Obligation Holcem 3% ( XS1713466495 ) en EUR

Holcem

100 % ▼

Suisse

XS1713466495 ( en EUR )

3% par an ( paiement annuel )

Perpétuelle

Prospectus brochure de l'obligation Holcim XS1713466495 en EUR 3%, échéance Perpétuelle

100 000 EUR

500 000 000 EUR

05/07/2026 ( Dans 146 jours )

Holcim est une entreprise mondiale de matériaux de construction, produisant du ciment, du béton prêt à l'emploi, des granulats et des solutions de construction durables.

L'Obligation émise par Holcem ( Suisse ) , en EUR, avec le code ISIN XS1713466495, paye un coupon de 3% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le Perpétuelle

Prospectus dated 3 April 2019

Holcim Finance (Luxembourg) S.A.
(incorporated as a société anonyme under the laws of Luxembourg)
500,000,000 Subordinated Fixed Rate Resettable Notes
guaranteed on a subordinated basis by
LafargeHolcim Ltd
(incorporated in Switzerland with limited liability)
Issue Price: 99.412 per cent.
The 500,000,000 Subordinated Fixed Rate Resettable Notes (the "Notes") will be issued by Holcim Finance (Luxembourg) S.A. (the "Issuer") on 5 April 2019 (the "Issue Date") and guaranteed on a
subordinated basis pursuant to a Guarantee (the "Guarantee") issued by LafargeHolcim Ltd (the "Guarantor").
The Notes will bear interest on their principal amount from (and including) the Issue Date to (but excluding) 5 July 2024 (the "First Reset Date") at a rate of 3.000 per cent. per annum, payable annually in arrear
on 5 July in each year, except that the first payment of interest, to be made on 5 July 2019, will be in respect of the period from (and including) the Issue Date to (but excluding) 5 July 2019 and will amount to
7.48 per 1,000 in principal amount of the Notes. Thereafter, unless previously redeemed, the Notes will bear interest from (and including) the First Reset Date to (but excluding) 5 July 2029 at a rate per annum
which shall be 3.074 per cent. above the 5 year Swap Rate (as defined in the Terms and Conditions of the Notes, the "Conditions"), payable annually in arrear on 5 July in each year. From (and including) 5 July
2029 to (but excluding) 5 July 2044 the Notes will bear interest at a rate per annum which shall be 3.324 per cent. above the 5 year Swap Rate payable annually in arrear on 5 July in each year. From (and including)
5 July 2044, the Notes will bear interest at a rate per annum which shall be 4.074 per cent. above the 5 year Swap Rate payable annually in arrear on 5 July in each year, al as more particularly described in "Terms
and Conditions of the Notes--Interest Payments".
If the Issuer does not elect to redeem the Notes in accordance with Condition 7(g) thereof on or before the 31st day following the occurrence of a Change of Control Event (as defined in the Conditions), the then
prevailing interest rate per annum (and each subsequent interest rate per annum otherwise determined in accordance with the Conditions) shall be increased by 5 per cent. per annum with effect from (and including)
such date, see "Terms and Conditions of the Notes--Interest Payments--Step-up after Change of Control Event".
The Issuer may, at its discretion, elect to defer any payment of interest in whole but not in part on the Notes as more particularly described in "Terms and Conditions of the Notes--Optional Interest Deferral". Any
amount so deferred, together with further interest accrued thereon (at the interest rate per annum prevailing from time to time), shall constitute Arrears of Interest (as defined in the Conditions). The Issuer may pay
outstanding Arrears of Interest, in whole but not in part, at any time in accordance with the Conditions. Notwithstanding this, the Issuer shall pay any outstanding Arrears of Interest, in whole but not in part, on the
first occurring Mandatory Settlement Date (as defined in the Conditions) following the Interest Payment Date on which a Deferred Interest Payment (as defined in the Conditions) arose, all as more particularly
described in "Terms and Conditions of the Notes--Optional Interest Deferral--Mandatory Settlement of Arrears of Interest".
The Notes will be perpetual securities in respect of which there is no fixed redemption date, but shall be redeemable (at the option of the Issuer) in whole but not in part on any Call Date (as defined in the
Conditions), at the principal amount of Notes, together with any accrued and unpaid interest up to (but excluding) such date and any outstanding Arrears of Interest. In addition, upon the occurrence of a Tax Event,
a Gross-up Event, a Rating Agency Event, an Accounting Event, a Repurchase Event or a Change of Control Event, (each such term as defined in the Conditions), the Notes shall be redeemable (at the option of the
Issuer) in whole but not in part at the prices set out, and as more particularly described in "Terms and Conditions of the Notes--Redemption".
The Issuer may, upon the occurrence of a Tax Event, a Gross-up Event, a Rating Agency Event or an Accounting Event, at any time, without the consent of the holders of the Notes, either: (i) substitute all, but not
some only, of the Notes for; or (ii) vary the terms of the Notes with the effect that they remain or become, as the case may be, Qualifying Securities (as defined in the Conditions), in each case in accordance with
Condition 8 thereof and subject to the receipt by the Fiscal Agent of the certificate of the directors of the Issuer and any relevant opinions referred to in Condition 9 thereof.
Subject to certain preconditions which are set out in "Terms and Conditions of the NotesSubstitution of Issuer", the Issuer may at any time substitute for itself as the principal debtor under the Notes, any company
that is the Guarantor or a Subsidiary (as defined in the Conditions) of the Guarantor. The Notes will be unsecured securities of the Issuer and will constitute subordinated obligations of the Issuer, all as more
particularly described in "Terms and Conditions of the Notes--Status" and "Terms and Conditions of the Notes--Subordination". The payment obligations under the Guarantee will constitute subordinated
obligations of the Guarantor, al as more particularly described in "Form of Subordinated Guarantee".
Payments in respect of the Notes and under the Guarantee shall be made free and clear of, and without withholding or deduction for, or on account of, taxes of Luxembourg (in the case of payments under the
Notes) and Switzerland (in the case of payments under the Guarantee), unless such withholding or deduction is required by law. In the event that any such withholding or deduction is made, additional amounts may
be payable by the Issuer or the Guarantor, subject to certain exceptions as are more fully described in "Terms and Conditions of the Notes--Taxation" and "Form of Subordinated Guarantee".
Application has been made to the Commission de Surveillance du Secteur Financier (the "CSSF") in its capacity as competent authority under the Luxembourg Act dated 10 July 2005 relating to prospectuses for
securities, for the approval of this Prospectus for the purposes of Article 5.3 of Directive 2003/71/EC, as amended (the "Prospectus Directive"). Application has also been made to the Luxembourg Stock Exchange
for the Notes to be admitted to the official list of the Luxembourg Stock Exchange (the "Official List") and to be admitted to trading on the Luxembourg Stock Exchange's regulated market (the "Market").
References in this Prospectus to the Notes being "listed" (and all related references) shall mean that the Notes have been admitted to the Official List and admitted to trading on the Market. The Market is a
regulated market for the purposes of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments. By approving this Prospectus, the CSSF gives no undertaking as to
the economic and financial soundness of the transaction or the solvency of the Issuer in line with the provisions of article 7 (7) of the Luxembourg Law on prospectuses for securities.
The Notes will initially be issued in registered form and represented upon issue by a registered global certificate which will be registered in the name of a nominee for a common depositary on behalf of Euroclear
Bank SA/NV ("Euroclear") and Clearstream Banking SA ("Clearstream, Luxembourg") on or about the Issue Date. Notes in definitive form will be issued only in limited circumstances (as described in "The
Global Certificate").
The Notes are expected to be rated BB+ by S&P Global Ratings Europe Ltd ("Standard & Poor's") and Ba1 by Moody's Deutschland GmbH ("Moody's") (each, a "Rating Agency"). Each of Standard & Poor's
and Moody's is established in the European Union (the "EU") and is registered under Regulation (EC) No. 1060/2009 (as amended) of the European Parliament and of the Council of 16 September 2009 on credit
rating agencies. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.
Investing in the Notes involves a high degree of risk. Prospective investors should have regard to the factors described under the section headed "Risk Factors" in this Prospectus.
Structuring Agents to the Guarantor and the Issuer and Global Co-ordinators
HSBC
J.P. Morgan
Joint Bookrunners
BNP PARIBAS
Citigroup
HSBC
J.P. Morgan
MUFG
NATIXIS
Société Générale Corporate &
Investment Banking

This Prospectus comprises a prospectus for the purposes of Directive 2003/71/EC, as amended (the
"Prospectus Directive") and for the purpose of giving information with regard to the Issuer, the Guarantor
and its subsidiaries taken as a whole (together, the "Group" or "LafargeHolcim") and the Notes which,
according to the particular nature of the Issuer, the Guarantor and the Notes, is necessary to enable investors
to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects
of the Issuer and the Guarantor. The Issuer and the Guarantor accept responsibility for the information
contained in this Prospectus. To the best of the knowledge and belief of the Issuer and the Guarantor (each of
which has taken all reasonable care to ensure that such is the case), the information contained in this
Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such
information.
This Prospectus is to be read in conjunction with all the documents which are incorporated herein by
reference (see "Documents Incorporated by Reference").
This Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuer, the Guarantor or
the Joint Bookrunners (as defined in "Subscription and Sale" below) to subscribe or purchase, any of the
Notes. The distribution of this Prospectus and the offering of the Notes in certain jurisdictions may be
restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer, the
Guarantor and the Joint Bookrunners to inform themselves about and to observe any such restrictions.
For a description of further restrictions on offers and sales of the Notes and distribution of this Prospectus, see
"Subscription and Sale" below.
No person is authorised to give any information or to make any representation not contained in this
Prospectus and any information or representation not so contained must not be relied upon as having been
authorised by or on behalf of the Issuer, the Guarantor or the Joint Bookrunners. Neither the delivery of this
Prospectus nor any sale made in connection herewith shall, under any circumstances, create any implication
that there has been no change in the affairs of either the Issuer or the Guarantor since the date hereof or that
there has been no adverse change in the financial position of either the Issuer or the Guarantor since the date
hereof or that the information contained in it or any other information supplied in connection with the Notes is
correct as of any time subsequent to the date on which it is supplied or, if different, the date indicated in the
document containing the same.
The Joint Bookrunners accept no responsibility whatsoever for the contents of this Prospectus or for any other
statement made or purported to be made by a Joint Bookrunner or on its behalf in connection with the Issuer,
the Guarantor or the issue and offering of Notes or any responsibility for any acts or omissions of the Issuer,
the Guarantor or any other person (other than the Joint Bookrunners) in connection with this Prospectus or the
issue and offering of Notes. Each Joint Bookrunner accordingly disclaims all and any liability whether arising
in tort or contract or otherwise (save as referred to above) which it might otherwise have in respect of this
Prospectus or any such statement.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933 (the "Securities
Act"). Subject to certain exceptions, the Notes may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act ("Regulation S").
Neither this Prospectus nor any other financial statements are intended to provide the basis of any credit or
other evaluation and should not be considered as a recommendation by the Issuer, the Guarantor or the Joint
Bookrunners that any recipient of this Prospectus or any other financial statements should purchase the Notes.

i

The Notes may not be a suitable investment for all investors. Each potential investor in the Notes must
determine the suitability of that investment in light of its own circumstances. In particular, each potential
investor should:
(a)
have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits
and risks of investing in the Notes and the information contained or incorporated by reference in this
Prospectus or any applicable supplement;
(b)
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Notes and the impact the Notes will have on its
overall investment portfolio;
(c)
have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes;
(d)
understand thoroughly the terms of the Notes and be familiar with the behaviour of the relevant
financial markets and of any financial variable which might have an impact on the return on the Notes;
and
(e)
be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear the
applicable risks.
The Notes are complex financial instruments and such instruments may be purchased by potential investors as
a way to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to their
overall portfolios. A potential investor should not invest in the Notes unless it has the expertise (either alone
or with a financial adviser) to evaluate how the Notes will perform under changing conditions, the resulting
effects on the value of the Notes and the impact this investment will have on the potential investor's overall
investment portfolio.
Prospective investors should also consult their own tax advisers as to the tax consequences of the purchase,
ownership and disposition of the Notes.
The credit ratings assigned to the Notes may not reflect the potential impact of all risks related to structure,
market, additional factors discussed above, and other factors that may affect the value of the Notes. A credit
rating is not a recommendation to buy, sell or hold Notes and may be revised or withdrawn by the rating
agency at any time. A credit rating is not a statement as to the likelihood of deferral of interest on the Notes.
Holders of the Notes ("Noteholders" or "Holders") have a greater risk of deferral of interest payments than
persons holding other securities with similar credit ratings but no, or more limited, interest deferral
provisions. In addition, each of the Rating Agencies, or any other rating agency may change its methodologies
for rating securities with features similar to the Notes in the future. This may include the relationship between
ratings assigned to an issuer's senior securities and ratings assigned to securities with features similar to the
Notes, sometimes called notching. If the Rating Agencies were to change their practices for rating such
securities in the future and the ratings of the Notes were to be subsequently lowered, this may have a negative
impact on the trading price of the Notes.
The investment activities of certain investors are subject to legal investment laws and regulations, or review
or regulation by certain authorities. Each potential investor should consult its legal advisers to determine
whether and to what extent: (1) the Notes are legal investments for it; (2) the Notes can be used as collateral
for various types of borrowing; and (3) other restrictions apply to its purchase or pledge of any of the Notes.
Financial institutions should consult their legal advisers or the appropriate regulators to determine the
appropriate treatment of Notes under any applicable risk-based capital or similar rules.

ii

Certain financial and statistical information in this Prospectus has been subject to rounding adjustments.
Accordingly, the sum of certain data may not conform to the total. In addition, all financial information in this
Prospectus is qualified by reference to, and should be read in conjunction with, the documents incorporated
by reference in to this Prospectus (see "Documents Incorporated by Reference" below).
In this Prospectus, unless otherwise specified or the context otherwise requires, references to "", "EUR",
"Euro" and "euros" are to the single currency of those member states of the European Union participating in
the third stage of the European economic and monetary union from time to time as amended, references to
"U.S.$" or "USD" are to United States dollars, references to "GBP" and "Sterling" are to pounds sterling,
and references to "CHF" are to Swiss francs.
In connection with the issue of the Notes, J.P. Morgan Securities plc (in such capacity, the "Stabilising
Manager") (or any person acting on behalf of any Stabilising Manager) may over-allot the Notes or
effect transactions with a view to supporting the market price of the Notes at a level higher than that
which might otherwise prevail. However, there is no assurance that the Stabilising Manager (or any
person acting on behalf of any Stabilising Manager) will undertake stabilisation action. Any
stabilisation action may begin on or after the date on which adequate public disclosure of the terms of
the offer of the Notes is made and, if begun, may be ended at any time, but it must end no later than the
earlier of 30 days after the issue date of the Notes and 60 days after the date of the allotment of the
Notes. Any stabilisation action or over-allotment must be conducted by the relevant Stabilising
Manager or person acting on behalf of any Stabilising Manager in accordance with all applicable laws
and rules.
This Prospectus contains certain forward-looking statements. A forward-looking statement is a statement that
does not relate to historical facts and events. They are based on analyses or forecasts of future results and
estimates of amounts not yet determinable or foreseeable. These forward-looking statements are identified by
the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may",
"plan", "predict", "project", "will" and similar terms and phrases, including references and assumptions. This
applies, in particular, to statements in this Prospectus containing information on future earning capacity, plans
and expectations regarding the Group's business and management, its growth and profitability, and general
economic and regulatory conditions and other factors that affect it.
Forward-looking statements in this Prospectus are based on current estimates and assumptions that
LafargeHolcim makes to the best of its present knowledge. These forward-looking statements are subject to
risks, uncertainties and other factors which could cause actual results, including the Group's financial
condition and results of operations, to differ materially from and be worse than results that have expressly or
implicitly been assumed or described in these forward-looking statements. The Group's business is also
subject to a number of risks and uncertainties that could cause a forward-looking statement, estimate or
prediction in this Prospectus to become inaccurate. Accordingly, investors are strongly advised to read the
following sections of this Prospectus: "Risk Factors", "Documents Incorporated by Reference", "Overview"
and "Business". These sections include more detailed descriptions of factors that might have an impact on the
Group's business and the markets in which it operates. In light of these risks, uncertainties and assumptions,
future events described in this Prospectus may not occur.
In addition, none of the Issuer, the Guarantor or the Joint Bookrunners assume any obligation, except as
required by law, to update any forward-looking statement or to conform these forward-looking statements to
actual events or developments.
MiFID II product governance / Professional investors and ECPs only target market Solely for the
purposes of each manufacturer's product approval process, the target market assessment in respect of the

iii

Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and
professional clients only, each as defined in Directive 2014/65/EU (as amended, "MiFID II"); and (ii) all
channels for distribution of the Notes to eligible counterparties and professional clients are appropriate. Any
person subsequently offering, selling or recommending the Notes (a "distributor") should take into
consideration the manufacturers' target market assessment; however, a distributor subject to MiFID II is
responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or
refining the manufacturers' target market assessment) and determining appropriate distribution channels.
PRIIPs Regulation / Prohibition of sales to EEA retail investors  The Notes are not intended to be
offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to
any retail investor in the European Economic Area ("EEA"). For these purposes, a retail investor means a
person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive
2014/65/EU (as amended, "MiFID II"); or (ii) a customer within the meaning of Directive 2002/92/EC (as
amended or superseded, the "Insurance Mediation Directive"), where that customer would not qualify as a
professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information
document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or
selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and
therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA
may be unlawful under the PRIIPS Regulation.
Singapore SFA Product Classification: In connection with Section 309B of the Securities and Futures Act
(Chapter 289) of Singapore, as modified or amended from time to time (the "SFA") and the Securities and
Futures (Capital Markets Products) Regulations 2018 of Singapore (the "CMP Regulations 2018"), the
Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A(1) of the SFA),
that the Notes are `prescribed capital markets products' (as defined in the CMP Regulations 2018) and
Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment
Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
Amounts payable under the Notes are calculated by reference to the mid-swap rate for euro swaps with a term
of 5 years which appears on the Reuters screen "ICESWAP2" as of 11:00 a.m. (Central European time) on the
relevant Reset Interest Determination Date (as defined in the Conditions) which is provided by ICE
Benchmark Administration ("ICE") or by reference to EURIBOR, which is provided by the European Money
Markets Institute ("EMMI"). As at the date of this Prospectus, ICE appears in the European Securities and
Markets Authority ("ESMA")'s register of administrators under Article 36 of Regulation (EU) No. 2016/1011
(the "Benchmark Regulation") and EMMI does not appear in ESMA's register of administrators under the
Benchmark Regulation. As far as the Issuer is aware, the transitional provisions in Article 51 of the
Benchmark Regulation apply, such that EMMI is not currently required to obtain authorisation or registration
(or, if located outside the European Union, recognition, endorsement or equivalence).

iv

TABLE OF CONTENTS
Page
RISK FACTORS ................................................................................................................................................ 1
DOCUMENTS INCORPORATED BY REFERENCE .....................................................................................25
OVERVIEW ......................................................................................................................................................28
TERMS AND CONDITIONS OF THE NOTES ..............................................................................................36
THE GLOBAL CERTIFICATE ........................................................................................................................65
FORM OF SUBORDINATED GUARANTEE .................................................................................................68
USE OF PROCEEDS ........................................................................................................................................72
DESCRIPTION OF THE ISSUER ...................................................................................................................73
THE LAFARGEHOLCIM GROUP ..................................................................................................................75
BUSINESS ........................................................................................................................................................77
TAXATION .......................................................................................................................................................86
SUBSCRIPTION AND SALE ..........................................................................................................................92
GENERAL INFORMATION ............................................................................................................................97

v

RISK FACTORS
The Issuer and the Guarantor believe that the following factors, together with the section entitled "Risk and
control" and notes 14.5 and 17 to the consolidated financial statements of LafargeHolcim for the year ended
31 December 2018, each incorporated by reference in this Prospectus (on pages 66 to 82, 227 to 237 and 252
to 255, respectively of the 2018 Annual Report, see "Documents incorporated by reference") may affect its
ability to fulfil its obligations under the Notes and/or the Guarantee, as the case may be. All of these factors
are contingencies which may or may not occur and the Issuer and the Guarantor is not in a position to
express a view on the likelihood of any such contingency occurring.
Factors which the Issuer and the Guarantor believe may be material for the purpose of assessing the market
risks associated with the Notes are also described below.
The Issuer and the Guarantor believe that the factors described below represent the principal risks inherent in
investing in the Notes, but the Issuer and the Guarantor may be unable to pay interest, principal or other
amounts on or in connection with the Notes and/or under the Guarantee, as the case may be, for other
reasons which may not be considered significant risks by the Issuer and the Guarantor based on information
currently available to them or which they may not currently be able to anticipate. Prospective investors
should also read the detailed information set out elsewhere in this Prospectus (including any documents
deemed to be incorporated by reference herein) and reach their own views prior to making any investment
decision.
Risks Relating to the Group's Business
Legal and compliance risks
Competition
The markets for cement, aggregates and other construction materials and services are very competitive.
Competition in these markets is largely based on price, but also increasingly on quality and service. On the
basis of data contained in the Global Cement Directory (2018), as at January 2018, the top four global cement
producers represented approximately 25 per cent. of global capacity (excluding China). Competition for the
Group in the cement industry varies from market to market, but on a global basis LafargeHolcim believes that
its major competitors are HeidelbergCement AG, CRH plc and Cemex S.A.B. de C.V. The Group also
competes with numerous small or local competitors. Competition, whether from established market
participants or new entrants, could cause the Group to lose market shares, or reduce pricing, any one of which
could have an adverse effect on business, financial condition, results of operations or prospects.
The Group competes in each of its markets with domestic and foreign building materials suppliers, as well as
with importers of foreign products and with local and foreign construction service providers. Accordingly, the
profitability of the Group is generally dependent on the level of demand for such building materials and
services as a whole as well as the Group's ability to maximise efficiencies and control operating costs. Prices
in these markets are subject to material changes in response to relatively minor fluctuations in supply and
demand, general economic conditions and other market conditions beyond the control of the Group. As a
consequence, LafargeHolcim may face price, margin or volume declines in the future, which could (if
significant), have an adverse effect on the Group's results of operations. Risk of such declines are particularly
acute in markets where overcapacity and/or oversupply exists.
1

Competition regulation
In recent years, various competition regulators worldwide have imposed fines on cement, building materials
and building materials services companies for involvement in illegal cartel practices or other anticompetitive
practices.
The competition authorities in various regions have initiated competition law investigations against certain
members of the Group regarding alleged involvement in illicit agreements and anti-competitive practices. The
investigations and proceedings are at different stages and are ongoing (for the material cases, see also
"BusinessCompetition Proceedings").
The Group cannot predict the outcome of the pending competition proceedings or investigations. A finding of
an infringement of competition law could adversely affect the Group in a variety of ways. For example, it
could result in: (i) the imposition of significant fines (the amount of any such fine could vary significantly
from one jurisdiction to the next, and depends on a variety of factors; it is typically based around the turnover
generated by the relevant company from sales of the product subject to the infringement); (ii) third parties
(such as customers, and in more limited cases, competitors) initiating civil litigation claiming damages caused
by anticompetitive practices; (iii) reputational damage to LafargeHolcim; (iv) restrictions on the Group's
ability to carry out acquisitions (in certain jurisdictions); (v) forced divestments; (vi) significant costs or
changes in business practices that may result in reduced revenues and/or margins; and/or (vii) potential
debarment from public tenders. These potential consequences could have a material adverse effect on the
business, and the results of operations and financial condition of the Group.
The Group has in place a code of business conduct including principles of fair competition and has a fair
competition compliance programme across the Group that aims to ensure no member of the Group infringes
applicable competition laws. The programme focuses heavily on training and the conduct of Fair Competition
Reviews (in-depth assessments of risks based on interviews, document and email reviews). Fair competition
controls, along with those of other risk areas (bribery, sanctions, data privacy) were updated and included in
the revised minimum control standards for Group companies. Additionally, the Group manages all
competition investigations, information requests and enforcement cases through a central team of legal
specialists.
Minority interests, minority participations and joint ventures
The Group conducts its business through subsidiaries. In some cases, minority shareholders hold significant
interests in such subsidiaries. Various disadvantages may result from the participation of minority
shareholders whose interests may not always be aligned with those of the Group. Minority interests may,
among other things, impede the ability of LafargeHolcim to implement organisational efficiencies, enforce its
global transfer pricing policy and its controls framework, including its full compliance program, and to
transfer cash and assets from one subsidiary to another in order to allocate assets in the most effective way.
In certain jurisdictions, members of the Group have entered into shareholders' and/or joint venture
agreements with respect to the corresponding participation in such jurisdiction. Such contractual obligations
may limit in the future the freedom of action of the Group and/or may result, under certain circumstances, in
financial obligations of LafargeHolcim towards joint venture partners. Certain joint venture agreements may
contain "deadlock" provisions that may result in put and/or call options becoming exercisable in the event of
disagreements, rights of first refusal or the sale of the joint venture. The Group could be required to expend
significant sums to perform its obligations under these options. In addition, stable relationships with local
joint venture partners may be critical to the success of the operations of the Group in these jurisdictions.
There can be no assurance that relationships with joint venture partners will remain stable or that joint venture
partners will not be acquired by competitors of LafargeHolcim.

2

In certain of its operations, the Group has a significant but not always a controlling interest. Under the
governing documents for certain of these partnerships and corporations, certain key matters, such as the
approval of business plans and decisions as to the timing and amount of cash distributions, may require the
consent of the partners of LafargeHolcim or may be approved without the consent of the Group. These
limitations could constrain the Group's ability to pursue its corporate objectives in the future.
Litigation risks
In the ordinary course of business, the Group is and may in the future become involved, in lawsuits, claims,
investigations and proceedings, including product liability, ownership, commercial, environment, health and
safety, social security and tax claims.
In connection with acquisitions made by the Group in past years, the Group is or may become subject to
various demands or complaints, including those from minority shareholders.
In connection with disposals made in the past, the Group has provided customary warranties notably relating
to accounting, tax, employees, product quality, litigation, competition, and environmental matters. The Group
may receive in the future notice of claims arising from said warranties.
For further information on proceedings in connection with alleged dealings in Syria, see "Business Court,
Arbitral and Administrative Proceedings Syria" on page 83.
LafargeHolcim tracks all Group-relevant commercial litigation cases, and provides support to the relevant
operating companies in defense and dispute resolution. In addition, root cause analysis of disputes and
enforcement cases is taken into account in the continuous improvement cycle. Notwithstanding, any
proceedings where the Group is and may in the future become involved may have a material adverse effect on
the reputation of the Group. In addition, there can be no assurance that such proceedings will not have a
material adverse effect on the asset position, financial condition and results of operations of the Group (see
also "Business -- Legal Proceedings").
Compliance risks
The LafargeHolcim compliance programme covers several areas:
(i) Bribery, corruption, money laundering and fraud: anti-corruption activities centred on training,
management of third party risk through targeted due diligence, and management of conflicts of interest.
(ii) Fair Competition: the programme focuses heavily on training and the conduct of Fair Competition
Reviews as described in the "Competition regulation" risk above.
(iii) Sanctions & Trade Restrictions: the Group's requirements are set through the Group's Sanctions
Compliance Directive, which is implemented through dedicated training, communications and screening
for potentially restricted transactions. In addition, procedures for the screening and continuous
monitoring of all suppliers and customers against worldwide sanctioned party and enforcement lists in
those exposed operations.
(iv) Data Privacy: data privacy, and compliance with the European Union General Data Protection
Regulation is also supported with specific training, controls, monitoring and reporting systems.
Notwithstanding the preventive measures the Group takes to reduce compliance related risks, the risk that the
Group is found to have violated laws and regulations covering business conduct and unfair competition
cannot be excluded and its corresponding potential impacts (iInvestigation costs, financial penalties,
debarment, profit disgorgement and reputational damage) cannot be underestimated.

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Sustainability risks
Environmental regulations
Building materials suppliers' operations are subject to numerous national and supranational environmental,
health and safety laws, regulations, treaties and conventions (together with the other laws and regimes
discussed below), including those designed to control greenhouse gas emissions, the discharge of materials
into the environment and the use, handling and disposal of hazardous materials and substances, requiring
removal and clean-up of environmental contamination; establishing certification, licensing, noise, health and
safety, taxation, labour and training standards; or otherwise related to the protection of human health and the
environment (including in relation to asbestos and crystalline silica dust). Violations of existing
environmental regulations expose violators to substantial fines and sanctions and may require technical
measures or investments to ensure compliance with mandatory emission or immission limits. In some cases,
violations may lead to the Group being unable to produce and/or to market certain products. Environmental
regulations currently in force may be amended or modified or new environmental regulations may be adopted,
further curtailing or regulating the cement industry and related industries in the various jurisdictions in which
the Group operates. LafargeHolcim cannot predict the extent to which its future earnings may be affected by
compliance with such new environmental regulations.
Carbon dioxide emissions and climate change
Cement industry carbon dioxide ("CO2") emissions result mainly from the chemical process of producing
clinker and from the combustion of fossil fuels. Compared to other energy-intensive industrial activities, CO2
emissions per unit of financial added value for the cement industry is relatively high. Public concerns over
greenhouse gas emissions may lead to regulations to curb emissions which may significantly increase costs
for the cement and related industries. In the European Union, the cement industry is subject to a cap and trade
scheme on CO2 emissions, requiring cement producers to surrender emission allowances for the CO2 it has
emitted. Cement producers are allocated CO2 allowances corresponding to the CO2 intensity of their
production. Any remaining allowance surplus can be sold, and any shortage can be addressed, on the CO2
allowance market. Companies that fail to meet their obligation to surrender allowances are subject to
significant penalties. The quantity of allowances allocated to the cement industry is scheduled to decrease in
the future, and the cost of carbon allowances could materially increase the cost of clinker production in the
European Union (as well as in other European countries covered by the scheme including Switzerland).
Similar cap and trade schemes (or carbon pricing schemes) have been implemented, among others, in Canada,
in China (seven provinces), and in New Zealand. The implementation of those systems in these and/or other
jurisdictions may lead to exposure to similar business risks as in the European Union.
The implementation of varied CO2 regulatory systems in different countries may affect international
competitiveness and could eventually lead to ineffective use of assets (including discontinuation of the use of
such assets) in regions with stringent CO2 emissions regulations. There can be no assurance that
LafargeHolcim will be able to meet its own CO2 emissions targets or comply with targets that external
regulators may impose upon the cement industry. Furthermore, additional, new and/or different regulations,
such as the imposition of lower limits than those currently contemplated or a ban on the use of coal or other
traditional fossil fuels could be enacted. These new or additional regulations, including as a consequence of
implementing the global agreement on the reduction of greenhouse gas emissions reached at the 2015 United
Nations Climate Change conference in Paris (known as "COP 21") could have a material adverse effect on
the business, results of operations and financial condition of the Group or reputational damage. Large carbon
emitters could also be subject to climate change litigation resulting in compensation of alleged damages
caused to society which may impact the financial performance of the Group.

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