Buzzi Unicem — Investor Presentation 2016

Oct 11, 2016

Investor Roadshow

Paris – 11 October ²⁰¹⁶

Executive summary H1 2016

Volumes

• Cement up 2.7% in Q2 and YTD, thanks mainly to a good start to the year in the United States and a positive Q2 in Central and Eastern Europe; ready-mix concrete stable (-0.6%)
• Italy: poor results in Q2 (cement -6.8%) with export suffering; YTD cement down 3.1% and stable ready-mix (+0.2%)
• United States: stable volumes in Q2 (cement -0.7%) but favorable YTD (cement +6.1%) thanks to the strong start to the year; central Texas still positive despite continuing slowdown in oil-well cement shipments; ready mix down 6.6%
• Central Europe: sound Q2 (cement +8.3%; ready-mix concrete +7.0%) and positive YTD (cement +4.8%), with both Germany and Luxembourg up
• Eastern Europe: favorable trend in Q2 (cement +7.6%) in all the markets and notably in Poland and Ukraine; YTD stable sales (cement +1.0%), mainly due to Poland (+8.1%) and Ukraine (+2.2%); Czech Republic resilient (+0.7%)and Russia down 2.4%
• Prices
• Sound increase in USA and Ukraine (local currency); still unfavorable variance in Poland, to a minor extent also in Luxembourg and Germany; stable or marginal weakness in other markets
• Foreign Exchange
• Negative impact on sales (€m 21.9) due to weaker ruble and hryvnia
• Results
• Revenues at €m 1,261.3 versus €m 1,238.2 (+1.9%)
• EBITDA at €m 222.5 (recurring €m 219.3) versus €m 166.6 (recurring €m 165.2), boosted by favorable cost variance
• Fine tuning of the outlook for financial year 2016

Volumes

Price trends by country

In local currency; FY13 = 100

FX changes

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

Net sales by country

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

EBITDA by country

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

Net sales and EBITDA development

• United States account for 2/3 of the consolidated EBITDA
• Decreasing contribution from emerging markets, from 29% to 21% of EBITDA in H1 16 vsH1 15 (was 40% in H1 14) due to forex and economic troubles

EBITDA variance analysis

Energy costs impact

Consolidated Income Statement

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

(1) Net Profit + amortization & depreciation

Consolidated Cash Flow Statement

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

1) of which expansion projects 51.6 (82.4 in H1 15; 164.3 in 2015)

Net Financial Position

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

Gross debt breakdown (€m 1,940.6)

Debt maturity profile

• Total debt and borrowings stood at €m 1,863 at June 2016
• As at June 2016 available €m 337 of undrawn committed facilities (€m 300m for Buzzi Unicem, €m 37 for Dyckerhoff)

Focus on industrial capex

• In the period 2007-2015 equal to €m 3,296, of which €m 1,174 for expansion projects(1)
• Regular maintenance capex program to guarantee optimal efficiency levels

(1) Includes 50% of Corporación Moctezuma up to 2013.

Expansion projects

Maryneal, Texas – USA

• On stream since July ²⁰¹⁶
• New line with a capacity of 1.2m tons per year (versus 0.6m currently)
• Total cost: about \$m 315
• Aimed at capturing demand coming from oil and gas, residential and infrastructure in Texas
• Cost saving thanks to increased efficiency and environmental footprint reduction

Apazapan, Veracruz - Mexico

• On stream end 2016/ beginning ²⁰¹⁷
• Second line with a capacity of 1.3m tons per year, to double the current 1.3m
• Aimed at preserving market share in a growing consumption trend
• Total cost: \$m 200

Expected trading in 2016

	V l ∆ o u m e	P i ∆ r c e
I l t a y
S f U i t d t t A i n e a e s o m e r c a
G e r m a n y
L b e m o r g u x u
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 x c o

Appendix

pag ¹⁷ Investor Roadshow | October 11, 2016

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"

Ownership structure

Cement plants location and capacity

2015 Consumption vs. Peak

^{2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015} United StatesRussiam ton

Historical series of cement consumption by country

Historical EBITDA development by country

EU Rm			20 08	20 09	20 10	20 11	20 12	20 13	20 14	20 15
Ita	ly	EB ITD A	143 .4	92 .7	32 .5	10 .3	-5. 9	-18 .1	-18 .7	-37 .2
		in ma rg	16. 9%	13. 1%	5.3 %	1.8 %	-1. 2%	-4. 2%	-4. 8%	-9. 8%
	Ge rm an	EB ITD A	102 .7	116 .3	76 .3	90 .3	72 .2	108 .1	88 .6	72 .1
	y	in ma rg	3% 17.	22 .0%	13. 9%	14. 2%	0% 12.	0% 18.	14. 7%	12. 6%
	Lu x/	EB ITD A	24 .6	18 .6	17 .0	35 .0	8.3	11 .5	15 .9	19 .7
	Ne the rla nd s	in ma rg	11. 1%	9.5 %	8.3 %	15. 7%	4.3 %	6.3 %	9.7 %	11. 7%
	Cz Re ec	EB ITD A	73 .2	44 .2	32 .8	35 .2	25 .4	19 .2	27 .0	32 .6
	h / p Slo kia va	in ma rg	28 .1%	25 .2%	20 .5%	20 .5%	17. 0%	14. 6%	20 .2%	24 .0%
		EB ITD A	70 .0	31 .2	33 .4	36 .9	21 .8	27 .1	18 .2	22 .7
	Po lan d	in ma rg	38 .1%	25 .7%	25 .8%	26 .6%	20 .0%	26 .8%	20 .4%	20 .4%
		EB ITD A	49 .9	-4. 5	-10 .5	6.9	15 .8	12 .3	11 .0	4.0
	Uk rai ne	in ma rg	23 .8%	0% -6.	-12 .8%	6.2 %	11. 8%	10. 0%	12. 5%	5.7 %
		EB ITD A	173 .2	42 .1	39 .7	65 .7	96 .1	92 .6	73 .4	48 .4
	Ru ia ss	in ma rg	64 .8%	42 .6%	32 .0%	37 .4%	41 .0%	37 .2%	35 .0%	29 .0%
		EB ITD A	20 5.8	13 1.3	88 .7	71 .4	123 .9	15 1.0	20 7.3	31 1.7
	US A	in ma rg	27 .4%	21 .4%	14. 8%	12. 8%	18. 2%	20 .7%	24 .2%	28 .1%
	Me xic	EB ITD A	79 .9	69 .9	77 .2	82 .6	97 .5	77 .5	Ad tio f op n o
	o	in ma rg	38 .9%	38 .7%	36 .2%	34 .7%	36 .2%	33 .2%	IFR S 1 1
		EB ITD A	92 2.7	54 1.7	38 7.0	43 4.3	45 5.1	48 1.2	42 2.7	47 3.2
Co oli ns	da ted	in ma rg	26 .2%	20 .3%	14 .6%	15 .6%	16 .2%	17 .5%	16 .9%	17 .8%