Lafarge Africa Plc N131.65 Billion Rights Issue Facts Behind the - - PowerPoint PPT Presentation

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Lafarge Africa Plc N131.65 Billion Rights Issue

Facts Behind the Offer November 30, 2017

The information in this presentation is given in confidence and may not be reproduced or redistributed to any other persons This document has been prepared solely for use at the Facts Behind the Offer held in connection with the Lafarge Africa PLC (“Lafarge Africa” or the “Company”) Rights Issue Programme. The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed

• n, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. The information set out

herein may be subject to updating, revision, verification and amendment and such information may change materially. Chapel Hill Denham Advisory Limited (“Chapel Hill”), and Standard Chartered Capital & Advisory Nigeria Limited (“Standard Chartered”), are not under any obligation to update the information contained in this presentation and any opinions expressed in it are subject to change without notice. Chapel Hill, Standard Chartered or any of their respective affiliates, advisers or representatives shall not have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use

• f this document or its contents, or otherwise in connection with this presentation

Any decision to purchase or subscribe for securities in connection with the Right Issuance should be made solely on the basis of your own investigations with respect to Lafarge Africa and the Rights Issuance None of the professional parties herein stated nor any of their representatives make any representation or warranty, expressed

• r implied, as to the accuracy or completeness of any information contained in this document

Only those particular representation and warranties, if any, which may be made in a definitive written agreement, when, as and if executed, and subject to such limitation and restrictions as may be specified therein, will have any legal effect Any market analysis and estimates presented in this document represent the subjective views of Chapel Hill, and Standard Chartered or the source reference if any

Disclaimer

2

Outline

3

Section Page 1. Company Overview 5 2. Nigerian Cement Industry Overview 11 3. Financial Overview 15

• 4. Business Outlook

21

• 5. Transaction Summary

24

• 6. Appendix

28

Company Overview

REVENUE CONTRIBUTION (FY’16)

Snapshot of Lafarge Africa

LISTING INFORMATION

► Listed on The Nigerian Stock Exchange in 1979 ► 9th largest company on The NSE by market

capitalisation

► Market capitalization of N307 billion1

PRODUCTION INFORMATION

14.1 MTPA2 TOTAL CAPACITY

OPERATIONS

3 COUNTRIES (NIGERIA, SOUTH AFRICA, GHANA) 21 QUARRIES

PRODUCTS

► Cement ► Ready-Mix ► Aggregates ► Fly Ash

9th

70% NIGERIA 30% SOUTH AFRICA

SELECT AWARDS

► Most innovative in manufacturing (2017,

2016), BusinessDay

► Best Company in Stakeholder Engagement

and Most Outstanding Company of the Decade (2016), SERA

► Best Company in Sustainability Reporting

(2015), SERA

Revenue (FY’16) Revenue CAGR (FY’12 – FY’16) PAT (FY’16) Earnings per share (FY’16) Total assets (FY’16) Return on equity (FY’16)

Sources: Lafarge Africa, NSE, Bloomberg

• 1. As at 20 October 2017
• 2. Excludes aggregates, RMC, Fly Ash

6 CEMENT PLANTS

N220bn 24.7% N3.15 N16.9bn N503bn 6.8%

6

Lafarge Africa – Key Milestones

6

• Increased stake in

UNICEM from 35% to 50% through the acquisition of 15% stake from Flour Mills

• Completed Ashaka

Mandatory Tender Offer to Minority Shareholder increasing stake from 58.6% to 82.5%

• Commissioning of

Ewekoro II plant in Ogun State, taking the total capacity to 4.5 MTpa

• ‘N11.8 billion

bond issued

• West African

Portland Cement Company Plc changes name to Lafarge Cement WAPCO Nigeria Plc

• Lafarge SA

becomes majority shareholder in WAPCO through take over of Blue Circle Industries Plc UK

• Second factory
• pened in

Sagamu,Ogun

• State. Combined

capacity now 1.5 MTpa

• West African

Portland Cement Company Limited is established

1959 1960 1978 1979 2001 2003 2008 2009 2011 2014 2015

• Lafarge Africa

is formed through a consolidation of Lafarge S.A.’s assets in Nigeria and South Africa

• Commencement
• f Lakatabu

Expansion Project in Ewekoro, Ogun State

• Modern state of the

art plant (1.1 MTpa) replaces

• ld plant in Ewekoro,

Ogun State

• West African

Portland Cement listed on the Nigerian Stock Exchange

• First factory

commissioned in Ewekoro, Ogun

• state. 200,000 Tpa

later increased to 600,000 Tpa

2016

• Completed

acquisition of UNICEM equity

• Concludes N60

billion bond issuance

• Commissioned

additional 2.5mmt plant in Mfamosing, Cross River State

• To conclude N25

billion Commercial paper Issuance

2017

Lafarge Africa: Operations

Cement Operations

Region

• South West
• South East
• North East
• South West
• North Central
• South East
• South Africa

Locations

• Sagamu
• Ewekoro
• Calabar
• Gombe
• Lagos
• Abuja
• Port-Harcourt
• Johannesburg

Capacity (Mtpa)

• 4.5
• 5.0
• 1.0
• n/a
• 3.6

Main products / Service

• Elephant
• Supaset
• PowerMax
• Unicem
• Ashaka
• Ready Mix
• Cement
• Ready Mix
• Aggregate
• Fly ash

Revenue contribution (FY’16)

• 39.3%
• 19.7%
• 7.8%
• 2.8%
• 30.4%

Main site picture

Ready Mix LSAH

Nigeria operations South Africa operations

9

Lafarge Africa: Products and Innovative Solutions

Ready mix

All Lafarge Readymix Nigeria products are durable and of a consistently high quality to provide excellent structural performance with strong support towards environmental friendly applications and green building  Lafarge Africa’s commitment to innovation  Mixed to project specifications and delivered to site  Services all sectors of the local industry

Aggregates

Aggregates, generally consisting of crushed stone, gravel, and sand, are mainly used in the construction of roads, rail track beds, the manufacturing of concrete, concrete products, and asphalt  Lafarge works with strategic partners in the country to ensure aggregate supply are consistent and conform to BS-EN 12620

Fly ash

Fly ash is an extremely fine powder consisting of spherical particles less than 50 microns in size  Fly ash is one of the construction industry's most commonly used pozzolans

Cement

The Company has a wide range of cement solutions designed to meet all building and construction needs from small projects like individual home buildings to major construction projects  Lafarge’s cement brands some of Nigeria’s preferred cement of all time  Over 55 years with impeccable pedigree

 Annual Nigerian Industrial Standards Certificate for product quality from the Standards Organisation of Nigeria for over two decades

Brand range

10

Select construction projects

• National Assembly Complex Abuja,
• Third Mainland Bridge, Lagos
• Cocoa House, Ibadan
• ABTI American University, Yola
• Tinapa Business and Leisure Resort, Akwa Ibom
• Shoprite Mall, Enugu

Nigerian Cement Industry Overview

10

Nigeria as a key investment destination

US$457bn1

Nigeria’s 2016 GDP

18 years

Median age in Nigeria 77%

• f population

under 35 years

c.187mn

Nigeria’s population Rural : urban mix expected to shift from

52:48 in 2015 to 48:52 in 2021

2.5%

Population growth to reach 212mn by 2021

One of Africa’s largest economies

Economic recovery expected in 2017, following 2016 recession; c.1% growth expected in 2017

600%

Nigeria’s middle class growth from 2000 to 2014 Middle class households expected to grow from 4.1mn to 11.7mn by 2030 Household spending expected to grow by

US$26bn

from 2015 – 2020

Sources: World Bank, EIU, AFDB Economic Outlook, National Bureau of Statistics, Standard Bank Research, McKinsey & Company, International Monetary Fund

1 World Bank – Constant 2010 US$

11

Cities with population

• ver 1 million people

Favourable Demography and Economic Reforms continue to position Nigeria as a key investment destination

Demography to drive household demand

• Urbanization and middle class
• Young population

Support from key policy reforms:

• ERGP
• Fiscal discipline
• World Bank Housing Finance

Development Program Improving Financial Stability

• Improved currency liquidity
• Successful Eurobond and

Diaspora Bond issuances

• I&E Window for foreign

portfolio investors

• Recovery of Stock Exchange

Agriculture, 22.97% Industries, 23.31% Services, 53.73%

A diversified economy with large growth scope for industrials

US$2,178

GDP Per Capita

Macro-economics at a glance

11

Strong fundamental in the Long Run Strong improvement in 2017 Recovery expected in 2018-2019

• Population growth at

+2,6%p.a. (+5% for urban)

• Nominal GDP at +5% p.a.

(assumption oil price from 45-71$/bbl)

• Major housing gap (still

growing)

• Infrastructure gap (roads,

power, rail, …)

• Exit from recession but

mainly from Oil and Agric

• sector. Construction and

Manufacturing still lagging

• Stabilization of FX rate but

strong Naira liquidity squeeze

• In 2018-2019, recovery is

expected with real GDP growth bouncing back

• IMF anticipate +1,9% in

2018 and 2019

• World Bank forecast +2,5%

’

GDP growth and oil prices ’ ’

Nigerian Cement Industry: Demand

12

Main Drivers of Cement Demand in Nigeria:

 Increasing urban population (~50%) growing twice as fast as total population (~5% p.a.)  Major housing gap of 17M houses still increasing  $3,000bn of investment required in infrastructure

Housing Deficit - Nigerian housing stock per capita (units/1000)

• 3

2 7 12 17 22 27 32 37 42 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Housing stock per capita Ideal

Infrastructure stock (%)

0% 20% 40% 60% 80% 100% Nigeria Brazil India China South Africa Indonesia Poland State of Infrastructure Benchmark Source: National Planning Commission Source: Chapel Hill Denham Research

Cement consumption per capita (kg) in 2015

125 150 180 210 430 600 970 400 560 200 400 600 800 1,000 1,200 Nigeria Senegal Algeria Libya Global Average Source: Global Cement Magazine, 2015

% of Construction in GDP

2010 2011 2012 2013 2014 2015 Non-construction Construction

Nigerian Cement Industry: Overview

13

GDP vs Cement Growth

• Strong boom in

cement consumption between 2005-2013 (CAGR 9,7%)

• Cement market

stabilized around 21mt between 2013-2016

• Cement growth in

Nigeria at an avg premium to GDP growth of +2,5%

Source: Lafarge Africa Estimates Source: IMF, TAC, Economics Intelligence Unit, Lafarge Africa Estimates

Cement supply multiplied by 5 in 10 years

14

Cement nominal capacity (mn tonnes)

Source: BMI Research

Structured market with strong regional imbalance

15

• 10.000
• 15.000
• 20.000
• 25.000
• 30.000
• 35.000
• 40.000
• 45.000
• 50.000
• 55.000
• 60.000
• 60

80 100 120 140 160 180 200 220 240 260 280 300 jan-14avr-14 jui-14 oct-14jan-15avr-15 jui-15 oct-15jan-16avr-16 jui-16 oct-16jan-17avr-17 jui-17 LH Cement Net Price (NGN/t) LH Cement Net Price (CHF/t) LH Net Price (USD) @ CBN Rate LH Net Price (USD) @ Avg Rate LH Net Price (NGN)

Rational price changes and at the right level

16

BUA Sokoto 2 announcement BUA Edo Launch

Financial Overview

2016 Performance: Perfect Storm (1/2)

18

CAGR: 25.7% CAGR: 5.6%

Revenue (N’bn) and y-o-y growth Gross Profit (N’bn) and GP Margin

Source: Lafarge Africa PLC Audited Financials 88 206 261 267 220 41% 134% 27% 2%

• 18%
• 40%

0% 40% 80% 120% 160%

• 50

100 150 200 250 300

2012 2013 2014 2015 2016 Revenue % Growth 33 67 83 83 41 37% 33% 32% 31% 19%

0% 40%

• 10

20 30 40 50 60 70 80 90

2012 2013 2014 2015 2016 Gross Profit Margin

EBITDA (N’bn) and EBITDA Margin PBT (N’bn) and PBT Margin

21 64 40 29 (23) 24% 31% 15% 11%

• 10%
• 40%

0% 40% (40) (20)

• 20

40 60 80

2012 2013 2014 2015 2016 PBT PBT Margin 32 56 69 68 26 36% 27% 27% 25% 12%

0% 40%

• 10

20 30 40 50 60 70 80

2012 2013 2014 2015 2016 EBITA EBITA Margin

2016 Performance: Perfect Storm (2/2)

19

Source: Lafarge Africa PLC Audited Financials

Total Debt (N’bn) Net Debt (N’bn) Total Assets (N’bn) Shareholders Funds (N’bn)

37 28 121 148 128 2012 2013 2014 2015 2016 28 (6) 101 132 102 2012 2013 2014 2015 2016 152 298 416 452 502 2012 2013 2014 2015 2016 68 171 176 176 249 2012 2013 2014 2015 2016

Turnaround Plan in Nigeria to deliver our ambitions

20

Pricing

Key Indicators

Commercial Performance Industrial Performance Fuel Flexibility FX impact on Cost Re-

• rganisation

Turnaround Enablers Impact compared to Q3 LY

+N16,3 Bn Market share sustained ~98% reliability Stable industrial operations with all running kilns at

• ptimal levels, in spite of disruption in August in

Mfamosing Strong contribution from coal, pet-coke and alternative fuels SAP implementation, Go live in Q1 2018 South West plants operations optimised Reduced exposure to FX in our cost, mainly thanks to higher reliance on coal & AF N2,5 Bn 15% improvement in exposure On track Price adjustments in Q1 and April 2017 sustained Product portfolio optimization on track Route to market initiatives and Logistics Performance improvement plan

Impact YTD

+N66 Bn Market share improvement N6,1 Bn 12,6% improvement in exposure

Unaudited Quarter 3 & 9 Months Results 2017

Key Financial Figures for Q3 & 9M 2017

21 Unaudited Quarter 3 & 9 Months Results 2017

Q3 2017 9M 2017 2016 2017 Variance 2016 2017 Variance NGN Million Net Sales 53,679 68,829 28% 161,044 223,669 39% Operating EBITDA* (377) 6,700 10,192 45,279 344% Operating EBITDA margin

• 0.7%

9.7% 10.4pps 6.3% 20.2% 13.9pps EBIT (7,351) (9,716) (32,972) 18,402

• 156%

EBIT Margin

• 13.7%
• 14.1%
• 0.4pps
• 20.5%

8.2% 28.7pps Net Finance Cost (2,836) (7,351) (7,395) (17,309) Before tax Profit (10,183) (17,067) (40,368) 1,094 After tax Profit (7,156) (18,794) (37,402) 938 Earnings per Share (in Kobo) (162) (360) (827) 10 Operating Cash flow 8,592 (1,537) Net Debt 117,551 243,550 Capex 30,405 7,396

*Operating EBITDA adjusted for Ashaka delisting cost, Rights Issue Cost, restructuring and ERP implementation cost, South Africa System stabilization Project & Inventory write-off: (9M-17 N3.6b : Q3-17 N2.3b, 9M-16 Nil, Q3-16 Nil)

Nigeria Operations – Strong operational performance

22

Lafarge Africa Staff

Unaudited Quarter 3 & 9 Months Results 2017

Q3 2017 9M 2017 2016 2017 Variance 2016 2017 Variance Cement (kt) 1,015 936

• 7.8%

4,093 3,401

• 16.9%

ReadyMix (km3) 41 41 0.0% 144 143

• 0.7%

NGN Million Net Sales 30,703 44,191 44% 107,406 155,611 45% Operating EBITDA* (1,440) 12,198 8,619 49,873 479% Operating EBITDA margin

• 4.7%

27.6% 32.3pps 8.0% 32.0% EBIT (6,911) (2,331) (32,023) 26,779 EBIT Margin

• 22.5%
• 5.3%

17.2pps

• 29.8%

17.2% Net Finance Cost** (2,697) (6,902) (6,660) (16,132) Before tax Profit (9,608) (9,233) (38,683) 10,647 After tax Profit (7,276) (13,780) (36,796) 6,847

**S,G&A** inclusive of ERP Implementation cost, Ashaka delisting, Rights Issue and other resturcturing costs **Net finance cost driven by finance charges on the shareholder loans & other borrowings *Operating EBITDA adjusted for Ashaka delisting cost, Rights Issue Cost, restructuring and ERP implementation cost: (9M-17 N2.7b : Q3-17 N1.4b, 9M-16 Nil, Q3-16 Nil)

• SG& A expenses higher than LY, due to SAP implementation cost & training of users across the business

Nigeria Operating EBITDA* 9M 2017 vs. LY

23

In N’ B

*Operating EBITDA adjusted for Ashaka delisting cost, Rights Issue Cost, restructuring and ERP implementation cost

Unaudited Quarter 3 & 9 Months Results 2017

8,6 49,9

• 6,3

66,3

• 17,1
• 5,0

6,1 1,6

• 4,3

OpEBITDA 9M 2016 Volume Price Inflation and FX Distribution Energy Raw Materials & Others Fixed costs OpEBITDA 9M 2017

South Africa Operations

24

Lafarge Africa Staff

• SA operations adversely impacted by:
• Operational challenges at our Lichtenburg plant
• On-going stabilization of SAP system implemented in January

Unaudited Quarter 3 & 9 Months Results 2017

Q3 2017 9M 2017 2016 2017 Variance 2016 2017 Variance NGN Million Net Sales 22,977 24,638 7% 53,638 68,058 27% Operating EBITDA* 1,064 (5,498) 1,573 (4,593) Operating EBITDA margin 4.6%

• 22.3%
• 26.9pps

2.9%

• 6.7%
• 9.7pps

EBIT (441) (7,385) (950) (8,377) EBIT Margin

• 1.9%
• 30.0%
• 28.1pps
• 1.8%
• 12.3%
• 10.5pps

Net Finance Cost** (138) (449) (735) (1,176) Before tax Profit (576) (7,834) (1,684) (9,553) After tax Profit 120 (5,015) (606) (5,910)

*Operating EBITDA adjusted for ERP Stabilization project cost & inventory write-off: (9M-17 N0.88b : Q3-17 N0.88b, 9M-16 Nil, Q3-16 Nil)

Operating EBITDA to Net Income

25 Unaudited Quarter 3 & 9 Months Results 2017

Q3 2017 9M 2017 NGN Million 2016 2017 Variance 2016 2017 Variance Operating EBITDA* (377) 6,700 10,192 45,279 Depreciation & Amortisation (4,642) (4,802) (12,288) (16,174)

• One-Offs Adjustment
• (2,280)
• (3,614)

Current Operating income (5,019) (383) (2,096) 25,491

• Net other operating income /(expenses)

(2,332) (9,333) (30,876) (7,089)

• EBIT

(7,351) (9,716) (32,972) 18,402 Net finance costs (2,836) (7,351) (7,395) (17,309)

• Share of net income from associates

3

• Profit before Tax

(10,183) (17,067) (40,368) 1,094

• Income tax

3,027 (1,728) 2,965 (156)

• Profit after Tax

(7,156) (18,794) (37,402) 938

• *Operating EBITDA adjusted for Ashaka delisting cost, Rights Issue Cost, restructuring and ERP implementation cost, South Africa System

stabilization Project & Inventory write-off: (9M-17 N3.6b : Q3-17 N2.3b, 9M-16 Nil, Q3-16 Nil)

Net Financial Debt Dec 2016 to September 2017

26

Net Debt (N’B)

• South Africa debt included in Net debt position
• Net debt position in Nigeria is N227 Billion (Net borrowing is largely 220mUSD converted from Quasi

equity to loan)

• Nigeria position is expected to improve to <N200 Billion by year-end after the Right Issue

Unaudited Quarter 3 & 9 Months Results 2017

* *

* Excl Quasi Equity Instrument

Business Outlook

• Cement market demand in Nigeria is expected to recover slightly in Q4 2017, to close the

year -14% to -12%, lower than LY :

• Overall market rebound expected in Q1 2018
• Sizeable infrastructure investments are foreseen to be initiated and executed from Q1 2018
• Current low consumption per capita
• Industrial & operational performance expected to remain stable in Nigeria
• Stable pricing environment in Nigeria for Q4 2017 and Volume trend to reflect seasonality effect
• On-going Logistic and Industrial Performance Improvement plan to deliver
• Target EBITDA margin in mid-30s is expected to be achieved
• Cement market in South Africa is expected to close the year lower, however:
• Industrial stabilization team in place to ensure plant is operational
• Cost containment programs in place
• SAP stabilization process in place, with learning points established for other entities
• Financial restructuring to be completed by year-end
• Rights issue of N131,7 billion at a price of 42,5N/share to be concluded by Year-End
• Commercial Paper of N25 billion to be completed beginning of November
• Net Debt position for Nigeria to improve, to close the year at < N200 Billion
• Expansion plans on track
• Ashaka power plant on track to be delivered in Q4 2018

Outlook

28

Lafarge Africa: Key Investment Highlights

29

• The only vertically-integrated Cement Company in Nigeria
• Growing Aggregates & Concrete penetration
• Diversified Cement Product Line

Vertical Integration

• Strong track record of profitability with an annual CAGR of

33.5% from N8.5 billion in 2011 to N28.6 billion in 2015.

• Strong H1 2017 recovery with N19.7 billion net income from
• perating loss in 2016 given the impact of naira devaluation

Consistent Profitability

Business reorganization to produce cost and revenue synergies, driven by:  Optimising route to market,  Supplier Rationalisation,  Fixed-Cost Dilution from Mfamosing 2, etc.

Cost and Revenue Synergies

Regional diversification strengthening competitive position and mitigating country-specific cycles

Regional Diversification

Leverages on the expertise of the Lafarge Holcim Group, the Global Industry Leader, with access to:  World-Class R&D facilities (Lyon, France)  Global Best Practices, and  Wide product portfolio/knowledge

Access to Group Expertise

Resilient demand drivers for Building Materials including the N117bn Marshall Plan for the North East, and FGN infrastructure budgetary spend

Strong Industry Demand Drivers

Strong presence in Africa’s two largest economies – Nigeria and South Africa

Strong Presence in Africa

Lafarge Africa is rated by two leading credit rating agencies:  A+ by Global Credit Ratings Co,  A+ by Agusto a& Co

Strong Credit Ratings

Rights Issue – Transaction Summary

Right Issue terms

31

Offering structure

• Listing of new ordinary shares on the Nigerian Stock Exchange
• Issuer is Lafarge Africa Plc.

Offering size

• N131,65bn through an offering of 3,098 million new ordinary shares

Subscription price

• N42,5 per new shares - discount of 17,5% to closing price of 22nd Sept. 2017

Subscription ratio

• Subscription ratio of 5 rights for every 9 shares held as at November 1, 2017

Use of proceeds

• Any convertible loan; shareholder loan or any other loan facility is due from the

company are authorized to apply for any shares subscribed for.

• The rights issue is being undertaken to de-leverage Lafarge Africa’s balance sheet,

finance working capital and the expansion of operations

Key dates

• Qualification Date: November 1, 2017
• Rights trading and subscription period : November 24, 2017 to December 15, 2017

Issuing Houses

• Lead Issuing House : Chapel Hill Denham Advisory Ltd
• Joint Issuing House : Standard Chartered Capital & Advisory Nigeria Ltd

Rights Issue Impact on Lafarge Africa

32

Rights Issue Impact

• Debt restructuring through the

rights issue reduces the impact FX volatility has on Lafarge Africa’s earnings

• Greater headroom to raise

additional capital to further capitalize on the emerging

• pportunities in Africa.
• Cashflow preservation-

reduction in interest expense

• Short term liquidity support

through financing working capital

Deleveraged Balance Sheet Headroom for Additional Capital Cashflow Preservation Improved Liquidity

Lafarge Africa – Trading Performance

High (N) Low (N) VWAP (N) Share price volatility 30 day 58 48.58 50.8054 2.35% 60 day 63 48.54 53.0098 2.10% 90 day 63 48.54 55.0245 2.62% 120 day 63 48.54 54.6579 2.48% 6 month 63 46.00 53.2889 2.54% 1 year 63 34.50 49.0804 2.82% Market cap (N billion) 307.469 RI Size (N billion) 131.7 RI size as % of Market Cap 42.83%

Key statistics (as at 17 October 2017)

Description # Share Price (N) 56.00 Shares outstanding ( billion) 5.49 Market cap (N ‘billions) 307.469 P/E 4.37 P/BV (2016) 3.99 Free float liquidity 35.76%

VWAP analysis

The volume weighted average price provides a sense of trading momentum on the stock The recent trading performance of Lafarge on the NSE will be a core benchmark for shareholders considering participation in the Rights Issue

30 35 40 45 50 55 60 65 20,000 40,000 60,000 80,000 100,000 120,000 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17

Volume Traded Price 30 day VWAP 60 day VWAP 90 day VWAP 120 day VWAP 6 month VWAP 1 year VWAP

Lafarge Africa – Shareholder Options

5 for 9 rights issue Investor holding 9 shares receives 5 rights Sells the 5 rights

• n the NSE to a

new investor No action taken Accepts and Subscribes to 5 new shares at the rights price New investor subscribes for 5 new shares at rights price Unsubscribed shares allotted to shareholders who applied for additional rights Issuer allots 5 new shares

• Subscription Ratio: Existing

shareholders receive subscription rights based on their shareholding. 5 for 9 means shareholder receives 5 rights for every 9 shares they

• wn
• Oversubscription: When existing

shareholders apply for additional rights above and beyond all the shares available in the issue

• Partial subscription: When a

shareholder takes up some but not all of their provisional rights allocation

• Renunciation: When a shareholder

does not take up their rights

• Trade in Rights: When a

shareholder trades their right to another investor

Shareholder earns premium

• n rights traded

LafargeHolcim Group1

Ownership Structure Before & After Rights Issue

73% 27% Subsidiary Division

35 Lafarge Africa Plc

1Related entities before Ashaka Scheme of Arrangements ( Court Order Meeting October 23rd, 2017) 2 Ownership will depend on subscription during the rights issue

Before Rights Issue

Minority Shareholders

After Rights Issue

Egyptian Cement Holding BV. 100% 100% 100% 86.51% 100% 100%

LafargeHolcim Group2 Minority Shareholders

100% 72.4%

35%

Lafarge ReadyMix Nigeria Ltd AshakaCem Atlas Lafarge South Africa Holding South African Operations West Operations Nigeria Cement Holding BV. UniCem East & West Operations Lafarge ReadyMix Nigeria Ltd AshakaCem Lafarge South Africa Holding 72.4% South African Operations 100% 100% 100%

Lafarge Africa Plc

CBI Ghana CBI Ghana

35%

Indicative Transaction Timetable

36

Activity Target Dates Acceptance List Opens/ Trading in Rights begins

• 24 November 2017

Acceptance List Closes/ Trading in Rights end

• 15 December 2017

Receive SEC clearance of allotment

• 5 January 2018

Pay net proceeds of the Rights Issue to Lafarge Africa

• 9 January 2018

Publish Allotment announcement

• 12 January 2018

Timeline is indicative and subject to timely receipt of regulatory approvals

Thank You

Appendix

Lafarge Africa Plc: Board of Directors

Chairman – Mobolaji Balogun, Esq. is an Economics (Honours) graduate

• f the London School of Economics and the Chief Executive Officer of

Chapel Hill Denham Vice-Chairman – Mr. Guillaume Roux, Esq is a graduate of Institute d’ Etudes Politiques, Paris. He joined the Lafarge Group in 1980 as an Internal Auditor. He was the former Group MD/CEO of Lafarge Africa Director – Dr. Adebayo Jimoh Esq. holds an MBA degree from Enugu State University of Science. A Fellow of the Nigeria Institute of Management, Marketing of Nigeria. He was previously Executive Director, Group Operations of John Holt Plc Director – Ms. Sylvie Rochier she started her career with Lafarge where she held senior management positions such as Controller and Finance Director for Lafarge Materiaux de Specialities. She is presently the Group Senior Vice-President, Finance. Director – Mr. Jean-Carlos Angulo joined Lafarge in 1975 as Project Manager and later Projects Director. He was President of the Cement

• perations in Western Europe and Morocco. He was an Executive Vice

President with responsibilities for Lafarge Group operations in several countries Director – Mr. Adebode Adefioye is a graduate of the University of Lagos with a Master of Science degree. He is the CEO of IBK Services Limited and Director at Wema Bank Plc and Ceerem Investment Nigeria Ltd. Director – Dr. Shamsuddeen Usman CON, OFR is a Nigerian economist and banker. He is currently the CEO of SUSMAN and Associates. He is a past Minister of National Planning Director – Mrs. Adenike Ogunlesi is the founder of Ruff ‘n’ Tumble, a children’s clothing line and has a reputation for being one of the best manufacturers of children’s clothing in Nigeria. Director – Mrs. Elenda Ohirenua Giwa-Amu is currently the CEO, Chandrea Lifestyle Ltd. She also previously headed Private Banking in Chartered Bank, now Stanbic IBTC Director – Alhaji Umaru Kwairanga is an Investment Banker and a Chartered Stockbroker. He is currently a member of Presidential Advisory Council, Nigeria Industrial Revolution Plan, Chairman of AXA Mansard Pensions Limited, Council Member of the Nigerian Stock Exchange, and a former Chairman of Ashakacem Plc Group MD/CEO – Michel Puchercos is a graduate of Ecole Polytechnique and Ecole Nationale du Genie Rural, des Forets Nationale Superieure des Mines de Paris/France. He was previously president and CEO of Lafarge South Korea Japan

• Ag. Company Secretary & Legal Director – Mrs. Edith Onwuchekwa is

a graduate of Law from the University of Uyo, Akwa Ibom State. She joined Lafarge Cement WAPCO Nigeria in April 2005. She is currently the acting Chairman of Ashakacem Plc and was appointed acting Company Secretary

• f Lafarge in June 2017

39

Lafarge Africa Plc: Key Management

40

• Bruno is a Mechanical Engineer graduate, a safety professional

and an alumnus of London Business School.

• He joined Lafarge in the Middle East and Africa Regional office

in Cairo and held various senior management positions in Egypt, France, Malawi, and Nigeria Bruno Hounkpati Logistics Director

• Bruno holds a Business Engineering degree from Universite

Catholique de Louvain-la-Neuve in Belgium, and completed his Master’s in Business Administration at Georgetown University, specialising in Financial Risks Management

• Mr. Bayet joined Lafarge in 2013 as a director in AshakaCem

Plc and added the role of Chief Financial Officer in September 2014 Bruno Bayet Chief Financial Officer

• Abdel-Ileh holds MBA from Georgetown University, Washington

D.C. and a post graduate degree in Financial Risks Management with honours

• He started his career as a Project Engineer with Lafarge in

1998 and has held various key positions in operations including Production Manager and Plant Manager. In 2012, he became the H&S Director, a role he held until 2015 when he was appointed Director of Concrete Operations for Lafarge Morocco Abdel-lleh Chouar Industrial Director – Cement

• Michel Pucheros was appointed on 16th March 2016
• He was the past MD at Bamburi Cement from September 2005 to 2009 and then appointed President and

CEO of Lafarge South Korea Japan Operations Michel Puchercos Group MD/CEO

• He has over 35 years work experience spanning several

countries and several industries.

• He joined Lafarge India and later moved into East Africa on

Technical Partnership support covering countries like Kenya, Tanzania and Malawi.

• Vipul joined Unicem in 2006 and worked as Marketing &

Technical Assistance capacity on the Excom of the BU, before the eventual merger in 2015. He was appointed Acting Marketing Director in May 2016 Vipul Agrawal Marketing Director

• He holds a Master of Business Administration from Heriot-Watt

University, Edinburgh and a Bachelor of Arts in Economics from the University of Essex, Colchester.

• Lolu joined Lafarge as the CFO for Lafarge WAPCO.

Lolu Alade-Akinyemi Procurement Director

• She holds several degrees including M.Sc (Sociology) and

Masters in Business Administration

• She joined Lafarge in December 2010 and prior to this was

General Manger, HR Fidelia Osime Organization and Human Resource Director

• She holds a Bachelor of Accounting degree from London

Guildhall and a Masters of Business Administration from the Open University, Milton Keynes, UK

• She was appointed as Director of Communications, Public

Affairs & Sustainable Development, Lafarge Africa Plc in October 2016 Folashade Ambrose Medebem Communications, Public Affairs & Sustainable Development Director

• Marlene has a BA, International Business and Marketing from

NEGOCIA ACI (Academie Commerciale Internationale) in Paris as well as a General Management Progam from Harvard Business School

• She joined the organisation in January 2016 as Sales Director,

Key Accounts & IHB Precast Segment Marlene Kiniffo-Zounon Sales Director

41

• Rabiu is a graduate of Accounting from Bayero University Kano

as well as General Management Program from Harvard Business School

• He joined Lafarge Nigeria in June 2014 as the Energy and

Power Director, and is currently the Managing Director Ashaka Cem Rabiu Umar Managing Director, Ashaka

• Raymond joined LafargeHolcim Group Qatar- the Qatar

Readymix Group, as the Company Manager of both the quarry company and the trading / transport company. Raymond was then promoted to the role of Industrial Manager for the aggregates business in South Africa.

• Prior to this, he worked for Hanson Aggregates (now part of the

Heidelberg Cement Group) for 17 years in a range of line management roles Raymond Chambers Head of Aggregates & Concrete

Lafarge Africa Plc: Key Management (cont’d)

• Edith is a graduate of Law 1997 (LLB)
• She is a member of the Institute of Chartered Secretaries and

Administrators UK

• She joined Lafarge WAPCO in 2005 and later became

Company Secretary/Legal Adviser of the Company in 2008

• In 2011 moved to the Regional office in Cairo, Egypt as Legal

Counsel Sub-Saharan Africa and currently Lafarge Africa General Counsel/Public Affairs Director Edith Onwuchekwa Legal & Public Affairs Director

• Helmut holds an Executive MBA (2006) from California State

University

• He started his professional career as a military infantry officer

in Austria which included a number of command and staff positions at home as well as overseas. Mr Korak resigned from the armed forces in 2001 and became a diplomat appointed to the Organization for Security and Co-operation in Europe

• He joined Lafarge Africa in July 2016

Helmut Korak Country Security Manager

• Graeme has a Mechanical Engineering degree from University
• f Birmingham and an MBA from Manchester Business School.
• He has over twenty years industrial experience in the power,

sugar and cement business. The last thirteen of these have been spent in Asia and Africa in Cement.

• In Lafarge, he has held manufacturing roles in plant line

management, head office and regional coordination. Graeme Bride Health and Safety Director

42

Lafarge Africa: Key Financial Information

In Millions of Naira 2016 2015 2014 2013 2012 Lafarge Africa (UNICEM consolidated) Lafarge Africa (UNICEM partially consolidated) Lafarge WAPCO Income Statement Revenue 219,714 267,234 260,073 206,073 87,965 Cost of Sales (179,052) (184,703) (177,783) (138,754) (55,565) Gross Profit 40,661 82,531 83,027 67,319 32,399 EBITDA 25,924 67,794 69,475 55,662 31,661 EBITDA Margin 12% 25% 27% 27% 36% EBIT Pro forma (10,978) 52,900 54,000 45,400 26,192 One off expenses

• (14,600)

(5,700)

• Profit Before Taxation

Pro Forma (22,818) 43,900 46,000 42,611 21,283 Profit Before Tax Margin Pro Forma (10%) 16% 18% 21% 24% Profit for the Year Pro Forma 16,898 41,600 39,200 34,716 14,712 Profit Margin Pro Forma 16% 16% 15% 17% 17%

Lafarge Africa: Key Financial Information (cont’d)

43

In Millions of Naira 2016 2015 2014 2013 2012 Lafarge Africa (UNICEM consolidated) Lafarge Africa (UNICEM not consolidated) Lafarge WAPCO Balance Sheet Total Assets 502,491 453,012 415,947 298,126 151,949 Total Debt 127,530 148,288 121,137 28,277 37,305 Cash and cash equivalents 25,501 16,493 20,330 33,896 8,892 Shareholders Funds 248.952 176,152 175,579 171,025 68,359 Cash Flow Cash Flow from Operations 10,663 57,867 57,817 48,731 24,969 Capex Pro forma (22,164) (13,700) (9,000) (7,082) (5,748) Capex UNICEM line II (19,200) (46,300) (16,800)

• Free Cash Flow1

(30,701) (1,170) 32,090 41,649 19,221

1. Calculated as Cash Flow from operations less Capex

Contact Us

44

Kemi Awodein Email: kawodein@chapelhilldenham.com Mobile: + 234 802 242 7729 Michelle Akinrinade Email: makinrinade@chapelhilldenham.com Mobile: +234 802 242 7750 Yemisi Deji - Bejide Email: Yemisi.deji-bejide@sc.com Mobile: +234 802 3188 781 Yetunde Falore Email: Yetunde.falore@sc.com Mobile: +234 703 480 9132 Wole Adeleke Email: wole.adeleke@lafargeholcim.com Mobile: + 234 802 3641894 Damilola Oni Email: Damilola.oni@lafargeholcim.com Mobile: +234 701 583 4293

27B Gerrard Road Ikoyi Lagos Telephone: +234 1 271 3990 1st Floor, 45 Saka Tinubu Street P.O. Box 74520 Victoria Island Lagos Telephone: +234 1 279 9563/4 142 Ahmadu Bello Way Victoria Island Lagos Telephone: +234 1 236 8374