CO² Focus Roadshow

Casale M.to, 27 April 2021

What we have achieved so far

Buzzi Unicem vs reference competitors

Focus on CO² initiatives by country

Capex requirements and financial headroom

Next steps: towards 2050 Roadmap

2020 Buzzi Unicem breakdown of gross CO² emission by country

Specific CO² emission /t cem product)

	2020	2019	D %
Gross	694	688	+0.9
Net	634	637	-0.5

(Kg CO²

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Cementitious product (t/000)

Our achievements so far By 2020, we have reduced by approx. 17% the specific net CO² emissions compared to 1990 level (plants taken into consideration according to SBTI methodology)

Reduction's drivers:

Higher alternative fuels utilization
Thermal energy optimization
Lower clinker to cement ratio
Improved technologies

CO2 Intensity emission: Buzzi Unicem compared to reference competitors

Key CO² emissions drivers: Buzzi Unicem compared to reference competitors

		Buzzi Unicem		Player #1		Player #2		Player #3		Player #4
	2020	2019	D %	2020	2019	D %	2020	2019	D %	2020	2019	D %	2020	2019	D %
Clinker/cement ratio (%)	80.9	79.7	+1.5	74.3	74.5	-0.3	70.6	70.8	-0.3	77.0*	77.8*	-1.0	79.1	80.5	-1.7
Thermal substitution (%)	29.2	27.6	+5.8	25.7	24.0	+7.1	21.0*	20.0*	+5.0	25.3	28.0	-9.6	25.8	26.5	-2.6
Specific Thermal consumption (MJ/t clk)	4,109	4,080	+0.7	n.a.	3,573	-	3,538	3,526	+0.3	4,024	3,999	+0.6	3,552	3,507	+1.3
Specific Electricity consumption (kWh/ t cementitious product)	121	122	-0.8	n.a.	n.a.	-	100*	100*	=	123	122	+0.8	102*	101*	+1.0

*value recalculated to be compared with our metrics

Our exposure in non-ETS countries (USA, Russia and Ukraine) is equal to 50% of the total cement volumes sold, higher than the reference competitors and clearly influences the group metrics.
For this reason, we are still convinced that a fair comparison has to be by country.

Buzzi Unicem CO2 Intensity emission index by country: 2020 vs 1990

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EU ETS phase IV (2021-2030): Update on CO² emissions and allowances net balance

Estimated trend first half phase IV period (reduction scenario includes CO² reduction projects and >/< 15% rule)

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Category	Italy	USA	Germany	Russia	Czech Rep.	Poland	Ukraine	Luxembourg	Group	Potential short therm CO 2 reduction
Reducing clinker content in cement	19	6	8	3	1	2	2	-	41	High
Low Carbon concrete	-	-	2	-	1	-	-	-	3	Low
Reducing CO intensity in energy 2 consumption	3	2	4	4	4	1	2	-	20	High
Increasing fuel substitution	5	8	4	-	-	2	-	1	20	High
In-house production of electrical power	-	1	2	-	2	-	-	1	6	High
Reducing transportation's emissions	-	2	3	1	1	-	1	-	8	Low
R&D – Pilot Testing (i.e. low carbon clinker, CCU/S, CO Mineralisation, kiln 2 electrification, etc.)	4	1	6	-	-	-	-	-	11	Low
Total initiatives by country	31	20	29	8	9	5	5	2	109

Calcined clay cement CEM II/C cement

Calcined clay is produced by heating sources of kaolin (clay, paper sludge etc.) to between 650°C and 750°C, to produce a material that can be added to cement in place of clinker.

Blends of Portland cement with calcined clay are fairly widely tested and accepted in standards around the world, including in Europe and North America

The project intends to develop a concept based on the production, with low capex requirement, of the calcined clay directly at the cement plant, to produce cement with lower clinker content (<50%), becoming indipendent from slag and fly ash suppliers

Where: Industrial testing in Germany and Ukraine

This type of cement enables the reduction of the clinker content (clinker content ≈ 50%), the slag need and the CO² emission by reaching high strengths data and good durability performances.

CEM II/C cements are not yet authorised by EN standard but Buzzi Unicem is already selling them in Germany since 2020, having obtained a European Technical Assessment (ETA).

Where: Germany

WHR - waste heat recovery

Where: Hranice, Czech Republic
Description: The cement plant uses thermal energy to produce clinker. Excess heat is only partially used to dry the raw material. The WHR Power Plant shall utilize the available waste heat for electricity production

H2

Where: San Antonio, USA
Description: H2 and O2, as combustion enhancer, are injected into the existent burner. By increasing the speed of combustion, we obtain a reduction on CO² emissions.

OxyFuel – Catch 4 climate

Where: CI4C, Germany
Technology: Oxyfuel
Type: Semi-industrial scale

For additional information: https://www.buzziunicem.com/170

ANICA - ACT Cleanker

Where: Darmstadt, Germany
Technology: Indirectly heated carbonate looping (IHCaL)
Type: Pilot phase
Capex: EU Commission has financed with EUR 2.4m the ANICA project

For additional information: http://www.act-ccs.eu/anica

Where: Vernasca, Italy
Technology: Integrated Calooping
Type: Pilot phase
Capex: EUR 9m fully covered by EU Commission

For additional information: (www.cleanker.eu)

Financial Headroom for industry transformation: Buzzi Unicem compared to reference competitors

E-MARKET SDIR
CERTIFIED

	Buzzi Unicem	Player #1	Player #2	Player #3	Player #4
# Plants incl. JVs	42	153	269	64	16
EBITDA (EURm)	781	3,707	5,247	2,158	557
Net Debt (EURm)	242	6,893	7,926	8,857	1,202
Net Debt/EBITDA ratio	0.3x	1.9x	1.5x	4.1x	2.2x
Headroom (EURm)*	2,882	7,395	13,062	0	1,026
Headroom coverage (%plants)**	69	52	49	0	64

Source: 2020 Annual Report

* Headroom to 4.0x Net Debt/EBITDA

** Headroom Coverage (%) if investment of 100 EURm per plant

To stay in business and to achieve the carbon neutrality goal, significant capex are likely to be required in the long run

Capex Requirements

Over the next 5 years, Buzzi Unicem will be involved in more than 100 initiatives aiming to reduce CO² emissions
This plan leads to CO² specific capex per year equal to approx 10-15% of the annual avg capex spending

CO2 Capex breakdown by initiatives

Approx. 75% of CO² specific capex will be dedicated to initiatives with high short therm potential of CO² reduction, such as: increasing fuel substitution, reducing clinker content in cement, in-house production of electrical power and reducing CO² intensity in energy consumption
Within R&D-Pilot Testing category, the most important initiative will be CCU/S

Following Cembureau's 2050 Carbon Neutrality Roadmap (announced in May 2020), GCCA and PCA are planning to announce their own Roadmap (expected by the end of 2021). As member of these associations, we have been and we will be actively involved in the definition of these roadmaps.
About the risk and opportunities assessed according to TCFD recommendations, in 2021 we have started a dedicated project in cooperation with a leading expert. Outcomes are expected by September this year.
As soon as PCA and GCCA Roadmaps are announced, we will disclose our own 2050 Roadmap (expected in H1 2022) which, of course, will be tailored on our geographical exposure and on the different markets and regulations of the regions we operate in.

Appendix

Buzzi Unicem at a glance

International multi-regional, "heavy-side" group, focused on cement, ready-mix and aggregates
Dedicated management with a long-term vision of the business
Highly efficient, low cost producer with strong and stable cash flows
Successful geographic diversification with leading positions in attractive markets
- Italy (# 2 cement producer), United States (# 4 cement producer), Germany (# 2 cement producer), material joint venture assets in Mexico and Brazil
- Significant positions in Luxembourg, The Netherlands, Poland, Czech Republic, Slovakia, Russia and Ukraine, as well as entry point in Slovenia and Algeria
High quality and environmentally friendly assets
Leading product and service offering
Conservative financial profile and balanced growth strategy

"Value creation through lasting, experienced know-how and operating efficiency"