OUR JOURNEY TO CREATING A WORLD CLASS O2C FUNCTION

At the heart of construction.

Vision AI at the heart of construction. Our people leading a transformation of the construction industry to a more sustainable future. Mission To be recognised as the safest, most customer focused company in our industry. One team growing, innovating and developing together, creating sustainable value with higher returns.

Transforming the construction industry to a more sustainable future.

AI has global capability as part of LafargeHolcim Providing the reassurance of a long-term partner with extensive support

£2.7 billion

Operating Profit

£1.1 billion

Net Income

£21.4 billion

Net Sales

£4.4 billion

Operating EBITDA

90 countries

2,500 operations

115,000 employees

Swiss stock Exchange, SIX

& Euronext

2015 Investor relations figures

Al is available, across the UK and beyond Our extensive national plant network provides our customers with materials around the clock

46 Quarries

50 Asphalt Plants

15 Precast Concrete Sites

1 Secondary and Recycled Aggregate Plants

33 Railheads and Wharves + 17 across Northern Europe

5 Cement Import Terminals

1 Aggregate Bagging Plants

77 Ready-Mixed Concrete Plants, including 12 London Concrete plants

2 Cement Plants

4100 Dedicated Employees

Over

338 Including sales offices, depots and laboratories

Total sites

Operational excellence: delivered on a scale

Aggregates

31.4Mt

Ready Mixed Concrete

2.7Mm3

Asphalt

5.6Mt

Concrete Products

2.2Mt

Cement (Production + Imports)

2.5Mt

Contracting

2.0Mt asphalt laid

Our 2016 volumes showcase our production and delivery capability

The fundamental principles that underpin everything that we do The fundamentals are the core elements of our corporate DNA.

Health & Safety .

People Integrity .

∙ The safety of all the people we engage with as a business is our number one concern

∙ Visible Felt Leadership is a key part of this journey helping to achieve our best ever TIFR in 2014 (a group leading 1.26)

∙ Our people are critical on delivering each element of the AI strategy

∙ AI is an employer of choice by providing an interesting, rewarding and challenging place for our colleagues to work

∙ In all areas of our business and all interactions, we act with integrity

∙ Ensure we operate within a safe environment for all of our employees, customers, contractors and local communities building a true safety culture

Sustainability & stewardship ∙ A long-term commitment to our surrounding

environments and communities

∙ Gold leaf founding member of the UK Green Building Council

∙ Biodiversity benchmark status at key locations

∙ Founding member of the supply chain sustainability school

∙ First company in the world to achieve BES6001 responsible sourcing of construction products accreditation

∙ Market-leading Life range of products.

The responsible source – looking after our environment

∙ 2% electricity usage reduction 2013-2014

∙ 20 asphalt plants converted from liquid fuels to natural gas

∙ Transport CO2 emissions (kg/t) reduced from 4.62 in 2012 to 3.07 in 2014

∙ Water consumption reduction from 2012 level of 5.9M m3 to 4.7M m3 in 2014

∙ Waste to landfill reduction from 13,555T in 2012 to just 1,388T in 2014 with zero target for 2016

∙ “Make the difference” volunteering local community project across the company.

Sector-leading logistics

∙ By ship, rail or barge, we can move our products to market unlike any other in our industry

∙ Whilst reducing truck movements on the roads and carbon output

∙ 44% or 14.4Mt our aggregates were transported by rail or ship in 2014

∙ We operate 33 railheads and wharves with over 40 years experience

∙ Have an award-winning non-tipping trailer fleet of 27 units.

∙ Ongoing investment in our logistics fleet to ensure products are with our customers, as and when needed.

The UK’s most comprehensive range of building products and materials

Aggregates • Construction Aggregates • Rock Armour • Recycled Aggregates • Specialist sand • Building aggregates

and materials • Decorative stone and sand • Westcountry walling stone

Asphalt • Airfields • Infrastructure • Commercial • Industrial • Domestic • Sports and leisure • Road surfacing contracting • Small load and collect asphalt

Ready-Mix • British Standard

concrete mixes • Concrete specialist products • Screed • Small loads of concrete

Contracting • Surfacing • Civil engineering

contractor services • Composite pavements • Construction solutions • SpadeOak

Domestic Landscapes • Garden • Driveway

Building Products • Concrete blocks • Dense • Medium dense • Ultra lightweight • Insulated Concrete Formwork • Coursing bricks • Masonry • Roofing tiles • Walling • Walling blocks

Cement • Bulk Cement • Bagged Cement • Grey cement • SuperWhite Cement • Fly Ash • GGBS • Cement mixes

Commercial Landscapes • Paving • Kerbs • Surface water drainage • Staircase and flooring • Surface water solutions

and SUDS

Case Study Materials for unique applications BIRMINGHAM INTERNATIONAL AIRPORT

∙ Supplied specialist AirFlex asphalt product to deal with unique customer problem

∙ Specially designed to withstand the high stress turning forces of high axle-loaded vehicles

∙ Successfully trialled and laid at the UK’s second busiest airport outside of London

∙ Full depth reconstruction of the pavement structure utilising a 60mm layer of Airmat binder course

∙ Required high quality granite aggregate from our Bardon Hill quarry

ASP

AGG

CON

Case Study Creating icons THE SHARD

∙ UK’s largest ever concrete pour

∙ Significant volume of concrete required in short time frame

∙ 5,500m3 ready-mixed concrete poured continuously over 32 hours.

∙ Enabled programme acceleration helping our customers with cost efficiencies

∙ Cracking and shrinkage risk (due to heat build up during curing) of large volume pours expertly managed

∙ Managed logistics to ensure continuity of supply in the Capital's congested traffic

RMX CEM

Case Study Building gateways LONDON GATEWAY

∙ Record breaking single shipment of 86,813 tonnes to within 20 miles of central London

∙ Completed within 46 hours (against a target of 72) with challenges, including tidal currents and an incomplete quayside,

∙ Saved 9,000 vehicle movements and significantly reduced CO2 emissions

∙ Glensanda SuperBase™, SuperStone™ and SuperSand™ were used to produce Cement Bound Granular materials

∙ Creating heavy duty, high performance concrete pavements as part of the £1.5bn London Gateway development, the UK’s first 21st Century deep-sea container port and Europe’s largest logistics park

AGG LOG

Case Study Delivering 2012 OLYMPIC PARK ∙ One of the most successful construction

projects in UK history – delivered ahead of schedule

∙ Sole aggregate and RMX supplier ∙ 2.5Mt of aggregates delivered using 24

trains per week each carrying 1,200 tonnes ∙ Saving 125,000 vehicle movements in the

process ∙ Over 90% of total aggregate volume

delivered by sustainable source against a target of 30%

∙ Concrete with a secondary aggregate content of more than 50% supplied to several venues

∙ Over £9 million of asphalt surfacing

RMX ASP AGG

CEM CPR CON LOG

Case Study Delivering 2012 ∙ Cement substitution average of 32%

across RMX products ∙ 73% carbon saving using rail transport of

secondary aggregates versus road use ∙ Over 51k m2 of precast concrete paving

and 7k linear metres of kerb ∙ Concrete with a secondary aggregate

content of over 50% supplied (target of 25%)

∙ Over 450kt of asphalt surfacing and 1,500 bespoke precast concrete units delivered

∙ Over 4kt of waste materials taken away from site by our Bennetts Barges business

∙ Olympic Rings transported to site using our barge business

RMX ASP AGG

CEM CPR CON LOG

Case Study Connecting continents THE CHANNEL TUNNEL

∙ One of the biggest construction feats in modern history

∙ Supply of 2.3 million tonnes of Glensanda SuperSand™ and SuperStone™ granite plus 1 million tonnes of SuperRail™ rail ballast

∙ Supply solutions conducted over a six year period

∙ Used for production of tunnel segments and other construction works direct at the tunnel head

∙ A complete logistics package by ship, rail and dedicated supply terminal at the Isle of Grain, Kent created for this project

AGG LOG

Case Study Enabling journeys SNCF RAIL INFRASTRUCTURE, FRANCE

∙ A unique solution to deliver 90,000 tonnes of Glensanda SuperRail™ track ballast

∙ A bespoke logistics operation delivering material to Bilbao using Glensanda’s MV Yeoman Bank

∙ Using the expertise of our French Group partner to understand our end customer needs

∙ Technical services created a bespoke processing unit to tailor the material to French Rail specification

∙ Delivered against very tight timescales, keeping the network running

AGG LOG

Case Study A platform for performance PREMIER SPORT ∙ Aggregate Industries offer the UK’s most

extensive range of specialist sands for sports applications

∙ Four Specialist Sands sites provide sector-specific products to meet the exacting needs of professional sport

∙ Sands and rootzones have been trusted by national stadiums, Premier League grounds and training academies to create the perfect pitches

∙ Dried sands for Premier League rugby 3G pitches and volleyball sand for Olympic Horse Guards arena

∙ Bunker, dressing and drainage materials for golf courses including Wentworth, St. Andrews and Sunningdale

AGG

Overseas • Capability point • Logistics point • Speciality point • Structure point • Product offering point • Local sales management point

CREDIT SERVICES

A snap shot of what we do...

•Open new credit accounts •Allocate cash •Collect overdue and due debt •Manage risk •Work very closely with our Commercial teams and customers •Find trading solutions for out commercial teams and customer

© Aggregate Industries Ltd. 2016

How we are structured....... three basic areas.

New Business Opportunities - 3 FTE

Cash Allocation - 4.9 FTE

Cash Collection/Risk Management - 21 FTE

Credit Academy – 2 Apprentices


In O2C............

▪ 30,000 accounts

▪ Credit limits range from £1k to £40m ▪ White van man to Multi Nationals

▪ 1.3m invoices per year in various currencies

▪ 250,000 phone calls per year.

▪ O2C credit services team looks after: Master data Risk Collection Allocation Academy Solutions for the business


The scene five years ago..........

▪Unsustainable processes and procedures.

▪Staff moral and quality - FTE 50

▪Lack of credibility with the company.

▪ Inadequate resources

▪Under performing O2C function.


Where do we want to be

▪Firstly we created...........

Our Roadmap

Stakeholder map

Swot analysis

Ok nothing new about these but.....


Going from Good to Great.........

These are some of the things that worked well on our journey...which I want to share with you......


How we operated.......

▪Changed our offering to the business: Extended our office hours from 7.30 am to 5.30 Monday

to Friday and 7.30 to 10.00 on a Saturday.

Extended our daily banking hours to 19.00 by using cash processing centre.

Allocation team in Saturdays when month end fell at a weekend.

Agreed SLAs for account opening, cash allocation collection process with the business.


New Account Process

▪New account opening process New account form.... redesigned to be customer

friendly......keep it simple but compliant.

We were now able to : open accounts in one business day. 2 hour fast track for urgent requests It used to take 2 weeks to set up an account.

Introduced prospect customers to our commercial

team..... We have 30,000 ready


New Account Process continued.........

Never say no to an account..... Flex accounts ......sales generation of £3m pa

i-deal accounts......sales generation of £500k pa

Dormant accounts Created a reactivation team ......sales generation £5m pa


Invoicing and Payments.............

▪Cash allocation highly automated process

Historically unallocated cash £20m Lack of clarity in reporting Introduced automated module.....Alloc8 Worth the investment – cost reduction - Speed and Accuracy - 6 FTE Reduction 85-93% receipts automatically allocated down to invoice

level


Its not all about BACS and cheques and credit cards............................

Amex AP Scheme - AI early payment - Customer extension - Risk transfer - Incremental business

Winner of ‘Project of the Year ‘ - British Credit Awards 2016

Supply Chain Finance Worked with a number of customers Early payment opportunity Risk transfer Visibility of supplier AP account

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://premiumcareplasticsurgery.com/resources/financing/american-express-copy/&ei=kfqcVf2MI4ydgwTQnrHgCQ&bvm=bv.96952980,d.eXY&psig=AFQjCNFiXjz5dpOhwnUC32kdghVDX6sAqQ&ust=1436437511583239


Invoicing and Payments

Customer Portal....a one stop shop Invoices online and available to download Pods online and available to download Pay account by credit/debit card Everything available 24/7

▪Electronic invoicing 65% invoices are now delivered by edi or email Cost savings Speed and efficiency Less reliance on mail delivery Uploads of PODs to customers Paperless PODs being trialed


Invoicing and Payments continued.

Payments

We Invoice and receive payments in multi currencies in addition to cheques and BACS : Take all major cards Direct Debits Paypal

80% of receipts are now electronic mainly

BACS


Cash collection............

▪ Power dialler introduced in collections team Touchstar by Daviker It was their first B2B installation

Increased outbound calls by 50% year on year 12,000 per month 12,000 in bound

Easy to target overdue Allowed prequalification campaigns Transfer workloads between staff Quick and easy call outcome recording Call monitoring and coaching


Staff

▪Originally over 50 FTE Dialler , Allocation and streamlining processes along with

‘on boarding’ reduced FTE to 29

Training programme Excel and word Google mail, drive etc etc Legal processes Advanced telephone collection – CICM in house CICM /CICMQ & Industry seminars Supervisory and Management courses Sponsor CICM study

3 MCICM grads 9 ACICM 7 various stages of CICM study 10 Affiliates


Staff..... Behavioural change

Changed their attitudes and behaviour... we introduced FISH! The FISH! Philosophy is a fresh and powerful training solution.

Create a culture where people choose to bring their best to work.

▪ Provide amazing service that makes customers want to come back again and again.

▪ Improve teamwork and build trust


It changed attitudes Worked as a team Social events Charity events Celebratory lunches Made it a better place to work Results improved

Positive, supportive workplaces retain valued employees and attract great candidates. The FISH! Philosophy builds a culture people want to be part of


Engage the whole team

▪Lets go 4 it’

▪‘Drive 4 25’

▪‘Flat10 it’ ▪ Daily Huddle Boards

▪ Monthly 121 with staff

▪ Totem boards with each separate teams results


Tim Lodge - Team GB motivational and inspirational talk............


Exceptional Achievers

▪ Reward programme above company bonus scheme

Rewarding exceptional performance ‘i Pad draws 22nd December Monthly lunches Earn a days holiday each month

Events CICM Fellows lunch CICM British credit awards Networking events Staff exchange


We have to let off steam now and again...............

Exceptional Achievers Award Programme

Lunch with live music at the Hall

Euros Table Football competition


Invest in the Future

▪Credit Academy 2 school/college leavers Advanced apprenticeship programme at

college and CICM Trail Blazer scheme CICM qualifications Cost effective ready trained staff Engaged the whole team


Credibility

▪ CICMQ.... embarking on this programme was one of the most important decisions we made Confidence Recognition Differentiated from others Ensures a consistent high standard

CICM Centre of Excellence


Involve yourself in other parts of the business

▪Sales and Commercial Training Institute of Sales Management and Marketing - ISMM

Finance module includes credit that we host and mentor

Hold regular road shows within the business...... We call

them ‘Cash Box Talks’


Finally ensure that you are always focussed and up to date

▪Surveys Staff Surveys Customer Surveys Within the business Surveys Find out what’s working or not Find out what they really think How customers and the business perceive what you are

doing. Quickly change things that don't work Don’t be afraid of criticism.

Easily managed on Survey Monkey or Google


Staying ahead.......our systems and processes

▪Direct Debits – March 2016 ▪ As originators

▪Risk and Collect – June 2016 ▪ State of the art credit risk management tool and account

collection module. ▪ Intelligent telephone strategy ▪ Workflows ▪ Credit limit Management ▪ Opportunities to increase sales

▪


A snap shot of what happened

I cant show you all the results but we will have a look at DSO and Aged debt.


40

42

44

46

48

50

52

54

56

Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16

DSO

DSO


0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15

Age Debt %

Age Debt %


Staying ahead.......our systems and processes

▪Contextualised Commerce and Payment innovations

▪ Self serve ▪ Embedded cash sale payments ▪ Block Chain


Our team........ We aim to develop every member to be the best that they can.......

▪We engage and invest Every one is a member of CICM 7 staff studying for CICM 12 qualified CICM 18 hours CPD every staff member in 2016 Every member of staff visited a credit

conference or outside workshop in 2015 Credit Academy........Apprenticeship scheme Regular visits to our sites and business

Accredited since 2010 Centre of Excellence since 2014 Winners in 2014,2015,2016 & 2017

Thank you for listening


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OUR JOURNEY TO CREATING A WORLD CLASS O2C FUNCTION · Sector-leading logistics ∙ By ship, rail or...

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