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MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  LafargeHolcim Ltd    LHN   CH0012214059

LAFARGEHOLCIM LTD

(LHN)
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Delayed Quote. Delayed Swiss Exchange - 10/30 12:31:02 pm
39.35 CHF   +1.21%
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LafargeHolcim: Resilient H1 performance, full recovery in June

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07/30/2020 | 01:45am EDT

Regulatory News:

 

LafargeHolcim (Paris:LHN):

 

PERFORMANCE OVERVIEW

 
Group (in million CHF)               H1 2020  H1 2019  +/-%   +/-% LfL 
Net sales                            10,693   13,059   -18.1  -10.8 
Recurring EBIT                       1,194    1,667    -28.4  -22.0 
Recurring EBIT margin                11.2     12.8 
Net income(2)                        347      1,009    -65.7 
Net income before impairment and 
 divestments(2)                      501      769      -34.8 
EPS                                  0.55     1.68 
EPS before impairment and 
 divestments                         0.80     1.28     -37.1 
Free cash flow(1)                    749      252      +198 
Net financial debt                   10,652   12,650   -15.8 
 

Jan Jenisch, CEO: "I'm very proud of our teams' rapid and agile response to the crisis since the beginning of January. We were quick to respond and take all necessary measures to protect the health of our people while supporting our communities, from donating materials to build emergency field hospitals all the way to supplying essential goods, touching the lives of over four million people around the world.

 

"Our half-year results demonstrate the great resilience of our business. I'm encouraged by our team's agility to weather the storm with the rapid execution of our "HEALTH, COST & CASH" action plan, effectively driving cost savings ahead of expectations, improving net working capital and delivering record free cash flow(1) .

 

"The peak of the crisis is behind us. We expect a solid second half of the year based on June's full recovery, the trend of our order book and upcoming government stimulus packages.

 

"As an essential sector to keep society running, we look forward to playing our part in driving the recovery. We are accelerating our sustainability efforts to ensure our green solutions are fully part of the recovery. I am confident LafargeHolcim will emerge stronger from this crisis."

 

RESILIENT PERFORMANCE AND RECORD FREE CASH FLOW(1)

 

Net sales of CHF 10,693 million decreased by 18.1% compared to the prior year, of which 10.8% was on a like-for-like basis, reflecting the severe impact of the implementation of strict lockdowns of construction sites in several major operating countries. The strong appreciation of the CHF against all currencies accounted for 6.2% of the absolute decrease. Following the easing of the lockdowns, net sales in all five regions resumed prior-year levels by the end of June.

 

Recurring EBIT reached CHF 1,194 million, a decrease of 22.0% like-for-like for the half year. Swift implementation of the "HEALTH, COST & CASH" action plan helped to offset the earnings impact of the crisis.

 

Tax and financial expenses have continued to reduce, allowing net income(2,3) to reach CHF 501 million.

 

Earnings per share(3) were CHF 0.80 for the first half of 2020 compared to CHF 1.28 in the prior-year period.

 

Free cash flow(1) reached a record CHF 749 million in the six-month period, up 198% compared to CHF 252 million in the first half of 2019.

 

Net debt amounted to CHF 10.7 billion as at 30 June 2020, down by 15.8% compared to CHF 12.7 billion as at 30 June 2019.

 

BUILDING A HEALTHIER WORLD TOGETHER

 

Since the beginning of the crisis, LafargeHolcim teams around the world have undertaken extraordinary measures to fight COVID-19 across their communities, touching the lives of more than four million people. Advancing access to health infrastructure for all, LafargeHolcim donated five million kilograms of material to build emergency field hospitals from Wuhan to Boston. Furthermore, the Group donated over two million relief and emergency kits, including personal protective equipment, food and water.

 

In the first half of 2020 LafargeHolcim achieved a number-one Environmental, Social and Governance (ESG) ranking in the construction materials sector out of more than one-hundred peer companies, according to ESG research and ratings agency Sustainalytics. Playing its part in a green recovery, LafargeHolcim is advancing its leadership in sustainable and circular construction, notably with the worldwide rollout of ECOPact, its green concrete. Further accelerating the transition to renewable energy, LafargeHolcim leveraged 3D printing in an innovative partnership with GE Renewable Energy and COBOD to build more powerful wind turbines.

 

OUTLOOK 2020

 

Based on the speed of June's rebound, the company expects a solid second half of the year and anticipates for full year 2020(4) :

   -- Fast demand recovery with an encouraging outlook for the second half of 
      2020 
 
   -- Execution of action plan "HEALTH, COST & CASH" to continue ahead of 
      targets 
 
   -- Free cash flow1 generation above CHF 2 billion 
 
   -- Debt leverage below 2x 
 
   -- Solid second half of the year expected 
 

KEY GROUP FIGURES

 
Group Q2                             2020    2019    +/-%   +/-% LfL 
Net sales (CHFm)                     5,400   7,099   -23.9  -17.0 
Recurring EBIT (CHFm)                932     1,362   -31.6  -26.1 
Recurring EBIT margin (%)            17.3    19.2 
 
Group H1                             2020    2019    +/-%   +/-% LfL 
Net sales (CHFm)                     10,693  13,059  -18.1  -10.8 
Recurring EBIT (CHFm)                1,194   1,667   -28.4  -22.0 
Recurring EBIT margin (%)            11.2    12.8 
Operating profit (EBIT)              1,005   1,581   -36.4 
Net income2                          347     1,009   -65.7 
Net Income before impairment and 
 divestments(2)                      501     769     -34.8 
EPS before impairment and 
 divestments                         0.80    1.28    -37.1 
Cash flow from operating activities  1,330   1,067   24.7 
Free cash flow(1)                    749     252     198 
Net financial debt                   10,652  12,650  -15.8 
 
 
 
 
Group results by segment                    H1 2020  H1 2019  +/-%    +/-% LfL 
Sales of cement (mt)                        87.2     103.8    -16.0   -13.1 
Net sales of cement (CHFm)                  7,029    8,783    -20.0   -11.6 
Recurring EBIT of cement (CHFm)             1,131    1,441    -21.5   -14.0 
Recurring EBIT margin of cement (%)         16.1     16.4 
 
Sales of Aggregates (mt)                    113.8    121.7    -6.5    -6.0 
Net sales of Aggregates (CHFm)              1,699    1,907    -10.9   -5.5 
Recurring EBIT of Aggregates (CHFm)         101      174      -42.0   -40.1 
Recurring EBIT margin of Aggregates (%)     5.9      9.1 
 
Sales of Ready-Mix Concrete (m m(3) )       19.2     23.6     -18.6   -15.8 
Net sales of Ready-Mix Concrete (CHFm)      2,103    2,595    -19.0   -12.3 
Recurring EBIT of Ready-Mix Concrete 
 (CHFm)                                     -47      13       -475.6  -617.4 
Recurring EBIT margin of Ready-Mix 
 Concrete (%)                               -2.2     0.5 
 
Net sales of Solutions & Products (CHFm)    819      996      -17.8   -13.9 
Recurring EBIT of Solutions & Products 
 (CHFm)                                     6        39       -84.0   -94.9 
Recurring EBIT margin of Solutions & 
 Products (%)                               0.8      3.9 
 

REGIONAL PERFORMANCE H1

 

Asia Pacific

 

The Asia Pacific region experienced the most severe COVID-19 related disruption yet delivered a resilient Recurring EBIT margin, led by India and supported by effective cost and price management as well as lower input costs. China delivered a full recovery over the second quarter with volumes closing at higher levels than in the prior-year period and activity was also resilient in Australia.

 
Asia Pacific                             H1 2020  H1 2019  +/-%   +/-% LfL 
Sales of cement (mt)                     28.0     38.9     -28.0  -21.0 
Sales of aggregates (mt)                 13.1     13.3     -1.4   2.2 
Sales of ready-mix concrete (m m(3) )    3.6      5.2      -31.0  -16.4 
Net sales to external customers (CHFm)   2,413    3,417    -29.4  -18.0 
Recurring EBIT (CHFm)                    437      682      -35.9  -29.6 
Recurring EBIT margin (%)                18.1     19.9 
 

Europe

 

Results for the Europe region were impacted by COVID-19 with full recovery in June. Markets in Germany, Central and Eastern Europe were resilient. Strict lockdown measures in the UK and France impacted the performance of the region. Volumes suggest a V-shaped recovery in June for the majority of markets, except in the UK.

 
Europe                                   H1 2020  H1 2019  +/-%   +/-% LfL 
Sales of cement (mt)                     20.9     22.5     -7.0   -7.0 
Sales of aggregates (mt)                 51.9     57.2     -9.3   -9.2 
Sales of ready-mix concrete (m m(3) )    8.3      9.6      -14.2  -14.6 
Net sales to external customers (CHFm)   3,274    3,796    -13.8  -9.4 
Recurring EBIT (CHFm)                    288      408      -29.4  -26.2 
Recurring EBIT margin (%)                8.7      10.6 
 

Latin America

 

The Latin America region showed an expanding Recurring EBIT margin amid COVID-19, with an especially strong contribution from Mexico. Performances in Ecuador, Colombia and El Salvador were significantly impacted by the pandemic. Most markets experienced a strong recovery in June.

 
Latin America                            H1 2020  H1 2019  +/-%   +/-% LfL 
Sales of cement (mt)                     10.4     12.1     -14.3  -14.3 
Sales of aggregates (mt)                 2.2      2.0      7.8    7.8 
Sales of ready-mix concrete (m m(3) )    1.6      2.5      -34.7  -34.7 
Net sales to external customers (CHFm)   980      1,331    -26.4  -12.1 
Recurring EBIT (CHFm)                    275      358      -23.0  -12.0 
Recurring EBIT margin (%)                27.9     26.7 
 

Middle East Africa

 

(MORE TO FOLLOW) Dow Jones Newswires

07-30-20 0045ET


Stocks mentioned in the article
ChangeLast1st jan.
ACC LTD -0.18% 1649 Delayed Quote.14.07%
AMBUJA CEMENTS LIMITED 2.23% 259.55 End-of-day quote.32.22%
DOW JONES AFRICA TITANS 50 INDEX 1.20% 469.73 Delayed Quote.-12.38%
LAFARGEHOLCIM LTD 1.21% 39.35 Delayed Quote.-26.72%
S&P AFRICA 40 INDEX 0.89% 154.11 Delayed Quote.-11.58%
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Financials
Sales 2020 23 111 M 25 198 M 25 198 M
Net income 2020 1 949 M 2 125 M 2 125 M
Net Debt 2020 8 734 M 9 522 M 9 522 M
P/E ratio 2020 13,8x
Yield 2020 5,08%
Capitalization 24 149 M 26 360 M 26 329 M
EV / Sales 2020 1,42x
EV / Sales 2021 1,32x
Nbr of Employees 72 452
Free-Float 84,5%
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Mean consensus OUTPERFORM
Number of Analysts 18
Average target price 50,70 CHF
Last Close Price 39,35 CHF
Spread / Highest target 57,6%
Spread / Average Target 28,8%
Spread / Lowest Target -13,3%
EPS Revisions
Managers
NameTitle
Jan Jenisch Chief Executive Officer
Beat W. Hess Chairman
Géraldine Picaud Chief Financial Officer
Óscar Fanjul Martín Vice Chairman
Adrian W. Loader Independent Director
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