Caribbean n Cement Pete ter Donke kersloo rsloot General Manager Co Comp mpan any Limi mited ted
DIS ISCL CLAIM AIMER ER • The purpose of this document is to provide analytical tools to CCCL (Caribbean Cement Company Limited) ("the Company” hereinafter) for use in their own decisions • The following document is strictly internal to the Company and shall not be copied, reproduced or circulated to third parties without permission. The contents of this document belongs exclusively to the Company and are private and confidential • To perform the various analysis contained in this document, we have estimated market volumes, prices and calculations with the Company's internal data or from public sources an contained in reports published by independent analysts as well as the information obtained through the DD proceedings • Any reference to costs, market positions, volumes and pricing of third parties have been made with the Company's estimates considering also the information obtained in the DD • This presentation contains analysis, comments, perceptions and value judgments (of the Company and third parties) that have been made exclusively by the Company based on data compiled in this presentation and analysis above has not shared any information with third parties • All users of this presentation have been informed of their obligation to strictly enforce the law and the provisions contained in the CEMEX Code of Ethics
Ag Agen enda da HI HISTOR ORY OUR R NEW BUSINES NESS PARTNE RTNER POST ME MERGER GER INTEGRATION GRATION PRO ROCES ESS OPORTUNI ORTUNITIES TIES AND RISK WHA HAT`S NEXT Q&A
Sha hare e pr price ce ev evol olution ution in the n the pa past st 20 20 ye year ars 34,8 32,5 19,0 12,9 9,5 8,9 4,3 4,1 4,0 3,5 3,5 3,0 3,1 3,0 2,9 2,4 2,4 2,0 1,7 1,0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 * As of 31 st of December each year
Re Refle lected cted over r outst tstanding anding result ults s in in the pas ast t year ars s Profit its s (loss oss) before ore taxation on (2008 8 – 2017; 7; M J J$) 1,726 1,558 1,351 572 256 -3 -241 -2,242 -2,672 -2,984 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Ag Agen enda da HI HISTOR ORY OUR R NEW BUSINES NESS PARTNE RTNER POST ME MERGER GER INTEGRATION GRATION PRO ROCES ESS OPORTUNI ORTUNITIES TIES AND RISK WHA HAT`S NEXT Q&A
CE CEMEX X has as sho hown wn strong rong gr growt owth h ov over r the e pas ast ~30 30 year ars 2016 6 Figur ures CEMEX’s sales and EBITDA evolution (US$ B, 1985-2017e) Sales Net sales es EBITDA 13.7 (US$ S$ B) B) EBI BITD TDA A 2.6 .6 (US$ S$ B) B) Cement ent Capac acity ity 93 93 (MTPY TPY) Cement ent Plan ants ts 54 54 1,5 ,555 Read ady-mix ix Plants ts Aggrega regates tes 249 249 Qua uarrie rries 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E
CE CEMEX X to top p pr priorities orities gu guide de ou our st strate ategy gy • Zero for Life HEALTH & SAFETY CUSTOMER • Reinforce our customer-focused culture CENTRICITY • Leverage knowledge across our operations GLOBAL CEMEX RETURN TO • Regain financial flexibility INVESTMENT GRADE 8
Ag Agen enda da HI HISTOR ORY OUR R NEW BUSINES NESS PARTNE RTNER POST ME MERGER GER INTEGRATION GRATION PRO ROCES ESS OPORTUNI ORTUNITIES TIES AND RISK WHA HAT`S NEXT Q&A
We a e are on tr e on trac ack to to rea each ch our target of ZERO LTI’s Lost Time Injuries Direc rect Extern rnal al -50% 3 -50% 0 5 0 4 2 2015 2016 2017 Our goal Ou al Total Recordable Injuries 0% 0% -25% 25% 2 3 2 6 5 4 2015 2016 2017 Our goal 10
“If you take care of your employees, the hey y wil ill l tak ake e ca care e of of you our r customers” JW JW Ma Marriot rriot
Fo Focus us on on fi fixed ed cos osts ts red eduction uction Fixed Cost M JA$ Fixed cost improvements: 1,178 3,859 Scheduling maintenance • through preventive 607 methodology 3,252 Implementing a contractor • management strategy 571 2,681 Redefining our structures • 2015 2016 2017 …decreasing Ja $ 1,2 B (~US$ 9,4 M) in 3 years
We h e hav ave e si sign gnifica ificantly ntly red educed uced ou our wo working ing cap apital tal Working Capital Balance in $ Ja M End of period Working Capital 2,742 Improvements 1,702 1,338 Decidedly reducing our • accounts receivables 364 327 38 Focus on inventories • 1,077 reduction and specially spare parts -1,040 Supplier financing • 2014 2015 2016 2017 program WCAP 1 -23 38 8 Days …releasing Ja $ 2,742 B (~US$ 21,4 M) in 3 years
Fi Findi nding ng th the e be best st al alte ternative rnative to to br bring ng ba back th the e as asse sets ts to to CC CCCL CL Back ckgro round Agree reemen ent st 118.3 • Asse set Price ce at March h 31 st .3 MUS$ 2017 7 – 2018 Asse set Valuat uation ion 122.9 .9 MUS Today • Excess Cash 10 – 15 M US$ • 3rd party Debt (J$) nt ment on Agreeme • Amount: Max of ~US$40 M – 60 M (eq. in J$) 38 M U US$ Write-Off ffs • Conditions: 2010 – 2013 • At competitive price Difficult ficult Times 52 MUS$ debt t conv nverted ted to • No prepayment fees tion Prefe ference nce Shares res • No collateral assets uisiti set Acquis • Intercompany Loan with TCL or CEMEX TCL lease sed d asse sets s to CCCL 2008 8 – 2010 for US$ 272 M Expansion nsion Asse • Prefe ference nce redempt ption: ion: 40.5 5 MUSD • To be paid through at least 1/3 of distributable Consid nsideri ering ng that at at the end d of the e leas ase e the assets ets will sti till be owne ned d profits for a period not longer than 10 years. by TCL, by L, then en CCCL L assets ets acqui quisiti tion n becom ome the e best val alue ue for r mone oney
Our cap Ou apac acity ity to to sa sati tisfy sfy near ar fu futur ture demand and 1.407 1.400 1.400 1.400 1.400 1.400 1.400 1.400 1.216 1.200 1.200 Spare 1.158 Capacity 1.103 1.050 1.000 953 907 Demand increase 5% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 …has spare room, of more than 2.0 Million tons to export after suppling the Jamaican Market for the next 10 years 16
In Inve vesting sting in our n our As Asse sets ts to to en ensu sure re Op Oper erational ational Co Competitive petitivenes ness M US$ - Annual al Capita tal l Investment stment Expans ansion on 19 19 Platfo atform rm 13 13 12 12 12 5 5 11 9 8 8 8 7 7 5 5 5 201 012 201 013 201 014 201 015 201 016 201 017 201 018 201 019 202 020 202 021 Over $50 MM inv invested in in our operation sin since we to took over Reiterating our co commitment to to building of a a gre reater Jam amaica
Po Posi sitively tively impa pacting cting ov over er 20 200, 0,000 000 Ja Jamaic aicans ans by by inv nvesting esting $2 $200 00 MM JMD
Ac Achieve eved d our 20 2017 17 ob obje jectives tives Result Objective HEALTH & SAFETY • Reduce LTI 75% and zero for direct employees WORKFORCE • Over 4000 hours of training DEVELOPMENT REDUCTION OF FIXED • Reduced by $ 1.2 Billion (US$ 9.4 M) COST WORKING CAPITAL • Release more than US$ 21 M though WCAP • Bring assets to CCCL ownership with the best financial LEASE structure CORPORATE SOCIAL • More than 200.000 Jamaicans impacted RESPONSABILITY
Ag Agen enda da HI HISTOR ORY OUR R NEW BUSINES NESS PARTNE RTNER POST ME MERGER GER INTEGRATION GRATION PRO ROCES ESS OPORTUNI ORTUNITIES TIES AND RISK WHA HAT`S NEXT Q&A
Jam amai aica a has as a a big opportunity ortunity in infr frastruct astructure ure
Co Concrete ete pav avements ments so solutions utions wi with th si significa ificant nt advanta ad antages s ag agai ainst st as asphal halt Superior Durability at Minimum Maintenance Significantly lower Cost Over the Full Life Cycle Base Cost Asphalt Concrete 3 100 ASPHALT Initial Cost 2 Maintenance 1 CONCRETE 0 0 10 20 30 40 0 10 20 30 YEARS YEARS Reduced Vehicle Fuel Consumption Reduced Heat Island Effect Aspha halt lt Aspha halt lt Concre ncrete Concre ncrete A 3% improvement of US Normal (left) and thermographic (right) pictures of pavements: fuel consumption would save around 46.5 MMt of Average Temperature Concrete: 33 33 ° C C (92 ° F) F) CO 2 yearly, the equivalent of a country like Denmark. Average Temperature Asphalt: 49 49 ° C C (121 21 ° F) F)
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