Titan S.a. · EURONEXT:TITC
Titan — Titan Cement International — Investor Presentation (October 2023)
57 slides from Titan's investor presentation, October 2023
Slide 1: Corporate Presentation
Corporate Presentation October 2023 1 Integrated OYMPIA Cement Plant, ODOS,Patras Greece GREECE Photo © NIKOS DANIILIDIS
Slide 2: Table of Contents
Table of Contents Titan Group at a glance Key investment highlights Overview of markets by region 1st Half 2023 Results Outlook ESG performance 2022 Appendix 2
Slide 3: Titan Group at a glance
Titan Group at a glance 3
Slide 4: Titan Group at a glance
Titan Group at a glance More than 120 years with a strong track record of growth and international diversification 1902 1912 1920 1960-1980 1990-2023 Titan Cement Listing on the Started exports • 1962: 2nd cement plant, Thessaloniki (GR) • International expansion to the US, SE Europe, Egypt, founded
Slide 5: Key investment highlights
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Slide 6: Key investment highlights
Key investment highlights A strong position in the USA and Greece, where more than 70% of our revenue is being generated. Leading market positions in US, Greece and SEE Vertically integrated business model, strengthening market positions for maximum value Modern & efficient asset base, healthy cash
Slide 7: Geographically diversified cement and building materials producer
Geographically diversified cement and building materials producer As of 31 December 2022 USA Greece & Western Europe Southeastern Europe Eastern Mediterranean Group* TOTAL ASSETS: €1,362m TOTAL ASSETS: €700m TOTAL ASSETS: €490m TOTAL ASSETS: €443m TOTAL ASSETS: €2,994m 2 cement plants 3 cement plant
Slide 8: Geographic diversification reduces reliance on any one market
Geographic diversification reduces reliance on any one market EBITDA 12Month-Rolling Quarterly Analysis by Region (2007-2023) USA Greece & Western Europe South Eastern Europe Eastern Mediterranean 8
Slide 9: Leading market positions in key geographies
Leading market positions in key geographies USA Greece & Western Europe • Significant presence in the East • Plants are near the 3 Coast with 2 integrated cement #2 major cities and ports, plants in Florida & Virginia facilitating exports • Import Terminals in New • Largest operator in #1 Jersey, No
Slide 10: Vertically integrated business model, strengthening market positions for maximum value
Vertically integrated business model, strengthening market positions for maximum value Selectively increased vertical integration since 1992 Key benefits of vertical integration for Titan Group Diversifying our offering in the cement value chain • Vertical Integration provides strong competitive adv
Slide 11: Well-invested, low-cost and modern asset base
Well-invested, low-cost and modern asset base €5bn invested since 2000; €3.2bn in CAPEX & €1.8bn in acquisitions Acquisition of Lafarge’s 50% stake in Egypt USA Ready Mix Acquisition of 50% Adocim Turkey Tarmac America acquisition acquisition Acquisition of 50% 700 Construction of new plant in Acqui
Slide 12: In 2017-2022 Strong Cash Flow generation despite market volatility
In 2017-2022 Strong Cash Flow generation despite market volatility Sources and Uses of Cash in 2017-2022 2017-2022 Operating Free Cash Flow 86 (802) 1,692 1,600 €793m 1,100 (182) (135) (342) 600 (288) (72) (133) 100 (11) (79) -400 EBITDA Non-Cash CapEx Operating Acquisitions Returns to Interest and
Slide 13: Established Group with a strong shareholder base, dedicated management team, strong governance
Established Group with a strong shareholder base, dedicated management team, strong governance and a long-term vision Shareholder structure* Strong Corporate Governance: Board of Directors & Committees • E.D.Y.V.E.M. & TCI Founders 37.03% • High standards of corporate governance embedded in TCI valu
Slide 14: Transforming for growth: Business priorities
Transforming for growth: Business priorities GROWTH • Continue improving the performance of our existing business and transform our source of future competitive advantage • Develop our ability to transform by building on our talent with new skills and an agile organization 14
Slide 15: Ambitious ESG Targets for 2025 and Beyond in Four Focus Areas
Ambitious ESG Targets for 2025 and Beyond in Four Focus Areas Four focus areas Decarbonization and Growth-enabling work Positive local impact Responsible sourcing Digitalization environment Acceleration of CO2 reduction efforts. Strong environmental performance Our accomplishments and ambitions – CO
Slide 16: Cement producers' exposure to ETS
Cement producers’ exposure to ETS Lower exposure of TITAN to carbon pricing comparing to most developed markets cement peers % cement and concrete sales under ETS (2022) Peer Company 6 Peer Company 5 Peer Company 4 Peer Company 3 Peer Company 2 Peer Company 1 0% 5% 10% 15% 20% 25% 30% 35% * Excludin
Slide 17: Digital transformation
Digital transformation Applying the tools of the fourth industrial revolution to our business Manufacturing Productivity & Reliability Factor Improvements Manufacturing • AI-based Real-Time Optimizers (RTOs) o Already deployed in 8 plants in US, Greece & SE Europe o Both TITAN’s plants in the US liv
Slide 18: Overview of markets by region
Overview of markets by region
Slide 19: USA – Business Overview
USA – Business Overview Titan America is well positioned and is investing further to capture growth along the East Coast Operating units Sales & EBITDA (€m) 2 Cement plants 1,314 8 Quarries 1,400 50% 45% 1,200 860 952 938 984 82 Ready-mix plants 1,000 40% 35% 30% 8 Concrete block plants 800 21% 21%
Slide 20: USA - Housing and infrastructure drive demand
USA - Housing and infrastructure drive demand Housing starts still at levels above average US Infrastructure Bill - Additional Cement Consumption 2,500 by Construction Sector (million Metric Tons) 2,000 Power & Grid 1.36 housing starts 1,500 Western Water 1.81 1,000 Ports & 500 Waterways 2.99 0 00 0
Slide 21: USA - Strong demographics drive demand beyond housing
USA - Strong demographics drive demand beyond housing (schools, health, entertainment etc.) Florida – Strong demographics drive demand Miami’s top spot: best US cities for foreign businesses 24 15 Cement Consumption (millions of MT) 22 R² = 0.9973 13 “Businesses from Europe and the Middle Population
Slide 22: Greece and Western Europe - Business Overview
Greece and Western Europe - Business Overview Titan’s home market: strong capacity to dynamically cover the rising local market and to serve export markets Operating units Sales & EBITDA (€m) 3 Cement plants 326 1 Grinding plant 268 300 245 247 237 25 Quarries 9% 9% 200 29 Ready-mix plants 7% 1 Dry
Slide 23: Greece and Western Europe – Increasing confidence in recovery
Greece and Western Europe – Increasing confidence in recovery supported by macro data and strong fiscal response Activity in Greece during 2022 Cement consumption >5 mn tons annually until 2010 Number of Permits Surface Volumes (m2) 15 35,000 Greece enters Cement consumption (mMT) Eurozone 11.6 30,0
Slide 24: Southeastern Europe - Business Overview
Southeastern Europe - Business Overview Attractive regional cluster set to benefit from long-term infrastructure needs and EU admission Operating units Sales & EBITDA (€m) 5 Cement plants 386 21 Quarries 400 350 6 Ready-mix plants Serbia 300 263 271 291 239 1 Processed engineered fuel facilities 250
Slide 25: SEE Prospects for Growth Lead to Positive Outlook
SEE Prospects for Growth Lead to Positive Outlook Low Volatility Markets with Upside Potential as Urbanization Rises GDP growth % 8.5 9.5 7.4 4.0 4.2 4.3 5 3.9 4.0 3.4 3.7 2.7 2.3 2.1 2.2 -0.9 -4.4 -3.5 -5.3 -6.1 Bulgaria Serbia Albania North Macedonia Kosovo 2019 2020 2021 2022 Source: IMF, World E
Slide 26: Eastern Mediterranean - Business Overview
Eastern Mediterranean - Business Overview Two large markets (>105m MT of combined cement consumption) Operating units Sales & EBITDA (€m) 3 Cement plants 280 256 1 Grinding plant 16.0% 173 13 Quarries 180 154 150 152 7.4% 6.8% 6 Ready-mix plants 7.8% 6.0% 2 Processed engineered fuel facilities 80 -0
Slide 27: Favorable Demographics Generate Economic Growth in the Eastern Mediterranean
Favorable Demographics Generate Economic Growth and Investment Needs in the Eastern Mediterranean Large, young and growing population… (Population in millions) 101 102 104 106 108 99 83 84 85 85 86 87 2019 2020 2021 2022 2023f 2024f Egypt Turkey …combined with recorded and anticipated GDP growth...
Slide 28: Brazil – Joint Venture 50/50
Brazil – Joint Venture 50/50 Cimento Apodi operates two units in Ceará state Operating units 1 Cement plants (Quixeré) 1 Grinding plant (Pecém) 4 Quarries 4 Ready-mix plants Principal products / activities Cement plant Cement Ready-mix concrete Grinding plant Cement capacity: 2 m MT Trends & Drivers
Slide 29: 1st Half 2023 Results
1st Half 2023 Results
Slide 30: First Half 2023 Highlights
First Half 2023 Highlights • Good markets and solid performance in the US and Europe drove sales and earnings growth. • Group Sales in H1 2023 reached €1,229m (+19% vs last year), while EBITDA increased by 77% to €241m and EBITDA margin rose to 19.6%. Sales in Q2 were €641m (+10% vs Q2 2022) and EBI
Slide 31: Volumes growth and higher prices raise H1 2023 sales
Volumes growth and higher prices raise H1 2023 sales by 18.7% to €1.2bn. Strong market demand supports increased prices and EBITDA rises by 77%. Group Sales Group EBITDA Group NPAT First Half Group Sales Group EBITDA Group NPAT 10.3% 49.2% 51.7% Second Quarter 641.0 150 44.1 75 66.6 750 60.1 134.0 2
Slide 32: 12MR financials highlight record levels of sales and profitability growth
12MR financials highlight record levels of sales and profitability growth 12-Month Rolling 12-Month Rolling 12-Month Rolling Group Sales Group EBITDA Group NPAT First Half 32
Slide 33: Market Overview
Market Overview Critical Cost Factors softer, but quite higher than 2020/21 levels. WTI Brent Actual Futures / Forecasts as of 30/6/2023 33
Slide 34: Healthy demand in the US and Greece. Rise in most domestic market volumes
Healthy demand in the US and Greece. Rise in most domestic market volumes in cement, ready-mix and aggregates. All cement exports directed to Group terminals. First Half Sales Volume Second Quarter Sales Volume -2% +3% 4.6 4.5 8.4 2022A 8.1 2022A 2023A 2023A +6% +4% 9.4 10 4.9 4.7 -1% +3% 2.8 2.8 1.
Slide 35: High EBITDA results to Net Debt reduction by €36m to €762m
High EBITDA results to Net Debt reduction by €36m to €762m. Strong free cash flow generation despite seasonal working capital needs and CAPEX program. Sources and Uses of Cash H1 2023 Operating Free Cash Flow (€ in millions) 250 2 41 13 (1 17) €77m 200 150 (6 0) 100 (2 ) (5 ) (2 4) 50 (2 1) 11 36 0
Slide 36: Investments in energy efficiency, logistics and digitization continue
Investments in energy efficiency, logistics and digitization continue. Completion in H1 of major projects (Kamari calciner, Tampa dome) Capital Expenditure Major 2023 CAPEX projects (€ in millions) Tampa Dome 61.6 USA 60.0 Norfolk Dome 34.0 Titan America RMC Trucks GREECE 19.0 H1 2023 Florida Silos
Slide 37: Group net debt down to €762m. Leverage ratio dropped to 1.7x
Group net debt down to €762m. Leverage ratio dropped to 1.7x. New Fitch credit rating at BB+. Strong EBITDA growth led to rapid reduction of Net Debt / EBITDA ratio. Group Net and Gross Debt Evolution (€ in millions) Net debt ross Debt Net Debt B D 1,200 2 3 3 2 795 76 800 3 3 3 32 33 3 3 33 3 3 3 2
Slide 38: Further reduction of carbon footprint and acceleration of decarbonization initiatives
Further reduction of carbon footprint and acceleration of decarbonization initiatives • Completion of three key alternative fuels investments in Greece, Bulgaria and Turkey, Specific net CO2 emissions (Scope 1) including the €26m calciner project in the Kamari plant, Greece (kg/t cementitious produc
Slide 39: Group Digital CoC: H1 2023 highlights
Group Digital CoC: H1 2023 highlights All initiatives on track Manufacturing Supply Chain & Customer Experience ▪ Real-Time Optimizers (RTOs) ▪ Digital Supply Chain & Customer Excellence (US) • Added RTOs in plants in US, Greece & Albania; assets in 6 • Phase 1 launched in November 2022 other plants
Slide 40: Overview of markets performance
Overview of markets performance
Slide 41: Strong demand for cement in tight supply markets led to favorable price-cost dynamics
Strong demand for cement in tight supply markets led to favorable price-cost dynamics and growth in US sales and profitability. Market fundamentals support resilient demand levels. USA Sales USA EBITDA 24.5% 115.3% 144.5 735.5 750 72.5 135.5 591.0 120 First Half 500 80 63.0 $644m $644m $795m $795m $
Slide 42: Greek domestic Sales significantly increase across products
Greek domestic Sales significantly increase across products. Step up of EBITDA to higher level. Healthy Greek economy momentum supports construction activity. Greece & WE Sales Greece & Corporate EBITDA 21.3% 82.4% 750 First Half 120 500 34.6 80 162.7 197.3 16.4 36.3 250 19.9 40 0 0 Sales Variance S
Slide 43: SEE sustained operational growth in 2023
SEE sustained operational growth in 2023. Higher volumes in residential and infrastructure construction. SEE Sales SEE EBITDA 15.7% 37.0% 750 120 First Half 500 80 16.2 60.0 26.5 195.1 43.8 250 168.6 40 0 0 Sales Variance Sales EBITDA Variance EBITDA 2022 2023 2022 2023 26.0% EBITDA Margin 30.8% • S
Slide 44: EMED affected by volatile environment and currency devaluations
EMED affected by volatile environment and currency devaluations. Rising demand in Turkey while Egypt market receded to lower level. EMED Sales EMED EBITDA -10.7% -2.7% 750 120 First Half 500 80 250 40 113.1 -12.1 101.0 -0.3 9.6 9.3 0 0 Sales Variance Sales EBITDA Variance EBITDA 2022 2023 2022 2023
Slide 45: Brazil – Joint Venture: Cimento Apodi profitability improves
Brazil – Joint Venture: Cimento Apodi * profitability improves $ 1,069.3 H1 2023 Apodi (100%) 2023 2022 Sales (€m) 59.7 50.5 EBITDA (€m) 6.0 3.6 * Consolidated on an equity basis • In H1 2023, the country’s cement demand was lower by 1.6% y-o-y, as both real estate and infrastructure construction sl
Slide 46: Outlook
© Outlook
Slide 47: Outlook
Outlook Global economic conditions started improving, helped by softer energy prices and improved sentiment, however, high-interest rates may impact investment confidence. • US economy remains strong with positive private residential construction in our regions, amidst low housing inventories and a
Slide 48: ESG performance in 2022
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Slide 49: Ambitious GHG emissions targets
Ambitious GHG emissions targets Validated by the Science Based Targets initiative (SBTi) according to the 1.5°C scenario 1990 - 2020 2020 - 2030 2030 - 2050 Strong track record A whole new level of ambition Commitment to net zero in CO2 emissions reduction with science-based targets for Scope 1, 2 &
Slide 50: Best annual reduction in CO2 emissions in the last decade
Best annual reduction (-5%) in CO2 emissions in the last decade ✓ ✓ Alternative fuels substitution rate (%) Specific net CO2 emissions (Scope 1) 20% 17.5% (kg/t cementitious product) 700 682 -5% 15.5% 675 672 15% 13.4% 12.8% 652 11.8% 650 % heat basis 10% 619 600 5% 550 0% 2018 2019 2020 2021 2022 2
Slide 51: Committed to good governance and transparent communication
Committed to good governance and transparent communication Our efforts acknowledged by leading ESG rating agencies TITAN receives top score “A” from CDP Information on all our ESG ratings can be found at: www.titan-cement.com/sustainability/esg-ratings Disclaimer statement. The use by Titan Cement I
Slide 52: Appendix
Appendix
Slide 53: As full effect of 2022/23 prices kicks in, sales growth exceeded cost inflation
As full effect of 2022/23 prices kicks in, sales growth exceeded cost inflation bringing higher EBITDA and NPAT. Variance Variance In Million Euros, unless otherwise stated H1 2023 H12022 Q2 2023 Q2 2022 H1 23 vs H1 22 Q2 23 vs Q2 22 Sales 1,229.0 1,035.5 18.7% 641.0 580.9 10.3% Cost of Goods Sold -
Slide 54: Group Balance Sheet 30 June 2023
Group Balance Sheet 30 June 2023 Variance In Million Euros, unless otherwise stated 30 Jun' 23 31 Dec' 22 Jun 23 vs Dec 22 Property, plant & equipment and inv. Property 1,653.8 1,675.7 -21.9 Intangible assets and goodwill 356.2 364.7 -8.5 Investments/Other non-current assets 142.7 141.7 1.0 Non-curr
Slide 55: Q2 Sales and Profitability by Region
Q2 Sales and Profitability by Region Sales USA GREECE & WE SEE EMED 14.5% 14.1% 6.1% -10.2% 450 450 450 47.1 372.6 325.5 $ 255.1 $ 265.9 300 300 300 12.8 104.9 6.4 111.3 150 $349.0 150 90.7 103.5 150 -6.1 53.6 $307.5 59.7 0 0 0 Sales Variance Sales Sales Variance Sales Sales Variance Sales Sales Var
Slide 56: Disclaimer
Disclaimer By accepting this presentation, recipients acknowledge that they have read, understood and accepted the terms of this disclaimer. This presentation (“the Presentation”) has been prepared by Titan Cement International S.A (the “Company” and together with its subsidiaries, “the Group”) is b
Slide 57: Thank you!
Thank you! We invite you to visit our corporate’s website dedicated section “Net Zero” & “Digitalization”, as we are shaping a more sustainable nature-positive future for all and creating an ecosystem of digital innovation.
Titan Cement International — Investor Presentation (October 2023) on 6ix