Holcim to restructure operations in Europe

Holcim has said it will introduce a leaner management structure in Europe to reflect the lower level of construction activity,  and expects to save at least CHF120m (EUR97mm) a year.

The additional cash costs for restructuring in the fourth quarter of 2012 will amount to approximately CHF100m (EUR80.8m) including site restoration costs. Write-offs of property, plant and equipment will reach CHF410m (EUR331.5m) to be charged in the fourth quarter of 2012.

The restructuring accelerates the implementation of the Holcim Leadership Journey and the major part of the anticipated cash costs CHF200m (EUR161.7m) to realise the programme will be incurred in 2012.

Measures evaluated and initiated will lead to cost savings, a better utilisation rate of the capacity and a more efficient allocation of capital expenditure,” Holcim said in a statement. Consultation procedures with regards to impact on personnel have been initiated in some group companies, it added.

Impact on credit metrics

Moody’s Investors Service has said that Holcim's accelerated restructuring plan will slow the recovery of the firm’s credit metrics this year. The revamp costs of at least CHF100m  in the fourth quarter will give the producer a worse-than- expected cash position at year-end, Moody’s analysts said in a note published following Holcim's announcement. The ratings firms expects the cuts to boost the Swiss-major's credit metrics “from a strategic medium- to long-term perspective.”