Slide 1: Second Quarter 2016 Results
Second Quarter 2016 Results Eric Olsen, CEO and Ron Wirahadiraksa, CFO August 5, 2016 © LafargeHolcim Ltd 2015
Slide 2: Overview of Q2 2016 Results
01 Overview of Q2 2016 Results Eric Olsen, Chief Executive Officer © 2016 LafargeHolcim 2
Slide 3: Q2 2016 Highlights
Q2 2016 Highlights Adjusted operating EBITDA of CHF 1.7bn up 6.0% like for like on Q2 2015 Profitability improvement translates into adjusted operating EBITDA margin of 23.4%, up 2pp versus last year: Effective pricing strategy: upwards price trajectory showing momentum in the second quarter wi
Slide 4: CHF 3.5bn divestment program exceeded
CHF 3.5bn divestment program exceeded Executed divestments Secured divestments Expected closing date • South Korea (effective in April 2016, EV CHF 465m) • Saudi Arabia Q3 2016 • Morocco (effective in July) • Lafarge India Q3 2016 • Sri Lanka Q3 2016 • China Q4 2016 • Vietnam Q4 2016 CHF ~ 3.5bn Net
Slide 5: Q2 2016 results and Performance analysis
02 Q2 2016 results and Performance analysis Ron Wirahadiraksa, Chief Financial Officer © 2016 LafargeHolcim 5
Slide 6: Key financial figures
Key financial figures CHF m Q2 2016 Q2 2015 േ% Like-for-like % 6M 2016 6M 2015 േ % Like-for-like % Volumes Cement (Mt) 62.8 68.1 -7.8% -3.0% 119.3 123.9 -3.7% -0.1% Aggregates (Mt) 78.6 77.3 1.8% 3.0% 130.2 129.6 0.5% 2.2% Ready-mix (Mm³) 14.9 14.9 0.3% 0.3% 27.5 27.3 0.9% 1.0% Net sales 7'280 7'804
Slide 7: Net sales and operating EBITDA adjusted by Region – Q2 2016
Net sales and operating EBITDA adjusted1) by Region – Q2 2016 Europe Europe Net sales 26% Operating EBITDA Adj. 25% Middle East Africa Middle East 15% Africa North 18% North America America Latin 22% 21% America Latin 9% America 11.5% Asia Pacific Asia Pacific 29% 24% CHF m Q2 2016 Q2 2015 േ % Like-
Slide 8: Asia Pacific
Asia Pacific CHF m Q2 2016 Q2 2015 േ% Like-for-like % 6M 2016 6M 2015 േ% Like-for-like % Volumes Cement (Mt) 30.6 32.4 -5.6% -0.9% 60.7 60.6 0.1% 2.6% Aggregates (Mt) 8.6 8.1 5.7% 18.5% 15.9 15.9 0.2% 14.0% Ready-mix (Mm³) 4.2 4.0 4.8% 4.8% 8.0 7.7 3.8% 3.8% Net sales 2'194 2'334 -6.0% -0.1% 4'341 4
Slide 9: Europe
Europe CHF m Q2 2016 Q2 2015 േ% Like-for-like % 6M 2016 6M 2015 േ% Like-for-like % Volumes Cement (Mt) 11.9 12.1 -2.4% -2.4% 19.6 20.1 -2.7% -2.7% Aggregates (Mt) 33.7 33.0 2.4% 2.4% 59.0 58.7 0.5% 0.5% Ready-mix (Mm³) 5.0 5.1 -1.3% -1.3% 9.1 9.1 -0.6% -0.6% Net sales 1'968 2'022 -2.7% -3.1% 3'465 3
Slide 10: Latin America
Latin America CHF m Q2 2016 Q2 2015 േ% Like-for-like % 6M 2016 6M 2015 േ% Like-for-like % Volumes Cement (Mt) 5.8 6.9 -15.6% -15.6% 11.8 13.6 -13.2% -13.2% Aggregates (Mt) 1.6 1.9 -17.1% -21.9% 3.3 3.8 -10.9% -10.9% Ready-mix (Mm³) 1.7 1.8 -7.3% -7.3% 3.4 3.6 -6.7% -6.7% Net sales 684 807 -15.3% -5.
Slide 11: Middle East Africa
Middle East Africa CHF m Q2 2016 Q2 2015 േ% Like-for-like % 6M 2016 6M 2015 േ% Like-for-like % Volumes Cement (Mt) 10.9 11.2 -2.3% -2.3% 21.7 21.7 0.3% 0.3% Aggregates (Mt) 2.4 3.0 -19.1% -19.1% 6.0 5.4 10.2% 10.2% Ready-mix (Mm³) 1.7 1.5 13.6% 13.6% 3.1 2.8 12.0% 12.0% Net sales 1'081 1'226 -11.8%
Slide 12: North America
North America CHF m Q2 2016 Q2 2015 േ% Like-for-like % 6M 2016 6M 2015 േ% Like-for-like % Volumes Cement (Mt) 5.3 6.1 -12.8% -0.4% 8.8 9.0 -2.7% 5.8% Aggregates (Mt) 32.3 31.3 3.3% 3.3% 46.0 45.8 0.3% 0.3% Ready-mix (Mm³) 2.4 2.5 -6.0% -6.0% 3.9 4.0 -1.9% -1.5% Net sales 1'538 1'512 1.7% 0.7% 2'404
Slide 13: Operating EBITDA adjusted Q2 2016
Operating EBITDA adjusted1) Q2 2016 CHF m 126 86 170 19 8 23 39 1’705 1’662 1’579 Adj. op.EBITDA Volume Price Cost & Others CIS FX Synergies Adj. op.EBITDA Merger, Restruct. & op.EBITDA Q2 2015 Q2 2016 other one-offs 2) Q2 2016 reported 1) Excluding merger, restructuring and other one-offs 2) Of whi
Slide 14: Operating EBITDA adjusted 6M 2016
Operating EBITDA adjusted1) 6M 2016 CHF m 41 Of which CHF -173m from: - Nigeria (mCHF -121) - China (mCHF -52) 179 116 176 16 21 274 2’711 82 2’529 2’353 Adj. op.EBITDA Volume Price Cost & Others CO2 CIS FX Synergies Adj. op.EBITDA Merger, Restruct. & op.EBITDA 6M 2015 6M 2016 other one-offs 2) 6M 2
Slide 15: Quarter-on-quarter price trend
Quarter-on-quarter price trend Cement price increased 2.2% vs. Q1 2016, following a +1.2% sequential QoQ improvement in Q1 2016 vs. Q4 2015 1) Sequential QoQ price development calculated at constant geographical mix effect and constant FX © 2016 LafargeHolcim 15
Slide 16: Acceleration of synergies delivery in Q2 2016
Acceleration of synergies delivery in Q2 2016 CHF m Operational 2015 Q1 16 Q2 16 optimisation / best 44 38 84 • Cement productivity best-practices deployment practice Target • Network optimization in major overlapping countries 220 Procurement 38 21 23 • Reduction of external spending by renegotiati
Slide 17: Operating Free Cash Flow
Operating Free Cash Flow CHF m -539 -726 120 7 307 -247 6M 2015 Op. EBITDA Net Working Capital 1) Capex Net Others 6M 2016 1) Change in net working capital mainly impacted by cash effective merger, restructuring and other one-offs © 2016 LafargeHolcim 17
Slide 18: Net Financial Debt March 2016 to June 2016
Net Financial Debt March 2016 to June 2016 CHF m 170 108 136 989 525 447 397 18'041 18'141 March 2016 CF from operating Capex Net Disposals Dividends Non-cash items 1) FX Others Jun. 2016 activities 1) Of which PPA adjustments of CHF 56m © 2016 LafargeHolcim 18
Slide 19: Net Financial Debt December 2015 to June 2016
Net Financial Debt December 2015 to June 2016 CHF m 275 42 14 1'010 370 261 800 18'141 17'266 Dec. 2015 CF from operating Capex Net Disposals Dividends Non-cash items 1) FX Others Jun. 2016 activities 1) Of which PPA adjustments of CHF 128m © 2016 LafargeHolcim 19
Slide 20: Improvement of maturity profile and cost of debt
Improvement of maturity profile and cost of debt June 2016 Dec. 2015 6'000 6'000 5'000 5'000 4'000 4'000 3'000 Average 3'000 Average maturity maturity 2'000 2'000 4.9 y 4.2 y 1'000 1'000 0 0 <1y 1-2y 2-3y 3-4y 4-5y 5-6y 6-7y 7-8y 8-9y 9-10y >10y <1y 1-2y 2-3y 3-4y 4-5y 5-6y 6-7y 7-8y 8-9y 9-10y >10y
Slide 21: Outlook and Update on Strategic Initiatives
03 Outlook and Update on Strategic Initiatives Eric Olsen, Chief Executive Officer © 2016 LafargeHolcim 21
Slide 22: Outlook for 2016
Outlook for 2016 Cement demand outlook 2016: overall global demand in the range of 1-3 per cent Other expectations for 2016 remain unchanged › Capex below CHF 2.0 billion › Incremental synergies of more than CHF 450 million of adjusted operating EBITDA › Pricing recovery actions and commercial e
Slide 23: On track for 2018 targets
On track for 2018 targets¹) Free Cash Flow Capex ROIC AT › At least CHF 10.0bn › Max CHF 3.5bn › At least 300bps improvement cumulative 2016 – 2018 cumulative 2016 – 2017 from 2015 level by 2018 from operational improvement › CHF 3.5-4.0bn run rate by 2018 › At least CHF 6 per share run rate by 2018
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Slide 25: Appendix
04 Appendix © 2016 LafargeHolcim 25
Slide 26: Net sales and operating EBITDA adjusted by Region – 6M 2016
Net sales and operating EBITDA adjusted1) by Region – 6M 2016 Europe Europe Net sales 25% Operating EBITDA Adj. 21% Middle East Africa North Middle East 16% America Africa 14% 21% North America 17% Latin America Asia 10% Latin Asia Pacific Pacific America 29% 32% 15% CHF m 6M 2016 6M 2015 േ % Like-f
Slide 27: Net sales and adjusted operating EBITDA – Cement
Net sales and adjusted operating EBITDA – Cement 2) CHF m 2016 2015 Net Sales Q1 Q2 Q1 Q2 Q3 Q4 FY 2015 Asia Pacific 1'742 1'738 1'794 1'893 1'692 1'920 7'299 Europe 619 898 650 939 889 793 3'271 Latin America 582 580 690 688 721 664 2'764 Middle East Africa 937 946 1'052 1'101 957 963 4'072 North A
Slide 28: Net sales and adjusted operating EBITDA – Aggregates
Net sales and adjusted operating EBITDA – Aggregates 2) CHF m 2016 2015 Net Sales Q1 Q2 Q1 Q2 Q3 Q4 FY 2015 Asia Pacific 114 135 123 130 134 141 528 Europe 396 502 403 501 511 463 1'879 Latin America 12 11 16 16 15 14 60 Middle East Africa 26 31 30 32 31 29 123 North America 203 403 200 400 489 385
Slide 29: Net sales and adjusted operating EBITDA – Other
Net sales and adjusted operating EBITDA – Other 2) CHF m 2016 2015 Net Sales Q1 Q2 Q1 Q2 Q3 Q4 FY 2015 Asia Pacific 292 320 299 311 309 303 1'222 Europe 482 568 499 581 599 527 2'206 Latin America 88 93 103 104 104 106 417 Middle East Africa 86 104 83 92 82 85 342 North America 198 452 186 390 532 4
Slide 30: Operating Free Cash Flow
Operating Free Cash Flow CHF m േ% Q2 2016 Q2 2015 6M 2016 6M 2015 േ% Operating EBITDA 1'579 1'429 10.5% 2'353 2'346 0.3% Total other non cash items 89 60 48.3% 174 111 56.8% Change in net working capital -549 -225 -144.0% -1'244 -997 -24.8% Financial expenses paid net -232 -238 2.5% -441 -489 9.8% I
Slide 31: Net Financial Debt
Net Financial Debt CHF m Liquidity summary Net Financial Debt (per June 30, 2016) • Cash + marketable securities: mCHF 3’922 • Cash + marketable securities + unused committed credit lines: mCHF 9’902 18'141 Debt summary • Current financial liabilities1: mCHF 5’691 17'686 • Fixed to floating ratio: 5
Slide 32: Operating EBITDA to Net Income
Operating EBITDA to Net Income CHF m േ% Q2 2016 Q2 2015 6M 2016 6M 2015 േ% Operating EBITDA 1'579 1'429 10.5% 2'353 2'346 0.3% Depreciation & Amortization -591 -629 6.0% -1'138 -1'234 7.8% Operating Profit 987 799 23.5% 1'214 1'111 9.3% Other Income / - Expenses 22 -445 n.a 24 -11 n.a Share of profi
Slide 33: Condensed Statement of Financial Position
Condensed Statement of Financial Position CHF m Jun 30, 2016 Dec 31, 2015 Jun 30, 2016 Dec 31, 2015 Invested Capital 52’534 55’290 Equity 33’686 35’722 Out of which: Out of which: Goodwill 16’307 16’490 Equity attributable to the LH 29’414 31’365 Prop, Plant & Equipment 33’855 36’747 shareholders In
Slide 34: Volume and price development Cement – 6M 2016 vs. 6M 2015
Volume and price development Cement – 6M 2016 vs. 6M 2015 Volume Price & Other Volume Price & Other Volume Price & Other Volume Price & Other Asia Pacific 2.6% -4.2% Latin America -13.2% 12.2% Europe -2.7% -1.1% Middle East Africa 0.3% -8.0% Bangladesh -17.4% -4.6% Argentina -14.4% 40.3% Azerbaijan
Slide 35: Volume and price development Aggregates – 6M 2016 vs. 6M 2015
Volume and price development Aggregates – 6M 2016 vs. 6M 2015 Volume Price & Other Volume Price & Other Volume Price & Other Volume Price & Other Asia Pacific 14.0% -5.5% Latin America -10.9% -5.6% Europe 0.5% -5.6% Middle East Africa 10.2% -4.3% Australia 8.8% -0.5% Brazil -18.1% -15.2% Belgium 5.5
Slide 36: 2016 Outlook – Cement Market Overview by Region
2016 Outlook – Cement Market Overview by Region Volumes Highlights Asia Pacific* 3% to 5% Market growth across the region supported by an acceleration in India; China adjustment to continue Europe -3% to -1% Stable markets in most countries; declines in Russia, Azerbaijan, Spain and Italy Latin Amer
Slide 37: 2016 Outlook – Cement Market Overview by Selected Countries
2016 Outlook – Cement Market Overview by Selected Countries Market volum es Market volum es Market volum es Market volum es % % % % 1) Asia Pacific 3 to 5 Latin America -6 to -4 Europe -3 to -1 Middle East Africa 3 to 5 2) China -3 to -1 Argentina -14 to -12 France 0 to 2 Algeria 1 to 3 India 4 to 6
Slide 38: Contact information and event calendar
Contact information and event calendar Contact information Event calendar Corporate Communications November 4, 2016 Q3 2016 Results Phone +41 58 858 87 10 November 18, 2016 Capital Markets Day Fax +41 58 858 87 19 communications@lafargeholcim.com Investor Relations Phone +41 58 858 87 87 investor.re
Slide 39: 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.
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