February 28, 2014, Zurich, Switzerland – Holcim was able to
achieve a sharp rise in net income despite a drop in net sales hurt by
fluxuating currency prices.
February 28, 2014, Zurich, Switzerland – Holcim was able to
achieve a sharp rise in net income despite a drop in net sales hurt by
fluxuating currency prices.
In the 2013 financial year, Holcim achieved cement sales of
138.9 million tonnes, compared to 142.3 tonnes in the previous year. The 2.4
percent fall was mainly attributable to lower volumes in Group region Asia
Pacific, while in Europe cement sales were higher mainly due to the sustained
high demand in Russia and Azerbaijan.
Aggregates volumes contracted in 2013 by 2.4 percent to
154.5 million tonnes. The demand for crushed stone, gravel and sand was higher
in North America due to positive market development in the US. In Asia Pacific
volumes were lower mainly on account of lower demand in Australia.
Restructuring of aggregates activities resulted in a more pronounced fall in
volumes in Latin America.
Deliveries of ready-mix concrete fell by 12.9 percent to
39.5 million cubic meters, as many Group companies were restructuring their
activities to improve their profitability in this segment. Asphalt sales were
impacted by lower demand in Canada and the US, while sales in the United
Kingdom were higher. Consolidated volumes contracted by 2 percent to 8.9
million tonnes.
Net sales were down 6.8 percent to CHF 19.72 billion, but
increased on a like-for-like basis by 0.2 percent. It was significantly harder
to implement price increases in various markets than in the previous year. The
Swiss franc exchange rate rose in 2013 against various currencies, particularly
the Indian, Indonesian, and Brazilian currencies, while it weakened in respect
of the Euro. Overall, this had an adverse impact of CHF 798 million on the net
sales.
Holcim achieved operating EBITDA of CHF 3.90 billion
compared to CHF 3.89 billion in the previous year. A positive contribution was
made to operating EBITDA by Holcim US and the Group companies in the UK,
Germany, Ecuador and the Philippines, while operating EBITDA was negatively
impacted by the Group companies in India, Mexico, Canada, and Brazil.
Operating profit improved by 34.8 percent to CHF 2.36
billion, up from CHF 1.75 billion. The Holcim Leadership Journey made a
significant contribution to the positive result and achieved the objectives set
for 2013. The various work streams of the Holcim Leadership Journey, which
particularly gathered pace from the middle of the year, contributed CHF 943
million to consolidated operating profit. This means that the Holcim Leadership
Journey, together with the achievements of 2012, made a total contribution of
CHF 1.10 billion. ROIC before taxes rose from 6.8 percent in 2012 to 9.1
percent.
Net income rose sharply by 59.3 percent to CHF 1.60 billion,
up from CHF 1.00 billion. Net income attributable to shareholders doubled to
CHF 1.27 billion from CHF 610 million.
Holcim continues to maintain a strong balance sheet and a
good balance between equity and debt, with the Group’s net debt falling by CHF
864 million to CHF 9.46 billion.
Cash flow improved to CHF 2.79 billion from CHF 2.64
billion.
Outlook for 2014
For 2014 Holcim expects the global economies to show another
year of uneven performance. Construction markets in Europe are expected to have
reached the bottom with slow recovery in sight. At the same time, North
American markets are expected to continue to benefit from a further recovery
especially in the United States. Latin America on the other hand could continue
to face uncertainties in Mexico but should overall show slight growth in 2014.
The Asia Pacific region is expected to grow although at a comparatively slower
pace than experienced in recent years. Africa Middle East is expected to
gradually improve.
Holcim expects cement volumes to increase in all Group
regions in 2014. Aggregates volumes are expected to remain flat overall as
increases in Asia Pacific, Europe, North America, and Africa Middle East are
offset by negative volumes in Latin America. In ready-mix concrete volumes are
also expected to increase in most regions with the exception of Europe and
Latin America.
The Board of Directors and Executive Committee expect that
organic growth in operating profit can be achieved in 2014. The ongoing focus
on the cost base coupled with all the benefits expected from the Holcim
Leadership Journey will lead to a further expansion in operating margins in
2014.
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