Holcim says its half-year results show rising cement volumes; better prices and higher operating EBITDA (operating earnings before interest, tax, depreciation and amortization). The group also says it will achieve organic growth in 2012 as well as benefit from the group’s Leadership Journey programme, which aims to increase returns. As part of the programme, Holcim will streamline its organisation from 1 September, implementing a “leaner and more efficient structure.”
Holcim says its half-year results show rising cement volumes; better prices and higher operating EBITDA (operating earnings before interest, tax, depreciation and amortization).
The group also says it will achieve organic growth in 2012 as well as benefit from the group’s Leadership Journey programme, which aims to increase returns. As part of the programme, Holcim will streamline its organisation from 1 September, implementing a “leaner and more efficient structure.”
The half-year results to 30 June show that Holcim increased its consolidated sales of cement fuelled by the emerging markets and North America in the first half of 2012, and in particular, the group companies in India, the Philippines, Thailand and Indonesia achieved significantly higher cement sales, as well as the US and Mexico.
With the exception of Russia and Azerbaijan, which also sold more, “this positive picture contrasts with the negative market development in Europe, caused by the debt crisis.”
Higher sales volumes and prices as well as cost-cutting measures enabled Holcim to increase its operating EBITDA despite restructuring costs in some markets.
The group says that all group regions achieved organic growth apart from Europe and Africa Middle East, and it also achieved better margins in the second quarter.
Consolidated net sales increased by 2.1% to CHF10.4 billion (€8.66 billion); operating EBITDA rose by 1.9% to CHF1.9 billion (€1.6 billion), despite the poor state of the European market and restructuring costs in markets such as Spain, Great Britain, Brazil and Mexico of CHF37 million (€30.8 million).
“Holcim also improved its operating EBITDA margin in the second quarter. This positive development was due to a combination of rising sales volumes and partial price increases, albeit not yet on the desired scale. 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 6.3% in the first half of the year and 6.9% in the second quarter,” says Holcim.
Net income improved by 6.6% to CHF624 million (€519.5 million) and the share of net income attributable to shareholders of Holcim rose by 9% to CHF389 million (€324 million). Cash flow from operating activities came to CHF211 million (€175.7 million), an increase of 194.2% on the same period last year. Net financial debt rose since year-end 2011 by 5.3% CHF12.2 billion (€10 billion).
During the first half consolidated cement sales increased by 4.4% to 74 million tonnes compared to the same period in 2011 while deliveries of aggregates declined by 7% to 75.6 million tonnes and ready-mix concrete volumes by 1.3% to 22.8 million m³. Sales of asphalt decreased, mainly in Europe, by 16.2% to 3.6 million tonnes.
With an increase in cement deliveries of 3.1 million tonnes, Asia Pacific was the strongest group region. North and Latin America as well as Africa Middle East also recorded gains.
The Holcim Leadership Journey programme, which aims to increase the return on invested capital to at least 8% after tax between 2012 and the end of 2014, is “on track.” Appropriate measures are being introduced to further strengthen customer excellence and cost leadership and increase the operating profit by at least CHF1.5 billion(€1.25 billion) by the end of 2014, with a target of at least CHF150 million (€125 million) for the 2012 financial year. The programme was launched group-wide in May.
