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The United States and Canada form the North America Group area. In its largest market area, HeidelbergCement is one of the leading manufacturers of cement, aggregates, ready-mixed con- crete, asphalt, and building products.

The US economy recovered slowly but steadily in 2013. Especially in the second half of the year, growth rates rose substantially – fuelled by a surge in private consumption. Given the considerably weaker situation in the first half, which was marred by the budget battle in Congress (fiscal cliff), GDP expanded by only 1.9 % in 2013, compared to 2.8 % in 2012. Positive economic data lead us to expect another upward trend in 2014. The labour market also improved in the reporting year, with unemployment rate sinking to 6.7 % by the end of 2013. The construction sector in 2013 grew only by 1.5 %, compared to 7.6 % in the previous year. Residential construction was up by 8.5 %, while non-residential construction rose by 9.3 %, especially as a result of growth in industrial and commercial construction. Public construction, on the other hand, was down 3.0 %, which is attributable to declines in public-sector investment as tax revenues were delayed and budget consolidation measures were implemented.

While Canada’s gross domestic product increased by 2.0% in 2013, construction activity was down 1.0 %. Mainly residential and infrastrucural construction declined; non-residential construction was unchanged.

Cement business line

In 2013, cement consumption in the United States rose by 4.5% to 82 million tonnes. The American Cement Association PCA expects a further significant increase in 2014. In Canada, however, cement consumption is expected to have dropped between 9 % and 10 % in 2013.

Cement and clinker sales volumes of our plants reached 12.5 million tonnes (previous year: 11.7), an increase of 6.8 %. The highest increase in volumes was recorded at a double-digit level in the West Region. Due to the growing construction activity in recent years, especially in Los Angeles and San Francisco, cement demand continued to grow in 2013. Sales volumes in the South Region also improved considerably. The same goes for our plants in Canada, though poor weather con- ditions were a moderating factor for cement sales. The North Region suffered the most from the prolonged winter and subsequent heavy rainfalls with sales volumes only slightly exceeding the previous year. In the reporting year, the sales volumes of our two white cement plants recorded double-digit growth compared with 2012. Revenue of the cement business line only rose by 5.2 % to €1,134 million (previous year: 1,078) in 2013 as a result of exchange rate effects; in US dollar, revenue was up by 8.7 %.

In the quarry of the Permanente plant in Cupertino, California, the primary crusher was relocated and at the same time extensively renewed to open up further reserves. Investments were made in all US cement plants to meet the new emission standards for hazardous air pollutants, NESHAP, which will come into effect in September 2015.

Aggregates business line

In the United States and western Canada, HeidelbergCement has a dense network of production sites for sand, gravel, and hard rock. In total, sales volumes fell short of previous year levels by only 0.3 % – at 104.1 million tonnes (previous year: 104.5). With the exception of the Regions West and South, where double-digit growth was achieved in some markets, sales volumes in the other market regions of the United States and Canada fell significantly. This is primarily attributable to the decline in government infrastructure investment and poor weather conditions in the north of the United States and in Canada. Revenue of the aggregates business line was up by only a

modest 1.0 % to €1,043 million (previous year: 1,032) as a result of exchange rate effects. In US dollar, this translates to an increase of 4.4 %.

In Canada, we invested in the renewal of production and extraction equipment at the Sechelt and Villeneuve locations.

Building products business line

The building products business line includes the production of concrete and pressure pipes, precast concrete parts, bricks, and concrete roof tiles.

In 2013, the development of the building products business line was mixed. On the one hand, rising residential construction activities fuelled the demand for bricks. On the other hand, the decrease in infrastructure investments led to declines in concrete and pressure pipes, especially in Canada. Sales volumes of precast concrete parts and roof tiles also experienced a decline. In order to streamline our business activities, we closed several plants both in the United States and in Canada during the reporting year and transferred production to neighbouring locations. This allowed us to further ensure cost-effective delivery to our markets.

Revenue of the building products business line fell by 11.7 % to €639 million (previous year: 723), as a result of exchange rate and consolidation effects brought about by our withdrawal from the concrete paving block business last year. In US dollar, revenue decreased by 8.7 %.

Concrete-service-other business line

This business line primarily comprises ready-mixed concrete and asphalt activities. While we have an extensive network of ready-mixed concrete plants throughout the Group area, asphalt production focuses mainly on New York and Pennsylvania, as well as California.

Ready-mixed concrete deliveries declined in comparison with the previous year by 3.3 % to 5.9  million cubic metres (previous year: 6.1). Excluding consolidation effects, sales volumes were at the level of the previous year. Our plants in Canada achieved a substantial increase in sales volumes thanks to brisk activity in the oil and gas sector. The overall decline in sales volumes is partly due to the sale of a ready-mixed concrete company in the South Region in the third quarter of 2012. During the previous year, we also restructured our ready-mixed concrete activities in the Los Angeles area in the West Region, which led to a decrease in volumes for this year. Bad weather conditions in the North Region considerably impacted the demand for ready-mixed concrete. Asphalt sales volumes fell by 11.2 % to 3.0 million tonnes (previous year: 3.4) in the reporting year. This reflects the general decline in infrastructure construction and the decrease in government investments in this area.

In 2013, total revenue of the concrete-service-other business line dropped by 4.1% to €955 million (previous year: 995), which translates to a marginal decline of 0.8 % in US dollar.

Revenue and results

After conversion to euro, total revenue in the North America Group area fell by 1.0 % to €3,407 million (previous year: 3,441). In operational terms, i.e. excluding consolidation and exchange rate effects, revenue rose by 3.4 %. The weakening of the Canadian dollar against the euro had a particularly strong impact. As a result of our intensive cost-cutting measures and the success of our various Group-wide efficiency improvement programmes, we were able to increase operat- ing income before depreciation (OIBD) by 6.2 % to €607 million (previous year: 572); excluding

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consolidation and exchange rate effects, the increase was 9.5 %. Despite lower profits compared with the previous year from the sale of exhausted quarries in Canada, operating income rose by 17.4 % to €378 million (previous year: 322); excluding consolidation and exchange rate effects, this equates to an increase of 19.9 %.

Key data North America

€m 2012 2013 Change

Revenue 3,441 3,407 -1.0 %

Operating income (2012: restated) 322 378 17.4 %

Investment in property, plant, and equipment 162 192 18.7 %

Cement and clinker sales volumes (Mt) 11.7 12.5 6.8 %

Aggregates sales volumes (Mt) 104.5 104.1 -0.3 %

Asphalt sales volumes (Mt) 3.4 3.0 -11.2 %

Ready-mixed concrete sales volumes (Mm3_{) 6.1 5.9 -3.3 %}

Employees as at 31 December 11,001 10,781 -2.0 %

Revenue North America 2013: €3,407 million