Heidelberg Materials Governance Presentation 2024

Dr Bernd Scheifele
March 2024
2 March 2024 Governance Presentation
1
Overview & review 2023
51,000 3,000 Leading positions in cement,

locations aggregates, and ready-mixed
employees
worldwide concrete
on 5 continents

Africa – East MB
9% Aggregates
22%
Asia - Pacific
18%
FY 2023 48% Europe FY 2023 51% Cement
27%
25% Ready Mix &
North America Asphalt
Difference of totals to 100% is due to intercompany eliminations and trading business.

1) 1)
Strong pricing Record high RCO, Solid Record ROIC, we Significant Third year in row Specific CO2
drives top-line despite volume improvement continue to earn improvement with around emissions
growth pressure driven by strong premium on our (+0.9 €bn vs. PY) reduced further
1 billion EUR
operational cost of capital with cash by 17 kg per ton
return to
performance conversion rate of cem. material2)
shareholders
above 50%
1) All like-for-like, excluding currency and scope impacts

2) Preliminary and unaudited figures; final and audited figures will be published in the combined Annual and Sustainability Report 2023

New share buyback program of 1.2 €bn

Progressive dividend increase
(2024-2026)
will continue in the upcoming years
20% increase vs. previous program
Share buyback
Dividend per share (€) Dividend - Minorities
Dividend - HMAG
2.60 968 978

2.40
2.20 877
350 350
298
181 169 95
437 458 484
2020 2021 2022 2023 E 2024 E 2025 E 2021 2022 2023 2024 E 2025 E 2026 E

We focus on what we do best: heavy building materials.
We commit to generate 50% of our revenue from

sustainable products by 2030.
We commit to reduce CO2 emissions by almost 50% to 400

kg CO2/t CEM by 2030.
We will make this transition a successful business case: on

growth, margins, cash flow, ROIC, and leverage.
We drive the change for the benefit of our customers, our

shareholders, our employees, and the society we live in.

2
Our path to net zero
400kg CO2/t cementitious material as average across the whole

portfolio in 20301
47% emission reduction2 across the cementitious materials

portfolio by 2030
50% of our revenue will be generated from sustainable products

by 2030
Corporate carbon footprint reduction in line with

SBTi 1.5°C path by 2030
1 Scope 1, 2 acc. to GCCA; 2 Reference year 1990 with an average of 750 kg CO2/t of cementitious material

-3.1% +120 bps

750 45.0%
551 534 29.9%
28.7%
400
2.9%
1990 Dec 2022 Dec 2023 2030 1990 Dec 2022 Dec 2023 2030
-140 bps +220 bps

82.0% 39.4%
71.6% 70.2% 68.0% 37.2%
1990 Dec 2022 Dec 2023 2030 Dec 2022 Dec 2023
Leading in transparency and reliability, all numbers are audited with reasonable assurance

® ®
Applies to all business lines: cement, concrete, aggregates, asphalt Applies to cement and concrete products
• Sustainability brand for low-carbon and circular • Globally unique product: CCS technology, applied
products for the first time at a large scale in Brevik, enables
net-zero carbon footprint of evoZero®.
• One global brand with one global, unified
definition applicable for all products • Broadest product application combined with
lowest CO₂ footprint: customers benefit from
trusted product performance.
• High transparency: every tonne of captured CO₂

only accounted for once, independently reviewed
by third-party verifier and secured by blockchain
technology.

2024 2025 2026 2028 2029 2030
Brevik, Norway Germany Edmonton, Canada Padeswood, UK Antoing, Belgium Slite, Sweden
Capacity: LEILAC 1: finalised Capacity: Capacity: Capacity: Capacity:
p.a. LEILAC 2: engineering p.a. p.a. p.a. p.a.
Capacity:
CC p.a.
Devnya, Bulgarien
OxyCal-Pilotanlage Devnya, Bulgaria Geseke, Germany Mitchell, Indiana, US
Capacity: Capacity: Capacity:
Mergelstetten, Germany p.a. p.a. p.a.
Oxyfuel demo
CCU
Lengfurt, Germany
Capacity: 70 kt CO₂ p.a.
We are confident to deliver on our target of reducing CO2 emissions by 10 mt through CCUS by 2030
All dates estimated start of operations, timing dependent on various factors, incl. funding decision


3
Supervisory Board
• Individual election for 4-year term • Several aspects of the business • Ensure qualified and constructive • Every two years, effectiveness of the
(max. 12 years in total) model to be considered in the oversight of and advice to Managing work of the Supervisory Board and its
composition Board committees
• Age limit 70 years at the time of
election • Apply sufficient mechanisms to • Members of Supervisory Board • Compliance with German Corporate
prevent any kind of material conflict require: Governance Code
• Transparent and individual of interest
disclosure of meeting participation • Adequate knowledge & expertise • Focus of self-evaluation fall 2023:
• Minimum of 30% women/men along with professional experience • Internal structure/organization
• Sufficient capacity and profile of (currently 3 male and 3 female out
skills • Sector exposure and/or specific • Preparation, conduct and recording
of 6 shareholder representatives)
fields of knowledge (e.g., finance, of meetings
• Align structure with Corporate • At least 50% overall independence sustainability) • Discussion and working culture
Governance frameworks of shareholder representatives, also • Content and topics of meetings
within committees (currently 4 out • High level of professional • Composition of SB and cooperation
• Constructive communication with commitment and integrity
of 6) with MB
stakeholders
• Provision of information
• Sustainability and committee-
specific aspects
• No significant need for change
• Potential for further optimization were

identified and initiated

Supervisory Board
Ext. mandates1 as member of the Chief Financial Officer of Vodafone Group Ext. mandates1 as member of the
Supervisory Board of Supervisory Board of
• PHOENIX Pharma SE and PHOENIX Ext. mandates1: • Deutsche Telekom AG
Pharmahandel GmbH & Co KG • None • DWS Group GmbH & Co. KGaA
(chairman) • Greiner AG
• Infineon Technologies AG
• Verlagsgruppe Georg von
Holtzbrinck GmbH (chairman)
Born: 1958 • Springer Nature AG & Co. KGaA Born: 1971 Born: 1956
Nationality: German Nationality: German Nationality: German
Member since 2022 until April 2024 Member since 2019 Member since 2017
CEO of Merckle Service GmbH Chief Operating Officer Hydrogen at RWE Chair of Innovation and Technology
Generation SE, Essen Management at Institute for
Ext. mandates1 as member of the Entrepreneurship, Technology
Supervisory Board of Ext. mandates1: Management and Innovation at the
• Kässbohrer Geländefahrzeug AG • None Karlsruhe Institute of Technology
(chairman)
• PHOENIX Pharma SE and PHOENIX Ext. mandates1 as member of the
Pharmahandel GmbH & Co KG Born: 1966
Supervisory Board of
Born: 1965 Born: 1974
Nationality: German (deputy chairman) Nationality: German Nationality: German • MTU Aero Engines AG
Member since 1999 Member since 2022 Member since 2012 • ExxonMobil Central Europe
• Semperit Aktiengesellschaft
1 Including mandates in listed and non-listed companies; 2 Not for re-election in 2024

Supervisory Board
Gender M M M W W W
Age 65 58 52 67 49 57
Committee membership 3 4 2 3 1 3
Skills & competencies

Industry knowledge ✓ ✓ - - - ✓
International Leadership ✓ - ✓ ✓ ✓ ✓
Personnel competence ✓ ✓ ✓ ✓ ✓ ✓
Governance, Legal & Compliance ✓ ✓ ✓ ✓ ✓ ✓
Accounting, Auditing &

✓ ✓ ✓ ✓ - -
Controlling
Strategy & Capital Market ✓ ✓ ✓ ✓ ✓ ✓
Sustainability ✓ - ✓ ✓ ✓ ✓
Digitalisation - ✓ ✓ ✓ - ✓

Supervisory Board
Ludwig Merckle Luka Mucic Univ. Prof Dr Ludwig Merckle Univ. Prof Dr
(chairman) (chairman) Weissenberger-Eibl (chairman) Weissenberger-Eibl
(chairwoman) (chairwoman)
Ludwig Merckle
Luka Mucic Ludwig Merckle Margret Suckale Dr Bernd Scheifele
(deputy chairman)
Univ. Prof Dr Weissen-

Dr Bernd Scheifele Dr Bernd Scheifele Dr Sopna Sury
berger-Eibl
Margret Suckale Margret Suckale
• Preparation of decisions by • Pre-auditing of • Advising the Managing • Recommended by the • Proposals for
the Supervisory Board (consolidated) financial Board on digital German Corporate appointment/dismissal of
regarding appointment of statements, supervision of transformation and key ESG Governance Code and Managing Board members in
the Managing Board and accounting, internal aspects: carbon capture, composed of shareholder case that required majority is
their remuneration control/risk/compliance biodiversity, employee safety representatives only not achieved
management, etc.
• Composed of equal number • Review and monitor • Recommendations on • To be equally represented by
of shareholder and employee • Composed of equal number company specific proposals for candidates for shareholder representatives
representatives of shareholder and employee commitments and targets the Supervisory Board to be and by employee
representatives that relate to ESG elected by shareholders representatives

Supervisory Board
• Annual Financial Statements, including non-financial reporting • Further development and implementation of the sustainability and
digitalisation strategy - including the role of recycling and alternative fuels for
• Financing matters, portfolio optimisation
the decarbonisation roadmap
• Share buyback
• Health & Safety
• Discussion and approval of Operating Plan 2024
• Artificial intelligence in the company and related investments
• Management Board matters (new appointments, extensions, remuneration)
• New remuneration system for the Management • Financial and non-financial reporting • Sustainability Commitments 2030
Board (Remuneration System 2024+) • Compliance Management System • CO2 Roadmap
• Preparation of new structure of the Management • Risk management and internal control systems • Strengthening of circularity and recycling as well as
Board technologies for the capture, utilization and
• Audit and financing matters
storage of CO2
• Cyber Security
• Technical background and possible fields of
• Global roll-out of new ERP system application as well as projects in 3D printing
Continuous exchange between CEO and Chairman of the Supervisory Board

Supervisory Board
Sustaina-
bility and
Plenary Personnel Audit Innovation Nomination Mediation
session Committee Committee Committee Committee Committee Total
Number of
Supervisory Board 8 5 6 2 2 0 23
committee meetings
Scheifele 7/8 5/5 6/6 - - 0/0 18/19
Merckle 8/8 5/5 6/6 2/2 2/2 - 23/23
Mucic 7/8 5/5 6/6 - - - 18/19
Suckale 8/8 - 6/6 - 2/2 - 21/21
Sury 8/8 - - 2/2 - - 10/10
Weissenberger-
8/8 - - 2/2 2/2 0/0 12/12
Eibl

Supervisory Board
1. Presentation of the adopted annual financial statements, the

approved consolidated financial statements and the combined
management report of Heidelberg Materials AG and the Group as well
as the report of the Supervisory Board for the 2023 financial year
2. Appropriation of the balance sheet profit for the 2023 financial year
3. Individual discharge of the Managing Board for the 2023 financial year
4. Individual discharge of the Supervisory Board for the 2023 financial
year
5. Appointment of the auditor for the 2024 financial year
6. Approval of the remuneration report for the 2023 financial year
7. Approval of the remuneration system for the Managing Board
8. Individual election of the shareholder representatives of the
Supervisory Board
9. Amendment of Section 16 para. 1 sentence 1 of the Articles of
Association (record date for the Annual General Meeting)

Supervisory Board
Achievements Considerations & Actions
• Supervisory Board majority independence • Reduction in the number of mandates for the
and Committees with at least 50% independence Chairman of the Supervisory Board
• Standard limit for the length of membership in the • Succession planning for Supervisory Board
Supervisory Board is 12 years
• Election proposal for a reduced membership term of
• Steady enhancement of Supervisory Board 4 years in line with market practice
know-how to improve competence and impact
• Propose amended remuneration system
• Focus on sustainability and digitalisation (including related reflecting best market practice and strategic goals:
business models) as areas of responsibility • Simplify the structure of management remuneration
• Appointed Chief Sustainability Officer on Board level and • Installing an ESG component in LTI
established Sustainability and Innovation Committee on • Further modifications (e.g., clawback, share ownership)
Supervisory Board level
• Improved competence & profile of skills

4
Remuneration system
New Management remuneration system will become effective retroactively as of 1 January 2024, if approved by the annual general
meeting.
Amendments include:
• Long-term Incentive Plan (LTI) – Reduction of complexity through standardized and market common plan design, an increase
to 100% share price orientation and anchoring ESG targets to support the achievement of ambitious sustainability goals
• Annual bonus plan (STI) – Reducing complexity by reducing the number and harmonization of performance criteria, increasing
the transparency and comparability of Managing Board targets and ensuring an even closer link to the strategic principles of
Heidelberg Materials
• Maximum remuneration – specification of the maximum remuneration amounts
• Share Ownership Guidelines – change from absolute number to relative ownership
• Clawback – strengthening the Supervisory Board's scope for action by implementation of performance clawback
• Transitional allowances – deleted

Remuneration system
25% 25% 25% 25%

EBIT ROIC EBIT ROIC
Performance
Metrics 50% 25%
Relative TSR (vs. DAX and MSCI) ESG Relative TSR (vs. Peer Group) 25%
Payout 100%
50%: Cash- 50%: Share- Bundling of the 2 components into one plan:
Plan type based on
based (MC1) based (CMC1) 100% via Performance Share Units (PSU)
share price
50%: 3 years (MC) 100%: 4 years

Duration ▪ 3 years performance period + 1 year holding period (payout
50%: 4 years (CMC)
amount determined after 4 years)
▪ Described changes ensure full alignment with regulatory and investors’ most important demands
▪ TSR peer group will consist of ca. 15 construction materials companies
1 MC = Management Component; 2 CMC = Capital Market Component

Remuneration system
125% of base
¼ EBIT
Share price % achieve- # awarded One- # final Final share

¼ ROIC ment PSUs
PSUs (120) price
(e.g. 120%) (= 100) year
# awarded # final PSUs holding Pay-out
PSUs ¼ ESG (= 120)
period
amount
(e.g. 100)
¼ Relative TSR vs. Peer Group

Determination of
% achievement
Reflects HM’s three-year planning horizon Addresses regulatory and Cap at 225% of
investors’ requirements target amount

Remuneration system
Group Performance Individual / Strategic Targets
Group Group/Area Health &

Group Up to 5 CO2- Sustainable 1 individual
CO2- Share of Free Cash Safety
Share of individual Multiplier Revenue target
Multiplier Profit Flow Group
Profit goals (MBOs)
40% ±10% 20% ±10% 20% ±10% 20% ±10%
Weighting: 2/3 Weighting: 1/3
Component Weighting: 50% Component Weighting : 50%
▪ High number of individual targets per ▪ Reduction of the number of targets and standardization towards quantitative,
Managing Board member leads to high measurable metrics
coordination costs ▪ Target span remains at 0-200%,
▪ Investors and corporate governance code
demand more transparency re individual
targets for Managing Board members

Remuneration system
Maximum New maximum remuneration:

▪ Percentage of total remuneration
remuneration ▪ Managing Board member: 6m € / 6.5m $ 1
Defined as a percentage of base salary2
▪ CEO: 30.000 shares ▪ CEO: 180% of base salary
Share
Ownership ▪ Managing Board member: 15.000 ▪ Managing Board member: 100% of base salary
shares ▪ As before, 50% of the LTI payout must be used to purchase HM shares
until the guideline is met
▪ Transitional allowance equal to the

Transitional
last base salary paid for 6 months ▪ Deletion of transitional allowance
allowance
after termination
▪ Currently, variable compensation

Clawback ▪ Performance Clawback to cover for cases of (material) restatements of
can be withheld /clawed back in
clause HM’s financials
case of compliance violations
1 New maximum remuneration for CEO: 11m €, 2 The value of the self-investment will be determined by the respective share price at the date of purchase to avoid the need for catch-up purchases in case the share price drops.

Group Director COM & IR Head of Investor Relations Senior Manager Investor
Relations
T +49 6221-48113249 T +49 6221-48141326
T +49 6221 481 41016
M +49 162-2747613 M +49 151 160 320 39
M +49 151 5251 3320
christoph.beumelburg@ robert.adolph@
heidelbergmaterials.com heidelbergmaterials.com katharina.forster@
heidelbergmaterials.com
▪ 7 May 2024: First quarter trading update
▪ 16 May 2024: Annual General Meeting
▪ 30 July 2024: Half year results
▪ 7 Nov 2024: Third quarter trading update

Unless otherwise indicated, the financial information provided herein has of these investigations; events of force majeure including natural disasters,
been prepared under International Financial Reporting Standards (IFRS). pandemics, acts of terrorism, political unrest, armed conflicts, industrial
accidents and their effects on our sales, purchasing, production or service
This presentation contains forward-looking statements and information. activities as well as various other factors. More detailed information about
Forward-looking statements and information are statements that are not certain of the risk factors affecting Heidelberg Materials is contained
historical facts, related to future, not past, events. They include statements throughout this presentation and in Heidelberg Materials’ financial reports,
about our believes and expectations and the assumptions underlying them. which are available on the Heidelberg Materials website,
These statements and information are based on plans, estimates, www.heidelbergmaterials.com. Should one or more of these risks or
projections as they are currently available to the management of Heidelberg uncertainties materialize, or should underlying assumptions prove incorrect,
Materials. Forward-looking statements and information therefore speak only actual results may vary materially from those described in the relevant
as of the date they are made, and we undertake no obligation to update forward-looking statement or information as expected, anticipated,
publicly any of them in light of new information or future events. intended, planned, believed, sought, estimated or projected.
By their very nature, forward-looking statements and information are In addition to figures prepared in accordance with IFRS, Heidelberg
subject to certain risks and uncertainties. A variety of factors, many of which Materials also presents alternative performance measures, including, among
are beyond Heidelberg Materials’ control, could cause actual results to defer others Operating EBITDA, EBITDA margin, Adjusted EPS, free cash flow and
materially from those that may be expressed or implied by such forward- net debt. These alternative performance measures should be considered in
looking statement or information. For Heidelberg Materials particular addition to, but not as a substitute for, the information prepared in
uncertainties arise, among others, from changes in general economic and accordance with IFRS. Alternative performance measures are not subject to
business conditions in Germany, in Europe, in the United States and IFRS or any other generally accepted accounting principles. Other
elsewhere from which we derive a substantial portion of our revenues and in companies may define these terms in different ways.
which we hold a substantial portion of our assets; the possibility that prices
will decline as result of continued adverse market conditions to a greater “Operating EBITDA” definition included in this presentation represents
extent than currently anticipated by Heidelberg Materials’ management; “Result from current operations before depreciation and amortization
developments in the financial markets, including fluctuations in interest and (RCOBD)” and “Operating Income” represents “Result from current
exchange rates, commodity and equity prices, debt prices (credit spreads) operations (RCO)” lines in the annual and interim reports.
and financial assets generally; continued volatility and a further
deterioration of capital markets; a worsening in the conditions of the credit
business and, in particular, additional uncertainties arising out of the
subprime, financial market and liquidity crises; the outcome of pending
investigations and legal proceedings and actions resulting from the findings

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Dr Bernd Scheifele

51,000 3,000 Leading positions in cement,

4 March 2024 Governance Presentation

FY 2023 48% Europe FY 2023 51% Cement

Difference of totals to 100% is due to intercompany eliminations and trading business.

5 March 2024 Governance Presentation

1) All like-for-like, excluding currency and scope impacts

6 March 2024 Governance Presentation

New share buyback program of 1.2 €bn

2.60 968 978

437 458 484

7 March 2024 Governance Presentation

We focus on what we do best: heavy building materials.

We commit to generate 50% of our revenue from

We commit to reduce CO2 emissions by almost 50% to 400

We will make this transition a successful business case: on

We drive the change for the benefit of our customers, our

8 March 2024 Governance Presentation

400kg CO2/t cementitious material as average across the whole

47% emission reduction2 across the cementitious materials

50% of our revenue will be generated from sustainable products

Corporate carbon footprint reduction in line with

10 March 2024 Governance Presentation

-3.1% +120 bps

-140 bps +220 bps

11 March 2024 Governance Presentation

• High transparency: every tonne of captured CO₂

12 March 2024 Governance Presentation

2024 2025 2026 2028 2029 2030

13 March 2024 Governance Presentation

15 March 2024 Governance Presentation

• No significant need for change

• Potential for further optimization were

17 March 2024 Governance Presentation

18 March 2024 Governance Presentation

Skills & competencies

Governance, Legal & Compliance ✓ ✓ ✓ ✓ ✓ ✓

Accounting, Auditing &

Strategy & Capital Market ✓ ✓ ✓ ✓ ✓ ✓

19 March 2024 Governance Presentation

Univ. Prof Dr Weissen-

Margret Suckale Margret Suckale

20 March 2024 Governance Presentation

Continuous exchange between CEO and Chairman of the Supervisory Board

21 March 2024 Governance Presentation

Scheifele 7/8 5/5 6/6 - - 0/0 18/19

Merckle 8/8 5/5 6/6 2/2 2/2 - 23/23

Mucic 7/8 5/5 6/6 - - - 18/19

Suckale 8/8 - 6/6 - 2/2 - 21/21

Sury 8/8 - - 2/2 - - 10/10

22 March 2024 Governance Presentation

1. Presentation of the adopted annual financial statements, the

23 March 2024 Governance Presentation

Achievements Considerations & Actions

• Improved competence & profile of skills

24 March 2024 Governance Presentation

26 March 2024 Governance Presentation

25% 25% 25% 25%

50%: 3 years (MC) 100%: 4 years