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LafargeHolcim 2016 Capital Markets Day

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World Cement,

Eric Olsen, CEO of LafargeHolcim said: “LafargeHolcim has hit its stride. The Group is on track and the momentum of earnings and cash flow growth is accelerating. We re-affirm our commitment to a solid investment grade rating. Our potential to grow, benefiting from our unique portfolio, operational leverage, ability to differentiate our offer, and optimization of our cost base, underpins our 2018 targets. The result for shareholders is that, within our strict capital allocation discipline, we will deliver significant cash returns including the first tangible measures announced today.”

LafargeHolcim 2016 Capital Markets Day

Medium term Group targets adjusted and upgraded

2018 targets have been adjusted to accurately reflect the adjusted scope of the Group and to take into account the evolution of exchange rates. LafargeHolcim have identified and initiated CHF 200 million of additional cost savings, which enables the company to upgrade the 2018 adjusted operating EBITDA target to CHF 7 billion, taking into account these adjustments. This translates into a 2018 run rate operating Free Cash Flow range of CHF 2.8 – 3.3 billion, or CHF 5 per share. The company now expect a cumulated operating Free Cash Flow of CHF 7.5 billion over 2016 – 18.

LafargeHolcim maintain commitment to a 2018 run rate capex of less than CHF 2 billion and ROIC improvement of 300bps in 2018 vs. 2015 level.

Cash returns to shareholders within strict capital allocation discipline

Consistent with LafargeHolcim’s strict capital allocation discipline and commensurate with maintaining a solid investment grade credit rating, the company will sustain an attractive dividend policy.

Therefore, LafargeHolcim will propose a dividend per share of CHF 2, up from CHF 1.50 for the previous year, to shareholders at the May 2017 Annual General Meeting. The company expect to grow the dividend from a minimum of CHF 2 per share targeting an average payout ratio of 50% through the cycle.

Reflecting LafargeHolcim’s confidence in the strength of its portfolio and its ability to generate cash, the company also intend to buy back up to CHF 1 billion of our shares over the next two years.

As the improvement of LafargeHolcim’s operating performance crystallises, the company intend to return excess cash to shareholders, notably through special dividends.

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