• Execution of action plan “HEALTH, COST & CASH” in all countries
• Reduction of CAPEX by at least CHF 400 million compared to 2019
• Reduction in fixed cost by at least CHF 300 million in 2020
• Reduction of Net Working Capital at least in line with level of activity
• Strong liquidity of CHF 8 billion as of March 26, 2020
• Confirmation of Annual General Assembly on May 12, 2020 and confirmation of dividend proposal
Since the beginning of the Coronavirus (Covid-19) pandemic, LafargeHolcim has taken the necessary measures to protect the health of its employees, customers, suppliers and other stakeholders. We are closely monitoring all markets according to the evolving situation and to the guidance provided by the authorities in each country.
While the construction sector and construction sites are generally more resilient than other sectors, LafargeHolcim is now experiencing disruptions in operations in various countries. In China, the recovery of the construction sector has started and all our plants outside of Hubei Province are operating. We forecast the market demand to further recover and to supply 70% of last year’s volume in April 2020. In most of the other key markets, the construction sector is disrupted and we forecast significant volume declines in April and May. While demand in Q1 was solid overall, LafargeHolcim expects a significant negative impact on its business in Q2.
Currently the development of the Coronavirus pandemic and its implications for the business are volatile and very different from country to country. In order to mitigate the financial impact of the situation, we have launched the action plan “HEALTH, COST & CASH” for immediate execution in all countries. Targets are:
- Reduction of CAPEX by at least CHF 400 million compared to 2019
- Reduction in fixed cost by CHF 300 million in 2020
- Realization of reduction of energy prices and full review of all third party products and services
- Reduction of Net Working Capital at least in line with level of activity
Based on the significantly strengthened balance sheet, LafargeHolcim has strong liquidity of CHF 8 billion as of March 26, 2020.
Due to the impact of the Coronavirus pandemic, the guidance for 2020 is no longer valid. While the implementation of the action plan “HEALTH, COST & CASH” is in full execution, the dynamic, volatile development of the Coronavirus pandemic makes it currently no longer possible to fully evaluate its impact on the performance of LafargeHolcim in 2020. We will provide a more comprehensive business update at the first quarter 2020 results release on April 30, 2020.
In its meeting on March 26, 2020, the Board of Directors confirmed the date of the Annual General Assembly and the proposal for the payment of a cash dividend.
The Annual General Assembly will be held on May 12, 2020, as planned. In accordance with the requirements as defined in the Ordinance of the Federal Council of Switzerland, dated March 16, 2020, to protect the public, shareholders will not be allowed to attend the event in person. Shareholders are requested to vote their shares in advance by giving a power of attorney to the independent proxy.
For the 2019 financial year, the Board of Directors confirms the proposal of a cash dividend of CHF 2.00 per registered share, subject to approval by the shareholders at the Annual General Meeting on May 12, 2020. The dividend will be fully paid out of the foreign capital contribution reserve and is not subject to Swiss withholding tax.
LafargeHolcim is the global leader in building materials and solutions and active in four business segments: Cement, Aggregates, Ready-Mix Concrete and Solutions & Products. Its ambition is to lead the industry in reducing carbon emissions and shifting towards low-carbon construction. With the strongest R&D organization in the industry, the company seeks to constantly introduce and promote high-quality and sustainable building materials and solutions to its customers worldwide - whether individual homebuilders or developers of major infrastructure projects. LafargeHolcim employs over 70,000 employees in over 70 countries and has a portfolio that is equally balanced between developing and mature markets.
Important disclaimer - forward-looking statements:
This document contains forward-looking statements. Such forward-looking statements do not constitute forecasts regarding results or any other performance indicator, but rather trends or targets, as the case may be, including with respect to plans, initiatives, events, products, solutions and services, their development and potential. Although LafargeHolcim believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions as at the time of publishing this document, investors are cautioned that these statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are difficult to predict and generally beyond the control of LafargeHolcim, including but not limited to the risks described in the LafargeHolcim's annual report available on its website (www.lafargeholcim.com) and uncertainties related to the market conditions and the implementation of our plans. Accordingly, we caution you against relying on forward-looking statements. LafargeHolcim does not undertake to provide updates of these forward-looking statements.