Holcim in Latin America

Transcription

Strength. Performance. Passion.
Andreas Leu, Member of the Executive Committee
© 2012 Holcim Ltd
Agenda
Latin America from a Macroeconomic Perspective
- A Rich History
- A Promising Future
Concluding Remarks
Investor and Analyst Day 2012
3
16
16
31
40
© 2012 Holcim Ltd
2
~10‘700 km
Latin America, a large region…
Latin America covers an
area of around 21 Mio km2
Mexico
Cuba
Guatemala
El Salvador
Puerto Rico
Jamaica Haiti/ Dom.Rep.
Honduras
Nicaragua
Costa Rica
Venezuela
Guayanas
Panama
Colombia
Ecuador
Brazil
Brazil accounts for roughly
40% of Latin America in
terms of size and is nearly
12% larger than Australia
Peru
Bolivia
Paraguay
Chile
Uruguay
Argentina
Argentina accounts for
roughly 13% of Latin America
in terms of size and is roughly
16% smaller than India
~8‘000 km
© 2012 Holcim Ltd
3
…with a young and growing population…
Mio people
700
600
114.8 Mio people
500
Mexico D.F. (20.1 Mio)
327
384
268
267
2011
2020E
400
300
Caracas (5.0 Mio)
46.9 Mio people
200
Bogota (8.5 Mio)
100
0
29.4 Mio people
Lima (9.0 Mio)
196.7 Mio people
< 25 years old
> 25 years old
Belo Horizonte (5.4 Mio)
Rio de Janeiro (11.9 Mio)
Sao Paulo (19.7 Mio)
17.3 Mio people
Santiago (6.0 Mio)
Buenos Aires (13.4 Mio)
• An increasing number of people
is entering the middle class
• The continued strong youth base
offers future growth
40.8 Mio people
Source: : BMI Country Business Forecast 3Q12, United Nations World Urbanization Prospects report (data: 2011)
© 2012 Holcim Ltd
4
…and income power development potential…
USD bn
12000
10’059 USD p.c.
17’415
USD
18000
10000
15000
8000
12000
9’638
5’108 USD p.c.
6000
9000
4000
6000
5’738
11’330
2000
12’577 USD p.c.
4’080 USD p.c.
3000
0
0
2011
GDP nominal
2020E
GDP per capita (rhs)
10’771 USD p.c.
10’076 USD p.c.
• CAGR GDP nominal:
7.9%
• CAGR GDP per capita: 6.8%
Source: : BMI Country Business Forecast 3Q12 (data: 2011)
© 2012 Holcim Ltd
5
…with many similarities…
• 3 regional commercial blocks
• 2 main languages
• 1 main religion
• 91% literacy
• 79% urbanization
Trade areas
CAN (Comunidad Andina)
Mercosur (Mercado Común del
Sur)
SICA (Sistema de la Integración
Centro Americana
Main Free Trade Agreements
APEC (Asia-Pacific Economic
Cooperation
NAFTA (North America
Free Trade Agreement)
Source: WDI (2010/11 data)
© 2012 Holcim Ltd
6
… but more diverse than often perceived abroad
Rich ethnic (> 500 indigenous languages) & cultural diversity
Source: Wikipedia, Google images
© 2012 Holcim Ltd
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…but more diverse than often perceived abroad
Weather, biodiversity & natural resources
© 2012 Holcim Ltd
8
…but more diverse than often perceived abroad
Political orientation, social & economic
stability/development, security, trade partners, etc.
© 2012 Holcim Ltd
9
However, a common need for infrastructure and housing,
Roughly USD 300 bn housing deficit (~ 18.5 million
units) and more than USD 160 bn announced
infrastructure projects to be executed until 2020
Examples of announced infrastructure projects
Country
Project
8
Panama
Canal expansion
12
Peru/Brazil
HW Peru-Brazil
13
Peru
Port Tacna
14
Brazil
Port Açu
15
Brazil
Dam Monte Belo
20
Paraguay
Aluminium plant
25
Chile
Casela
26
Chile
Dam Castilla
x
Projects < USD 3.5 bn
x
Projects > USD 3.5 bn
Source: CEPAL & internal estimates.
© 2012 Holcim Ltd
10
which results in sustainable cement demand growth,
250
3.7% CAGR
3.9% CAGR
4.0% CAGR
25
200
13
12
17
13
Mio tonnes
Bag ratio
150
100
11
7
5
6
10
--- 73-90%
19
9
8
9
11
--- 50-90%
--- 85%
--- 74%
--- 62%
33
--- 84%
46
30
50
95
21
60
---69%
39
26
0
1990
Brazil
Brasil
2000
Mexico
Argentina
2010
Colombia
Peru
FC 2020
Central America
Others
Latin America generates roughly 8% of the global GDP while consuming some 5% of global cement production
Source: Global Cement Review & internal estimates
© 2012 Holcim Ltd
11
today led by Brazil and Mexico, …
~ 34 Mio t
~ 10 Mio t
~ 9 Mio t
~ 65 Mio t
~ 13 Mio t
Bubbles size according to 2011 national cement demand estimates
© 2012 Holcim Ltd
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which together with the rest of Latin America will drive
future cement demand
~ 48 Mio t
~ 17 Mio t
~ 12 Mio t
~ 95 Mio t
~ 13 Mio t
© 2012 Holcim Ltd
13
Agenda
- A Rich History
Concluding Remarks
3
16
16
31
40
© 2012 Holcim Ltd
14
Agenda
- A Rich History
Concluding Remarks
3
16
16
31
40
© 2012 Holcim Ltd
15
Holcim has build its current leading strategic footprint over
the last 60 years
• 1953 Brazil
• 1964 Mexico
• 1969 Colombia
• 1970 Costa Rica
• 1975 Chile
• 1976 Ecuador
• 1993 Argentina
• 1997 Nicaragua
• 1998 El Salvador
Indicates Holcim country presence
© 2012 Holcim Ltd
16
Investing in its people
• Training at all levels of the company
•
•
More than 90% of employees enrolled in formal training
355’476 hours spent on training in 2011
• Implementation of insurance and pension schemes
LatAm Maintenance course
• Short and long term transfers
•
•
personal and professional in-house development
region and Group performance improvement through
knowledge sharing and spread of best practice
LatAm CAPEX project management
course
Sustainably maintaining Holcim’s image as a preferred
employer who rarely loses talent to the competition or other
industries.
40th Global CEM manufacturing
conference
© 2012 Holcim Ltd
17
Developing strong professional and local teams
• “I am grateful to Holcim because they trusted me and gave me the opportunities, which
allowed me to grow personally and professionally thereby supporting me all the way ”.
Plant Manager of Holcim Argentina.
• “During the 19 years of my professional journey , The Group has offered me many
development opportunities … with special emphasis in sustainable management and
delivering on our promises to all our stakeholders”.
Commercial Director of Holcim Argentina.
• “Besides the enriching personal and professional experience within the Group, the
opportunities offered by Holcim rewarded me with a number of external acknowledgments”.
General Director of Holcim Nicaragua, “Entrepreneur Woman of the Year for the Construction Industry” and “Extraordinary Services Provider to
the Central America Construction Industry”, awarded in 2011.
© 2012 Holcim Ltd
18
Developing strong professionals and local teams
•
“After 17 years of journey, interacting with colleagues, customers, communities and
institutions, I got a broad view of our business and developed skills that today allow me to
handle different challenges. I am still convinced that Holcim is the company I want to
continue to be part of”.
Plant Manager of Holcim Costa Rica
• “Over the last 9 years I lived many enriching experiences, developing personal and
professionally but also accompanying Holcim Colombia on its way to a business leader
and recognized role model in our industry”.
RMX Plant Manager of Holcim Colombia
© 2012 Holcim Ltd
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Adapting its organization according to evolving needs
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012 …
IT (+ 1 country)
Regional HR Director
IT (+ 3 countries)
IT SSC (region)
Regional CSR Coordinator
AGG & RMX Regional Management Support Organization (RMSO)
IT (+ 2 countries)
CEM RMSO
Regional Procurement Organization (Americas)
IT Shared Service Center (SCC)
( 3 countries)
Head Commercial Projects
Head Financial Projects
© 2012 Holcim Ltd
20
Sustainably developing through fit for purpose solutions
Holcim has proven its ability to adapt to local conditions,
• Becoming a long term business partner,
Retail entrepreneurs
Self-builders & masons
Affordable housing developers
Suppliers development
(business model seminar)
© 2012 Holcim Ltd
21
• …
• with service excellence & innovation,
Los Bronces - Chile
Estadio Maracanã - Brazil
Bogota Airport - Colombia
© 2012 Holcim Ltd
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• …
• while allocating funds to capture growth opportunities,
Hermosillo
Nobsa
Barroso
Guayaquil
© 2012 Holcim Ltd
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• …
• continuously working on efficiency improvements,
Holcim Cement performance
radar
Bogiflex – Argentina /
Ecuador
Cement drive (mill) – Ecuador /
HGRS
Alternative Fuels & Raw materials
businesses in 8 countries
© 2012 Holcim Ltd
24
• …
• and establishing itself as a good neighbor in the community
‘’Construyendo Juntos’ – Costa Rica
‘Aférrate a tu línea de vida’ - Colombia
‘Educación para todos’
- Ecuador
© 2012 Holcim Ltd
25
• Becoming a long term business partner,
• with service excellence & innovation,
• while allocating funds to capture growth opportunities,
• continuously working on efficiency improvements,
• and establishing itself as a good neighbor in the community
Over the last 60 years Holcim has laid the foundations for a
sustainable business in Latin America
© 2012 Holcim Ltd
26
Consolidating a sustainable, profitable business
• Asia heads today Holcim growth but Latin
America continues generating cash for the
Group
• Some 2011 figures:
•
Lost Time Injury Frequency Rate: 2.1
•
Sales volume:
24.2 Mio t CEM (17% of Holcim Group)
14.5 Mio t AGG (8% of Holcim Group)
11.0 Mio m3 RMX (23% of Holcim Group)
•
Net Sales: CHF 3’310 Mio (16% of Holcim Group)
•
Op. EBITDA: CHF 888 Mio (22% of Holcim Group)
•
EBITDA Margin: 26.8%
20 cement plants
7 grinding stations
25 AGG quarries
220 RMX plants
© 2012 Holcim Ltd
27
based on a sound strategy
12.2 mtpa
Grow with the market
where already present
3.5 mtpa
2.1 mtpa
Exploring entry into new
markets (countries or
regions), focusing on
acquisitions, JVs and/or
mergers
5.5 mtpa
5.3 mtpa
4.6 mtpa
Very selective expansion
of Aggregates footprint
2.3 mtpa
Holcim capacity > 5 years foreseen sales
Upcoming Holcim capacity limits
Footprint expansion potential
x mtpa Million tons Holcim cement installed capacity
© 2012 Holcim Ltd
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driven by 12’867 skilled and engaged employees
12’867 Holcim employees
• 27 nationalities
• 45 international transfers within the region
and 17 to/from the Group
• 85% of senior, top and middle
management positions covered from
internal succession pool
• majority of local management teams led by
CEOs who started their professional
career in the region
• 10% non managerial level female
employees. First female Country Head of
the Group
• 1% disabled employees
Above average regional employee
engagement score of 83%1
2011 data
1) Results of the Hewitt engagement and satisfaction survey performed in all Holcim companies in Latin America (90% response rate).
Aon Hewitt's research indicates that organizations with Engagement scores above 65% consistently deliver better business results, estimated as Total Shareholder Return
22% above average (TSR = sum of total shareholder’s gain (share price growth + dividends paid) divided by previous year’s share price).
© 2012 Holcim Ltd
29
Agenda
- A Rich History
Concluding Remarks
3
16
16
31
40
© 2012 Holcim Ltd
30
Holcim Leadership journey in Latin America continues some specific on-going examples
•
Customer
Excellence
Strengthen skills of energy champions and Alternative Fuels (AF) teams
Energy review per country (fuel mix optimization, contracts renegotiation, Waste Heat
Energy
•
•
Logistics
•
•
•
Process/model regional standardization, incl. e-logistics where possible
Roll-out RMX distribution optimization model
Streamline product flows (e.g. cement brownfield in Brazil, clinker supply in Costa Rica)
Fixed
Costs
•
•
•
•
RMX right size & AGG strategy review (Mexico & Brazil in particular)
Shared Transactional Shared Service Center
Local Cost Reduction Champions (cross functional initiatives)
Procurement
Cost
Leadership
•
•
Regional roll out of margin management models, incl. sales force incentive
systems & training
Review of commercial areas size and structure, incl. new Value added
solutions (VAS) and/or large projects organization in selected markets
Finalize & leverage integrated retail market solution strategy roll-out
Foster high performance innovation (e.g. microinjet in Brazil)
•
•
Alternative mineral components, mainly in Brazil
Regional key strategic sourcing / expanded regional pooling categories (TCO
mindset)
Process simplification, automation & regional standardization for P2P
processes
recovery & AF installations, strengthen renewable energy partnerships)
•
© 2012 Holcim Ltd
31
Customer Excellence - RMX margin improvement based on
business intelligence, e.g. Chile
Our target
• Reach better margins at all RMX sites
What
we are
doing
• Increased transparency on current margins:
•
critical RMX KPIs1 for each job site identified
•
new margin calculation and monitoring tools & processes
enforced
•
sales force incentive systems reviewed
•
monthly monitoring of job deviation vs. quotation
• Re-negotiation or termination of jobs contracted with negative
integrated margins
Results
• Santiago region: additional CHF 5.5 Mio Operating Profit in 10
months
• Rest of the region (yet to be quantified):
•
better margins per product and customer
•
optimized/strategically repositioned RMX networks
1) KPI: Key performance Indicator
© 2012 Holcim Ltd
32
Customer Excellence – Concrete focused, Value Added
Solutions organizations, e.g. Mexico
Our target
• Partner with urban & large construction developers, competing with
differentiated solutions at a TLC1 level (vs. just construction costs / mere price)
What
we are
doing
• Balance span of control within commercial organization
• New Specific Value Added concrete Solutions (VAS) department:
•
cement and RMX technical and commercial competencies
•
close collaboration with customers on defining best TLC1
solution
Example of VAS project: flooring solution for a large scale retailer
improving margin while creating value for customer
Results
• Lean commercial organization providing integrated solutions and
creating more value for all stakeholders
• Increase share of projects with integrated commercial margin
>20%
1) TLC: Total Lifecycle Cost
© 2012 Holcim Ltd
33
Customer Excellence - Integrated retail market solution,
e.g. Argentina
Our target
• Provide integrated solutions to retailers and home builders
(~60% of construction)
• Franchisees network with additional value for all stakeholders
•
•
•
•
•
•
Results
One-stop-shopping for all building
needs
Guaranteed quality products
Credit (USD 10 Mio loans in 2011)
Technical support (80% of customers
in 2011)
Transparent commercial conditions
Neat & friendly environment
Multiregional coverage
•
•
Retailer value
What
we are
doing
End user value
•
•
•
•
Premium brands
Branding (store design) & advertising
Training & improved professionalism
(2’620 people trained in 2011; NPS
customer loyalty system)
Higher sales (shop sales typically
increase by 15-25%)
Sales & purchase clubs (20%
discount on trading goods and
assured supply)
• Holcim
value in Argentina: 88% customer satisfaction, 90% of
Holcim value
retailers are promoters, NPV ~ USD 20 Mio
• Similar results achieved/expected in rest of the region (different
development stages)
© 2012 Holcim Ltd
34
Customer Excellence – integrated retail market solutions
•
•
•
•
•
•
Holcim Apasco
Holcim Ecuador
Holcim El Salvador
Holcim Costa Rica
Holcim Nicaragua
Holcim Argentina
(Mi Casa / Obra)
(Disensa)
(ConstruFacil)
(ConstruRed)
(ConstruMas)
(Red Minetti)
•
•
•
•
•
ACC and Ambuja
Holcim Indonesia
Holcim Morroco
Holcim Serbia
Holcim Vietnam
(Solusi Rumah)
(Batipro)
(Partner Plus)
(Dong Hanh)
Holcim leads in Integrated Retail Market Solutions and
Brand Equity, working with a network of over 75’000
branded retail partners
© 2012 Holcim Ltd
35
Customer Excellence – High performance cement
innovation, e.g. Microinjet in Brazil
Our target
• Consolidate position as preferred supplier of high performance
innovative solutions
• Dedicated team on R&D of new solutions, replying to specific
customer needs &/or identified market trends, e.g. microinjet:
What
we are
doing
•
Solution based on microcement & on-site services (injection & quality
control) which no other cement producer provides in Brazil
•
Main value added: avoids demolition & reduces job execution time
•
Target markets: geotechnical injections (tunnels, dams) and
recovering of concrete structures
•
Results
2013 investment to increase production (specially tailor-made offers)
• Maintain construction recovery share and capture new
opportunities of upcoming large projects (FIFA World Cup 2014,
Olympic Games 2016)
• USD 32 Mio NPV and additional ~ USD 5 Mio annual Op. Profit
© 2012 Holcim Ltd
36
Cost Leadership - Regional key strategic sourcing and P2P
process standardization
Our target
• Leverage & commit spend and sourcing at the most appropriate
layer
• Simplify and standardize Procurement to Pay processes
What
we are
doing
• Strengthen a Total Cost of Ownership spend mindset
• Expand list of key procure categories to be pooled and procured at
a regional level
• Determine and consolidate regional procure strategy, structure,
processes and resources
• Further transactions automation Organizational governance model
review
Results
• Regional annual savings of ~ USD 20 Mio resulting from suppliers’
service improvement and inventory reductions, thus:
•
reduction of business risks, maintenance & operational cost
•
better cash conversion cycle
© 2012 Holcim Ltd
37
Cost Leadership - Regional logistic process / model
standardization
Our target
What
we are
doing
Results
• Further automatize and regionally standardize logistics processes
and business models, leveraging on existing Group best practices
•
•
•
•
•
Self-assessment and gap analysis per country
Standardization and upgrade of processes and tools planned
New key performance indicators and reports under discussion
Transport strategy and fee negotiation under review
Join developments with commercial (e.g. e-commerce upgrade),
procurement (e.g. include transport companies in SRM1 tool) and
cement / RMX operations (e.g. pallet management) on-going
• Improved working context with internal and external stakeholders
• Higher customer service (specially, delivery reliability) at lower
costs
• Regional logistic annual savings of ~ CHF 22 Mio
1) SRM: Supply Relationship Management
© 2012 Holcim Ltd
38
Agenda
- A Rich History
Concluding Remarks
3
16
16
31
40
© 2012 Holcim Ltd
39
Concluding Remarks
• Latin America benefits from many growth drivers, such as a growing population,
vast mineral and agricultural resources, a growing middle class, democratic
governments and sounder macro-economic fundamentals
• Infrastructure and housing construction will sustainably drive Latin America’s
demand building materials
• Asia heads today Holcim growth but Latin America continues generating cash for
the Group, while offering opportunities for expansion and diversification
• Holcim has the broadest geographical footprint in Latin America, is ideally placed to
grow and has skilled and passionate employees, determined to continue to
significantly contribute to the Group
People, Footprint & Growth:
Latin America’s foundations for further contribution to the
Holcim Leadership Journey
© 2012 Holcim Ltd
40
Disclaimer
Cautionary statement regarding forward-looking statements
This presentation may contain certain forward-looking statements relating to
the Group’s future business, development and economic performance.
Such statements may be subject to a number of risks, uncertainties and other
important factors, such as but not limited to (1) competitive pressures; (2)
legislative and regulatory developments; (3) global, macroeconomic and
political trends; (4) fluctuations in currency exchange rates and general
financial market conditions; (5) delay or inability in obtaining approvals from
authorities; (6) technical developments; (7) litigation; (8) adverse publicity and
news coverage, which could cause actual development and results to differ
materially from the statements made in this presentation. Holcim assumes no
obligation to update or alter forward-looking statements whether as a result of
new information, future events or otherwise.
© 2012 Holcim Ltd
41

Holcim in Latin America

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