Holcim Ltd · SIX:HOLN
Holcim — LafargeHolcim — Q3 2017 Earnings Presentation
39 slides from Holcim's earnings presentation, Oct 27, 2017
Slide 1: Third Quarter 2017 Results
Third Quarter 2017 Results Jan Jenisch, CEO Ron Wirahadiraksa, CFO October 27, 2017 © LafargeHolcim Ltd 2015
Slide 2: Initial views: Q3 2017 and Outlook
01 Initial views Q3 2017 and Outlook Jan Jenisch, Chief Executive Officer © 2017 LafargeHolcim 2
Slide 3: Initial views
Initial views Best global asset base Attractive sector with high growth potential Merger integration complete Committed, skilled employees © 2017 LafargeHolcim 3
Slide 4: Realising LafargeHolcim's full potential
Realising LafargeHolcim’s full potential • Develop a global blue-chip with leading margins and an attractive growth profile, positioned for sustainable value creation › Capitalize on leading cement portfolio, competence and brand › Improve performance culture and management efficiency › Exploit oppo
Slide 5: 9M Highlights: solid growth in sales and earnings
9M Highlights: solid growth in sales and earnings Op. EBITDA adj. +9.2% CHF yoy LFL Recurring Net Sales 1.1 billion synergies EPS growth +4.3% +8.2% yoy LFL ahead of yoy ambitions +100 bps margin improvement 9M Op. EBITDA › Earnings have grown but this does not adj. margin yoy reflect our full poten
Slide 6: 2017 Outlook – Cement market
2017 Outlook – Cement market • Expect growth in most markets, global growth of 1 - 3% Europe • 0% to 2% volume growth • Overall positive sentiment driving confidence North America • 0% to 2% volume growth Asia Pacific1) • Steady growth supported by • 1% to 3% volume growth positive trends • Market g
Slide 7: Outlook - Company
Outlook - Company 2017 • Operating EBITDA adjusted +5% to +7% versus 2016, on a like for like basis • Recurring EPS growth • Net financial debt / Operating EBITDA adjusted ~2.5x 2018 • Operating EBITDA adjusted at least +5% versus 2017, on a like for like basis © 2017 LafargeHolcim 7
Slide 8: Regional results
02 Regional results Ron Wirahadiraksa, Chief Financial Officer 8
Slide 9: Key financial figures
Key financial figures CHF m Q3 2017 Q3 2016 Like-for-like 9M 2017 9M 2016 Like-for-like Volumes Cement (Mt) 53.8 57.9 -7.0% 4.7% 155.8 177.2 -12.1% 1.8% Aggregates (Mt) 80.1 81.3 -1.5% 0.1% 208.1 211.5 -1.6% 0.2% Ready-mix (Mm³) 13.3 14.4 -7.4% -2.2% 37.7 41.9 -10.1% -3.8% Net Sales 6'944 7'036 -1.3
Slide 10: Operating EBITDA adjusted Q3 2017
Operating EBITDA adjusted Q3 2017 +5.9% CHF m LFL 1 173 -165 97 -66 -7 1'749 1'750 1'717 1'651 Op. EBITDA adj. Scope LFL Op. EBITDA adj. Volume Price Costs & others Synergies LFL Op. EBITDA adj. FX Op. EBITDA adj. Q3 2016 Q3 2016 Q3 2017 Q3 2017 © 2017 LafargeHolcim 10
Slide 11: Net Sales and Operating EBITDA adjusted by Region – Q3 2017
Net Sales and Operating EBITDA adjusted by Region – Q3 2017 North North Net Sales America Operating EBITDA adj. America 25% 33% Middle East 15% Asia Africa Asia Pacific 12% 25% Pacific Middle East 12% 11% Latin Africa 24% America 15% 27% Europe Latin Europe America CHF m Q3 2017 Q3 2016 Like-for-lik
Slide 12: Asia Pacific
Asia Pacific Q3 2017 Sales volumes CHF m Q3 2017 Q3 2016 Like-for-like Q3 2016 25.8 LFL Net Sales 1'797 1'894 -5.1% 13.1% 21.4 Operating EBITDA adj. 1) 284 358 -20.8% -5.9% +15% Operating EBITDA adj. margin 15.8% 18.9% -310bps -320bps +9% +9% Cash flow from Op activities 152 152 0.0% 20.9% 8.1 7.8 3
Slide 13: Europe
Europe Sales volumes Q3 2017 CHF m Q3 2017 Q3 2016 Like-for-like Q3 2016 33.9 34.3 LFL Net Sales 1'922 1'890 1.7% -0.4% Operating EBITDA adj. 450 421 6.9% 5.2% +0% -1% -3% Operating EBITDA adj. margin 23.4% 22.3% 110bps 120bps 12.1 12.0 Cash flow from Op activities 327 431 -24.1% -24.4% 4.6 4.8 Cape
Slide 14: Latin America
Latin America Q3 2017 Sales volumes CHF m Q3 2017 Q3 2016 Like-for-like Q3 2016 6.7 6.3 LFL Net Sales 747 716 4.3% 12.0% Operating EBITDA adj. 288 234 23.1% 25.6% +10% -22% +1% Operating EBITDA adj. margin 38.5% 32.7% 590bps 410bps Cash flow from Op activities 182 120 51.5% 58.6% 1.0 1.6 1.4 1.6 Cap
Slide 15: Middle East Africa
Middle East Africa Q3 2017 Sales volumes CHF m Q3 2017 Q3 2016 Like-for-like 9.5 Q3 2016 8.8 LFL Net Sales 812 882 -7.9% 3.0% 1) -5% -7% -25% Operating EBITDA adj. 232 248 -6.4% -2.1% Operating EBITDA adj. margin 28.6% 28.1% 50bps -140bps 2.7 2.9 Cash flow from Op activities 107 163 -34.0% -37.7% 1.
Slide 16: North America
North America CHF m Q3 2017 Q3 2016 Like-for-like Net Sales 1'790 1'801 -0.6% -2.6% Operating EBITDA adj. 621 575 7.9% 7.6% 1) Operating EBITDA adj. margin 34.7% 32.0% 270bps 340bps Cash flow from Op activities 364 354 2.8% 1.6% Capex Net -45 -154 70.5% Continued EBITDA growth despite unfavourable w
Slide 17: Operating EBITDA to Net Income
Operating EBITDA to Net Income CHF m Q3 2017 Q3 2016 9M 2017 9M 2016 Operating EBITDA adj. 1'750 1'717 1.9% 4'286 4'290 -0.1% 1) 2) Merger, restructuring and other one-offs -127 -91 -39.7% -165 -267 38.1% Operating EBITDA 1'623 1'626 -0.2% 4'120 4'023 2.4% Depreciation & Amortization -578 -534 -8.2%
Slide 18: Operating Free Cash Flow
Operating Free Cash Flow CHF m Q3 2017 Q3 2016 9M 2017 9M 2016 Operating EBITDA 1'623 1'626 -0.2% 4'120 4'023 2.4% Total other non cash items 88 92 -4.3% 65 317 -79.5% Change in net working capital -205 -195 -5.1% -1'855 -1'438 -29.0% Share of profit of JVs -45 -32 -40.6% -111 -76 -46.1% Dividends r
Slide 19: Net Financial Debt Sept 2016 to Sept 2017
Net Financial Debt Sept 2016 to Sept 2017 CHF m -2'922 -2'781 7992) 4861) 1'197 297 -141 -2'243 16'497 1'424 15'535 NFD (Sept 2016) CF Op. Act. PPA adjustment Capex Net Disposals Dividends Share buy-back FX Others NFD (Sept 2017) 1) Mainly due to EUR appreciation 2) Includes CHF 325m of share purcha
Slide 20: Financial ratios
Financial ratios Outlook FY Sept 2017 (LTM) Sept 2016 (LTM) 2017 Net financial debt / 2.6 2.9 Improving Op. EBITDA adj. 1) Cash Flow from operating activities / 17.9% 18.6% Stable Net financial debt 1) Operating EBITDA adjusted includes JVs contribution © 2017 LafargeHolcim 20
Slide 21: Next steps
03 Next steps Jan Jenisch, Chief Executive Officer 21
Slide 22: Next steps
Next steps 1. Started in September 2017 – Business review underway • Country strategies • Focus on simplification, cost discipline and performance management 2. March 2018 – FY17 results and Strategic Update 3. 2018 Q3 – Capital Markets Day © 2017 LafargeHolcim 22
Slide 23: Appendix
Appendix Li LafargeHolcim
Slide 24: Operating EBITDA adjusted 9M 2017
Operating EBITDA adjusted 9M 2017 +9.2% CHF m LFL -538 -114 722 312 -260 -127 4'290 4'400 4'286 4'030 Op. EBITDA adj. Scope LFL Op. EBITDA adj. Volume Price Costs & others Synergies LFL Op. EBITDA adj. FX Op. EBITDA adj. 9M 2016 9M 2016 9M 2017 9M 2017 © 2017 LafargeHolcim 24
Slide 25: Synergy delivery ahead of schedule
Synergy delivery ahead of schedule Total synergies realized until Q3 2017 x Q3 2017 CHF m Target run rate 2017 realized synergies Operational 359 29 optimization 200 220 Procurement 16 340 253 SG&A 9 260 Growth & 248 Innovation 200 43 1'080 Total 97 1’000 Implementation 819 cost 1’100 22 © 2017 Lafa
Slide 26: Net Sales and Operating EBITDA adjusted by Region – 9M 2017
Net Sales and Operating EBITDA adjusted by Region – 9M 2017 North North Net Sales America Operating EBITDA adj. America Middle East 21% 24% Africa Asia 13% 20% Pacific Asia 28% Pacific 18% Latin 11% Middle East America Africa 17% 22% 27% Latin Europe Europe America CHF m 9M 2017 9M 2016 Like-for-lik
Slide 27: Cement and Aggregates sales volumes by region
Cement and Aggregates sales volumes by region Cement sales volumes Mt Q3 2017 Q3 2016 Scope Like-for-like 9M 2017 9M 2016 Scope Like-for-like Asia Pacific 21.4 25.8 -16.8% -6.1 8.7% 67.6 86.4 -21.7% -21.0 3.4% Europe 12.1 12.0 0.3% 0.0 0.2% 32.1 31.6 1.7% 0.0 1.5% Latin America 6.7 6.3 6.0% -0.2 9.5
Slide 28: Net Sales and Operating EBITDA adjusted by region
Net Sales and Operating EBITDA adjusted by region Net Sales CHF m Q3 2017 Q3 2016 Scope FX Like-for-like 9M 2017 9M 2016 Scope FX Like-for-like Asia Pacific 1'797 1'894 -5.1% -304 -1 13.1% 5'492 6'236 -11.9% -1'070 52 5.3% Europe 1'922 1'890 1.7% -11 50 -0.4% 5'328 5'355 -0.5% -29 -71 1.4% Latin Ame
Slide 29: Net Sales and Operating EBITDA adjusted by segment
Net Sales and Operating EBITDA adjusted by segment Cement Aggregates CHF m 2017 2016 2017 2016 Net Sales Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Asia Pacific 1'394 1'462 1'318 1'742 1'739 1'457 125 149 151 114 135 134 Europe 645 918 939 619 910 879 385 477 488 396 502 492 Latin America 601 672 656 582 5
Slide 30: Net Financial Debt
Net Financial Debt Net Financial Debt (per Sep 30, 2017) Liquidity summary 15’535 233 › Cash + marketable securities: CHF 4’295m › Cash + marketable securities + unused committed 15’302 credit lines: CHF 10’969m Debt summary › Current financial liabilities1: CHF 4’109m Incl. Fair Value adj. Excl. Fa
Slide 31: Maturity profile and cost of debt
Maturity profile and cost of debt Sep. 2017 Dec 31, 2016 CHF m 4’781 CHF m 4’483 Average Average maturity maturity 3,185 3’279 6.1 y 5.9 y 2’286 1’931 1’808 1’717 1’869 1’674 2’049 2’052 1’979 1’726 Average 1’590 Average 622 cost of 901 534 cost of 151 424 442 debt 150 debt Q4 2018 2019 2020 2021 20
Slide 32: Condensed Statement of Financial Position
Condensed Statement of Financial Position CHF m Sep 30, 2017 Dec 31, 2016 Sep 30, 2017 Dec 31, 2016 Invested Capital 47'538 46'641 Equity 34'116 34'747 Out of which: Out of which: Goodwill 16'214 16'247 Equity attributable to the LH 30'312 30'822 Prop, Plant & Equipment 31'370 32'052 shareholders In
Slide 33: Net Financial Debt December 2016 to Sept 2017
Net Financial Debt December 2016 to Sept 2017 CHF m -1’086 333 234 297 -1'002 760 -1'098 1'371 -84 15'535 14'724 NFD (Dec 2016) CF Op. Act. PPA adjustment Capex Net Disposals Dividends Share buy-back FX Others NFD (Sept 2017) © 2017 LafargeHolcim 33
Slide 34: Volume and Price development Cement – 9M 2017 vs. 9M 2016
Volume and Price1) development Cement – 9M 2017 vs. 9M 2016 Holcim Spain Volum e Price & Other Volum e Price & Other Volum e Price & Other Volum e Price & Other Asia Pacific 3.4% 2.2% Latin America 3.2% 6.2% Europe 1.5% 2.7% Middle East Africa -4.7% 16.5% 2) China + ++ Argentina Azerbaijan ++ ++ Alg
Slide 35: Volume and Price development Aggregates – 9M 2017 vs. 9M 2016
Volume and Price development Aggregates – 9M 2017 vs. 9M 2016 Volum e Price & Other Volum e Price & Other Volum e Price & Other Volum e Price & Other Asia Pacific 12.1% -0.5% Latin America -24.5% 16.7% Europe 1.0% -0.6% Middle East Africa -7.1% 6.2% Australia ++ - Brazil -- -- Belgium ++ = South Afr
Slide 36: 2017 Outlook – Cement Market Overview by Selected Countries
2017 Outlook – Cement Market Overview by Selected Countries Market volum es Market volum es Market volum es Market volum es % % % % Asia Pacific 1) 1 to 3% Latin America 1 to 3% Europe 0 to 2% Middle East Africa -4 to -2% China 2) 0 to 2% Argentina 8 to 10% France 1 to 3% Algeria -5 to -3% India 4 t
Slide 37: Contact information and event calendar
Contact information and event calendar Contact information Event calendar Corporate Communications March 2, 2018 Q4 2017 Results Phone +41 58 858 87 10 Fax +41 58 858 87 19 communications@lafargeholcim.com Investor Relations Phone +41 58 858 87 87 investor.relations@lafargeholcim.com www.lafargeholc
Slide 38: Disclaimer
Disclaimer These materials are being provided to you on a confidential basis, may not be distributed to the press or to any other persons, may not be redistributed or passed on, directly or indirectly, to any person, or published or reproduced, in whole or in part, by any medium or for any purpose.
Slide 39: LafargeHolcim
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