Holcim Leadership Journey 2012–2014

Group seeking to generate additional operating profit of at least CHF1.5 billion by end of 2014

HOLCIM Ltd have announced the launch of a programme to further strengthen market and cost leadership, with the aim of supporting a higher return on invested capital.

The executive committee and management of Holcim Group companies are together starting the ‘Holcim Leadership Journey with specific measures to increase operating profit by at least CHF1.5 billion by the end of 2014, compared with the baseline financial year 2011.

Chief executive officer Bernard Fontana (pictured) said: ‘After intensive discussions at senior-management level and based on close collaboration with the Group companies, I am confident that we will achieve these targets. At least CHF150 million positive impact will be achieved in 2012.’

The Holcim Leadership Journey’ will focus on the following areas:

• Customer excellence by improving customer focus and innovation; 
• Cost leadership (in energy, raw materials, logistics, procurement and fixed costs);
• Further reduction of net working capital and selective divestments;
• Reduction of the investment cost per tonne of new cement capacity; and
• Further development and generation of talents and leaders as well as strengthening of the social dialogue with all stakeholders. 

Holcim say the realization of this programme is likely to incur one-off costs of less than CHF200 million.

Meanwhile, just ahead of the programme launch, Holcim reported that consolidated net sales increased by 2.2% to CHF4.8 billion during the first quarter of 2012, compared with the same period of 2011, while operating EBITDA was almost stable with a 1.1% decrease to CHF745 million.

During the quarter, consolidated cement sales increased by 6.2% to 35.2 million tonnes, deliveries of aggregates were down 7.8% to 31.6 million tonnes, volumes of ready-mixed concrete decreased by 0.3% to 10.4 million cubic metres, and asphalt sales declined by 18.4% to 1.4 million tonnes.

Looking ahead to the rest of this year, Holcim expect demand to rise in emerging markets in Asia and Latin America, as well as Russia and Azerbaijan. A slight improvement in North America is also anticipated, while demand in Europe is expected to remain stable, provided the situation is not undermined by further systemic shocks.