Cementos Argos S.A Corporate presentation 2015 New presentation of - PowerPoint PPT Presentation

Argos Innovation Center, EAFIT University, Medellin, Colombia Cementos Argos S.A Corporate presentation – 2015

New presentation of grey and white cement of 1kg in Colombia This document contains forward-looking statements and information related to Cementos Argos S.A. and its subsidiaries (together referred to as “Argos”) that are based on the knowledge of current facts, expectations and projections, circumstances and assumptions of future events. Various factors may cause Argos’ actual future results, performance or accomplishments to differ from those expressed or assumed herein. If an unexpected situation presents itself or if any of the premises or of the company’s estimations turn out to be incorrect, future results may differ significantly from the ones that are mentioned herein. The forward-looking statements are made to date and Argos does not assume DISCLAIMER DISCLAIMER any obligation to update said statements in the future as a result of new information, future events or any other factors. 2

Leading pure cement player in our core geography… 3 2014 9M15 20 M MT Installed COP 5.8 Tn * COP 4.3 Tn * Regional cement Divisions Revenues vs 2013 ∆ +17% vs 9M14 ∆ +35%** capacity USD 2,191 M USD 2,908 M vs 2013 ∆ +9% vs 9M14 ∆ -1% 18 M m 3 EBITDA 14 14 COP 1.1 Tn COP 784 Bn Installed ready-mix vs 2013 ∆ +8% vs 9M14 ∆ +41% capacity USD 534 M USD 404 M Countries vs 9M14 ∆ + 4% vs 2013 ∆ +2% Market Leadership: 9 13 ~ 390 Caribbean & Grinding Cement RMX plants Colombia USA Central America stations plants 2nd 1 out of 2 Revenues by geography 9M15 Revenues by product 9M15 largest cement leading producers #1 Other Other producer in the Caribbean & 0.5% 1% 47% Southeast Central America outright Colombia share of the seaborne 18.8% 37.8% 2nd Market trade market for Cement RMX largest RMX leader cement and clinker 53% 46% producer in USA Emerging Major: USA 42.9% 5th largest producer in Latam Cementos Argos S.A. has a presence in Venezuela through its subsidiary Corporación de Cemento Andino C.A., which is currently a party to a legal proceeding regarding the expropriation by the Venezuelan government of its plant located in the state of Trujillo, Venezuela. Any compensation to which Cementos Argos S.A. or its subsidiary Compañía de Cemento Andino C.A. may be entitled to is subject to the decisions of the relevant courts in the Bolivarian Republic of Venezuela. Cementos Argos S.A. has written-down to zero its investment in the plant. 3 * 1 trillion (Tn) = 1,000,000,000,000 - FX as of December 31st, 2014 : COP 2,392.46 / USD: as of March 31st, 2015: COP 2,576.05 / USD ** Comparative vs 1Q14 IFRS figures

…in more than 70 years of profitable and continuous growth  Successful share issuance  Acquired  Acquisition Holcim’s of Lafarge Honduras interest in a 2015 Caribbean JV  Acquired  Included in  1934: and Caricement assets from DJSI Compañía de Lafarge in Antilles Cementos USA Argos 2014  Divested non-  Merger of (currently core coal asset 8 cement Grupo Argos) companies to Vale 2013 was founded  Acquired  1944:  Merger of 3 Southern Cementos ready-mix 2012 Star del Caribe concrete Concrete  Acquired 2011 (currently companies Company cement Cementos  Acquired terminal in 2010 Argos) was assets from Puerto 2009 founded Vulcan in Rico 2008 Florida – 2007 USA  Ongoing 2006  Acquired expansion 1934 2005 assets in projects in 1944 French Colombia: Guiana Rioclaro -  New Sogamoso  Spin-off of - dispatch non core center in  Acquired assets to Cartagena  Commenced operations RMCC in US  Ongoing Grupo Argos at Cartagena plant plant in  Duty free zone Harleyville  Acquired Colombia is created in  Expanded operations in expansion Cementos Cartagena Suriname Andino Source: Cementos Argos 4

Investment drivers for Cementos Argos 1 2 3 4 Ability to seize Experienced Clear Financial the unique Competitive management with Corporate flexibility to advantages a proven track strategy growth grow record opportunities 5

Clear Corporate strategy… 1 1 4 Provide our Selectively customers with pursue attractive the best value opportunities 3 proposition Improve operating efficiencies and Continue to focus reduce on our core production costs business and consolidate market leadership in our existing 2 markets Continue 5 enhancing Maintain emphasis distribution & on innovation, our logistics network people & sustainable development 6

…focused on the advantages of three 1 contiguous regions Logistics synergies Balance given our geographic between area, port developed & infrastructure and emerging maritime know-how economies Countries with Economies with different consumption per capita growth market potential cycles. 7

Competitive Advantages: Vertically integrated 2 operations optimize flexibility, stability and profitability Limestone Colombia Regional Division Energy Caribbean & Central America Regional Division Clinker Vertical integration and interconnectivity Cement boosted by our geographic footprint Aggregates RMC USA Transport & Regional logistics Division 8

Competitive advantages: Strategically located assets and a 2 broad logistics and distribution network enhances flexibility Strategically located assets Well established distribution network 24 USA plants provide additional flexibility 13  Efficient cement plants with access to transport links, Ports / Cement Plants Low cost cement Terminals both rail and sea production &  Potential to supply our Caribbean and Central America Export Potential ~390 ~2.800 markets via exports from the port in Mobile, Alabama Mixers RMX Plants Roberta Harleyville 9 ~ 70 Newberry Dispatch facilities & Grinding warehouses Stations Source: Cementos Argos Currently supplied Cartagena from Cartagena Potential supply Enhanced flexibility and coverage capabilities to Cartagena plant enhances regional linkages supply local and  Efficient dry line, with production capacity of 2.3 mm MTPA of cement regional markets State of the art  Efficient access to low cost limestone reserves & direct facility access to a dedicated port  Operates in a zone with favourable tax rates and tariff exemptions secured to 2028 9

Competitive advantages: Our value proposition, tailor-made 2 business model for each customer segment Our cement can be more than a commodity One High-value Differential Technical Technological Commercial brand service assistance platform assistance For retail customers For industrial customers Value propositions offered include… Value propositions offered include…  Tailor-made concrete solutions based on a unique  Promote our customers’ business growth understanding of each project  Develop initiatives to create demand  Access to technology and equipment (on-site plants, placement equipment)  Proximity and ease of access to our products  Specialized technical assistance : Durability, concrete technologies  Recognition and use of our brand  Lead time optimization With proven results: Satisfaction and loyalty levels above industry Increasing market share in infrastructure averages 10

3 Experienced management with proven track record Board of Directors José Alberto Vélez + 20 7 Members Chairman 5 Independent* years of average experience in the Jorge Mario Velásquez Senior industry CEO management Since 1983 at Argos Colombia Caribbean & CA Legal and Talent and USA Regional Finance and Regional Regional Institutional Sustainability Organizational Technical Innovation Division Shared Services Division Division Affairs Architecture Carlos Yusty Tomás Restrepo Mauricio Ossa Eric Flesch Juan Luis María Isabel Jorge I Acevedo Victor Lizarralde Camilo Restrepo Since 2007 at Argos Since 1996 at Argos Since 1979 at Argos Echeverry Since 2005 at Argos Since 1982 at Argos Since 2005 at Argos Since 1996 at Argos Múnera Since 2005 at Argos Since 1997 at Argos With a proven track record 18% Focus & Completed organic growth Acquisitions reorganization CAGR Revenues Examples: Examples: Examples: + USD 3.5 Bn  Cartagena expansion: USD 560 M 2010-2014  Wetvan O. Puerto R: USD 18M +  2005: Merge of 8 cement Funded & invested +  Colombia power plants: USD 68 M  Lafarge Guayana F: USD 69 M companies in Colombia during the last 10  Panama grinding expansion: USD 65 M 18%  Activos Vulcan FL: USD 720 M  2012: Spin-off of non core  Cartagena dispatch center: USD 35 M years  Lafarge Honduras: USD 305 M assets  White cement conversion: USD 23 M  Lafarge EEUU: USD 760 M  Divestitures of non core  Oil well cement development: USD 1 M CAGR EBITDA  Holcim Caribe: USD 157 M assets 2010-2014  RMCC EEUU: USD 243 M  Cemento Andino: USD 192 M  SSC EEUU: USD 245 M Source: Cementos Argos * Two out of five independent members are certified following regulation related to BoD in Colombia 11