In the financial year 2014, Holcim’s cement volumes exceeded the previous year’s level, backed by a stronger economy in North America and growth momentum in some emerging markets such as India, the Philippines, Indonesia and Mexico offsetting a challenging situation in Latin America. Consolidated cement sales were up 1.0 percent to 140 million tonnes, a like-for-like increase of 1.4 percent.
Holcim increased net sales by 3.0 percent on a like-for-like basis. Growth mostly resulted from price improvements in many regions, particularly in North America, against the backdrop of a favorable market environment and in Latin America in response to cost inflation. An unfavorable currency effect of 5.2 percent and negative changes in consolidation structure impacted the consolidated net sales performance in 2014, which was down 3.1 percent to $19.2 million (CHF 19.11 million).
Like-for-like operating EBITDA adjusted for merger and restructuring costs of $138.4 million (CHF 138 million) increased by 5.5 percent in 2014. Consolidated operating EBITDA however was down 3.8 percent mainly as a result of negative currency effects and merger and restructuring related costs.
In 2014, operating profit adjusted for merger and restructuring costs of $149.3 million (CHF 149 million) went up by 10.6 percent on a like-for-like basis. Consolidated operating profit however was down 1.7 percent in 2014.
Holcim CEO Bernard Fontana stated, “Holcim achieved solid like-for-like performance in the financial year with a strong fourth quarter. The group further increased its profitability and recorded a higher operating profit margin. The Holcim Leadership Journey significantly over achieved its targets and was a key contributor to the group’s results building on an increased focus on customer excellence and ongoing cost discipline.”
Holcim expects the global economy to continue its gradual recovery in 2015. Key construction markets of Holcim in countries like the U.S., Mexico and Colombia are expected to be the main growth drivers. The company believes Latin America will continue to face uncertainties in countries such as Argentina and Brazil but should overall show slight growth in 2015. Cement volumes should increase in all group regions in 2015 with the exception of Europe.
On a stand-alone basis and unconnected to the proposed merger with Lafarge, the board of directors and executive committee of Holcim expect like-for-like operating profit adjusted for merger-related costs to be between $2.7 billion and $2.9 billion in 2015. Higher pricing and ongoing cost savings are anticipated to offset cost inflation, leading to a further expansion in operating margins in 2015.