HeidelbergCement : Annual Results 2019 Presentation

2019 Full Year Results

19 March 2020

Dr. Dominik von Achten - Group CEO Dr. Lorenz Näger - Group CFO

Key Messages

• Solid performanceandimprovement in most key financial metrics in2019
• Good business startinto2020
• Significant liquidity headroom
• Determined to take all necessary measuresto fightimpacts from the coronavirus
• General assembly postponeddue to legal

restrictions

• Good progressinfurther reducing ourglobal CO2 emissions in 2019

Results 2019

Current Business Update

Sustainability

Key takeaways

Appendix

R E S U L T S 2 0 1 9

Solid performance and improvement in most key financial metrics in 2019

Operations

EPS

Costs

Portfolio

Debt

Shareholder

return

LfL revenue increases by +2.1%; Operating EBITDA increases by +2.5%

Adjusted EPS increases by +23% to 6.4 EUR*

134 m€ SG&A savingsvs. initial plan of 100 m€

622 m€ disposalswithout major EBITDA impact

1.2 b€ net debt reductionbrings leverage down to 2.3x

5 % increase in dividend, payout ratio reaches 40 %

* Adjusted EPS: Earnings per share excluding additional ordinary result.

4	2019 Full Year Results | 19.03.2020

R E S U L T S 2 0 1 9

We continue to create value and earn a premium on our cost of capital

					WACC		ROIC post IFRS 16
					ROIC pre IFRS 16	7,2
					7,0				6,9	7,1
6,7				6,6				6,9
														6,6
		6.3							6,3
														27,456
															1,288
20.849	23.595	26.064	25.481	26.168

• Net debt reduction and operational result increase compensated the negative impact from IFRS 16 (‐0.2% vs. 2018)
• ROIC continues to benefit from the low level of cash tax payments
• ROIC definition and calculation due to evolved standards under review in 2020

2015	2016	2017	2018	2019
		IFRS 16 impact		Average invested capital (in m€)

ROIC calculated as RCO minus income taxes paid divided by average invested capital (last 4 quarter average).

5	2019 Full Year Results | 19.03.2020

R E S U L T S 2 0 1 9

HC proposes dividend increase for the 10thtime in a row to 2.20 € per share

+5%

Annual General Meeting postponed

‒ Due to the spread of the coronavirus,

HeidelbergCement will not hold its AGM as

0,25

0,12

CAGR
+34% p.a.	1,90
	1,60
1,30

0,75

0,60

0,47

0,35

2,10

2,20

scheduled on 7 May 2020

‒ The authorities of Baden‐Württemberg have

forbidden all events until 15 June 2020

‒ The payout of the dividend is postponed as a

consequence

‒ The AGM shall be held at a new date within the

first eight months of the current financial year

‒ HeidelbergCement will inform its shareholders

about its further planning in a timely manner

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

6	2019 Full Year Results | 19.03.2020

R E S U L T S 2 0 1 9

Adjusted earning per share increased significantly

m€	2018 1)	2019	Delta
Revenue	18,075	18,851	4%
RCOBD	3,100	3,580	16%
in % of revenue	17.2%	19.0%
RCO	2,010	2,186	9%
Profit for the financial year	1,286	1,242	‐3%
Earnings per share in € 2)	5.76	5.50	‐5%
Dividend per share in € 3)	2.10	2.20	5%
Cash flow from operating activities	1,968	2,664	696
Investments (gross cash outflow)	‐1,723	‐1,316	407
Net debt	8,323	8,410	87
Net debt pre IFRS 16	8,323	7,124	‐1,199

• LFL revenue +2% above prior year
• LFL RCO increases by +5%
• Net income impacted by ‐143 m€ non‐cash effect from disposal of Ukraine, which is included in Additional Ordinary Result (AOR)
• Adjusted Earnings per Share increased by 23%
• Net debt pre IFRS 16 significantly decreased by 1.2 bn€

1) Amounts restated. 2) Attributable to the shareholders of the parent entity. 3) Proposal of the Managing Board and the Supervisory Board to the AGM.

7	2019 Full Year Results | 19.03.2020

R E S U L T S 2 0 1 9

Income statement December 2019

m€	2018 1)	2019	Delta
Revenue	18,075	18,851	777
RCOBD (Operating EBITDA)	3,100	3,580	480
Depreciation and amortization	‐1,090	‐1,394	‐303
Result from current operations (RCO)	2,010	2,186	177
Additional ordinary result	108	‐178	‐286
Financial result	‐353	‐375	‐22
Income taxes	‐464	‐358	106
Net result from continuing operations	1,300	1,275	‐26
Net result from discontinued operations	‐14	‐32	‐18
Non‐controlling interests	‐143	‐151	‐8
Group share of profit	1,143	1,091	‐52

1. Prior year values adjusted.

Additional ordinary result:

• Sharp decrease in AOR driven by negative non‐cash currency effect from the sale of Ukraine business in 2019 (‐143 m€)
• Material gains from disposals were included in the AOR in 2018 (e.g. German limestone business, US white cement business)

Financial result:

• Decrease in interest expenses (+49 m€) offset by negative accounting effects from IFRS 16 (‐45 m€) and change in discount rate for the measurement of provisions (‐28 m€)

Income taxes:

• Higher current tax expense (‐158 m€ vs. prior year) fully compensated by lower deferred tax expense (+264 m€ vs. prior year).

8	2019 Full Year Results | 19.03.2020

R E S U L T S 2 0 1 9

Strong free cash flow generation and significant net debt reduction

Free cash flow generation (m€) *

Net debt development (m€)

Cash conversion rate: 45%

3.250
	‐353		76
	‐294
				‐911		1.468
					‐300
2019	Interest	Tax	Change in	Sustaining	Other	FCF
EBITDA	payment	payment	working	CapEx		Generation
			capital

* FCF pre IFRS‐16 leasing.

		‐1,199			1.286	8,410
8,323
			586	‐192	7,124
	‐1,468	‐125
Net debt	FCF	Net	Dividends	Currency	Net debt	IFRS 16	Net debt
Dec		growth		/ other	pre		Dec
2018		CapEx			IFRS‐16		2019

9	2019 Full Year Results | 19.03.2020

Results 2019

Current Business Update

Sustainability

Key takeaways

Appendix

C U R R E N T B U S I N E S S U P D A T E

Good start into the year - Current demand above prior year

Solid start to the year (January + February volumes)

Cement volume (mt)

2017

2018

2019

2020

Aggregates volume (mt)

	2017	2018	2019	2020
	Ready‐Mix volume (mm3)
	2017	2018	2019	2020
11	2019 Full Year Results | 19.03.2020

Update on key markets up until March 18, 2020:

US:

• Volumes up in all regions so far
• Some construction projects being put on hold recently (Boston, San Francisco, Pennsylvania)

Europe:

• Western and Southern European volumes on average up until week 11; volumes down from week 12, especially in Italy, France and Spain
• Eastern European volumes significantly up for now

Asia:

• Mixed picture: Volumes up in Thailand, India; volumes down in China, Australia, Indonesia

Africa:

• Strong start into the year, volumes up in most countries; cement volumes in Egypt and aggregates in Israel still under pressure

C U R R E N T B U S I N E S S U P D A T E

Determined to take all necessary measures

Current	Most plants are still running with the exception
business
of three plants in Lombardy.
situation

Most countries do not report any material impact on the construction market yet.

Some construction projects in US, Australia and Western Europe are being put on hold.

HC reaction

Started to take action very early in February.

Crisis teams established in every country and on Group level.

Every day assessment of situation.

International and national travel ban.

All business meetings are carried out remotely since end of February.

Contingency plans for all plants and business critical functions in place.

12 2019 Full Year Results | 19.03.2020

C U R R E N T B U S I N E S S U P D A T E

Coronavirus contingency plan: Swift actions taken with immediate effect

PEOPLE

Adopt "Smart Working" wherever possible

Freeze hiring, limit 3rdparty contracts to business critical areas

Reduce overtime, use vacation days, consider short pay and unpaid leave

BUSINESS

Review energy demand under worst case scenario

Selective approach with regard to forward energy buying

Review production planning under worst case scenario

CASH

Cash conservation as first priority

Stop all non‐essential CapEx

No rolling stock replacement

13 2019 Full Year Results | 19.03.2020

H I G H L I G H T S 2 0 1 9

Sufficient liquidity and ample headroom in covenants for credit lines

Significant liquidity headroom and well balanced maturity profile		Free credit line*		Debt Instruments
m€		Cash position		Bond
6,489

2.872

2,157

3.617	357	1,310		1,216										1,262
	1,152				1,021	1,012
			60		785		12		761
						216
	1.800			402				21			12
	1.250				35		1.250		11
	1.000			1.000	1.000
		750	750	750
Dec 2019	2020	2021	2022	2023	2024	2025	2026	2027	2028

Currently no plans to tap the bond market in 2020

* Total committed confirmed credit line is 3,000 m€.

14 2019 Full Year Results | 19.03.2020

Results 2019

Current Business Update

Sustainability

Key takeaways

Appendix

S U S T A I N A B I L I T Y U P D A T E

We made good progress in further reducing our global CO2emissions in 2019

750	749
		‐22%						‐30%
700
650
600		599	590	~40%
						~40%
550								~20%
500
1990	2018	2019	Alternative	Energy	Clinker‐/ Target 2030
				Fuels	efficiency	Cement‐
								factor

Specific net CO emissions: kg CO /t cementitious material

Caption Calibri Light210 pt. 2

Reduction of CO2emissions (status 2019):

• 22% less specific net CO2emissions compared to 1990 (from 20% in 2018)
• 24% share of alternative fuels
• 74.5% Clinker‐/Cement factor

In addition, we move forward with our R&D projects on process integrated CO2‐capturing as well as re‐carbonization of recycled concrete.

HeidelbergCement is the first company in the cement industry with science‐based emission reduction targets!

16 2019 Full Year Results | 19.03.2020

S U S T A I N A B I L I T Y U P D A T E

Innovative CO2reduction technologies in all parts of the world

HeidelbergCement has intensified its R&D efforts on CCU/S across the globe

17 2019 Full Year Results | 19.03.2020

S U S T A I N A B I L I T Y U P D A T E

LEILAC - Upscaling direct CO2capture technology to large‐scale industrial size

Promising first phase of the LEILAC (Low Emissions Intensity Lime And Cement) research project

LEILAC focuses on direct CO2capture during the decarbonisation process of the limestone through indirect heating of the raw material.

Pilot installation at the Belgian Lixhe plant of HeidelbergCement confirms CO2capture in its purest form (around 90%).

Next steps:

• Upscaling of the technology to large‐scale industrial size through an EU funded follow‐up project

−Complete integration of the LEILAC system into the process of a kiln line

• Heat supply of the installation with electricity from renewable sources

18 2019 Full Year Results | 19.03.2020

Results 2019

Current Business Update

Sustainability Update

Key takeaways

Appendix

K E Y T A K E A W A Y S

Our focus areas in 2020

Operational

Excellence

• Price driven top line growth
• Result focused cost management
• Further margin improvement

Coronavirus

mitigation

• Swift actions with immediate effect
• Focus on people, business and cash
• Minimize the potential impact on all levels

Sustainable

Growth

• Further reduce our carbon footprint globally
• Develop roadmap for our vision to become carbon neutral in concrete by 2050 latest

Cash Generation

and Allocation

€

• Continuous focus on cash generation
• Bring leverage further down
• Portfolio optimization and disciplined CapEx

Strategy

Update

• A global strategy review based on internal & external feedback
• Re‐define priorities, business focus and KPIs
• New strategy to be announced in Sep 2020

20 2019 Full Year Results | 19.03.2020

Key Takeaways

• We generatestrong cash flowand have

significant liquidity headroom

• Determined to take all necessary measuresto fightimpacts from the coronavirus
• General assembly postponeddue to legal

restrictions

• We will continue the successful path offurther

reducing our carbon footprint globally

• We will communicate ourstrategy updatein

September 2020

Subject to adjustments based on coronavirus developments.

Results 2019

Current Business Update

Sustainability Update

Key takeaways

Appendix

A P P E N D I X

North America

Q418 Q419

Sales volumes

	Lfl: ‐5%			Lfl: ‐1%				Lfl: +6%
	‐196			+25				+136
						30,207
4,051						1,912
		3,855
		30,181			1,775

Cement (kt)

Aggregates (kt)

Ready mix (km3)

Q4 Market overview

• Successful price increases in all business lines lead to revenue increase despite weaker than expected volumes.
• Solid earnings growth in US overshadowed by the continuing pressure in Canada business.
• Slightly higher operating costs in aggregates as plants are running almost at full capacity.

Operational highlights

		Lfl: +2%				Lfl: ‐3%		Lfl: ‐126 bps
								+83 bps
		+81					+29
		1,164			292			25.1%
1,083			263			24.3%

Revenue (m€)

Operating EBITDA (m€)

Margin

Lfl: Excluding scope, currency and IFRS 16 leasing impacts. Previous year figures are restated due to classification changes of "Result from associates" and credit card fees.

23 2019 Full Year Results | 19.03.2020

A P P E N D I X

Western & Southern Europe

Q418 Q419

Sales volumes

	Lfl: ‐5%			Lfl: ‐6%			Lfl: ‐6%
	‐585				‐930				‐157
7,792			20,925			4,602
						19,994				4,445
		7,206

Cement (kt)

Aggregates (kt)

Ready mix (km3)

Q4 Market overview

• Difficult market environment due to very strong comparison base and local temporary market problems in Q4 2019.
• Continuous improvement in cost base driven by saving initiatives.
• All countries were able to maintain momentum of 2019 price increases, despite the lower volumes.

Operational highlights

	Lfl: ‐3%							Lfl: ‐203 bps
			Lfl: ‐15%				+15 bps
	‐24
				‐2
1,258	1,234	202	200			16.2%
					16.1%

Revenue (m€)

Operating EBITDA (m€)

Margin

Lfl: Excluding scope, currency and IFRS 16 leasing impacts. Previous year figures are restated due to classification changes of "Result from associates" and credit card fees.

24 2019 Full Year Results | 19.03.2020

A P P E N D I X

Northern & Eastern Europe - Central Asia

Q418 Q419

Sales volumes

	Lfl: ‐6%			Lfl: +1%			Lfl: ‐6%
	‐650			+102				‐138
						12,680
6,320					1,886
		5,670
		12,577						1,748

Cement (kt)

Aggregates (kt)

Ready mix (km3)

Q4 Market overview

• Solid pricing which partly compensates weak volumes and cost inflation lead to margin improvement in the quarter.
• Stable demand in Eastern European countries.
• Delays in infrastructure projects and a shortfall in residential is putting pressure on cement volumes in Nordics.

Operational highlights

	Lfl: ‐2%				Lfl: +11%		Lfl: +272 bps
							+536 bps
	‐34					+31
					188
753	719					26.2%
		157			20.8%

Revenue (m€)

Operating EBITDA (m€)

Margin

Lfl: Excluding scope, currency and IFRS 16 leasing impacts. Previous year figures are restated due to classification changes of "Result from associates" and credit card fees.

25 2019 Full Year Results | 19.03.2020

A P P E N D I X

Asia ‐ Pacific

Q418 Q419

Sales volumes

	Lfl: 0%			Lfl: ‐5%			Lfl: ‐10%
	‐9				‐576				‐244
9,621			10,550			3,355
						9,975				3,111
		9,613

Cement (kt)

Aggregates (kt)

Ready mix (km3)

Q4 Market overview

• Continued recovery in Indonesia and Thailand more than offsets softness in Australia.
• Strong pricing strategies across the region compensates for slightly weaker demand in the quarter.
• Effective cost management in the quarter leads to solid growth in EBITDA and margin.

Operational highlights

	Lfl: ‐5%			Lfl: +7%		Lfl: +237 bps
						+443 bps
	‐10				+37
				208
897	886				23.4%
		170			19.0%

Revenue (m€)

Operating EBITDA (m€)

Margin

Lfl: Excluding scope, currency and IFRS 16 leasing impacts. Previous year figures are restated due to classification changes of "Result from associates" and credit card fees.

26 2019 Full Year Results | 19.03.2020

A P P E N D I X

Africa - Eastern Mediterranean Basin

Q418 Q419

Sales volumes

	Lfl: +1%			Lfl: ‐3%			Lfl: ‐3%
	+19				‐67				‐48
	4,817
	2,321			1,424
							2,254
4,799									1,377

Cement (kt)

Aggregates (kt)

Ready mix (km3)

Q4 Market overview

• Continuing strong result improvement in all Sub‐Saharan Africa countries more than compensates weakness in Egypt.
• EBITDA continues to grow despite lower than expected demand in the quarter.
• Well‐managed costs lead to further margin improvement.

Operational highlights

	Lfl: ‐1%				Lfl: +7%		Lfl: +174 bps
							+258 bps
	+8					+13
	425			102			23.9%
417			89			21.4%

Revenue (m€)

Operating EBITDA (m€)

Margin

Lfl: Excluding scope, currency and IFRS 16 leasing impacts. Previous year figures are restated due to classification changes of "Result from associates" and credit card fees.

27 2019 Full Year Results | 19.03.2020

A P P E N D I X

Group Services

Q418 Q419

Operational highlights

	Lfl: ‐40%		Lfl: ‐102%	Lfl: ‐180 bps
	‐191		‐8		‐147 bps
477	8	1.7%

286
1	0.3%

Revenue (m€)

Operating EBITDA (m€)

Margin

Q4 Market overview

• Revenues decline as a result of lower pricing in fuels and partly due to lower volumes as we decreased the shipments to the more risky countries
• Trading volume reached 30.4 million tons in 2019.
• Clinker oversupply in Mediterranean and Middle East‐Indian Ocean regions remains high and continues to put pressure on international clinker pricing.
• Freight market dropped significantly by 40% in Q4 2019.
• Clinker imports of more than 20 million tonnes to China supported the export prices in the Asia‐Pacific region.

Lfl: Excluding scope, currency and IFRS 16 leasing impacts. Previous year figures are restated due to classification changes of "Result from associates" and credit card fees.

28 2019 Full Year Results | 19.03.2020

A P P E N D I X

Operating EBITDA continues to grow

Full Year Operating EBITDA Bridge (m€)

						330	8	3,580
			+2.5%
	64	3,164	‐29	107	3,242
3,100
2018 EBITDA	Currency	2018 LfL	Net volume	Price over cost	2019 LfL	Leasing	Scope	2019 EBITDA
		EBITDA			EBITDA

Lfl: Excluding scope, currency and IFRS 16 leasing impacts. Previous year figures are restated due to classification changes of "Result from associates" and credit card fees.

29 2019 Full Year Results | 19.03.2020

A P P E N D I X

AOR in 2019 driven by negative currency differences from the sale of Ukraine

Additional ordinary income (m€)	2018	2019	Change
Gains from disposal of business units	125	86	‐39
Other non‐recurring income	115	79	‐36
Total additional ordinary income	240	165	‐75
Additional ordinary expense (m€)	2018	2019	Change
Losses from disposal of business units	‐4	‐163	‐159
Goodwill & asset impairments	‐34	‐67	‐33
Restructuring expenses	‐17	‐99	‐82
Other non‐recurring expense	‐77	‐15	63
Total additional ordinary expense	‐132	‐343	‐211
Total additional ordinary result	108	‐178	‐286

• AOR in 2019 driven by negative currency effects from the sale of Ukraine business (‐143 m€)
• Restructuring expenses include expenses related to closure of Maastricht cement activities and one‐off costs relating to SG&A restructuring
• Decrease of additional ordinary income due to less gains from disposals

30 2019 Full Year Results | 19.03.2020

A P P E N D I X

Net financial result driven by further reduction in interest expenses

			49
				‐8
					‐20
		3
	‐353
						‐45	‐375
	Financial	Interest	Interest	FX gain/losses	Other	IFRS 16	Financial
	result 2018	income	expense				result 2019
31	2019 Full Year Results | 19.03.2020

• Investment grade rating and improved financing conditions lead to further reduction in interest expenses (+49 m€).
• Accounting and FX effects negatively impact the financial result by ‐73 m€.

A P P E N D I X

Cash tax ratio still on historic low level

Cash Tax Ratio2)	2008	2009	2010	2011	2012	20131)	2014	2015	2016	2017	2018	2019
Annual	26.1%	59.0%	26.0%	39.8%	48.8%	40.0%	40.8%	31.9%	34.7%	25.3%	17.2%	21.9%
3Y Average	23.2%	25.0%	31.6%	39.3%	38.8%	42.4%	42.7%	37.4%	35.2%	29.9%	24.4%	21.4%
60 %

50 %

40 %

30 %

20 %

Annual 3Y average

1. From 2013: Excluding net result from joint ventures and associates.
2. Restatements: year 2013 retrospective application of IFRS 10 and IFRS 11; year 2016 restated upon PPA finalization of ITC and Mibau; year 2017 reclassification of 27 m€ from tax expense into financial result; year 2018 restated due to reclassification of result from associates.

32 2019 Full Year Results | 19.03.2020

A P P E N D I X

Portfolio optimization continues successfully

Disposal proceeds 2018‐2019

				1.500
			1.190
		622
	568
	2018	2019	Total	Target
				2018‐2020
33	2019 Full Year Results | 19.03.2020

Disposal proceeds 2019

m€

622

Decrease shares in subsidiaries Cement plants, Italy

Land disposal, Everett

Ship disposals

White cement plant, Egypt Disposal Ukraine business

Other non‐core / idle assets

A P P E N D I X

Balance sheet December 2019

m€	2018	2019	Change
Intangible assets	11,820	12,184	364	3 %
Property, plant and equipment	12,962	14,529	1,568	12 %
Financial assets	2,107	2,128	21	1 %
Fixed assets	26,889	28,841	1,952	7 %
Deferred taxes	314	313	‐1	0 %
Receivables	3,853	3,661	‐191	‐5 %
Inventories	2,035	2,170	135	7 %
Cash and current fin. investments	2,613	3,586	973	37 %
Assets held for sale	79	16	‐63	‐79 %
Total Assets	35,783	38,589	2,805	8 %

m€	2018	2019	Change
Equity attributable to shareholders	15,430	16,987	1,558	10 %
Non‐controlling interests	1,392	1,517	125	9 %
Equity	16,822	18,504	1,683	10 %
Debt	10,981	12,028	1,047	10 %
Provisions	2,507	2,546	39	2 %
Deferred taxes	723	726	3	0 %
Operating liabilities	4,740	4,783	43	1 %
Liabilities held for sale	11	1	‐10	‐88 %
Total Equity and Liabilities	35,783	38,589	2,805	8 %

34 2019 Full Year Results | 19.03.2020

A P P E N D I X

Cash flow statement December 2019

m€	2018	2019	Change
Cash flow	2,399	2,903	504
Changes in working capital	‐107	76	183
Decrease in provisions through cash payments	‐324	‐315	8
Cash flow from operating activities ‐ disc. operations	‐1	‐1	0
Cash flow from operating activities	1,968	2,664	695
Investments	‐1,723	‐1,316	407
Divestments and change in consolidation scope	589	410	‐179
Cash flow from investing activities ‐ disc. operations		1	1
Cash flow from investing activities	‐1,134	‐906	228
Capital increase / decrease ‐ non‐controlling interests	8	0	‐8
Dividend payments	‐565	‐586	‐22
Changes in ownership interests in subsidiaries	‐20	117	137
Net change in bonds, loans and lease liabilities	228	‐404	‐633
Cash flow from financing activities	‐348	‐873	‐525
Net change in cash and cash equivalents	486	884	398
Effect of exchange rate changes	‐7	73	80
Change in cash and cash equivalents	479	958	479

• Cash flow from operating activitiesincreases due to better operating result, high cash conversion and good management of working capital.
• Strict capex discipline and portfolio optimization programvisible in favorable development of cash flow from investing activities. Disposal proceeds exceed growth investments resulting in positive net growth Capex of +125 m€ (including proceeds from changes in ownership interests).

35 2019 Full Year Results | 19.03.2020

A P P E N D I X

Strong cash generation results in net debt reduction of 1.2 bn€.

		2017							2018						2019
		1.403							1.296						1.468				125
	291	583		317	212		501		231	377		188			1.007		417	169
				FCF vor pre IFRS 16 1)			Net Growth Capex			Debt Payback		Dividends HCAG		Dividends to minorities

m€
8,999			8,688				‐1,199 m€
	‐583	272	‐231					8,410
		‐134	8,323
							‐1,007			1.286
								‐192	7,124
Net Debt	Debt	Accounting	Net Debt	Debt	Accounting	Net Debt	Debt	Accounting	Net Debt	IFRS 16	Net Debt
2016	Payback	& FX	2017	Payback	& FX	2018	Payback	& FX	2019		2019
									pre IFRS		post IFRS

1) Free cash flow pre IFRS 16 and before growth investments and disposals (incl. cash flow from discontinued operations).

36 2019 Full Year Results | 19.03.2020

A P P E N D I X

Sales volumes, revenues, Operating EBITDA & Operating Income

Sales Volumes			Q4 2019				FY 2019
CEM	AGG	RMC	ASP	CEM	AGG	RMC	ASP
North America	3,855		30,207		1,912	1,226	16,114	128,143		7,737	5,046
West / South Europe	7,206		19,994		4,445	870	29,873	83,493		18,393	3,552
North / East Europe	5,670		12,680		1,748	0	23,922	48,244		6,778	0
Asia Pacific	9,613		9,975		3,111	731	35,783	39,781		11,980	2,286
Africa / Med. Basin	4,817		2,254		1,377	96	19,495	8,887		5,280	430
Group Service	210		0		146	0	729	0		520	0
HC GROUP	31,370		75,041		12,737	2,922	125,916	308,323		50,688	11,314
Operating result (m€)	Revenues			Operating EBITDA	Operating Income
Q4 2019	FY 2019	Q4 2019	FY 2019	Q4 2019	FY 2019
North America	1,164		4,778		292	1,042	188	664
West / South Europe	1,234		5,112		200	779	94	363
North / East Europe	719		2,888		188	677	135	474
Asia Pacific	886		3,372		208	746	142	493
Africa / Med. Basin	425		1,686		102	392	74	282
Group Service	286		1,611		1	18	0	14
HC GROUP	4,578		18,851		968	3,580	603	2,186

37 2019 Full Year Results | 19.03.2020

A P P E N D I X

Organic EBITDA growth bridge per region

Operating EBITDA (Q4)	Q4 2018	Currency	Q4 2018 LfL	Q4 2019	Leasing	Scope	Q4 2019 LfL	LfL Growth
North America	263	8	271	292	28	3	262	‐3.4%
West / South Europe	202	1	203	200	26	2	172	‐15.1%
North / East Europe	157	1	157	188	17	‐3	175	10.9%
Asia Pacific	170	5	175	208	19	0	188	7.5%
Africa / Med. Basin	89	2	91	102	4	0	98	7.5%
Group Service	8	0	8	1	1	0	0	‐102.2%
HC GROUP	858	17	875	968	94	2	872	‐0.3%
Operating EBITDA (Full Year)	FY 2018	Currency	FY 2018 LfL	FY 2019	Leasing	Scope	FY 2019 LfL	LfL Growth
North America	978	48	1,026	1,042	71	2	969	‐5.6%
West / South Europe	610	1	611	779	105	5	669	9.5%
North / East Europe	576	‐6	570	677	63	0	614	7.6%
Asia Pacific	599	12	611	746	71	5	670	9.7%
Africa / Med. Basin	382	8	390	392	19	‐5	378	‐3.1%
Group Service	38	1	39	18	1	0	17	‐56.3%
HC GROUP	3,100	64	3,164	3,580	330	8	3,242	2.5%

38 2019 Full Year Results | 19.03.2020

A P P E N D I X

Scope and currency impacts on volume and revenue

Scope & Currency		Scope Impact on Volumes		Revenue
(Quarter)	CEM	AGG	RMC	ASP	Scope	Currency
North America	0	212	24	242	25		33
West / South Europe	‐237	401	104	0	3		10
North / East Europe	‐283	‐82	‐20	0	‐17		‐6
Asia Pacific	9	0	89	0	4		29
Africa / Med. Basin	‐38	0	0	0	‐3		14
Group Service	0	0	0	0	0		1
HC GROUP	‐549	531	197	242	13		82
Scope, Currency		Scope Impact on Volumes		Revenue
(Year‐to‐Date)	CEM	AGG	RMC	ASP	Scope	Currency
North America	‐145	905	143	887	77		212
West / South Europe	‐691	2,480	341	0	16		11
North / East Europe	‐919	‐912	‐57	0	‐54		‐43
Asia Pacific	9	0	706	66	56		82
Africa / Med. Basin	‐220	0	0	0	‐24		55
Group Service	0	0	0	0	0		4
HC GROUP	‐1,965	2,473	1,133	953	71		321

39 2019 Full Year Results | 19.03.2020

A P P E N D I X

Change in accounting (IFRS16‐Leasing) & prior year restatements

IFRS16 - Leasing (m€)			Fourth Quarter 2019						Full Year 2019
	EBITDA	Depreciation	Oper. Income		EBITDA		Depreciation	Oper. Income
North America		27.4		‐20.7			6.7	70.5		‐58.7			11.8
West / South Europe		26.3		‐24.2			2.1	105.1		‐94.3			10.8
North / East Europe		16.8		‐14.5			2.2	63.3		‐56.9			6.4
Asia Pacific		19.0		‐17.0			2.0	71.0		‐63.4			7.6
Africa / Med. Basin		3.8		‐3.8			0.0	18.9		‐14.3			4.6
Group Service		0.9		‐0.3			0.6	1.4		‐1.3			0.1
HC GROUP		94.2		‐80.6		13.6	330.2		‐289.0		41.3
Prior year restatements (m€)		Result from associates (2018)				Credit card fees (2018)
Impact on EBITDA	Q1		Q2	Q3	Q4	FY	Q1	Q2	Q3	Q4	FY
North America	‐1.7	‐5.9	5.4			5.8	3.6	2.7		2.6	4.0			4.1	13.4
West / South Europe	‐5.1	10.1	8.7			6.4	20.2	0.0		0.0	0.0			0.0	0.0
North / East Europe	0.0	0.5	0.6			0.4	1.5	0.0		0.0	0.0			0.0	0.0
Asia Pacific	0.2	0.2	0.2			0.2	0.8	0.6		0.7	0.6			0.8	2.7
Africa / Med. Basin	2.9	3.0	3.2			1.9	11.1	0.0		0.0	0.0			0.0	0.0
Group Service	0.9	2.0	0.9			1.0	4.8	0.0		0.0	0.0			0.0	0.0
HC GROUP	‐2.7	9.7	19.2			15.9	42.0	3.3		3.3	4.6			4.9	16.1

40 2019 Full Year Results | 19.03.2020

A P P E N D I X

Change in accounting (IFRS16‐Leasing) & prior year restatements

IFRS16 - Leasing (m€)						Fourth Quarter 2019						Full Year 2019
			EBITDA			Depreciation	Oper. Income		EBITDA		Depreciation	Oper. Income
North America				27.4				‐20.7			6.7		70.5			‐58.7			11.8
West / South Europe				26.3				‐24.2			2.1		105.1			‐94.3			10.8
North / East Europe				16.8				‐14.5			2.2		63.3			‐56.9			6.4
Asia Pacific				19.0				‐17.0			2.0		71.0			‐63.4			7.6
Africa / Med. Basin				3.8				‐3.8			0.0		18.9			‐14.3			4.6
Group Service				0.9				‐0.3			0.6		1.4			‐1.3			0.1
HC GROUP				94.2				‐80.6		13.6		330.2		‐289.0		41.3
Restatements (m€)	Result from associates (2018)				Credit card fees (2018)				Credit card fees (2019)
Impact on EBITDA	Q1	Q2	Q3	Q4	FY	Q1	Q2	Q3	Q4	FY	Q1	Q2	Q3	Q4	FY
North America	‐1.7		‐5.9	5.4		5.8		3.6	2.7	2.6	4.0	4.1	13.4		3.2	3.3	4.8	5.3	16.6
West / South Europe	‐5.1		10.1	8.7		6.4		20.2	0.0	0.0	0.0	0.0	0.0		0.0	0.0	0.0	0.0	0.0
North / East Europe	0.0		0.5	0.6		0.4		1.5	0.0	0.0	0.0	0.0	0.0		0.0	0.0	0.0	0.0	0.0
Asia Pacific	0.2		0.2	0.2		0.2		0.8	0.6	0.7	0.6	0.8	2.7		0.8	0.7	1.0	1.2	3.7
Africa / Med. Basin	2.9		3.0	3.2		1.9		11.1	0.0	0.0	0.0	0.0	0.0		0.0	0.0	0.0	0.0	0.0
Group Service	0.9		2.0	0.9		1.0		4.8	0.0	0.0	0.0	0.0	0.0		0.0	0.0	0.0	0.0	0.0
HC GROUP	‐2.7	9.7	19.2		15.9		42.0	3.3	3.3	4.6	4.9	16.1		4.0	4.0	5.8	6.6	20.3

41 2019 Full Year Results | 19.03.2020

A P P E N D I X

HeidelbergCement is industry leader in ESG ratings

HeidelbergCement received numerous awards for its sustainability performance in 2019.

• In addition to financial criteria, we view many aspects in the areas of corporate governance, environmental protection and social responsibility as important key performance metrics.
• The very good rating by leading ESG rating agencies confirms our industry‐leading sustainability performance and transparent reporting.
• HeidelbergCement is also member of the new DAX 50 ESG index of Deutsche Börse.

42 2019 Full Year Results | 19.03.2020

A P P E N D I X

We want concrete to become the most sustainable building material

2020 ‐ 2030

Reduction of CO2content in clinker

• Further improve energy efficiency
• Increase use of alternative fuels, raw materials, and new binder concepts

Reduction of CO2content in cement and concrete

• Use clinker with lower CO2content and secondary cementitious materials
• Optimise concrete mixes through new cement types

Research projects for CO2capture and usage

• Process‐integrated CO2capture
• Recarbonisation of recycled concrete
• Use of CO2in circular economy (e.g. chemical products)

2030 ‐ 2050

Our vision 2050: Carbon‐neutral concrete

Rollout of new technologies in industrial scale

An adequate political framework is the prerequisite for successful decarbonisation.

43 2019 Full Year Results | 19.03.2020

A P P E N D I X

Contact information and financial reporting calendar

Date	Event
19 March 2020	Full Year Results
7 May 2020	First Quarter Results
30 July 2020	Half Year Results
16 September 2020	Capital Market Day
5 November 2020	Third Quarter Results
TbD	Annual General Meeting

Contact Information

Mr. Christoph Beumelburg

Director Communication & IR

Phone: [phone]

[e-mail]

Mr. Ozan Kacar

Head of Investor Relations

Phone: [phone]

[e-mail]

Mr. Piotr Jelitto

IR Manager

Phone: [phone]

[e-mail]

44 2019 Full Year Results | 19.03.2020

Disclaimer

Unless otherwise indicated, the financial information provided herein has been prepared under International Financial Reporting Standards (IFRS).

This presentation contains forward‐looking statements and information. Forward‐looking statements and information are statements that are not historical facts, related to future, not past, events. They include statements about our believes and expectations and the assumptions underlying them. These statements and information are based on plans, estimates, projections as they are currently available to the management of HeidelbergCement. Forward‐looking statements and information therefore speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

By their very nature, forward‐looking statements and information are subject to certain risks and uncertainties. A variety of factors, many of which are beyond HeidelbergCement's control, could cause actual results to defer materially from those that may be expressed or implied by such forward‐looking statement or information. For HeidelbergCement particular uncertainties arise, among others, from changes in general economic and business conditions in Germany, in Europe, in the United States and elsewhere from which we derive a substantial portion of our revenues and in which we hold a substantial portion of our assets; the possibility that prices will decline as result of continued adverse market conditions to a greater extent than currently anticipated by HeidelbergCement's management; developments in the financial markets, including fluctuations in interest and exchange rates, commodity and equity prices, debt prices (credit spreads) and financial assets generally; continued volatility and a further deterioration of capital markets; a worsening in the conditions of the

credit business and, in particular, additional uncertainties arising out of the subprime, financial market and liquidity crises; the outcome of pending investigations and legal proceedings and actions resulting from the findings of these investigations; as well as various other factors.

More detailed information about certain of the risk factors affecting HeidelbergCement is contained throughout this presentation and in HeidelbergCement's financial reports, which are available on the HeidelbergCement website, www.heidelbergcement.com. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward‐looking statement or information as expected, anticipated, intended, planned, believed, sought, estimated or projected.

In addition to figures prepared in accordance with IFRS, HeidelbergCement also presents alternative performance measures, including, among others Operating EBITDA, EBITDA margin, Adjusted EPS, free cash flow and net debt. These alternative performance measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Alternative performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways.

"Operating EBITDA" definition included in this presentation represents "Result from current operations before depreciation and amortization (RCOBD)" and "Operating Income" represents "Result from current operations (RCO)" lines in the annual and interim reports.