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LafargeHolcim reports positive earnings in 2016

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World Cement,

LafargeHolcim has reported a rise in adjusted operating earnings of 12.9% in 2016 as it pushed its adjusted earnings margin up from 19.5% to 21.6%, compensating for a fall of 8.7% in net sales.

“Faster than expected delivery of synergies, reduced costs and improved pricing were reflected in higher margins,” the company said in its annual report.

Synergies from the merger of Lafarge and Holcim in 2015 contributed CHR638 million over the full year – “well ahead” of the CHF550 million target, the company said. “The steady improvement in pricing over the year means that overall price levels are now higher than before the marked decline seen over the course of 2015.”

Cement prices improved by 1.1% in the final quarter of the year to finish 5% above the levels seen in 4Q15.

Sales of cement were down 8.8%, however, to 233.2 million t, as volumes fell in all geographical regions. Sales of aggregates and ready-mixed concrete were also down over the year, resulting in a fall in net sales of 8.7% to €26.9 billion.

As has been a common theme in the results of cement makers, the US provided positive news. Higher pricing and cost control offset a fall in volumes that resulted from adverse weather conditions and softer growth in the markets served by LafargeHolcim compared to the national average. Overall, adjusted operating earnings were up 12.3% in North America.

Adjusted operating income also rose in Latin America (+6.5%), Europe (+5.1%), but fell in Asia Pacific (2.2%) and in the Middle East Africa (-12.2%).

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