Net sales of CHF 10 693 million decreased by 18.1% compared to the prior year, of which 10.8 % was on a like-for-like basis, reflecting the severe impact of the implementation of strict lockdowns of construction sites in several major operating countries. The strong appreciation of the CHF against all currencies accounted for 6.2% of the absolute decrease. Following the easing of the lockdowns, net sales in all five regions resumed prior-year levels by the end of June.
Recurring EBIT reached CHF 1 194 million, a decrease of 22.0 % like-for-like for the half year. Swift implementation of the ‘HEALTH, COST & CASH’ action plan helped to offset the earnings impact of the crisis. Tax and financial expenses have continued to reduce, allowing net income to reach CHF 501 million. Earnings per share were CHF 0.80 for the first half of 2020 compared to CHF 1.28 in the prior-year period. Free cash flow reached a record CHF 749 million in the six-month period, up 198% compared to CHF 252 million in the first half of 2019. Net debt amounted to CHF 10.7 billion as at 30 June 2020, down by 15.8% compared to CHF 12.7 billion as at 30 June 2019.
Building a healthier world
Since the beginning of the crisis, LafargeHolcim teams around the world have undertaken extraordinary measures to fight COVID-19 across their communities, touching the lives of more than four million people.
Advancing access to health infrastructure for all, LafargeHolcim donated five million kilograms of material to build emergency field hospitals from Wuhan to Boston. Furthermore, the Group donated over two million relief and emergency kits, including personal protective equipment, food and water.
In the first half of 2020 LafargeHolcim achieved a number-one Environmental, Social and Governance (ESG) ranking in the construction materials sector out of more than one-hundred peer companies, according to ESG research and ratings agency Sustainalytics.
Playing its part in a green recovery, LafargeHolcim is advancing its leadership in sustainable and circular construction, notably with the worldwide rollout of ECOPact, its green concrete. Further accelerating the transition to renewable energy, LafargeHolcim leveraged 3D printing in an innovative partnership with GE Renewable Energy and COBOD to build more powerful wind turbines.
Based on the speed of June’s rebound, the company expects a solid second half of the year and anticipates for full year 2020:
• Fast demand recovery with an encouraging outlook for the second half of 2020.
• Execution of action plan ‘HEALTH, COST & CASH’ to continue ahead of targets.
• Free cash flow generation above CHF 2 billion.
• Debt leverage below 2x.
• Solid second half of the year expected.
The Asia Pacific region experienced the most severe COVID-19 related disruption yet delivered a resilient Recurring EBIT margin, led by India and supported by effective cost and price management as well as lower input costs. China delivered a full recovery over the second quarter with volumes closing at higher levels than in the prior-year period and activity was also resilient in Australia.
Results for the Europe region were impacted by COVID-19 with full recovery in June. Markets in Germany, Central and Eastern Europe were resilient. Strict lockdown measures in the UK and France impacted the performance of the region. Volumes suggest a V-shaped recovery in June for the majority of markets, except in the UK.
The Latin America region showed an expanding Recurring EBIT margin amid COVID-19, with an especially strong contribution from Mexico. Performances in Ecuador, Colombia and El Salvador were significantly impacted by the pandemic. Most markets experienced a strong recovery in June.
Middle East Africa
The Middle East Africa region showed resilient margins and recovery from the impact of COVID-19 by June. Volumes declined in Algeria, Egypt, Iraq and South Africa due to government restrictions and curfews. Ramadan in May slowed down the recovery in the respective countries. Nigeria delivered a resilient performance.
The North America region delivered a remarkable performance with a Recurring EBIT up 20% for the first half of 2020 over the prior-year period on a like-for-like basis. This leading performance amid COVID-19 was largely due to fast and effective cost management in the US, partly offset by the impact of lockdowns in Eastern Canada and the economic challenges facing Western Canada due to a slowdown in the oil & gas industry.
Jan Jenisch, CEO of LafargeHolcim, said, “I’m very proud of our teams’ rapid and agile response to the crisis since the beginning of January. We were quick to respond and take all necessary measures to protect the health of our people while supporting our communities, from donating materials to build emergency field hospitals all the way to supplying essential goods, touching the lives of over four million people around the world.”
“Our half-year results demonstrate the great resilience of our business. I’m encouraged by our team’s agility to weather the storm with the rapid execution of our ‘HEALTH, COST & CASH’ action plan, effectively driving cost savings ahead of expectations, improving net working capital and delivering record free cash flow. “The peak of the crisis is behind us. We expect a solid second half of the year based on June’s full recovery, the trend of our order book and upcoming government stimulus packages.”
“As an essential sector to keep society running, we look forward to playing our part in driving the recovery. We are accelerating our sustainability efforts to ensure our green solutions are fully part of the recovery. I am confident LafargeHolcim will emerge stronger from this crisis.”
Read the article online at: https://www.worldcement.com/europe-cis/30072020/lafargeholcim-shares-half-year-results/
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