Displaying items by tag: LafargeHolcim

Switzerland: In the first half of 2015, Holcim generated higher cash flow from operating activities and increased net income supported by the gain from the divestment of its minority shareholding in Siam City Cement in March 2015. However, Holcim was faced with a challenging development in the first half of 2015 as lower than anticipated demand in some markets caused volume declines in cement and impacted financial performance. Positive dynamics in markets such as the United Kingdom, the United States, Mexico and the Philippines were not able to compensate for these effects.

In the first half of 2015 consolidated cement volumes decreased by 2% to 67.6Mt as group regions like Asia Pacific, Europe and Africa Middle East reported declines. Like-for-like net sales across the group were almost unchanged in the first half of 2015. Net sales were down by 3.1% to Euro8.12m, as better performance in North America could not compensate for lower sales in other group regions. Operating earnings before income, taxes, depreciation and amortisation (EBITDA), adjusted for merger-related costs of Euro80.8m, fell by 3.7% to Euro1.46m. Operating EBITDA decreased by 7.8% to Euro1.38m, impacted by merger-related costs and lower financial performance in Europe and Asia Pacific. Operating profit adjusted for merger-related costs of Euro80.8m, was down by 5.5% to Euro857m. Operating profit fell by 12.3% to Euro777m, as increases in Latin America and North America were not able to compensate for merger-related costs and lower performance in Asia Pacific, Europe and Africa Middle East. Net income increased by 4.9% to Euro648m, mainly as a result of the divestment of Holcim's minority shareholding in Siam City Cement.

Holcim was again confronted with a mixed global economic environment that was influenced by moderate growth levels as well as political and economic uncertainty. Although lower oil prices influenced economic development positively in oil-importing regions, ongoing investment weakness more than offset these effects in both advanced and emerging markets. With its strong focus on prices and cost management as well as its balanced geographic footprint, Holcim was able to mitigate some of these effects. Cement volumes declined in all group regions with the exception of North America and Latin America. More cement was sold in important markets including Romania, the Philippines, Vietnam and the US. Adjusted for merger-related costs, operating EBITDA was lower, despite the positive developments in North America and Latin America. Operating profit adjusted for merger-related costs also declined. While Group companies including Aggregate Industries UK, Holcim US, Holcim Mexico and Holcim Spain reported increased like-for-like financial performance, the development in Indonesia, India, Switzerland and France was less favourable.

Holcim expects that in 2015, the global economy will continue its gradual recovery. Key construction markets of Holcim in countries like the USA, India, Mexico, Colombia, the UK and the Philippines are expected to be the main growth drivers. Europe overall should have flat development. Latin America will continue to face uncertainties in Brazil, but should overall show slight growth in 2015. The Asia Pacific region is expected to grow, although at a modest pace. Flat development is expected in Africa Middle East. Cement volumes should increase in all group regions in 2015 with the exception of Europe, Africa and the Middle East.

France: Lafarge has reported mixed results for the second quarter and first half of 2015, with lower cement volumes but higher sales for both periods.

In the second quarter of 2015, cement volumes decreased by 3% due to lower export sales. On its domestic markets, Lafarge's volumes increased by 2%. Cement prices fell by 0.5% year-on-year but rose by 0.5% quarter-on-quarter. Volumes were supported by continuing positive trends in many markets such as Romania, the Philippines, Egypt and Canada, while adverse weather limited growth in the US. Some markets faced more challenging economic and/or political environments. This was notably the case in France, where the construction sector remains subdued. In Brazil, Lafarge faces a very challenging overall environment. In Iraq and Syria difficulties in transporting cement across the country have prevailed since June 2014.

Lafarge's sales grew by 5% year-on-year to Euro3.54bn in the second quarter of 2015. Exchange rates continued to be favourable with a positive impact on sales of Euro249m or 8%, while the impact of Lafarge's divestments, notably in Ecuador, Russia and Pakistan, reduced its sales by 3% or Euro75m. Its earnings before income, taxes, depreciation and amortisation (EBITDA) improved by 1% to Euro820m, supported by favourable exchange rates with a positive impact of Euro52m or 6%. Its operating income fell by 3% year-on-year to Euro608m.

Results in the second quarter of 2015 were impacted by one-off items in connection with the creation of LafargeHolcim that was finalised on 10 July 2015. These one-off items include Euro450m of impairment on some of the assets to be divested to CRH in the third quarter of 2015. Pre-tax merger costs of Euro94m were booked in the second quarter of 2015 and one-off restructuring costs, mainly reflecting reorganisation measures in France, amounted to Euro51m, compared to Euro32m in the same period of 2014. Excluding one-off items, Lafarge's net income was Euro210m in the second quarter of 2015, down by Euro27m from the same period of 2014.

Lafarge received Euro232m in cash for divestments in the second quarter of 2015, mainly reflecting the proceeds for its operations in Pakistan. Investments totalled Euro262m. Capital expenditures remained limited at Euro82m compared to Euro67m in the second quarter of 2014. Development investments amounted to Euro180m, mainly including projects in North America (Exshaw in Canada and Ravena in the US) and in Algeria, as well as a few debottlenecking projects, notably in the Philippines.

For the first half of 2015, Lafarge has reported a 4% year-on-year reduction in cement sales to 54.7Mt, while its sales grew by 5% to Euro6.32bn. Its EBITDA grew by 6% to Euro1.22bn and its operating income grew by 8% to Euro813m.

For the entirety of 2015, Lafarge expects cement market growth of 1 - 4%. Cost inflation should continue albeit at a slower pace than in 2014, given the evolution of fuel oil prices. This should result in higher prices overall. Lafarge should also benefit from more favourable exchange rates.

Zimbabwe: Lafarge Cement Zimbabwe, which recently merged with Holcim, is considering retaining its Lafarge brand in the country, according to All Africa.

A Lafarge spokesperson could not clearly indicate how the merger would affect the local brand, but suggested that Zimbabwe could remain with the Lafarge brand with a LafargeHolcim endorsement, in comment with the Financial Gazette's Companies and Markets,

"There will be three different approaches to the branding of the new countries. In countries with a balanced overlap, including cement operations in Bangladesh, Brazil, Morocco, Russia, Spain and the US, as well as for the trading business of the new group, LafargeHolcim will be introduced as the corporate brand, while existing Holcim and Lafarge brands on the market will remain and be complemented by the endorsement, 'a member of LafargeHolcim'," said the spokesperson. "In other countries with overlap of activities including France, Indonesia, Malaysia and the Philippines, either Lafarge or Holcim will become a corporate brand receiving the endorsement. In the countries without overlap, the existing brand will remain at all levels, also with the group endorsement." Zimbabwe has no overlap as Holcim did not have a presence in the country.

Europe: In accordance with Article 20 of the Federal Act on Stock Exchanges and Securities Trading (Stock Exchange Act), LafargeHolcim Ltd was informed by Schweizerische Cement-Industrie-Gesellschaft (Thomas Schmidheiny), Groupe Bruxelles Lambert (Jacqueline Desmarais, André Desmarais, Paul Desmarais Jr, Albert Frère), Eurocement Holding AG (Filaret Galchev-Kaltsidis), NNS Jersey Trust (Nassef Sawiris), Dodge & Cox and Harbor Funds about their number of voting rights and of the registered share capital they hold in LafargeHolcim Ltd as of 15 July 2015. The data is as follows:

- Schweizerische Cement-Industrie-Gesellschaft (Thomas Schmidheiny): 11.872%;
- Groupe Bruxelles Lambert (Jacqueline Desmarais, André Desmarais, Paul Desmarais Jr, Albert Frère): 9.84%;
- Eurocement Holding AG (Filaret Galchev-Kaltsidis): 6.38%;
- NNS Jersey Trust (Nassef Sawiris): 4.97% (3.99% in reg. shares);
- Dodge & Cox: 3.41%;
- Harbor Funds: 1.8609%.

UK: Aggregate Industries' new cement division will be led by Joe Hudson as managing director of cement and concrete products. He joins Aggregate Industries from Lafarge, where he has worked in a number of key functional and operational roles since 2001. Hudson was heavily involved in preparations for the LafargeHolcim merger as group senior vice president for organisation and development at Lafarge and has experience of running a cement business, having previously worked as managing director / CEO for Lafarge Wapco Plc in Nigeria.

Indonesia: PT Holcim Indonesia Tbk is preparing to merge with PT Lafarge Cement Indonesia after the finalisation of the LafargeHolcim merger.

Deputy corporate secretary Andika Lukman said in statement that the new holding company has started the strategic transformation process, focusing on revenues, capital allocation, commercial transformation and integration of the new holding. "The LafargeHolcim merger could raise revenues up to US$1.53bn in three years after the merger," said Lukman.

Holcim entered Indonesia by acquiring PT Semen Cibinong Tbk shares in 2001 for US$340m in the wake of a monetary crisis. The company was found by Hashim Djojohadikusumo, younger brother of Indonesia's 2014 presidential candidate Prabowo Subianto. Semen Cibinong's name was later changed to PT Holcim Indonesia. Meanwile, Lafarge entered the Indonesian market by acquiring shares of PT Semen Andalas Indonesia, which operates cement plant in Aceh, Sumatera in 1994. Semen Andalas' name was later changed to PT Lafarge Cement Indonesia.

UK: Leicestershire-based Aggregate Industries, now part of the LafargeHolcim group, has taken ownership of Lafarge cement plants in Cauldon, Staffordshire and Cookstown, County Tyrone, Northern Ireland.

The transfer of ownership of the two plants, along with a quarry at Cauldon Low and a cement terminal at Belfast Docks, was finalised on 20 July 2015 and also involves the transfer of 250 employees from the existing operations to Aggregate Industries. Originally owned by Holcim, Aggregate Industries said that becoming a cement producer and supplier 'is the final piece in the jigsaw,' providing a full range of construction materials to its customers.

"These are exciting times for Aggregate Industries. Along with the wider benefits of being part of the new LafargeHolcim group, the integration of cement production represents a significant strategic opportunity for us. We're now able to offer our customers the full range of construction materials and solutions, while maintaining our high levels of customer service," said Pat Ward, Aggregate Industries CEO. The business will continue with the Lafarge cement brand for its bulk cement products, although some of the bagged products will be renamed in due course.

India: CRH has reportedly submitted a binding bid for the Indian assets of the newly formed LafargeHolcim, according to the Irish Examiner.

CRH is already paying Euro6.5bn for certain assets in the Americas, Europe and Asia that needed to be offloaded to enable the LafargeHolcim merger. The transaction, which will make CRH the third-largest building materials business in the world, is set to formally conclude by the end of July 2015, although it will take slightly longer to finalise the takeover of the Asian assets.

HeidelbergCement and Barings Private Equity (Asia) have also reportedly submitted bids for LafargeHolcim assets in India. The reports have suggested a price of US$600 - 800m for the Indian assets, which include Lafarge's Sonadih cement plant and the Jojobera grinding station in the east of the country.

France: Holcim's French subsidiary will be renamed Orsima on 1 August 2015, according to Le Moniteur. The change comes at a time when the assets have been purchased by CRH as part of the LafargeHolcim merger. The businesses of Cement Orsima, Orsima Concrete and Aggregates Orsima will be used legally and commercially.

With the acquisition, CRH becomes the third-largest cement producer in France with about 15% of the market share. The assets include three cement plants (Holcim Lumbres, Héming and Rochefort-sur-Nenon), four grinding plants (Grand-Couronne, Dannes, Dunkirk and La Rochelle), a mixing station in Montoir-de-Bretagne, Loire-Atlantique and 170 concrete plants and aggregates sites (LafargeHolcim will retain eleven in Haut-Rhin Department).

World: LafargeHolcim will not sell any additional assets, except for those that were negotiated with the European Commission (EC) in order to approve their merger, according to French Collection. The combined group hopes to complete its overall integration by the end of 2016.