half year results 2009 holcim ltd

Highlights Half-Year 2009ƒ Due to its strong presence in growth markets, Holcim performed well in a difficult economic market environment and significantly increased its cash flow ƒ Robu

Half-Year Results 2009

© Herzog & de Meuron

Highlights Half-Year 2009

ƒ Due to its strong presence in growth markets, Holcim performed

well in a difficult economic market environment and significantly

increased its cash flow

ƒ Robust organic growth in Asia Pacific, Latin America and Africa

Middle East in the second quarter

ƒ At 24.8 percent in the second quarter, operating EBITDA margin

exceeds previous year’s 23.8 percent

ƒ Strong balance sheet and sound liquidity

ƒ Based on the successful cost management, the target for fixed cost reduction in 2009 has been increased from CHF 375 million

to CHF 600 million

ƒ Asia will continue to grow and Latin America and Africa Middle East are also likely to follow favorable trends; in Europe and North

America, the stimulus programs will have a positive impact on

demand building up gradually over the next year

Europe: Sales of building materials still falling

ƒ In some markets, the recession has intensified even more since the beginning of this year

ƒ Spain, the UK and Eastern Europe including Russia and Azerbaijanare suffering from the economic downturn

ƒ Group companies quickly adjusted production capacity in all

seg-ments: Two kilns in Eastern Europe mothballed; Pleven

plant in Bulgaria is presently only operating as a grinding station

ƒ As previously announced, the Torredonjimeno plant in Spain was permanently closed in the second quarter of 2009

ƒ Despite cost-cutting measures in all areas, only the Group

companies in Germany and Switzerland were able to match their prior-year performance

ƒ Internal operating EBITDA development was at -44.8 percent

(Q2: -29.8 percent)

North America: Still no upturn

ƒ The economic situation remained fraught but in the US, although the downturn became less severe in the second quarter

ƒ Canada also reported a decline in overall economic output

ƒ All Group companies registered a decline in deliveries

ƒ Holcim US responded swiftly to the decline in the market and in

addition to the closure of the Dundee and Clarksville plants balled the Artesia and Mason City plants

moth-ƒ Aggregate Industries US systematically continued with measures to cut costs and reduce capacity

ƒ The new Ste Genevieve plant of Holcim US produced its first clinker

in July

ƒ Internal operating EBITDA development was at -57.3 percent

(Q2: -35.7 percent)

Latin America: Regionally mixed demand

ƒ The global slowdown in growth had a mixed impact on Latin America

ƒ Positive market trends in Ecuador and Colombia owing to the building and infrastructure sectors

house-ƒ In the first half, Group companies in Mexico, El Salvador, Brazil,

Chile and Argentina each mothballed one kiln line

ƒ The ready-mix concrete network was streamlined in several markets

ƒ Despite the deconsolidation of Holcim Venezuela, this Group region achieved good operating results in local currency terms

ƒ Holcim increased its stake in Cemento El Salvador from 64 to more than 90 percent

ƒ Internal operating EBITDA growth was 6.6 percent

(Q2: 7.7 percent)

Africa Middle East: Stable construction markets

ƒ Despite slightly weaker economic growth, the development in Africa Middle East was largely stable

ƒ High demand for building materials related to housebuilding and

infrastructure projects in Morocco

ƒ After a sluggish start of the year and a strike in the transportation sector, Holcim Morocco increased cement sales slightly

ƒ The easing of political tensions in Lebanon stimulated construction activity and the Chekka plant produced at full capacity

ƒ The commissioning of a second cement mill at National Cement in Abu Dhabi, strengthened the market position in the Gulf region

ƒ Internal operating EBITDA development was -1.5 percent

(Q2: 9.9 percent)

Asia Pacific: Construction sector generally growing

ƒ Construction activity remained lively in most countries of Asia Pacific

ƒ In India in particular, high pent-up demand in the infrastructure

sector and positive development of the agriculture sector

ƒ The Indian Group companies significantly increased their cement

sales in all regions of the country

ƒ Holcim increased domestic deliveries of cement and ready-mix

concrete in the Philippines and in Vietnam

ƒ Despite predominantly unfavorable exchange rates, this Group

region increased its operating EBITDA in Swiss francs

ƒ Asia Pacific posted an internal operating EBITDA growth of 22.5

percent (Q2: 27.4 percent)

Holcim in preparation for the next economic upturn

ƒ Markets such as the US, UK, Spain and Eastern Europe are

expected to remain challenging

ƒ Asia, Latin America as well as Africa Middle East are likely to follow

a favorable trend

ƒ On balance, Holcim's strong footprint in the emerging markets

partially offsets the negative EBITDA development in mature markets

ƒ In Europe and North America, the stimulus programs will have a

positive impact on demand building up gradually over the next year

ƒ Investments will continue to be kept to a minimum, and current

assets will be strictly managed

ƒ Rigorous cost reduction, favorable development of cash flow,

successful capital market and refinancing transactions as well as the strategic expansion in Australia and China provide the basis for

strengthening the Group in preparation for the next economic upturn

Key financial figures

2008 2008 2009 LFL CIS FX Total

Net sales 25,157 12,434 10,082 -11.2% -0.4% -7.3% -18.9% Operating EBITDA 5,333 2,802 2,143 -14.4% -1.9% -7.2% -23.5% Operating profit 3,360 1,964 1,306 -23.7% -3.0% -6.8% -33.5% Net income 2,226 1,338 787 -33.9% -1.9% -5.4% -41.2% Cash flow from

operating activities 3,703 664 805 38.1% -0.8% -16.1% 21.2%

6.99 2EPS in CHF 1

+/-1 Calculated on the weighted average number of shares outstanding retrospectively restated in accordance with IAS 33

2 Net of plant closure costs

Major changes in the scope of consolidation

Effective as at

– Egyptian Cement Company January 23, 2008

– Panamá Cement and Cementos Colón December 31, 2008

– United Cement Company of Nigeria April 1, 2009

+/– Various smaller companies

1 LATAM Basket (MXN, BRL, ARS, CLP) 1 1.10 1.00 0.85 -15.0%

1 Asian Basket (AUD, IDR, INR, THB, PHP) 1 1.11 1.00 0.90 -10.0%

Statement of financial position

1 EUR 1.61 1.49 1.52 2.0%

1 GBP 2.03 1.53 1.81 18.3%

1 USD 1.02 1.06 1.08 1.9%

1 LATAM Basket (MXN, BRL, ARS, CLP) 2 1.28 1.00 1.10 10.0%

1 Asian Basket (AUD, IDR, INR, THB, PHP) 2 1.10 1.00 1.05 5.0%

1 Weighted by net sales 6M 2008

2 Weighted by net sales full year 2008

Cement – Sales volumes by region

5.0 6.7

7.5

13.0

17.1 16.8

34.1 33.5

32.5

4.5 4.8

7.9

11.2

Total Group 6M 2007 74.2 6M 2008 72.5 6M 2009 65.1 Million t

15.3 20.9

23.7

38.0

48.7 51.0

2.1 2.3

1.9

1.2 1.2

4.6

5.9 6.1 6.6

Total Group 6M 2007 87.3 6M 2008 79.7 6M 2009 62.5 Million t

Ready-mix concrete and asphalt – Sales volumes

Ready-mix concrete in million m 3

10,082

12,434 13,002

Net sales by region

Δ 6M 08/6M 09 LFL Change in

structure

FX Total

Europe -23.9% 2.4% -8.5% -30.0% North America -24.4% 0.3% 1.9% -22.2% Latin America -1.2% -8.3% -9.0% -18.5% Africa Middle East 2.0% -4.9% -2.3% -5.2% Asia Pacific 9.2% 0.6% -10.1% -0.3% Total -11.2% -0.4% -7.3% -18.9%

1445 1857

2253

1674 2053

3083

6M 2007 6M 2008 6M 2009 Million CHF

North America 13.9%

Europe 34.5%

Asia Pacific 29.6%

Africa Middle East

5.9%

Latin America 16.1%

Net sales 6M 2009

Net sales by region

343

199

543 607

608

559

1135 1115

186 206

389

873 783

940

6M 2007 6M 2008 6M 2009 Million CHF

1

Operating profit by region

445 495

487

224

798 815

158 178

350

670 561

699

Million CHF

-74 46

168

6M 2007 6M 2008 6M 2009

Δ 6M 08/6M 09 LFL Change in

structure

FX Total

Europe -68.5% -1.9% -1.5% -71.9% North America -245.7% 0.0% -15.2% -260.9% Latin America 6.7% -8.3% -8.5% -10.1% Africa Middle East -3.4% -6.2% -1.6% -11.2% Asia Pacific 31.6% 0.4% -12.6% 19.4% Total -23.7% -3.0% -6.8% -33.5%

787 1,338

2,858

527 1,066

805 664

Cash flow statement

Net investments to maintain productive

capacity and to secure competitiveness -1,104 -429 -111 -74.1%

Expansion investments -3,287 -1,283 -1,026 -20.0% Financial investments net -1,084 -927 -580 -37.4%

Financing

Capital paid-in by minority interests 2 1 –

Movements of treasury shares net -349 -5 -17

Increase in financial liabilities 4,119 3,093 702

Increase (or decrease) in cash and

Maturity profile (CHF million)

Financial debt, maturities and liquidity

as of June 30, 2009

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

2 Liquidity II =Cash + marketable securities

0

Loans Capital markets

ƒ Fixed to floating ratio: 34% fixed

ƒ Capital markets 51%; Loans 49%

ƒ Corporate vs subsidiary debt: 80% corporate

ƒ Ø total maturity: 3.6 years

ƒ CP borrowings: EUR 38 million

ƒ No financial covenants at corporate level ST/LT ratings summary as of August 20, 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

0

Net financial debt

Total shareholders' equity

Gearing

Financial position

Cement – Price/volume variances per region

Domestic cement prices

Domestic cement prices

* If not otherwise indicated calculation based on local currencies 1 Calculation in USD

Cement – Price/volume variances per region

Africa Middle East

Domestic cement prices

Cement – Price/volume variances per region

Domestic cement prices

* If not otherwise indicated calculation based on local currencies

Cement – Price/volume variances per region

Contact information and event calendar

November 11, 2009 Press and analyst conference for

the third quarter 2009 March 3, 2010 Press and analyst conference for

the annual results 2009 May 5, 2010 Results for the first quarter 2010 May 6, 2010 General meeting of shareholders August 19, 2010 Half-year results for 2010

November 10, 2010 Press and analyst conference for

the third quarter 2010