During today’s Investor and Analyst Day 2014, Holcim will announce details on the future development of the Holcim Leadership Journey, as well as 2015 guidance.
Holcim Leadership Journey
The Holcim Leadership Journey, which was launched across the company in 2012, has become a major success for Holcim. All its aspects (cost reductions and change in mindset towards increased customer excellence) have now been embedded in the organisation. Total contributions of approximately CHF1.7 billion have already been achieved three months ahead of the 2014 year-end target, exceeding the original goal of a contribution to operating profit of CHF1.5 billion. Holcim launched more than 6000 initiatives at all levels of the organisation, which impacted these positive financial contributions.
“The success of the Holcim Leadership Journey is a broad based achievement with all cost streams outperforming our original ambition,” said Bernard Fontana, CEO of Holcim. “Customer Excellence is now firmly planted in our Group’s culture, serving as the sustainable base for future benefits.”
The Holcim Leadership Journey will continue on several levels beyond 2014 as ongoing cost inflation and challenging market conditions require continuous performance improvement.
Guidance for 2015
Holcim expects 2015 to be a solid year for the company, with the objective of achieving substantial improvements of its results. Benefiting from the companies in India, Indonesia, the USA, Mexico and the UK as the main growth drivers, like-for-like operating profit (excluding merger related costs) is expected to be in the range of CHF2.7 – 2.9 billion. Operating profit margin will be higher as increased volumes, better pricing and continued cost savings are expected to more than offset cost inflation.
In 2015, Holcim will also conclude its extensive expansion strategy, allowing the company to sustainably create value from its existing asset base. As a result, Holcim plans to reduce its capex to CHF1.5 billion for 2015. Increasing the capacity utilisation of existing plants, coupled with continued cost reductions, is expected to result in a further improvement of ROIC after taxes towards 8%.
“Holcim is the best positioned company in its industry to capture both the recovery in mature as well as the opportunities in emerging countries,” said Thomas Aebischer, CFO of Holcim. “Our current footprint will allow us to grow for several years without significant expansion needs, creating higher returns for our shareholders.”
India, Southeast Asia and sustainable development
During today’s Investor and Analyst Day, Holcim will also provide updates on its expectations in India and Southeast Asia. In India, the company expects recent favourable developments under the new government to continue, leading to increased cement demand from 2015 onwards. Indonesia and the Philippines are expected to be the growth drivers in the Southeast Asia region, fuelled by solid growth and improved supply and demand balances.
Additionally, Holcim will provide insights into its Sustainable Development Ambition 2030, which, as announced in June 2014, focuses on activities in the areas of climate, resources and communities with an intention to significantly increase the portfolio of sustainability-enhanced solutions.
Adapted from press release by Rosalie Starling
Read the article online at: https://www.worldcement.com/europe-cis/18112014/holcim-holds-investor-and-analyst-day-2014-867/