Exane BNP paribas 11th european seminar markus akermann CEO june 11 2009 holcim ltd

Infrastructure and public works Commercial and industrial Housing and residential Application by end markets Applications vary between mature and emerging markets... Housing markets are

Exane BNP Paribas – 11 th European Seminar

Markus Akermann – CEO

June 11, 2009

© Herzog & de Meuron

Agenda

1 Attractiveness of the industry

2 Challenges and management priorities

3 Conclusions

Attractiveness of the heavy-side building materials

ƒ Housing and infrastructure are basic needs

ƒ Diverse customer base include private and public sector

ƒ Sustainable Development is our “license to operate”

ƒ Concrete is an attractive, eco-friendly product

The demand drivers and characteristics of our products

provide for continued growth and profitability

The industry invests in physical assets

ƒ No process obsolescence risk

ƒ Products are not affected by short-term life-cycles

ƒ Limited substitution potential

ƒ Own raw material reserves

ƒ Inflation hedge (real value)

ƒ Plant and distribution network

Investments in real assets offer long term value

Infrastructure and public works

Commercial and industrial

Housing and residential

Application by end markets

Applications vary between mature and emerging markets

Housing markets are less dependent on financial markets and policies

ƒ Rural market demand is impacted by agricultural

productivity gains, crop yields and weather

ƒ Decreasing size of the average household

ƒ Rising income levels

ƒ Strong local brands

Rural and housing markets offer sound growth prospects

Sources: Holcim, US Census Bureau, Economist Intelligence Unit

GDP per capita (at PPP) CAGR 08-13E

Cumulated population

growth 08-13E

Mature markets Emerging markets

Size of circles represents influenced capacity 2008

Western Europe 25.9 Mt

Eastern Europe 23.1 Mt

Africa Middle East 23.6 Mt

North America 21.3 Mt

India 44.6 Mt

China 38.5 Mt

Asia Pacific excl India and China

America 39.0 Mt

Cement – market positioning to capture growth

Demand growth

Latin America 13.4 Mt

North America 49.3 Mt

Asia 4.7 Mt

GDP per capita (at PPP) CAGR 08-13E

Mature markets Emerging markets

Size of circles represents consolidated sales volumes 2008

Sources: Holcim, US Census Bureau, Economist Intelligence Unit

Eastern Europe 11.5 Mt

Aggregates – counterweight in mature markets

Demand growth

1OCMS – Other Construction Materials and Services

Estimated replacement cost / tonne of approximately CHF 300

ƒ 151 plants with a total capacity of 194 million tonnes

ƒ Product sales volume of 143 million tonnes

ƒ Segment revenue of CHF 16.2 billion

ƒ 415 operations

ƒ Product sales volume of 168 million tonnes

ƒ Segment revenue of CHF 2.5 billion

ƒ 1,217 ready-mix concrete plants

ƒ Product sales volume of 48 million m 3 of ready-mix and

13 million tonnes of asphalt

ƒ Segment revenue of CHF 9.4 billion

Full year consolidation 2008

Agenda

1 Attractiveness of the industry

2 Challenges and management priorities

3 Conclusions

ƒ The first global economic contraction since WWII

Holcim will benefit from both resilience in the emerging market

as well as infrastructure spending from the stimulus packages

ƒ Declining volumes in mature markets

ƒ Slowing growth rates in emerging markets

ƒ Cost cutting initiatives in all segments and regions

ƒ Impact from stimulus programs within the next two years

ƒ Geographic diversification strategy proving its strength

Annual GDP growth in percentage points

ƒ Relative to previous crises and slowdowns, the economies of Asia, Latin America, Africa and the Middle East are better positioned to return to growth

Source: IMF World Economic Outlook Update April 2009

Not all countries are equally affected by the

downturn

Emerging Market

Emerging Market

GDP Growth weighted with Holcim EBITDA 2008 per country [%] (excl China)

Challenge – regional overcapacity and global

trade

Holcim is streamlining its asset base and building new plants in

high growth markets in order to capture future growth

ƒ Industry expansion combined with lower volume growth

ƒ Local overcapacities combined with low freight rates

ƒ Capacity adjustments and expansion delays occurring across the industry and the world

ƒ New capacity is in markets with sound growth rates

ƒ Introducing environmentally friendly state-of-the-art plants

100 million was realized in 1st quarter 2009

Management has reacted quickly to the changed environment

Taken actions which are leading to a more cost-efficient and

environmentally-friendly operation

Holcim closed or mothballed > 10 million tonnes of its capacities since the beginning of the crisis

USA:

ƒClosing 2 cement plants

ƒMothballed 3 kiln lines

ƒClosing 67 ready-mix, aggregates, asphalt &

concrete product plants

Asia Pacific:

ƒMothballed 4 kiln lines

Note: Select cost and capacity initiatives in progress – highlighted using estimated numbers

Sample of initiatives in execution

Latin America:

ƒMothballed 5 kiln lines

ƒClosing 23 ready-mix plants

Europe:

ƒClosing 1 cement plant

ƒMothballed 5 kiln lines

ƒClosing 43 ready-mix, asphalt and aggregates plants

Challenge – financial market volatility and crisis

ƒ Borrowing and capital markets are impaired by the financial crisis

ƒ Holcim continues to successfully participate in the capital and credit markets across currencies and regions

ƒ No financial covenants at the corporate level

ƒ Conservative balance sheet and low leverage

More than CHF 2.5 bn in financing raised in Q1 2009

ƒ Lack of available funds for the industry

ƒ Increases the cost to refinance in certain currencies

Maturity profile (CHF million) 1

Liquidity summary

ƒ Liquidity II 2: CHF 4.2 billion

ƒ Liquidity III 3: CHF 5.8 billion Debt summary

ƒ Fixed to floating ratio: 32% fixed

ƒ Capital markets 44%; Loans 56%

ƒ Corporate vs subsidiary debt: 79% corporate

ƒ Ø total maturity: 3.6 years

ƒ CP borrowings: EUR 147 million

ƒ No financial covenants at corporate level ST/LT ratings summary as of May 4, 2009

ƒ S&P Credit Rating: A-2 / BBB, outlook stable

ƒ Fitch Credit Rating: F2 / BBB, outlook negative

ƒ Moody’s Credit Rating: P-2 / Baa2, outlook stable

1Current financial liabilities adjusted for short-term drawings under long-term committed credit lines

2Liquidity II =Cash + marketable securities

3Liquidity III =Liquidity II + unused committed credit lines

Strong balance sheet and liquidity position as of March 31, 2009

Agenda

1 Attractiveness of the industry

2 Challenges and management priorities

3 Conclusions

Conclusions

investments

economic crisis – infrastructure programs support demand

business environment, which also offers opportunities

took strong and decisive measures – anticipating the crisis development is a continuous management task

Holcim will emerge from the crisis as a stronger company

Disclaimer

Cautionary statement regarding forward-looking statements

This presentation may contain certain forward-looking statements

relating to the Group’s future business, development and economic performance

Such statements may be subject to a number of risks, uncertainties and other important factors, such as but not limited to (1) competitive pressures; (2) legislative and regulatory developments; (3) global,

macroeconomic and political trends; (4) fluctuations in currency

exchange rates and general financial market conditions; (5) delay or inability in obtaining approvals from authorities; (6) technical

developments; (7) litigation; (8) adverse publicity and news

coverage, which could cause actual development and results to differ materially from the statements made in this presentation Holcim

assumes no obligation to update or alter forward-looking statements whether as a result of new information, future events or otherwise.