Holcim Ltd · SIX:HOLN
Holcim — Merger or Acquisition (April 2014)
34 slides from Holcim's merger presentation, Apr 7, 2014
Slide 1: LafargeHolcim: Creating the Most Advanced Group in the Building Materials Industry
LafargeHolcim 7 April 2014 CREATING THE MOST ADVANCED GROUP IN THE BUILDING MATERIALS INDUSTRY
Slide 2: Disclaimer
Disclaimer Not for distribution in the United States, Canada, Australia or Japan Important information This communication does not constitute an offer to purchase or exchange or the solicitation of an offer to sell or exchange any securities of Lafarge or an offer to sell or exchange or the solicita
Slide 3: Geographical Complementarity of Portfolios
GEOGRAPHICAL COMPLEMENTARITY OF PORTFOLIOS Combined sales by region Emerging Developed (in billion) markets markets Total CHF 11.0 / EUR 9.0 # of 73 17 90 countries 51% 5.6 49% CHF 8.6 / EUR 7.0 5.4 CHF 7.0 / EUR 5.7 Europe 5.2 3.2 61% 45% 39% 3.3 3.8 55% Asia North America CHF 5.9 / EUR 4.8 CHF 2.0
Slide 4: A Merger of Equals to Create the Most Advanced Group
A MERGER OF EQUALS TO CREATE THE MOST ADVANCED 1 GROUP IN THE BUILDING MATERIALS INDUSTRY CREATING THE BEST GROWTH PLATFORM IN THE INDUSTRY 2 POSITIONING OUR BUSINESS TO MEET CHANGING 3 MARKET NEEDS A UNIQUE VALUE PROPOSITION 4 NEXT STEPS & CONCLUDING REMARKS 5 4
Slide 5: Vision of LafargeHolcim
VISION OF LafargeHolcim CREATING THE MOST ADVANCED GROUP IN THE BUILDING MATERIALS INDUSTRY CREATING THE BEST GROWTH POSITIONING OUR BUSINESS PLATFORM IN THE INDUSTRY TO MEET CHANGING MARKET NEEDS » Driving growth across a truly global » Enhancing the value proposition and balanced footprint to meet
Slide 6: Unique Value Proposition for Shareholders
UNIQUE VALUE PROPOSITION FOR SHAREHOLDERS NEW BEST-IN-CLASS GLOBAL PORTFOLIO SUPERIOR GROWTH AND OPERATING PROFITABILITY SIGNIFICANT SYNERGIES STRICT CAPITAL ALLOCATION DISCIPLINE AND STRONG CAPITAL STRUCTURE ATTRACTIVE RETURNS FOR SHAREHOLDERS 6
Slide 7: Key Transaction Highlights
KEY TRANSACTION HIGHLIGHTS COMPANY » LafargeHolcim NAME DEAL » Merger of equals STRUCTURE » Company domiciled in Switzerland EXCHANGE RATIO » Exchange ratio of 1 Holcim share for 1 Lafarge share » Capitalise on developed markets recovery REBALANCED » Divestments of assets representing CHF 6bn / EUR
Slide 8: A Merger of Equals
A MERGER OF EQUALS PRO FORMA SHAREHOLDING BALANCED GOVERNANCE AND LEADERSHIP STRUCTURE » Chairman: Wolfgang Reitzle¹ BOARD OF » Equally composed Board with DIRECTORS 7 members from Holcim and 7 members from Lafarge » CEO: Bruno Lafont MANAGEMENT » CFO: Thomas Aebischer OTHER LAFARGE SHAREHOLDERS » C
Slide 9: A Combination of Two Successful Groups
A COMBINATION OF TWO SUCCESSFUL GROUPS ILLUSTRATIVE DISPOSALS SYNERGIES1 ILLUSTRATIVE COMBINED PRO FORMA2 COUNTRIES 90 90 2013 SALES (CHF / EUR bn) CHF 38.6 / EUR 31.6 c. CHF (6) / EUR (5) CHF 0.5 / EUR 0.4 c. CHF 33 / EUR 27 2013 EBITDA (CHF / EUR bn) CHF 7.8 / EUR 6.4 c. CHF (1) / EUR (0.8) CHF 1.
Slide 10: A Transaction to Benefit All Stakeholders
A TRANSACTION TO BENEFIT ALL STAKEHOLDERS » Value-added products & solutions best fitting customer needs » Integrated solutions to improve value chain efficiency CUSTOMERS » Innovation on a larger scale to improve the value proposition » New solutions to tackle the challenges of sustainable construc
Slide 11: A Merger of Equals to Create the Most Advanced Group
A MERGER OF EQUALS TO CREATE THE MOST ADVANCED 1 GROUP IN THE BUILDING MATERIALS INDUSTRY CREATING THE BEST GROWTH PLATFORM IN THE INDUSTRY 2 POSITIONING OUR BUSINESS TO MEET CHANGING 3 MARKET NEEDS A UNIQUE VALUE PROPOSITION 4 NEXT STEPS & CONCLUDING REMARKS 5 11
Slide 12: The Strengths of the New Group
THE STRENGTHS OF THE NEW GROUP BEST-IN-CLASS PORTFOLIO OUTSTANDING PLATFORM OF ASSETS TO SCALE UP » The best product offering globally » Scale up both companies’ operational across cement, concrete excellence across the value chain and aggregates » Scale up unique innovation capabilities » Most bala
Slide 13: Geographical Complementarity of Portfolios
GEOGRAPHICAL COMPLEMENTARITY OF PORTFOLIOS Combined sales by region Emerging Developed (in billion) markets markets Total CHF 11.0 / EUR 9.0 # of 73 17 90 countries 51% 5.6 49% CHF 8.6 / EUR 7.0 5.4 CHF 7.0 / EUR 5.7 Europe 5.2 3.2 61% 45% 39% 3.3 3.8 55% Asia North America CHF 5.9 / EUR 4.8 CHF 2.0
Slide 14: Strategic Portfolio Optimisation
STRATEGIC PORTFOLIO OPTIMISATION Selected divestments in Developed markets DEVELOPED c. CHF 4 bn / EUR 3 bn Revenues MARKETS c. CHF 0.5 bn / EUR 0.4 bn EBITDA 10% to 15% of combined EBITDA Limited divestments in Emerging markets EMERGING c. CHF 2 bn / EUR 1.5 bn Revenues MARKETS c. CHF 0.4 b
Slide 15: Best-in-Class Portfolio for Growth
BEST-IN-CLASS PORTFOLIO FOR GROWTH PORTFOLIO BREAKDOWN (2013 SALES)1 » 60% of pro forma sales » 13 countries out of our Top 20 EMERGING with strong infrastructure needs2 c. 60% Emerging MARKETS markets » 6% CAGR for construction outputs expected until 20253 LatAm Africa/Middle East Eastern Europe DE
Slide 16: Outstanding Platform to Leverage Operational Excellence
OUTSTANDING PLATFORM TO LEVERAGE OPERATIONAL EXCELLENCE » Best-in-class professional teams OPERATIONAL » State-of-the-art assets and technologies EXCELLENCE » Shift to eco-friendly plants » Cross benefit from each company best practices ABILITY TO DEVELOP » From cement and aggregates to ready-mix co
Slide 17: A Shared Commitment to Employees
A SHARED COMMITMENT TO EMPLOYEES BEST LOCAL TEAMS INTEGRATED GLOBALLY HIGHEST GLOBAL EXPERTISE AND INNOVATION SKILLS COMMITTED TO HEALTH & SAFETY WORLD-CLASS LEARNING DEVELOPMENT 17
Slide 18: A Merger of Equals to Create the Most Advanced Group
A MERGER OF EQUALS TO CREATE THE MOST ADVANCED 1 GROUP IN THE BUILDING MATERIALS INDUSTRY CREATING THE BEST GROWTH PLATFORM IN THE INDUSTRY 2 POSITIONING OUR BUSINESS TO MEET CHANGING 3 MARKET NEEDS A UNIQUE VALUE PROPOSITION 4 NEXT STEPS & CONCLUDING REMARKS 5 18
Slide 19: Enhancing the Value Proposition to Meet Changing Customer Demands
ENHANCING THE VALUE PROPOSITION TO MEET CHANGING CUSTOMER DEMANDS » Increased quality and depth of choice across the construction value chain » Ability to address the needs of large building companies as they become more global 19
Slide 20: Addressing the Challenges of Urbanisation
ADDRESSING THE CHALLENGES OF URBANISATION… INNOVATION NEEDED FOR HOUSING FOR ALL e.g. solutions for affordable housing BEAUTY e.g. focus on performance CONNECTIVITY DURABILITY e.g. an offer for roads, e.g. focus on airport, stations quality LIMITED URBAN SPRAWL e.g. solutions for vertical buildings
Slide 21: Best-in-Class R&D and Innovation
BEST-IN-CLASS R&D AND INNOVATION Worldwide leading platform with more than 1,000 dedicated people HOLDERBANK » Central Research Centre MONTREAL based in Lyon BRATISLAVA DUNDEE LYON BEIJING ALGIERS VIENNA » Network of Regional CAIRO CHONGQING Development Labs MUMBAI SINGAPORE KUALA LUMPUR RIO DE JANE
Slide 22: Setting the Benchmark for Sustainability
SETTING THE BENCHMARK FOR SUSTAINABILITY Focus on efficient Capturing new Best practice Commitment to use of water, opportunities in CO2 reduction local communities energy and in waste and CSR policy resources management Eco-friendly plants Co-founders Dow Jones of the Cement Sustainability Sustaina
Slide 23: A Merger of Equals to Create the Most Advanced Group
A MERGER OF EQUALS TO CREATE THE MOST ADVANCED 1 GROUP IN THE BUILDING MATERIALS INDUSTRY CREATING THE BEST GROWTH PLATFORM IN THE INDUSTRY 2 POSITIONING OUR BUSINESS TO MEET CHANGING 3 MARKET NEEDS A UNIQUE VALUE PROPOSITION 4 NEXT STEPS & CONCLUDING REMARKS 5 23
Slide 24: Positioned for Sustainable and Profitable Growth
POSITIONED FOR SUSTAINABLE AND PROFITABLE GROWTH BEST-IN-CLASS PORTFOLIO: INNOVATION STRONG FIT LEVERAGE GROWTH, ON AN EXPANDED FOR SUCCESSFUL BEST PRACTICES DIVERSIFICATION SCALE INTEGRATION & BALANCE DELIVER ON SYNERGIES SUPERIOR REVENUE GROWTH ENHANCED CASH FLOW & SIGNIFICANT OPERATIONAL GENERATI
Slide 25: Operational Synergies
OPERATIONAL SYNERGIES ESTIMATED EBITDA SOURCE RUN-RATE SYNERGIES » Operational optimisation / best practices E.g. logistics, distribution, IT, energy consumption CHF 240 m / EUR 200 m » Procurement Savings in overlapping countries CHF 410 m / EUR 340 m Economies of scale in centralized procure
Slide 26: Financing & Cash-Flow Synergies
FINANCING & CASH-FLOW SYNERGIES ESTIMATED RUN-RATE SOURCE SYNERGIES » Financing savings CHF 120 m / EUR 100 m (from end of year 1) Up to CHF 240 m / EUR 200 m (over time) » Capital expenditures Best practice on maintenance capex CHF 250 m / EUR 200 m Higher efficiency on expansion capex TOTAL SY
Slide 27: CHF 1.7 bn / EUR 1.4 bn Run-Rate Synergies
CHF 1.7 bn / EUR 1.4 bn RUN-RATE SYNERGIES PRE-TAX SYNERGIES (CHF bn / EUR bn) – PHASED IN OVER 3 YEARS CHF 1.7 / EUR 1.4 CHF 1.7 / EUR 1.4 0.2/0.1 0.3/0.2 0.3/0.2 CHF 0.7 / EUR 0.5 0.2/0.2 0.1/0.1 0.2/0.1 0.2/0.1 CHF 0.1 / EUR 0.0 0.1/0.1 0.2/0.1 1.2/1.0 1.2/1.0 0.1/0.1 0,8/0.7 0.4/0.3 (0.6)/(0.5)
Slide 28: Building Blocks in Place for a Successful Integration
BUILDING BLOCKS IN PLACE FOR A SUCCESSFUL INTEGRATION CLEARLY » CEO, CFO and CIO already designated DEFINED LEADERSHIP » Integration committee to prepare the integration plan » Strong focus on innovation SHARED VISION » From product supplier to solution provider » Same vision of the business model:
Slide 29: Strong Earnings and Capital Structure
STRONG EARNINGS AND CAPITAL STRUCTURE ILLUSTRATIVE DISPOSALS SYNERGIES1 ILLUSTRATIVE COMBINED PRO FORMA2 2013 SALES (CHF / EUR bn) CHF 38.6 / EUR 31.6 c. CHF (6) / EUR (5) CHF 0.5 / EUR 0.4 c. CHF 33 / EUR 27 2013 EBITDA (CHF / EUR bn) CHF 7.8 / EUR 6.4 c. CHF (1) / EUR (0.8) CHF 1.2 / EUR 1.0 c. CH
Slide 30: A Merger of Equals to Create the Most Advanced Group
A MERGER OF EQUALS TO CREATE THE MOST ADVANCED 1 GROUP IN THE BUILDING MATERIALS INDUSTRY CREATING THE BEST GROWTH PLATFORM IN THE INDUSTRY 2 POSITIONING OUR BUSINESS TO MEET CHANGING 3 MARKET NEEDS A UNIQUE VALUE PROPOSITION 4 NEXT STEPS & CONCLUDING REMARKS 5 30
Slide 31: Key Steps to Closing
KEY STEPS TO CLOSING MAJOR STEPS DESCRIPTION WORKS COUNCIL » Lafarge and Holcim Works Council consultations initiated immediately CONSULTATIONS DIVESTMENTS » Process to start immediately INTEGRATION » Prepare an integration plan for implementation straight after closing PREPARATION of the transactio
Slide 32: Creating Most Advanced Group in Building Materials
CREATING MOST ADVANCED GROUP IN BUILDING MATERIALS MERGER OF EQUALS REFLECTED IN TRANSACTION STRUCTURE AND BALANCED CORPORATE GOVERNANCE CREATION OF AN OUTSTANDING GROWTH PLATFORM BEST ADAPTED TO FUTURE INDUSTRY CHALLENGES MORE INNOVATIVE SOLUTIONS FOR CUSTOMERS – MORE SUSTAINABLE ALTERNATIVES FOR C
Slide 33: Oigny Sainte Benoite Le Teil
Oigny Sainte Benoite Le Teil 33
Slide 34: LafargeHolcim
LafargeHolcim 7 April 2014 CREATING THE MOST ADVANCED GROUP IN THE BUILDING MATERIALS INDUSTRY