Buzzi Unicem — Investor Presentation 2020

Sep 24, 2020

Executive Summary

O S V L U M E	I Q 2 t l d l i d i l l h i t i l l i I t l d E t E d t t h d i n c e m e n v o u m e s e c n e n a g e o g r a p e s, p a r c u a r y n a y a n a s e r n u r o p e, u e o e p a n e m c i t, t f t h U S A F Q 2 h l t d 6. 1 % m p a c a p a r r o m e o r a s a w o e, c e m e n o w n - Y T D t l d ( 3. 4 % ) t 1 3. 4 t d i t l i t d ( 6. 3 % ) c e m e n v o u m e s o w n a m o n ; r e a y -m x c o n c r e e v o u m e s m o r e m p a c e - - f S I t l t t i d t t h l k d i d t i l t i t i l M t t d i J b t Y T D a s e e r e c o n r a c o n e o e o c o n o n s r a o p e r a o n s n a r o n g e r r e n n n e y : v u w u u y. u u • f l t i l l d i i i t l H i i t d i d t i o m e s s o n s g n c a n e a e r m p a c o n r e a -m p r o c o n v u w y. v y x u U i d S i h f i h l f, h k i l i f C i d- 1 9 d i i t t t t t t t t t t t n e a e s : c e m e n u p n e r s a a n s o m a r g n a m p a c r o m o v a n n o r e s r c o n s o n • i i i ( i h N h- E ) d i l i h l d t t t t t t t t t c o n s r u c o n a c v y e x c e p n e o r a s ; r e a y -m x s g y o w n C l E C Y T D l i h l d i G d f b l i L b ( k A i l d t t t e n r a u r o p e : e m e n s g y o w n n e r m a n y a n u n a v o r a e n u x e m o u r g v e r y w e a p r a n • t t d i M J ). R d i i G t h k t d i f f t b t i i f i t l d i s r o n g e r r e n n a y u n e e a y m x u p n e r m a n y a n s o e r e n s c o p e u s g n c a n y o w n n - B l e n e u x C E t E t l i h t l b t t i h R b l i h i l U k i P l d d R i a s e r n u r o p e : c e m e n s g y e e r n z e c e p u c, m e a n w e r a n e, o a n a n u s s a m o r e • f f t d b t h d i d i d d a e c e e p a n e m c r e a -m e c r e a s e y ; y x
P R I C E S	F b l i t h b d i l l i t i l l i P l d d I t l a o r a e a r a n c e a c r o s s e o a r n o c a c r r e n c e s, p a r c a r n o a n a n a v v u u y y
F O R E I G N E X C H A N G E	A l t € 1 1 d t N t l d € 3 E B I T D A f t d l l d h i m o s m a v a n a g e o n e s a e s a n m o n r o m s r o n g e r o a r a n r y v n a
F I N A N C I A L S	N S l € 1, 2 0 ( € 1, 1 9 i 2 0 1 9 ), 1. 4 % l i k f l i k t t 5 5 e a e s a m m n e- o r- e • - E B I T D A € 3 1 4 ( € 2 8 9 i 2 0 1 9 ), 8. 3 % l i k f l i k t + a m m n e- o r- e • N t d b t t € 3 8 5 € 5 6 8 t d 2 0 1 9 e e a m v e r s u s m a y e a r e n •
G U I D A N C E	G f % % i d 2 0 2 0 i E B I T D A t d t d b t 5 d 1 0 l t a n c e o r r e c r r n g e p e c e o e c r e a s e e e e n a n e r s s a s e a r u : u x w v u y

Volumes H1 2020

Price Index by country

In local currency; FY16 = 100

FX changes

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

H1 20 Financial Highlights

Net Cash from operations (€m, % of sales)

EBITDA (€m, % of sales)

Results by Geographic Area | Italy & United States of America

• • Cement volumes down due to lockdown of industrial operations in Mar and Apr. Recovery trend in May and June. Stronger impact on readymix production
• •Favourable trend for selling prices.

• 13% of consolidated H1 net sales (17% in H1 19) and 3% of consolidated H1 EBITDA (11% in H1 19)

• •Cement volumes improved thanks to marginal impact from Covid-19 and no restrictions on the construction sector in the vast majority of the country. Ready-mix slightly down
• •No relevant changes in average selling prices in local currency
• •40% of consolidated H1 net sales (38% in H1 19) and 57% of consolidated H1 EBITDA (50% in H1 19)

Results by Geographic Area | Central & Eastern Europe

EBITDA (€m)

Central Europe

•Average selling prices improved

• 27% of consolidated H1 net sales (27% in H1 2019) and 19% of consolidated H1 EBITDA (18% in H1 19)

• • Cement volumes slightly better in Czech Republic, meanwhile Ukraine, Poland and Russia perfomed worse, more affected by the pandemic; readymix negatively impacted too
• • Average selling prices in local currency improved (Poland in particular)
• • 18% of consolidated H1 net sales (19% in H1 19) and 21% of consolidated H1 EBITDA (21% in H1 19)
  -

EBITDA (€m)

Results by Geographic Area | Mexico & Brazil (valued at equity)

• • Cement volumes slightly up, thanks to a series of civil works considered strategic by the government, which allowed the carrying on of production and sales in the plants. Ready-mix decreased significantly
• •Average selling prices in local currency declined

• Negative impact from the depreciation of the Mexican peso (-10%)

16.5

100%

H1 20

• improved despite some cointainment measures introduced by the local authorities following the worsening of the pandemic in the country
• • Positive variance in selling prices, in local currency
• • Negative impact from the meaningful depreciation of the Brazilian real (-25%)

EBITDA variance analysis

Energy costs impact

Consolidated Cash Flow Statement

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

Net Financial Position

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

Gross debt breakdown (1,432.4 €m )

Debt Maturity Profile

• Total nominal value of debt and borrowings (except €m 98 leasing), stood at €m 1,267 at June 2020
• As at June 2020 available €m 322m of undrawn committed facilities (€m 300 for Buzzi Unicem, €m22 for Dyckerhoff)

Guidance 2020: Recurring EBITDA expected to decrease between 5% and 10% versus 2019 results

Italy

• In the second half, a foreseeable moderate recover in demand will only partially offset the loss in volumessufferedduringthelockdownperiod
• Operating results expected to be higher than previous year, net of the sale of CO2emission rights

USA

• Demand expected to contract in the second half due to the concerns and growing uncertainties followingthecriticalepidemiologicalpicture
• Operating results in local currency expected to close somewhat down in comparison with previous year

Central Europe

• Expectedsomemarginalslowdownindemandinthesecond half
• Operating results should remain in line with previous year

Eastern Europe

• In the second half, demand is not expected to rebound due to the continuing criticality of the epidemiological picture and the related greater uncertainties regarding the timing of the economic recovery
• Operating results expected to worsen in comparison with previous year

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"

Shares & Shareholders

S h C i l t a r e a p a
• O d i r n a r y	1 6 5 3 4 9 1 4 9 , ,
S i • a n g s v	4 0 1 1, 9 4 9 7 ,
N b f h m e r o s a r e s u	2 0 6 0 6 1, 0 9 8 ,

Ordinary Shares

• B i h l d i o n g s u z z	9 4 6 1, 3 0 0 7 ,
--------------------------------------------------------------------	--------------------------------------------

•Free float 67,486,691

•Treasury shares 401,158

0.3%

As at 30 August 2020

Cement plants location and capacity

HSBC Italian Jewels Conference | 24 September 2020

pag 18

2019 Consumption vs. Peak

Historical series of cement consumption by country

Net Cash Flow from Operations and Capex| €m

Historical EBITDA development by country

			2 0 1 1	2 0 1 2	2 0 1 3	2 0 1 4	2 0 1 5	2 0 1 6	2 0 1 7	2 0 1 8	2 0 1 9
	I ta ly	EB ITD A	10 3 ,	9 -5,	-18 1 ,	-18 7 ,	-37 2 ,	-22 2 ,	-79 7 ,	-1, 7	43 4 ,
	Ge rm an y	in ma rg	1, 8%	-1, 2%	-4, 2%	-4, 8%	-9, 8%	9% -5,	-18 6% ,	-0, 4%	8, 6%
		EB ITD A	90 3 ,	72 2 ,	108 1 ,	88 6 ,	72 1 ,	76 8 ,	78 1 ,	82 5 ,	102 3 ,
		in ma rg	2% 14 ,	0% 12 ,	0% 18 ,	7% 14 ,	6% 12 ,	4% 13 ,	3% 13 ,	0% 13 ,	1% 15 ,
	Lu / x	EB ITD A	35 0 ,	8, 3	11 5 ,	15 9 ,	19 7 ,	25 8 ,	17 6 ,	23 1 ,	22 7 ,
	Ne he lan ds t r Cz h Re / ec p	in ma rg	15 7% ,	4, 3%	6, 3%	9, 7%	11 7% ,	14 7% ,	9, 4%	11 7% ,	11 8% ,
		EB ITD A	35 2 ,	25 4 ,	19 2 ,	27 0 ,	32 6 ,	34 4 ,	36 5 ,	43 6 ,	46 3 ,
	S lov k ia a Po lan d	in ma rg	20 5% ,	17 0% ,	14 6% ,	20 2% ,	24 0% ,	25 2% ,	24 7% ,	26 5% ,	27 5% ,
		EB ITD A	36 9 ,	21 8 ,	27 1 ,	18 2 ,	22 7 ,	23 4 ,	24 1 ,	31 9 ,	32 1 ,
	U kra ine	in ma rg	6% 26 ,	0% 20 ,	8% 26 ,	4% 20 ,	4% 20 ,	6% 24 ,	9% 24 ,	6% 28 ,	9% 25 ,
		EB ITD A	6, 9	15 8 ,	12 3 ,	11 0 ,	4, 0	12 8 ,	16 0 ,	7, 0	21 0 ,
		in ma rg	6, 2%	11 8% ,	10 0% ,	12 5% ,	5, 7%	16 1% ,	16 9% ,	8, 0%	15 9% ,
	Ru ia ss	EB ITD A	65 7 ,	96 1 ,	92 6 ,	73 4 ,	48 4 ,	43 2 ,	46 0 ,	50 1 ,	57 7 ,
		in ma rg	37 4% ,	41 0% ,	37 2% ,	35 0% ,	29 0% ,	28 0% ,	24 9% ,	27 0% ,	26 9% ,
	U S A	EB ITD A	71 4 ,	123 9 ,	15 1, 0	20 7, 3	31 1, 7	35 6, 5	36 9, 6	34 1, 2	40 2, 7
	Me ico x	in ma rg	12 8% ,	18 2% ,	20 7% ,	24 2% ,	28 1% ,	31 9% ,	33 0% ,	31 9% ,	32 4% ,
		EB ITD A	82 6 ,	97 5 ,	77 5 ,	Ad tion of op
		in ma rg	34 7% ,	36 2% ,	33 2% ,	IFR S 11
		E B I T D A	4 3 4, 3	4 5 5, 1	4 8 1, 2	4 2 2, 7	4 7 3, 2	5 5 0, 6	5 0 8, 2	5 7 7, 2	7 2 8, 1
	Gr ou p	in ma rg	1 5, 6 %	1 6, 2 %	1 7, 5 %	1 6, 9 %	1 7, 8 %	2 0, 6 %	1 8, 1 %	2 0, 1 %	2 2, 6 %

Estimated trend of CO2 emissions and allowances in the first half EU ETS phase IV period (2021-2025)

(Reduction scenario includes CO2reduction projects and >/< 15% rule)

Breakdown of CO2emissions per country in 2019

Solutions for de-carbonization

			factors influencing feasibility:
	CLINKER CEMENT	MBURFAL The European Cement Association	low very high *
	CONCRETE	2050 CARBON NEUTRALITY ROADMAP (Kg C02/t cement)	performance and market acceptance	standards	availability of supplementing materials/fuels	permits	nimby	R&D	increase of
	CONSTRUCTION								cost	capex
	CARBONATION								production
cements with a lower clinker content		-72	***	***	**				*	**
alternative fuels with biomass content		-71			**	***	*		*	米米
technical update (BAT)		-61								*
new cements with lower carbon footprint		-17	***	***	***	*		**	*	**
carbon capture		-280				***	*	*	*	*
concrete recipe optimization		-52	**	*	***				**	*
H2 + electrification		-19			本本本本本			本本	本本本本本	本本本本本
decarbonated raw materials		-27			本本本本本					本本
carbon neutral trasnsport		-17			本本本本本					本本本
CO2 uptake		-51
already achieved up to 2017 since 1990		-116
total		-783

CCS situation: where are we now?

Good news…

•Various CC options available although not all with the same level of technical readiness (TRL).

• •Storage and utilization solutions potentially available.
• •EU financing.

Bottlenecks

•High costs

• •Lack of infrastructure
• •Not enough renewable energy / H2
• •NIMBY syndrome

What do we need to go forward?

• • High costs entail risk of carbon leakage. We need rules for maintaining our competitiveness.
• •Infrastructure projects and support for storage still missing.
• •Renewable energy supply.
• •New liaisons and new alliances between energy intensive industry and big emitters.
• •Stakeholder dialogue to prevent/limit NIMBY.