1 we trans- form LIVES, COMMUNITIES, TERRITORIES- INTEGRATED REPORT 2019 2019 INTEGRATED REPORT we trans LIVES,- COMMUNITIES,FORM TERRITORIES Cement company of 3 [102-2]Where [102-4] [102-6] [102-7] we operate 13 Installed Financial outstanding Cement plants capacity [102-2]results [A-RE2] achievements 73 Dispatch centers 2017 2018 2019 2 Argos starts producing Investment Cement plants Green Cement +usd 9 +265 cop Concrete 23 Concrete plants million 78 m plants 9.4 tons of trillions 38% fewer CO� emissions 7 cement Grinding +600 2,618 196 jobs generated Men Women mills 1,493 COP 8.5 trillions 8.5 COP 817 204 trillions COP 8.4 during the cons- 93% 7% Men Women Railway wagons 30% 11 less energy truction 80% 20% Ingresos 2,814 Ports and consumption of this new line terminals 16.5 USA employees 1,021 million Caribbean and Central CCA 31 cubic meters Ports and terminals cop America Region of concrete employees 1.8 Argos is one of the only trillions companies in the world to implement this technology 4 203 3 19 +2,400 Cement Concrete Grinding Ports and Mixer trucks COP 1.54 trillions On site trillions * 1.54 COP plants plants mills terminals Ebitda [A-LS1] USA Region 25% 10 16 of total revenue Grinding million comes from [102-7]Talent [102-8] 15 mills countries usd 806.5 M innovation and territories net Value Added to Society (VAS), 16 million 16 16.2 million 16.2 3.8 times the retained benefit 3,179 633 5 Men Women Own boats and Volume of dispatched 83% 17% one leased long-term cement (tons) 3,812 We export to Colombian 10 employees million 50% 37% 13% We were awarded the Gold Class For the seventh consecutive Colombia USA CCA 33 distinction in the SAM S&P year, we are listed in the Dow 10.6 million destinations 10.3 million Sustainability Yearbook 2020. Jones Global Sustainability 7,647 7 +54 1 Index as one of the world’s most Cement Concrete Port 56% 25% 19% sustainable cement manufac- Employees plants plants USA Colombia CCA Volume of dispatched turers. Men Women concrete (m3) 86% 14% Colombia Region Revenue per region *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. We are convinced that different Cement Concrete Aggregates outlooks add value and diversity multiplies it. This is a binding material composed of limestone This is a mixture of cement and filler materials Aggregates are granular and inert materials of Employees in Dallas, United States What do rock and clay and is the most widely-used (sand and gravel aggregates), water and additives natural origin or obtained by grinding rocks. construction input in the world. that, when hardened, have the capacity to withs- They comprise between 65% and 85% of the total we do? Its adhesive and resistant properties make it ideal tand extreme compression volume of concrete; in addition, they make up for all kinds of constructions approximately 95% of asphalt mixtures Our We create value to the society we deliver and the company through inno- culture vative products and solutions outstanding and logistics synergies. pillars client solutions We lay the foundations for Our higher purpose development in a sustainable What makes manner and constantly innovate us different? to have a hopeful outlook of To build dreams We are the future. » We support our customers in the development of their busi- We take on major challenges nesses, being an ally in the materialization of their dreams and a team that allow us to carve out new that boost projects through which we built a future and multiply growth paths, shape realities and trans- opportunities together. cend boundaries, advancing development » We attract the best talent and we are committed to delivering with concrete extraordinary solutions for customers. We take and assured steps. and transform » We build relationships of trust based on ethics and transpa- ownership rency. lives. » We are a company committed to creating value. 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 to market SDG 9 Obtain $400 million