- Strong growth in Net Sales, up
+6.4%1
- Over-proportional increase in
Recurring EBITDA, up +20.6%2
- Profitability increase in all
business segments
- Significant reduction in debt for
the year end
- 2019 targets confirmed
Regulatory News:
Performance Q1 2019
Group (in million CHF) Q1 2019 Q1 2018
change LfL Net Sales of cement
4,079 3,995 2.1% 7.5% Net
Sales of aggregates
813 764 6.4%
7.6% Net Sales of ready-mix concrete
1,223 1,181 3.6% 4.8% Net
Sales of Solutions & Products
417 420
-0.7% 4.0% Net Sales
5,959 5,830 2.2% 6.4%
Recurring EBITDA (pre-IFRS 16)
809 700
15.5% 20.6% Recurring EBITDA (post-IFRS 16)
920
Jan Jenisch, CEO: “We had a very strong start of the year and I
am especially pleased to see our strong sales growth and an
over-proportional increase in profitability. Our momentum is very
positive and the Q1 2019 is the third consecutive quarter with
Recurring EBITDA growing faster than Net Sales.”
“Our strategic decision to divest South East Asia was executed
with very attractive valuations allowing us to achieve a new level
of financial strength. We have delivered on the promised
strengthening of our balance sheet and we are on track to
accelerate the execution of our Strategy 2022 – ‘Building for
Growth’.”
“Our momentum in the past 3 quarters, a solid global market
demand and the ambitions of our teams give us great confidence for
reaching our targets for the full year.”
CONTINUATION OF STRONG
MOMENTUM
Like-for-like Net Sales grew by 6.4 percent for the first
quarter compared to the prior-year period, while Recurring EBITDA
grew over proportionally by 20.6 percent3.
The Europe region delivered very good results with strong volume
growth in all business segments and significant price increases.
Improved operational efficiency in our plants and an early start of
the construction season allowed the company to grow margins
further.
The North America region had a good start of the year, with good
volume growth in the quarter and several multi-year construction
contracts supporting a strong order book. The region also made
further progress on its cost savings program.
The Latin America region delivered a resilient performance in a
softer market environment. Effective price management and cost
savings nearly offset the challenging environment in key countries.
Recovery is ongoing in Brazil and Colombia while Mexico and
Argentina experienced lower cement demand.
The Asia Pacific region continued its strong momentum based on
strong cement demand in India and progressive price improvement in
most markets. Profitability in Australia and the Philippines was
higher and China continued to contribute solidly to a positive
result in the region.
Markets in the Middle East Africa region have started to
stabilize overall. Turnaround plans in several countries are
delivering visible results. Changes in supply and demand in key
countries are still impacting prices.
STRATEGY 2022
Our growth strategy generated strong sales growth and an over
proportional increase in profitability. The execution of Strategy
2022 – “Building for Growth” is building up momentum and Q1 2019 is
the third consecutive quarter with Recurring EBITDA growing faster
than Net Sales.
Growth was achieved in all four business segments supported by
solid global market demand. Four bolt-on acquisitions were
completed in North America, Australia and Europe and key investment
programs have progressed.
The CHF 400 million SG&A cost savings program has supported
the quarter’s performance and is on track to deliver the targets
for the full year. The Recurring EBITDA has increased in all four
business segments. The Aggregates and the Ready-mix Concrete
business segments continued to improve margins and to close the gap
to best in class performance.
Based on our strategic portfolio review, the exit from the
increasingly hyper competitive arena in South East Asia was
executed. The divestments were achieved at very attractive
valuations leading to a new level of financial strength. The Net
Debt to Recurring EBITDA ratio is expected to improve by 0.6 times
at the closing of all transactions and we are over achieving on our
ambitious de-leveraging targets for 2019. Both credit rating
agencies, Moody’s and Standard Poor’s, upgraded the outlook for
LafargeHolcim to “stable” in March 2019.
OUTLOOK
The positive momentum in Q1 is expected to continue in 2019
with:
- Continued market growth in North
America
- Softer but stabilizing cement demand in
Latin America
- Continued demand growth across most
countries in Europe
- Challenging but stabilizing 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 growth4 of at least 5
percent on a like-for-like basis
- Ratio of Net Debt to Recurring EBITDA 2
times or less by end of 20192
- Continue improving cash conversion
- Capex and bolt-on acquisitions of less
than CHF 2 billion
GROUP AND REGIONAL
FIGURES
Group
Q1 2019
Q1 2018 ±% ±%
like-for-like Sales of cement million t 50.1 50.0 0.1 4.6 Sales
of aggregates million t 49.6 49.8 -0.2 1.7 Sales of ready-mix
concrete million m3 11.4 11.1 2.1 2.9 Net Sales million CHF 5,959
5,830 2.2 6.4 Recurring EBITDA (pre-IFRS 16) million CHF 809
700 15.5 20.6 Recurring EBITDA (post-IFRS 16) million CHF 920
Asia Pacific
Q1 2019 Q1 2018 ±%
±% like-for-like Sales of cement million t 20.9 22.6
-7.6 2.2 Sales of aggregates million t 6.6 7.6 -13.6 -8.7 Sales of
ready-mix concrete million m3 2.9 3.1 -6.1 0.8 Net Sales million
CHF 1,745 1,836 -5.0 4.3 Recurring EBITDA (pre-IFRS 16)
million CHF 341 299 14.0 22.5 Recurring EBITDA (post-IFRS 16)
million CHF 356
GROUP AND REGIONAL
FIGURES (continued)
Europe
Q1 2019
Q1 2018 ±% ±%
like-for-like Sales of cement million t 9.6 8.3 15.8 15.8 Sales
of aggregates million t 26.2 25.4 3.3 5.8 Sales of ready-mix
concrete million m3 4.6 4.1 12.1 11.7 Net Sales million CHF 1,703
1,518 12.2 15.7 Recurring EBITDA (pre-IFRS 16) million CHF
155 90 72.9 76.7 Recurring EBITDA (post-IFRS 16) million CHF 188
Latin America
Q1 2019 Q1 2018 ±%
±% like-for-like Sales of cement million t 5.9 6.1
-2.6 -2.6 Sales of aggregates million t 0.9 0.8 4.7 4.7 Sales of
ready-mix concrete million m3 1.2 1.3 -8.8 -8.8 Net Sales million
CHF 636 686 -7.4 4.2 Recurring EBITDA (pre-IFRS 16) million
CHF 220 236 -6.7 -1.6 Recurring EBITDA (post-IFRS 16) million CHF
227
Middle East Africa
Q1 2019 Q1 2018
±% ±% like-for-like Sales of cement million t
8.8 9.0 -2.1 -2.1 Sales of aggregates million t 1.7 1.9 -9.6 -9.6
Sales of ready-mix concrete million m3 1.0 1.0 0.4 0.4 Net Sales
million CHF 736 750 -1.9 -2.4 Recurring EBITDA (pre-IFRS 16)
million CHF 151 176 -14.5 -15.8 Recurring EBITDA (post-IFRS 16)
million CHF 171
North America
Q1 2019 Q1 2018
±% ±% like-for-like Sales of cement
million t 3.4 3.2 4.7 4.7 Sales of aggregates million t 14.2 14.0
1.7 1.1 Sales of ready-mix concrete million m3 1.8 1.7 2.5 -4.1 Net
Sales million CHF 951 867 9.7 4.0 Recurring EBITDA (pre-IFRS 16)
million CHF 14 8 76.1 38.1 Recurring EBITDA (post-IFRS 16)
Million CHF 46
RECONCILIATION TO GROUP
ACCOUNTS
Reconciling measures of profit and loss to the consolidated
statement of income of LafargeHolcim
Million CHF Q1 2019 Q1 2018
Recurring EBITDA*
920 700
Depreciation and amortization and
impairment of operating assets**
(615) (577) Restructuring, litigation, implementation and
other
non-recurring costs
(18) (55)
Operating profit 288 68
* including CHF 111 million of IFRS16 lease impact
** including CHF (102) million of IFRS16 lease impact
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 first quarter trading update is
available on our website at www.lafargeholcim.com.
Analyst call: 08:30 CET, May 15, 2019
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-like2 like-for-like, pre-IFRS 163 like-for-like,
pre-IFRS 164 Pre-IFRS 16
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