Buzzi Unicem — Investor Presentation 2018

Nov 15, 2018

Italian Equity Conference

New York – 15 November 2018

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

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

Consolidated Cash Flow Statement

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

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, among other things, 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)
• The first step of the agreements entails an outlay by Buzzi Unicem of R\$ 700 million (of which R\$ 350 million for the stake purchase held by the current minority shareholders and R\$ 350 million for the dedicated capital increase) corresponding to approximately € 150 million
• A shareholders' agreement will be signed between the Ricardo Brennand Group and Buzzi Unicem providing for the co-control management rules 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 BrennandCimentos (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
• Closing is expected to take place by 31 December 2018

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)