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Buzzi Unicem Interim / Quarterly Report 2018

Jan 11, 2019

4218_ip_2019-01-11_1a0959ca-6a09-474e-b8a8-421b74772bcc.pdf

Interim / Quarterly Report

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Lyon – 11 January 2019 Forum 2019

Executive summary 9M 2018

Volumes

  • Cement up 2.0% in Q3 (+0.4% lfl) and +3.1% YTD (-0.8% lfl)
  • In Q3 volume reduction in the USA, Ukraine and Luxembourg, but positive trend in all the other markets
  • Volumes up in Italy and in Germany mainly thanks to scope changes
  • In the United States record rainfall in September completely stopped the August promising trend
  • Ready-mix concrete down 1.8% YTD (-3.9% in Q3)

Prices

Favorable variances in all markets

Foreign Exchange

Negative impact on sales (€m 77.7) mainly due to weaker dollar and ruble

Results

Revenues at €m 2,137.4 versus €m 2,133.4 in 9M 2017

Volumes 9M 18

Price index by country

In local currency; FY15 = 100

FX changes

9
M
1
8		 9
M
1
7		 ∆ 2
0
1
7		 t
c
u
r
r
e
n
E
U
R
1
=		 a
g
v		 a
g
v		 % a
g
v
U
S
D		 1.
1
9		 1.
1
1		 7
2
-		 1.
1
3		 1.
1
5
R
U
B		 3
4
2
7		 6
0
0
5		 1
2
9
-		 6
9
4
5		 7
9
7
2
U
A
H		 3
2
1
8		 2
9
4
7		 9
2
-		 3
0
0
2		 3
1.
7
4
C
Z
K		 2
5
5
7		 2
6
5
5		 3
7
+		 2
6
3
3		 2
5
7
2
P
L
N		 4
2
5		 4
2
7		 0
4
+		 4
2
6		 4
3
0
M
X
N		 2
2
7
4		 2
1.
0
1		 8
2
-		 2
1.
3
3		 2
2
4
9

Cement volumes by geopraphical area

Net sales by country

9
M
1
8		 9
M
1
7		 ∆ ∆ F
o
r
e
x		 S
c
o
p
e		 f-
l-
l
∆
E
U
R
m		 b
a
s		 % b
a
s		 b
a
s		 %
I
l
t
a
y		 3
4
5
0		 3
1
6
1		 2
8
9		 9
1
+		 - 3
6.
0		 2.
2
-
S
U
i
t
d
t
t
n
e
a
e
s		 9
1.
0
7		 8
2
2
5		 (
6
1.
2
)		 2
7
-		 (
6.
9
)
5		 - 0.
5
-
G
e
r
m
a
n
y		 4
6
4
5		 4
4
8
1		 1
3
7		 3
9
+		 - 1
1.
4		 1.
3
+
L
/
N
h
l
d
t
e
e
r
a
n
s
u
x		 1
4
5
1		 1
3
7
0		 8
1		 5
9
+		 - - 5.
9
+
C
h
R
/
S
l
k
i
e
c
e
p
o
a
a
z
v		 1
2
3
4		 1
0
8
7		 1
4
7		 1
3
5
+		 3.
5		 - 1
0.
3
+
P
l
d
o
a
n		 8
5
2		 7
4
9		 1
0
3		 1
3
7
+		 0.
3		 - 1
3.
3
+
U
k
i
r
a
n
e		 6
3
6		 7
3
3		 (
9
7
)		 1
3
2
-		 (
)
5.
9		 - -5
2
R
i
u
s
s
a		 1
4
4
8		 1
4
5
7		 (
1.
0
)		 0
7
-		 (
1
8.
7
)		 - 1
2.
2
+
E
l
i
i
t
i
m
n
a
o
n
s		 (
)
2
6.
0		 (
)
2
2.
6		 (
)
3.
5
T
t
l
o
a		 2
1
3
7
4
,		 2
1
3
3
4
,		 4
0		 0
2
+		 (
7
7.
7
)		 4
7.
4		 1.
6
+
M
i
(
1
0
0
%
)
e
x
c
o		 4
7
9
6		 5
2
9
3		 (
)
4
9
8		 9
4
-		 (
3
9.
)
5		 - 1.
9
-

EBITDA by country

H
1
1
8		 H
1
1
7		 ∆ ∆ F
o
r
e
x		 S
c
o
p
e		 l-
f-
l
∆
E
U
R
m		 b
a
s		 % b
a
s		 b
a
s		 %
I
t
l
a
y		 (
)
8
9		 (
)
1
3
4		 4
5		 3
3
5
+		 - 4.
8		 2.
2
-
i
r
e
c
u
r
r
n
g		 (
2.
9
)		 (
1
1.
0
)		 8.
1		 7
4.
0
+		 4.
8		 3
0.
4
+
S
U
A		 1
4
3
0		 1
6
1.
4		 (
)
1
8
4		 1
1.
4
-		 (
1
6.
8
)		 - 1.
0
-
i
r
e
c
u
r
r
n
g		 1
2
6.
3		 1
6
3.
5		 (
3
7.
1
)		 2
2.
7
-		 (
1
4.
9
)		 1
3.
6
-
G
e
r
m
a
n
y		 2
7
8		 3
2
7		 (
)
4
9		 1
5
0
-		 - (
5.
9
)		 3.
1
+
i
r
e
c
r
r
n
g
u		 3
2.
8		 3
2.
7		 0.
1		 0.
3
+		 - (
9
)
5.		 1
8.
4
+
L
/
N
h
l
d
t
e
e
r
a
n
s
u
x		 8
3		 6
2		 2
0		 3
2
5
+		 - - 3
2.
5
+
C
h
R
/
S
l
k
i
z
e
c
e
p
o
v
a
a		 1
9
7		 1
3
4		 6
3		 4
6
9
+		 0.
9		 - 4
0.
3
+
P
l
d
o
a
n		 1
6
4		 9
2		 2
7		 9
0
7
+		 0.
2		 - 7
7.
0
+
i
r
e
c
r
r
n
g
u		 1
1.
0		 9.
2		 1.
8		 1
9.
8
+		 0.
1		 - 1
8.
5
+
U
k
i
r
a
n
e		 1.
6		 8
8		 (
7
2
)		 8
1.
8
-		 (
0.
2
)		 - 9.
-7
7
R
i
s
s
a
u		 1
9
6		 2
2
9		 (
3
3
)		 1
4
3
-		 (
2.
9
)		 - 1.
8
-
T
t
l
o
a		 2
2
7
4		 2
4
1.
1		 (
)
1
3
7		 5
7
-		 1
8.
8
-		 1.
1
-		 2.
6
+
i
r
e
c
u
r
r
n
g		 2
1
6.
4		 2
4
5.
6		 (
2
9.
2
)		 1
1.
9
-		 1
6.
9
-		 1.
1
-		 4.
6
-
M
i
(
1
0
0
%
)
e
x
c
o		 1
5
3
2		 1
7
3
0		 (
)
1
9
8		 1
1.
4
-		 (
1
4.
9
)		 - 2.
8
-

Consolidated Income Statement

H
1
1
8		 H
1
1
7		 ∆ ∆
E
U
R
m		 b
a
s		 %
N
t
S
l
e
a
e
s		 1,
3
3
7
4		 1,
3
5
3
8		 (
1
6
4
)		 1.
2
-
E
B
I
T
D
A		 2
2
7
4		 2
4
1.
1		 (
)
1
3
7		 5
7
-
f
h
i
h,
i
o
w
c
n
o
n
r
e
c
u
r
r
n
g
%
f
l
(
i
)
o
s
a
e
s
r
e
c
u
r
r
n
g		 (
1
1.
0
)
1
6.
2
%		 4.
5
1
8.
1
%
D
i
t
i
d
t
i
t
i
e
p
r
e
c
a
o
n
a
n
a
m
o
r
z
a
o
n		 (
)
1
0
4
0		 (
)
1
0
8
6		 4
6
O
f
t
i
i
t
p
e
r
a
n
g
p
r
o
(
E
B
I
T
)		 1
2
3
5		 1
3
2
5		 (
)
9
1		 6
8
-
%
f
l
o
s
a
e
s		 9.
2
%		 9.
8
%
E
i
t
i
q
u
y
e
a
r
n
n
g
s		 4
0
2		 4
9
7		 (
)
9
5
N
f
i
t
t
e
n
a
n
c
e
c
o
s
s		 (
4
4
)		 (
1
2
2
)		 7
8
P
f
i
b
f
t
t
r
o
e
o
r
e
a
x		 1
5
9
3		 1
7
0
1		 (
1
0
8
)		 6
4
-
I
t
n
c
o
m
e
a
e
p
e
n
s
e
x
x		 (
3
8
)
5		 (
0
8
)
5		 1
4
9
N
t
f
i
t
e
p
r
o		 1
2
3
4		 1
1
9
3		 4
1		 3
4
+
M
i
i
i
t
n
o
r
e
s		 (
0
4
)		 (
1.
7
)
C
l
i
d
d
f
i
t
t
t
o
n
s
o
a
e
n
e
p
r
o		 1
2
3
0		 1
1
6
7		 4
5		 4
6
+

Net Financial Position

S
1
8
e
p		 D
1
7
e
c		 ∆ S
1
7
e
p
E
U
R
m		 b
a
s
C
f
h
d
t
h
i
i
l
t
a
s
a
n
o
e
r
n
a
n
c
a
a
s
s
e
s		 6
4
4
2		 8
2
9
8		 (
)
1
8
5
6		 7
1
6
4
S
h
t-
t
d
b
t
o
r
e
r
m
e		 (
)
3
1
3
5		 (
)
4
2
4
6		 1
1.
1		 (
)
3
9
2
5
N
t
h
t-
t
h
e
s
o
r
e
r
m
c
a
s		 3
3
0
7		 4
0
5
2		 (
4
)
7
5		 3
2
3
9
L
f
i
i
l
t
t
o
n
g
e
r
m
n
a
n
c
a
a
s
s
e
s
-		 3
7		 3
2		 0
5		 1
2
2
L
t
d
b
t
o
n
g
e
r
m
e
-		 (
)
1,
0
5
7
7		 (
)
1,
2
7
0
9		 2
1
3
2		 (
)
1,
2
5
1.
3
N
t
d
b
t
e
e		 (
2
3
4
)
7		 (
8
6
2
)
5		 1
3
9
1		 (
9
1
2
)
5

Gross debt breakdown (€m 1,371.3)

pag 9 Forum 2019 | January 11, 2019

Consolidated Cash Flow Statement

E
U
R
m		 H
1
1
8		 H
1
1
7		 2
0
1
7
C
h
d
f
i
t
t
a
s
g
e
n
e
r
a
e
r
o
m
o
p
e
r
a
o
n
s		 9
6
0		 1
8
6
5		 0
6
6
5
%
f
l
o
s
a
e
s		 7.
2
%		 1
3.
8
%		 1
8.
1
%
I
t
t
i
d
n
e
r
e
s
p
a		 (
)
1
5
1		 (
)
1
5
5		 (
)
4
3
9
I
t
i
d
n
c
o
m
e
a
x
p
a		 (
)
2
7
7		 (
)
3
7
1		 (
)
9
1.
9
N
h
b
i
i
i
i
t
t
t
t
e
c
a
s
o
p
e
r
a
n
g
a
c
e
s
y
v		 3
2
5		 1
3
3
9		 3
0
8
7
%
f
l
o
s
a
e
s		 4.
0
%		 9.
9
%		 1
3.
2
%
C
1
)
i
t
l
d
i
t
a
p
a
e
x
p
e
n
u
r
e
s		 (
)
1
0
7
8		 (
)
9
0
4		 (
)
1
8
3
7
E
i
t
i
t
t
q
u
y
n
v
e
s
m
e
n
s		 (
)
5
4
5		 (
)
2
7
5		 (
)
3
3
9
D
i
i
d
d
i
d
e
n
s
p
a
v		 (
2
8
3
)		 (
2
1.
8
)		 (
2
2
0
)
f
D
i
i
d
d
i
t
v
e
n
s
r
o
m
a
s
s
o
c
a
e
s		 1.
9
5		 3
2
5		 8
3
5
D
i
l
f
f
i
d
d
i
t
t
t
s
p
o
s
a
o
x
e
a
s
s
e
s
a
n
n
v
e
s
m
e
n
s		 2
6
3		 5
5		 1
2
5
f
f
T
l
t
i
d
i
d
d
i
t
i
r
a
n
s
a
o
n
e
r
e
n
c
e
s
a
n
e
r
v
a
v
e
s		 2
7
9		 (
)
9
6		 (
)
4
0
2
A
d
i
b
l
t
t
c
c
r
e
n
e
r
e
s
p
a
a
e
u
y		 (
)
5
7		 6
9		 (
1.
4
)
I
i
d
t
t
n
e
r
e
s
r
e
c
e
e
v		 6
4		 4
1		 9
7
C
t
i
t
l
i
b
i
l
i
t
i
o
n
n
g
e
n
a
e
s		 (
6
1.
5
)
C
h
i
l
i
d
t
i
d
t
h
a
n
g
e
n
c
o
n
s
o
a
o
n
a
r
e
a
a
n
o
e
r		 (
0
9
)		 (
1.
3
)		 (
6
)
5
4
C
h
i
t
d
b
t
a
n
g
e
n
n
e
e		 (
)
3
1.
6		 3
2
3		 7
9
1
N
f
i
i
l
i
i
(
d
f
i
d
)
t
t
e
n
a
n
c
a
p
o
s
o
n
e
n
o
p
e
r
o		 (
8
9
4
0
)		 (
9
0
9
2
)		 (
8
6
2
)
5

1) of which expansion projects 18.5 (11.9 in H1 17; 28.7 in 2017)

Debt maturity profile

  • Total nominal value of debt and borrowings stood at €m 1,264 at September 2018
  • As at September 2018 available €m 324m of undrawn committed facilities (€m 300m for Buzzi Unicem, €m 24 for Dyckerhoff)

Expected trading in 2018

V
l
∆
o
m
e
u		 P
i
∆
r
c
e
I
l
t
a
y
U
i
t
d
S
t
t
f
A
i
n
e
a
e
s
o
m
e
r
c
a
G
e
r
m
a
n
y
L
b
u
x
e
m
o
u
r
g
C
h
R
b
l
i
z
e
c
e
p
u
c
P
l
d
o
a
n
U
k
i
r
a
n
e
R
i
u
s
s
a
M
i
e
c
o
x

Strategic move: agreement with Grupo Ricardo Brennand (1/6)

  • 1-Stable improvement in the Buzzi Unicem financial situation
  • 2-Enlargement of the geographical diversification
  • RATIONALE 4- Per capita cement consumption in Brazil is currently at its lowest levels in years 3- Brazil: largest economy in South America
  • 5- Current downturn in the Brazilian economy and cement industry in particular, is expected to be positively resolved starting from 2019

Strategic move: agreement with Grupo Ricardo Brennand (2/6)

National cement market: evolution over last 45 years

Source: SNIC

Strategic move: agreement with Grupo Ricardo Brennand (3/6)

  • On 6 September 2018 Buzzi Unicem has signed an agreement with Grupo Ricardo Brennand aimed at acquiring 50% of BCPAR SA, a subsidiary of Brennand Cimentos
  • BCPAR SA owns two full-cycle cement plants operating in Brazil, one in the North-East region of the country (state of Paraíba) and the other in the South-East (state of Minas Gerais)
  • On 27 November 2018 Buzzi Unicem has purchased 50% of BCPAR SA, acquiring the totality of the shares held by the current minority shareholders, a part of the shares held by BrennandCimentos, and underwriting a dedicated capital increase of BCPAR SA. The cash outlay of R\$ 700 million (of which R\$ 350 million for the share purchase and R\$ 350 million for the capital increase) corresponding to approximately € 160 million, has occurred at the same time as the purchase of the shares.
  • A shareholders' agreement has been signed between the Ricardo Brennand Group and Buzzi Unicem providing for the governance of the joint venture BCPAR SA, on the basis of an equal participation in the board of directors and the shareholders' meeting. The agreement also entails a Put option (exercisable from 1 January 2023) and a Call option (exercisable from 1 January 2025) referring to the residual ownership interest by Brennand Cimentos (50%)

Strategic move: agreement with Grupo Ricardo Brennand (4/6)

  • The exercise price of the options will be established on the basis of the consolidated average EBITDA achieved by BCPAR SA during the three years before the exercise of the option, taking into account the net financial position
  • The minimum exercise price of the options is equal to US\$250 million, to which the corresponding portion (50%) of the net financial position at the time of purchase must be added or deducted
  • The strike is the same in case of either Put or Call
  • The completion of the 100% acquisition, if the option are exercised, will occur no later than 2026

Strategic move: agreement with Grupo Ricardo Brennand(5/6)

Minas Gerais Cement Plant (CNC):

  • • CNC is a complete cement production line, able to produce clinker (1 rotary kiln) and cement (2 cement mills)
  • • Started its operation in May 2011.The total production capacity is 2.4 million tons of cement per year and 1.2 million tons of clinker per year
  • • The plant meets cement demand of Southeast Region (largest Brazilian Market), part of the South, Mid-West and North

Strategic move: agreement with Grupo Ricardo Brennand(6/6)

Paraíba Cement Plant (CCP):

  • • CCP is a complete cement production line, able to produce clinker (1 rotary kiln) and cement (1 cement mill)
  • • Started its operation in August 2015, with total production capacity of 1.7 million tons of cement per year and 1.4 million tons of clinker per year
  • • The plant meets cement demand of Northeast Region (second largest cement market in Brazil)

Appendix

pag 19 Forum 2019 | January 11, 2019

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), US (# 4 cement producer), Germany (# 2 cement producer), joint venture in Mexico (# 4 cement producer)
  • 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"

Shares & Shareholders

Cement plants location and capacity

2017 Consumption vs. Peak

pag23Forum 2019 | January 11, 2019

Historical series of cement consumption by country

Historical EBITDA development by country

EU
Rm		 20
10		 20
11		 20
12		 20
13		 20
14		 20
15		 20
16		 20
17
Ita
ly		 EB
ITD
A		 32
.5		 10
.3		 -5.
9		 -18
.1		 -18
.7		 -37
.2		 -22
.2		 -79
.7
in
ma
rg		 5.3
%		 1.8
%		 2%
-1.		 -4.
2%		 -4.
8%		 8%
-9.		 9%
-5.		 -18
.6%
Ge
rm
an		 EB
ITD
A		 76
.3		 90
.3		 72
.2		 108
.1		 88
.6		 72
.1		 76
.8		 78
.1
y in
ma
rg		 13.
9%		 14.
2%		 12.
0%		 18.
0%		 14.
7%		 12.
6%		 13.
4%		 13.
3%
Lu
x/		 EB
ITD
A		 17
.0		 35
.0		 8.3 11
.5		 15
.6		 19
.7		 25
.8		 17
.6
Ne
the
rla
nd		 s
in
ma
rg		 8.3
%		 15.
7%		 4.3
%		 6.3
%		 9.7
%		 11.
7%		 14.
7%		 9.4
%
Cz
Re
ec		 EB
ITD
A		 32
.8		 35
.2		 25
.4		 19
.2		 27
.0		 32
.6		 34
.3		 36
.5
h
/
p
Slo
kia
va		 in
ma
rg		 20
.5%		 20
.5%		 17.
0%		 14.
6%		 20
.2%		 24
.0%		 25
.2%		 24
.7%
EB
ITD
A		 33
.4		 36
.9		 21
.8		 27
.1		 18
.2		 22
.7		 23
.4		 24
.1
Po
lan
d		 in
ma
rg		 25
.8%		 26
.6%		 20
.0%		 26
.8%		 .4%
20		 .4%
20		 24
.6%		 .9%
24
EB
ITD
A		 -10
.5		 6.9 15
.8		 12
.3		 11
.0		 4.0 12
.8		 16
.0
Uk
rai
ne		 in
ma
rg		 -12
.8%		 6.2
%		 11.
8%		 10.
0%		 12.
5%		 %
5.7		 16.
1%		 16.
9%
EB
ITD
A		 39
.7		 65
.7		 96
.1		 92
.6		 73
.4		 48
.4		 43
.2		 46
.0
Ru
ia
ss		 in
ma
rg		 .0%
32		 37
.4%		 .0%
41		 .2%
37		 .0%
35		 .0%
29		 28
.0%		 24
.9%
EB
ITD
A		 88
.7		 71
.4		 123
.9		 15
1.0		 20
7.3		 31
1.7		 35
6.5		 36
9.6
US
A		 in
ma
rg		 8%
14.		 12.
8%		 2%
18.		 20
.7%		 24
.2%		 28
.1%		 31
.9%		 33
.0%
Me
xic
o		 EB
ITD
A		 .2
77		 82
.6		 97
.5		 77
.5		 Ad
tio
of
op
n
in
ma
rg		 36
.2%		 34
.7%		 36
.2%		 33
.2%		 S 1
1
IFR
EB
ITD
A		 38
7.0		 43
4.3		 45
5.1		 48
1.2		 42
2.7		 47
3.2		 55
0.6		 50
8.2
Co
oli
da
ted
ns		 in
ma
rg		 .6%
14		 .6%
15		 16
.2%		 .5%
17		 16
.9%		 .8%
17		 .6%
20		 18
.1%

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