Holcim Ltd · SIX:HOLN
Holcim — FY2002 Earnings Presentation
25 slides from Holcim's earnings presentation, 2003
Slide 1: Annual results 2002 and outlook for 2003
Annual results 2002 and outlook for 2003 Holcim Group 2002 Strong operating results in a difficult market environment. Gratifying internal growth, excluding the negative impact of foreign currency translations. Increase in operating EBITDA margin confirms efficiency gains in production and dis
Slide 2: Corporate Governance; Roadmap to increase efficiency
Corporate Governance Corporate Governance at Holcim is aimed at meeting the requirements of a progressive, internationally- oriented public company. Chairman of the Board of Directors and CEO functions have been separated. Audit Committee and Nomination & Compensation Committee have been establi
Slide 3: Europe; Positions in Europe
Europe Economic growth continued to slow down. Higher demand for building materials in Italy, Spain and most countries in Central and Eastern Europe. Germany stuck in recession in its 8th year. Overall, stagnating cement consumption in Group region Europe. EU expansion will lead to fresh impetus. 4
Slide 4: Facts Europe; Status Eternit AG, Niederurnen
Facts Europe Proximity to markets supports sales. Holcim increases cement deliveries in a generally flat market. Central Eastern European country cluster lead by one management team and further concentration on core business in Switzerland. Most Group companies post better operating results.
Slide 5: Status of cartel investigation (Germany); Strengthening of market presence (Spain)
Status of cartel investigation (Germany) In 2002, the German Federal Cartel Office initiated a nationwide investigation into the cement industry. The legal proceedings are related to market violations in the 1990s. Both Holcim Group companies in Germany have been under new management since 2000
Slide 6: North America; Positions in North America
North America The US economy remained stable in 2002. During the second half of the year, the economy slowed down noticeably. The Canadian economy showed solid growth rates during the entire year. Despite large projects and lively housing construction activity, cement consumption declined slightly.
Slide 7: Facts North America; Status of expansion projects (USA)
Facts North America St. Lawrence Cement exceeded last year's good results. It benefited from the new slag cement plant in Camden (USA) and lively demand in Canada. Holcim (US) overcame its production bottleneck in the Mid-West by commissioning the new Portland plant in the second half of the y
Slide 8: Latin America; Positions in Latin America
Latin America Markets and currencies strained by the crisis in Argentina, the difficult political situation in Venezuela and Colombia and the reluctance to invest in Brasil. The construction sector was a strong pillar of economic development in Mexico and Central America. Overall, Latin America rema
Slide 9: Facts Latin America; Africa Middle East
Facts Latin America Only minor decline in cement sales while price development was solid. Higher sales of Apasco in Mexico balanced market declines in other countries in this region. Holcim Brazil remained firm in a challenging economic environment. Group companies in Central America, Ecuador
Slide 10: Positions in Africa Middle East; Facts Africa Middle East
Positions in Africa Middle East Group: Cement plant Grinding plant Terminal Participation: Cement plant Grinding plant Terminal Cement capacity Group (Africa Middle East): 13.3 m t; additionally with partners: 5.1 m t. 18 Annual results 2002 Facts Africa Middle East Significant increase in sales i
Slide 11: Asia Pacific; Positions in Asia Pacific
Asia Pacific The countries of this Group region made further progress in 2002. The construction industry was generally the most important growth factor. Thailand and Vietnam in particular enjoyed a significantly higher demand for cement. Housing construction was the driving force in many places. Bro
Slide 12: Facts Asia Pacific; Status Queensland Cement (Australia)
Facts Asia Pacific Group region strengthened by first-time full consolidation of PT Semen Cibinong in Indonesia. Strong increase in sales in most markets and all segments. Better capacity utilization boosts operating results. Improved performance especially in Vietnam, Thailand and Australia.
Slide 13: Key financial figures; Major changes in the scope of consolidation
Key financial figures +/- Million CHF 2000 2001 2002 in CHF in loc. curr. Net sales 13'531 13'644 13'010 -4.6% 2.1% Operating profit 2'001 1'945 1'903 -2.2% 5.8% Operating EBITDA 3'365 3'335 3'341 0.2% 7.7% EBITDA 3'595 3'574 3'399 -4.9% 2.5% Group net income after minority interests 886 812 506 -37
Slide 14: Capacity and sales volumes; Exchange rates
Capacity and sales volumes Cement capacity in million t Cement sales in million t Aggregates sales in million t Ready-mix concrete sales in million m3 141.9 121.2 113.2 90.5 92.1 86.6 89.5 80.6 84.3 24.9 25.5 25.3 2000 2001 2002 26 Annual results 2002 Exchange rates Statement of income average excha
Slide 15: Currency exposure; Net sales
Currency exposure Sales Operating Profit CHF CHF 7% Other 6% Other 26% 24% USD 41% USD EUR 51% 19% EUR 26% 2002 28 Annual results 2002 Net sales Million CHF 13'531 13'644 13'010 Volume / price 523 4.5% 166 1.2% -108 -0.8% Change in structure 521 4.4% 359 2.6% 398 2.9% Forex movements 779 6.7% -412 -
Slide 16: Net sales by region
Net sales by region 4590 4523 4480 Million CHF 2000 3159 3143 2001 2763 2002 1684 1159 1312 1129 1213 1136 3742 3805 3248 ∆ 01/02 Volume/ Change in Currency Total price structure Europe 1.3% -0.6% -1.7% -1.0% North America -4.4% 0.4% -8.1% -12.1% Latin America -7.3% 0.1% -7.4% -14.6% Africa Middle E
Slide 17: Net sales by segment; Operating profit
Net sales by segment Million CHF 2000 % 2001 % 2002 % Cement / clinker 9'544 65 9'994 68 9'698 70 Aggregates / concrete 3'451 23 3'588 25 3'350 24 Other products / services 1'829 12 1'043 7 843 6 Subtotal 14'824 100 14'625 100 13'891 100 Eliminations -1'293 -981 -881 Total 13'531 13'644 13'010 32 An
Slide 18: Operating profit by region; Operating EBITDA
Operating profit by region Million CHF 540 2000 423 513 479 2001 306 294 2002 200 242 156 165 152 97 835 820 785 ∆ 01/02 Volume/ Change in Currency Total price/cost structure Europe -4.5% -0.4% -1.8% -6.6% North America 4.6% 0.3% -8.8% -3.9% Latin America 4.3% 0.0% -8.5% -4.3% Africa Middle East 43.
Slide 19: EBITDA; Group net income
EBITDA Million CHF Margin 26.6% 26.2% 26.1% 3'595 3'574 3'399 + 15.4% - 0.6% - 4.9% 2000 2001 2002 36 Annual results 2002 Group net income Before minority interests in million CHF After minority interests in million CHF + 5.8% - 0.4% 1'035 1'031 + 11.4% - 8.4% - 22.7% 886 812 797 - 37.7% 506 2000 20
Slide 20: Variance in other (expenses) income; Cash flow from operating activities
Variance in other (expenses) income Million CHF 2001 2002 Dividends earned 88 78 Financial income 88 6 • Lower interest rate level • Losses incurred on the sale of Cimpor shares • Impairment loss on Swiss International Airlines investment Depreciation on non-operating assets -27 -107 • Argentina, ot
Slide 21: Cash flow statement; Financing
Cash flow statement Million CHF 2000 2001 2002 +/- Cash flow from operating activities 2'557 2'402 2'388 -0.6% Investments to maintain productive capacity and to secure competitiveness -816 -855 -843 -1.4% Free cash flow 1'741 1'547 1'545 -0.1% Expansion investments -824 -875 -409 -53.3% Financial i
Slide 22: Gearing; Employee benefit obligations
Gearing 100.7% 94.1% 93.9% 10'383 9'768 9'435 9'000 9'060 8'857 2000 2001 2002 Equity in million CHF Net financial debt in million CHF Gearing 42 Annual results 2002 Employee benefit obligations A large part of the employees’ pension funds (contribution plans) are completely outsourced and indepen
Slide 23: Energy cost; Financial indicators
Energy cost Total energy cost included in production cost in % of Mio. CHF net sales Thermal energy 607 4.6 Electricity 647 5.0 Total energy cost 1'254 9.6 For 2003, most of thermal energy requirement already contracted or on stock 44 Annual results 2002 Financial indicators 2000 2001 2002 Targe
Slide 24: Definitions; Outlook 2003 I
Definitions Annual Report 2002 Pages Operating EBITDA Earnings before interest, taxes, depreciation, amortization and other (expenses) income 74/90 EBITDA Earnings before interest, taxes, depreciation and amortization 74/90 EBITDA net interest EBITDA divided by financial expenses (excluding foreign
Slide 25: Outlook 2003 II; Strength. Performance. Passion.
Outlook 2003 II Holcim focuses on further efficiency increases in production and distribution. We continue to invest selectively. Holcim aims to generate a solid free cash flow. Holcim is dedicated to maintain its comparatively strong investment rating. We expect a further increase in the