LafargeHolcim reports net sales growth of 6% in 1Q19
LafargeHolcim reported strong growth in net sales for 1Q19, rising 6.4 per cent and an over-proportional increase in recurring EBITDA, up 20.6 per cent.
Group net sales of cement for 1Q19 amounted to CHF4079m up from CHF3995m in 1Q18, advancing by 2.1 per cent. Aggregate net sales climbed to CHF813m, up from CHF764m, an increase of 6.4 per cent on 1Q18. The group's ready-mix net sales in 1Q19 totalled CHF1223m, up 3.6 per cent from CHF1181m in 1Q18. The Solutions and Products sector recorded net sales of CHF417m, down from CHF420m, a drop of 0.7 per cent on 1Q18.
Jan Jenish, LafargeHolcim CEO, said: "We had a very strong start to the year and I am especially pleased to see our strong sales growth and an over-proportional increase in profitability. Our momentum is very positive and the 1Q19 is the third-consecutive quarter with recurring EBITDA growing faster that net sales.
Southeast Asia divestments
"Our strategic decision to divest southeast Asia was executed with very attractive valuations allowing us to achieve a new level of financial strength. We have delivered on the promised strengthening of our balance sheet and we are on track to accelerate the execution of our Strategy 2022 – 'Building for Growth'.
The divestments from the hyper-sensitive southeast Asian region were achieved at very attractive valuations leading to a new level of financial strength, said LafargeHolcim. The net debt to recurring EBITDA ratio is expected to improve by 0.6 times at the closing of all transactions.
Regional review
Europe delivered excellent results for LafargeHolcim with growth in all business segments and significant price increases. Improved operational efficiency in plants and an early start to the construction season allowed the company to grow margins.
Cement sales rose to 9.6Mt from 8.3Mt in 1Q18. Aggregate sales rose to 26.2Mt from 25.4Mt in 1Q18 and ready-mix increased to 4.6Mm3 from 4.1Mm3 in 1Q18.
North America had a good start to the year and volume growth in 1Q19 with several multi-year construction contracts and progress was made on the cost savings programme. Cement sales reached 3.4Mt up from 3.2Mt in 1Q18, while aggregate sales rose to 14.2Mt from 14Mt in 1Q18. Ready-mix sales rose slightly to 1.8Mm3 from 1.7Mm3 in 1Q18.
Latin America delivered a resilient performance in a softer environment. Recovery is ongoing in Brazil and Colombia, while Mexico and Argentina experienced lower demand.
Cement sales slipped to 5.9Mt down from 6.1Mt in 1Q18, while aggregate sales increased to 0.9Mt from 0.8Mt in 1Q18. Ready-mix sales fell to 1.2Mm3 from 1.3Mm3 in 1Q18.
Asia continued its strong momentum, based on strong cement demand in India and progressive price improvement in most markets. Profitability in Australia and the Philippines was higher, and China continued to contribute solidly.
Cement sales dropped to 20.9Mt from 22.9Mt in 1Q18, down by 7.6 per cent. Aggregates also fell to 6.6Mt from 7.6Mt in 1Q19. Ready-mix cement also dropped to 2.9Mm3 from 3.1Mm3 in 1Q18.
Markets in the Middle East and Africa started to stabilise. Turnaround plans in several countries are delivering visible results, claimed LafargeHolcim. Changes in supply and demand in key countries are still impacting prices. Cement sales fell to 8.8Mt down from 9Mt in 1Q18 and aggregate sales fell to 1.7Mt from 1.9Mt in 1Q18. ready-mix sales were stable at 1Mm3.
