Rock to Road

Holcim releases half-year financial results

August 16, 2013  By Rock to Road

August 15, 2013,
Zurich, Switzerland – Holcim has released its financial results for the first
half of 2013, with Canada falling short of the company’s expectations for sales

August 15, 2013,
Zurich, Switzerland – Holcim has released its financial results for the first
half of 2013, with Canada falling short of the company’s expectations for sales

 Global economic
growth in the first half of 2013 was weaker than foreseen. Construction
activity was hurt by the severe winter as well as the bad weather encountered
in many regions. Demand fell short of expectations in India, Canada, Mexico and
Morocco in particular. By contrast, the economic climate was significantly
better in the Philippines and Ecuador, among other markets. 

 Holcim succeeded in
increasing Group net income and cash flow from operating activities. Europe and
Latin America achieved better operating results, leading on balance to a higher
operating EBITDA margin. It was primarily on account of India that Holcim was
unable to exceed the previous year’s operating EBITDA growth on a like-for-like
basis. However, in the second quarter the Group achieved organic growth in both
operating EBITDA and operating profit. Thanks to the Holcim Leadership Journey,
which is making progress above all on the cost front, ROIC before taxes
continued to increase. Over 12 months, net financial debt decreased by CHF 1.2


Consolidated sales
volumes were lower in all segments. Latin America contributed most positively
to the development of cement sales. The decline in deliveries of aggregates
and, above all, ready-mix concrete was more acute. This reflects not only the
frequently limited demand, but also the reorganization and restructuring
efforts initiated, and in some cases completed, in order to sustainably improve
margins. Holcim has been able to achieve better prices in many markets. 

Group regions Europe
and Latin America reported year-on-year increases in operating results. On
account of Canada, North America was not quite able to match the figures of the
previous year, and Asia Pacific and Africa Middle East fell considerably short
of the previous year’s levels owing to India and Morocco, respectively. Holcim
Philippines, Aggregate Industries UK, Holcim Ecuador and Holcim US achieved
substantially improved operating results. Overall, like-for-like operating
EBITDA at Group level fell by 0.6 percent in the first half. At 0.1 percent,
like-for-like operating profit developed moderately positively. The
corresponding figures for the second quarter were positive at +2.8 percent and
+5.4 percent.

Sales volume and
price development

Consolidated cement
sales were down 3.7 percent to 68.6 million tonnes. Deliveries of aggregates
declined by 7.2 percent to 69.4 million tonnes, and ready-mix concrete volumes
decreased by 15 percent to 18.8 million cubic meters. Asphalt sales were down
by 8.3 percent to 3.3 million tonnes because of North America. 

The Group companies
in Ecuador, Azerbaijan and Russia reported significant increases in cement
sales, while deliveries of aggregates were up at Holcim Switzerland and
Aggregate Industries UK. Upturns in ready-mix concrete sales were recorded by
Holcim Indonesia, Holcim Malaysia and Holcim Ecuador. 

Price development in
all regions continued to be positive with the exception of Europe. 

Financial results

Consolidated net
sales decreased by 5.1 percent to CHF 9.6 billion. The 3.4 percent decline in
operating EBITDA to CHF 1.8 billion was largely attributable to the two Indian
Group companies as well as Holcim Canada, Holcim Mexico, Holcim Morocco and
Holcim France. Group regions Europe and Latin America achieved better results.
On the positive news front, fixed costs were lower and the price environment
was in many cases stable or slightly better. Proceeds from the sale of CO2 emission certificates were down by CHF 10,3 million in Europe.
Consolidated operating profit fell by 3.3 percent to CHF 1 billion, but on a
like-for-like basis moderate growth of 0.1 percent (2nd quarter of 2013: +5.4
percent) was recorded. Group net income increased by 23.8 percent to CHF 760
million, and the share of net income attributable to shareholders of Holcim Ltd
rose by 47.4 percent to CHF 571 million. 


Net financial debt
was down by CHF 1.2 billion compared to the same period of the previous year at
CHF 11.0 billion. In the same period, gearing decreased from 62.6 percent to
57.1 percent. 


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