LafargeHolcim surprises the market with its financial results

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The cement giant LafargeHolcim, formed as a result of a merger in 2015, presented this morning its results for the second quarter of the year. And these were enough to impress. The operating EBITDA (adjusted) increased to CHF 1.71 billion in the Q2/16 – 2.6% above the prior year’s level. And had it not been for the gas shortages in Nigeria, “a market with high growth rates” for the group, during the reporting period, this result would have been even better.  The company has already taken measures to avoid such effects in future and those should become „effective by the end of the year“. Nevertheless, the EBITDA margin increased from 21.3% in the same period last year to 23.4% in the last quarter – an increase which is a result of the apparent synergies, ongoing cost-cutting measures, lower energy costs and price increases of cement by 2.2%. This strategy – aiming at improving the margin instead of increasing the business volume - seems to be working. Although the net sales fell from CHF 7.8 billion to CHF 7.28 billion compared to the same period last year, the net income grew during the first half of 2016 by CHF 318 million to 452million. The group confirmed both, the guidance for 2016 and the targets set for 2018. Furthermore, the group was able to exceed the original target for the proceeds from business divestitures that reached a bit more than CHF 3.5 billion after just 7 months. CEO Eric Olsen announced a new target of CHF 5 billion which is to be achieved by the end of 2017.

All in all, the company surprised the market with the financial figures and will experience today a positive start to a new trading day.

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