July 29, 2015 – LafargeHolcim announced its roadmap for the second half of 2015 as it releases half-year results for Lafarge S.A. as well as Holcim Ltd, the predecessor company of LafargeHolcim Ltd.
Eric Olsen, CEO of LafargeHolcim says: “We continue to operate in a demanding global market environment and this has affected our first-half performance. However, as a new company we have hit the ground running. A team of 200 senior leaders of LafargeHolcim met as early as last week to align on priorities, targets and initiatives to drive the integration process. It is a great team we have on board. We have launched a set of synergy acceleration activities covering areas such as capex, procurement, cement industrial performance, network optimization as well as commercial transformation. We expect to see first tangible results in all areas by year-end.”
LafargeHolcim expects to deliver at least CHF 100 million synergies impacting earnings in the period until year-end as part of its program to achieve CHF 1.5 billion (EUR 1.4 billion) run rate synergies by year three.
Leveraging its new footprint, the company has also launched a review of its asset base and the planned capital expenditures for the remainder of the year. It targets an overall reduction in capex of at least CHF 200 million until year-end, compared to what both companies had planned to spend on a standalone basis. This results in capex of below CHF 1.4 billion for the second half of 2015. In parallel, the company has also launched a portfolio review for further optimization.
The company has defined capital allocation discipline as a key focus area with a view to reduce capex and maximize cash generation and returns for shareholders. While ensuring a solid investment grade rating, one objective is to offer an attractive dividend policy.
As a first step, LafargeHolcim has decided on a progressive dividend policy, starting at least at CHF 1.30 per share for the financial year 2015, subject to the approval of the Annual General Meeting in 2016. This will apply to all shares, including the new shares to be awarded to shareholders as a scrip dividend of one share per 20 shares held that was announced in March. This scrip dividend is now expected to be issued on September 8, 2015.
In terms of net debt, the Group expects net proceeds of around CHF 6.0 billion by year-end from divestments that will be used to reduce debt, supporting a solid financial structure. This would lead to a net debt below CHF 15.0 billion by year-end 2015, prior to the fair value adjustment on the Lafarge debt and a potential squeeze-out of Lafarge S.A.
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