LafargeHolcim announce ‘roadmap’ for the second half of 2015

Company to focus on successful execution of integration and free cash flow generation

LafargeHolcim have announced their ‘roadmap’ for the second half of 2015, as the new Group releases the financial results of Lafarge and Holcim as standalone companies for the first half of this year.

LafargeHolcim’s chief executive officer, Eric Olsen (pictured), said: ‘We continue to operate in a demanding global market environment and this has affected our first-half performance. However, as a new company we have hit the ground running. A team of 200 senior leaders of LafargeHolcim met as early as last week to align on priorities, targets and initiatives to drive the integration process.

‘It is a great team we have on board. We have launched a set of synergy acceleration activities covering areas such as capex, procurement, cement industrial performance, network optimization as well as commercial transformation. We expect to see our first tangible results in all areas by year end.’

The Group expects to deliver on synergies of at least CHF 100 million, impacting on earnings in the period until year end as part of its programme to achieve a €1.4 billion synergy target within three years.

LafargeHolcim have also launched a review of their asset base and planned capital expenditures for the reminder of the year. The company plans to reduce capex by at least CHF 200 million until the end of the year and has identified capital allocation discipline as a key focus area with a view to reduce capex, and maximize cash generation and returns for shareholders. It has also launched a portfolio review for further optimization.

While LafargeHolcim aims to secure a solid investment grade rating, another objective of the Group is to offer an attractive dividend policy. As a first step, it has decided on a ‘progressive dividend policy’ beginning with a minimum ‘CHF 1.30 per share’ for the current financial year.

As for net debt, the company expects to receive net proceeds of around CHF 6.0 billion by the end of 2015 from divestments that will be used to reduce debt and support a solid financial structure. As a result, net debt is estimated to be below CHF 15.0 billion by the end of this year.