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Integrated Report 2019 2019 Integrated Report 1 we trans- form LIVES, COMMUNITIES, TERRITORIES- INTEGRATED REPORT 2019 2019 INTEGRATED REPORT we trans LIVES,- COMMUNITIES,FORM TERRITORIES Cement company of [102-2]Where [102-4] [102-6] [102-7] we operate 2,618 196 Men Women 93% 7% 2,814 USA employees 4 203 3 19 Cement Concrete Grinding Ports and plants plants mills terminals USA Region [102-7]Talent [102-8] 3,179 633 Men Women 83% 17% 3,812 Colombian 50% 37% 13% employees Colombia USA CCA 7,647 7 +54 1 Cement Concrete Port Employees plants plants Men Women 86% 14% Colombia Region 13 Installed Cement plants capacity 73 Dispatch centers 2 Cement plants 9 +265 Concrete 23 Concrete plants million plants tons of 7 cement Grinding mills 817 204 1,493 Men Women Railway wagons 11 80% 20% Ports and terminals 16.5 1,021 million Caribbean and Central 31 CCA Ports and terminals cubic meters America Region employees of concrete +2,400 Mixer trucks On site 10 Grinding 15 mills countries and territories 5 Own boats and one leased long-term We export to 33 destinations 56% 25% 19% USA Colombia CCA Revenue per region 3 Financial outstanding [102-2]results [A-RE2] achievements 2017 2018 2019 Argos starts producing Investment Green Cement +usd cop 9.4 78 m trillions 38% fewer CO� emissions +600 jobs generated COP 8.5 trillions COP 8.5 COP 8.4trillions 30% during the cons- less energy truction Ingresos consumption of this new line cop 1.8 Argos is one of the only trillions companies in the world to implement this technology COP 1.54 trillions COP 1.54 trillions * 1.54 trillions COP Ebitda [A-LS1] 25% 16 of total revenue million comes from usd 806.5 M innovation net Value Added to Society (VAS), 16 million 16 16.2 million 3.8 times the retained benefit Volume of dispatched cement (tons) 10 million We were awarded the Gold Class For the seventh consecutive distinction in the SAM S&P year, we are listed in the Dow 10.6 million 10.3 million Sustainability Yearbook 2020. Jones Global Sustainability Index as one of the world’s most sustainable cement manufac- Volume of dispatched turers. concrete (m3) *2017: The adjusted EBITDA excludes advance payments of non-recurring severance payments and pensions associated with BEST. Reporte Integrado 2019 Who are we? A growing multinational company with an established presence in 15 countries and territories with emerging and developed economies. We have been building history for over eighty years, and today we are the number one cement and concrete manufacturer in Colombia, the second concrete and fourth cement company in the United States and one of the largest in the Caribbean and Central America. Cement This is a binding material composed of limestone What do rock and clay and is the most widely-used construction input in the world. we do? Its adhesive and resistant properties make it ideal for all kinds of constructions We create value to the society and the company through inno- vative products and solutions and logistics synergies. We lay the foundations for Our higher purpose development in a sustainable manner and constantly innovate to have a hopeful outlook of the future. To build dreams We take on major challenges that allow us to carve out new that boost paths, shape realities and trans- cend boundaries, advancing development with concrete and assured steps. and transform lives. Reporte Integrado 2019 Concrete Aggregates This is a mixture of cement and filler materials Aggregates are granular and inert materials of (sand and gravel aggregates), water and additives natural origin or obtained by grinding rocks. that, when hardened, have the capacity to withs- They comprise between 65% and 85% of the total tand extreme compression volume of concrete; in addition, they make up approximately 95% of asphalt mixtures What makes us different? » We support our customers in the development of their busi- nesses, being an ally in the materialization of their dreams and projects through which we built a future and multiply growth opportunities together. » We attract the best talent and we are committed to delivering extraordinary solutions for customers. » We build relationships of trust based on ethics and transpa- rency. » We are a company committed to creating value. We are convinced that different outlooks add value and diversity multiplies it. Employees in Dallas, United States Our we deliver culture outstanding pillars client solutions We are a team We take ownership About this Report 4 Letter from the Chairman Contents of the Board of Directors 8 Our Corporate Governance 10 we go boldly 16 -forth MANAGEMENT REPORT we EVOL 40 -VE STRATEGIC FRAMEWORK This is How We Create Value 42 Materiality Analysis 44 Stakeholders 47 Strategic Framework 50 Risk Management 54 Value Added Statement to Society (VAS) 57 we 64 con _ NECTACTION FOCUSES Efficiency and Productivity 66 Adapting to Market Dynamics 72 Talent Management 80 Climate Change 84 Ethics and Compliance 90 Ecosystems 94 Industry Positioning 100 Health and Safety at the Workplace 104 Air Emissions 110 Supply Chain Management 113 Community Engagement 118 Human Rights Management System 124 we make PRO 126 GRESS - APPENDICES Consolidated Financial Statements 128 Separate Financial Statements 234 IIRC Table 320 GRI Content Index 322 Consolidated Environmental Indicators 327 Sustainability Program 335 Memorandum of Independent Review 338 Integrated Report 4 About this Report 2019 ABOUT THIS REPORT [102-32] [102-46] [102-48] [102-49] [102-50] [102-51] [102-52] [102-53] [102-54] [102-55] [102-56] We grow with our clients! Luis Carlos Vergel, Constructora Bolívar, Cali (Colombia) At Argos, we believe that a profitable long-term business model must be based on integrated thinking, recognizing that strategic decisions should include environmental, social and economic considerations. Contact Us Consequently, for the eighth consecutive year, we present our For more information about our Integrated Report, which takes as its roadmap the material issues report, please contact María identified through our strategic and competitive review process and Isabel Echeverri, Legal and Sustainability Vice President, at dialogues with stakeholders. We hope it’s a useful tool in generating [email protected], broader discussions and promoting ever-deeper engagement between or María Isabel Cárdenas, the different areas of the company and all of our stakeholders. Sustainability Director, at [email protected]. Integrated Report About this Report 5 2019 Reporting period Materiality January 1st The content focuses on the material - December issues identified in the strategic and st competitive review process and in 31 , 2019 dialogues developed with our stake- holders in 2019. (See page 44). Scope of data reported Currency The data includes the activities of compa- Colombian pesos for figures nies whose figures are consolidated in the associated with operations of the financial statements of the cement, concrete Colombia Region and corporate and aggregated businesses in the Colombia, results, and US dollars for the results USA, and the Caribbean and Central America of the USA and Caribbean and Central regions (except where otherwise indicated). America operations. Exchange rate Frameworks used for the construction of the Integrated Report cop 3,283.21 unless otherwise noted in the specific section. International Integrated Reporting Council (IIRC). (See page 160) GRI standards, with regards to the general basic content. See codes highlighted in green, example: [102-3] External verification Sustainability guidelines and reference indicators for the Global Concrete and Cement Deloitte & Touche has independently Association* (GCCA) industry under the verified this report and the corresponding extended compliance option. report can be found in the appendices. Learn more on (See page 178). https: //sustainability.argos.co/GCCASustainable Development Goals. See the available SDG icons throughout the report as well as in page 6 *The work carried out by the World Business Council for Sustainable Development (WBCSD) through its Sustainable Cement initiative (CSI) was transferred to the GCCA as of January 1, 2019. Integrated Report 6 About this Report 2019 Sustainable Development Goals (SDGs) We remain committed to the 2030 To meet this goal, we continue to The table below shows the four SDGs Agenda’s universal goal of leaving no innovate by proposing high social we have prioritized, their relationship one behind, protecting the environment impact initiatives, such as the Casa to the material issues, the goals and promoting alternatives that pro- para Mí project (see page 79), and defined by the UN that we have vide enough opportunities so that all investing, measuring and tracking selected to guide our strategy and the can have a dignified and peaceful life. progress towards the attainment of indicators through which we measure our organizational goals, which are our progress. connected to some of the goals set fort by the United Nations in the four SDGs that the company has prioriti- zed. (See page 175). Target Material issue SDG Goal year SDGs 8 Reduce the heat consumption by 10% with respect to 2013 2025 and 13 consumption levels Goal 8.4 Reduce electricity consumption by 15% with respect to 2013 2025 Efficiency and Goal 13.2 consumption levels productivity Reach a 15% use of alternative materials in cement operations 2025 (See page 66) SDG 8 Reach a 15% use of supplemental materials in our concrete operations 2025 Goal 8.2 Accumulatively use 216,000 tons of recycled aggregates in concrete Goal 8.4 2025 operations Adapting
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