Jan Jenisch, the French-Swiss giant’s new chief executive, said the strategy would revitalise the world’s biggest cement group by allowing it to grow faster than the overall market, whilst chopping costs.
Other key targets in the strategy are Group recurring EBITDA (earnings before interest, taxes, depreciation and amortisation) growth of at least 5%/year, improvement in free cash flow to over 40% of EBITDA, and boosting the return on invested capital to more than 8%.
LafargeHolcim posted 4.7% growth in sales on like-for-like basis in 2017, largely due to higher cement volume sales. The group’s recurring EBITDA was up 6.1% on like-for-like basis, EPS was 11.9% up on prior year excluding impairment and divestments, free cash flow was up by 1.5%.
The French-Swiss sector heavyweight needed to soak up a 3.829 billion Swiss franc (€3.29 billion) impairment charge during Q4 2017 as Jenisch and his executive team made preparations for the new five-year strategy with a detailed review of the group’s assets portfolio.
“In 2017 we made good progress across all key metrics. The growth in sales and the over-proportional increase in EBITDA represent a good performance and give us a very good basis to build on. The fact that four of our five regions reported growing EBITDA is testimony to our global strength,” said Jenisch.
The new LafargeHolcim CEO continued: “Our new Strategy 2022 – ‘Building for Growth’ will allow us to more vigorously capture market opportunities, capitalising on the best assets in a growing building materials market. We have already started to create a leaner more agile organisation, moving considerably closer to our customers through the empowerment of the country management.
“The strategy is underpinned by a new set of targets that centres on growth, improving profitability, increasing cash generation and producing more attractive and sustainable returns for shareholders. Our vision is to be a global blue chip company in the attractive and growing building materials market.”
