareholders interest bon
Slide 27: Target Overachieved, Net Debt to Rec EBITDA at 1.4x
LEVERAGE IMPROVEMENT TARGET OVERACHIEVED, NET DEBT TO REC EBITDA AT 1.4X NFD / Recurring EBITDA 2.4x 2.2x 1.4x 2017 2018 2019 27
Slide 28: Strong Progress Towards 2022 Target
RETURN ON INVESTED CAPITAL STRONG PROGRESS TOWARDS 2022 TARGET ROIC >8.0% 7.6% 6.5% 5.8% 5.2% 2016 2017 2018 2019 … 2022 28
Slide 29: Attractive Dividend of CHF 2 per Share Proposed
DIVIDEND ATTRACTIVE DIVIDEND OF CHF 2 PER SHARE PROPOSED Dividend per share (CHF) 2.0 2.0 2.0 2.0 1.5 › 2019 cash dividend of CHF 2.0 per share proposed at AGM on May 12th, 2020 › The dividend will be fully paid out of foreign capital contribution reserve and is not subject to Swiss withholding tax
Slide 30: Introducing Recurring EBIT as New Profitability Metric
NEW PROFITABILITY METRIC INTRODUCING RECURRING EBIT AS NEW PROFITABILITY METRIC Recurring EBIT replaces Recurring EBITDA as new performance indicator from 2020 onwards: › to achieve full transparency and accountability under IFRS 16 › to fully capture operational achievement › to reflect financial d
Slide 31: Outlook and Targets 2020
Confidential – Not to be distributed 03 OUTLOOK AND TARGETS 2020 Jan Jenisch, Chief Executive Officer All numbers in this section are post IFRS 16 © LafargeHolcim Ltd 2015
Slide 32: Solid Markets Expected in 2020
OUTLOOK 2020 SOLID MARKETS EXPECTED IN 2020 NORTH AMERICA Continued market growth LATIN AMERICA Improving market conditions EUROPE Continued demand growth across most countries MIDDLE EAST AFRICA Challenging market conditions ASIA PACIFIC Demand growth in India, challenging environment in China 32
Slide 33: New Level of Financial Performance to Continue in 2020
TARGETS 2020 NEW LEVEL OF FINANCIAL PERFORMANCE TO CONTINUE IN 2020 Net Sales growth of 3% to 5% LFL Recurring EBIT1 growth of at least 7% LFL Cash conversion2 of 40% Debt leverage below 2x Capex and Bolt-on acquisitions less than CHF 2 bn 1 This guidance doesn’t take into account the impact that th
Slide 34: Upcoming Events 2020
UPCOMING EVENTS 2020 April 30, 2020: Q1 2020 Trading Update May 12, 2020: Annual General Meeting May 27, 2020: Capital Markets Day July 30, 2020: Half-Year 2020 Results October 30, 2020: Q3 2020 Trading Update 34
Slide 35: Appendix
APPENDIX 35
Slide 36: Net Income
RECONCILIATION OF NON-GAAP MEASURES NET INCOME 2019 Impairment 2019 2019 CHF m pre IFRS 16 and pre IFRS 16 IFRS 16 impact reported post IFRS 16 before impaiment & divestments & divestments Net Sales 26'722 26'722 26'722 Recurring EBITDA 6'153 6'153 428 6'581 Depreciation & Amortization -2'096 -2'096
Slide 37: Rec EBIT by Region
RECONCILIATION OF NON-GAAP MEASURES REC EBIT BY REGION 2019 2019 2019 2019 CHF m IFRS 16 Impact IFRS 16 Impact pre IFRS 16 reported post IFRS 16 pre IFRS 16 reported post IFRS 16 Group Europe Recurring EBITDA 6'153 428 6'581 1'596 125 1'720 Depreciation of right of use assets -21 -383 -404 -5 -116 -
Slide 38: Free Cash Flow
RECONCILIATION OF NON-GAAP MEASURES FREE CASH FLOW 2019 2019 CHF m pre IFRS 16 IFRS 16 impact reported post IFRS 16 Recurring EBITDA 6'153 428 6'581 Change in inventories 357 357 Change in other working capital -91 24 -67 Income taxes paid -711 -711 Net financial expenses paid & FX -488 -69 -557 Sha
Slide 39: Net Financial Debt to Rec EBITDA Ratio
RECONCILIATION OF NON-GAAP MEASURES NET FINANCIAL DEBT TO REC EBITDA RATIO 2019 2019 CHF m IFRS 16 impact pre IFRS 16 reported post IFRS 16 Recurring EBITDA 6'153 428 6'581 Net Financial Debt 8'811 1'299 10'110 Debt leverage 1.4x 1.5x 39
Slide 40: Disclaimer
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