LafargeHolcim sales dip in first nine months
Results impacted by merger costs, adverse foreign exchange and economic slowdown in some markets
DESPITE good performances in the US, the UK and most countries in Asia Pacific and Latin America, LafargeHolcim say their first nine-month results were impacted by merger and restructuring costs, adverse foreign exchange, an economic slowdown in China and Brazil as well as softness in France and in Switzerland.
Sales volumes in all of the Group’s product lines declined slightly in the first nine months of 2015. On a pro-forma basis, consolidated cement volumes decreased by 1.3% to 189.2 million tonnes, aggregates volumes were 1.6% lower at 216.3 million tonnes, and ready-mixed concrete volumes declined 3.0% to 42.6 million cubic metres.
Net sales for the nine months were down 6.5% (–0.6% like for like) to CHF22 billion, while adjusted operating EBITDA was down 9.0% (–3.2% like for like) to CHF4.3 billion. For the third quarter, net sales of CHF7.8 billion were down 8.7% (–1.1% like for like) while adjusted operating EBITDA was down 16.1% (–8.9% like for like) to CHF1.6 billion.
Commenting on the first set of results since the closing of the merger, chief executive officer Eric Olsen (pictured) said: ‘The first nine months of this year, and in particular the third quarter, have been impacted by the difficult economic context in some of our large markets and considerable negative foreign exchange fluctuations.
‘In addition, the closing of the merger triggered both one-off costs and organizational changes, the benefits of which will start coming through next year. At the same time, we have also seen solid market trends that, combined with our commercial efforts, led to good performance in several countries such as Argentina, Mexico, the Philippines, the UK and the US.’
Mr Olsen continued: ‘On 1 December, at the Capital Markets Day, we will present the new company’s first three-year plan, including a clear roadmap on how we plan to achieve our new targets, one of which is a cumulative 2016 to 2018 free cash flow generation of at least CHF10 billion. This plan will come into effect on 1 January 2016 and will become the benchmark against which we will measure LafargeHolcim’s performance, including management incentive plans.’
