[PPT] - Cementos Argos Corporate presentation February, 2019 Growing PowerPoint Presentation

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February, 2019

Cementos Argos

Corporate presentation

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Growing multinational, producer

f building materials with focus
n value creation

Successful track-record deploying a disciplined expansion strategy Value generation by closing efficiency gaps: BEST program Healthy financial position and flexibility to pursue growth The best footprint in the Americas Segmented value proposition for market differentiation

1 2 3 4 5

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The best footprint in the Americas

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EBITDA by region (LTM*) Revenues by product (LTM*)

23M MT

Cement installed capacity RMC installed capacity

18M M3

Colombia USA Caribbean and Central America

▪ Logistic synergies ▪ Balance between emerging and developed economies ▪ Markets with high growth potential ▪ Negative correlation between economic cycles

Interconnected footprint to maximize value generation

* Last Twelve Months until 4Q18

Revenues by region (LTM)

27% 52% 21%

25% 43% 32% Cement; 59% RMX; 41%

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▪ #1 cement, RMC and aggregates producer ▪ Capacity : 8.7 M TM of cement and 3.8 M m3 of RMC ▪ ~38% of the total cement installed capacity ▪ ~22% of the total RMC installed capacity ▪ 1 of 2 leader producers ▪ 47% cement and clinker seaborne trade ▪ Capacity : 4.7 M TM of cement and 0.9 M m3 of RMC ▪ ~20% of the total cement installed capacity ▪ ~5% of the total RMC installed capacity

CCA

21% of revenues*

Colombia

27% of revenues*

13 Cement plants +340 RMC plants 33 Ports & terminals 9 Grinding facilities +2.600 mixers 1.274 Rail cars

▪ 2nd largest RMC producer ▪ 4th largest cement producer ▪ Capacity: 9.6 M MT of cement and 13 M m3 of RMC ▪ ~42% of the total cement installed capacity ▪ ~74% of the total RMC installed capacity

USA

52% of revenues*

* Last Twelve Months until 4Q18

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USD 239 M USD 1,489 M

Strategic location close to growing demand centers Leadership in our businesses with relevant market share:

Defined leadership strategy for urban centers in the RMC business

Interconnected and privileged assets network: ▪ Vertical integration: 36% of cement sales to our own RMC operations ▪ 1,274 rail cars Imports potential: ▪ 9 ports with ~5.5M MT capacity Value generation through innovation: 15 new VASP* and/or LEED products

2018 Revenues 2018 EBITDA

Cement plants RMC plants Grinding facilities Ports/Terminals

US Region:

Recovery drives operational growth and EBITDA margin normalization

*Value Added Specialized Products

9.6M MT

Cement installed capacity RMC installed capacity

13M M3

▪ Minimum unemployment levels: 4% (Jan 2019) ▪ Consumer confidence in maximum levels

Infrastructure needs with ongoing plans

10%

Infrastructure plans materializing at state level

f bridges are

structurally deficient

Non-residential segment boosted by macroeconomic recovery

Solid fundamentals support growth potential:

16.1%

2018 EBITDA margin

Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18

Dodge Index

+4.3% 2018

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Multi-plant player, present across the country with the best logistic interconnection ▪ +9,000 clients in the massive segment served in 801 municipalities (71% of the country) ▪ We move 15% of the country's load ▪ Presence in +5,700 hardware stores Differentiated value proposition for the industrial and massive segment Efficiency and competitiveness: reduction of more than USD 12/MT in cash cost during last 18 months in 2017 through BEST ~29.7% of revenues generated through innovative products

7 Cement plants 1 Port 48 RMC plants

Leaders with more than 80 years of history and broad presence

COLOMBIA region:

National coverage offers a strong competitive advantage to capture infrastructure and housing growth

Cement plants RMC plants Ports/Terminals

8.7M MT

Cement installed capacity RMC installed capacity

3.8M M3 COP 412.9 Bn COP 2,261 Bn 18.3% 2018 Revenues 2018 EBITDA* 2018 EBITDA margin

Turnaround trend in bagged cement in the retail business supported by consumer confidence and a macro recovery Growth in dispatches to heavy construction boosted by the materialization and advances

f infrastructure projects

Dispatches to builders still slow due to the slow housing segment dynamic. Housing sales in positive territory supported by the social segment

*Adjusted EBITDA 2018 YTD: excludes non-recurring severance payments related with BEST (COP 10 Bn), the fine imposed by the Superintendence of Industry and Commerce (COP 74 Bn, 2Q18), power plants sale in Colombia (COP 79 Bn 1Q18, COP 27 Bn 4Q18)

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Tailor made business model Trading and vertical integration through the Caribbean Sea

▪ 47% market share in clinker and cement trading

Transport synergies through an interconnected network of ports, terminals and grinding facilities

▪ 11 ports and terminals

Logistic flexibility: supply from Cartagena Plant Region with the highest ROCE (double digit)

Cement plants RMC plants Grinding facilities Ports/Terminals

4.7M MT

Cement installed capacity RMC installed capacity

0.9M M3

Long term growth potential and interconnected regions Profitable and efficient interconnection

Caribbean and Central America Region:

Presence in diversified markets offers flexibility USD 178 M USD 593 M

2018 Revenues 2018 EBITDA

30.1%

2018 EBITDA margin

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Value generation through efficiency:

BEST Program

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Leaner and faster

Improve ROCE

BEST

Building efficiency and sustainability for tomorrow Operational transformation Alternative fuels Reduction of non core assets Administrative synergies Clinker to cement ratio

Argos Puente Aranda

Cost champions Sustainability leaders Customer centered

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What have we done? What are we doing?:

+USD 460M

▪

Working capital optimization

▪

Capex optimization

▪

Additional divestments of non-core assets

▪

Growth through allies (Eg. Agregados Argos) ▪ Increase the operating free cash flow ▪ Fire power to grow ▪ ROCE improvement ▪ Focus on core assets

Goals:

divestments

BEST: Optimization of our assets base as a growth lever

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Logistics

BEST:

Next steps

Cement: Improvement of capacity utilization

RMC Network & Fleet optimization

Supply chain & logistics

Energetics

Drivers shortage

Building Efficiency and Sustainability for Tomorrow

BEST USA 2.0

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Segmented value proposition

for market differentiation

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Differentiated value proposition

Value added for our customers Customer ally Recognized brand Privileged and interconnected network of assets

Industrial segment Retail Segment

+

Customer centric Constant focus on our customers needs Experience and track record More than 80 years of experience

+

Tailor-made service Tailor-made products and processes Technical Know-how Participation on emblematic projects in the Americas Innovative products Microcement, advanced concrete, etc. Confidence and backup Technical experts in high complexity projects Knowledge transference Constant training to our customers and suppliers Accessibility Presence in: +15 countries, 14 states in the US and +800 municipalities in Colombia Quality High quality product portfolio Reputation DJSI and Merco Colombia supports our trajectory, responsibility and commitment

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v

...contributing to the productivity

f our customers projects

Argos, at the forefront of the industry´s digital revolution.

▪

Self service from beginning to end

▪

Make online orders

▪

Track the delivery of orders

▪

Generate quality reports

▪

Visualize historical transactions

▪

Make online payments

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Successful track-record deploying a

disciplined growth strategy

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+USD 4,300 M

invested in the last 10 years (organic and inorganic)

13%

CAGR revenues 2012-2018

9%

CAGR EBITDA 2012-2018

EBITDA* (COP billion) Revenue (COP billion)

USD M 482 385 447 524 484 553 547

+ +

Organic growth

▪ 2005: Merge of 8 cement companies in

Colombia

▪ 2012: Non-cement assets spin-off ▪ 2016: BEST as a program to maximize

competitivity

Disciplined growth strategy boosting the EBITDA growth and value generation

Puerto Rico USD 8 M West Virginia USD 660 M Puerto Rico terminal USD 18 M French Guiana USD 69 M Vulcan FL USD 720 M Lafarge Honduras USD 305 M Lafarge USA USD 760 M Holcim Caribbean USD 157 M RMCC USA USD 243 M Cemento Andino USD 192 M SSC USA USD 245 M

Acquisitions Focus and reorganization

Cartagena USD 560M Rioclaro USD 93M Energy plants in Colombia USD 68M Panama grinding facility expansion USD 65M Harleyville VCM USD 58M Cartagena´s distribution center USD 35M White cement conversion USD 23M Oil-well cement development USD 1M

Note: COLGAAP figures 2010-2013, IFRS figures 2014-2018

0% USD M 2,437 2,656 2,833 2,881 2,790 2,892 2,848

2.077 1.907 2.154 2.184 2.194 2.218 2.107 2.108 2017 2018 1Q 2Q 3Q 4Q 4380 4968 5817 7.912 8.517 8.533 8.418

2012 2013 2014 2015 2016 2017 2018

791 978 968 1.519 1.672 1.481 1.486 18,1% 19,7% 16,6% 19,2% 19,4% 17,2% 17,7%

2012 2013 2014 2015 2016 2017 2018

294 300 382 404 428 426 377 356 2017 2018 1Q 2Q 3Q 4Q

*Adjusted EBITDA 2018 YTD: excludes non-recurring severance payments related with BEST (COP 10 Bn), the fine imposed by the Superintendence of Industry and Commerce (COP 74 Bn, 2Q18), power plants sale in Colombia (COP 79 Bn 1Q18, COP 27 Bn 4Q18) and the sale of 2 RMC clusters in the US (USD 15.6M 4Q18)

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Track record of successfully implementing a disciplined growth strategy

WV, USA – Heidelberg (2016)

USD 660M

Cement Plant 2.2 M MT Terminals 8

Florida, USA – Vulcan Cement Investment (2014)

USD 720M

Cement Plant 1.6 M MT Ports Grinding facilities 1.9 M MT RMX 3.3 M m3 Blocks 109 M units / year 2

French Guiana – Lafarge (2014)

€50M

Grinding Facility 0.2 M MT

(100% ownership)

Port concession

€231 M

Cement Plant Grinding facility 1.0 M MT 0.3 M m3

(53% ownership)

Puerto Rico

2015: USD18.3M

Port

(60% ownership)

2017: USD 8M

(60% ownership)

Cement Plant 0.6 M MT

USA – Lafarge (2011) USD 760M Honduras – Lafarge (2013)

Colombia USA Caribbean and Central America

Ports & terminals Grinding facilities 1 RMX 79 plants 6 Cement Plant 2

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Healthy financial position and

flexibility to pursue growth

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Match between currencies and EBITDA generation and competitive cost of debt Extended debt’s average life for enhanced flexibility

Expedite access to the Colombian capital markets ▪ Recognized as a recurrent issuer Local and international banks Stock portfolio provides additional flexibility ▪ Two types of shares (CEMARGOS and PFCEMARGOS)

Debt Structure per currency (December 2018)

Access to diverse sources of financial flexibility

▪ Grupo Sura: 6% (Common share)

Flexible debt structure and access to funding sources to finance growth

Cost of debt: ▪ 7.4% COP ▪ 4.3% USD

COP 52% USD 48%

210 305 300 96 92 65 129 37 93 49 96 119 57 39 123 100 200 300 400 500 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2038 2042 Bank Loans Bonds

▪ Cartón de Colombia: 2.1% (Common share)

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Delivering on our plan to reduce leverage

Non Core assets divestment plan Capex Optimization Working capital improvement EBITDA growth

3.2x Net debt / EBITDA + dividends by June 2020

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www.argos.co/ir

This recognition, called Reconocimiento Emisores – IR is given by the Colombian Stock Exchange, Bolsa de Valores de Colombia S.A. It is not a recognition that certifies the quality of registered stock , nor does it guarantee the solvency of the issuer.

Contact Information IR Team

Manuela Ramirez Carolina Londoño

mramirezm@argos.com.co clondono@argos.com.co

ir@argos.com.co