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Holcim releases its 3Q13 figures and announces changes in its senior management

Published by , Editor - Hydrocarbon Engineering
World Cement,

The global economic trend remained subdued despite significant growth in several emerging markets and improved economic data from the US. Demand for construction materials fell in key markets such as India, Mexico, Canada and Brazil, while Europe stabilised. Despite these circumstances, Holcim achieved:

  • An increase in net income and cash flow from operating activities, despite disappointing net sales development, especially in India and Mexico.
  • Progress in reducing fixed and variable costs.
  • A rise in operating EBITDA and operating profit.
  • Further reduction of net financial debt.
  • Positive development of the “Holcim Leadership Journey” programme, leading to higher ROIC.

Sales volumes and price development

  • Consolidated cement sales fell by 2.6% to 104.3 million t. However, on a like-for-like basis there was a slight increase of 0.2% in 3Q13. The markets with sales growth in the first nine months of the year included Ecuador, Russia, Azerbaijan, the Philippines and Argentina.
  • Sales of aggregates were down by 3.7% to 114.8 million t. However considerable progress was made in this segment by France, Switzerland, Aggregate Industries US, Bulgaria and Croatia.
  • Sales of ready-mix concrete amounted to 29.5 million m3, a fall of 14.3%. However, in this segment Holcim’s sales improved amongst others in Indonesia, Malaysia and Italy.
  • Due mostly to the results of Aggregate Industries US and Holcim Canada, sales of asphalt declined by 3.1% to 6.4 million t.

Financial results

  • Consolidated net sales in the first nine months of 2013 fell by 6.1% to CHF14.94 billion.
  • Operating EBITDA came to CHF2.95 billion, a decline of 4.1% on the previous year’s figure, due to the lower results posted by the Group companies in India, Mexico, Canada and Brazil.
  • On a like-for-like basis, operating EBITDA increased by 1% in the first nine months, and by as much as 3.6% in 3Q13.
  • Consolidated operating profit decreased by 1.7% to CHF1.8 billion in 3Q13. However it improved on a like-for-like basis by 4% over the first nine months of the year and by 9.6% in 3Q13. This development was due to restructuring in aggregates and ready-mix concrete, and substantial savings in fixed and variable costs across all segments.
  • Net income rose by 16.8% to CHF1.28 billion, and net income attributable to shareholders of Holcim Ltd was up by 33.5% to CHF1.04 billion.
  • Revenue from the sale of CO2 emission certificates decreased by CHF12 million to CHF10 million.

Outlook for 2013

The company does not expect to reach the previous year’s sales volumes of cement, aggregates and ready-mix concrete in 2013. However, organic growth in operating EBITDA and operating profit should be achieved in 2013. The “Holcim Leadership Journey”, whose cost programmes have contributed CHF531 million and operating profit of at least CHF1.5 billion is expected by the end of 2014, will contribute to this development.

Changes in senior management

Holcim have announced a series of changes in its most senior management that will further streamline and focus the leadership of the Group. At the same time, these moves will strengthen the development of a new generation of leaders with broad commercial and technical experience as well as a sound track record in Occupational Health and Safety. Changes are occurring in the Indian subcontinent and Africa Middle East, of which Bernard Terver is responsible for, in East and South East Asia, of which Ian Thackway is in charge, and in North America and the UK, where Alain Bourguignon is to become area manager. All changes are to become effective on 1 January 2014.

Adapted from press release by Rosalie Starling

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