Slide 1: Fourth Quarter and Annual Results 2015
Fourth Quarter and Annual Results 2015 Eric Olsen, CEO and Ron Wirahadiraksa, CFO March 17, 2016 © LafargeHolcim Ltd 2015
Slide 2: Overview of 2015 and Q4 Results
01 Overview of 2015 and Q4 Results Eric Olsen, Chief Executive Officer © 2016 LafargeHolcim 2
Slide 3: Highlights
Highlights 2015 was a year of change and transformation for the company Integration is largely behind us Delivery of synergies ahead of schedule and portfolio review completed 2015 commitments on Capex and Net Debt met Free cash flow generation accelerated © 2016 LafargeHolcim 3
Slide 4: Merger integration largely completed
Merger integration largely completed Key elements of merger behind us… › Operating model and organization in place › Local mergers completed Focus on execution of our plan › Commercial transformation underway › Synergies on track › Disciplined capital allocation being applied › Enhanced cost managem
Slide 5: Overview of results
Overview of results Positive demand trends › Cement volume growth of 4.8% YoY LFL in Q4 › Positive performances in US, Mexico, Argentina, Philippines, Australia and the UK Results impacted by a few challenging markets e.g. Brazil, China, Switzerland, France, Indonesia, Iraq and Azerbaijan Deci
Slide 6: Portfolio optimisation and restructuring progressing fast
Portfolio optimisation and restructuring progressing fast Divestments program Restructuring and cost management initiatives More than one third of our CHF 3.5 billion Decisive actions in place to address disposal target for 2016 has already market challenges in been secured: › China › Saudi Arab
Slide 7: Outlook for 2016
Outlook for 2016 Overall cement demand in our markets expected to grow between 2% to 4% Self-help measures in place to focus on pricing, reduce costs and capture future opportunities Strategic plan to gain momentum in 2016 › Capex less than CHF 2.0 billion › Incremental synergies of more than
Slide 8: Regional Results and Performance Analysis
02 Regional Results and Performance Analysis Ron Wirahadiraksa, Chief Financial Officer © 2016 LafargeHolcim 8
Slide 9: Key financial figures for Q4 and 2015
Key financial figures for Q4 and 2015 Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Volumes Cement (Mt) 63.4 66.5 4.8% 4.8% 255.2 255.7 0.2% 0.2% Aggregates (Mt) 73.7 75.8 2.9% 2.9% 293.7 292.2 -0.5% -0.5% Ready-mix (Mm³) 14.2 14.3 0.8% 0.8% 57.7 56.8 -1.4% -1.4% Net Sales 7’912 7’441 -
Slide 10: Operating EBITDA adjusted by Region for Q4 and 2015
Operating EBITDA adjusted* by Region for Q4 and 2015 Europe Europe 20% 20% Middle Middle East East Africa North North America Africa America 18% 22% 19% 21% Latin Asia America Asia Latin Pacific 14% Pacific America 26% 25% 14% CHF m Q4 14 Q4 15 Variance LFL CHF m 12M 14 12M 15 Variance LFL Asia Paci
Slide 11: Asia Pacific
Asia Pacific Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Net sales 2'448 2'363 -3.5% 2.6% 9'512 9'048 -4.9% -1.7% Operating EBITDA adj.* 456 400 -12.4% -6.5% 1'769 1'565 -11.5% -8.6% Operating EBITDA margin adj.* 18.6% 16.9% -1.7 pp 18.6% 17.3% -1.3 pp * Operating EBITDA adjusted excl
Slide 12: Europe
Europe Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Net sales 1'946 1'783 -8.4% -1.2% 8'367 7'356 -12.1% -2.4% Operating EBITDA adj.* 372 304 -18.4% -11.7% 1'537 1'264 -17.8% -8.7% Operating EBITDA margin adj.* 19.1% 17.0% -2.1 pp 18.4% 17.2% -1.2 pp * Operating EBITDA adjusted exclude
Slide 13: Latin America
Latin America Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Net sales 892 784 -12.0% 1.3% 3'540 3'241 -8.4% 2.8% Operating EBITDA adj.* 249 217 -13.0% -7.0% 964 907 -5.9% 0.1% Operating EBITDA margin adj.* 28.0% 27.6% -0.3 pp 27.2% 28.0% 0.8 pp * Operating EBITDA adjusted excludes all m
Slide 14: Middle East / Africa
Middle East / Africa Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Net sales 1'196 1'077 -10.0% 3.7% 4'969 4'536 -8.7% 1.9% Operating EBITDA adj.* 363 271 -25.4% -12.9% 1'611 1'362 -15.4% -4.6% Operating EBITDA margin adj.* 30.3% 25.1% -5.2 pp 32.4% 30.0% -2.4 pp * Operating EBITDA adju
Slide 15: North America
North America Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Net sales 1'500 1'501 0.1% 3.1% 5'418 5'678 4.8% 5.4% Operating EBITDA adj.* 302 326 8.1% 11.6% 1'065 1'183 11.1% 12.0% Operating EBITDA margin adj.* 20.1% 21.7% 1.6 pp 19.7% 20.8% 1.2 pp * Operating EBITDA adjusted excludes al
Slide 16: Operating EBITDA adjusted Q4 2015
Operating EBITDA adjusted* Q4 2015 CHF m 91 -154 -127 -42 Of which -150 from: - China -112 94 - Egypt - India - Indonesia -407 - Switzerland 1'647 1’395 988 Adj. Op.EBITDA 2014 Volume Price Cost & Others CO2 FX Synergies Adj. Op.EBITDA 2015 Merger, Restruct. & Op.EBITDA 2015 other one-offs ** report
Slide 17: Operating EBITDA adjusted 12M 2015
Operating EBITDA adjusted* 12M 2015 CHF m -76 -20 -279 -65 130 -378 -1'106 6'438 5'751 4'645 Adj. Op.EBITDA 2014 Volume Price Cost & Others CO2 FX Synergies Adj. Op. EBITDA 2015 Merger, Restruct. & Op.EBITDA 12M 2015 other one-offs ** reported * Operating EBITDA adjusted excludes all merger, restruc
Slide 18: Operating EBITDA synergies of CHF 130 million ahead of plan
Operating EBITDA synergies of CHF 130 million ahead of plan CHF m Operational 44 • Cement productivity best-practices deployment optimisation / • Network optimization in major overlapping countries best practice 220 38 • ~2% reduction of external spending by renegotiating top 2000 contracts, Procure
Slide 19: Details on asset impairments & provisions review
Details on asset impairments & provisions review CHF m Included in Included in Included in Operating EBITDA Operating Profit Net Income North America (1) (150) (150) Europe (18) (843) (898) Asia (478) (482) Latin America (2) (875) (960) Africa/Middle East (2) (230) (230) Corporate/Eliminations (31)
Slide 20: Pro Forma Adjusted Financials Reconciliation
Pro Forma Adjusted Financials Reconciliation Operating EBITDA Net Income CHFm FY 15 CHFm FY 15 Pro-Forma numbers Pro-Forma Adjusted Pro-Forma Adjusted 5’751 represent 12 months of 784 Operating EBITDA Net Income Out of which: operations of the Group Merger, restructuring & other Merger, restructurin
Slide 21: Net Financial Debt: Bridge from 30 September to 31 December 2015
Net Financial Debt: Bridge from 30 September to 31 December 2015 CHF m -1,534 838 -219 -128 18,309 17,266 Sep 2015 CF from op. Activities Capex FX Others Dec 2015 © 2016 LafargeHolcim 21
Slide 22: Update on Financing Strategy and Synergies
Update on Financing Strategy and Synergies Main priorities › Maintain solid liquidity at all times › Extend debt maturity profile to above 5 years average debt maturity › Optimize debt portfolio and generate financing synergies › Reduce gross debt with disposal proceeds Recent major achievements
Slide 23: Performance Management System
Performance Management System New management performance system New set of value drivers › Comprehensive and cohesive management tool From PL focused performance management: with a common language across the group decisions in the industry historically EBITDA › Common value drivers across the grou
Slide 24: 2016 Outlook – Cement Market Overview by Region
2016 Outlook – Cement Market Overview by Region Volumes Highlights Asia Pacific* 3 - 5% Market growth across the region supported by an acceleration in India and Indonesia; China adjustment to continue Europe Stable Improvement expected in most markets; decline in Russia, Azerbaijan Latin America -5
Slide 25: 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 % % % % Asia Pacific* 3 to 5 Latin America -5 to -3 Europe Stable Middle East Africa 3 to 5 China** -6 to -4 Argentina -4 to -2 France 0 to 2 Algeria 1 to 3 India 4 to 6 Brazil
Slide 26: Closing Remarks
04 Closing Remarks Eric Olsen, Chief Executive Officer © 2016 LafargeHolcim 26
Slide 27: Building for tomorrow
Building for tomorrow › Strong long-term potential in emerging markets › Recovery in developed markets World population density map ` LH integrated cement plants and grinding stations Note: Map includes plants from joint ventures / Source: NASA Earth Observations 27
Slide 28: Reconfirmation of medium term Group targets
Reconfirmation of medium term Group 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 › CHF 3.5-4.0bn run rate by 2018 from operational improvement › At least CHF 6 per share run
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Slide 30: Appendix
05 Appendix © 2016 LafargeHolcim 30
Slide 31: Synergies ahead of schedule: delivery of full CHF 1.1bn run-rate target
Synergies ahead of schedule: delivery of full CHF 1.1bn run-rate target earlier than end of 2017 CHF m EBITDA synergies Procurement Operational SG&A Growth & Total performance Innovation run-rate pre- 380 220 280 220 tax cash flow synergies 880 130m delivered in 2015 Ramp-up 1’100 800 ~ 1’500 of EBI
Slide 32: Net Sales by Region for Q4 and 2015
Net Sales by Region for Q4 and 2015 Europe Europe 24% 25% Middle Middle East East Africa Africa 14% 15% North North America America 20% Latin Latin 19% America America 11% 11% Asia Asia Pacific Pacific 31% 31% CHF m Q4 14 Q4 15 Variance LFL CHF m 12M 14 12M 15 Variance LFL Asia Pacific 2’448 2’363 -
Slide 33: Operating EBITDA reported by Region for Q4 and 2015
Operating EBITDA reported by Region for Q4 and 2015 Europe Europe 18% 19% Middle East Middle North Africa North East America 16% America Africa 22% 19% 22% Latin America 16% Latin Asia Asia Pacific Pacific America 28% 25% 15% CHF m Q4 14 Q4 15 Variance LFL CHF m 12M 14 12M 15 Variance LFL Asia Pacif
Slide 34: Sales volumes Q4 2015
Sales volumes Q4 2015 CEM Million t AGG Million T +2.1% +1.6% RMX Million m3 30.6 30.4 30.9 2014 30.0 2015 -1.6% +6.9% +2.8% +6.1% +6.2% 10.4 10.2 5.4 5.8 4.7 4.4 2.3 2.4 33.0 31.1 CEM AGG RMX CEM AGG RMX +11.8% -3.1% 8.4 9.4 4.2 4.0 +10.8% -5.8% +14.8% +0.2% CEM AGG RMX -14.2% -4.6% 10.2 11.3 7.1 6
Slide 35: Sales volumes FY 2015
Sales volumes FY 2015 CEM Million t +1.3% -1.1% AGG Million T RMX Million m3 124.4 123.0 113.8 115.3 2014 2015 -4.7% +4.2% +0.9% +0.8% -1.0% 44.2 42.1 20.9 21.8 122.2 123.1 18.5 18.7 9.4 9.3 CEM AGG RMX CEM AGG RMX +1.8% -0.2% 34.2 34.8 +1.0% 16.0 15.9 -1.2% 42.9 43.4 -25.7% -6.7% +5.9% CEM AGG RMX
Slide 36: Asia Pacific
Asia Pacific Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Volumes Cement (Mt) 31.1 33.0 6.2% 6.2% 122.2 123.1 0.8% 0.8% Aggregates (Mt) 8.4 9.4 11.8% 11.8% 34.2 34.8 1.8% 1.8% 3 Ready-mix (Mm ) 4.2 4.0 -3.1% -3.1% 16.0 15.9 -0.2% -0.2% Net sales 2'448 2'363 -3.5% 2.6% 9'512 9'048 -4.9%
Slide 37: Europe
Europe Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Volumes Cement (Mt) 10.4 10.2 -1.6% -1.6% 44.2 42.1 -4.7% -4.7% Aggregates (Mt) 30.4 30.9 1.6% 1.6% 124.4 123.0 -1.1% -1.1% 3 Ready-mix (Mm ) 4.4 4.7 6.1% 6.1% 18.5 18.7 0.9% 0.9% Net sales 1'946 1'783 -8.4% -1.2% 8'367 7'356 -12.1% -
Slide 38: Latin America
Latin America Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Volumes Cement (Mt) 7.1 6.7 -5.8% -5.8% 28.2 27.9 -1.2% -1.2% Aggregates (Mt) 2.4 2.0 -14.2% -14.2% 10.6 7.9 -25.7% -25.7% 3 Ready-mix (Mm ) 1.9 1.8 -4.6% -4.6% 7.8 7.3 -6.7% -6.7% Net sales 892 784 -12.0% 1.3% 3'540 3'241 -8.4
Slide 39: Middle East & Africa
Middle East & Africa Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Volumes Cement (Mt) 10.2 11.3 10.8% 10.8% 42.9 43.4 1.0% 1.0% Aggregates (Mt) 2.4 2.8 14.8% 14.8% 10.6 11.2 5.9% 5.9% 3 Ready-mix (Mm ) 1.4 1.4 0.2% 0.2% 5.9 5.6 -5.8% -5.8% Net sales 1'196 1'077 -10.0% 3.7% 4'969 4'536
Slide 40: North America
North America Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Volumes Cement (Mt) 5.4 5.8 6.9% 6.9% 20.9 21.8 4.2% 4.2% Aggregates (Mt) 30.0 30.6 2.1% 2.1% 113.8 115.3 1.3% 1.3% 3 Ready-mix (Mm ) 2.3 2.4 2.8% 2.8% 9.4 9.3 -1.0% -1.0% Net sales 1'500 1'501 0.1% 3.1% 5'418 5'678 4.8% 5.4% O
Slide 41: Free Cash Flow
Free Cash Flow Q4 12M CHF m 2014 2015 Variance LFL 2014 2015 Variance LFL Cash flow from op. activities 1'774 1'560 -12.0% -8.2% 3'135 2'550 -18.7% -19.2% Maintenance capex -498 -505 1.5% -8.2% -1'051 -1'148 -8.4% -19.5% Expansion capex -449 -408 -9.2% -5.0% -1'647 -1'453 11.8% 1.4% Free Cash Flow *
Slide 42: Volume and price development Cement – FY 2015
Volume and price development Cement – FY 2015 Volum e * Price & Other Volum e * Price & Other Volum e * Price & Other Volum e * Price & Other Asia Pacific 0.8% -2.6% Latin America -1.2% 5.9% Europe -4.7% -1.5% Middle East Africa 1.0% -0.4% Bangladesh -2.7% -5.2% Argentina 7.4% 32.2% Azerbaijan -29.6
Slide 43: Volume and price development AGG – FY 2015
Volume and price development AGG – FY 2015 Volum e Price & Other Volum e Price & Other Volum e Price & Other Volum e Price & Other Asia Pacific 1.8% -7.0% Latin America -25.7% 1.7% Europe -1.2% 2.4% Middle East Africa 5.9% -2.1% Australia 0.2% -6.6% Brazil -15.9% -12.1% Belgium 1.1% 6.4% South Afric
Slide 44: Condensed Statement of Financial Position
Condensed Statement of Financial Position CHF m Dec 31, 2015 Dec 31, 2015 Invested Capital 55’292 Equity 35’722 Out of which: Out of which: 16’490 Equity attributable to the LH shareholders 31’365 Goodwill Prop, Plant & Equipment 36’747 Non controlling interest 4’357 Intangible assets 1’416 Investme
Slide 45: 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 % % % % Asia Pacific* 3 to 5 Latin America -5 to -3 Europe Flat Middle East Africa 3 to 5 Bangladesh 9 to 11 Argentina -4 to -2 Azerbaijan -17 to -15 Algeria 1 to 3 China** -6
Slide 46: 2015 and Q4 EBITDA to Net Income Table (including impairment)
2015 and Q4 EBITDA to Net Income Table (including impairment) CHFm Q4 15 FY 15 1) Impact of Merger Costs CHF (1.1bn) 2) Impairment of CHF (2.6bn) Pro-Forma Operating EBITDA Adj. 1’395 5’751 3) Includes CHF 0.5bn for the fair value uplift of Unicem and Lafarge Egypt Exceptional Items(1) (407) (1’106)
Slide 47: Contact information and event calendar
Contact information and event calendar Contact information Event calendar Corporate Communications May 12, 2016 Annual General Meeting Phone +41 58 858 87 10 Q1 2016 Results Fax +41 58 858 87 19 August 5, 2016 Q2 2016 Results communications@lafargeholcim.com Investor Relations Phone +41 58 858 87 87
Slide 48: 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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