Page 1MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH

Oil sinks below 50 US$/Barrel, Holcim – Lafarge Merger

What will be the future of Alternative Fuels ?

9th Global Cemfuels Conference & Exhibition on

alternative fuels for cement and lime

16th – 17th of February 2015, Dubai

Page 2MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

I. Lafarge Holcim merger - an update

II. Oil price collapse - influence on alternative fuels

III. Summary and outlook

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Presentation contents

Page 3MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Lafarge Holcim merger

• The merger aims to create a group with €27b pro-forma

revenue present in ninety countries on all continents

• The companies target operational EBITDA synergies of

ca. €1b plus financial savings and capex benefits

• They anticipate that to satisfy regulatory requirements

they will have to make divestments equivalent to around

15% of revenue (ca. €5b) and 10-15% of EBITDA

• The companies expect two thirds of the divestments (by

revenue) to come from developed markets, the majority

of which in Europe

• Innovation on a larger scale is a key driver behind the

merger, to create new solutions to tackle the challenges

of sustainable construction

• The merger, if successfully executed as planned, will

create a global company with market share outside

China of ca. 14%

• It will put Lafarge Holcim into the league with two

Chinese cement giants

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Largest global cement producers

Company Country

Cement

volume

2013 (mt)

1CNBM China 285

2LafargeHolcim* Switzerland/ France 234

3Anhui Conch China 228

Holcim Switzerland 139

LafargeHolcim France 137

4HeidelbergCement Germany 91

5Sinoma China 89

6CR Cememt China 75

7Cemex Mexico 65

8Shanshui China 63

9Jidong China 56

10Italcementi Italy 43

11Ultratech India 41

12Votorantim Brazil 38

13Buzzi Unicem Italy 27

14Semen Indonesia Indonesia 26

15Eurocement Russia 22

*assuming disposal of 15% of pre-merger total

Page 4MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

| Content | Lafarge Holcim merger | Influence of fossil fuel prices on AF | Summary

Lafarge Holcim - before merger

Sources for data of specific energy consumption, clinker factor, cement production capacities:

Annual Report Registration Document Lafarge 2013

Sustainability Report Holcim 2013

Holcim at a Glance

Company / Group CountryCapacity

(Mt/yr)

Substitution Rate

2012

(%)

Substitution Rate

2013

(%)

Cemex Mexico 96 24.7 28.4

Heidelberg Cement Germany 118 21.4 21.7

Buzzi Italy 45 17.5 19.1

Votorantim* Brazil 57 6.3 14.8

Italcementi Italy 74 5.5 9.4

Lafarge France 159 13 17.2

Holcim Switzerland 142 12.5 12.8

CRH before Lafarge /

Holcim aq.Ireland 12 20.1 21.2*

Page 5MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Lafarge Holcim - after merger

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Clinker capacities and alternative fuels:

Cement Group

Clinker production

capacity

Substitution rate

2013

Spec. energy

consumption 2013

Equivalent to

alternative fuel at

4000 kcal/kg

Mt/yr % kcal/kg clinker Mio. Mt/yr

Lafarge 159 17.2 874 6

Holcim 144 13.7 828 4.1

After Lafarge/ Holcim

merger303 15.6 852 10.1

Page 6MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Lafarge Holcim merger - sales

Group Plant

Clinker pr.

MT/yr

in 2013

Holcim Brazil Cantagalo 1.19

Holcim Brazil Pedro Leopoldo 1.91

Holcim Brazil Barroso 1.2

Holcim Canada Mississauga 2.9

Holcim Canada Joliette 1.34

Holcim France Rochefort Plant 0.7

Holcim France Lumbers Plant 0.75

Holcim France Heming Plant 1

Holcim Hungary Hejocsaba Plant Miskolc 0.62

Holcim Serbia Novi Popovac 1.4

Holcim Slovakia Rohoznik Plant 1.5

Holcim Slovakia Turna Plant 1.5

Holcim US Trident 0.43

total: 13 16.44

Group Plant

Clinker pr.

MT/yr

in 2013

Lafarge Germany Wössingen 0.8

Lafarge Germany Karsdorf 2.3

Lafarge Republic Inc

PhilippinesNorzagaray Plant 1.7

Lafarge Republic Inc

PhilippinesBulacan Plant 0.45

Lafarge Republic Inc

PhilippinesBatangas Plant 1.5

Lafarge Republic Inc

PhilippinesTeresa plant 1.87

Lafarge Romania Hoghiz Plant 1

Lafarge Romania Medgidia Plant 2.1

Lafarge Tarmac UK Tunstead Cement Plant 0.8

Lafarge Tarmac UK Aberthaw Works 0.55

Lafarge Tarmac UK Cookstown Works 0.5

Lafarge Tarmac UK Dunbar Works 1

total: 12 14.57

Page 7MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Lafarge Holcim - after merger

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Sources for data of specific energy consumption, clinker factor, cement production capacities:

Annual Report Registration Document Lafarge 2013

Sustainability Report Holcim 2013

Holcim at a Glance

Company/ Group CountryCapacity

(Mt/yr)

Substitution

Rate 2013

(%)

Substitution

Rate 2015

(%)

Cemex Mexico 96 28.4 ?

Heidelberg Cement Germany 118 21.7 ?

Buzzi Italy 45 19.1 ?

Votorantim* Brazil 57 14.8 ?

Italcementi Italy 74 9.4 ?

Holcim / Lafarge Switzerland / France 271.99 12.8 / 17.2 < 10% est.

CRH new capacity Ireland 43.01 > 30%

Page 8MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Oil price drop - influence on AF?

0

20

40

60

80

100

120

2010 2011 2012 2013 2014 2015

Ye

arl

yB

ask

et

Pri

ce in

$

Year

Oil Price Development

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Page 9MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Oil price reduction - why?

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Fracking USA

Page 10MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Oil price reduction - why?

Oil production higher than energy demand

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Country 1970 1980 1990 2000 2007 2008 2009 2010 2011 2012

part in

%

2012

accumulated

in % 2012

1. Saudi- Arabia 192.2 509.8 342.6 455 492.4 513.5 462.7 466.6 525.8 547 13.3 13.3

2. Russia 307 546.7 515.9 323.3 491.3 488.5 494.2 505.1 511.4 526.2 12.8 26.1

3. USA 533.5 480.2 416.6 352.6 309.8 304.9 328.6 339.9 352.3 394.9 9.6 35.6

4. China 30.7 106 138.3 162.6 186.3 190.4 189.5 203 203.6 207.5 5 40.7

5. Canada 70.1 83.3 92.6 126.9 158.6 155.9 156.1 164.4 172.6 182.6 4.4 45.1

6. Iran 191.6 74.2 162.8 189.4 209.6 213 204 207.1 205.8 174.9 4.2 49.4

7. VAE 36.9 84.2 107.5 123.1 140.7 142.9 126.3 131.4 150.1 154.1 3.7 53.1

Page 11MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Oil price reduction - why?

Oil production higher than energy demand

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Source: www.eia.gov

Page 12MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015 Page 12

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Influence of oil prices

Source: www.cmegroup.com

Page 13MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Influence of oil prices - on coal prices

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Countries

Clinker production

capacity

Substitution rate

2013

Spec. energy

consumption 2013

Equivalent to

alternative fuel at

4000 kcal/kg

Mio Mt/yr % kcal/kg clinker Mio Mt/yr

China 2400 0.4 920 2.2

ROW 1719 1.5 850 5.5

World 4119 1.9 891 17.4

Page 14MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Influence of oil prices - on AF substitution

1.475.105.0321.464.510.674

1.363.585.476

1.252.065.919

1.100.000.000

1.150.000.000

1.200.000.000

1.250.000.000

1.300.000.000

1.350.000.000

1.400.000.000

1.450.000.000

1.500.000.000

Baseline: Coal 1,9 20 40

CO

2[t

/a]

Reduction of fossil CO2 emissions

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Page 15MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Influence of oil prices - on AF substitution

Simulation Tool

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Kiln data

Total clinker production World

[t/a] 4,119,000,000

Specific heat consumption [kcal/kg clinker] 891

Heat consumption [Gcal/a] 3,670,029,000

Thermal Substitution

Baseline Substitution scenario

coal RDF Remaining coal

Net calorific value [kcal/kg] 6,200 4,000 6,200

Dosage fuels [t/a] 591,940,161 17,432,638 580,693,298

Heat portions [Gcal/a] 3,670,029,000 69,730,551 3,600,298,449

Substitution rate [%] 1.9%

Costs [US$/t] 65 35 65

[US$/a] 38,476,110,484 610,142,321 37,745,064,385

Savings [US$/a] 120,903,778

Page 16MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Influence of oil prices - on AF substitution

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Reduction of Biomass substitution after „crash“ in 2008:

Page 17MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Influence of oil prices - on AF substitution

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Significant AF downturn in 2008:

Page 18MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Influence of oil prices - on AF substitution

Significant AF downturn in 2008:

Page 19MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Influence

Source: Deutsche Bank, Thomson Reuters

Page 20MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Influence??????

Major 0il Exporters' Fiscal Constraints

All figures USD

CountryApproximate

break- even price

Percent of

government

revenue from oil

Current reserve in

billions

Bahrain $137 87% $5.3

Iran $137 44% $100

Kazakhstan $66 54% $27.7

Kuwait $71 79% $32.2

Libya $148 99% $100

Nigeria $128 64% $39.5

Oman $105 87% $65.0

Qatar $72 33% $43.5

Russia $102 30% $443.8

Saudi Arabia $95 89% $740.3

UAE $75 76% $68.2

Venezuela $140 45% $20.6

Source: www.stratfor.com

Page 21MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Fossil Fuels versus Alternative Fuels Scenario

Alternative fuel shares presented exclude the additional energy requirement for CCS. The CO2 storage figures presented here

are based on capture potentials. Additional analysis is needed to verify the storage potential in different regions.

Source: CEMENT ROADMAP EIA/ WBCSD

Canada and United States BLUE low demand BLUE high demand India BLUE low demand BLUE high demand

Technologies 2015 2030 2050 2015 2030 2050 Technologies 2015 2030 2050 2015 2030 2050

Energy use (Mtoe) 12.4 11.4 12.3 12.2 11.3 14.2 Energy use (Mtoe) 19.4 29.9 47.4 19.6 33.6 60.1

Share of alternative fuel use 8% 21% 37% 9% 22% 38% Share of alternative fuel use 13% 23% 33% 15% 27% 35%

Clinker to cement ratio 0.90 0.85 0.81 0.90 0.84 0.81 Clinker to cement ratio 0.77 0.73 0.71 0.77 0.72 0.72

CO2 captured (Mt) 0 4.9 21.5 0 9.3 43.0 CO2 captured (Mt) 0 23.7 99.8 0 28.8 173.1

European Union 25 BLUE low demand BLUE high demand Other developing Asia BLUE low demand BLUE high demand

Technologies 2015 2030 2050 2015 2030 2050 Technologies 2015 2030 2050 2015 2030 2050

Energy use (Mtoe) 15.5 13.3 13.7 16.5 15.7 19 Energy use (Mtoe) 24.7 35.1 51.2 26.3 39.4 64.5

Share of alternative fuel use 17% 28% 39% 18% 30% 40% Share of alternative fuel use 11% 21% 34% 15% 28% 35%

Clinker to cement ratio 0.76 0.73 0.69 0.76 0.72 0.71 Clinker to cement ratio 0.78 0.72 0.7 0.78 0.72 0.73

CO2 captured (Mt) 0 4.3 20.7 0 9.4 69.8 CO2 captured (Mt) 0 21.4 100.2 0 21 150.6

Other OECD Europe BLUE low demand BLUE high demand Economies in transition BLUE low demand BLUE high demand

Technologies 2015 2030 2050 2015 2030 2050 Technologies 2015 2030 2050 2015 2030 2050

Energy use (Mtoe) 2.7 3.3 3.9 2.9 3.9 5.4 Energy use (Mtoe) 14.7 12.7 10.8 17.9 15.2 16.2

Share of alternative fuel use 19% 30% 39% 21% 30% 40% Share of alternative fuel use 14% 22% 35% 7% 16% 37%

Clinker to cement ratio 0.82 0.80 0.80 0.78 0.72 0.73 Clinker to cement ratio 0.77 0.74 0.72 0.77 0.74 0.72

CO2 captured (Mt) 0 1.7 5.5 0 4.6 3.7 CO2 captured (Mt) 0 1.5 12.9 0 4.1 19

OECD Pacific BLUE low demand BLUE high demand Latin America BLUE low demand BLUE high demand

Technologies 2015 2030 2050 2015 2030 2050 Technologies 2015 2030 2050 2015 2030 2050

Energy use (Mtoe) 9.7 8.2 7.5 10.3 9.5 10.7 Energy use (Mtoe) 14.5 18.4 26.4 14.4 18.5 32.7

Share of alternative fuel use 12% 23% 35% 13% 24% 35% Share of alternative fuel use 16% 25% 39% 16% 25% 40%

Clinker to cement ratio 0.83 0.77 0.72 0.82 0.76 0.72 Clinker to cement ratio 0.73 0.71 0.7 0.73 0.71 0.72

CO2 captured (Mt) 0 4.0 15.8 0 7.2 38.2 CO2 captured (Mt) 0 9.7 49.7 0 11.8 73.3

China BLUE low demand BLUE high demand Africa and Middle East BLUE low demand BLUE high demand

Technologies 2015 2030 2050 2015 2030 2050 Technologies 2015 2030 2050 2015 2030 2050

Energy use (Mtoe) 118.2 66.1 53.3 118.8 85.6 76.9 Energy use (Mtoe) 25.5 30.5 47 26.4 35.3 68

Share of alternative fuel use 8% 20% 36% 8% 14% 34% Share of alternative fuel use 11% 22% 33% 14% 25% 35%

Clinker to cement ratio 0.72 0.69 0.68 0.71 0.69 0.7 Clinker to cement ratio 0.82 0.77 0.74 0.81 0.76 0.76

CO2 captured (Mt) 0 25.0 82.0 0 40.3 236.8 CO2 captured (Mt) 0 8.4 97.1 0 21.5 158.7

Page 22MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Source: EIA / WBCSD

MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015 Page 23

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Oil price forecast: US

U.S. Energy Prices

U.S. Energy Information Administration, Short-Term Energy Outlook - January 2015:

2014 2015 2016

Jan Feb May Jun Dec Jan Feb Mar Aug Dec Jan Apr Jul Aug Dec

Crude Oil (dollars per barrel)

West Texas Intermediate Spot

Average94.62 100.82 102.18 105.79 59.29 46 46 47 57 67 66 71 73 73 72

Brent Spot Average 108.12 108.9 109.54 111.8 62.34 49 49 50 60 70 70 75 77 77 76

Imported Average 89.63 96.04 98.44 100.17 55.79 42.5 42.5 43.5 53.5 63.5 62.5 67.5 69.5 69.5 68.5

Refiner Average Acquisition

Cost93.52 99.32 100.57 102.45 58.29 45 45 46 56 66 65 70 72 72 71

Liquid Fuels (cents per gallon)

Refiner Prices for Resale

Gasoline 260 270 295 300 161 134 143 152 174 171 173 211 217 215 183

Diesel Fuel 298 309 299 297 191 166 170 171 187 213 215 232 234 234 228

Heating Oil 306 305 288 288 189 171 168 164 170 209 213 218 220 218 226

Refiner Prices to End Users

Jet Fuel 299 299 297 295 187 164 165 167 180 208 211 226 226 228 223

No. 6 Residual Fuel Oil (a) 248 253 242 242 175 139 128 121 142 165 162 167 174 178 175

Retail Prices Including Taxes

Gasoline Regular Grade (b) 331 336 367 369 254 215 213 219 241 239 241 280 288 288 254

MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015 Page 24

Commodity market

40,00

70,00

100,00

130,00

160,00

190,00

Jan '07 Jan '08 Jan '09 Jan '10 Jan '11 Jan '12 Jan '13 Jan '14 Jan '15

$US nominal, 2010=100

Energy

Metals

Agriculture

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Page 25MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

• Holcim Lafarge merger will loose significant volumes of AF in developed

markets

• AF knowledge transfer to ?

• Oil price decrease will have a significant impact on alternative fuels projects

especially in the MENA region

• First AF investment already “on hold” due to favourable coal/ fossil fuel prices

• Sustainable waste management systems by producing AF / RDF will not be

feasible at such low fossil fuel prices

• 1,2 €/ GJ “all in price” max feasible price for emerging markets

• Slow down in AF / energy efficiency in the cement industry in 2015/2016

| Content | Lafarge Holcim Merger | Influence of fossil fuel prices on AF | Summary

Summary

Page 26MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

The most comprehensive compendium of alternative

fuels and raw materials for the cement and lime industry

Special Conference

Discount!

Page 27MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Leading consultant company in alternative fuels and energy

Advise in “Sustainable Development”

Project development for municipalities in production of alternative fuels

Project development for cement industries (worldwide) in using of AF as environmental friendly and cost-effective energy - independently

Supply Chain Management

Technical support in AF implementation (engineering)

Project management

Engineering and development of WTE plants

WTE, waste processing and AF facilities acquisitions due diligence reports

Energy Efficiency concepts

What do we do?

Page 28MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Consultancy

• Waste processing plants

• Waste management strategies

• Alternative fuel implementation

• Environmental impact assessment

• RDF dosing/feeding systems

• Quality management

• CDM

• Engineering of WTE facilities

• Sustainable development

• Aluminum industry

• Utility industry

• Mergers & acquisitions

• Energy efficiency concepts

Supply Chain Management

• RDF supply by vessels and trucks

• Organising logistics solutions

• Stock management

• Permitting process for transfrontier shipments

• Biomass supply

• Deliveries to cement plants since 1986

• More than 250.000 tons of RDF /year supplies

Development

We are interested in participating in different AF project through:

• Own investment• JVs• Minority shareholding with the

management contract for operating the plant

Collaboration for AF projects• Supplier side• User side

Business Activities

Page 29MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Some references

Page 30MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Experience in AFR since more then 25 years!!

Page 31MVW Lechtenberg Projektentwicklungs- und Beteiligungsgesellschaft mbH 16th - 17th of February 2015

Thank you for your attention!!