LafargeHolcim, the world’s biggest cement maker, expects growth of 2-4% in its building materials markets in 2016, after reporting a Q4 2015 dip in sales. The sector giant expects China and Brazil to remain tough places to do business in an overall improving environment for emerging markets, where LafargeHolcim is counting on cost cuts and efficiency gains to shore up profit.
LafargeHolcim, the world’s biggest cement maker, expects growth of 2-4% in its building materials markets in 2016, after reporting a Q4 2015 dip in sales.
The sector giant expects China and Brazil to remain tough places to do business in an overall improving environment for emerging markets, where LafargeHolcim is counting on cost cuts and efficiency gains to shore up profit.
The company expects some growth in North America, and European markets to be in a better position in 2016 compared to 2015.
Mexico, East Africa and the Philippines are all seen by LafargeHolcim as growing well, with India benefiting greatly from low oil prices.
The group posted a fourth-quarter loss of 2.86 billion Swiss francs (€2.6 billion) after booking 3 billion francs (€2.73 billion) in impairment and other charges.
However, it maintained the 1.50 franc per share dividend announced in November and said it was on track to hit its 2018 financial targets.
Fourth-quarter adjusted operating earnings before interest, tax, depreciation and amortisation (EBITDA) fell 15.3% to 1.4 billion francs, below the 1.45 billion expected by analysts polled by Reuters news agency.
Q4 2015 sales fell 5.9% to 7.44 billion francs (€6.78 billion), below the 7.51 billion (€6.85 billion) expected by analysts.
“Many of the key elements of the merger are now behind us,” Olsen said in the results statement, forecasting “notably more” than 450 million francs of incremental EBITDA synergies expected this year.
LafargeHolcim net debt fell by 1 billion francs to 17.3 billion francs (€15.77 billion) in the quarter, and the firm reiterated its aim to maintain a solid investment grade debt rating. It expects net debt to drop to around 13 billion francs (€11.85 billion) in 2016.
The company said its 3.5-billion-franc (€3.19 billion) divestment programme was well under way with confirmed deals in South Korea and Saudi Arabia. In Morocco it agreed with partner SNI to enlarge a joint venture by merging two companies.
