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| Holcim announces half-year results 2013  Swiss group Holcim, the world's largest cement maker by market value, succeeded in increasing Group net income and cash flow from operating activities. Europe and Latin America achieved better operating results, leading on balance to a higher operating EBITDA margin. It was primarily on account of India that Holcim was unable to exceed the previous year's operating EBITDA growth on a like-for-like basis. However, in the second quarter the Group achieved organic growth in both operating EBITDA and operating profit. Thanks to the Holcim Leadership Journey, which is making progress above all on the cost front, ROIC before taxes continued to increase. Over 12 months, net financial debt decreased by CHF 1.2 billion.Consolidated sales volumes were lower in all segments. Latin America contributed most positively to the development of cement sales. The decline in deliveries of aggregates and, above all, ready-mix concrete was more acute. This reflects not only the frequently limited demand, but also the reorganization and restructuring efforts initiated, and in some cases completed, in order to sustainably improve margins. Holcim has been able to achieve better prices in many markets. Group regions Europe and Latin America reported year-on-year increases in operating results. On account of Canada, North America was not quite able to match the figures of the previous year, and Asia Pacific and Africa Middle East fell considerably short of the previous year's levels owing to India and Morocco, respectively. Holcim Philippines, Aggregate Industries UK, Holcim Ecuador and Holcim US achieved substantially improved operating results. Overall, like-for-like operating EBITDA at Group level fell by 0.6 percent in the first half. At 0.1 percent, like-for-like operating profit developed moderately positively. The corresponding figures for the second quarter were positive at +2.8 percent and +5.4 percent. Sales volume and price development Consolidated cement sales were down 3.7 percent to 68.6 million tonnes. Deliveries of aggregates declined by 7.2 percent to 69.4 million tonnes, and ready-mix concrete volumes decreased by 15 percent to 18.8 million cubic meters. Asphalt sales were down by 8.3 percent to 3.3 million tonnes because of North America. The Group companies in Ecuador, Azerbaijan and Russia reported significant increases in cement sales, while deliveries of aggregates were up at Holcim Switzerland and Aggregate Industries UK. Upturns in ready-mix concrete sales were recorded by Holcim Indonesia, Holcim Malaysia and Holcim Ecuador. Price development in all regions continued to be positive with the exception of Europe. Financial results Consolidated net sales decreased by 5.1 percent to CHF 9.6 billion. The 3.4 percent decline in operating EBITDA to CHF 1.8 billion was largely attributable to the two Indian Group companies as well as Holcim Canada, Holcim Mexico, Holcim Morocco and Holcim France. Group regions Europe and Latin America achieved better results. On the positive news front, fixed costs were lower and the price environment was in many cases stable or slightly better. Proceeds from the sale of CO2 emission certificates were down by CHF 10, 3 million in Europe. Consolidated operating profit fell by 3.3 percent to CHF 1 billion, but on a like-for-like basis moderate growth of 0.1 percent (2nd quarter of 2013: +5.4 percent) was recorded. Group net income increased by 23.8 percent to CHF 760 million, and the share of net income attributable to shareholders of Holcim Ltd rose by 47.4 percent to CHF 571 million. Net financial debt was down by CHF 1.2 billion compared to the same period of the previous year at CHF 11.0 billion. In the same period, gearing decreased from 62.6 percent to 57.1 percent. Holcim Leadership Journey on track Although construction activities have slowed visibly in a number of markets since the Holcim Leadership Journey was launched, the program is on track. Thanks mainly to progress on the cost front, it contributed CHF 376 million to consolidated operating profit in the first half of 2013, with CHF 47 million stemming from the Customer Excellence stream. Outlook for 2013 Holcim anticipates an increase in sales of cement in 2013, but the Group does not expect to reach the previous year's levels in the aggregates and ready-mix concrete businesses. While Group regions Asia Pacific and Latin America are expected to witness higher cement sales volumes, Holcim is somewhat less optimistic with regard to Europe and Africa Middle East. In North America, cement sales are expected to reach similar levels to previous year. Turning to operating EBITDA and operating profit, the Board of Directors and Executive Committee expect a further improvement in margins. The Holcim Leadership Journey, which gains further momentum, will contribute to this development. Under similar market conditions, organic growth in operating EBITDA and operating profit should be achieved in 2013. write your comments about the article :: © 2013 Construction News :: home page |