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Buzzi Unicem Investor Presentation 2024
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Investor Presentation
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E&C Conference
Equita
Milan, 10 April 2024
EXECUTIVE SUMMARY
COMPANY OVERVIEW INVESTMENT HIGHLIGHTS FY 2023 OVERVIEW OUTLOOK 2024 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
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
MEXICO* 3 plants 8.3 m/t cement production capacity 27 ready-mix batch plants 2 aggregate quarries BRAZIL* 7 plants 7.2 m/t cement production capacity 6 deposits and terminals * Joint ventures ALGERIA** 2 plants 2.0 m/t cement production capacity ITALY 11 plants 10.8 m/t cement production capacity 109 ready-mix batch plants 7 aggregate quarries 4 deposits and terminals UNITED STATES 8 plants 10.2 m/t cement production capacity 67 ready-mix batch plants 4 aggregate quarries 36 deposits and terminals 9 plants 8.6 m/t cement production capacity 122 ready-mix batch plants 3 aggregate quarries 2 deposits and terminals POLAND 1 plant 1.6 m/t cement production capacity 18 ready-mix batch plants 1 terminal CZECH REPUBLIC AND SLOVAKIA 1 plant 1.1 m/t cement production capacity 64 ready-mix batch plants 6 aggregate quarries UKRAINE 2 plants 3.0 m/t cement production capacity 5 ready-mix batch plants 2 deposits and terminals SLOVENIA** 1 plant 1.3 m/t cement production capacity 3 ready-mix batch plants 3 aggregate quarries
GERMANY, LUXEMBOURG AND NETHERLANDS
** 35% ownership
OUR PRESENCE
RUSSIA 2 plants
1 terminal
4.9 m/t cement production capacity
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% | |
| Czech Rep/ Slovakia |
EBITDA | 27.0 | 32.6 | 34.4 | 36.5 | 43.6 | 46.3 | 46.8 | 51.3 | 56.8 | 72.0 |
| 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% | |
| Ukraine | EBITDA | 11.0 | 4.0 | 12.8 | 16.0 | 7.0 | 21.0 | 21.9 | 13.3 | (6.8) | 5.6 |
| margin | 12.5% | 5.7% | 16.1% | 16.9% | 8.0% | 15.9% | 18.9% | 10.5% | -11.4% | 6.5% | |
| Russia | EBITDA | 73.4 | 48.4 | 43.2 | 46.0 | 50.1 | 57.7 | 52.9 | 58.6 | 99.6 | 96.2 |
| margin | 35.0% | 29.0% | 28.0% | 24.9% | 27.0% | 26.9% | 28.3% | 28.3% | 34.3% | 33.8% | |
| USA | EBITDA | 207.3 | 311.7 | 356.5 | 369.6 | 341.2 | 402.7 | 444.2 | 455.1 | 497.5 | 639.2 |
| 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 dividens ~250 € million ad buybacks
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.
FY 2023 OVERVIEW
2023 IN BRIEF
Consolidated Net Sales reached 4,317 €m (+11.1% lfl), driven by solid price momentum in all Regions.
Recurring EBITDA at 1,237 €m (+43.7% lfl), the highest result ever in the group history; main additional contribution from Italy, Germany and USA.
Significant improvement in EBITDA margin at 28.7% (+640bps)
Sound cash generation, although negative impact from working capital and higher capex. Positive development of ROCE over WACC spread, strengthened in 2023 despite higher cost of capital.
Dividend increased by 33% at 0.60 € ps. Share price +133% past two years.
2030 CO2 reduction program on track and targets confirmed.
Commitment to the price over cost evolution in all Regions to protect margins 2024 group recurring EBITDA expected to consolidate the 2023 level
2023 KEY FIGURES
NET SALES VARIANCE ANALYSIS
EBITDA BRIDGE
OUTLOOK 2024
OUTLOOK 2024
Macroeconomic condition are still going to weight on construction investments in 2024, with subdued residential activity in all Regions; infrastructure projects are expected to support investments in Italy and USA
USA: cement demand bolstered by infrastructures spending and re-shoring activity Italy: resilient demand driven by the implementation of PNRR
Energy cost are expected to remain at high levels, despite some easiness in the fuel component
Full commitment to the price over cost evolution in all the markets
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
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
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).
APPENDIX
VOLUMES
PRICE INDEX BY COUNTRY
ENERGY COST
Energy cost (€m)
Energy cost / Revenues*
Power cost (€/ton)
Fuel cost (€/ton)
Fuel cost / Revenues* (%)
Power cost / Revenues* (%)
Total energy (ex. Russia) Power & Fuel (ex. Russia)
*only cement
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.