The company has outlined its action plan in response to the Coronavirus pandemic.
LafargeHolcim’s statement is as follows:
Since the beginning of the Coronavirus pandemic, LafargeHolcim has taken the necessary measures to protect the health of its employees, customers, suppliers and other stakeholders. We are closely monitoring all markets according to the evolving situation and to the guidance provided by the authorities in each country.
While the construction sector and construction sites are generally more resilient than other sectors, LafargeHolcim is now experiencing disruptions in operations in various countries. In China, the recovery of the construction sector has started and all our plants outside of Hubei Province are operating. We forecast the market demand to further recover and to supply 70% of last year’s volume in April 2020. In most of the other key markets, the construction sector is disrupted and we forecast significant volume declines in April and May. While demand in Q1 was solid overall, LafargeHolcim expects a significant negative impact on its business in Q2.
Currently the development of the Coronavirus pandemic and its implications for the business are volatile and very different from country to country. In order to mitigate the financial impact of the situation, we have launched the action plan ‘HEALTH, COST & CASH’ for immediate execution in all countries. Targets are:
- Reduction of CAPEX by at least CHF 400 million compared to 2019.
- Reduction in fixed cost by CHF 300 million in 2020.
- Realisation of reduction of energy prices and full review of all third-party products and services.
- Reduction of Net Working Capital at least in line with level of activity.
Based on the significantly strengthened balance sheet, LafargeHolcim has strong liquidity of CHF 8 billion as of 26 March 2020. Due to the impact of the Coronavirus pandemic, the guidance for 2020 is no longer valid. While the implementation of the action plan ‘HEALTH, COST & CASH’ is in full execution, the dynamic, volatile development of the Coronavirus pandemic makes it currently no longer possible to fully evaluate its impact on the performance of LafargeHolcim in 2020. We will provide a more comprehensive business update at the first quarter 2020 results release on 30 April 2020.
In its meeting on 26 March 2020, the Board of Directors confirmed the date of the Annual General Assembly and the proposal for the payment of a cash dividend. The Annual General Assembly will be held on 12 May 2020, as planned. In accordance with the requirements as defined in the Ordinance of the Federal Council of Switzerland, dated 16 March 2020, to protect the public, shareholders will not be allowed to attend the event in person. Shareholders are requested to vote their shares in advance by giving a power of attorney to the independent proxy.
For the 2019 financial year, the Board of Directors confirms the proposal of a cash dividend of CHF 2.00 per registered share, subject to approval by the shareholders at the Annual General Meeting on 12 May 2020. The dividend will be fully paid out of the foreign capital contribution reserve and is not subject to Swiss withholding tax.
Read the article online at: https://www.worldcement.com/europe-cis/27032020/coronavirus-company-updates-lafargeholcim/