Regulatory News:
Performance Q1 2020
Group (Million CHF) Q1 2020 Q1 2019 +/-% +/-%LfL
Net sales 5,293 5,959 -11.2 -3.3
Recurring EBIT 262 305 -14.1 -2.6
Jan Jenisch, CEO: "We are confronting an unprecedented health
crisis with COVID-19 that is changing how we live and how we work
in many ways. Keeping our employees healthy and safe is our number
one priority and core value. In early January, when the first signs
of the pandemic emerged, we were quick to respond and take all the
necessary measures to protect the health of our people while
supporting our partners and communities, in full alignment with
local authorities across our markets.
I am very proud of how our people have gone above and beyond to
engage in relief work worldwide. Building on our long tradition of
working closely with our communities, our teams are actively
supporting health efforts around the world - from participating in
the rapid construction of emergency field hospitals to sanitizing
public spaces and disposing of medical waste all the way to
providing critical supplies such as personal protective
equipment.
This crisis highlights how essential construction is to keep
society running. I would like to extend my sincere gratitude to all
our people around the world whose swift response to our new reality
has been exemplary. It has allowed us to maintain vital business
continuity so that we can play our role to address this crisis. I
applaud the determination of all our front-line workers who are
providing critical materials and services in challenging lockdown
circumstances.
Our Q1 results show how resilient we are as a business. With our
significantly strengthened balance sheet, we are in a very strong
position to weather this storm. We are currently successfully
executing our action plan "HEALTH, COST & CASH" in all
countries, setting the company up for the recovery of our markets.
I am confident that LafargeHolcim will emerge from this pandemic as
an important contributor to economic recovery as building activity
gets back to normal."
STRONG PERFORMANCE IN CHANGING MARKET CONDITIONS
The company had a strong start to the year as Q1 performance
remained well ahead of last year's results until Mid-March, when
the impact of COVID-19 spread beyond China into all business
regions. Nevertheless Q1 results remained resilient with net sales
of -3.3% and Recurring EBIT -2.6% compared to the prior-year
period, both on a like-for-like basis.
Europe delivered solid results despite disruptions in key
markets, with good market growth in Eastern Europe and resilient
performances in Switzerland and Germany. Volumes in France, the UK
and Spain were impacted by COVID-19. Recurring EBIT improved on a
like-for-like basis as a result of operational efficiencies.
North America delivered excellent improvement in volume growth
across all business segments. The region showed a continuation of
strong cement demand trends from 2019, further supported by
favorable weather, while aggregate volume improvement of 12% in the
quarter was driven by megaprojects along the Mississippi River. The
US and Canadian operations both delivered solid industrial
performances, with only minor impact from COVID-19 in the
quarter.
Latin America delivered a resilient performance, led by a solid
performance in Mexico. Brazil, Argentina, Ecuador and Colombia were
impacted by COVID-19 lockdown measures since mid-March. The
Recurring EBIT margin was resilient thanks to effective price and
cost management.
Performance of Asia Pacific was impacted by the COVID-19
outbreak, with China significantly impacted in Q1. There was strong
profitability improvement in India despite lockdown measures
towards the end of March. The market slowdown in Australia
continued.
Middle East Africa delivered an over-proportional increase in
Recurring EBIT with turnaround initiatives offsetting COVID-19
impact in the region. Nigeria, Algeria and Iraq were solid
contributors, while South Africa and Lebanon were impacted by
lockdown measures.
CREDIT RATING CONFIRMED, STRONG LIQUIDITY SECURED
LafargeHolcim has a strong balance sheet and liquidity, with a
ratio of Net Financial Debt to Recurring EBITDA of 1.5x as at the
end 2019. As at the end of the quarter the company had secured
strong liquidity of CHF 8 billion in cash and unused committed
credit lines.
These strengths were recently confirmed on March 27, 2020, when
S&P re-affirmed its BBB / outlook stable credit rating of
LafargeHolcim, then again on April 20, 2020, when Moody's
re-affirmed its rating of Baa2 / outlook stable.
The company also executed successful re-financing in April 2020
by issuing a two-year, CHF 250 million 1.05% bond and a five-year,
EUR 500 million 2.375% bond.
ACTION PLAN "HEALTH, COST & CASH"
Since the beginning of the COVID-19 pandemic, LafargeHolcim has
taken all necessary measures to protect its employees and partners.
The company is closely monitoring all markets according to the
evolving situation and to the guidance provided by the authorities
in each country.
The development of the COVID-19 pandemic and its implications
for the business remains volatile and very different from country
to country. With a sharp focus on business resilience, the action
plan "HEALTH, COST & CASH" is in full execution to meet the
following targets:
-- Reduction of CAPEX by at least CHF 400 million compared to 2019
-- Reduction in fixed costs by CHF 300 million in 2020
-- Realization of the reduction in energy prices and review of all third
party products and services
-- Reduction of Net Working Capital at least in line with the level of
activity
SUPPORTING PREVENTION AND MITIGATION OF COVID-19
To promote the health and well-being of the communities where it
operates, LafargeHolcim has been implementing an extraordinary
range of measures at country level from the very start of the
pandemic, to support health efforts around the world. Services
include:
-- Supplying concrete and other building materials for emergency field
hospitals and other public health infrastructure
-- Driving public hygiene, from disposing of medical waste to sanitizing
public spaces
-- Leading awareness campaigns with employees, partners and communities
-- Providing critical products such as masks, gloves and sanitizer gels
-- Delivering basic goods such as prepared meals and water
In Wuhan and surrounding cities, for example, thousands of tons
of cement have been donated for the rapid construction of makeshift
hospitals. Reaching out to local authorities proactively to offer
their support, local teams managed to execute on tight delivery
schedules despite severe limitations on the movement of people and
equipment, thus enabling the facilities' ultra-fast construction.
Local teams further supported public authorities with the disposal
of COVID-19 related medical waste, while leading prevention
awareness campaigns and donating personal protective equipment and
basic goods.
For more information on our response to COVID-19, please visit
the dedicated section on our website, www.lafargeholcim.com.
OUTLOOK
LafargeHolcim is well-positioned to weather the crisis. The
company is supported by a strong balance sheet, with a ratio of Net
Financial Debt to Recurring EBITDA at 1.5x as at the end of 2019.
The company has secured strong liquidity of CHF 8 billion and both
credit ratings were recently confirmed.
Early implementation and execution of the action plan "HEALTH,
COST & CASH" will further strengthen business resilience.
The biggest impact from COVID-19 is expected in Q2. The full
impact of the crisis on the company's 2020 results cannot be
assessed at this point. Given the encouraging April data on the
rebound of activity in China, the company looks forward with
confidence. More fundamentally, the building industry is resilient
and expected to benefit from future recovery plans from governments
and central banks.
GROUP AND REGIONAL FIGURES
Group Q1 2020 Q1 2019 +/-% +/-%LfL
Sales of cement (mt) 44.9 50.1 -10.4 -5.2
Sales of aggregates (mt) 49.1 49.6 -1.1 0.5
Sales of ready-mix concrete (m m(3) ) 9.8 11.4 -13.8 -8.5
Net sales (CHFm) 5,293 5,959 -11.2 -3.3
Recurring EBIT (CHFm) 262 305 -14.1 -2.6
Asia Pacific Q1 2020 Q1 2019 +/-% +/-%LfL
Sales of cement (mt) 15.8 20.9 -24.3 -12.3
Sales of aggregates (mt) 5.6 6.6 -14.7 -4.3
Sales of ready-mix concrete (m m(3) ) 2.1 2.9 -27.7 -3.8
Net sales to external customers (CHFm) 1,327 1,745 -23.9 -9.2
Recurring EBIT (CHFm) 169 243 -30.3 -20.7
Europe Q1 2020 Q1 2019 +/-% +/-%LfL
Sales of cement (mt) 9.3 9.5 -2.3 -2.3
Sales of aggregates (mt) 25.5 26.2 -3.0 -2.8
Sales of ready-mix concrete (m m(3) ) 4.1 4.6 -10.5 -11.0
Net sales to external customers (CHFm) 1,569 1,703 -7.9 -3.9
Recurring EBIT (CHFm) 27 22 23.3 9.3
Latin America Q1 2020 Q1 2019 +/-% +/-%LfL
Sales of cement (mt) 5.6 5.9 -5.9 -5.9
Sales of aggregates (mt) 1.2 0.9 34.9 34.9
Sales of ready-mix concrete (m m(3) ) 1.0 1.2 -16.5 -16.5
Net sales to external customers (CHFm) 565 636 -11.2 -0.5
Recurring EBIT (CHFm) 159 176 -9.6 -2.7
Middle East Africa Q1 2020 Q1 2019 +/-% +/-%LfL
Sales of cement (mt) 8.4 8.8 -4.8 -4.8
Sales of aggregates (mt) 1.0 1.7 -43.6 -43.6
Sales of ready-mix concrete (m m(3) ) 0.7 1.0 -23.2 -23.2
Net sales to external customers (CHFm) 650 736 -11.6 -7.2
Recurring EBIT (CHFm) 74 75 -2.1 3.3
North America Q1 2020 Q1 2019 +/-% +/-%LfL
Sales of cement (mt) 3.6 3.4 8.0 8.0
Sales of aggregates (mt) 15.9 14.2 11.5 11.9
Sales of ready-mix concrete (m m(3) ) 1.9 1.8 7.6 5.5
Net sales to external customers (CHFm) 1,019 951 7.2 10.0
Recurring EBIT (CHFm) -76 -114 33.9 31.5
RECONCILIATION TO GROUP ACCOUNTS
Reconciling measures of profit and loss to the consolidated
statement of income of LafargeHolcim
Million CHF Q1 2020 Q1 2019
Recurring EBITDA 838 920
Depreciation of right-of-use assets -97 -107
Recurring EBITDA after leases 741 813
Depreciation and amortization -479 -508
Recurring EBIT 262 305
Restructuring, litigation, implementation and other
non-recurring costs -13 -18
Impairment of operating assets -4 1
Operating profit 244 288
ADDITIONAL INFORMATION
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.
Analyst presentation
The analyst presentation of the first quarter trading update is
available on our website at www.lafargeholcim.com.
Media conference: 09:00 CEST Analyst conference: 10:00 CEST
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.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20200429005915/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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