Company drives cost savings, improves new working capital and delivers record free cash flow
LafargeHolcim have reported a resilient performance for the six months to 30 June 2020, with net sales of CHF10,693 million down by 18.1% compared to the prior year, of which 10.8% was on a like-for-like basis, reflecting the severe impact of the implementation of strict lockdowns of construction sites in several major operating countries.
Recurring EBIT reached CHF1,194 million, a decrease of 22.0% like for like for the half year, although swift implementation of the company’s ‘Health, Cost & Cash’ action plan helped to offset the earnings impact of the crisis.
Free cash flow reached a record CHF749 million in the six-month period, up 198% compared with CHF 252 million in the first half of 2019.
Cement sales volumes in the first half were down 13% to 87.2 million tonnes on a like-for-like basis, whilst aggregates were down 6% at 113.8 million tonnes and ready-mixed concrete sales were down 15.8% at 19.2 million cubic metres.
Chief executive officer Jan Jenisch (pictured) said: ‘I’m very proud of our teams’ rapid and agile response to the crisis since the beginning of January. We were quick to respond and take all necessary measures to protect the health of our people while supporting our communities, from donating materials to build emergency field hospitals all the way to supplying essential goods, touching the lives of over four million people around the world.
‘Our half-year results demonstrate the great resilience of our business. I’m encouraged by our team’s agility to weather the storm with the rapid execution of our ‘Health, Cost & Cash’ action plan, effectively driving cost savings ahead of expectations, improving net working capital and delivering record free cash flow.’
Looking ahead, Mr Jenisch said: ‘The peak of the crisis is behind us. We expect a solid second half of the year based on June’s full recovery, the trend of our order book and upcoming government stimulus packages.
‘As an essential sector to keep society running, we look forward to playing our part in driving the recovery. We are accelerating our sustainability efforts to ensure our green solutions are fully part of the recovery. I am confident LafargeHolcim will emerge stronger from this crisis.’
