Rising cement deliveries in the first nine months of 2012:
- Price increases support earnings, slightly better margins
- Higher operating EBITDA and operating profit
- Solid cash flow from operating activities
- Net income - attributable to shareholders of Holcim Ltd - significantly higher than last year
- Holcim Leadership Journey progresses on plan
- Holcim will achieve organic growth in 2012
Holcim continues to have the advantage of a strong presence in emerging markets, where construction activity remains high. This unique geographic diversification in the industry helped support sales in the first nine months of 2012 in spite of a difficult market situation in Europe. Compared with the previous year, Holcim achieved higher consolidated sales of cement and nearly stable sales of ready-mix concrete – often at better prices. Deliveries of aggregates and asphalt were lower. The Group companies in India, the Philippines, Indonesia, Russia, Thailand, Mexico and the USA recorded significantly higher cement sales.
Sales development and financial results
Consolidated cement sales increased by 3 percent to 111.4 million tonnes in the first nine months of 2012. Deliveries of aggregates declined by 7.7 percent to 120.3 million tonnes, and ready-mix concrete volumes contracted by 1.7 percent to 35.5 million cubic meters. Sales of asphalt decreased by 14 percent to 6.6 million tonnes, primarily due to poor business development in the UK.
Despite the difficult market situation in Europe, consolidated net sales increased by 4.8 percent to CHF 16.2 billion and operating EBITDA by 5.9 percent to CHF 3.1 billion. Operating profit also increased over proportionally compared with net sales by 7.2 percent to CHF 1.9 billion. These results reflect the solid performance in a number of emerging markets, stronger demand for building materials in North America, improvements in efficiency, and the first successes of the Holcim Leadership Journey. Compared with the previous year, the operating EBITDA margin improved by 0.2 percentage points to 19.4 percent, despite restructuring costs totaling CHF 58 million in nine months in Spain, Brazil, UK, Mexico and now Hungary. On a like-for-like basis, i.e. excluding changes in the scope of consolidation and exchange rates, the Group grew at the operating EBITDA level by 6.4 percent in the first nine months of the year. All Group regions achieved organic growth except for Europe and Africa Middle East.
Net income increased by 10.3 percent to CHF 1.1 billion and the share of net income attributable to shareholders of Holcim Ltd rose by 9.8 percent to CHF 783 million.
Due to the higher operating EBITDA and lower taxes paid, cash flow from operating activities improved by 19.1 percent to CHF 1.1 billion. With CHF 11.6 billion, net financial debt remained stable. Gearing improved to 56.3 percent (year-end 2011: 58.8).
Holcim Leadership Journey progresses according to plan
The Holcim Leadership Journey, a Group-wide program introduced in May, is progressing positively. Regions and Group companies have already started to implement initial measures and the organizational adjustments at Group level have been made. These include the introduction of a leaner management structure for Europe to handle the difficult economic situation in that Group region, and the creation of a Project Management Office to monitor the progress of the Holcim Leadership Journey. Guidelines to measure the operational and financial progress of the program have also been put in place. The financial impact of the entire Holcim Leadership Journey will be released together with the year-end results 2012.
Holcim expects demand for building materials to rise in emerging markets in 2012 in Asia and Latin America, as well as in Russia and Azerbaijan. In North America, cement volumes will also increase. In Europe however, sales volumes are expected to decrease in all segments.
In any case, Holcim will accord cost management the closest attention, and pass on inflation-induced cost increases. Holcim’s approach to new investments will be cautious.
Holcim expects the Group to achieve organic growth in 2012 on the level of operating EBITDA, and additionally to reap the first positive effects of the Holcim Leadership Journey this year.
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Holcim is one of the world's leading suppliers of cement and aggregates (crushed stone, gravel and sand) as well as further activities such as ready-mix concrete and asphalt including services. The Group holds majority and minority interests in around 70 countries on all continents.
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