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Holcim releases its third quarter results

World Cement,

As expected, many emerging markets enjoyed brisk construction activity. However, in the eurozone and in North America, growth mainly remained restrained.Despite this, Holcim increased its third quarter and nine months sales volumes for cement, aggregates and ready-mix concrete. Only asphalt declined slightly.The higher demand was accompanied by above-average inflation for energy, transport and raw materials. These cost increases could for the time being only partially be passed on to sales prices. However, the Group's operating EBITDA was also negatively impacted in the amount of CHF458 million by the strong Swiss franc, and by the fact that, contrary to last year, sales of CO­2 emissions certificates in Europe are still outstanding. Costs that could be influenced were kept well under control.

On a like-for-like basis, operating EBITDA was higher than last year in Latin America and Asia Pacific. Europe fared less well, mainly because of the still outstanding sales of CO­2 certificates. In the US, the ongoing insufficient demand for construction materials and the stabilisation of prices at a low level both impacted results.

Development of sales volumes

Consolidated cement deliveries increased by 5.2% to 108.1 million t by end of September 2011. Shipments of aggregates increased by 9.8% to 130.4 million t, and ready-mix concrete rose by 5% to 36.1 million m3.

The cement segment in Latin America achieved the strongest rise, followed by Asia Pacific and Europe. Latin America also ranked first in terms of aggregates, while Asia Pacific too achieved double-digit growth. North America experienced a particularly sharp rise in sales of ready-mix concrete.

Financial results

Consolidated net sales decreased by 6.7% to CHF15.5 billion, mainly because of exchange rate factors. On a like-for-like basis, it rose by 5.8%. Operating EBITDA fell by 16.9% to CHF3 billion, but on a like-for-like basis the decline came to a smaller 4.4%, and organic growth reached 1.1% in the third quarter.

In particular, the Group companies in Russia, Singapore, Indonesia, Colombia as well as Holcim Australia made larger contributions in Swiss francs to the result. While many other Group companies improved their results in local currency terms, in the consolidated financial statements, the strong Swiss franc cancelled out these successes.

The Group company in the Philippines was among those to see their performance hit by rising costs and regional falls in selling prices. The operating EBITDA margin reached 19.2% (nine months 2010: 21.6%) despite the still outstanding sales of CO2 emissions certificates. Signs of a slight improvement in operating EBITDA did start to emerge in the third quarter, as demand clearly increased, particularly in the emerging markets and in North America. As a result of the increase in net current assets, one-off tax refunds in the previous year and lower operating EBITDA, cash flow from operating activities came to CHF930 million.

From January to September 2011, net income decreased by 17.9% to CHF1 billion and net income attributable to shareholders of Holcim Ltd declined by 18.5% to CHF713 million.

In the past twelve months, net financial debt decreased by 4.7% from CHF12.7 billion to CHF12.1 billion, due to cash flow from operating activities and the depreciation of various currencies against the Swiss franc.


As a leading producer of construction materials, Holcim heavily depends on developments in economic activity. In Europe, the demand for construction materials should remain solid in many places. In North America, the Group expects a slight improvement in the construction sector. Most emerging markets in Latin America and Asia should remain on track for growth. No change is anticipated in business conditions in Group region Africa Middle East. The sharp global rise in energy, raw material and transportation costs call for further price adjustments. This and continuous, consistent cost management are focal points at all levels of the Group. For the current financial year, Holcim expects a like-for-like operating EBITDA that will be close to last year’s level.

The Group will be successful in securing its share of future growth in the emerging countries due to its consistently expanded presence in these markets. In Europe and North America, Holcim's lean cost structure will enable it to benefit more than average from economic recovery.

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