Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — HeidelbergCement — Investor Day (September 2020)
13 slides from Heidelberg Materials's investor day presentation, Sep 16, 2020
Slide 1: Focusing on Efficient Cash Generation and Allocation
2020 Capital Markets Day 16 September 2020 Focusing on Efficient Cash Generation and Allocation Dr. Lorenz Näger CFO
Slide 2: Efficient cash generation and cash allocation
EXECUTIVE SUMMARY Efficient cash generation and cash allocation – Active portfolio management 1 Capital efficiency – Strategic initiatives for ROIC clearly above 8% business excellence – Strong focus on free cash flow 2 Cash generation Cash conversion rate: – CapEx mainly used to around 45% improve
Slide 3: ROIC definition changed to widely accepted standard
CAPITAL EFFICIENCY ROIC definition changed to widely accepted standard ROIC: changed calculation of taxes and − Adjusted effective current tax rate is applied average invested capital on NOPAT 6,9% -0.7% − Tax rate calculated as current tax expenses of the current year divided by pre-tax profit ex
Slide 4: Our ROIC target: clearly above 8%
CAPITAL EFFICIENCY Our ROIC target: clearly above 8% ROIC target underpinned by country-level transformation plans Digital transformation (HConnect, Clearly Masterplan HProduce, above 8.0 % Margin HService) improvement execution action plan (US, France,…) Portfolio Organic (NAM, UK,…) management g
Slide 5: Cash conversion rate target around 45%
CASH GENERATION Cash conversion rate target around 45% Free Cash Flow: changed CapEx definition Drivers for reaching target − Strict monitoring of investments based on clear 2019 Old definition (€m) 2019 New definition (€m) criteria limiting CapEx Net to approx. €1.2 bn p.a. Cash flow 2,664 Cash f
Slide 6: CapEx with clear focus on asset base improvement
CASH GENERATION CapEx with clear focus on asset base improvement CapEx Net limited at approx. €1.2 bn p.a. Maintenance Major plant CO2 reduction Digital trans- Greenfield & CapEx overhauls and environ- formation brownfield to have mental projects projects state-of-the-art improvement quality asset
Slide 7: Growth CapEx / M&A based on stringent investment criteria
CASH GENERATION Growth CapEx / M&A based on stringent investment criteria Focus on value creation Investment criteria strictly applied Strategic fit, aligned with Selective bolt-on growth CapEx and portfolio strategy M&A with high synergy potential Contribute to net profit in year 1 after acquisit
Slide 8: Targeted and disciplined approach to investment projects
CASH GENERATION Targeted and disciplined approach to investment projects Focus on disciplined implementation aligned with portfolio strategy: Strategy Technical Sustainability Finance Strategic fit, Technical aspects of Compatibility with Financial markets and any project sustainability attractive
Slide 9: Committed to strong balance sheet – reducing leverage ratio to 1.5x-2.0x
CASH ALLOCATION Committed to strong balance sheet – reducing leverage ratio to 1.5x-2.0x Leverage ratio (Net Debt / EBITDA) Clear commitment to reach leverage target − HeidelbergCement has a history of consistent deleveraging over the last years − We will most likely achieve leverage of 2 or below
Slide 10: Dividends as important part of shareholder returns
CASH ALLOCATION Dividends as important part of shareholder returns Dividend per share (€) Progressive dividend 2,10 1,90 1,60 1,30 0,75 0,60 0,60 0,47 0,35 0,25 0,12 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 …. 10 Capital Markets Day 2020 | 16.09.2020
Slide 11: Strictly defined capital allocation framework
CASH ALLOCATION Strictly defined capital allocation framework Cash generation & allocation over the next 3 years Growth CapEx / Bolt-on M&A ‒ Only if net debt & dividend commitment are not at risk ‒ Aligned with focus markets identified in portfolio review ‒ ROIC clearly above 8% after full integr
Slide 12: Efficient cash generation and cash allocation
EXECUTIVE SUMMARY Efficient cash generation and cash allocation – Active portfolio management 1 Capital efficiency – Strategic initiatives for ROIC clearly above 8% business excellence – Strong focus on free cash flow 2 Cash generation Cash conversion rate: – CapEx mainly used to around 45% improve
Slide 13: Disclaimer
Disclaimer Unless otherwise indicated, the financial information provided herein has been prepared credit business and, in particular, additional uncertainties arising out of the subprime, under International Financial Reporting Standards (IFRS). financial market and liquidity crises; the outcome of