Holcim Ltd

Bernard Fontana – Chief Executive Officer Thomas Aebischer – Chief Financial Officer

Remo Rosenau – Neue Helvetische Bank Christian Korth – MainFirst Bank AG Mike Betts – Jefferies Gregor Kuglitsch – UBS Harry Goad – Credit Suisse Will Morgan – Goldman Sachs Martin Husler – Zurcher Kantonalbank Yassine Touahri – Exane BNP Paribas Muriel Fellous – Societe Generale John Fraser-Andrews – HSBC Robert Gardiner – Davy Stockbrokers

Ladies and gentlemen, good morning. We welcome you to the presentation of our Third Quarter 2014 Results and Nine-Month Results.

So some of us are in Zurich and some are connected to this call. After my remarks highlighting the main developments throughout the Group, Thomas Aebischer, the CFO, will explain the Group financial results.

And I will then comment on the outlook and open a Q&A session for the room and for those who are connected. Holcim reported robust nine-month 2014 results with like-for-like Group cement volume increases driven by the regions Asia Pacific, North America, and here mainly the USA and Africa Middle East.

The same is also true when looking only at Q3 cement volumes. These volume increases together with a solid pricing environment yielded higher nine-month like-for-like net sales, operating EBITDA, and operating profit.

This achievement was supported by the, again, substantial contributions from our Holcim leadership journey, which delivered strong cost savings, and is now three months ahead of schedule, already substantially exceeding the target of CHF 1.5 billion in operating profit contribution by year end of 2014. Group operating profit on the like- for-like basis increased despite total charges of CHF 91 million that are related to restructuring and merger costs.

Adjusted to these restructuring and merger-related costs, the like-for-like operating profit increased by 7.8%. The operating profit margin, again, adjusted for the already-mentioned costs improved from 12% after nine months in 2013 to now 12.7%.

And when we take the margin of the – of Q3's operating profit margin, there is increase in all regions compared with Q3 last year except Latin America. Adverse exchange rate movements eased during the quarter as our major trading currencies remain relatively stable vis-à-vis the Swiss franc.

However, on a nine-month horizon, the negative impact on our results was still very substantial. During the third quarter of 2014, we received the latest approval from the competition authorities for our transactions with CEMEX in Spain, Germany, and the Czech Republic.

In the meantime, we had further discussions and agreed to a final and adjusted agreement, which takes into account the proposed merger between Lafarge and Holcim. The closing of these transactions with CEMEX is expected for the first quarter of 2015 Furthermore, we have now submitted all necessary regulatory filings in connection with the proposed merger between Holcim and Lafarge, and we are on track to close the transaction as planned by mid 2015.

In 2014, we continued to streamline our top management, while allowing talents to take over more responsibility in our Group. For the rest of the year 2014, Holcim confirms its guidance for higher organic operating profit and margin.

Now, the Holcim leadership journey. The Holcim leadership journey continued to make substantial contribution to our results, with a strong impact in Q3.

Three months ahead of time the target contribution of – in excess of CHF 1.5 billion has been achieved, reaching savings of CHF 1.5 billion, CHF 1.7 billion. In the quarter, the customer excellence stream gained some more momentum again, improving by CHF 80 million and bringing it to a total number of CHF 380 million.

And we are confident that the increased customer focus will continue to be a strong profit contributor in the future, especially in markets, where the volume recovery is not yet strong. The cost leadership stream with its four sub-segments delivered good results, pushing the overall contribution since the program started to over CHF 1.3 billion.

Worth noticing is the fact that, this result is not only due to one sub-segment being the star, but all four exceeding the original target already at this stage, and this reflects the continued alignment and focus of Holcim teams on performance. Our efforts under the Holcim leadership journey will continue for the rest of 2014 and well into the coming years.

Continuous cost efficiency and productivity improvements are now embedded in our organization, in our processes, in our culture, and they will help us improving our profitability further. Let me give you now a more detailed overview of the performance in our five Group regions.

Economies in Group region remain on a growth path and the situation in India turned more promising following the election. In India we witnessed construction activity starting to pickup gradually and in the Philippines lively construction activity drove demand for building materials.

During the first nine months of 2014, India as Holcim’s largest market across the group, benefited from the more promising situation in local construction market and both Ambuja Cement and ACC, recorded highest cement volumes with a pronounced increase at Ambuja Cements, which is less exposed to the Southern markets. Holcim Indonesia sold more volumes in cement, aggregates, and ready-mix concrete.

In the Philippines, demand for building materials remained high, primarily thanks to government initiatives aimed at improving the country's infrastructure. Subsequently, cement volumes at Holcim Philippines were significantly higher than last year.

In Australia, the lively private housing construction market continued to drive demand for bagged cement and ready-mix concrete. However, delays in larger construction projects posed some challenges for the local Group company.

Fewer projects from the resources sector and bad weather in New South Wales and Queensland throughout the middle of the year affected volumes at Holcim Australia. While in ready-mix concrete higher demand from markets such as New South Wales was able to partially mitigate these effects, aggregate volumes were below last year.

Operating EBITDA in Asia Pacific also remained under pressure from negative currency effects and declined 12.1% to CHF 994 million. Holcim Indonesia and Holcim Australia were the Group companies that impacted this result most strongly.

Like-for-like operating EBITDA fell by 1.3% in the first nine months, while it improved by 4% during the third quarter compared with the third quarter of past year. So we see a reverse of trend there.

Economic developments in Latin America remained uneven over the first nine months of 2014, as solid development in some smaller economies was paired with slower growth in larger countries, such as Brazil. In addition, the debt crisis in Argentina was also felt negatively.

While there were positive stimuli from industrial and commercial projects during the first nine months of the year, Holcim Mexico remained negatively impacted by a contracting housing market. Following the decline last year, cement volumes were stable now, but the price situation has improved.

Thanks to the continued investment in infrastructure projects and despite a competitive market environment, Holcim Columbia was able to increase its cement deliveries in 2014. Ready-mix concrete volumes were up there as well.

While Holcim Ecuador reported solid growth over the last years reaching an all-time record in 2013, lower consumption of bagged cement and delays in large public projects caused by liquidity constraints under government have led to cement volume decreases from the local Group company. Holcim Brazil benefited from livelier construction markets in the southeast of the country, and increased cement deliveries despite ongoing delays in large infrastructure projects.

Holcim Argentina suffered from a volume drop in cement and aggregates as the debt crisis from the affected construction markets leading to a significant fall in demand for building materials. Group region Latin America recorded a fall in operating EBITDA as the financial performance of several Group companies was lower and weaker local currencies in a number of countries also took their toll.

On a positive note, we confirm that Holcim Mexico has now troughed from the past year's decline. Looking at Europe, construction markets were affected by a level of uncertainty as demand slowdown following a strong first quarter with lively building activity.

If you remember, we had almost no winter in Q1. The United Kingdom continued to improve in particular, due to government programs supporting residential construction driving demand for building materials.

Aggregate industries UK increased aggregate deliveries thanks to the dynamic construction markets in most regions. Ready-mix concrete volumes were up significantly as the company continued to benefit from its strong footprint in the booming London markets.

Holcim Belgium and Holcim France were impacted by the unfavorable economic situation, which translated into decreased construction activity. However, the dynamic first quarter has led to increases in cement volumes while both aggregates and Aramex activities recorded declines.

Holcim Germany increased both cement and aggregate volumes, mainly thanks to strong sales in the first quarter, which over the course of the year flattened out. And Holcim Switzerland reported cement volumes that were nearly unchanged.

Supported by exports, Holcim Spain increased cement volumes, while following a strong start to the year Eastern European construction markets have developed more slowly. As a result of market pressure from two new competitors and increasing imports, Holcim Azerbaijan sold less cement in the period under review.

In Russia, cement volumes continue to grow despite the political tensions in the region. Operating EBITDA increased 4.9% over the first nine months of 2014, thanks to the strong focus on cost management and the implemented restructuring measures across the Group region.

Like-for-like operating EBITDA was up 6.8% and like-for- like operating profit was up by 9%. We continued to restructure our fixed cost base in Europe, more specifically in Spain and Belgium, with the restructuring cost of CHF 28 million.

Adjusted from these restructuring costs, like-for-like operating EBITDA and operating profit increased in Europe by 10.9% and 27.7% respectively. Let me turn to Group region North America.

Residential construction coupled with some slight impulses from public projects remained a key driver for the increase in construction activity over the first nine months of 2014. Holcim US increased cement volumes markedly as the United States' strong economic growth fueled demand across the Group company's footprint.

Demand was particularly strong in the Northern Central region and July was a very strong month for Holcim US with the highest monthly sales since 2008. Aggregate industries U.S.

also benefited from the favorable economic climate and growth of construction markets. Over the first nine months of the year, the Group company sold more aggregates, with particularly strong demand in the west central, twin cities, Fargo, and central regions.

Aggregate industries U.S. recorded strong increases in asphalt, thanks to various paving projects in most regions.

Ready-mix concrete volume decreased driven by the lease of Chicago area plants to a third-party. Cement volumes at Holcim Canada were up during the period under review as construction markets in all regions except Quebec and Atlantic were more dynamic.

Operating EBITDA in North America increased markedly, by 15.3%, and 22.4% like-for-like respectively, as a result of the improved financial performance of both Group companies in the United States. On the operating profit level, these improvements were of 47% and 56.7% respectively.

Group region Africa Middle East continued to be impacted by political tensions that increased over the course of the year and slowed down economic performance in some countries of the region. Still in the challenging market environment, Holcim Morocco recorded mainly stable cement deliveries, but clinker exports to the Ivory Coast overall led to significantly higher volume in Morocco.

Holcim Lebanon was able to increase its cement deliveries despite the tense political situation in the region. The Group company, however, recorded volume declines in its ready-mix concrete business.

In the Indian Ocean region, cement volumes increased in La Reunion and Madagascar, while in West Africa Holcim continued to benefit from the dynamic construction market in the Ivory Coast. Like-for-like operating EBITDA in the Group region was up 3.4% as better financial performance in Morocco and the Indian Ocean could offset a decrease in Lebanon.

And during Q3, like-for-like EBITDA and operating profit in Africa Middle East increased by 8.5% and 33.9% respectively. Now, Thomas, you will come back in more detail on some key financial figures.

Okay. Thank you very much, Bernard.

Good afternoon. In the third quarter of 2014, we have seen a strong financial performance with like-for-like increase adjusted for merger-related costs on operating EBITDA and operating profit of 4.4% and 7.2% respectively.

Group cement volumes were increased – were up in the quarter, while aggregates and ready-mix volumes declined in a combination of lower volumes in Europe and Latin America, partly as a consequence of our restructuring efforts in 2013. Holcim has been able to post like-for-like increases in net sales, operating EBITDA, and operating profit despite these still challenging circumstances, especially operating profit reported a very solid increase of 3% like-for-like, despite inclusion of CHF 32 million of merger related costs.

Excluding this, reported operating profit would have increased not only 0.7%, but 5%. But also the operating profit margin already increasing from 14.2% to 14.6% would have been even higher at 15.2%.

in the third quarter Holcim did not receive the last installment payment of US97.5 million from Venezuela, as has been agreed in 2010 as a compensation payment – as the last compensation payment for the nationalization of the Holcim assets in 2008. Moving to the first nine months' numbers, in the first nine months Group-wide cement volume increased by 1.6% to 105.9 million tons, mainly driven by positive developments in the United States, in India, and in the Philippines offsetting some lower volumes in Azerbaijan, Italy, and Argentina in particular.

Aggregates were slightly lower primarily as a result of the segment restructuring in certain parts of Latin America during 2013. Ready-mix concrete volumes also were lower, the result of restructuring and divestment activities, as well as the market contraction in Latin America.

On the like-for-like basis, net sales, operating EBITDA, and operating profit all improved compared to the previous year. However, on the reported basis, the negative impact from exchange rate movements more than offset this.

Our operating profit margin adjusted for restructuring and merger-related costs of CHF 91 million improved from 12% in 2013 to now 12.7%. This is a result of disciplined pricing and our efforts achieved under our Holcim leadership journey.

Net income attributable to Holcim shareholders decreased by 10.3% as 2013 included the gain on the sale of the 25% stake in Cement Australia and the compensation payment from Venezuela, which we received last year but is delayed in 2014. Cash flow from operating activity was down 10.6%, exclusively due to negative foreign exchange impacts and lower dividends received.

Moving to the foreign exchange rate impact, overall the translation impact on our Q3 2014 net sales amounted to CHF 232 million and minus CHF 35 million on operating EBITDA respectively. These negative impacts are lower than we have experienced in the first six months of 2014 as the maturity of our trading currencies have stabilized.

For the first nine months of the year, however, we still suffered substantial foreign exchange losses amounting to over CHF 1 billion on net sales, nearly CHF 220 million on operating EBITDA, and around CHF 150 million on operating profit. The most pronounced negative foreign exchange rate movements were witnessed in Indonesian rupiahs, Brazilian real, Indian rupee, Australian dollar, Canadian dollar, and the Mexican peso.

Operating profit reached CHF 1.7 billion, an increase of 2.8% on a like-for-like basis. Like-for-like and adjusted for merger and restructuring-related costs operating profit increased by CHF 141 million, representing an increase of 7.8%.

Benefits from a mild winter and restructuring initiatives in Europe, from a stronger economy in the U.S., and from volume recovery in India have been partially offset by adverse developments mainly in Holcim Australia, Azerbaijan, Brazil, Chile, and, in Europe, pronounced in France and Belgium. Operating profit margin increased from 12% in the first nine months to current 12.1%.

Adjusted for the restructuring and merger-related costs, operating profit margin increased to 12.7%. When looking at the operating profit bridge for the first nine months 2014, we see a picture that gives value for optimism, as volume and price improvements more than offset the negative impact from increased variable and fixed costs.

Excluding the restructuring and merger-related costs of CHF 91 million from the fixed cost development would have been flat in the year compared to a year ago, so no fixed cost increases compared to 2013. The leadership journey continues to be an important contributor to our earnings quality, as the markets alone do not yet allow us to cover the persisting cost inflation in some counties entirely with higher prices.

Variable cost measured as cost inflation without considering volume movements increased by 2.8% in the first nine months in an inflationary environment on our footprint of somewhere between 3.7% to 3.9%. If you break the 2.8% down a combination of 3.6% of inflationary pressure manifests themselves in higher distribution costs and 2.4% in the increased production costs.

Distribution cost increased in India, Indonesia, and Argentina, Argentina mainly as a result of the very significant inflation in Argentina itself, while production cost increases were most pronounced again in Argentina, Indonesia, and Ambuja cement in India. The Group region Asia Pacific decreased its operating profit by 12.4% to roughly CHF 700 million.

On a like-for-like basis, it deteriorated by 1.9%, despite some progress on the cost front. Positive cement volume and price dynamics in India could not offset adverse cost development in Indonesia, again, mainly related to distribution and lower contributions of Holcim Australia.

Operating profit for Group region Latin America deteriorated by 14.9% to roughly CHF 490 million. Cement volume dropped in some key markets together with higher variable costs in Argentina, Brazil, and Chile resulted in decrease of operating profit for Latin America by 6.2% on a like-for-like base.

Mexico managed to improve its operating profit despite still sluggish cement market environment in the first nine months of the year. The Group region Europe improved operating profit by around 26% to CHF 397 million, despite slowdown in economic recovery in major European markets, continental European markets.

On a like-for-like basis, operating profit increased by 19%. A large part of this growth was and is attributable to the restructuring initiatives executed in many counties in the second-half of 2012 and 2013, coupled with cost discipline.

Additionally, aggregates industry UK benefited from a more dynamic construction environment. Group region North America posted the highest operating profit growth, at 47%, and if you look at it on a like-for-like basis even more at 56.7% to CHF 215 million.

This growth was only attributable to ongoing solid recovery in the United States. Operating profit in Canada deteriorated slightly on a like-for-like basis.

Operating profit in the Group region Africa Middle East improved by 5.5% to CHF 171 million. Positive cement volume dynamics across the region together with price increase in Morocco resulted in increase of operating profit for the region by 11% on a like-for-like basis.

On net income attributable to Holcim shareholders decreased by 10.3% to CHF 933 million. Below operating profit, other income decreased to CHF 108 million from CHF 203 million a year ago and was mainly driven by the gain on the disposal of the 25% stake in Cement Australia in 2013.

The contribution from associated companies improved and amounted to CHF 124 million mainly due to additional contribution of Huaxin Cement in China. Financial income decreased to – excuse me, decreased to CHF 93 million from CHF 168 million as a result of, as I have mentioned before the delayed payment related to the nationalization of our assets in Venezuela.

Financial expenses last, but not the least, decreased from CHF 576 million to CHF 436 million driven by lower interest expense and lower foreign exchange losses. The overall financing requirements for the first nine months amounted to CHF 742 million, cash flow from operating activities, as mentioned was at CHF 1 billion compared to the same period in 2013, now roughly 10.6%.

Cash flow improvements in India, in the United Kingdom and North America were offset by adverse performance in Azerbaijan, Indonesia, Brazil, France, and as we have spoken in the past related tax payment through the tax reform in in Mexico. Like-for-like cash flow from operating activities decreased by 4%.

For the nine months 2014, investments to sustain the asset base decreased to 700 – to CHF 365 million. On the net base expansion investment at CHF 784 million, are down 13.8%.

Total shareholders' equity increased to roughly CHF 20 billion. Net financial debt compared to year end 2013 increased in absolute terms by CHF 951 million mainly due to foreign exchange impacts and lower dividends received, but remained almost stable over the last 12 months.

So with this thank you very much. And I'd like to hand over to Bernard.

Thank you, Thomas. And now for the outlook for 2014, Holcim expects cement volumes to increase in all Group regions in 2014 with the exception of Europe.

Despite positive developments in North America, aggregates volumes are expected to decline. In ready- mix concrete volumes are expected to decline in all regions driven by restructuring and divestments.

The Board of Directors and the Executive Committee expects that organic growth in operating profit can be achieved in 2014. The ongoing focus on the cost base, coupled with all the benefits expected from the Holcim leadership journey will lead to a further expansion in operating margins in 2014.

Ladies and gentlemen, with this, I would like to conclude our introductory presentation and open the floor for our – for your questions. I propose that we start with a couple of questions in the room and then we'll continue with those who are connected to this conference.

I have a question on your guidance. You expect organic growth in operating profit for the full-year.

Now, in the first nine months, you achieved 3%, I think that's the comparable basis organic growth in operating profit. In the fourth quarter, you will face quite a challenging weather comparison in Europe.

So what makes you confident that you can be able to achieve this positive organic growth, is it on the cost side due to the recent decline in some major raw material price, I understand that oil is not so important for you, but all the derivatives. So will we see that kind of benefit starting in the fourth quarter, or what else do you have which would…?

So for me, thank you, thank you, Patrick. For me, first, you can see that the momentum on the Holcim leadership journey was strong in Q3 and remains strong, so this is one thing.

Second, you could see that North America, in particular USA is doing well and is driving the growth of our results. In Q3, if you take India, you could see a completely different story on the margins.

We didn't benefit from all the volumes that were offered by the market, but very focused on improving our own margin. And if I just take the operating profit margin of ACC, they gained almost 3 percentage points during the quarter and Ambuja was close – was more than – almost 5 percentage points during the quarter.

So that's a big difference. And finally, Mexico, which is a large country for us, last year volume and prices decreased by 9%, minus 9% on volume and 9% on prices.

Now, we are back to positive orders in pricing, so the pricing situation is healthier. So that's the fundamental that we have.

Of course, there are some challenge here and there, but we have also, I think a better orientation of our footprint.

I think, if I may add, if you look at the growth development and margin development overall for Holcim in the third quarter, we believe is actually pretty strong. So if you adjust the quarter for merger-related costs they are not going to be there forever, as we all know, and the restructuring which we have initiated beginning of the year, then we are growing operating profit for the quarter at 7.2% When you look – I give you another indication.

When you look at the operating profit bridge, which I have presented, the fixed cost virtually remain stable, or virtually they remain stable. We have gained in volume and price in the nine months, now I'm jumping to nine months.

We have gained close to CHF 400 million on operating profit through volume and price. On the other hand, we suffered still some inflationary pressure on variable costs, main driver there is distribution.

So if you take that inflation off of CHF 238 million, CHF 240 million then you have a contribution for the first nine months on operating profit of roughly CHF 140 million. Unfortunately, we are still negative, but we – your question was about like-for-like, unfortunately, we are still negative because of the currency.

So in the fourth quarter, the currency impact, as you have seen also on the slide in the third quarter, currency impacts were significantly less. But we are talking like-for-like, I understand.

And we believe that in Europe the positive development in the UK will continue as compared to a year ago in the fourth quarter. We still have strong performance on margin and contributions in Russia and in Azerbaijan.

And then, of course, we have the mixed bag as we talked about it in Europe. India, you've seen the results of India what Bernard has mentioned.

India and Mexico really start to gain momentum, and the United States clearly is off to a good track. Now in your question was also the word weather, and, yes, I'm not going to predict the weather.

Based on the record we have today in the first nine months and how we believe compared to the fourth quarter 2013 how things should continue, we feel confident and that's why we have stayed with the outlook the way we phrased it unchanged. Just to double check, this guidance is – is it excluding merger costs, or you intend to achieve growth despite the merger costs?

And if it is so what kind of – what amount of merger costs do you expect in the fourth quarter, and probably also a word to the energy costs outlook.

I will take the energy cost, now you take.

Okay. So with respect to merger-related costs, they are slightly higher than we have – I think, we talked about this.

I don't remember when I think it was after the first quarter when we had the press conference. I think, the guidance we were given you then was somewhere between CHF 50 million and CHF 60 million.

So we are today a little bit higher. We are somewhere between CHF 70 million, CHF 75 million on merger-related costs.

We will also have a – the Wellington transaction or the transaction with CEMEX, as we have announced last week has come to a successful conclusion. You may have and you have paid attention, which I'm sure, you all did.

You have seen that the scope of the transaction has slightly changed. We are no longer selling all our assets in Spain.

We are selling two plants in Spain. The other assets we keep.

Originally, the plan was to sell all assets and to keep a 25% interest in the CEMEX Spanish assets. So due to the change of this transaction, we will have additional depreciation costs, which we have – these assets were held for sale, as you may recall, so we will have – for the assets we don't sell, we will have additional depreciation costs in the range of CHF 20 million.

We will also have a gain on the sale of these assets, but the gain obviously will only be realized in our accounts at closing. And closing is expected to take place last year – last year, that would be nice – is expected to take – I wish to take place next year, so there is a little gap.

But when we give about guidance, we are talking about like-for-like. As you have read, we are not talking about excluding merger-related and restructuring costs.

Thank you, Thomas. As for the energy, so if I take energy costs after nine months, we are at CHF 14.00 per ton of cement.

Last year at the same time, we were at CHF 14.8 million. But if we take it like-for-like, because we had a lot of currency movement.

We are CHF 0.7 higher than the situation after nine months last year. So it’s mostly linked to the increase of electricity price that we face in Indonesia, maybe that government announced an increase of 60.7% in foreign payments, so we already have three of the foreign payments in our costs in Lebanon, in Australia, in Cement Australia and, to some extent in the Philippines.

This being said, yes, the trend on thermal energy is probably more favorable, as we can see. So – but at this stage, it's a relatively stable plus if we take like-for-like because of this electricity impact.

I will take a second question and then I will switch to – yes, and I will be back to you.

Remo Rosenau, Neue Helvetische Bank. We have seen that India seems to go through the trough now, having reached the trough, getting a bit better, which is the most important country for you in this region.

However, due to other countries, we still have the lowest margin of all regions in the region Asia Pacific of – if I'm not mistaken in the third quarter of 18.4% operating EBITDA margin, which is lower than Europe and lower than all the other regions, used to be almost 30% a few years ago. Okay, things start to get a bit better in most important countries, but where do you think you should get to over the next few years in operating EBITDA margin in this region looking at all the developments you see at the moment?

So Philippines is doing well. India, but you know when you – we went down on price and volume and a month and now when you recover, you need a – you come – you start from lower.

But here clearly, we have a better trend. We have suffered in our margin in Indonesia partly to distribution and electricity, but also because we had a delayed startup of the new plant in Tuban.

And to prepare the startup, we made some trade by buying clinker and selling cement and this clearly impacts the margin. So you see our volume grows margin with the market, I think our volume growth after nine months is 4.8%, so we grow, but now we should enjoy the full effect.

So we see all those touches coming in the right direction. Where we have suffered was in Australia, because we were switching from higher- margin activity in mining, where the activity probably goes down and should be sustainable with the soft landing we can see in the deliveries to China to increasing real estate activity in housing, but with lower margin.

And to acknowledge that, we have initiated a cost adjustment initiative in Australia in October, so this has been implemented, and we believe that with this we will stabilize and further improve the margin. So I believe this area is geared for improved margins.

So summing that up means that we should expect, or you probably internally expect not a slight improvement in this region, but a remarkable improvement.

So you could see when it goes down, it goes down, so we swallowed it. We tried to mitigate by effect, but we then – we need to have the proper timing of it.

But it's true that if a country like India comes back to higher margin as we expect, it's very significant, yes.

So you have seen the margin development in the third quarter in India really positive, we are disappointed. We expected the turnaround in India this year to be visible earlier, so meaning the second quarter and in the second quarter, as you recall, unfortunately, we have not seen much.

Now, the third quarter was a very positive quarter relatively speaking to where we were. We are – clearly, when you look at the margin in India, India is today somewhere around 19%, close to 19%.

Today we expect that to increase still for the full year of 2014, so to have a better margin development in 2014 versus 2013, but clearly not to the extent we originally have anticipated. But India is showing a very good trend, and clearly, when the margin starts to pick up in India, we may recall the nice days when we were over 30%.

We are now below 20%. We still expect a margin – sustainable margin somewhere between 26% and 28 in India.

They will not materialize tomorrow, but with this positive momentum we have today, volume improving now, price improving now, that we should clearly see visible margin improvements in 2015 absolutely.

Thank you.

Maybe I will take a third question and then we will switch to the operator, because I see we have a lot of questions. Yes.

Thank you very much. It’s Christian Korth from MainFirst.

I have two questions please. The first one deals with India as well.

You have announced last year some cost savings of around $150 million from the synergies effects from Ambuja and ACS. My question would be how that will play out over the next quarters, maybe you should, or you could shed some light on that please.

And the second quarter – the second question deals with the potential asset sales that you are targeting. I just would like to ask if you could give us some kind of schedule how things could happen going forward?

Also related to the question with the European Commission where you have filed for the approval, do you have, for example, to sell the assets first before you will get the final approval? that will be very helpful.

Thank you very much.

Thank you. I will go to Europe.

Do you want to take the $150 million, or I can take it too?

Yes, so with respect to India, the $150 million cost savings, if I recall the number right, I think it was in U.S. dollars.

Yes.

This is related to the restructuring of India. We have not been able to close that restructuring yet.

We are waiting for the last approval from the Foreign Investment Board, which has to – we have all the approvals in India with the exception of, as I said, the FIPB approval. This approval we have to get in order close the transaction.

And only when the transaction is closed, we can then start working, I mean, we have the plans in place, but we have – we are not able to implement it as long as the transaction is not closed. So we talked about – positively about the election and the impact it has in the trading results.

However, due to the change in government, the approval process with the new administration – old administration didn't want to approve it, passed it on to the new administration, and so that has clearly taken longer than we have thought. So that's directly connected, so you can expect these savings to materialize as soon as we are able to close on the transaction.

And the next question is then when do we get approval. Since we had so many deadlines already communicated by the Indians to us, it's a little bit hard to speculate, but we're still hopeful that we get the approval before the end of this year.

Thank you, Thomas. For the approval you need the Secretary of Economy, and he has been nominated two days ago, I think, so this will be helpful.

Back to the timing in Europe, so for the regulatory, we have notified the merger in all the jurisdiction, where this had to be done. It's roughly 20 of them and, of course, also in Europe.

In Europe, while we were in the pre-notification discussion, we had really a positive and constructive discussion with the case team to identify the necessary remedy package. We have also with the notification provided the remedy package, we plan to divest.

You could see that there is a small change, so to take into account those discussions, but no fundamental change on the size of the package. So now we will continue – European Commission will continue the assessment of the case.

We continue the divestment process with quite a good visibility on the divestment package. And then our plan is to conclude the sale of assets to one or several investors, we'll see the outcome of the process, conditional to the closing of the merger.

And we expect then we would – we might have booked an approval of the merger by the Commission, so we'll see if it's phase 1, phase 2, short phase 2, long phase 2. We believe all this is consistent in any case with a closing by midyear and with the remedies we propose and conditions.

And then – that's how the sequence will happen. And then we will only close the divestment of our assets when we have closed the merger itself.

So that's a bit the sequence of events that is planned currently. Now, I propose that we take also questions from those who are connected, operator.

Operator?

Thank you very much. Two questions from me.

Could you talk a little bit about Canada and, particularly, pricing there, I noticed it was up 0.5% after six months and down 1.7% after nine months, so what's going on there and some idea if pricing has now stabilized? And then also I, and I think consensus was surprised by the extent of the pickup in the profit contribution from Middle East and Africa relative to earlier in the year.

You referred to Morocco price increases. Was that where it mainly was, because I think the volume was quite weak in Morocco?

Thank you.

Hi, Mike. It’s Thomas Aebischer speaking.

Hi.

I understand you are talking about – let's talk about Canada in two respects, on one hand, of course, the aggregates performance, and on the other hand the cement performance. So on the cement performance, you have seen in the handout and in the slides, which I'm sure you have, that on pricing – domestic cement price, we are roughly 1.7% negative and the volume remains more or less flat.

It's – not exactly sure what your question is targeting, but it's what we also said in our press release and when you read the information Canada is kind of a stable environment. The price – the domestic cement price, the variance is also depending on the mix or the geographic mix of where we are selling product, because the price, as you appreciate, is different talking from region to region.

So in the 1.7% there is really nothing to read into it other than just a pure mix on the geographic mix of sales. And when you look at the aggregates position, in Canada in aggregates, we have actually been able to improve pricing.

Also the volume demand on aggregates was slightly higher – or was actually higher than in cement. And again, we have excellent positions of aggregates in the two big markets, in the greater Toronto area and greater Montreal market.

And these additional volumes are mainly related to large project, which are also reflected in the results of our construction business in Canada, big serial construction projects, where we had a lot of pull-through on our aggregates and less pull-through on the cement.

Okay. Thank you.

And as for Africa and Middle East for us it's mostly two countries, it's Morocco and Lebanon. So Morocco the – globally the market continues to go down.

You see there is a demand front, still Holcim Morocco has been proactive to increase the price. And that's why we reported already last time some price increases compared to past year even in spite of this difficult environment.

And this was, in particular, possible because we have a good integrated platform that we call Batipro that allows us to really work with a very committed retail network, and they are doing a great job there. The volumes in the market go down, but Holcim Morocco – thanks to this retail network has a good performance.

And on top of that, we have used Holcim Morocco to ship some products to our activities in the West Coast Africa that allows us also to have an impact on the cost per ton in the country. As for Lebanon, in spite of all the tensions you may find in the area, they continued to increase their volumes, had more difficulty to increase their prices, but their volumes continue to improve.

They work as Holcim Morocco on their cost, so there are positive developments there. In Lebanon it's the situation in Aramex, which is a bit more challenging currently.

So all-in-all it's a positive development we can see there. Not yet visible I think even this year for us, La Reunion where there is a big project, which is La Route Du Littoral, the road all around.

That's a massive project, has now been initiated. So we started the first shipment.

I think, the visible effect will be more for next year, but we will also…

And maybe if I can add on Canada, Mike, since you know the markets very well and you are very much also in the detail with respect to projects. The crushed stone increase – the aggregates increase is mainly due to two initiatives in Ontario wind farms and.

And as you may recall, the extension of the Highway 407, which we started and we were also the main provider of building materials back, maybe, I guess, about 10 years ago. They are now extending the Highway 407 around the Toronto area and that's the main driver for the increased aggregates volumes.

Operator next question?

Hi, good morning, I've got a couple of questions. The first one is on Indonesia, and you alluded to it that, obviously, there is a cost mismatch with clinker imports and Tuban not having fully ramped up.

And we can obviously see the local accounts, where margins are down, I think almost a 11 percentage points year-on-year in quarter three. I just wanted to get a sense when that stabilizes, i.e., are you saying this is already a quarter-four event, or is it going to continue to be down year-on-year of a similar scale for a few more quarters before we sort of get a sequential improvement?

The second question was relating to India, I just wanted to see – I think you’d previously given the guidance of 18%, or a target of 18% EBITDA margin for the year. Is that something you are willing to confirm today, or does that change at all?

And then the final question is maybe a little bit of a controversial one, but it's relating to your merger with Lafarge. Obviously, we've seen some intense – more intense pressure in some of the Middle Eastern countries coming out.

We'll obviously see what Lafarge reports later this week. But from your own perspective is there a point – if the operating performance of the two businesses diverge too far at which point do you think the deal terms are not appropriate anymore?

Thank you.

So for Indonesia, so this is linked with the startup of Tuban 1 and the data I had two days ago is that from November, we should rely now completely on Tuban 1, because when know when you make trade you need to speak to yourself and then swallow it. So the effect should – positive effect should start from November.

In India, so now it's – as was mentioned in the previous question, so then the dynamics can be quite strong in one way or the other. If I take the margin in India, we have at the end of nine months an EBITDA margin – or a operating profit margin of – sorry, an EBITDA of 18.6%, 21.6% in Ambuja and 15.8% in ACC.

So what we could see is that, the margins have improved in Q3. If I take the EBITDA margin in Q3 in ACC, it has improved from 11.9% in 2013 to 15.2% in 2014, and from – in Ambuja from 14% in 2013 to 18.6% in 2014.

So you see we go in the right direction, so now it's where shall we go. We need to see the – really the story at year end, but I think we go really in the right direction.

Finally, you were mentioning the footprint, so the footprint is the footprint. The only thing I can tell you there is – in the merger agreement, there is no adjustment on the eastern threshold, that reflects the situation we have.

So maybe one more point on India. I think, if I understood you right, you mentioned 18%.

Clearly, this will be higher than 18%, the way Bernard has described the third quarter. If you extrapolate that to the fourth quarter, which festivities of October are now behind us, so we look at the moment closer to 20% than to 18% in India for the full year.

Your comparison under your accounting please?

So there is – it's like-for-like compared, so we are not – there is no accounting adjustments. We don't make accounting adjustments without talking about it, so it's comparable to the same comparison to 2013.

Obviously, we're all looking at local GAAP. It's different to the whole semi-IFRS numbers, that's what I was referring to in India.

Yes. There are obviously difference when you look at the published accounts in India.

They published them in line with Indian GAAP and we are publishing our account under IFRS, there are slight differences. But what I’m saying is there are no change to IFRS, we are comparing apples with apples.

The number I have given you is comparing apples with apples.

And the trend in margin in any case is more or less the same.

Okay. Thank you very much.

Thank you.

Thank you. Next question operator?

Yes, good morning. I've got a few questions please.

Firstly, with regard to the proposed Lafarge/Holcim merger I think there is another comment on newswires today about considering the option of IPO'ing the assets. If you were to go down that route, would you have to sell 100% of your stake in that business, or could you remain a minority shareholder?

The second question is just for comparing 2015 to 2014, can you just confirm whether there will be – whether you expect there to be similar restructuring and merger costs for the 2015 year? And then finally, just a market comment, can you just give a little bit more detail on market commentary on Australia, please?

Thank you.

I will take Australia and merger cost in 2015.

Okay, merger cost in 2015, it's a good question. It will depend also on commissions and how quickly we get approval.

The longer that takes, the higher the costs. But today – as with the knowledge we have today, and clearly, we expect that we have all relevant approvals from the Commissions sometime early next year, that with – under this assumption merger-related costs are going to be in the neighborhood of CHF 100 million for 2015.

With respect to the spin-off, or IPO, or I had a little bit trouble hearing your voice clearly. But with respect to the spin-off, or the hybrid capital market option as we call it, clearly, not 100% would have to be sold.

But anchor shareholders would not be entitled to still hold investments in the new entity. So that’s the main thing and obviously for a capital – or for a hybrid capital market option, we would have solutions already today if that's the option we would contemplate.

But it is one of the options amongst all the other options and the all the other options are pretty obvious, a straight-out sale either on a global scale or on a package scale the way we have communicated it.

And I think there was a request for more precisions in Australia. If we take our situation after nine months our volumes were down by 2.5% compared with past year, and the prices were down by 4.1% compared with past year.

And this 4.1% doesn't reflect some price decrease. It's a mix effect in our shipment, because when we supply to (inaudible) remote, mining activity will have a different set-up with higher margins.

So I think more or less the situation is currently this one. We took the assumption that the mining activity would remain where it is and would not be back necessarily to the higher volume of the previous years.

And that's why we have chosen to restructure our activity of fiscal space and that's what we do now. And I believe with this we will stabilize our situation there.

On the market itself, our teams are promoting price increase in the housing market, and I believe they will be successful.

Thank you.

Next question.

Good morning, I just had a couple of quick questions. The first one is on cost saving.

Clearly, you've already exceeded your leadership journey targets. I just wondered if you are expecting to do more in the fourth quarter and what we can expect further for 2015?

The second question is just related to the energy cost inflation. I just wondered if you were to kind of see markets as they are now going forward for 2015, how are you thinking about budgeting for energy cost development?.

I know you can't give official guidance probably at this stage, but just if markets were to stay where they are, how do you see things progressing? That would be great, thank you.

Yes, clearly, Holcim leadership journey we don't stop at the end of Q3. And we’ll be happy to report further improvements in Q4, and this will continue beyond Q4, because it’s not a one-off exercise.

We do the exercise, but also insert in our processes, in our organization, in our culture, the way to make it a continuous initiative within the company. So I think with the Investor Day that will be plan on November 18, we'll have our body to update on this and how we would communicate in the future.

But you can count on a continuing momentum, of course, on this. My personal belief is that the more you work on it the more you get agility to do it, the more you get organized, and we have not explored all the possibilities we have in several areas like procurement, although that they overachieve already their targets and in logistics.

As well the energy cost, so clearly the trend on thermal energy is favorable. We had guided last year a bit increase over 2013, if we take 2014 energy cost, we are not worried at all on reaching or even improving a bit the situation.

And as for 2015, we didn't give yet any guidance. We will give it when we announce 2014 results.

But clearly, we see that where electricity had to increase it has increased. And the trend on the thermal energy, be it on coal, on pet coke tends to be relatively favorable in the current environment.

So, yes, with respect to energy, I mean, for the first nine months on thermal energy, we are flat, so no increase in energy costs on thermal energy. The cost increase we have in electrical energy, so that is virtually 100% of the increase of CHF 0.7 per ton of cement is coming from electrical energy, thermal energy flat.

And if you now break that down into geographies or countries then it's mainly three countries which are contributing to the increase in electrical energy cost. That's Australia, so clearly a big push on electrical cost in Australia; then you have Indonesia.

You may have read about it, a push in Indonesia on electrical energy costs; and last, but not least, it's the Philippines. So these are the three main countries which contribute to the electrical cost increase in the first nine months.

Great, thank you very much.

Thank you.

Thank you. I’m Martin Husler, Zurcher Kantonalbank.

My question, the first one, is regarding Mexico and I was just wondering, I mean, it looked like quite a turnaround if I look on Page 37, as far as prices and also volume seen after nine months. Last time, you gave an indication what happened in Q2.

Can you maybe give a sequential development for Q3? So how high was the improvement?

And what do you expect for the next couple of months in Mexico? And the other question is turning to Brazil, where you mentioned in your press release that you saw a pick-up in Brazil.

But if I compare the figures you gave half year, and now nine months, I see that volume – or cement volume the development, kind of decreased a bit from a 5.1%, improvement after six months to now 3.6% after nine months. I was just wondering how I have to read that.

And what do you expect for the remainder of the year in Brazil?

So in Mexico, yes, as – remember last year a minus 9% volume, minus 9% price. After nine month, the price situation has improved compared with past year by 1% and the volume has improved by 2.1%.

If I take sequentially the past quarter we have focused more on price. We continue to improve the price by 1.1% compared with the Q2 and we were more or less stable on the volume.

Now, if we consider Brazil, here if we take nine month now we are up on volume 3.6% and the difficulty is more the pricing situation, because we are down by a bit more than 4% compared with past year in a country where there is still a bit of inflation. So here the momentum in the country it depends also the different regions of the country but not that strong as what is expected.

You have a bit of pressure on the price and I expect it to continue over Q4.

So if we look at it a little bit over various quarters and you look the sequence in Mexico then you clearly see the positive development on price sequentially. So when you go back to the first quarter the price increase was sequentially 5.3%, then you had 2.6% and now 1.1% and now I’m sure you know math better than I do, don’t think now this whole thing is slowing down.

The number is bigger and so the percentage is more difficult to push more – higher percentage numbers too. However, already looking at the fourth quarter in Mexico clearly the first indication is that this positive trend is going to continue.

And we were – on the volume side in Mexico we were more or less stable sequentially in the third quarter mainly due to the fact what Bernard has explained our focus on – really on volumes and on quality projects. This is in contrast to what do you see in Brazil.

In Brazil, we are in an extremely competitive environment, competitive environment that the news you read – I'm sure we're reading the same papers, it gets more and more competitive, and that competitiveness results in the negative pricing situation we have today in Brazil.

Okay. And then, maybe just one more on Venezuela, just to understand the process, what do you have to do now to actually get hold of the $97 million that you're still missing?

And when do you expect to receive that money?

I expect to receive the money on the September 10, then they had the 15-day grace period, so my next expectation was September 25. And now my next expectation is – because this is from the legal proceeding the next big date is November 9.

We have, obviously, contacted with the Venezuelan government. We have a very good contract, we can immediately virtually – after going through the legal proceedings, which are very short, we can virtually access the foreign assets of Venezuela, that's the agreement we’ve reached back in 2010.

So Venezuela has confirmed to us that they are willing to pay, but they are still looking for the money. So I don't know where they look for the money but we expect – in our internal calculation we are still expecting the money to receive before year end.

Is this positive, is this – I don't know, it’s our assumption based on the interaction we had. But definitively no – now, let's maybe take another question from – definitively no impairment.

We believe we have a very good contract and first and foremost we believe that the Venezuelan government honestly is trying now to pay the money to Holcim.

Thank you. Any question in – yes.

Michelle, any questions from the operator?

Yes, a couple of questions on pricing. First, it seems that in India the pricing was very good in the third quarter, but volume was a little bit weaker than some of your large competitors.

Is it the strategy at Holcim to produce on pricing and margin other than volumes? And then in France I think we've seen the opposite effect at the beginning of the year where volume were then much better than the market, but – so I'd like to understand if there is a pricing strategy there.

And then on the pricing strategy I would have a question about the pricing strategy in Indonesia and Columbia, where I think there are some new entrants, so mostly in Indonesia but a little bit in Columbia as well. Will you focus on prices or market share in the next quarter and in the coming years?

And then I have a question on the merger. First, we think that CEMEX and HeidelbergCement have announced that they are not considering to bid for the asset, is it a disappointment for you?

And another question on the merger was can you – if – can you avoid a Phase 2 investigation if you sell all of the assets there quickly? And is there is a Phase 2 investigation can you still close by the end of H1 2015?

So thank you. So I will start with the pricing in India.

So clearly the price strategy in Q3 was to avoid the price erosion that happens in the monsoon. Typically, you lose in history of INR500 per ton in the monsoon and here the strategy was to really focus on keeping the price and entering the post-monsoon area on a good price basis and entering next year on a good price basis.

And I must say this has being relatively successful, so of course, we have not achieved the same amount of volume development compared with competition, but it was a deliberate choice. Now the companies are in their market, that they are – and thanks to this that we’re able to over-perform and the financial results the competition.

Now, if we go in Columbia we could see our volume increase by 4% and the price suffer a bit by something like 4% in the – to take into account the dynamics you are describing on the market. At the same time the company is doing a lot of effort also on efficiency, so they have quite a good financial performance.

In Indonesia you can see that our volumes are more or less with the markets, slightly higher. We have – we want to increase price because there is the increase of the price of electricity, for example, I was mentioning to you the 64.7% increase of the cost of electricity by the government decision.

It seems so this has to be acknowledged and passed on, on the market. And I believe this will still be possible, because the start-up of Tuban 1 has been prepared.

We were importing clinker, so it's not a massive disruption on the market; it's just the substitution of production from our own assets to import. And it allows to our view a soft landing and will also allow us to reduce the distribution cost.

And Thomas was mentioning the increase of distribution cost in Indonesia. Part of them are linked to specificity of the country, but part of them were also linked to the fact we are to ship on longer distance in the preparation of Tuban 1.

So here I believe we should continue to focus on price. And we don’t see a big issue to place our volumes, because they are already on the market.

There was another country for – on price now. Then there was a question, if we divest could we avoid a Phase 2.

I think in the merger the sequence is a bit different. We notified this opens a 35-day period for the commission to go in Phase 1.

They may also make market tests. And after this Phase 1 they decide to approve unconditionally, with conditions, with remedies, or to go to Phase 2.

Phase 2 can be long or short Phase 2. And in any case the way it is structured, we have already put on the table a proposal of divestment package.

And it will be entirely the decision of the Commission to do only a Phase 1, or to do a short Phase 2, or a long Phase 2. If go to the Phase 2, it’s a four-month process, which itself is consistent with the goal of closing the deal of mid of next year.

And so, we go with the divestment negotiation on one way. We have this new process on the other way.

What is important for us is the stability of the divestment package. That's why all those positive and proactive discussions have been held.

And we are confident on the very high quality of our divestment package.

Okay. So part of the question was about CEMEX and Heidelberg, if I understood the question right.

So CEMEX we never – they were never part of the process to our knowledge. And so, no, they were – it was known to us that they are not participating from the very beginning, so, no, this is no surprise and also no disappointment.

With respect to Heidelberg, the announcement this morning, they were part of the process, otherwise they would not have said that they no longer part of the process. The deadline of non-binding offers was October 20.

And after we have reviewed the non-binding offers, we have invited certain parties into the second phase, and normally don't invite everybody. That's just not part of how the process is structured.

So are we disappointed that they are no longer participating? I leave it to you to come to a conclusion whether Heidelberg would have been a potential buyer for assets in Europe.

Most likely from a Commission's point of view, no, so we are not disappointed, but just reflects business reality. We have a lot of interest and we are very confident and actually very satisfied, where we are today in the process.

And now with the bidders, we have selected we are now going into a phase two.

And with CEMEX we really had the very constructive discussion on interlink transactions, because – so if you remember, we have exchange assets in Czech Republic, in Germany, and in Spain, we have to combine all our assets in a company where we will keep 25%. And those 25% plus the Lafarge assets would have been a bit too big if we take competition considerations.

So we find a deal where they buy 100% some of the assets and we keep other assets, mostly the plant in Caboneras that we use for export and (inaudible). So it's a good outcome for, I think, for both the parties.

And for Holcim it's a good position in standalone and in the context of a merger with Lafarge it's a good combination with Lafarge assets. So it was a positive discussion for all the parties.

Thank you very much. And the other country was France on pricing.

Can you please repeat the question..?

Sorry, the other question was – the other question on pricing was your pricing strategy in France, but it seems that you have gained a lot of market share in H1 and then lost some market share in Q3.

No, we did not gain market share in H1. We have had the situation in Europe – in continental Europe, where we had weather-related increases in volumes and then, obviously, other projects which are going on.

So what you see in France is just a normal market development. Now in 2014 with the weather being whatever it is, which was very nice in the first quarter.

We had strong volumes and now this is leveling out as we go to the remainder of 2014.

And also I think something you sometimes spot, in France we are a bit less present in the south, so are a bit less sensitive clearly to the market to the more difficult situation in housing, that's more or less what you can read in our figures.

Okay. So the difference versus the domestic market will be your regional exposure?

Sorry, I cannot hear you.

The difference between Holcim volume and the cement market volume – the domestic market volume in France would be your regional exposure.

We have a different regional exposure than other producers, other companies in France, and therefore the development is not one-to-one comparable.

Okay. That's very clear.

Thank you very much.

Thank you.

Thank you. Next question?

Yes, good afternoon gentlemen, I had two questions. My first question will be on India.

And I wanted to know if you could give us maybe a sort of a feel of the market after the monsoon, maybe the first week of October, if that's possible. And my second question will be on the ForEx.

I just wanted to have an idea of at – I would say at spot market of today, I mean, would you have an impact on your EBITDA on the ForEx, or could you maybe help us a little bit in the forecasting there? Many thanks.

So thank you. So I will start India and you will do the ForEx, Thomas.

In India, so in Q3, we were able to increase our price per bag in ACC by INR 15, and in Ambuja by INR 23, which is – in monsoon time is not that obvious. And what is happening?

So the cement market is positive. Our teams see a global increase for the year of 5% to 6% on the market.

October, you have a lot of festivals, you have Diwali, so you have also to take into account this for the volume aspect, but what we see is that the price situation in India remains healthy. So it’s a good – it's a complete different contribution than the one we had last year, where we were suffering important price decrease and volume decrease after the monsoon.

So that’s why we were positive in – when we are answering what can sustain our outlook, it is one of the elements. Of course, we must not always overestimate, but those trends are clearly in the right direction.

Then you have, of course, overcapacity in the country, so it's a bit more than 100 million tons overcapacity. Most of the overcapacity is in the South 70% of it and our teams estimate the overcapacity in the north region of a bit more than 20 million tons.

For the rest, the regions are relatively balanced, or even could be short of products in the near products. And the situation was very difficult in the south, especially in the first months of the year.

And the south, even if product doesn't ship that well, was starting to put pressure also on east. And we could see in the recent week considerable improvement of the pricing situation in the south, which, of course, will help sustain and continue to improve the price in the east region, which is an important region for Holcim.

Thomas?

So on foreign exchange, if I understood the question right, for the remainder of the year giving a forecast of currency (inaudible) we are very good at. But if you want to take – if you take history as an indicator for the fourth quarter, then clearly, we believe that the worst for the time being with respect to softening currencies is behind us.

We have suffered a lot in the first quarter this year. In the second quarter, you have seen the impact on operating – excuse me, on operating EBITDA for the third quarter was small negative CHF 35 million.

So if the currencies behave virtually where they are today for the rest of the year then we could actually see slightly positive contribution on operating EBITDA for the fourth quarter of 2014. So that would be – in absolute terms, at least, that would be good news.

But again we all know currencies can move very quickly. But since the currencies came down sharply last year, that is a good indication, since we have now a more stable environment that we should have a positive contribution, or a flattish contribution for the fourth quarter 2014.

Thank you. Next question?

Thank you very much.

Thank you.

Thank you. The first question is just coming back to Ambuja, the 1% volume rise in Q – the 1% volume fall rather in Q3.

My understanding was that, your volumes rose in July between 10% and 15% in Ambuja, and August, I believe you said were very strong. So can you just say what happened with Ambuja in September?

And then the second question, the price falls in Europe, the minus 2.7% for the nine months. There is some consistent price falls in France, Switzerland, Italy, can you say whether those price reductions are real price reductions in the market, and whether you see those as being sustainable?

So in India, yes, you have a slightly negative development from Ambuja, but this was clearly our strategy in Q3 to go for price, because in Monsoon you have less things to sell, so no need to reduce your price, because you don't have volume there. And they lost a bit, but it was a rational decision.

Also last year more or less at the end of Q3 and early Q4, Ambuja had a push of volume to regain some position, but they lost on price. So clearly, you will see a bit of – again of this when you will compare 2014 with 2015 – with 2013, a bit of this effect, at least, at the beginning of Q4.

So possibly a bit less horrible comparison on volume for Ambuja, but the situation on price is absolutely different. And what matters at the end is what we put in the operating profit in EBITDA and the financial results, and this is a good story.

So there was a bit of a special push on volume in Ambuja last year that also explained this one. As for Europe, so we saw some price erosions.

In fact, if we – if I read in retrospect, there was a strong activity because of the absence of winter. And the volumes, when people are accustomed to see the volume coming were not as strong, because what has been erected – I can see the building in front of my office, which is done in January, it doesn't need to be done in spring.

And as there were less volume at that time of the year, we saw a bit of pressure on the prices. Should it be a really sustainable?

I’m not, because you can see a focus on return, a focus on margin, and the effect of restructuring, so I see still a relative resilience of prices in Europe.

In Europe in Q3, you've said in France you see a normalization that you've got slightly positive volumes. Would you apply the same to Germany, where it looks like your volumes were double-digit, and it looks like you lost more than 20% down in volume in France and Italy.

Are these really just seasonal factors that in the first half you saw volumes were good and then Q3 it collapsed?

So clearly Germany improved its performance, but I link it more to the restructuring effort that has been done to – and you see a bit less Aramex sold there, because we went through partnership and so on, and more than to restructuring than the massive impact from the market.

If I can add for Europe, the generic question you are asking about Europe, as you know, we have adjusted the outlook. When it comes to volumes, we have talked about this.

So that we have – Holcim expects cement volumes to increase in all group regions with the exception of Europe. So what we see is a leveling out of the very significant volume increases in the first quarter, mild – very mild winter.

But clearly, if you take that statement, we will have slightly less volumes in Europe in cement, expecting it today in 2014 versus 2013. So there is clearly some weakness when you look at some of the countries, some weakness going on.

It's nothing dramatic when you look on the other hand, and we are not in cement. But when you look at UK, for example, very positive development in the UK, in general, and you have the weaknesses on volumes in France.

You have weakness in volumes in Belgium, and in Italy, and when you look at Switzerland actually on the volume side pretty resilient on volume. So it will be slightly less, but nothing dramatic.

And as you see volumes going down, it's a very natural occurrence that you experience some pressure on price.

Thank you.

Thank you. I propose we take a last question on the phone.

Operator?

Good afternoon, gentlemen, just two quick questions from me. Can you just remind us how you are booking the merger charges?

So you've kind of talked about CHF 70 million to CHF 75 million for 2014, another CHF 100 million for 2015. Can you just remind us where you are booking goes by – through the corporate line or by division?

And then in terms of your CapEx you haven't changed your CapEx. You are guiding CHF 1.9 billion having done CHF 1.2 billion in the first nine months.

And can you give us some idea of where that kind of goes to – for the full year, do you still expect to spend CHF 1.9 billion, and maybe what you will do in 2015? Thank you.

So the merger charging for you, Thomas, and I will take the CapEx.

So I hope I understood you right with respect – sorry. With respect to the merger charge for the year guidance is say CHF 70 million to CHF 75 million for 2015.

And obviously this is in our support process cost, administration cost – corporate administration costs, where it’s included. It’s part of our fixed costs, that's when I showed you the fixed cost analysis.

If you really want to compare like-for-like then we take these merger-related costs out. We will account the same way, so it’s included in operating EBITDA and profit, therefore, and for 2015, it will be today anticipated in the neighborhood of CHF 105 million.

Thank you, Thomas. And as for CapEx, so at – after nine months, we have CHF 360 million – CHF 365 million in maintenance CapEx and CHF 784 million in expansion CapEx, so a total of CHF 1.142 billion, which is roughly 10% less than last year.

We have guided CHF 1.9 billion with CHF 800 million on maintenance and CHF 1.1 million on growth, so – but still there are still projects ongoing, so we’ll stop them are the answer. But we're okay with this guidance.

So with this, I thank you very much for your interest. If you have any questions, please, our investor relation teams are at your disposal, and I wish a very good day.

Thank you.

Thank you.