Regulatory News:
LafargeHolcim (Paris:LHN):
PERFORMANCE OVERVIEW
Group (in million CHF) H1 2020 H1 2019 +/-% +/-% LfL
Net sales 10,693 13,059 -18.1 -10.8
Recurring EBIT 1,194 1,667 -28.4 -22.0
Recurring EBIT margin 11.2 12.8
Net income(2) 347 1,009 -65.7
Net income before impairment and
divestments(2) 501 769 -34.8
EPS 0.55 1.68
EPS before impairment and
divestments 0.80 1.28 -37.1
Free cash flow(1) 749 252 +198
Net financial debt 10,652 12,650 -15.8
Jan Jenisch, CEO: "I'm very proud of our teams' rapid and agile
response to the crisis since the beginning of January. We were
quick to respond and take all necessary measures to protect the
health of our people while supporting our communities, from
donating materials to build emergency field hospitals all the way
to supplying essential goods, touching the lives of over four
million people around the world.
"Our half-year results demonstrate the great resilience of our
business. I'm encouraged by our team's agility to weather the storm
with the rapid execution of our "HEALTH, COST & CASH" action
plan, effectively driving cost savings ahead of expectations,
improving net working capital and delivering record free cash
flow(1) .
"The peak of the crisis is behind us. We expect a solid second
half of the year based on June's full recovery, the trend of our
order book and upcoming government stimulus packages.
"As an essential sector to keep society running, we look forward
to playing our part in driving the recovery. We are accelerating
our sustainability efforts to ensure our green solutions are fully
part of the recovery. I am confident LafargeHolcim will emerge
stronger from this crisis."
RESILIENT PERFORMANCE AND RECORD FREE CASH FLOW(1)
Net sales of CHF 10,693 million decreased by 18.1% compared to
the prior year, of which 10.8% was on a like-for-like basis,
reflecting the severe impact of the implementation of strict
lockdowns of construction sites in several major operating
countries. The strong appreciation of the CHF against all
currencies accounted for 6.2% of the absolute decrease. Following
the easing of the lockdowns, net sales in all five regions resumed
prior-year levels by the end of June.
Recurring EBIT reached CHF 1,194 million, a decrease of 22.0%
like-for-like for the half year. Swift implementation of the
"HEALTH, COST & CASH" action plan helped to offset the earnings
impact of the crisis.
Tax and financial expenses have continued to reduce, allowing
net income(2,3) to reach CHF 501 million.
Earnings per share(3) were CHF 0.80 for the first half of 2020
compared to CHF 1.28 in the prior-year period.
Free cash flow(1) reached a record CHF 749 million in the
six-month period, up 198% compared to CHF 252 million in the first
half of 2019.
Net debt amounted to CHF 10.7 billion as at 30 June 2020, down
by 15.8% compared to CHF 12.7 billion as at 30 June 2019.
BUILDING A HEALTHIER WORLD TOGETHER
Since the beginning of the crisis, LafargeHolcim teams around
the world have undertaken extraordinary measures to fight COVID-19
across their communities, touching the lives of more than four
million people. Advancing access to health infrastructure for all,
LafargeHolcim donated five million kilograms of material to build
emergency field hospitals from Wuhan to Boston. Furthermore, the
Group donated over two million relief and emergency kits, including
personal protective equipment, food and water.
In the first half of 2020 LafargeHolcim achieved a number-one
Environmental, Social and Governance (ESG) ranking in the
construction materials sector out of more than one-hundred peer
companies, according to ESG research and ratings agency
Sustainalytics. Playing its part in a green recovery, LafargeHolcim
is advancing its leadership in sustainable and circular
construction, notably with the worldwide rollout of ECOPact, its
green concrete. Further accelerating the transition to renewable
energy, LafargeHolcim leveraged 3D printing in an innovative
partnership with GE Renewable Energy and COBOD to build more
powerful wind turbines.
OUTLOOK 2020
Based on the speed of June's rebound, the company expects a
solid second half of the year and anticipates for full year 2020(4)
:
-- Fast demand recovery with an encouraging outlook for the second half of
2020
-- Execution of action plan "HEALTH, COST & CASH" to continue ahead of
targets
-- Free cash flow1 generation above CHF 2 billion
-- Debt leverage below 2x
-- Solid second half of the year expected
KEY GROUP FIGURES
Group Q2 2020 2019 +/-% +/-% LfL
Net sales (CHFm) 5,400 7,099 -23.9 -17.0
Recurring EBIT (CHFm) 932 1,362 -31.6 -26.1
Recurring EBIT margin (%) 17.3 19.2
Group H1 2020 2019 +/-% +/-% LfL
Net sales (CHFm) 10,693 13,059 -18.1 -10.8
Recurring EBIT (CHFm) 1,194 1,667 -28.4 -22.0
Recurring EBIT margin (%) 11.2 12.8
Operating profit (EBIT) 1,005 1,581 -36.4
Net income2 347 1,009 -65.7
Net Income before impairment and
divestments(2) 501 769 -34.8
EPS before impairment and
divestments 0.80 1.28 -37.1
Cash flow from operating activities 1,330 1,067 24.7
Free cash flow(1) 749 252 198
Net financial debt 10,652 12,650 -15.8
Group results by segment H1 2020 H1 2019 +/-% +/-% LfL
Sales of cement (mt) 87.2 103.8 -16.0 -13.1
Net sales of cement (CHFm) 7,029 8,783 -20.0 -11.6
Recurring EBIT of cement (CHFm) 1,131 1,441 -21.5 -14.0
Recurring EBIT margin of cement (%) 16.1 16.4
Sales of Aggregates (mt) 113.8 121.7 -6.5 -6.0
Net sales of Aggregates (CHFm) 1,699 1,907 -10.9 -5.5
Recurring EBIT of Aggregates (CHFm) 101 174 -42.0 -40.1
Recurring EBIT margin of Aggregates (%) 5.9 9.1
Sales of Ready-Mix Concrete (m m(3) ) 19.2 23.6 -18.6 -15.8
Net sales of Ready-Mix Concrete (CHFm) 2,103 2,595 -19.0 -12.3
Recurring EBIT of Ready-Mix Concrete
(CHFm) -47 13 -475.6 -617.4
Recurring EBIT margin of Ready-Mix
Concrete (%) -2.2 0.5
Net sales of Solutions & Products (CHFm) 819 996 -17.8 -13.9
Recurring EBIT of Solutions & Products
(CHFm) 6 39 -84.0 -94.9
Recurring EBIT margin of Solutions &
Products (%) 0.8 3.9
REGIONAL PERFORMANCE H1
Asia Pacific
The Asia Pacific region experienced the most severe COVID-19
related disruption yet delivered a resilient Recurring EBIT margin,
led by India and supported by effective cost and price management
as well as lower input costs. China delivered a full recovery over
the second quarter with volumes closing at higher levels than in
the prior-year period and activity was also resilient in
Australia.
Asia Pacific H1 2020 H1 2019 +/-% +/-% LfL
Sales of cement (mt) 28.0 38.9 -28.0 -21.0
Sales of aggregates (mt) 13.1 13.3 -1.4 2.2
Sales of ready-mix concrete (m m(3) ) 3.6 5.2 -31.0 -16.4
Net sales to external customers (CHFm) 2,413 3,417 -29.4 -18.0
Recurring EBIT (CHFm) 437 682 -35.9 -29.6
Recurring EBIT margin (%) 18.1 19.9
Europe
Results for the Europe region were impacted by COVID-19 with
full recovery in June. Markets in Germany, Central and Eastern
Europe were resilient. Strict lockdown measures in the UK and
France impacted the performance of the region. Volumes suggest a
V-shaped recovery in June for the majority of markets, except in
the UK.
Europe H1 2020 H1 2019 +/-% +/-% LfL
Sales of cement (mt) 20.9 22.5 -7.0 -7.0
Sales of aggregates (mt) 51.9 57.2 -9.3 -9.2
Sales of ready-mix concrete (m m(3) ) 8.3 9.6 -14.2 -14.6
Net sales to external customers (CHFm) 3,274 3,796 -13.8 -9.4
Recurring EBIT (CHFm) 288 408 -29.4 -26.2
Recurring EBIT margin (%) 8.7 10.6
Latin America
The Latin America region showed an expanding Recurring EBIT
margin amid COVID-19, with an especially strong contribution from
Mexico. Performances in Ecuador, Colombia and El Salvador were
significantly impacted by the pandemic. Most markets experienced a
strong recovery in June.
Latin America H1 2020 H1 2019 +/-% +/-% LfL
Sales of cement (mt) 10.4 12.1 -14.3 -14.3
Sales of aggregates (mt) 2.2 2.0 7.8 7.8
Sales of ready-mix concrete (m m(3) ) 1.6 2.5 -34.7 -34.7
Net sales to external customers (CHFm) 980 1,331 -26.4 -12.1
Recurring EBIT (CHFm) 275 358 -23.0 -12.0
Recurring EBIT margin (%) 27.9 26.7
Middle East Africa
The Middle East Africa region showed resilient margins and
recovery from the impact of COVID-19 by June. Volumes declined in
Algeria, Egypt, Iraq and South Africa due to government
restrictions and curfews. Ramadan in May slowed down the recovery
in the respective countries. Nigeria delivered a resilient
performance.
Middle East Africa H1 2020 H1 2019 +/-% +/-% LfL
Sales of cement (mt) 15.6 17.6 -11.6 -11.6
Sales of aggregates (mt) 1.4 3.4 -60.1 -60.1
Sales of ready-mix concrete (m m(3) ) 1.2 1.9 -35.7 -35.7
Net sales to external customers (CHFm) 1,177 1,476 -20.3 -14.8
Recurring EBIT (CHFm) 137 193 -29.3 -27.0
Recurring EBIT margin (%) 11.5 13.0
North America
The North America region delivered a remarkable performance with
a Recurring EBIT up 20 percent for the first half of 2020 over the
prior-year period on a like-for-like basis. This leading
performance amid COVID-19 was largely due to fast and effective
cost management in the US, partly offset by the impact of lockdowns
in Eastern Canada and the economic challenges facing Western Canada
due to a slowdown in the oil & gas industry.
North America H1 2020 H1 2019 +/-% +/-% LfL
Sales of cement (mt) 8.9 9.0 -1.4 -1.4
Sales of aggregates (mt) 45.2 45.7 -1.1 -0.6
Sales of ready-mix concrete (m m(3) ) 4.5 4.4 2.7 1.5
Net sales to external customers (CHFm) 2,566 2,645 -3.0 0.8
Recurring EBIT (CHFm) 260 225 15.6 19.7
Recurring EBIT margin (%) 10.1 8.5
RECONCILIATION TO GROUP ACCOUNTS
Reconciling measures of profit and loss to the LafargeHolcim
Group's consolidated statement of income
H1 2020 H1 2019
Million CHF (Unaudited) (Unaudited)
Net sales 10,693 13,059
Recurring operating costs (8,717) (10,658)
Share of profit of joint ventures 176 272
Recurring EBITDA after leases 2,152 2,673
Depreciation and amortization of property, plant
and equipment, intangible and long-term assets (958) (1,007)
Recurring EBIT 1,194 1,667
Restructuring, litigation and other non-recurring
costs (39) (71)
Impairment of operating assets (151) (14)
Operating profit 1,005 1,581
H1 2020 H1 2019
Million CHF (Unaudited) (Unaudited)
Recurring EBITDA after leases 2,152 2,673
Depreciation of right-of-use assets 185 205
Recurring EBITDA 2,337 2,878
H1 2020 H1 2019
Million CHF (Unaudited) (Unaudited)
Recurring fixed costs (2,922) (3,436)
Recurring variable costs (5,795) (7,222)
Recurring operating costs (8,717) (10,658)
H1 2020 H1 2019
Million CHF (Unaudited) (Unaudited)
Net income 447 1,128
Impairment (143) (23)
Profit/(loss) on divestments (11) 265
Net income before impairment and divestments 601 886
Net income before impairment and divestments Group
share 501 769
Reconciliation of the Free Cash Flow after leases to the
consolidated cash flows of the LafargeHolcim Group
H1 2020 H1 2019
Million CHF (Unaudited) (Unaudited)
Cash flow from operating activities 1,330 1,067
Purchase of property, plant and equipment (442) (647)
Disposal of property, plant and equipment 30 41
Repayment of long-term lease liabilities (169) (209)
Free cash flow after leases 749 252
Reconciliation of Net financial debt to the consolidated
statement of financial position of the LafargeHolcim Group
H1 2020 H1 2019
Million CHF (Unaudited) (Unaudited)
Current financial liabilities 2,736 2,862
Long-term financial liabilities 11,697 12,886
Cash and cash equivalents 3,736 3,045
Short-term derivative assets 14 29
Long-term derivative assets 31 25
Net financial debt 10,652 12,650
NON-GAAP DEFINITIONS
Some non-GAAP measures are used in this release to help describe
the performance of LafargeHolcim. A full set of these non-GAAP
definitions can be found on our website.
Measures Definition
Like-for-like Like-for-like information is
information factoring out changes in
the scope of consolidation (such as
divestments and acquisitions occurring
in 2020 and 2019) and currency
translation effects (2020 figures are
converted with 2019 exchange rates in
order to calculate the currency
effects).
Recurring fixed costs Recurring fixed costs refer to all
recurring costs not directly related
to volumes such as Maintenance,
Personal costs in Production,
Administration, Marketing and Sales
Expenses, Third party services and
depreciation of right-of-use assets.
Recurring variable costs Recurring variable costs include
recurring operating costs directly
related to volumes such as raw
materials and finished goods
purchases, inventory variation,
energy, quarry outsourcing and
distribution costs. The addition of
variable and fixed recurring costs
equals the total recurring operating
costs.
Recurring operating costs The Recurring operating costs is an
indicator representing all recurring
costs. It is defined as: +/--
Recurring EBITDA after leases; -- net
sales; and -- share of profit of joint
ventures
Recurring EBITDA The Recurring EBITDA (earnings before
interest, tax, depreciation and
amortization) is an indicator to
measure the performance of the group
excluding the impacts of non-recurring
items. It is defined as: +/--
Operating profit (EBIT) -
depreciation, amortization and
impairment of operating assets -
restructuring, litigation and other
non-recurring costs
Recurring EBITDA Margin The Recurring EBITDA margin is an
indicator to measure the profitability
of the Group excluding the impacts of
non-recurring items. It is defined as
the Recurring EBITDA divided by net
sales.
Recurring EBITDA after leases The Recurring EBITDA after leases
(earnings before interest, tax,
depreciation and amortization) is an
indicator to measure the performance
of the Group including the impacts of
lease depreciation and excluding the
impacts of non-recurring items. The
Recurring EBITDA after leases is
defined as the Recurring EBITDA less
the depreciation of right-of-use
assets.
Recurring EBIT The Recurring EBIT is defined as
Operating profit/loss (EBIT) adjusted
for restructuring, litigation and
other non-recurring costs and for
impairment of operating assets.
Restructuring, litigation and other Restructuring, litigation and other
non-recurring costs non-recurring costs comprise
significant items that, because of
their exceptional nature, cannot be
viewed as inherent to the Group's
ongoing performance, such as strategic
restructuring, major items relating to
antitrust fines and other business
related litigation cases.
Profit/loss on disposals and other Profit/loss on disposals and other
non-operating items non-operating items comprise capital
gains or losses on the sale of Group
companies and of material property,
plant and equipment and other
non-operating items that are not
directly related to the Group's normal
operating activities such as
revaluation gains or losses on
previously held equity interests,
disputes with non-controlling interest
and other major lawsuits.
Net income/loss before impairment and Net income/loss before impairment and
divestments divestments excludes impairment
charges and capital gains and losses
arising on disposals of investments
which, because of their exceptional
nature, cannot be viewed as inherent
to the Group's ongoing activities. It
is defined as: +/- Net income/loss -
gains and losses on disposals of Group
companies - impairments of goodwill
and long-term assets
EPS (Earnings Per Share) before The EPS (Earnings Per Share) before
impairment and divestments impairment and divestments is an
indicator that measures the
theoretical profitability per share of
stock outstanding based on a net
income/loss before impairment and
divestments. It is defined as Net
income/loss before impairment and
divestments attributable to the
shareholders of LafargeHolcim divided
by the weighted average number of
shares outstanding.
Capex or Capex Net (Net Maintenance The Capex or Capex Net (Net
and Expansion Capex) Maintenance and Expansion Capex) is an
indicator to measure the cash spent to
maintain or expand its asset base. It
is defined as: + Expenditure to
increase existing or create additional
capacity to produce, distribute or
provide services for existing products
(expansion) or to diversify into new
products or markets (diversification)
+ Expenditure to sustain the
functional capacity of a particular
component, assembly, equipment,
production line or the whole plant,
which may or may not generate a change
of the resulting cash flow -- Proceeds
from sale of property, plant and
equipment
Free Cash Flow after leases The Free Cash Flow after leases is an
indicator to measure the level of cash
generated by the Group after spending
cash to maintain or expand its asset
base. It is defined as: +/-- Cash flow
from operating activities -- Net
Maintenance and Expansion Capex --
Repayment of long-term lease
liabilities
Net financial debt ("Net debt") The Net financial debt ("net debt") is
an indicator to measure the financial
debt of the Group after deduction of
the cash. It is defined as: +
Financial liabilities (short-term and
long-term) including derivative
liabilities -- Cash and cash
equivalents -- Derivative assets
(short-term and long-term)
Debt Leverage The Net financial debt to Recurring
EBITDA ratio is used as an indicator
of financial risk and shows how many
years it would take the Group to pay
back its debt.
Cash conversion The cash conversion is an indicator
that measures the Group's ability to
convert profits into available cash.
It is defined as Free Cash Flow after
leases divided by Recurring EBITDA
after leases.
ADDITIONAL INFORMATION
The analyst presentation of the results and our 2020 half-year
report are available on our website at www.lafargeholcim.com
The financial statements are based on IFRS can be found on the
LafargeHolcim Group website.
Media conference: 09:00 CET Analyst conference: 10:00 CET
Switzerland: +41 58 310 5000
France: +33 1 7091 8706
UK: +44 207 107 0613
US: +1 631 570 5613
About LafargeHolcim
LafargeHolcim is the global leader in building materials and
solutions and active in four business segments: Cement, Aggregates,
Ready-Mix Concrete and Solutions & Products. Its ambition is to
lead the industry in reducing carbon emissions and shifting towards
low-carbon construction. With the strongest R&D organization in
the industry, the company seeks to constantly introduce and promote
high-quality and sustainable building materials and solutions to
its customers worldwide - whether individual homebuilders or
developers of major infrastructure projects. LafargeHolcim employs
over 70,000 employees in over 70 countries and has a portfolio that
is equally balanced between developing and mature markets.
More information is available on www.lafargeholcim.com
Important disclaimer - forward-looking statements:
This document contains forward-looking statements. Such
forward-looking statements do not constitute forecasts regarding
results or any other performance indicator, but rather trends or
targets, as the case may be, including with respect to plans,
initiatives, events, products, solutions and services, their
development and potential. Although LafargeHolcim believes that the
expectations reflected in such forward-looking statements are based
on reasonable assumptions as at the time of publishing this
document, investors are cautioned that these statements are not
guarantees of future performance. Actual results may differ
materially from the forward-looking statements as a result of a
number of risks and uncertainties, many of which are difficult to
predict and generally beyond the control of LafargeHolcim,
including but not limited to the risks described in the
LafargeHolcim's annual report available on its website
(www.lafargeholcim.com) and uncertainties related to the market
conditions and the implementation of our plans. Accordingly, we
caution you against relying on forward-looking statements.
LafargeHolcim does not undertake to provide updates of these
forward-looking statements.
(1) After leases
(2) Group share
(3) Before impairment and divestments
(4) Subject to pandemic-related uncertainties
View source version on businesswire.com:
https://www.businesswire.com/news/home/20200729005862/en/
CONTACT: Media Relations:
media@lafargeholcim.com
+41 (0) 58 858 87 10
Investor Relations:
investor.relations@lafargeholcim.com
+41 (0) 58 858 87 87
SOURCE: LafargeHolcim
Copyright Business Wire 2020
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