India Presentation September , 2010 0 Agenda 1. HeidelbergCement - PowerPoint PPT Presentation

India Presentation September , 2010 0

Agenda 1. HeidelbergCement Group : An introduction 2. HeidelbergCement India Ltd. ( HCIL ) : Company Overview 3. HCIL’s Turnaround : Key Financials 4. Growth Prospects 1

HeidelbergCement Group : An Introduction 2

HeidelbergCement : An introduction – Founded in 1873 – No 1 in aggregates – No 3 in cement – No 4 in ready-mixed concrete – 53,000 employees – Core business: • Aggregates • Cement • Downstream activities – 2,500 locations in around 40 countries: • 583 production sites for sand, gravel and hard rock • 98 cement and grinding plants • 1,336 ready-mixed concrete plants • 97 asphalt plants – Cement capacity 110 million tonnes – Aggregates reserves 18 billion tonnes 3

HeidelbergCement India Ltd. : Company Overview 4

HeidelbergCement India Ltd. ( HCIL ) : Brief History – Incorporated in Year 1958 as Mysore Cements Ltd. – First plant at Ammasandra with a capacity of 1 lakh t p.a. commissioned in 1962 – Capacity of Ammasandra unit doubled to 2 lakh t p.a. in 1966 and further to 4 lakh t p.a. in 1968. – In 1978 capacity at Ammasandra further increased to 6 lakh t p.a.. – Green field 5 lakh t p.a. plant set up at Damoh , Madhya Pradesh in 1983 . Capacity of this unit enhanced to 1 million t p.a. in 1989 . – Another green field 5 lakh t p.a. grinding unit set up at Jhansi in 1989 . – HeidelbergCement Group acquired control of Mysore Cements Ltd. in August 2006 . – Pursuant to the merger of Indorama Cement Ltd. into and with Mysore Cements Ltd w.e.f 1 st April 2008 , the total capacity of the merged entity has increased to 3.07 million t p.a. . – The name of the company has also been changed to HeidelbergCement India Ltd. 5

HCIL plant locations - India 4 6

HCIL : Share Holding Pattern as on 30 th June 2010 Others, 8% Individuals, 14% FIs , Banks , Insurance co's and MF's, 4% FIIs, 5% Promoters, 69% Equity Share Capital of the company : Rs. 226.62 Crores 7

HCIL : Revenue Split for 1H 2010 South India, 7% West India, 22% Central India, 71% Central India contributed 71% of the total revenues for the company in the 1H 2010 . 8

HCIL : Turnaround post HC take over 9

HCIL : Sales Volume Growth over the years Cement Sold 3,000 25% 2,655 2,606 2,419 2,500 % Increase over last year 23% 20% 2,123 2,103 2,065 2,000 15% '000 t 1,450 14% 1,500 10% 1,000 5% 500 2% 1% 2% - 0% FY 2005 FY 2006* FY 2007 FY 2008P FY 2008$ FY 2009 6M 2010** Total Volume sold ( Cement + Clinker + GGBS ) 3,000 30% 2,743 2,715 2,555 25% 2,500 2,272 2,200 25% 2,147 r 20% a e t y 2,000 s 15% 16% la 1,512 r t e 0 v 1,500 10% 0 o '0 e s a 5% e 2% r 1,000 c In % 0% -1% -6% 500 -5% - -10% FY 2005 FY 2006* FY 2007 FY 2008P FY 2008$ FY 2009 6M 2010** FY 2006* : Figures for FY 2006 have been annualized for proper comparison FY 2008P : As per published accounts for year 2008 : includes 9 month’s results for Raigad ( erstwhile Indorama Cement Ltd. ). FY 2008$ : Results for 2008 arrived after considering full year results of Raigad operations ( erstwhile Indorama Cement Ltd. ) for the year 6M 2010** : Unannualized Results for first 6 months ( Jan to June ) 2010. 10

HCIL : Net Sales and EBITDA growth Net Sales 10,000 45% 9,364 9,000 40% 8,253 7,613 34% 8,000 35% 39% r a e 7,000 t y 30% 5,944 s r la 5,525 6,000 28% 5,095 25% R e IN v 5,000 o M 4,130 20% e s 4,000 a re 15% c 3,000 13% In % 10% 8% 2,000 5% 1,000 - 0% FY 2005 FY 2006* FY 2007 FY 2008P FY 2008$ FY 2009 6M 2010** EBITDA 2,500 25% 22% 23% 19% 18% 2,050 17% 20% 2,000 14% 1,454 15% % of Net Sales 1,331 1,500 1,158 1,149 10% MINR 1,000 748 5% 500 0% -7% - -5% FY 2005 FY 2006* FY 2007 FY 2008P FY 2008$ FY 2009 6M 2010** -296 -500 -10% FY 2006* : Figures for FY 2006 have been annualized for proper comparison FY 2008P : As per published accounts for year 2008 : includes 9 month’s results for Raigad ( erstwhile Indorama Cement Ltd. ). FY 2008$ : Results for 2008 arrived after considering full year results of Raigad operations ( erstwhile Indorama Cement Ltd. ) for the year 6M 2010** : Unannualized Results for first 6 months ( Jan to June ) 2010. 11

HCIL : PBT and PAT growth Profit Before Taxes 2,000 25% 19% 1,747 17% 20% 19% 14% 1,500 14% 15% 983 1,172 989 1,076 1,000 6% 10% s � The company had le 5% a 500 355 t S R absorbed all accumulated IN 0% e M f N - -5% business losses and o FY 2005 FY 2006* FY 2007 FY 2008P FY 2008$ FY 2009 6M 2010** % -10% -500 unabsorbed depreciation -22% -15% during 2009 . As a result , -1,000 -892 -20% the company has provided -1,500 -25% for a higher tax expense in the year 2009. Profit After Taxes 14% 1,500 20% 16% 16% 16% 1,340 977 15% � It is pertinent to note 1,255 13% 1,000 1,316 660 10% that the company has paid et Sales 500 5% income tax for the first -2% 0% R time after a gap of nearly MIN - % of N -5% 15 years . FY 2005 FY 2006* FY 2007 FY 2008P FY 2008$ FY 2009 6M 2010** -500 -10% -131 -15% -22% -1,000 -899 -20% -1,500 -25% FY 2006* : Figures for FY 2006 have been annualized for proper comparison FY 2008P : As per published accounts for year 2008 : includes 9 month’s results for Raigad ( erstwhile Indorama Cement Ltd. ). FY 2008$ : Results for 2008 arrived after considering full year results of Raigad operations ( erstwhile Indorama Cement Ltd. ) for the year 6M 2010** : Unannualized Results for first 6 months ( Jan to June ) 2010. 12

Key initiatives that helped in improving the profitability Technical efficiencies → consumption of power and fuel, higher blending material – incorporation, less downtime failures being significant ; Sales & marketing → brand awareness, higher road despatches leading to less freight – costs and transparent channel operations ensuring enhanced motivation amongst trade partners ; HR initiatives → retaining and hiring best talent and implementing a successful MBO – programme, congenial working atmosphere leading to enhanced productivity and initiative ; Procurement → entered into long term agreements for all key raw material with reputed – vendors ; created strong relationships with key vendors through an interactive model of participation ensuring uninterrupted supplies through a fair pricing mechanism. Finance → reduced number of days of outstandings on receivables to 8.3 days and on – payables managed at 31 days. – Reduced G&A costs by exercising cost control. 13

HCIL : Improved Net worth Net worth 9,000 8,000 7,687 7,032 7,000 5,735 6,000 5,000 R 4,000 3,244 MIN 2,268 3,000 2,000 1,000 - 31-Mar-2006 31-Dec-2006 31-Dec-2007 31-Dec-2008 31-Dec-2009 30-Jun-2010 -1,000 -1,120 -2,000 14

HCIL : Improved EPS Earnings Per Share 8.00 5.92 6.09 5.85 6.00 4.93 4.00 2.89 2.00 s. per Share - FY 2005 FY 2006* FY 2007 FY 2008P FY 2008 FY 2009 6M 2010** -2.00 ( ex. -1.01 Raigad ) -4.00 R -6.00 -8.00 -10.00 -10.56 -12.00 Merger of erstwhile Indorama Cements Ltd. was EPS accretive. FY 2006* : Figures for FY 2006 have been annualized for proper comparison FY 2008P : As per published accounts for year 2008 : includes 9 month’s results for Raigad ( erstwhile Indorama Cement Ltd. ). FY 2008 : Results for 2008 for stand alone Mysore Cements Ltd. 6M 2010** : Unannualized Results for first 6 months ( Jan to June ) 2010. 15

HCIL : Cash position ( Net of borrowings ) Net Cash 6,000 4,934 5,000 4,218 4,000 3,278 3,000 1,807 2,000 653 MINR 1,000 - 31-Mar-2006 31-Dec-2006 31-Dec-2007 31-Dec-2008 31-Dec-2009 30-Jun-2010 -1,000 -2,000 -3,000 -3,022 -4,000 Cash Balance reduced from 31 st December 2009 due to payments made towards the expansion project . 16

HCIL : VRS led to improved productivity Headcount 3500 2926 3000 2398 2455 2500 2183 2179 Number 2000 1500 1000 500 0 31-Dec-2006 31-Dec-2007 31-Dec-2008 31-Dec-2009 30-Jun-2010 – Headcount as on 31 December 2008 includes 194 employees of erstwhile Indorama Cements Ltd. – Headcount as on 31 December 2009 includes 179 employees of erstwhile Indorama Cements Ltd. – Headcount as on 30 June 2010 includes 178 employees of erstwhile Indorama Cements Ltd. 17

Expansion Plans to Drive Growth 18

Damoh Jhansi Capacity Expansion : Key Points • Expansion of clinker manufacturing capacity from 1.2 MTPA to 3.1 MTPA at Narsingarh, District Damoh, Madhya Pradesh. • Expansion of cement grinding capacity from 1 MTPA to 2 MTPA at Imlai, District Damoh, Madhya Pradesh. • Expansion of cement grinding capacity from 0.8 MTPA to 2.7 MTPA at Jhansi, Uttar Pradesh. • Commercial production Mar 2012 19