July 26, 2017/LafargeHolcim

• Net sales up 3.6% like-for-like in the quarter
• Operating EBITDA Adjusted increased 10.1% like-for-like driven by pricing, cost discipline and synergies
• Recurring Net Income increased to CHF 700 million; Recurring Earnings Per Share up 23.4% to CHF 1.16
• Net debt reduced by CHF 2.4 billion compared to Q2 2016 on divestments
• On track to achieve 2017 guidance
• Jan Jenisch to join LafargeHolcim as Group CEO on September 1, 2017

Beat Hess, Chairman and interim CEO said: “LafargeHolcim delivered positive earnings growth for the fifth consecutive quarter supported by favorable pricing, cost discipline and synergies.
“The unique strengths of our balanced portfolio are once again evident in our results with key countries such as the US, India, Nigeria and, notably this quarter, Mexico making significant contributions to earnings, more than offsetting headwinds in some of our markets. On that basis, and with our performance to date, we remain confident that we will achieve our full year guidance and our 2018 targets.
“In addition, our continued efforts to transform our commercial capability and improve our cost base put us in a strong position to fully capitalize on market growth.”
2017 Outlook
In 2017, we will deliver sustainable, profitable growth through continued strong focus on synergies, structural cost savings, commercial differentiation of our products and building solutions and Capex discipline. This will be particularly supported by the contribution of several markets such as the US, India, Nigeria and some countries in Europe. Based on the first half market development, we now forecast demand in our markets to increase by between 1 to 3 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 is returning cash to shareholders commensurate with a solid investment grade rating:

•  Dividend of CHF 2.0 a share
• Share buyback program of up to CHF 1 billion over 2017-2018

Group CEO succession

Jan Jenisch, whose appointment as Group CEO of LafargeHolcim was announced in May, will take on the role on September 1, 2017.

Group performance

In Q2, the Group delivered the fifth consecutive quarter of like-for-like Operating EBITDA Adjusted growth. Our Middle East Africa, Latin America and North America regions all contributed to earnings momentum with the US, Nigeria and Mexico among the notable performers. Despite positive results in India – which continued its recovery post-demonetization – the Asia Pacific region was weighed down by persistent challenging market conditions in Indonesia, Malaysia and the Philippines. Earnings in Europe were marginally down for Q2, though underlying trends are positive.

Despite the effect of fewer working days in the period, like-for-like cement volumes were up slightly compared to the prior year. Globally, cement prices improved by 5.5 percent compared to the prior year on a like-for-like basis. Sequentially, prices were 2.3 percent higher than in Q1 2017.

Synergies of CHF 121 million were delivered in Q2. At quarter end, the Group was close to delivering CHF 1 billion of total synergies, well ahead of the accelerated target of year-end 2017.

Operating EBITDA Adjusted increased by 10.1 percent to CHF 1,735 million on a like-forlike basis. Pricing, cost discipline and synergies were drivers for higher margins, with Operating EBITDA Margin Adjusted up by 150 basis points like-for-like in Q2.

Recurring Net Income was up 22.7 percent to CHF 700 million for the quarter and Recurring Earnings Per Share were up 23.4 percent to CHF 1.16 compared with Q2 2016.

Operating Free Cash Flow – which declined in the first quarter on higher seasonal cash outflow – improved in Q2 to CHF 174 million. Net debt was CHF 15.7 billion at quarter end, down approximately CHF 2.4 billion compared to Q2 2016.

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