Holcim sees integration benefits from acquisitions

Holcim sees integration benefits from acquisitions
Published: 11 November 2005

In the first nine months of the year, Holcim increased cement and clinker volume by 7.4 per cent to 83.0Mt.  Downstream volumes expanded at a faster rate, largely thanks to the acquisition of Aggregate Industries earlier this year, with ready-mixed concrete deliveries advancing by 28.3 per cent to 28.1m m³ and aggregates shipments rising by 55.8 per cent to 122.3Mt. 

Turnover rose by 34.0 per cent to SwFr.13,425m (€8661m) and the operating profit at the EBITDA level showed a 25.4 per cent advance to SwFr.3501m (€2259m), with the reduction in the EBITDA margin reflecting the shift in the business mix towards more downstream operations.  Acquisitions, notably Aggregate Industries, Ambuja Cement Eastern and the stake in The Associated Cement Companies led to a 74.3 per cent increase in the net debt to SwFr.13,446m (€8632m) at the end of September compared with the same period last year.  As a result, the gearing level rose from 70.9 per cent to 98.5 per cent.
In Europe, turnover rose by 41.9 per cent to SwFr.5153m (€3324m), while the EBITDA emerged at SwFr.1253m (€805m), an increase of 28.1 per cent in absolute terms and by 7.7 per cent on a comparative basis.  European cement deliveries improved by 1.7 per cent to 24.0Mt, with notably higher deliveries in Romania, Bulgaria and Russia and better volumes also in Spain, France, Switzerland and out of southern Germany being partially offset by lower shipments in northern Germany, northern Italy and Belgium.  Holcim gave up some market share in Belgium because of the weakening of prices there.  Aided by an additional 14.5Mt from Aggregate Industries, aggregates volume rose by 33.9 per cent to 58.8Mt and ready-mixed concrete deliveries advanced by 27.5 per cent to 13.0m m³, of which Aggregate Industries contributed 1.4m m³. 
North American profits increased strongly, with the EBITDA advancing by 62.4 per cent in absolute and by 16.1 per cent in comparative terms to SwFr.674m (€435m) on a turnover 73.3 per cent higher at SwFr.3349m (€2160m).  Cement deliveries rose in most areas, except for the north-east of the United States, showing a total increase of 2.3 per cent to 13.5Mt. Aggregate Industries sold 30.1Mt of aggregates and 2.7m m³ of ready-mixed concrete in the USA in the six months it was consolidated, but the downstream operations of St. Lawrence Cement reported lower volumes in both aggregates and ready-mixed concrete, at 14.8Mt and 1.7 m m³ respectively.