LafargeHolcim announce 2015 results
Merger on track and integration largely completed but net sales and profits decline
IN their full-year results for the 12 months ended 31 December 2015, LafargeHolcim report that the merger is on track with integration largely completed; 2015 targets on capex, synergies and net debt reduction have been exceeded; and more than one third of divestments have been secured and the remainder of the programme is on track.
However, despite strong growth in some markets, including the UK, US, Mexico and much of the rest of Latin America, LafargeHolcim say their 2015 results were affected by a weakening in performance in some regions, most notably the deceleration in economic growth in China and the deteriorating economic situation in Brazil.
Net sales for the full year were down 6.2% (+0.1% like for like) to CHF29.48 billion, while adjusted operating EBITDA was down 10.7% (–4.6% like for like) to CHF5.75 billion. Adjusted operating EBITDA margin was down one percentage point from 20.5% in 2014 to 19.5% last year.
With the exception of cement, sales volumes in all of the Group’s product lines declined slightly in 2015. On a pro-forma basis, consolidated cement volumes increased by 0.2% to 255.7 million tonnes, whilst aggregates volumes were 0.5% lower at 292.2 million tonnes, and ready-mixed concrete volumes declined 1.4% to 56.8 million cubic metres.
Commenting on results, chief executive officer Eric Olsen (pictured) said: ‘In a challenging environment in selected markets, we have exceeded all our 2015 commitments in terms of capex, synergies, and net debt reduction. We have also made significant progress on our divestment plan, while accelerating the pace of integration across the group and cost management actions.
‘Many of the key elements of the merger are now behind us. Our organization is in place; synergies will continue to gain momentum in 2016 with notably more than CHF450 million of incremental EBITDA synergies expected for this year; and we have taken decisive actions to further adjust and streamline our costs, notably in the most difficult markets.’
Looking ahead, Mr Olsen said: ‘Overall, we see demand in our markets growing 2–4% during 2016. We expect to see the combined effect of synergies, additional cost reductions and a strengthening pricing environment driving solid progress towards our 2018 objectives. With strict capital allocation discipline and the maximization of our cash flow, we are committed to maintaining a solid investment grade rating and returning cash to shareholders.’
