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Buzzi Unicem Investor Presentation 2024
4218_ip_2024-10-08_e295ee25-7172-45aa-b4f8-a4bdd585bda2.pdf
Investor Presentation
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Investor Roadshow
Mediobanca
Paris, 8 October 2024
EXECUTIVE SUMMARY
COMPANY OVERVIEW INVESTMENT HIGHLIGHTS H1 2024 OVERVIEW OUTLOOK OUR JOURNEY TO NET ZERO
COMPANY OVERVIEW
BUZZI AT A GLANCE: WELL POSITIONED TO CATCH FUTURE OPPORTUNITIES
MORE THAN 110 YEARS OF HISTORY
1907-1970 Foundation by Pietro and Antonio Buzzi, with Trino cement plant
Expansion in Northern Italy
Existing markets
Start of the ready-mix concrete production
1999
Acquisition and incorporation of Unicem;
Listing on the Italian stock exchange with the name of Buzzi Unicem
| Italy |
|---|
| United States |
2009-2011 New lines in United States Russia
Russia 2014 Acquisition of Korkino
Brazil 2018-2021 50% acquisition of Cimento Nacional in 2018 Acquisition of CRH Brazilian assets
BUZZI TODAY
OPERATIONAL SUMMARY AND KEY NUMBERS
GROUP STRUCTURE AND OPERATION (2023)
*Figures at 100% **In October 2024, Buzzi has completed the acquisition of the remaining 50% stake in the Brazilian JV.
OUR PRESENCE
GERMANY, LUXEMBOURG AND NETHERLANDS
INVESTMENTS HIGHLIGHTS
INDUSTRY LEADING PERFORMANCE THROUGH THE CYCLE
0
1000
2000
3000
4000
Net Sales
CAGR (2014-2023): +6.2% Solid growth fuelled by sound demand and significant price re-rating in recent years
EBITDA
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
CAGR (2014-2023):+ 12.7% Over proportional growth to Net Sales, with EBITDA which has more than doubled
EBITDA MARGIN
+12 percentage points Leading performance, driven by cost efficiency and synergies
Margin protection
Pass through of higher costs on selling prices
HISTORICAL EBITDA BY COUNTRY
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Italy | EBITDA | (18.7) | (37.2) | (22.2) | (79.7) | (1.7) | 43.4 | 33.8 | 40.8 | 82.0 | 175.2 |
| margin | -4.8% | -9.8% | -5.9% | -18.6% | -0.4% | 8.6% | 6.8% | 6.8% | 11.3% | 21.4% | |
| Germany | EBITDA | 88.6 | 72.1 | 76.8 | 78.1 | 82.5 | 102.3 | 123.8 | 127.5 | 120.5 | 189.1 |
| margin | 14.7% | 12.6% | 13.4% | 13.3% | 13.0% | 15.1% | 17.3% | 18.0% | 15.1% | 21.7% | |
| Benelux | EBITDA | 15.9 | 19.7 | 25.8 | 17.6 | 23.1 | 22.7 | 21.7 | 16.5 | 7.0 | 28.1 |
| margin | 9.7% | 11.7% | 14.7% | 9.4% | 11.7% | 11.8% | 11.3% | 8.2% | 3.1% | 13.1% | |
| EBITDA | 27.0 | 32.6 | 34.4 | 36.5 | 43.6 | 46.3 | 46.8 | 51.3 | 56.8 | 72.0 | |
| Czech Rep/ Slovakia |
margin | 20.2% | 24.0% | 25.2% | 24.7% | 26.5% | 27.5% | 29.4% | 28.9% | 28.2% | 35.2% |
| Poland | EBITDA | 18.2 | 22.7 | 23.4 | 24.1 | 31.9 | 32.1 | 35.3 | 31.3 | 27.2 | 38.2 |
| margin | 20.4% | 20.4% | 24.6% | 24.9% | 28.6% | 25.9% | 29.9% | 24.8% | 19.2% | 24.3% | |
| EBITDA | 11.0 | 4.0 | 12.8 | 16.0 | 7.0 | 21.0 | 21.9 | 13.3 | (6.8) | 5.6 | |
| Ukraine | margin | 12.5% | 5.7% | 16.1% | 16.9% | 8.0% | 15.9% | 18.9% | 10.5% | -11.4% | 6.5% |
| EBITDA | 73.4 | 48.4 | 43.2 | 46.0 | 50.1 | 57.7 | 52.9 | 58.6 | 99.6 | 96.2 | |
| Russia | margin | 35.0% | 29.0% | 28.0% | 24.9% | 27.0% | 26.9% | 28.3% | 28.3% | 34.3% | 33.8% |
| EBITDA | 207.3 | 311.7 | 356.5 | 369.6 | 341.2 | 402.7 | 444.2 | 455.1 | 497.5 | 639.2 | |
| USA | margin | 24.2% | 28.1% | 31.9% | 33.0% | 31.9% | 32.4% | 35.2% | 34.2% | 31.3% | 36.7% |
| Consolidated (IFRS application) |
EBITDA | 422.7 | 473.2 | 550.6 | 508.2 | 577.2 | 728.1 | 780.8 | 794.6 | 883.7 | 1,243.2 |
| margin | 16.9% | 17.8% | 20.6% | 18.1% | 20.1% | 22.6% | 24.2% | 23.1% | 22.1% | 28.8% | |
| Mexico (50%) | EBITDA | 93.9 | 128.1 | 146.7 | 164.6 | 144.5 | 126.1 | 132.5 | 141.3 | 152.9 | 232.8 |
| margin | 36.0% | 40.9% | 48.2% | 48.0% | 46.3% | 42.5% | 46.2% | 42.7% | 39.8% | 45.4% | |
| Brazil (50%) | EBITDA | 15.9 | 11.7 | 24.0 | 40.5 | 59.4 | 44.3 | ||||
| margin | 23.9% | 17.4% | 34.5% | 31.9% | 29.7% | 22.5% | |||||
| Consolidated (proportional method) |
EBITDA | 516.6 | 601.3 | 697.3 | 672.8 | 737.6 | 865.9 | 937.3 | 976.4 | 1,096.0 | 1,520.3 |
| margin | 18.7% | 20.2% | 23.5% | 21.4% | 22.7% | 24.2% | 26.2% | 25.0% | 23.3% | 30.2% |
SOUND CASH GENERATION AND VALUE CREATIVE CAPITAL ALLOCATION
STRONG BALANCE SHEET, PRESERVING INVESTMENT CAPACITY FOR GROWTH
Consistent deleveraging
Achieved in 10 years, while continuing to create value
Net Cash position
Since the end of 2021, further strengthened in 2023. Strongest balance sheet in the industry
Investment grade metrics
Remain among our commitments, preserving the capacity to create value for the company and shareholders, while financing the Net Zero transition
SUSTAINABLE GROWTH IN SHAREHOLDERS REMUNERATION
+21%
Equity FCF CAGR Thanks to strengthened operating results, selective CAPEX and reduced interests through deleveraging
~750 €million
Returned to shareholders since 2014 ~500 € million as dividend ~250 € million ad buyback
DPS growth
Commitment to a sustainable growth in dividend policy
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.
H1 2024 OVERVIEW
H1 2024 IN BRIEF
Weak demand in Central Europe and unfavorable weather conditions impacting Q2 volumes both in cement (-5.8%) and ready-mix (-6.8%)
Favorable price contribution to Net Sales partially offset by fx headwind (-27€m).
Stable H1 EBITDA margin, confirming last year excellent result
Positive price over cost dynamic in Italy and US counterbalancing lower margins in Central and Eastern Europe.
Net Cash Position improved by 100€m compared to the FY 23.
Guidance confirmed: 2024 Recurring EBITDA akin to last year record level
NET SALES VARIANCE BY REGION
(€m)
** Including change in scope of -2.2 €m
EBITDA VARIANCE
(€m)
Unfavorable Favorable
CASH GENERATION & CAPITAL ALLOCATION
OUTLOOK
OUTLOOK
Latest forecasts point to a better development in construction activity during H2, with still subdued investments in Central Europe, burdened by residential weakness, and a more resilient demand in the other Regions; civil engineering works continue to appear the main industry driver, particularly in Italy and United States
Energy costs are expected to stabilize in the following quarters
Price over cost evolution remains a key priority for the group
Group recurring EBITDA expected to consolidate the 2023 record level
After the approval by the antitrust authority (CADE), in October 2024, Buzzi has completed the acquisition of the remaining 50% of the Brazilian joint venture.
OUR JOURNEY TO NET ZERO
OUR JOURNEY TO NET ZERO
TRACK RECORD IN CO2 EMISSIONS REDUCTION AND AMBITIOUS TARGETS
Proven track record in CO2 emissions reduction. Already reduced by ~20% CO2 emissions in 2021 vs 1990.
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
2023 CO2 REDUCTION ON TRACK
Specific net CO2 emissions*
Kg CO2
/t cementitious product (net) CO2 emissions reduction in line with our roadmap.
Among main contributors:
- Reduced clinker ratio in Luxembourg (-410bps), Italy and US.
- Significant increase in thermal substitution in Italy (+640bps), Luxembourg (+850bps) and Czech Republic (+710bps).
ENVIRONMENTAL TRANSPARENCY
As part of the company's decarbonization strategy, after the validation of our CO2 emissions reduction target by the Science Based Target initiative (SBTi), in 2023 Buzzi participated in the Carbon Disclosure Project (CDP) questionnaire, receiving the B score.
In this way, the company has furthered its commitment to environmental transparency by disclosing its ecological footprint.
APPENDIX
Cement (mt) Ready-mix concrete (mm3 )
PRICE INDEX BY COUNTRY
NET SALES BY COUNTRY
| H1 2024 | H1 2023 | ∆ | ∆ | Forex | Scope | ∆ l-f-l | |
|---|---|---|---|---|---|---|---|
| EURm | abs | % | abs | abs | % | ||
| Italy | 414.4 | 424.1 | (9.7) | -2.3 | - | - | -2.3 |
| United States | 836.5 | 846.8 | (10.3) | -1.2 | (0.5) | - | -1.2 |
| Germany | 388.0 | 441.3 | (53.4) | -12.1 | - | - | -12.1 |
| Lux / Netherlands | 89.1 | 115.8 | (26.7) | -23.1 | - | (2.2) | -21.5 |
| Czech Rep / Slovakia | 96.2 | 102.8 | (6.6) | -6.5 | (5.2) | - | -1.4 |
| Poland | 73.1 | 76.6 | (3.5) | -4.6 | 4.9 | - | -10.9 |
| Ukraine | 44.7 | 35.1 | 9.7 | +27.6 | (3.0) | - | +36.2 |
| Russia | 132.5 | 142.8 | (10.3) | -7.2 | (23.1) | - | +9.0 |
| Eliminations | (20.9) | (35.6) | 14.7 | ||||
| Total | 2,053.6 | 2,149.6 | (96.1) | -4.5 | (27.0) | (2.2) | -3.1 |
| Mexico (100%) | 552.4 | 500.2 | 52.2 | +10.4 | 32.0 | - | +4.0 |
| Brazil (100%) | 186.9 | 189.7 | (2.8) | -1.5 | (0.3) | - | -1.3 |
EBITDA BY COUNTRY
| H1 2024 | H1 2023 | ∆ | ∆ | Forex | Scope | ∆ l-f-l | |
|---|---|---|---|---|---|---|---|
| EURm | abs | % | abs | abs | % | ||
| Italy | 107.9 | 98.5 | 9.3 | +9.5 | - | - | +9.5 |
| United States | 280.2 | 256.9 | 23.3 | +9.1 | (0.2) | - | +9.1 |
| Germany | 73.9 | 100.1 | (26.2) | -26.1 | - | - | -26.1 |
| Lux / Netherlands | 4.7 | 12.6 | (7.9) | -62.6 | - | (0.3) | -61.5 |
| Czech Rep / Slovakia | 28.3 | 33.6 | (5.4) | -16.0 | (1.6) | - | -11.2 |
| Poland | 12.7 | 22.7 | (10.1) | -44.3 | 0.8 | - | -48.0 |
| Ukraine | 2.4 | 2.3 | 0.1 | +3.7 | (0.2) | - | +10.7 |
| Russia | 42.8 | 48.4 | (5.7) | -11.7 | (7.5) | - | +3.7 |
| Adjustments | (0.0) | 0.0 | |||||
| Total | 552.7 | 575.3 | (22.5) | -3.9 | (8.5) | (0.3) | -2.4 |
| Mexico (100%) | 254.5 | 227.3 | 27.3 | +12.0 | 14.7 | - | +5.5 |
| Brazil (100%) | 44.5 | 38.3 | 6.3 | +16.4 | (0.1) | - | +16.6 |
LONG TERM EBITDA EVOLUTION BY REGION
HISTORICAL CEMENT CONSUMPTION BY COUNTRY
2023 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.
