Reporting its third quarter results 2012, Holcim says it continues to have the advantage of a strong presence in emerging markets, where construction activity remains high. “This geographic diversification in the industry helped support sales in the first nine months of 2012 in spite of a difficult market situation in Europe. Compared with the previous year, Holcim achieved higher consolidated sales of cement and nearly stable sales of ready-mix concrete, often at better prices,” says the company. “Deliveri
Reporting its third quarter results 2012, Holcim says it continues to have the advantage of a strong presence in emerging markets, where construction activity remains high.
“This geographic diversification in the industry helped support sales in the first nine months of 2012 in spite of a difficult market situation in Europe. Compared with the previous year, Holcim achieved higher consolidated sales of cement and nearly stable sales of ready-mix concrete, often at better prices,” says the company.
“Deliveries of aggregates and asphalt were lower. The group companies in India, the Philippines, Indonesia, Russia, Thailand, Mexico and the USA recorded significantly higher cement sales.
Consolidated cement sales increased by 3% to 111.4 million tonnes in the first nine months of 2012 (January-September) although deliveries of aggregates declined by 7.75 to 120.3 million tonnes and ready-mix concrete volumes contracted by 1.7% to 35.5 million m³. Sales of asphalt decreased by 14% to 6.6 million tonnes, primarily due to poor business development in the UK.
The group says that despite the difficult market situation in Europe, consolidated net sales increased by 4.8% to CHF 16.2 billion (€13.4 billion) and operating EBITDA by 5.9% to CHF 3.1 billion (€2.57 billion). Operating profit also increased over proportionally compared with net sales by 7.2% to CHF 1.9 billion (€1.57 billion).
These results reflect the solid performance in a number of emerging markets; stronger demand for building materials in North America; improvements in efficiency, and the first successes of the Holcim Leadership Journey, says the company.
Compared with the previous year, the operating EBITDA margin improved by 0.2 percentage points to 19.4%, despite restructuring costs totalling CHF 58 million (€48 million) in nine months in Spain, Brazil, UK, Mexico and now Hungary.
On a like-for-like basis (excluding changes in the scope of consolidation and exchange rates), the group grew at the operating EBITDA level by 6.4% in the first nine months of the year. All group regions achieved organic growth except for Europe and Africa Middle East.
Net income increased by 10.3% to CHF 1.1 billion (€910 million) and the share of net income attributable to shareholders of Holcim rose by 9.8% to CHF 783 million (€648 million).
The Holcim Leadership Journey, a proup-wide programme introduced in May, is said to be progressing positively with regions and group companies having started to implement initial measures and the organisational adjustments at group level have been made. These include the introduction of a leaner management structure for Europe to handle the difficult economic situation in that group region, and the creation of a project management office to monitor the progress of the Holcim Leadership Journey.
Guidelines to measure the operational and financial progress of the programme have also been put in place. The financial impact of the entire Holcim Leadership Journey will be released together with the year-end results 2012.
In its outlook for 2012, Holcim says it expects demand for building materials to rise in emerging markets in Asia and Latin America, as well as in Russia and Azerbaijan. In North America, cement volumes will also increase. In Europe however, sales volumes are expected to decrease in all segments.
“In any case, Holcim will accord cost management the closest attention, and pass on inflation-induced cost increases. Holcim’s approach to new investments will be cautious.
“Holcim expects the group to achieve organic growth in 2012 on the level of operating EBITDA, and additionally to reap the first positive effects of the Holcim Leadership Journey this year.”
