Cementos Argos Corporate presentation February, 2019
Growing multinational, producer of building materials with focus on value creation Value generation by 3 Segmented value proposition The best footprint 1 2 for market differentiation in the Americas closing efficiency gaps: BEST program Healthy financial position Successful track-record deploying 4 5 and flexibility to pursue growth a disciplined expansion strategy
The best footprint in the Americas
Interconnected footprint to maximize value generation ▪ Logistic synergies ▪ Balance between emerging and developed economies ▪ Markets with high growth potential ▪ Negative correlation between economic cycles 21% RMX; 41% 32% 25% 27% 52% Cement; 59% 43% Revenues by Revenues by EBITDA by region (LTM) product (LTM*) region (LTM*) 18M M 3 23M MT USA RMC installed Cement installed Colombia capacity capacity Caribbean and Central America * Last Twelve Months until 4Q18
52% of revenues* USA 13 Cement 2nd largest RMC producer ▪ plants 4th largest cement producer ▪ Capacity: 9.6 M MT of cement and 13 M m 3 of RMC ▪ ~42% of the total cement installed capacity ▪ +340 RMC ~ 74% of the total RMC installed capacity ▪ plants 9 Grinding 27% of revenues* Colombia facilities #1 cement, RMC and aggregates producer ▪ Capacity : 8.7 M TM of cement and 3.8 M m 3 of RMC ▪ ~38% of the total cement installed capacity ▪ 33 Ports ~22% of the total RMC installed capacity ▪ & terminals +2.600 21% of revenues* CCA mixers 1 of 2 leader producers ▪ 47% cement and clinker seaborne trade ▪ 1.274 Rail Capacity : 4.7 M TM of cement and 0.9 M m 3 of RMC ▪ cars ~20% of the total cement installed capacity ▪ ~5% of the total RMC installed capacity ▪ * Last Twelve Months until 4Q18
US Region: Recovery drives operational growth and EBITDA margin normalization 2018 Revenues 2018 EBITDA 2018 EBITDA margin USD 1,489 M USD 239 M 16.1% Strategic location close to growing demand centers 9.6M MT Leadership in our businesses with relevant market share: Cement installed capacity • Defined leadership strategy for urban centers in the RMC business Interconnected and privileged assets network: 13M M 3 ▪ Vertical integration: 36% of cement sales to our own RMC operations RMC installed capacity ▪ 1,274 rail cars Imports potential: Cement plants ▪ 9 ports with ~5.5M MT capacity RMC plants Grinding facilities Value generation through innovation : 15 new VASP* and/or LEED products Ports/Terminals *Value Added Specialized Products Solid fundamentals support growth potential: Infrastructure needs with ongoing plans Non-residential segment boosted by +4.3% ▪ Minimum macroeconomic recovery 2018 unemployment 10% levels: 4% (Jan 2019) Infrastructure plans materializing at state level Consumer ▪ of bridges are confidence in Dodge Index structurally deficient maximum levels 6 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
COLOMBIA region: National coverage offers a strong competitive advantage to capture infrastructure and housing growth 2018 Revenues 2018 EBITDA* 2018 EBITDA margin COP 412.9 Bn COP 2,261 Bn 18.3% Leaders with more than 80 years of history and broad presence 7 Cement plants Multi-plant player , present across the country 48 RMC plants with the best logistic interconnection 1 Port ▪ +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 3.8M M 3 8.7M MT Efficiency and competitiveness: reduction of more than USD 12/MT Cement plants Cement installed RMC installed in cash cost during last 18 months in 2017 through BEST RMC plants capacity capacity Ports/Terminals ~29.7% of revenues generated through innovative products *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) Dispatches to builders still slow Turnaround trend in bagged Growth in dispatches to heavy due to the slow housing segment cement in the retail business construction boosted by the dynamic. supported by consumer materialization and advances Housing sales in positive territory confidence and a macro of infrastructure projects supported by the social segment recovery
Caribbean and Central America Region: Presence in diversified markets offers flexibility 2018 Revenues 2018 EBITDA 2018 EBITDA margin USD 593 M USD 178 M 30.1% 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 0.9M M 3 4.7M MT Logistic flexibility: supply from Cartagena Plant RMC installed Cement installed Region with the highest ROCE (double digit) Cement plants capacity capacity RMC plants Grinding facilities Ports/Terminals Long term growth potential and Profitable and efficient interconnection interconnected regions
Value generation through efficiency: BEST Program
BEST Building efficiency and Operational Clinker to Alternative Administrative Reduction of non core assets sustainability for tomorrow transformation cement ratio fuels synergies Improve ROCE Leaner and faster Cost champions Customer centered Sustainability leaders Argos Puente Aranda
BEST: Optimization of our assets base as a growth lever Goals: Increase the operating free cash flow ▪ Fire power to grow ▪ ▪ ROCE improvement ▪ Focus on core assets What have we done? +USD 460M divestments What are we doing?: ▪ Working capital optimization ▪ Capex optimization ▪ Additional divestments of non-core assets ▪ Growth through allies (Eg. Agregados Argos) 11
BEST: Next steps BEST USA 2.0 Building Efficiency and Sustainability for Tomorrow Cement: Improvement of Energetics capacity utilization Supply chain & logistics Logistics RMC Network & Drivers shortage Fleet optimization 12
Segmented value proposition for market differentiation
Differentiated value proposition Value added for our customers + + Customer ally Recognized brand Privileged and interconnected network of assets Industrial segment Retail Segment Experience and track record Customer centric More than 80 years of experience Constant focus on our customers needs Knowledge transference Technical Know-how Constant training to our customers and suppliers Participation on emblematic projects in the Americas Accessibility Presence in: +15 countries, 14 states in the US Tailor-made service and +800 municipalities in Colombia Tailor-made products and processes Quality Innovative products High quality product portfolio Microcement, advanced concrete, etc. Reputation Confidence and backup DJSI and Merco Colombia supports our trajectory, Technical experts in high complexity projects responsibility and commitment 14
Argos, at the forefront of the industry´s digital revolution. ...contributing to the productivity of our customers projects v ▪ Self service from beginning to end ▪ Make online orders ▪ Track the delivery of orders ▪ Generate quality reports ▪ Visualize historical transactions ▪ Make online payments
Successful track-record deploying a disciplined growth strategy
Disciplined growth strategy boosting the EBITDA growth and value generation Revenue (COP billion) EBITDA * (COP billion) 1.672 0% 1.519 1.481 1.486 8.517 8.533 8.418 356 2.107 377 2.108 7.912 978 968 5817 426 2.194 2.218 428 791 4968 4380 2.154 2.184 404 382 19,7% 19,2% 19,4% 18,1% 17,7% 17,2% 16,6% 2.077 1.907 300 294 2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018 2017 2018 2017 2018 USD M 2,437 2,656 2,833 2,881 2,790 2,892 2,848 USD M 385 447 524 484 553 547 482 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Note: COLGAAP figures 2010-2013, IFRS figures 2014-2018 *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) Organic growth Acquisitions Focus and reorganization 13% +USD 4,300 M CAGR revenues Puerto Rico USD 8 M Cartagena USD 560M invested in the last 10 West Virginia USD 660 M Rioclaro USD 93M ▪ 2005: Merge of 8 cement companies in 2012-2018 Puerto Rico terminal USD 18 M Energy plants in Colombia USD 68M Colombia years 9% French Guiana USD 69 M Panama grinding facility expansion USD 65M ▪ 2012: Non-cement assets spin-off + Vulcan FL USD 720 M + (organic and inorganic) Harleyville VCM USD 58M Lafarge Honduras USD 305 M ▪ 2016: BEST as a program to maximize CAGR EBITDA Cartagena´s distribution center USD 35M Lafarge USA USD 760 M competitivity Holcim Caribbean USD 157 M White cement conversion USD 23M 2012-2018 RMCC USA USD 243 M Oil-well cement development USD 1M Cemento Andino USD 192 M SSC USA USD 245 M 17
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