LafargeHolcim - March 2019
LafargeHolcim's turnover in 2018 amounted to CHF27,466m (US$27,471m), a YoY increase of 1.6 per cent, while in euro terms this amounted to EUR24,178m. The Asia-Pacific region generated 27.2 per cent of group turnover, while Europe represented slightly more with 27.5 per cent and North America provided 21.4 per cent. Latin America contributed 9.9 per cent and Africa/Middle East 11.2 per cent. Margins eased from 22.2 per cent in 2017 to 21.9 per cent in 2018 while underlying operating EBITDA improved by 0.4 per cent to CHF6016m in Swiss franc terms, while in euro this amounted to EUR5296m. At the trading level there was a 2.4 per cent YoY improvement to a profit of CHF3306m (EUR2910m) and after a 10.5 per cent decline in the net financial charge to CHF878m (EUR773m), there was a pretax profit of CHF2451m (EUR2158m). After a CHF680m tax charge (EUR599m) and minorities 41.3 per cent higher at CHF.292m, there was a net attributable profit CHF1569m (EUR1381m), a 10.7 per cent YoY increase.
Net debt at the end of December was 5.8 per cent lower at CHF13,518m (EUR11,900m), giving a gearing level of 45 per cent compared with 46.3 per cent in 2017. Capital investment in 2018 declined by 5.1 per cent to CHF1286m (EUR1132m) and is forecast by the group to remain below CHF2000m in 2019, including bolt-on acquisitions.
Cement shipments were 0.8 per cent higher YoY at 221.9Mt. Over the same period, shipments of aggregates declined by 1.6 per cent to 273.8Mt while ready-mixed concrete deliveries edged ahead by 0.6 per cent to 50.9Mm³. For 2019 the group expects underlying turnover growth of 3-5 per cent and EBITDA to improve by at least five per cent.
Turnover in the Asia-Pacific region edged ahead by 0.6 per cent YoY to CHF7446m (EUR6555m) in 2018 while EBITDA improved by 13.4 per cent to CHF1609m (EUR1416m). Cement deliveries in Asia and Australasia were 3.1 per cent lower YoY at 89.7Mt. Deliveries of aggregates were 1.2 per cent lower at 31.4Mt and the ready-mixed concrete volume fell by 2.3 per cent to 12.5Mm³ in 2018 when compared with the previous year. The two main Indian subsidiaries combined sold 52.6Mt of cement and clinker, a YoY increase of seven per cent, representing a turnover of EUR3138.5m and EBITDA of EUR495m in 2018. Cement results in China improved and the associate Huaxin Cement contributed EUR294m and is expanding in neighbouring countries. In the Philippines volumes were ahead and turnover rose by 3.6 per cent YoY, but in a competitive market, EBITDA fell by 10.1 per cent and the net profit declined by 3.4 per cent. Malaysian volumes and prices were lower as a result of increased competition. Volumes increased in Australia and prices there were better.
The European turnover improved by 7.8 per cent YoY to CHF7554m (EUR6650m) and EBITDA advanced by 8.2 per cent to CHF1499m (EUR1320m) in 2018. Cement deliveries improved by 5.2 per cent to 45.3Mt when compared with the previous year, but shipments of aggregates were 3.8 per cent lower at 120.4Mt. Ready-mixed concrete deliveries rose by six per cent YoY to 19.3Mm³. Cement volumes and prices improved in Germany, Spain, Poland and Russia in particular. Central and eastern Europe benefited from a high level of infrastructure expenditure, while elsewhere the main growth came in the building sector.
The North American turnover improved by 3.7 per cent to CHF5875m (EUR5172m) and EBITDA was ahead by 2.7 per cent to CHF1523m (EUR1341m) when compared with 2017. Cement shipments increased by 3.1 per cent YoY to 19.8Mt. Fuel and energy cost inflation was compensated for by good cost control and effective price management. Aggregates deliveries improved by 2.4 per cent to 109.6Mt, while ready-mixed concrete volumes improved by 3.7 per cent to 9.4Mm³. Volumes were negatively affected by adverse weather conditions in the first quarter of 2018 and in December.
Turnover in Africa and the Middle East declined by 8.1 per cent YoY to CHF3080m (EUR2711m) and EBITDA fell by 32.4 per cent to CHF734m (EUR646m) in 2018. Cement deliveries were a marginal 0.4 per cent ahead at 35.9Mt, but downstream volumes were lower. Aggregates shipments fell by 15.9 per cent to 8.7Mt and ready-mixed concrete deliveries declined by 11.2 per cent to 4.2Mm³. Algeria, Iraq and Jordan suffered from an excess of supply leading to weaker prices. Weaker economies led to lower demand in Egypt and the Lebanon. On the other hand, Nigeria and the eastern African markets recorded improvements.
In Latin America the turnover declined by 7.2 per cent YoY to CHF2731m (EUR2404m) in 2018, and EBITDA came off by 9.2 per cent to CHF959m (EUR844m). Cement shipments improved by 0.7 per cent to 25.1Mt, but aggregates deliveries fell by 14.2 per cent to 3.6Mt, marking the third-consecutive year of double-digit decline. Ready-mixed concrete volumes were off by 5.5 per cent to 5.5Mm³. Brazil and Colombia were lower, but both now seem to have reached the bottom. Mexico and Ecuador were weaker.
LafargeHolcim is appearently considering the sale of its holding in Holcim Philippines, which earlier this year completed the expansion of its La Union works to 1.8Mt. With this and other work in hand, Holcim Philippines is expected to have a capacity of 13Mta by the end of next year. Companies looking at acquiring this sizeable producer include Anhui Conch Cement, Taiheiyo Cement, Eagle Cement and another two Chinese groups.
