LafargeHolcim reports 2Q earnings growth

LafargeHolcim reported today its fifth consecutive quarter of like-for-like adjusted operating EBITDA growth. Middle East Africa, Latin America and North America regions all contributed to the earnings momentum with the US, Nigeria and Mexico among the notable performers.

Net sales were up by 3.6 per cent on a like-for-like basis to CHF6850m (US$7175m). Despite positive results in India, which continued its recovery post-demonetisation, the Asia-Pacific region was weighted down by persistent challenging market conditions in Indonesia, Malaysia and the Philippines. Earnings in Europe were down marginally for the 2Q, though underlying trends are positive, the group noted.

Like-for-like cement volumes of 53.9Mt were up slightly compared to the prior year. Globally, cement prices improved by 5.5 per cent compared to the prior-year comparison. Sequentially, prices were 2.3 per cent higher than 1Q17.

Adjusted operating EBITDA increased by 10.1 per cent to CHF1735m on a like-for-like basis. Pricing, cost discipline and synergies were drivers for higher margins, with Adjusted operating EBITDA margin up by 150 basis points like-for-like in 2Q17.

Recurring net income rose by 22.7 per cent to CHF700m for the quarter. Recurring earnings per share increased by 23.4 per cent to CHF1.16 compared with 2Q16.

Net debt was CHF15.7bn at the quarter end, down approximately CHF2.4bn from a year earlier.
Synergies of CHF121m were delivered in 2Q17. At quarter end the group was close to delivering CHF1bn of total synergies, well ahead of its accelerated target of year-end 2017.

Beat Hess, chairman and interim CEO of the group, said: “LafargeHolcim delivered positive earnings growth for the fifth consecutive quarter supported by favourable pricing, cost discipline and synergies.
“The unique strengths of our balanced portfolio are once again evident in our results with key countries such as the US, India, Nigeria, and notably in this quarter, Mexico making significant contributions to earnings, more than offsetting headwinds in some of our markets. On that basis, and with our performance to date, we remain confident that we will achieve our full year guidance and our 2018 targets.”