HeidelbergCement : Trading Statement 2019 Presentation

Full Year Trading Update

18 Feb 2020

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

2019 Overview

Results by Group areas

Outlook 2020

Appendix

2 0 1 9 O V E R V I E W

Solid cash generation and debt reduction despite challenging operating environment

LfL +2% growth in revenues - lower demand in volumes compensated by successful price increases

LfL Operating EBITDA increases by +2.5% to 3.6 billion EUR

Portfolio optimization on track; disposals reach 1.2 billion EUR after 2 years

Record high free cash flow generation, brings net debt (pre IFRS 16) down to 7.1 billion EUR

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.

3	Trading Update Full Year 2019 | 18.02.2020

2 0 1 9 O V E R V I E W

Operating EBITDA margin continues to improve

Revenue (m€)					Operating EBITDA (m€)					Operating EBITDA Margin (%)
	Lfl: +2.1%						Lfl: +2.5%									Lfl: +81 bps
		+4.3%								+15.5%								Lfl: +6 bps			+289 bps
		18,851		Lfl: -4.5%			3,580							+184 bps				21.2%
18,075			-2.6%							Lfl: -0.3%
						3,100			+12.8%				19.0%
													18.3%
				4,700	4,578
										968	17.2%
												858

Full Year	Q4	Full Year	Q4	Full Year		Q4
							2019
						2018

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.

4	Trading Update Full Year 2019 | 18.02.2020

2 0 1 9 O V E R V I E W

Sales volumes slightly decrease as a result of "price over volume" strategy

Cement sales volumes (mt)			Aggregates sales volumes (mt)
	Lfl: -2%							Lfl: -1%
	-3%								0%		Lfl: -3%
129.9			Lfl: -3%	309.4	308.3
			-2%
125.9		-4%
									76.5	75.0
			32.8	31.4

Ready-Mix sales volumes (mm3)

Lfl: +1%

		+3%
		50.7		Lfl: -5%
49.0			-3%
				13.2	12.7

Full Year

Q4

Full Year

Q4

Full Year

Q4

2018 2019

5	Trading Update Full Year 2019 | 18.02.2020

2 0 1 9 O V E R V I E W

Operating EBITDA continues to grow

Full Year Operating EBITDA Bridge (m€)

						330	8	3,580
			+2.5%
		3,164		107	3,242
3,100	64	-29
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.

6	Trading Update Full Year 2019 | 18.02.2020

2 0 1 9 O V E R V I E W

Difficult comparison base limits the growth in 4thquarter

Q4 Operating EBITDA Bridge (m€)

						94	2	968
			-0.3%
858	17	875	-45	42	872
Q418 EBITDA	Currency	Q418 LfL	Net volume	Price over cost	Q419 LfL	Leasing	Scope	Q419 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.

7	Trading Update Full Year 2019 | 18.02.2020

2 0 1 9 O V E R V I E W

Significant reduction in net debt brings leverage down to 2.3X

Net debt development (billion EUR)

-1.2 billion EUR

9.6

8.7	1.3	8.4
		1.3	IFRS 16

8.7	8.3
	7.1	Net debt before IFRS 16

Dec 2017

Dec 2018

Dec 2019

8	Trading Update Full Year 2019 | 18.02.2020

R E S U L T S B Y G R O U P A R E A S

North America

Q418 Q419

Sales volumes

	Lfl: -5%			Lfl: -1%			Lfl: +6%
	-196			+25			+136
4,051				30,207		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.

9	Trading Update Full Year 2019 | 18.02.2020

R E S U L T S B Y G R O U P A R E A S

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			202					16.2%
			1,234				200	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.

10 Trading Update Full Year 2019 | 18.02.2020

R E S U L T S B Y G R O U P A R E A S

Northern & Eastern Europe - Central Asia

Q418 Q419

Sales volumes

	Lfl: -6%			Lfl: +1%				Lfl: -6%
	-650			+102				-138
6,320					12,680	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
753				188			26.2%
		719	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.

11 Trading Update Full Year 2019 | 18.02.2020

R E S U L T S B Y G R O U P A R E A S

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
897				208			23.4%
		886	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.

12 Trading Update Full Year 2019 | 18.02.2020

R E S U L T S B Y G R O U P A R E A S

Africa - Eastern Mediterranean Basin

Q418 Q419

Sales volumes

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

Cement (kt)

Aggregates (kt)

Ready mix (km3)

Q4 Market overview

• Continuing strong result improvement in allSub-Saharan Africa countries more than compensates weakness in Egypt.
• EBITDA continues to grow despite lower than expected demand in the quarter.
• Well-managedcosts 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.

13 Trading Update Full Year 2019 | 18.02.2020

R E S U L T S B Y G R O U P A R E A S

Group Services

Q418 Q419

Operational highlights

	Lfl: -40%		Lfl: -102%	Lfl: -180 bps
					-147 bps
	-191		-8
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 MiddleEast-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 theAsia-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.

14 Trading Update Full Year 2019 | 18.02.2020

O U T L O O K 2 0 2 0

World cement demand is expected to continue its growth

Market overview

	North Europe:
		Russia
	Stable demand
		Modest growth

North America:

US: Growthcontinues

Canada: Weaker demand

	Europe:
	Stable demand		China:
	Turkey:
		Slight growth
North Africa:	Strong decline
Slow recovery
	Egypt:
	The worst is behind	India:
		Moderate growth	Indonesia:
	Sub Saharan Africa:
			Strong growth
	Strong growth
	South Africa:			Australia:
	Stable			Weak demand

Note: Overview for selected HC operated markets only, not guidance.

15 Trading Update Full Year 2019 | 18.02.2020

Appendix

A P P E N D I X

Sales volumes, revenues, Operating EBITDA & Operating Income Overview

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

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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%

18 Trading Update Full Year 2019 | 18.02.2020

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

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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

20 Trading Update Full Year 2019 | 18.02.2020

Contact information and event calendar

Date	Event
19	March 2020	Full Year Results
7	May 2020	First Quarter Results
30	July 2020	Half Year Results
5	November 2020	Third Quarter Results

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]

21 Trading Update Full Year 2019 | 18.02.2020

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.