Heidelberg Materials Ag · XETR:HEI
Heidelberg Materials — HeidelbergCement — Commerzbank German Investment Seminar 2019
22 slides from Heidelberg Materials's conference presentation, Jan 14, 2019
Slide 1: Commerzbank German Investment Seminar 2019
Commerzbank German Investment Seminar 2019 New York, 14 January 2019 Dr. Bernd Scheifele, Group CEO Slide 1 - Commerzbank German Investment Seminar – 14 January 2019
Slide 2: HeidelbergCement
HeidelbergCement Slide 2 - Commerzbank German Investment Seminar – 14 January 2019
Slide 3: Solid business model with strong cash generation
Solid business model with strong cash generation Consistent improvement in finance cost and Most efficient tax Excellent cash company in the conversion sector Earning an increasing Continuous premium on cost deleveraging of capital Outstanding progress in portfolio cleanup Slide 3 - Commerzbank Germ
Slide 4: We continue to focus on key drivers with initiated action plan
We continue to focus on key drivers with initiated action plan Pulling all levers to improve margin, cash flow and support solid IG rating Cost Margin Cash Cash management improvement generation management Accelerated Aggressive New SG&A disposal policy Limit growth commercial program with to reach
Slide 5: Preliminary overview 2018
Preliminary overview 2018 Solid volume development and improved financials signal a strong Q4 performance Strong FCF generation Solid Improved Accelerated operational finance cost portfolio Increase in EPS result in Q4 and taxes optimization Further deleveraging Despite unexpected external fac
Slide 6: Overview of business development in 2018; First view 2019
Overview of business development in 2018; First view 2019 2018: Solid performance despite 2019: Strong results and margin unexpected factors improvement expected Unpredicted issues put pressure on operations: Indonesia turning • Energy costs inflation positive Margin Normalized improvement • Extreme
Slide 7: Portfolio Management – Growth CapEx & Disposals
Portfolio Management – Growth CapEx & Disposals Significant cash potential driven by: 1. Limit gross growth CapEx with 700m€ for next 2 years. 2. Accelerate disposal policy to reach high end of our target. Net Growth CapEx: -291 -500 +300 1,000* More front-loaded as a result of already committed pro
Slide 8: 1.0 to 1.5 billion EUR disposal potential in 3 years
1.0 to 1.5 billion EUR disposal potential in 3 years Disposals focused on 3 main categories Non-core businesses Weak market positions Idle assets • Business activities outside of • Market positions in countries • Depleted quarries and land core business lines CEM, AGG with high risk and/or limited •
Slide 9: Q3 marked a clear turnaround in Indonesia; trend continues in Q4
Q3 marked a clear turnaround in Indonesia; trend continues in Q4 Operating EBITDA vs. prior year same month Local currency billion IDR Driven by strong domestic sales growth, price increases 14 initiated already in July. Trend expected to maintain in 2019 with more stabilization in the industry af
Slide 10: Strengths, Performance & Strategies
Strengths, Performance & Strategies Slide 10 - Commerzbank German Investment Seminar – 14 January 2019
Slide 11: HeidelbergCement – An operational leader
HeidelbergCement – An operational leader • Best vertically integrated company. Solid business • Simple structure focused on 3 core business lines. model • Lean organization with strong local teams. • Ideal geographical footprint focused on urban centers. Unique asset • Well-balanced business line po
Slide 12: Vertical Integration Efficiency
Solid and efficient business model with clearly defined targets Vertical Efficiency Lean Sustainable Integration Gains Organization Development Actively Operate in all Focus on KPIs, Strong local contribute to core business savings, teams with flat the Sustainable lines in key technology, hierarchy
Slide 13: Focus on core business lines
Focus on 3 core business lines Cement Aggregates RMC & ASP 50% 22% 28% Well-balanced of Group revenue of Group revenue of Group revenue portfolio 61% 31% 2% of Group EBITDA of Group EBITDA of Group EBITDA Developed Developed Developed Ideal geographical 54% 92% 84% footprint Emerging Emerging Emergi
Slide 14: CO2 will increasingly influence production & investment decisions
CO2 will increasingly influence production & investment decisions 30 CO2 prices significantly increased since EU CO2 Emission last year driven by new regulations and 25 Allowances Price (€/t) emissions trading schemes 20 15 Consolidation in the markets 10 Capacity closure, increased utilization
Slide 15: Overview of latest results
Overview of latest results Slide 15 - Commerzbank German Investment Seminar – 14 January 2019
Slide 16: Market and financial overview Q3 2018
Market and financial overview Q3 2018 Organic growth achieved despite cost pressure and harsh weather impacts Volume increase in all business lines and positive pricing lead to +10% organic revenue growth. Operating EBITDA +2%; Operating Income +2% in LfL basis. Group share of profit in Q3 up
Slide 17: Key operational and financial figures
Key operational and financial figures Operational performance: m€ Sep 17 Sep 18 Change % LfL % Q3 17 Q3 18 Change % LfL % Cement volume (‘000 t) 93,537 97,010 3,473 3.7 % 3.9 % 33,446 35,145 1,699 5.1 % 5.9 % Aggregate volume (‘000 t) 228,950 232,913 3,963 1.7 % 1.1 % 86,646 87,741 1,095 1.3 % 1.3 %
Slide 18: Overview of Group Areas
Overview of Group Areas REVENUES Operating EBITDA Mio EUR Sep 18 LfL % Q3 18 LfL% Sep 18 LfL % Q3 18 LfL% North America 3,179 2.9 % 1,307 4.3 % 727 -1.9 % 406 7.7 % Western & 3,678 3.4 % 1,289 8.0 % 394 -8.2 % 185 -3.5 % Southern Europe Northern & Eastern 2,163 8.7 % 819 10.0 % 418 9.1 % 215 12.7 %
Slide 19: Drivers behind Outlook downgrade
Drivers behind Outlook downgrade Q1 Q2 Q3 Q4 • Solid order backlog • Robust volume growth • Volume increase in all BL + Indonesia expected • Strong growth in Africa • Solid pricing • Solid pricing continues to deliver positive • Positive organic growth • Indonesia result turns EBITDA growth positive
Slide 20: Significant increase in power cost in Europe
Significant increase in power cost in Europe Electricity cost inflation Q3 18 vs. Q3 17 Clinker Power consumption (kwh/t clinker) 54% Total Group 2017 2018 53% -2% -1% -1% 40% 34% 30% Q1 Q2 Q3 20% Total Europe 2017 2018 17% -3% 0% 0% BENE FRA GER UK NOR SWE POL Q1 Q2 Q3 Significant cost inflation pa
Slide 21: Free Cash Flow stable at roughly 1.2 bn€
Free Cash Flow stable at roughly 1.2 bn€ Usage of free cash flow (m€) L12M Sep 2016 1) L12M Sep 2017 L12M Sep 2018 1,131 1,174 1,166 410 391 86 244 347 297 317 213 544 59 377 186 FCF 2) Borrowing Growth CapEx Debt Payback Dividends HCAG Dividend to minorities -135 m€ 974 108 9.653 9.518 3.193 96 8.8
Slide 22: Disclaimer
Disclaimer This presentation contains forward-looking statements and information. Forward-looking statements and information are statements that are not historical facts, related to future, not past, events. They include statements about our beliefs and expectations and the underlying assumptions. T
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