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Buzzi Unicem Investor Presentation 2020

Jul 1, 2020

4218_sr_2020-07-01_e9b31398-df78-48b9-9e80-3a49aedd572e.pdf

Investor Presentation

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1-3 July 2020 Digital Italian Sustainability Week

Executive Summary

  • Cement and concrete: global market development
  • Main challenge: climate change and the transition to a low carbon economy
      • European Green Deal
      • EU ETS phase IV
      • Carbon Border Adjustment

Focus on CO2emissions

Buzzi Unicem ESG organization

Cement and concrete: global market development

The world's population is expected to increase by 2 billion persons in the next 30 years, from 7.7 billion currently to 9.7 billion in 2050, according to a new United Nations report launched in 2019.

This will be accompanied by rapid urbanisation. The need for buildings and infrastructure continues to grow worldwide…

Estimated worldwide cement production in 2019 was 4,2 billion*, half of which in China.

Forecast production in 2030 is expected to be around 4,8 billion.

EU construction sector in 2018 accounted for Eur 1,6 trn (9% of GDP)

* source: www.statista.com

4Digital Italian Sustainability Week – 1-3 July 2020

Main challenge: climate change and the transition to a low carbon economy

The reduction of manmade CO2 emissions is key for achieving the Paris Agreement's climate goal signed by almost all countries worldwide.

Cement production is estimated to contribute for about 6% of global anthropogenic CO2emissions.

EU is strongly committed.

  • European Green Deal
  • EU ETS system (phase IV)
  • Carbon Border Adjustment

European Green Deal: How EGD impacts on our industry

EU ETS phase IV (2021 – 2030)

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EU ETS phase IV (2021 – 2030)

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

8Digital Italian Sustainability Week – 1-3 July 2020

Carbon Border Adjustment (ongoing discussion…)

The goal is to link climate protection with maintaining competitiveness of the European economy…..

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11Digital Italian Sustainability Week – 1-3 July 2020

Breakdown CO2 emissions 2019 per country

cementitious

Benchmark : scope 1 relative net CO2emission

Solutions for de-carbonization…

CLINKER
CEMENT
CONCRETE
CONSTRUCTION
CARBONATION		 EMBUREAL
The European Cement Association		 factors influencing feasibility:
low
very high ****
2050 CARBON NEUTRALITY
ROADMAP
(Kg C02/t cement)		 performance
and market
acceptance		 availability of
standards supplementing
materials/fuels		 permits nimby R&D increase of
cost
production		 capex
cements with a lower clinker content -72 *** *** ** * **
alternative fuels with biomass content -71 ** *** * * **
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 孝孝 本本本本本 本本本本本
decarbonated raw materials -27 本本本本本 零零
carbon neutral trasnsport -17 本本本本本 李孝孝
CO2 uptake -51
already achieved up to 2017 since 1990 -116
tota -783

CC: estimated capex and opex for a typical 1 Mt cement plant

…but CO2 capture it is not enough! (1)

Initial investment: NOK 6.9 bn (Eur 641 m) https://www.equinor.com/en/news/2020-05-northern-lights.html

5,0 Mt/y CO2 capture, transport and storage

…but CO2capture it is not enough! (2)

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 sindrome

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.

Relevant CO2reduction projects realized/scheduled to meet our 2022 reduction target

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Climate Change Disclosure – Feedback of Investors and Analysts

Buzzi Unicem Materiality Matrix
2019 Assessment		 10January 2020
Rating Legenda
0=not relevant
1 = ow
2 = moderate
3 = high
4 = very high
5 = extremely sensitive
Material topics for discussion Questions Investor's Rating
a) How important is the disclosure of risks related to currency, cash and sales under our Risk Management approach? 3,4
ਜ b) How important is the disclosure of risks related to climate change under our Risk Management approach? 4,2
Risk Management and Governance ç) How important is the disclosure of risks related to other environmental issues under our Risk Management approach? 3,2
d) How important is the disclosure of risks related to social and governance issues under our Risk Management approach? 3,4
e) How important is the ESG integration in current management structure and/or Board composition? 3,6
Climate Change a) How important is the disclosure of CO2 reduction target to 2030? 4,5
b) How important is the disclosure of CO2 reduction target to 2050? 3,4
c) How important is the disclosure of the impact of annual capital expenditures on CO3 emissions? 4,0
d) How important is the disclosure of CO2 related cost increases in the P&L ? 4,4
e) How important is the disclosure of progresses of CO2 reduction plans by Country? 3,4
f) How important is the disclosure of R&D expense allocated to carbon capture projects? 3,4
Access to information a How important is the discosure of quantified amount of captal expenditure we are planning to its environmental impact in the next 5
year?
b) How important is the disclosure of data breakdown by Country available under our Sustainability Report? 4,3
3,1
c) How important is the disclosure of KPIs (e.g. CO2) and Country benchmarks? 3,5
ന d) How important is the quantified material Enviornmental metrics published? 3,6
e) How important is the quantified material Social metrics published? 3,1
f) How important is the quantified material Governance metrics published? 3,4
g) How important is the trade off between ESG spending and cashflow ? 4,0

1-3 July 2020 Digital Italian Sustainability Week

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