Cement sales up by 4.4% for the Holcim Group

Group results

The Holcim Group has released its results for 2Q12 and the first half of the year. Between January and June, net income rose by 6.6% to CHF624 million and by 9.6% to CHF508 million in 2Q12. On a like-for-like basis, operating EBITDA improved in the first six months and in the second quarter by 6.3% and 6.9%, respectively. This has been attributed to sales growth and a limited rise in prices. Overall, cement sales were up 4.4% y/y in the first half of the year and 2.9% in 2Q12, reaching 74 million t and 38.8 million t, respectively. Sales of ready-mix concrete suffered in the first half of the year, dropping by 1.3% to 22.8 million m³, while aggregates sales volumes fell by 7% from 81.3 million t to 75.6 million t.

Half year regional results

European sales volumes continued to feel the impact of the economic downturn, with cement, aggregates and ready-mix concrete sales declining by 4.1%, 14.8% and 11.4% y/y, respectively. However, the situation in North America improved, with cement sales increasing by 8.6% y/y from 5 million t to 5.4 million t. Ready-mix concrete sales also grew by 26% to 3.6 million m³. North America saw the greatest improvement in aggregate sales of all the regions, with volumes increasing by 2.8% y/y to reach 18 million t, driven by Holcim Canada.

The Asia Pacific region sold the highest volume of cement. Sales were up 8% y/y from 38.1 million t to 41.2 million t. However, aggregates and ready-mix concrete volumes fell slightly by 0.9% and 2.3%, respectively. Latin America also had mixed results. Although overall net sales increased by 3.9%, cement sales rose by 3.3% to 12.1 million t and aggregates by 0.3%, sales of ready-mix concrete dropped by 0.1% y/y to 5.3 million m³.

Africa and the Middle East performed well in the first half of the year, with cement sales increasing by 2.7% to 4.5 million t. Sales volumes of aggregates and ready-mix concrete also grew by 2.1% and 1.9%, respectively.

Outlook

The Holcim Group forecast continued organic growth in operating EBITDA in the latter half of the year. It also expects to feel the effects of the ‘Holcim Leadership Journey’, which was introduced in May. The scheme aims to improve customer services and increase operating profit by CHF150 million by the close of FY12. The Group believes that demand for building materials will increase in Latin America, Russia, Azerbaijan and Asia but continue to decline in Europe.

Streamlining measures

As part of the ‘Holcim Leadership Journey’ the organisational structure of the Group is to be streamlined. Changes to functional and regional roles include:

• Roland Kölher will lead the European region, with the exception of the UK. Kölher, who is currently Holcim Group Support CEO and a member of the Holcim Executive Committee, will be supported by three Area Managers.
• North America and the UK will be covered by Bernard Terver, who currently serves as an Area Manager and CEO of Holcim US and Aggregate Industries US.
• Javier de Benito will lead Africa and the Middle East, including West Africa and the Arabian Gulf.
• Ian Thackaway will continue to cover East Asia but will now also be responsible for Holcim Trading S.A.
• Urs Böhlen will no longer serve on the Executive Committee, and will instead take up the role of Advisor to the CEO of Holcim Ltd until his retirement in 2013.
• Urs Bleisch has been appointed Corporate Functional Manager of the ‘Holcim Leadership Journey’, while Ramit Budhraja will lead the Customer Excellence Initiative at Group level.
• Benoit-H. Koch and Patrick Dolberg, members of the Executive Committee, are to leave the Group.

Adapted from press release by Louise Fordham.

Read the article online at: https://www.worldcement.com/europe-cis/15082012/cement_holcim_half_year_results_2012/