Media release on 1st half results 2012

PDF-version of this media release

Holcim increased its consolidated sales of cement fueled by the emerging markets and  North America in the first half of 2012. In particular, the Group companies in India, the Philippines, Thailand and Indonesia achieved significantly higher cement sales, as well as the US and Mexico. With the exception of Russia and Azerbaijan, which also sold more, this positive picture contrasts with the negative market development in Europe, caused by the debt crisis.

Higher sales volumes and prices as well as cost-cutting measures enabled Holcim to increase its operating EBITDA despite restructuring costs in some markets. All Group regions achieved organic growth apart from Europe and Africa Middle East. The Group also achieved better margins in the second quarter.

Holcim Group, January-June and April-June

Sales development and financial results

Consolidated cement sales increased by 4.4 percent to 74 million tonnes. Deliveries of aggregates declined by 7 percent to 75.6 million tonnes, and ready-mix concrete volumes by 1.3 percent to 22.8 million cubic meters. Sales of asphalt decreased, mainly in Europe, by 16.2 percent to 3.6 million tonnes.

With an increase in cement deliveries of 3.1 million tonnes, Asia Pacific was the strongest Group region. North and Latin America as well as Africa Middle East also recorded gains. The top performer in the aggregates segment was North America, mainly due to Holcim Canada. In the ready-mix concrete business, Holcim achieved significant sales increases in North America. An important role was also played by the higher volumes of Holcim Singapore and Holcim Apasco in Mexico.

Consolidated net sales increased by 2.1 percent to CHF 10.4 billion. Operating EBITDA rose by 1.9 percent to CHF 1.9 billion, despite the poor state of the European market and restructuring costs in markets such as Spain, Great Britain, Brazil and Mexico of CHF 37 million. Third party transportation drove costs higher, especially in India and the US. Holcim also improved its operating EBITDA margin in the second quarter. This positive development was due to a combination of rising sales volumes and partial price increases, albeit not yet on the desired scale. On a like-for-like basis – i.e. excluding changes in the scope of consolidation and exchange rates – the Group grew at the operating EBITDA level by 6.3 percent in the first half of the year, 6.9 percent in the second quarter. Net income improved by 6.6 percent to CHF 624 million and the share of net income attributable to shareholders of Holcim Ltd rose by 9 percent to CHF 389 million.

Cash flow from operating activities came to CHF 211 million, an increase of 194.2 percent on the same period last year. The reasons are the higher operating EBITDA and lower taxes paid. Net financial debt rose since year-end 2011 by 5.3 percent to CHF 12.2 billion. The gearing decreased to 60.9 percent (June 30, 2011: 64.8).

"Holcim Leadership Journey" on track

The Board of Directors and the Executive Committee initiated the "Holcim Leadership Journey" program with the aim of increasing the return on invested capital to at least 8 percent after tax between 2012 and the end of 2014. Appropriate measures are being introduced to further strengthen Customer Excellence and Cost Leadership and increase the operating profit by at least CHF 1.5 billion by the end of 2014, with a target of at least CHF 150 million for the 2012 financial year. The program was launched Group-wide in May.

Outlook 2012

Holcim expects demand for building materials to rise in emerging markets in Asia and Latin America, as well as in Russia and Azerbaijan, in 2012. While demand in North America should beat the previous outlook, Holcim now expects a decline in Europe.

In any case, Holcim will accord cost management the closest attention, and pass on inflation-induced cost increases. Holcim’s approach to new investments will be cautious.

Holcim expects the Group to achieve organic growth in 2012 on the level of operating EBITDA, and additionally to reap the first positive effects of the "Holcim Leadership Journey" this year.

Tables:

Construction activity brisk in Asia Pacific

Latin America on course for growth

Europe's construction sector impacted by the debt and euro crisis

North America needs more construction materials again

Higher sales volumes in Group region Africa Middle East

Key figures Group Holcim, January-June

Additional information such as the Half-Year Report 2012 including detailed information on the Group regions is available at www.holcim.com/results.

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Holcim is one of the world's leading suppliers of cement and aggregates (crushed stone, gravel and sand) as well as further activities such as ready-mix concrete and asphalt including services. The Group holds majority and minority interests in around 70 countries on all continents.
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Corporate Communications: Phone +41 58 858 87 10
Investor Relations: Phone +41 58 858 87 87
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