May 3, 2017/LafargeHolcim
Click here for First Quarter 2017 Interim Report
Click here for Analyst Presentation
- Net sales increase by 5.3% on like-for-like basis driven by favorable pricing and
improving volume momentum - Operating EBITDA Adjusted up 14.5% on like-for-like basis
- Net income and recurring EPS improve for the quarter
- Net debt of CHF 15 billion at quarter end reflects seasonality
- On track to achieve 2017 guidance
Eric Olsen, CEO of LafargeHolcim said: “Our good Q1 performance has got us off to an excellent start for 2017 and marks our fourth consecutive quarter of earnings growth.
“Continued pricing strength, improving volume momentum and synergies underpinned our results across the portfolio. Our Middle East Africa region performed particularly well with a recovering Nigeria making a notable contribution to earnings growth. India showed encouraging signs in the quarter with the impact of demonetization now behind us while our US business was robust despite tough prior year comparisons on the back of mild weather in the first three months of 2016.
“Our performance in the first quarter, our continued strong execution combined with our diverse portfolio reinforces our confidence in achieving our full year guidance and our 2018 targets.”
2017 Outlook
In 2017, we will deliver sustainable, profitable growth through continued strong focus on lower Capex, structural cost savings, synergies and commercial differentiation of our products and building solutions. This will be particularly supported by the contribution of several markets such as the US, India, Nigeria and some countries in Europe while we forecast demand in our markets to increase by between 2 to 4 percent.
We expect to deliver strong growth in Operating EBITDA Adjusted and recurring EPS in 2017:
- Double-digit like-for-like growth in Operating EBITDA Adjusted over 2016
- Recurring EPS growth of more than 20 percent
- Targeted net debt to Operating EBITDA Adjusted ratio of around two times
In 2017, the Group will be returning cash to shareholders commensurate with a solid
investment grade rating: - Dividend of CHF 2.0 a share proposed at today’s AGM
- Share buyback program of up to CHF 1 billion over 2017-2018
Group performance
The Group recorded increased like-for-like Operating EBITDA Adjusted in four of our five regions. Europe, Latin America and North America all contributed to increased earnings while margins in Middle East Africa were up strongly year-on-year helped by an effective turnaround in Nigeria and good performance in Algeria. The US reported solid growth despite a tough prior year comparison while Mexico, Argentina and Ecuador performed well. India grew volumes as the effect of demonetization, which is now fully behind us, became steadily less pronounced over the quarter.
Persistent challenging conditions in Indonesia and Malaysia, where action plans continue to be implemented, plus a relative softening of the Philippines market, negatively affected prior year comparisons for the Asia Pacific region.
After a decline in 2016, global cement volumes were flat on a like-for-like basis for the first quarter supported by a strong month of March. Aggregates volumes increased by 3.9 percent like-for-like, helped by good performances in the US and UK.
The improvement in cement pricing seen over the previous year continued in Q1 with a 1.2 percent sequential increase over Q4 2016 and a 5.3 percent improvement on the prior year period, driven largely by positive movements in Middle East Africa and Latin America.
