LafargeHolcim - November 2015

LafargeHolcim is making an offer to acquire the shares in the Greek Heracles Cement SA. The offer runs until 11 December and, if successful, the Heracles Cement shares would be de-listed from the Athens stock exchange.

Lafarge Malaysia Bhd has bought Holcim Malaysia from Holcim Indonesia for EUR69.8m. With the addition of Holcim Malaysia, Lafarge Malaysia now has a cement capacity of 14.14Mta and operates three integrated cement works, two grinding centres, six aggregates quarries and in excess of 40 batching plants. 

LafargeHolcim's underlying turnover for the first nine months amounted to CHF22,042m, a decline of 6.5 per cent while in euro terms there was a 5.9 per cent improvement to EUR20,794m. The Asia Pacific region generated 30.3 per cent of group turnover, marginally up from 30 per cent a year earlier, while Europe represented 25.3 per cent, down from 27.2 per cent. Latin America contributed 11.1 per cent against 11.2 per cent, North America 19 per cent against 16.8 per cent and Africa/Middle East 15.7 per cent. Margins declined from 20.3 per cent to 19.8 per cent and underlying operating EBITDA came off by nine per cent to CHF4355m (EUR4109m) in Swiss franc terms, while it rose by 4.7 per cent when measured in euros. 

Net debt at the end of September was CHF18,309m (EUR16,790m), giving a gearing level of 47.9 per cent compared with 52.3 per cent a year earlier. Capital investment during the nine months amounted to CHF1688m (EUR1592m), with maintenance capital expenditure being CHF643m (EUR607m) and expansion investments CHF1045m (EUR984m).  

Group cement capacity stands at 374.4Mta. Cement shipments were 1.3 per cent lower at 189.2Mt, which represents an underlying 2.1 per cent increase. Sales of other binders amounted to 3.6Mt. Shipments of aggregates were 1.6 per cent lower at 216.3Mt and ready-mixed concrete deliveries were down by three per cent to 42.6Mm³. For 2015 the group expects cement deliveries to be higher in all regions except for Europe and that aggregates volumes should be ahead in all regions bar Europe and South America, while deliveries of ready-mixed concrete would be lower in all regions bar Asia Pacific. 

Turnover in the Asia Pacific region declined by 5.5 per cent to CHF6685m (EUR6307m) while EBITDA fell by 12.9 per cent to CHF1164m (EUR1098m). Cement deliveries in Asia were 1.1 per cent lower at 90.1Mt while deliveries of aggregates were 1.5 per cent lower at 25.4Mt, but ready-mixed concrete deliveries were 0.8 per cent higher at 11.9Mm³. The Indian subsidiaries sold 1.7 per cent less cement and clinker and pricing was soft. Cement shipments in China came off by 6.4 per cent and prices declined in double figures, but in the Philippines volumes rose by 9.2 per cent. Even stronger increases were reported in Sri Lanka and Vietnam at 16.9 per cent and 12.6 per cent, respectively. Volumes were ahead by 6.7 per cent in South Korea and by 2.6 per cent in Malaysia, while declines of 6.8 per cent were seen in Bangladesh and volumes in New Zealand and Indonesia fell by 2.7 per cent and 0.9 per cent, respectively. Sales of aggregates rose by 12.6 per cent to 25.4Mt, with volumes rising by 8.7 per cent in Indonesia but declining by 4.3 per cent in Australia as mining activity dropped. Ready-mixed concrete deliveries improved by 0.8 per cent to 11.9Mm³.

The European turnover declined by 12 per cent to CHF5573m (EUR5258m) and EBITDA fell by 17.6 per cent to CHF961m (EUR907m) before exceptionals. Cement deliveries came down by 5.7 per cent to 31.9Mt while shipments of aggregates declined by two per cent to 92.1Mt and ready-mixed concrete deliveries eased by 0.7 per cent to 14.0Mm³. Cement volumes grew by 17.6 per cent in Spain, by 15.3 per cent in Romania, by 15.2 per cent in Croatia and were ahead in Hungary and Bulgaria by 5.4 per cent and 5.1 per cent respectively. On the other hand, it dropped by 26.7 per cent in Azerbaijan, 16.3 per cent in Germany, 15.7 per cent in Italy, 14.3 per cent in Belgium, 11.5 per cent in Switzerland and 11.3 per cent in Greece, while single-digit reductions were seen in France, Poland and Russia. Prices were weaker, except for Spain, Hungary and Bulgaria. Aggregates volumes came off by 11.6 per cent in France, 8.9 per cent in Switzerland and 5.3 per cent in Italy, but jumped by 72.3 per cent in Romania and by 23.3 per cent in Bulgaria and were also ahead in Germany and Spain.

The underlying turnover in Africa and the Middle East declined by 8.3 per cent to CHF3459m (EUR3263m) and EBITDA was off by 12.5 per cent to CHF1092m (EUR1030m). Cement deliveries eased by two per cent to 32Mt. In Morocco domestic deliveries declined under competitive pressure and weak demand, while clinker exports were ahead. Algerian volumes were stable while in Egypt volumes improved by 12.4 per cent, but prices were under pressure, but the increased use of petcoke and alternative fuels helped profitability. Iraqi volumes fell by 10.1 per cent and prices weakened, with transport being a big problem. Weak economic conditions in Lebanon, Nigeria and South Africa led to pressure on volumes, but in Kenya and Uganda volumes improved. Aggregates shipments improved by 3.3 per cent to 8.5Mt, but ready-mixed concrete deliveries fell by 7.7 per cent to 4.1Mm³. 

In Latin America the turnover declined by 7.3 per cent to CHF2457m (EUR2318m) and EBITDA came off by 3.4 per cent to CHF690m (EUR651m). Cement shipments were 0.4 per cent ahead at 21.2Mt, but aggregates deliveries dropped by 29 per cent to 5.8Mt and ready-mixed concrete volumes declined by 7.4 per cent to 5.5 Mm³. Holcim Apasco in Mexico saw cement deliveries recover by 21.7 per cent and prices were up. Sales of ready-mixed concrete increased, but aggregates volumes fell by further 16.1 per cent. In Brazil volumes declined by 10.2 per cent in cement and by 16.1 per cent in aggregates. In Argentina cement deliveries increased by seven per cent in a strong pricing environment. Cemento Polpaico in Chile improved volumes by 4.4 per cent, while Holcim Colombia's cement shipments improved by three per cent. Elsewhere, volumes were ahead by 6.7 per cent in El Salvador but dropped 11.3 per cent in Ecuador.

The North American turnover improved by 5.7 per cent to CHF4177m (EUR3941m) and EBITDA advanced by 12.9 per cent to CHF857m (EUR808m). Cement shipments were 3.3 per cent ahead at 16Mt as the good levels of demand made up for the negative weather effects early in the year. Cement and clinker volumes in the USA rose by three per cent and the cement price improved. In Canada volumes were 6.4 per cent ahead, helped by increased exports to the USA, but the average price eased by one per cent. Aggregates deliveries improved by one per cent to 84.6Mt with shipments rising by 2.1 per cent in the United States but easing by 0.5 per cent in Canada. Ready-mixed concrete volumes declined by 6.7 per cent to 7Mm³, in spite of higher volumes in Canada.