LafargeHolcim: Record Start to the Year
- 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
ZUG, Switzerland–(BUSINESS WIRE)–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.
Contacts
Media Relations: [email protected]
+41 (0) 58 858 87 10
Investor Relations: [email protected]
+41 (0) 58 858 87 870
