LafargeHolcim posted a like-for-like (LfL) net sales growth of 3.5 per cent YoY in the first half of 2019. Sales increased from CHF13.272bn (US$13.4bn) in the 1H18 to CHF13.059bn with gains in all regions but particularly thanks to favourable market conditions in Europe and north America.

Recurring EBITDA (pre-IFRS16) increased 10.8 per cent to CHF2.662bn from CHF2.484bn in the previous year’s first six months. Net income attributable to share holders of LafargeHolcim Ltd more than doubled from CHF318m in the 1H18 to CHF1.009bn in the 1H19.

In addition, the company reduced its net financial debt from CHF16.127bn to CHF11.34bn, down by 29.7 per cent. “This very strong improvement has been achieved through successful initiatives and highly value-accretive divestments in Southeast Asia. Both credit rating agencies, Moody’s and Standard & Poor’s, upgraded the company’s outlook to ‘stable’ in March 2019,” according to a company statement.

In terms of portfolio optimisation, the divestments of Indonesia, Malaysia and Singapore have been successfully closed. In addition, the company has signed six bolt-on acquisition in attractive markets to support future growth. The acquisitions in Romania, Australia, Germany, the USA and Canada will allow LafargeHolcim to strengthen its ready-mix and precast concrete businesses in growth markets.

Jan Jenisch, CEO, said: "We have achieved a strong first half of the year and successfully continued our profitable growth strategy. All business segments have contributed to this success and to the continued over-proportional growth in profitability.

"Our financial discipline resulted in strong progress in cash flow and a significant reduction in debt. We are executing our Strategy 2022 – ‘Building for Growth’ at full speed and we are confident that we will achieve our targets for 2019."

Regional performance
Europe delivered positive results during the 1H19, supported by good market dynamics across the region. Net sales grew by 7.2 per cent while recurring EBITDA was up 17.1 per cent on a LfL basis. Price increases and improved operational efficiency were the main drivers of this strong margin growth.

In north America, net sales were impacted by weather and flooding in the US during the second quarter but nevertheless expanded by 2.8 per cent for the half-year. Recurring EBITDA improved slightly by one per cent on a LfL basis. A strong order book and positive price momentum in the US are expected to support improvement in the 2H19.

In Latin America, net sales improved by 3.1 per cent and recurring EBITDA decreased by 4.1 per cent on a LfL basis in a softer market environment.

The Asia-Pacific region showed strong recurring EBITDA gains, with price improvement and costs savings in India. China continued to contribute solidly to the region’s positive result. Net sales increased by 2.1 per cent and recurring EBITDA1d by 17.4 per cent in the 1H19 on a LfL basis.

In Middle East and Africa, the company achieved a successful turnaround in the 2Q19: recurring EBITDA advanced by 1.9 per cent on a LfL basis. Nigeria delivered a solid performance, while Iraq showed further signs of recovery and Algeria is stabilising. For the 1H19 net sales grew by 0.3 per cent on a like-for-like basis, while recurring EBITDA dropped by 6.6 per cent.

Sustainability
In the first six months of 2019, LafargeHolcim continued to reduce its CO2 emissions per tonne of cementitious material by 1.4 per cent compared with the year-ago period. The use of alternative fuels such as waste and biomass to replace fossil fuels increased by over 10 per cent YoY. Since 1990 LafargeHolcim has reduced its carbon emissions per tonne of cement by more than 25 per cent.

Outlook 2019
With expected continued market growth in north America, Europe and Asia-Pacific as well as softer but stabilising cement demand in Latin America and stabilising market conditions in the Middle East and Africa, Lafarge expects to achieve a net sales expansion of 3-5 per cent on a LfL basis with gains in recurring EBITDA of at least five per cent on a LfL basis. The company will also continue to improve its cash conversion and plans capex and bolt-on acquisitions of less than CHF2bn.