holcim strength performance passion third quarter interim report 2009 holcim ltd elbe philharmonic

Holcim quickly reacted to the difficult market environment with strict cost managementHigher net income like-for-like in the third quarter despite lower sales volumes Higher operating EB

Third Quarter Interim Report 2009 Holcim Ltd

Annual cement production capacity million t 198.5 194.41 +2.1 +2.6

Net income – equity holders of Holcim Ltd million CHF 1,200 1,739 –31.0 –22.3

Cash flow from operating activities million CHF 2,192 1,658 +32.2 +47.2

Total shareholders’ equity million CHF 21,599 17,9741 +20.2

Principal key figures in USD (illustrative) 4

Net income – equity holders of Holcim Ltd million USD 1,081 1,641 –34.1

Cash flow from operating activities million USD 1,975 1,564 +26.3

Total shareholders’ equity million USD 20,970 16,9571 +23.7

Principal key figures in EUR (illustrative) 4

Net income – equity holders of Holcim Ltd million EUR 795 1,080 –26.4

Cash flow from operating activities million EUR 1,452 1,030 +41.0

Total shareholders’ equity million EUR 14,304 12,0631 +18.6

3

EPS calculation based on net income attribut- able to equity holders of Holcim Ltd weighted

by the average number of shares The weighted average number of shares outstand- ing was retrospec- tively increased

by 5 percent to reflect the 1:20 ratio of the stock dividend and by an additional 3.6 per- cent to reflect the discount for existing share- holders in the rights issue for all periods presented.

4

Statement of income figures translated at average rate; statement of financial position figures at closing

Holcim quickly reacted to the difficult market environment with strict cost management

Higher net income like-for-like in the third quarter despite lower sales volumes

Higher operating EBITDA margin in the third quarter

Cash flow from operating activities significantly increased and free cash flow doubled

Acquisition in Australia strengthens Holcim in an attractive market

The Group will start the new financial year from a strong position and grow again

Dear Shareholder

In the mature markets, demand for building materials decreased further in the third quarter However, in many

emerging markets the construction industry continued to grow, particularly in Asia, driven by the strong market

growth in China and India

Therefore, operating EBITDA development remained clearly negative in Europe Also North America has yet to

see a pick-up – however, the third quarter performance was better than in the first six months Group region

Africa Middle East nearly maintained its position compared with the previous year Latin America and primarily

Asia Pacific achieved solid organic growth

The current results have only been possible because Holcim reacted quickly and decisively to the macroeconomic

environment and took the following measures:

Holcim has reduced production capacity by roughly 10 million tonnes of cement in markets with weak demand

This was achieved through temporary and permanent plant closures Also numerous operations in the

aggre-gates and ready-mix concrete business were shut down

Throughout the Group, Holcim continued to implement the extensive cost-cutting program, with a large number

of cost-reduction measures taken along the value chain

In the period from January to September, Holcim saved CHF 573 million in fixed costs These restructuring

measures unavoidably involved job losses, which were conducted in such a way as to minimize the social impact

Also in focus was maintaining the liquidity and lengthening the average term of debt financing As of

Septem-ber 30, cash liquidity reached CHF 5.7 billion, which is well above the internal target However, the payment for

the acquisition in Australia in the amount of CHF 1.7 billion was only made in the fourth quarter By the end of

October, bonds totaling CHF 5 billion were placed in the capital market

Despite the somewhat difficult market environment, Holcim continued to pursue its strategic expansion program

as planned and commissioned 5.6 million tonnes of cement capacity in the course of the year This allows the Group

to grow in attractive markets and gain in efficiency

The acquisition of Cemex Australia, which you approved by a capital increase, also shows great promise The new

Group company now operates under the name of Holcim Australia and will be fully consolidated as of October 1

It gives Holcim an optimal position in cement, aggregates, ready-mix concrete and concrete products on a

continent that is back on the growth path

Consolidated cement deliveries decreased by 8.9 percent to 99.1 million tonnes in the first nine months Sales ofaggregates also fell by 18.9 percent to 103.2 million tonnes, and volumes of ready-mix concrete sold were down

by 17.8 percent to 30.4 million cubic meters Asphalt sales amounted to 8.1 million tonnes, which represents adecrease of 21.4 percent

Group net sales declined by 18.4 percent to CHF 15.8 billion, impacted mainly by lower volumes Operating EBITDAfell by 17.2 percent to CHF 3.6 billion, and the related margin reached 22.9 percent, which is higher than thecorresponding previous year’s figure of 22.6 percent – a strong signal that the Group has gained in efficiency

In particular, the cost-cutting drive, lower energy costs and the largely stable price situation had a positiveimpact on the income statement A contribution of CHF 61 million came from the sale of CO2 emission certifi-cates by some European Group companies due to reduced cement production The development of currencyexchange rates against the Swiss franc was unfavorable Due to the strict management of net current assets,cash flow from operating activities came to CHF 2.2 billion, 32.2 percent higher than the previous year’s figure,and the free cash flow doubled to CHF 2 billion Net income decreased by 25.2 percent to CHF 1.6 billion Netincome attributable to shareholders of Holcim Ltd declined by 31 percent to CHF 1.2 billion The downturn inprofit primarily reflects the poor business development in Europe Reductions in sales volumes decreased

in the third quarter Due to cost savings, operating EBITDA and net income increased like-for-like by 5.5 percentand 13.7 percent respectively

Net income – equity holders of Holcim Ltd –

Cash flow from operating activities in million CHF 2,192 1,658 +32.2 +47.2

Net income – equity holders of Holcim Ltd –

Cash flow from operating activities in million CHF 1,387 994 +39.5 +53.3

* Factoring out changes in the scope of consolidation and currency translation effects.

In the UK, Aggregate Industries UK sold significantly less aggregates and ready-mix concrete However, the

situation stabilized to a certain degree in the third quarter A contributory factor was the major construction

activity in the run-up to the 2012 Olympic Games in London Resurfacing work on the road systems supported

deliveries of asphalt Volume developments at Holcim Spain remained unfavorably influenced by the residential

construction crisis

In France and Belgium, Holcim sold less cement and aggregates The reason for this was the continued

challeng-ing situation in the construction sector and the completion of significant infrastructure projects There was

evidence in Belgium of increased competition in the ready-mix concrete business Holcim Germany also felt

the weak domestic construction activity and sales volumes decreased in all segments The company only

increased cement exports Government programs to cushion the ailing industrial and commercial construction

sector have yet to impact on demand

Holcim Switzerland continued to benefit from robust construction activity The order volume remained at a high

level, particularly in the large conurbations Cement and ready-mix concrete sales virtually reached the previous

year’s level, and the company sold more aggregates In Northern Italy, the building materials markets remained

under pressure

Higher cost efficiency in Europe

In the European Union, there were growing signs of an economic stabilization in the third quarter France and

Germany returned to modest economic growth Nevertheless, the situation in Europe’s building materials

markets remained for the most part difficult In particular, Spain, the UK, Italy and Eastern European countries

including Russia and Azerbaijan experienced a weak level of private and public construction activity By contrast,

the construction level held up well in Switzerland

The situation in Eastern and Southeastern Europe was influenced by the heavy economic slump Despite the factthat Slovakia, the Czech Republic and Hungary somewhat recovered after the decline in the first half of the year,the demand for building materials was nevertheless restrained Holcim Hungary had to mothball a kiln line at itsLábatlan site Holcim Romania saw all segments fall short of last year’s volumes The situation was particularlydifficult in Bulgaria, where not only weak construction activity but also large volumes of cement imports fromTurkey weighed on the cement industry To reduce costs, clinker production was mothballed in the Pleven plant.

In Russia, the recession weakened to a certain extent in the third quarter In Moscow at least, there was a veryslight increase in demand for building materials, which meant the decrease in cement volumes at Group compa-

ny Alpha Cement was less dramatic than in the previous quarters However, there was still a significant decline

in cement volumes from January through September In the Shurovo plant, clinker production was stopped untilthe new kiln line comes on stream in the second half of 2010 The necessary clinker will be obtained from theVolsk plant, situated further south In Azerbaijan, both higher imports and the crisis in residential and industrialconstruction put pressure on the sales of Garadagh Cement

In Group region Europe, delivery volumes declined Nonetheless, the reduction slowed in all segments in thethird quarter In the first nine months, cement sales fell by 20.2 percent to 20.9 million tonnes, while sales ofaggregates decreased by 19.6 percent to 59.6 million tonnes Ready-mix concrete volumes declined by 19.3 percent

to 13 million cubic meters

Operating EBITDA decreased, also due to exchange rate fluctuations, by 39.7 percent overall to CHF 1 billion.However, the broad and consistently implemented cost-cutting measures provided some relief to the incomestatement In particular, the financial results of Aggregate Industries UK, Holcim Spain and Holcim FranceBenelux remained significantly below the figures of last year The operating result was also impacted by weakerresults from the Eastern and Southeastern European companies, including Alpha Cement and Garadagh Cement.The internal operating EBITDA development was –33.5 percent Compared with the previous quarters’ results,the decline slowed

Better third quarter in North America

Various indicators suggest that the North American economy has bottomed out, but the US construction try has yet to see any upturn The situation was somewhat more robust in Canada

indus-

Residential construction in the US has stabilized at a low level The number of new housing starts rose slightly

over the summer months However, the inventory of real estate for sale remained high and the vacancy rate in

the commercial real estate area has increased The only momentum has come from industrial construction sites

together with new clinics and hospitals The wait-and-see attitude in the run-up to the launch of the stimulus

programs to expand the country’s infrastructure has likewise affected the demand for building materials

Holcim US again experienced volume losses in all market regions in the third quarter The east of the country,

the Great Lakes region and Texas have been strongly affected Flooding along the Mississippi and Missouri rivers

also impacted cement demand

The low level of construction activity put pressure on the business of Aggregate Industries US Less building

materials were sold than in the previous year’s period However, asphalt sales benefited somewhat from road

construction in the third quarter

As a result of weak domestic demand and a lack of export opportunities to the US, Holcim Canada sold less

cement In Ontario, commercial and industrial construction declined in particular In Quebec, commercial and

infrastructure construction cushioned the decline in demand in other segments The weakness in private

house-building had a negative effect on the sale of aggregates and ready-mix concrete, particularly in Ontario and

Western Canada

The three North American Group companies responded to the difficult market environment by reducing

produc-tion early in the downturn Two cement plants of Holcim US were shut down and two others mothballed In both

countries, Holcim also reduced the number of aggregates plants and ready-mix concrete facilities including its

fleet of mixer and pump trucks In the administrative area, a number of rigorous cost-cutting measures were

implemented

On a consolidated basis, cement deliveries in North America declined by 25.9 percent to 8.3 million tonnes

Sales of aggregates dropped by 21.2 percent to 29.7 million tonnes and ready-mix concrete sales amounted to

4.1 million cubic meters, equivalent to a reduction of 25.5 percent

Operating EBITDA fell by 26.1 percent to CHF 328 million and internal operating EBITDA development amounted

to –25.7 percent However, cost savings partially offset the decline in volumes and prices The weak market

environment especially impacted the financial results of Holcim US The operating EBITDA of Holcim Canada

remained virtually unchanged The strongest improvement was achieved by Aggregate Industries US

Latin America Jan–Sept Jan–Sept ±% ±%

In Mexico, both private housebuilding and commercial and industrial construction remained weak HolcimApasco sold less cement and ready-mix concrete However, government programs to stimulate residential andinfrastructure construction strengthened demand in some parts of the country

Due to the delayed release of public funds for roadbuilding and a strong decline in private construction, Cemento

de El Salvador saw a volume decline in all segments Private construction activity in Costa Rica and Nicaraguawas very weak, and the Group companies experienced declining sales volumes

Holcim Ecuador significantly increased its sales in all segments Holcim Colombia sold less cement, but achievedhigher sales volumes of aggregates and ready-mix concrete In Brazil, Holcim focused on high-margin cementtypes, consciously accepting volume declines The sales of aggregates suffered from various project delays andsometimes difficult weather conditions Sales of ready-mix concrete slightly increased For Cemento Polpaico inChile, the recession and the market entry of a new competitor led to lower volumes in all segments Minetti inArgentina sold less cement due to market conditions, but increased its sales of aggregates and ready-mix concrete

In July, Holcim US started the commissioning of the new Ste Genevieve cement plant in the State of Missouriand produced its first clinker The plant, which is also exemplary from an ecological standpoint, has an annualcapacity of 4 million tonnes of cement and production will be gradually ramped up as construction work on thesite comes to completion Thanks to this new plant, containing integrated shipping and dispatch facilities on theMississippi river, Holcim US will be able to supply customers on a new, cost-efficient basis The Group company isideally positioned to benefit more than most from an upswing in demand

Organic growth in Latin America

Despite strong regional differences, Latin America’s economy remained very stable overall However, Mexico andCentral America have experienced a significant weakening of their economies due to their proximity to the US.This had a negative effect on the construction industry In contrast, demand for building materials in Ecuadorincreased and remained at a solid level in Colombia and Argentina As the first country of this Group region,Brazil returned to moderate economic growth in the middle of the year In Chile, the wait-and-see investmentattitude had a noticeable impact on cement consumption

In Group region Latin America, cement sales declined by 17 percent to 17.1 million tonnes Deliveries of aggregates

fell 11 percent to 8.9 million tonnes Sales of ready-mix concrete decreased by 15.6 percent to 7.6 million cubic

meters This reduction in volumes is partly attributable to changes in the scope of consolidation Due to the

nationalization by decree in June 2008, Holcim Venezuela was deconsolidated As a consequence, Holcim decided

for strategic reasons to sell its interests in Panama, the Dominican Republic, Haiti and the Caribbean at the end

of July 2009, which also reduced sales volumes

Nevertheless, Group region Latin America increased its operating EBITDA in local currencies Comprehensive

cost-cutting measures, lower energy costs and the largely stable price environment made it possible to offset the

decline in volumes and increase operating margins In Swiss francs, operating EBITDA decreased by 11.5 percent to

CHF 818 million The reason for this was the unfavorable exchange rates, particularly against the Brazilian real

and the Mexican peso Internal operating EBITDA growth amounted to 8.9 percent

Holcim held up well in Africa Middle East

The demand for building materials varied in the markets supplied by Holcim In Morocco and Lebanon, the

con-struction industry enjoyed a high level of activity However, local factors dampened the concon-struction industry in

West Africa and the Indian Ocean

In Morocco, despite the early Ramadan, demand for cement reached the previous year’s level The continued high

demand for building materials was driven by public programs for residential construction and the expansion of

infrastructure in roadbuilding and tourism Significantly higher were the aggregates sales of Holcim Morocco,

partially due to the commissioning of a new quarry

The more stable political situation in Lebanon helped the Chekka plant to enjoy a high level of capacity utilization

Holcim Lebanon slightly decreased its cement exports to neighboring countries to better serve the domestic

construction industry Sales of ready-mix concrete rose substantially

Despite political and economic turbulence, the West African group of countries, managed by Holcim Trading,maintained its volumes Due to the expansion of its grinding capacity, the Abu Dhabi-based affiliate NationalCement experienced a further increase in sales In the Indian Ocean area, business activity was moderate.The government crisis in Madagascar and the lack of follow-up orders from infrastructure projects in La Réunionled to a substantial decrease in sales volumes.

The cement sales of Group region Africa Middle East decreased by 5.7 percent to 6.6 million tonnes Comparablewith the previous year’s level, sales of aggregates were 1.9 million tonnes and volumes of ready-mix concretedecreased by 11.1 percent to 0.8 million cubic meters Mainly as a result of the deconsolidation in Egypt, operatingEBITDA declined by 9.1 percent to CHF 279 million Internal operating EBITDA development was –2 percent

Significant improvement of results in Asia Pacific

Group region Asia Pacific benefited from a positive business and investment climate In India, the government’sinfrastructure push and residential construction led to higher sales volumes of building materials Constructionactivity was also brisk in Vietnam, the Philippines and Indonesia In Thailand, the construction industry began togrow slightly after a long period of stagnation However, in New Zealand the building recession continued InAustralia, the demand for building materials rebounded somewhat after the slowdown in growth in the firsthalf of the year

Indian Group company ACC sold more cement in all regions of the country Deliveries of ready-mix concreteremained stable at the previous year’s level Ambuja Cements likewise enjoyed high capacity utilization, increas-ing its cement sales volumes both domestically and in the export market Holcim Bangladesh also sold morecement

Siam City Cement in Thailand saw full capacity utilization of the four large kiln lines at its Saraburi plant thanks

to higher exports In the domestic market, the Group company sold less cement and deliveries of ready-mix

concrete also declined By contrast, there was a considerable increase in sales of aggregates The robust market

situation in Ho Chi Minh City and in the southern Mekong Delta region led to higher sales of cement and

ready-mix concrete at Holcim Vietnam

Although there are a number of industrial building projects underway on the peninsular of Johor, sales at

Holcim Malaysia recovered only modestly as a result of subdued business levels in the other construction sectors

In Singapore, the intensive price competition in infrastructure construction continued, and the Group company

delivered less ready-mix concrete to large building sites However, building materials volumes in residential

construction picked up somewhat

Holcim Philippines benefited from solid residential and infrastructure construction across the country, selling

significantly higher volumes of cement In order to maximize its service to domestic customers, the Group

company refrained from exporting cement As a result of the healthy market situation, a mothballed kiln line

in the Lugait plant will be brought back into production before the end of this year The good investment climate

in the region also had a favorable impact on cement exports of Holcim Indonesia The company compensated

almost completely for the decline in sales volumes for infrastructure projects on Java through higher cement

and clinker exports Deliveries of aggregates and ready-mix concrete continued to suffer from a shortage of

major construction sites

Due to market and weather conditions, Cement Australia sold less cement, particularly on the East Coast

The sales of Holcim New Zealand remained under pressure in the third quarter However, due to an acquisition,

the Group company reported an increase in sales in the aggregates segment

Cement sales in Group region Asia Pacific rose by 1.6 percent to 49.9 million tonnes in the first nine months

of 2009 Sales of aggregates declined by 11.4 percent to 3.1 million tonnes and ready-mix concrete deliveries

dropped by 10.9 percent to 4.9 million cubic meters

The majority of Group companies improved operating EBITDA in local currencies and generated higher operating

margins Operating EBITDA likewise rose in Swiss francs by 14.9 percent to CHF 1.3 billion despite negative

exchange rate development

The region’s successful financial results were due not only to the favorable sales situation and innovative

marketing, but also to effective cost control and lower purchase prices for operating resources such as energy

Both Indian Group companies as well as Holcim Vietnam and Holcim Philippines achieved good results Internal

operating EBITDA growth in Group region Asia Pacific was a very positive 25.7 percent

Following the successful completion of due diligence and the approval of the Australian authorities, Holcim

completed its acquisition of Cemex Australia as of October 1, 2009 The new Group company, which now

operates as Holcim (Australia) Pty Ltd, will be fully consolidated as of this date Holcim has already started

the integration process in Australia Through this acquisition, Holcim has also extended to Australia its mature

market strategy of operating not only in the cement business but also in aggregates and ready-mix concrete

The capital increase at Huaxin Cement in China has yet to be completed

In Europe, especially in Spain, the UK and Eastern Europe including Russia, the markets will remain challengingfor a longer period More optimistic is Holcim with regard to the development in North America, as buildingmaterials markets are expected to return to modest growth in the second half of 2010 on the back of the stimulusprograms The situation going forward looks more positive for most of the emerging markets in Latin America,Africa Middle East and Asia Pacific Here, building activity will for the most part remain solid Especially in AsiaPacific, many of the countries can expect to see strong demand

In the fourth quarter, Holcim will concentrate its activities on exploiting existing market potential The target toreduce fixed costs in 2009 by CHF 600 million will be exceeded Replacements will be kept to a minimum andthe current capacity expansion program will continue as scheduled

The acquisition in Australia will be a solid contributor to the Group’s performance next year

The Board of Directors and the Executive Committee are convinced that Holcim will start the new financial yearfrom a strong position and show growth

Chairman of the Board of Directors Chief Executive Officer

November 11, 2009