- Growth momentum continues, net sales up 7.4% LFL
- Record quarter with increase of EBIT by 131% LFL, significant
margin increase in all regions
- Successful closing of Firestone Building Products
acquisition
- Strengthening leadership in sustainability with confirmed A1+
rating by Vigeo
- Growth trends expected to accelerate in 2021, Recurring EBIT
growth of at least 10% LFL
- Strategy 2022 targets to be achieved one year in advance
Regulatory News:
LafargeHolcim (Paris:LHN):
Performance overview
Group Q1 (Million CHF)
2021
2020
±%
±%LfL
Net sales
5,362
5,293
1.3
7.4
Recurring EBIT
528
262
101.7
130.7
Jan Jenisch, CEO: “I am pleased to share that we are off to a
strong start to the year, delivering record Q1 results, with net
sales up 7.4% and Recurring EBIT up 131%. This continues our strong
growth momentum of the last quarters, and we expect it to
accelerate with the Firestone Building Products acquisition and the
many government stimulus investments ahead. We are set to deliver
the targets of Strategy 2022 one year in advance.
“The pandemic has emphasized for all of us the need to build
back a better normal. We are fully committed to playing our part.
For instance, in the US, we are ready to contribute to President
Biden’s American Jobs Plan, offering a once-in-a-generation
opportunity to rebuild infrastructure, such as roads and bridges,
in a more sustainable way, while making buildings more
energy-efficient. With our sustainable building solutions, from
Firestone’s insulating roofing systems to our ECOPact green
concrete, we are committed to deploying our technologies at scale
to put climate action at the heart of the recovery.
“I would like to sincerely thank everyone within LafargeHolcim
for their continued resilience and agility throughout the pandemic.
I’m extremely proud of how our teams are keeping our people and
operations safe, while going above and beyond to stand by our
communities. Our number one priority remains the health and safety
of all.”
GROWTH MOMENTUM CONTINUES,
OVER-PROPORTIONAL EBIT INCREASE
The company got off to a record start to 2021, led by net sales
improving by 7.4% and an increase in Recurring EBIT of 130.7%
compared to the prior year period, both on a like-for-like basis.
Cement volumes grew by 5.6% for the Group and Ready-Mix Concrete
volumes grew by 2.2%, while Aggregates volumes decreased by 4.0%,
all on a like-for-like basis. All regions showed significant
increase in Recurring EBIT margin.
The Europe region showed good momentum with a strong increase in
margin. Performance in March was excellent, with strong volumes in
all segments and strong pricing trends overall. Market conditions
improved in the UK and demand in France continued to be strong.
These factors led to over-proportional Recurring EBIT growth
compared to net sales.
The Middle East Africa region delivered strong improvement in
Recurring EBIT margin. The region returned to cement volume growth,
driven by branded product sales. Good trends in Iraq, Kenya and
Nigeria led to strong Recurring EBIT margin improvement of 380
basis points versus the prior year.
North America showed good momentum with volume back to the 2019
level despite unfavorable weather at the start of the year. Market
demand in the US was strong and Canada West, which had been
affected by a slowdown in the oil & gas sector, showed signs of
stabilization. The Recurring EBIT margin for the region improved by
170 basis points versus the prior year.
The Latin America region continued its outstanding performance,
with volume growth in all business segments. Strong cement demand
growth was driven by residential and infrastructure sectors. The
region delivered an excellent operational performance, with a
record Recurring EBIT margin improvement of 810 basis points versus
the prior year.
The Asia Pacific region showed record performance with strong
growth in cement volumes. India’s outstanding performance was
supported by excellent volumes as well as effective price and cost
management. Improving activities in Australia were supported by
government stimulus programs. The region achieved a record
Recurring EBIT margin expansion of 730 basis points versus the
prior year.
FIRESTONE ACQUISITION SUCCESSFULLY
CLOSED
The transaction to buy Firestone Building Products successfully
closed on March 31st, 2021. The acquisition represents a milestone
in the transformation of LafargeHolcim to become the global leader
in innovative and sustainable building solutions. All 1,900
employees joined LafargeHolcim. Firestone Building Products will be
part of the newly established Global Business Unit Solutions &
Products, under the direction of Jamie Gentoso, who has been
appointed to the Group Executive Committee.
Firestone Building Products is the market leader in commercial
roofing and building envelope solutions in the United States with
net sales above USD 1.8 billion in 2020, 15 manufacturing
facilities, 1,800 distribution points and three R&D
laboratories. It will remain headquartered in Nashville, Tennessee.
The 2021 outlook for Firestone Building Products is strong, with
results to date above expectations.
In addition, LafargeHolcim completed four bolt-on acquisitions
across Europe in the quarter. Notable bolt-ons include Edile
Commerciale and Cemex Rhone Alpes, both suppliers of ready-mix
concrete and aggregates, ideally located in two of Europe’s largest
metropolitan areas, Milan, Italy, and Lyon, France. With 35
ready-mix concrete plants, these operations strengthen
LafargeHolcim’s position in two of the most dynamic and attractive
areas in Europe, with strong demographic trends and key
infrastructure projects. LafargeHolcim also announced its
investment in XtreeE, a French start-up specializing in large-scale
3D printing, in the first quarter.
STRENGTHENING LEADERSHIP IN
SUSTAINABILITY
In addition to its record financial results, LafargeHolcim has
continued to advance on its leading sustainability achievements in
2021. Vigeo.Eiris, the environmental, sustainability and governance
(ESG) rating and research agency, has ranked LafargeHolcim as
number one in its sector, giving the company its highest rating of
A1+. LafargeHolcim was also named best in its sector in terms of
transitioning to a low-carbon economy. This rating places
LafargeHolcim within the top 2% of companies ranked worldwide.
The Solar Impulse Foundation endorsed ten LafargeHolcim green
building solutions with its Solar Impulse Foundation efficient
solution label. The labelled solutions contributed to the Solar
Impulse Foundation’s challenge of identifying 1,000 clean
technologies that protect the environment in a profitable way. Each
awarded solution was strictly assessed by a pool of independent
experts. Among the recognized products is ECOPact green concrete,
which was launched globally in July 2020 and is now available in 16
countries, including the US and India, with an accelerated rollout
ahead. ECOPact is complemented by the company’s EcoLabel, which has
been deployed across 100 products around the world to transparently
communicate their environmental profile, with at least 30% lower
CO2 footprint, or 20% recycled content.
Other notable events in the quarter include LafargeHolcim’s
engagement as a founding member in the MIT Climate and
Sustainability Consortium (MCSC). Working with MIT’s world-class
research teams, LafargeHolcim is working alongside a cross section
of industry leaders to develop innovation-driven solutions to
tackle climate change. LafargeHolcim also committed to publish its
first Climate Transition report in 2022 and will submit it for
shareholder approval at the 2022 Annual General Meeting.
OUTLOOK
LafargeHolcim expects positive demand trends in all regions, to
be accelerated as of H2 2021 from various stimulus programs, as
governments announce measures to support the economic recovery with
a focus on infrastructure. LafargeHolcim is ready to contribute to
these programs around the world, from the CHF 2 trillion ‘Build
Back Better’ plan in the US, to the nearly CHF 2 trillion expected
from India’s ‘National Infrastructure Pipeline’ plan, and the UK’s
CHF 800 billion infrastructure plan.
The company expects to develop the Firestone Building Products
business in 2021, to accelerate bolt-on acquisitions and to
continue to progress on its 2030 sustainability targets.
LafargeHolcim further expects to achieve all Strategy 2022 targets
one year in advance, delivering:
- Net sales growth of 3%-5% LFL
- Over-proportional growth in Recurring EBIT of at least 10%
LFL
- Return on invested capital above 8%
- Cash conversion of above 40%
- Debt leverage below 2x
- Capex less than CHF 1.4bn
GROUP AND REGIONAL
FIGURES
Group Q1
2021
2020
±%
±%LfL
Sales of cement (mt)
47.3
44.9
5.5
5.6
Sales of aggregates (mt)
48.5
49.1
-1.1
-4.0
Sales of ready-mix concrete (m m3)
10.1
9.8
2.7
2.2
Net sales (CHFm)
5,362
5,293
1.3
7.4
Recurring EBIT (CHFm)
528
262
101.7
130.7
Europe & Middle East Africa
Q1
2021
2020
±%
±%LfL
Sales of cement (mt)
17.7
17.7
0.2
0.2
Sales of aggregates (mt)
25.3
26.4
-4.4
-4.0
Sales of ready-mix concrete (m m3)
5.1
4.8
5.7
4.7
Net sales to external customers (CHFm)
2,205
2,219
-0.6
4.0
Recurring EBIT (CHFm)
143
101
41.8
62.7
Europe Q1
Sales of cement (mt)
9.1
9.3
-2.4
-2.4
Sales of aggregates (mt)
24.4
25.5
-4.3
-3.9
Sales of ready-mix concrete (m m3)
4.5
4.1
9.6
8.5
Net sales to external customers (CHFm)
1,643
1,569
4.8
3.5
Recurring EBIT (CHFm)
56
27
107.1
102.3
Middle East Africa Q1
Sales of cement (mt)
8.6
8.4
3.0
3.0
Sales of aggregates (mt)
0.9
1.0
-6.7
-6.7
Sales of ready-mix concrete (m m3)
0.6
0.7
-15.9
-15.9
Net sales to external customers (CHFm)
562
650
-13.5
5.1
Recurring EBIT (CHFm)
87
74
17.7
48.1
North America Q1
2021
2020
±%
±%LfL
Sales of cement (mt)
3.4
3.6
-5.4
-5.4
Sales of aggregates (mt)
14.3
15.9
-9.9
-10.7
Sales of ready-mix concrete (m m3)
1.9
1.9
1.1
0.6
Net sales to external customers (CHFm)
913
1,019
-10.4
-6.5
Recurring EBIT (CHFm)
-53
-76
30.4
27.7
Latin America Q1
2021
2020
±%
±%LfL
Sales of cement (mt)
6.5
5.6
16.6
16.6
Sales of aggregates (mt)
1.4
1.2
14.9
14.9
Sales of ready-mix concrete (m m3)
1.1
1.0
9.6
9.6
Net sales to external customers (CHFm)
615
565
8.8
31.4
Recurring EBIT (CHFm)
223
159
40.5
68.9
Asia Pacific Q1
2021
2020
±%
±%LfL
Sales of cement (mt)
18.9
15.8
19.6
19.7
Sales of aggregates (mt)
7.6
5.6
35.4
11.0
Sales of ready-mix concrete (m m3)
2.0
2.1
-5.8
-5.8
Net sales to external customers (CHFm)
1,508
1,327
13.6
17.0
Recurring EBIT (CHFm)
303
169
79.0
85.7
RECONCILIATION TO GROUP
ACCOUNTS
Reconciling measures of profit and loss to the consolidated
statement of income of LafargeHolcim:
Group Q1 (Million CHF)
2021
2020
Recurring EBITDA
1,077
838
Depreciation of right-of-use assets
-84
-97
Recurring EBITDA after leases
993
741
Depreciation and amortization
-465
-479
Recurring EBIT
528
262
Restructuring, litigation, implementation
and other non-recurring costs
-40
-13
Impairment of operating assets
-4
-4
Operating profit
484
244
ADDITIONAL INFORMATION
Non-GAAP definitions Some non-GAAP measures are used in
this release to help describe the performance of LafargeHolcim. A
full set of these non-GAAP definitions can be found on our
website.
Analyst presentation The analyst presentation of the
first quarter trading update is available on our website at
www.lafargeholcim.com.
Media conference: 09:00 CEST
Analyst conference: 10:00 CEST
Switzerland: +41 (0) 58 310 50 00
France: +33 (0) 1 7091 8706
UK: +44 (0) 207 107 06 13
US: +1 (1) 631 570 56 13
Due to restrictions caused by COVID-19, the media conference at
09:00am CET and analyst’s conference at 10:00am CET will be held
virtually.
In order to participate in the analyst’s conference, please go
to https://www.lafargeholcim.com/q12021events.
ABOUT LAFARGEHOLCIM
As the world’s global leader in building solutions,
LafargeHolcim is reinventing how the world builds to make it
greener and smarter for all. On its way to becoming a net zero
company, LafargeHolcim offers global solutions such as ECOPact,
enabling carbon-neutral construction and Firestone roofing systems
for higher energy-efficiency in buildings. With its circular
business model, the company is a global leader in recycling waste
as a source of energy and raw materials through products like
Susteno, its leading circular cement. Innovation and digitalization
are at the core of the company’s strategy, with more than half of
its R&D projects dedicated to greener solutions.
LafargeHolcim’s 70,000 employees are committed to improving quality
of life across more than 70 markets through its four business
segments: Cement, Ready-Mix Concrete, Aggregates and Solutions
& Products.
More information is available on www.lafargeholcim.com
Important disclaimer – forward-looking statements:
This document contains
forward-looking statements. Such forward-looking statements do not
constitute forecasts regarding results or any other performance
indicator, but rather trends or targets, as the case may be,
including with respect to plans, initiatives, events, products,
solutions and services, their development and potential. Although
LafargeHolcim believes that the expectations reflected in such
forward-looking statements are based on reasonable assumptions as
at the time of publishing this document, investors are cautioned
that these statements are not guarantees of future performance.
Actual results may differ materially from the forward-looking
statements as a result of a number of risks and uncertainties, many
of which are difficult to predict and generally beyond the control
of LafargeHolcim, including but not limited to the risks described
in the LafargeHolcim's annual report available on its website
(www.lafargeholcim.com) and uncertainties related to the market
conditions and the implementation of our plans. Accordingly, we
caution you against relying on forward-looking statements.
LafargeHolcim does not undertake to provide updates of these
forward-looking statements.
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