- Net Sales up 4.0%1, Recurring EBITDA2 up 9.0% in 9M
- Net Sales up 4.9%1,Recurring EBITDA2 up 6.4% in Q3
- 2019 targets confirmed
- Appointment of Chief Sustainability Officer
Regulatory News:
LafargeHolcim (Paris:LHN):
9M 2019 Performance
Group (in million CHF)
9M 2019
9M 2018
±%
±%LfL
Net Sales
20,200
20,634
-2.1
4.0
Recurring EBITDA (pre-IFRS16)
4,543
4,351
4.4
9.0
Q3 2019 Performance
Group (in million CHF)
Q3 2019
Q3 2018
±%
±%LfL
Net Sales
7,142
7,362
-3.0
4.9
Recurring EBITDA (pre-IFRS16)
1,881
1,867
0.8
6.4
Jan Jenisch, CEO: “Q3 is the fifth consecutive quarter of
over-proportional growth in profitability and we are on track to
achieve all targets for 2019. I would like to congratulate all
employees for executing Strategy 2022 with high speed and
impressive results.
Our financial discipline is generating value and we are making
significant progress in cash conversion and in deleveraging our
balance sheet. We expect the positive dynamics to continue into the
fourth quarter and we are confident that we will deliver a strong
full-year performance and achieve a new level of balance sheet
strength.
We have further strengthened our sustainability efforts with the
appointment of the first Chief Sustainability Officer to the
Executive Committee. We are accelerating our vision of running our
operations with zero harm to people and contributing to a built
environment that will be carbon-neutral, fully recyclable and have
a positive environmental impact.”
NET SALES GROWTH IN ALL REGIONS IN
Q3
Growth was achieved in all regions and in all four business
segments, supported by solid global market demand, especially in
mature markets. With 7 bolt-on acquisitions in 2019, the latest one
in October in the UK, the company continues growing as outlined in
Strategy 2022 – “Building for Growth”.
5TH QUARTER OF OVERPROPORTIONAL GROWTH
OF RECURRING EBITDA2
During the quarter the Recurring EBITDA2 increased in all
business segments and in four out of five regions. North America
and Europe increased Recurring EBITDA2 by 6.9% and 7.1%
respectively, driven by volumes and positive price momentum.
REGIONAL PERFORMANCE
The Europe region had another very strong quarter, with good
market demand across the region. Further margin improvement was
driven by positive price momentum and operational efficiency. The
UK market was resilient despite signs of weaker market demand due
to current political uncertainty.
North America achieved strong results, with good volume growth
in all business segments. Positive price momentum and easing cost
inflation further supported profitable growth in the US, while
there was a softer market environment in Canada.
The Latin America region stabilized in Q3, with good performance
in Colombia and cement volume growth in Brazil. Markets in Mexico
and Ecuador were softer while effective cost and price management
partially mitigated these challenges.
The Asia Pacific region showed strong margin improvement in Q3.
The good progress in India was driven by price and easing cost
inflation despite softer demand. Effective turnaround initiatives
supported resilient performance in Australia. China continued to
deliver another positive contribution in Q3.
Ongoing turnaround efforts in the Middle East Africa region
partially offset a challenging environment in key markets. While
difficult market conditions persist in Algeria and Egypt, there
were performance improvements in South Africa, Iraq and Jordan.
STRENGTHENING
SUSTAINABILITY
In Q3 LafargeHolcim announced an allocation of CHF 160 million
to reduce its annual carbon footprint in Europe. The objective is
to reduce annual CO2 emissions in Europe by a further 15 percent
like-for-like, representing 3 million tons of CO2, by 2022.
The company made another major step with the appointment of its
first Chief Sustainability Officer position to the Executive
Committee, accelerating efforts to be the industry leader on
decarbonization, circular economy, health and safety and corporate
social responsibility.
OUTLOOK
The positive momentum of the first nine months is expected to
continue into Q4 with:
- Continued market growth in North America
- Softer but stabilizing cement demand in Latin America
- Continued demand growth across most countries in Europe
- Challenging market conditions in Middle East Africa
- Continued demand growth in Asia Pacific
Based on the above trends and the successful execution of
Strategy 2022, the previously communicated targets for 2019 are
confirmed:
- Net Sales growth of 3 to 5 percent on a like-for-like
basis
- Recurring EBITDA pre-IFRS 16 growth of at least 5 percent on a
like-for-like basis
- Ratio of Net Debt to Recurring EBITDA well below 2 times3 by
the end of 2019
- Significantly higher cash conversion
- Capex and bolt-on acquisitions of less than CHF 2 billion
KEY FIGURES
Group Q3
2019
2018
±%
±%LfL
Net Sales (CHFm)
7,142
7,362
-3.0
4.9
Recurring EBITDA (pre-IFRS16) (CHFm)
1,881
1,867
0.8
6.4
Recurring EBITDA (post-IFRS16) (CHFm)
1,985
Group 9M
2019
2018
±%
±%LfL
Net Sales (CHFm)
20,200
20,634
-2.1
4.0
Recurring EBITDA (pre-IFRS16) (CHFm)
4,543
4,351
4.4
9.0
Recurring EBITDA (post-IFRS16) (CHFm)
4,863
Group results by segment
9M 2019
9M 2018
±%
±%LfL
Sales of cement (mt)
156.4
165.4
-5.5
0.7
Net Sales Cement (CEM) (CHFm)
13,294
13,573
-2.1
5.5
CEM Recurring EBITDA (pre-IFRS16)
(CHFm)
3,551
3,449
3.0
7.9
CEM Recurring EBITDA margin (pre-IFRS16)
(%)
26.7
25.4
Sales of aggregates (mt)
202.4
205.3
-1.4
-0.4
Net Sales Aggregates (AGG) (CHFm)
3,105
3,091
0.4
3.1
AGG Recurring EBITDA (pre-IFRS16)
(CHFm)
653
631
3.5
5.4
AGG Recurring EBITDA margin (pre-IFRS16)
(%)
21.0
20.4
Sales of ready-mix concrete (m m3)
36.1
38.0
-5.0
-1.5
Net Sales Ready-Mix Concrete (RMX)
(CHFm)
4,002
4,111
-2.7
0.4
RMX Recurring EBITDA (pre-IFRS16)
(CHFm)
181
135
33.6
30.8
RMX Recurring EBITDA margin (pre-IFRS16)
(%)
4.5
3.3
Net Sales Solutions & Products (SOP)
(CHFm)
1,702
1,787
-4.7
2.0
SOP Recurring EBITDA (pre-IFRS16)
(CHFm)
159
137
15.9
31.6
SOP Recurring EBITDA margin (pre-IFRS16)
(%)
9.3
7.7
REGIONAL PERFORMANCE 9M
Asia Pacific
2019
2018
±%
±%LfL
Sales of cement (mt)
54.7
66.6
-17.9
-1.9
Sales of aggregates (mt)
20.4
23.6
-13.6
-2.9
Sales of ready-mix concrete (m m3)
7.4
9.3
-21.0
-1.3
Net Sales to external customers (CHFm)
4,879
5,576
-12.5
1.6
Recurring EBITDA (pre-IFRS16) (CHFm)
1,254
1,151
9.0
17.5
Europe
2019
2018
±%
±%LfL
Sales of cement (mt)
35.4
33.9
4.3
4.3
Sales of aggregates (mt)
89.1
91.0
-2.0
-2.1
Sales of ready-mix concrete (m m3)
14.6
14.3
1.7
1.6
Net Sales to external customers (CHFm)
5,836
5,692
2.5
6.4
Recurring EBITDA (pre-IFRS16) (CHFm)
1,170
1,079
8.4
12.6
Latin America
2019
2018
±%
±%LfL
Sales of cement (mt)
18.7
18.9
-1.4
-1.4
Sales of aggregates (mt)
3.1
2.7
15.7
15.7
Sales of ready-mix concrete (m m3)
3.8
4.2
-9.8
-9.8
Net Sales to external customers (CHFm)
1,973
2,126
-7.2
4.4
Recurring EBITDA (pre-IFRS16) (CHFm)
669
739
-9.4
-1.7
Middle East Africa
2019
2018
±%
±%LfL
Sales of cement (mt)
26.8
26.9
-0.6
-0.6
Sales of aggregates (mt)
5.0
6.7
-25.2
-25.2
Sales of ready-mix concrete (m m3)
2.8
3.1
-8.5
-8.5
Net Sales to external customers (CHFm)
2,189
2,306
-5.1
0.9
Recurring EBITDA (pre-IFRS16) (CHFm)
490
566
-13.3
-6.6
North America
2019
2018
±%
±%LfL
Sales of cement (mt)
15.8
14.9
6.1
6.1
Sales of aggregates (mt)
84.8
81.3
4.2
3.7
Sales of ready-mix concrete (m m3)
7.6
7.2
6.7
0.1
Net Sales to external customers (CHFm)
4,755
4,366
8.9
5.7
Recurring EBITDA (pre-IFRS16) (CHFm)
1,192
1,113
7.1
4.4
RECONCILIATION TO GROUP
ACCOUNTS
Reconciling measures of profit and loss to the consolidated
statement of income of LafargeHolcim
Million CHF
9M 2019
9M 2018
Recurring EBITDA*
4,863
4,351
Depreciation and amortization and
impairment of operating assets**
(1,824)
(1,668)
Restructuring, litigation, implementation
and other non-recurring costs
(101)
(354)
Operating profit
2,938
2,329
* Including CHF 320 million of IFRS 16 lease impact in 2019 **
Including CHF (286) million of IFRS 16 lease impact in 2019
ADDITIONAL INFORMATION
Non-GAAP definitions Some non-GAAP measures are used in
this release to help describe the performance of LafargeHolcim. A
full set of these non-GAAP definitions can be found on our
website.
Analyst presentation The analyst presentation of the
third quarter trading update is available on our website at
www.lafargeholcim.com.
Media conference: 09:00 CEST Switzerland: +41 58 310 5000
France: +33 1 7091 8706 UK: +44 207 107 0613
US: +1 631 570 5613
Analyst conference: 10:00 CEST
ABOUT LAFARGEHOLCIM
LafargeHolcim is the global leader in building materials and
solutions. We are active in four business segments: Cement,
Aggregates, Ready-Mix Concrete and Solutions & Products.
With leading positions in all regions of the world and a
balanced portfolio between developing and mature markets,
LafargeHolcim offers a broad range of high-quality building
materials and solutions. LafargeHolcim experts solve the challenges
that customers face around the world, whether they are building
individual homes or major infrastructure projects. Demand for
LafargeHolcim materials and solutions is driven by global
population growth, urbanization, improved living standards and
sustainable construction. Around 75,000 people work for the company
in around 80 countries.
More information is available on www.lafargeholcim.com
Important disclaimer – forward-looking statements:
This document contains
forward-looking statements. Such forward-looking statements do not
constitute forecasts regarding results or any other performance
indicator, but rather trends or targets, as the case may be,
including with respect to plans, initiatives, events, products,
solutions and services, their development and potential. Although
LafargeHolcim believes that the expectations reflected in such
forward-looking statements are based on reasonable assumptions as
at the time of publishing this document, investors are cautioned
that these statements are not guarantees of future performance.
Actual results may differ materially from the forward-looking
statements as a result of a number of risks and uncertainties, many
of which are difficult to predict and generally beyond the control
of LafargeHolcim, including but not limited to the risks described
in the LafargeHolcim's annual report available on its website
(www.lafargeholcim.com)
and uncertainties related to the market conditions and the
implementation of our plans. Accordingly, we caution you against
relying on forward-looking statements. LafargeHolcim does not
undertake to provide updates of these forward-looking
statements.
1 like-for-like 2 like-for-like, pre-IFRS 16 3 pre-IFRS 16 and
at constant foreign exchange
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