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Buzzi Unicem Investor Presentation 2023
4218_ip_2023-05-25_892101b1-4200-4685-ab1c-e08ce3354e05.pdf
Investor Presentation
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Italian Investment Conference
UniCredit – Kepler Cheuvreux
Milan, 25 May 2023
EXECUTIVE SUMMARY
- 1. COMPANY OVERVIEW
- 2. KEY INVESTMENT HIGHLIGHTS
- 3. Q1 2023 OVERVIEW
- 4. OUR JOURNEY TO NET ZERO
1. COMPANY OVERVIEW
BUZZI AT A GLANCE: WELL POSITIONED TO CATCH FUTURE OPPORTUNITIES
Well balanced portfolio with exposure to mature markets as well as emerging Strong market position in USA and Eurozone, enabling us to capture the local opportunities Relevant exposure to Mexico and Brazil, countries with attractive prospects in population growth and urbanization
Above 40 mt of cement capacity available and 400 concrete plants (incl. JVs)
Strategy focused on long term and sustainable growth
Proven ability to deliver strong financial perfomance and free cash flows
Clear commitment to sustainability and value creation for all stakeholders
MORE THAN 110 YEARS OF HISTORY
| 1907-50 | 1951-75 | 1976-99 | 2000-15 | 2016-22 |
|---|---|---|---|---|
| 1907 Foundation by Pietro and Antonio Buzzi; Trino (IT) cement plant 1925 |
1959 AITEC foundation; The 3rd generation joins the company 1965 |
1979 Entry into the USA market (Alamo) 1981 Entry into the Mexican market |
2001 Dyckerhoff acquisition (34%)** 2004 Buzzi Unicem USA has been founded |
2017-2019 Bolt-on acquisition in Italy and Germany 2018 Entry into the Brazilian market |
| Casale Monferrato (IT) cement plant |
Robilante (IT) cement plant |
1990 Entry into the additives market (Addiment Italia) |
2007-2010 100th • anniversary Entry in Algerian market • New line in Russia and • |
2020 CCU/S International projects: Cleanker and Catch4Climate |
| 1949 Fratelli Buzzi becomes joint stock company |
1967 Start of ready-mix concrete production |
1999 Unicem acquisition; Buzzi Unicem Spa and Unicalcestruzzi Spa have |
in Missouri (US) Greenfield plant in • Veracruz (MX) 2013 |
2021 Expansion in Brazil: acquisition of CRH Brazil assets |
| () Since 2007 Buzzi Unicem is included in the FTSE MIB Index (*) New markets: Poland, Czech Republic, Ukraine, Germany, Luxemburg, Netherlands and Russia |
1975 Start of expanded clay production |
been founded; Listing on Italian Stock Exchange* |
Dyckerhoff 100% 2014 - 2015 Acquisition of Korkino plant (RU); New line in Maryneal (TX) |
2022 Ceasement of the operational involvement in Russia |
SHAREHOLDERS STRUCTURE AND DIVIDENDS
0%
5%
10%
15%
20%
2. KEY INVESTMENTS HIGHLIGHTS
INDUSTRY LEADING PERFORMANCE THROUGH THE CYCLE
Net Sales
Solid growth fueled by sound demand, driven by residential, infrastructure needs and nonresidential recovery. CAGR (2010-2022): +3.2%
EBITDA
Over proportional growth to Net Sales More than 50% of group EBITDA generated in the USA CAGR (2010-2022): +6.6%
EBITDA Margin %
Leading performance driven by cost efficiency and synergies
+700 bps vs 2010.
EURm
HISTORICAL EBITDA BY COUNTRY
| 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Italy | EBITDA | (5.9) | (18.1) | (18.7) | (37.2) | (22.2) | (79.7) | (1.7) | 43.4 | 33.8 | 40.8 | 82.0 |
| margin | -1.2% | -4.2% | -4.8% | -9.8% | -5.9% | -18.6% | -0.4% | 8.6% | 6.8% | 6.8% | 11.3% | |
| EBITDA | 72.2 | 108.1 | 88.6 | 72.1 | 76.8 | 78.1 | 82.5 | 102.3 | 123.8 | 127.5 | 120.5 | |
| Germany | margin | 12.0% | 18.0% | 14.7% | 12.6% | 13.4% | 13.3% | 13.0% | 15.1% | 17.3% | 18.0% | 15.1% |
| EBITDA | 8.3 | 11.5 | 15.9 | 19.7 | 25.8 | 17.6 | 23.1 | 22.7 | 21.7 | 16.5 | 7.0 | |
| Benelux | margin | 4.3% | 6.3% | 9.7% | 11.7% | 14.7% | 9.4% | 11.7% | 11.8% | 11.3% | 8.2% | 3.1% |
| EBITDA | 25.4 | 19.2 | 27.0 | 32.6 | 34.4 | 36.5 | 43.6 | 46.3 | 46.8 | 51.3 | 56.8 | |
| Czech Rep/ Slovakia |
margin | 17.0% | 14.6% | 20.2% | 24.0% | 25.2% | 24.7% | 26.5% | 27.5% | 29.4% | 28.9% | 28.2% |
| EBITDA | 21.8 | 27.1 | 18.2 | 22.7 | 23.4 | 24.1 | 31.9 | 32.1 | 35.3 | 31.3 | 27.2 | |
| Poland | margin | 20.0% | 26.8% | 20.4% | 20.4% | 24.6% | 24.9% | 28.6% | 25.9% | 29.9% | 24.8% | 19.2% |
| Ukraine | EBITDA | 15.8 | 12.3 | 11.0 | 4.0 | 12.8 | 16.0 | 7.0 | 21.0 | 21.9 | 13.3 | (6.8) |
| margin | 11.8% | 10.0% | 12.5% | 5.7% | 16.1% | 16.9% | 8.0% | 15.9% | 18.9% | 10.5% | -11.4% | |
| Russia | EBITDA | 96.1 | 92.6 | 73.4 | 48.4 | 43.2 | 46.0 | 50.1 | 57.7 | 52.9 | 58.6 | 99.6 |
| margin | 41.0% | 37.2% | 35.0% | 29.0% | 28.0% | 24.9% | 27.0% | 26.9% | 28.3% | 28.3% | 34.3% | |
| EBITDA | 123.9 | 151.0 | 207.3 | 311.7 | 356.5 | 369.6 | 341.2 | 402.7 | 444.2 | 455.1 | 497.5 | |
| USA | margin | 18.2% | 20.7% | 24.2% | 28.1% | 31.9% | 33.0% | 31.9% | 32.4% | 35.2% | 34.2% | 31.3% |
| Group | EBITDA | 357.6 | 403.7 | 422.7 | 473.2 | 550.6 | 508.2 | 577.2 | 728.1 | 780.8 | 794.6 | 883.7 |
| (IFRS application) | margin | 14.1% | 16.0% | 16.9% | 17.8% | 20.6% | 18.1% | 20.1% | 22.6% | 24.2% | 23.1% | 22.1% |
| EBITDA | 97.5 | 77.5 | 93.9 | 128.1 | 146.7 | 164.6 | 144.5 | 126.1 | 132.5 | 141.3 | 152.9 | |
| Mexico (50%) | margin | 36.2% | 33.2% | 36.0% | 40.9% | 48.2% | 48.0% | 46.3% | 42.5% | 46.2% | 42.7% | 39.8% |
| Brazil (50%) | EBITDA | 15.9 | 11.7 | 24.0 | 40.5 | 59.4 | ||||||
| margin | 23.9% | 17.4% | 34.5% | 31.9% | 29.7% | |||||||
| Group | EBITDA | 455.1 | 481.2 | 516.6 | 601.3 | 697.3 | 672.8 | 737.6 | 865.9 | 937.3 | 976.4 | 1,096.0 |
| (proportional method) |
margin | 14.8% | 17.5% | 18.7% | 20.2% | 23.5% | 21.4% | 22.7% | 24.2% | 26.2% | 25.0% | 23.3% |
SOUND CASH GENERATION AND VALUE CREATIVE CAPITAL ALLOCATION
~ 4.2 billion euros invested in our industrial asset (2010-2022) thereof ~ 710 million euros in special projects dedicated to installed capacity expansion Invested ~ 700 million euros in equity investments, in order to enter in new countries (Brazil, 2018) and to strenghten our position in existing markets (Germany and Italy)
~ 4.7 billion euros cash generated from operations over the period (CAGR ~4%)
EURm
STRONG BALANCE SHEET, PRESERVING INVESTMENT CAPACITY FOR GROWTH
Solid track record of consistent deleveraging over the last decade, while continuing to create value
Net cash position achieved at the end of 2021.
Strongest balance sheet in the industry
Committed to Investment grade metrics, preserving our capacity to create value for the company and shareholders, while financing the Net Zero transition
CASH RETURN TO SHAREHOLDERS
| Strengthened Equity FCF, selective CAPEX, reducing interests through |
|---|
| deleveraging |
CAGR ~ 7%
-50
50
150
250
350
450
550
EURm
- From 2010, ~ 860 million euros returned to shareholders, thereof:
- 600+ million euros as dividends
- - ~ 250 million euros as buybacks
- ~ 30% cash returned to shareholders
DISCIPLINED AND BALANCED FINANCIAL APPROACH
WITHIN THE COMPANY….
- Margins protection, through organic growth, adequate pricing and efficient cost management
- Selective decisions on Capex (~8% to Net Sales)
- Maintaining positive avg ROIC vs WACC spread
- Maintaining investment grade metrics (Net debt/EBITDA ratio of 1.5 x – 2.0 x)
- Focus on cash generation and allocating exceeding cash to M&A and shareholders
…AND EXTERNAL FUNDING
- Funding plan with access to fixed income markets and loan markets as well as private placements focusing on maturity profiles, flexibility and cost of funding.
- Proactively looking for public subsidies for developing new technologies
- ESG targets and metrics will be integrated in our financial documentations.
4. Q1 2023 OVERVIEW
Q1 2023 IN BRIEF
Still challenging operating context with negative development of volumes in Q1, in line with generalized slowdown of demand.
Q1 cement and rmx volumes contracted in European markets and US, while volumes increased in Mexico and Brazil.
Strengthening of selling prices continued in Q1, albeit with varying degrees of intensity. Step up of selling prices in Central Europea, Poland and Czech. Further round up in USA. No significant changes in Italy
Net Sales at 956 €m (+19.5%, +16% lfl), driven by the positive price effect. Favorable fx fluctuations (dollar and ruble) contributed €m 28
Net cash position remained at 279 €m, stable compared to FY22.
Guidance confirmed: 2023 EBITDA should easily match the level achieved in 2022.
Q1 2023 HIGHLIGHTS
NET SALES BY COUNTRY
| Q1 23 | Q1 22 | ∆ | ∆ | Forex | Scope | ∆ l-f-l | |
|---|---|---|---|---|---|---|---|
| EURm | abs | % | abs | abs | % | ||
| Italy | 203.7 | 163.3 | 40.4 | +24.8 | - | - | +24.8 |
| United States | 375.0 | 301.9 | 73.1 | +24.2 | 16.3 | - | +18.8 |
| Germany | 195.1 | 175.4 | 19.7 | +11.2 | - | - | +11.2 |
| Lux / Netherlands | 53.9 | 52.0 | 1.9 | +3.7 | - | - | +3.7 |
| Czech Rep / Slovakia | 40.6 | 37.3 | 3.3 | +9.0 | 1.3 | - | +5.5 |
| Poland | 33.2 | 29.2 | 4.0 | +13.8 | (0.6) | - | +15.9 |
| Ukraine | 9.7 | 13.1 | (3.4) | -26.1 | (2.1) | - | -10.1 |
| Russia | 60.1 | 38.2 | 21.9 | +57.3 | 12.7 | - | +24.1 |
| Eliminations | (15.4) | (10.3) | (5.2) | ||||
| Total | 955.9 | 800.1 | 155.8 | +19.5 | 27.6 | - | +16.0 |
| Mexico (100%) | 242.0 | 166.6 | 75.3 | +45.2 | 31.0 | - | +26.6 |
| Brazil (100%) | 92.5 | 75.2 | 17.4 | +23.1 | 4.6 | - | +16.9 |
5. OUR JOURNEY TO NET ZERO
REDUCTION OF CO2 EMISSION
Specific gross CO2 emissions declined by 3.6% to 664 kg CO2 /t cem.mat, reaching the target as planned (-5% vs 2017)
- Main factors which contributed to meet the target:
- Significant reduction of clinker factor thanks to the changes in product mix applied by every country
- Further increase in alternative fuels rate
Kg CO2/t cementitiuos
material
OUR JOURNEY TO NET ZERO
HOW TO GET THERE
Proven track record in CO2 emissions reduction. Already reduced by ~20% CO2 emissions in 2021 vs 1990.
NEXT CHAPTER: NEW, SCIENCE BASED, REDUCTION TARGETS
Targeting to achieve CO2 emissions (scope 1 net) below 500 kg per ton of cementitious material by 2030, meaning another 20% reduction vs 2021 level*.
TCFD alignment SBTi validation
ROADMAP 2030 – 2050
Realistic path to turn ambition into reality
EXPECTED CAPEX BY 2030
750 €m
Expected capex requirements for 2030 target
20-30%
CO2 specific capex on total annual spending
~ 8%
Capex to net sales ratio over the period
2030 CO2 TARGETS VALIDATED BY SBTi
In March 2023, the Science Based Targets initiative (SBTi) has formally validated the scope 1 and scope 2 decarbonization targets envisaged by the roadmap "Our Journey to Net Zero"
Our targets are aligned with the objective of keeping climate warming "well below 2°", as defined by the 2015 Paris Climate Agreement.
APPENDIX
VOLUMES
25,6 25,6 26,8 27,9 29,1 29,3 31,2 28,3 6,4 5,8 2015 2016 2017 2018 2019 2020 2021 2022 Q122 Q123 11,9 11,9 12,3 12,1 12,1 11,7 12,1 11,5 2015 2016 2017 2018 2019 2020 2021 2022 Q122 Q123 Cement (mton) Ready-mix concrete (mm3 )
2,7 2,4
PRICE INDEX BY COUNTRY
FY 2016=100
HISTORICAL CEMENT CONSUMPTION BY COUNTRY
2022 CEMENT CONSUMPTION VS PEAK
Per capita consumption (kg)
THIS REPORT CONTAINS COMMITMENTS AND FORWARD-LOOKING STATEMENTS BASED ON ASSUMPTIONS AND ESTIMATES. EVEN IF THE COMPANY BELIEVES THAT THEY ARE REALISTIC AND FORMULATED WITH PRUDENTIAL CRITERIA, FACTORS EXTERNAL TO ITS WILL COULD LIMIT THEIR CONSISTENCY (OR PRECISION, OR EXTENT), CAUSING EVEN SIGNIFICANT DEVIATIONS FROM EXPECTATIONS. THE COMPANY WILL UPDATE ITS COMMITMENTS AND FORWARD-LOOKING STATEMENTS ACCORDING TO THE ACTUAL PERFORMANCE AND WILL GIVE AN ACCOUNT OF THE REASONS FOR ANY DEVIATIONS.
Italian Investment Conference
UniCredit – Kepler Cheuvreux
Milan, 25 May 2023
