Holcim has announced its full year results for 2012. The Swiss cement giant had a generally positive year, despite continuing recession in Europe and a difficult market in the Africa Middle East region.Highlights
- Cement sales increased by 2.5% to 148 million t, up from 144.3 million t in 2011.
- Consolidated net sales were up 3.9% to CHF20.744 billion.
- Adjusted operating profit was up 10.6% to CHF2.308 billion (this figure excludes one-off restructuring costs of CHF736 million).
North America achieved strong volume growth in cement sales, totalling 12 million t for the full year. This positive growth was not reflected in the aggregates and asphalt divisions, which saw declining volumes in 2012, but net sales still managed 9.7% growth to CHF2.987 billion (like for like, +3.3%). 4Q12 cement sales grew 7.4% on a like-for-like basis.
Cement sales in Latin America grew 3% in the full year and 2.8% in 4Q12, at 24.9 million t and 6.4 million t, respectively. Net sales for 2012 reached CHF3.490 billion. Holcim sees the region as a dynamic growth area, and accordingly is focusing on capacity expansion projects in Brazil and Ecuador. An additional facility at the Barroso site in Brazil will raise the total capacity of Holcim’s plants in the country to 7.6 million t when it comes onstream at the end of 2014. In Ecuador, a project is under way at the Guayaquil plant to increase capacity by ~1.5 million t of clinker by the end of 2015. Meanwhile, clinker production was discontinued at the Yocsina plant in Argentina as part of Holcim’s restructuring measures.
Another dynamic growth area, Asia Pacific performed well in 2012 with Group cement sales up 4.7% (4.4% l-f-l) to 79.2 million t. Slight growth of 1.5% was achieved in 4Q12, despite a slower than anticipated resurgence after the monsoon in India. Holcim’s Indian arm, ACC, is working on a new 2.8 million t clinker plant at its Jamul site for completion by the end of 2015, while in Indonesia a 1.6 million t cement plant is to come on stream in Java by the end of this year and an additional identical line is planned for the same site in Tuban by 2015.
Africa Middle East
Due to political instability in the Africa Middle East region, cement sales declined by 4.4% in the full year 2012, to 8.4 million t. Net sales were down 1.3% (-1.4% l-f-l) to CHF947 million. Operating EBITDA was down 11% (-11.1% l-f-l) to CHF274 million.
Of all Group regions, Europe has been the most difficult for Holcim. Cement sales totalled 26.3 million t in 2012, down 2% (-3.9% l-f-l) from 2011. Net sales decreased by 5.1% (-5% l-f-l) to CHF5.809 billion, while operating EBITDA, adjusted for one-off operating costs, fell 13.3% (-13.4% l-f-l) in FY2012.
Restructuring and the Holcim Leadership Journey
The Holcim Leadership Journey is well underway across the Group and has contributed to the overall positive operating performance. The organisation of Group region Europe has been streamlined to adjust to the challenges posed by the economic crisis in this market. The region is now headed by a single Executive Committee and three Area Managers. Capacity adjustments have taken place in Spain and the ready-mix concrete business in Germany has been reorganised. Other restructuring measures include:
- The intended closure of the Haccourt grinding station in Belgium.
- The intended transformation of the Dannes plant (France) and the Merone plant (Italy) into grinding stations.
- Adjustments to aggregates and ready-mix concrete operations in Australia, Brazil and Mexico.
In 2012, net financial debt dropped to CHF10.4 billion and net income increased by 50.4%. Holcim anticipates an increase in cement sales in 2013, with a similar trend in terms of regional performance. The Holcim Leadership Journey will continue to contribute to a further improvement in margins.
Adapted from press release by Katherine Guenioui.
Read the article online at: https://www.worldcement.com/europe-cis/27022013/holcim_results_show_restructuring_benefits_893/