LafargeHolcim’s new CEO, Jan Jenisch, has announced a strategic review of the business to focus on business simplification, cost discipline, and performance management. The announcement came in the Switzerland-based company’s latest quarterly results, which Jenisch described as “solid” but not reflective of “our full potential.”
Jenisch also revised down the company’s outlook for EBITDA growth to 5 – 7% for this year, down from the “double-digit like-for-like growth” that was forecast in its 2Q17 report. Demand growth remained at 1 – 3%.
“We have reset expectations for the group’s outlook to a level that reflects the current business dynamic,” said Jenisch.
The strategic review is set to conclude in March 2018 and will be announced with LafargeHolcim’s full years 2017 results. The company will also provide an update on portfolio management at that time.
A strategic review is not an unusual step for a new CEO looking to establish his position, noted Justin Jordan, an analyst at Jeffries. Jenisch only took up his position as head of the building materials giant in September, after joining from Swiss chemicals company, Sika.
Jordan also highlighted three areas the review may consider: a new business efficiency or cost saving target for LafargeHolcim in 2018 – 2019; a possible step up in CAPEX – albeit very selectively by geography; and selective bolt-on acquisitions.
This last point seems to be supported by the company’s recent expression of interest in South Africa’s leading cement maker, PPC.
For his part, Jenisch has promised to “reduce complexity and focus on operational excellence in order to fully realise the potential of LafargeHolcim. My goal is generate leading margins and an attractive growth profile, positioned for sustainable value creation.”
In addition to Jenisch, LafargeHolcim has also announced the appointment of a new Chief Financial Officer, Geraldine Picaud, who will start in February 2018, giving her a month with the company before the strategic review is announced.
Read the article online at: https://www.worldcement.com/special-reports/02112017/lafargeholcims-jenisch-announces-strategic-business-review/