Increased demand and sales price increases fuelled French Swiss global building materials giant Lafarge Holcim’s 5.8% rise in like-for-like year-on-year sales to CHF 7.362 billion (€6.469bn) in the third quarter of 2018.
The Group’s four business segments – cement, aggregates, ready-mix concrete and solutions & products – are all said to have contributed to the sales increase.
LafargeHolcim’s recurring earnings before income, tax, depreciation and amortisation (EBITDA) grew by 8.1% in Q3 compared to the prior-year period on a like-for-like basis, demonstrating strong momentum. Steep cost inflation in energy and logistics was said by the sector heavyweight to be more than offset by its volume growth, as well as the effectiveness of its pricing and efficiency programs.
The North America region delivered a robust contribution to LafargeHolcim trading, supported by favourable market conditions and successful commercial initiatives. Results from the Latin America region were lower in Q3 2018 compared to the very strong performance in the prior-year period, impacted by weakening demand in several countries. The Europe region delivered positive results overall, with continued good momentum from most key markets. The Middle East Africa region showed signs of stabilization in key markets. The Asia Pacific region had another strong quarter, supported by contributions from China and India as well as improved performance in South East Asia.
LafargeHolcim says the execution of its ‘Strategy 2022 – Building for Growth’ is at full speed and well on track on all four value drivers: Growth, Simplification & Performance, Financial Strength and Vision & People.
To date, the Group has made four bolt-on acquisitions this year in highly attractive markets, the most recent being the acquisition of Denver, U.S.A-based ready-mix concrete manufacturer Metro Mix in August. The July 2018 acquisition of the Vritz sandpit (FR) helps secure reserves in a well-positioned market for the next three decades. The business segments Aggregates and Ready-Mix Concrete achieved improved margins, a significant step in the implementation of the company’s Strategy 2022 – “Building for Growth”.
Speaking about the Q3 2018 results, Jan Jenisch, LafargeHolcim CEO, said: “In Q3 we were able to increase our positive momentum and to continue delivering on our ‘Strategy 2022 – Building for Growth’. Despite headwinds from steep cost inflation, we delivered stronger Net Sales and our earnings grew even faster. I am very satisfied with our growth in volumes, our solid pricing and the impact of our cost and efficiency programs. We are executing at full speed on our ‘Strategy 2022 – Building for Growth’.”
LafargeHolcim is forecasting 2018 annual sales growth of 4-6% - up from its previous 3-5% growth estimate. The positive global sales momentum will, the Group says, be thanks to continuing growth in North America, strong markets in Europe, challenging but stabilising conditions in Middle East Africa, and continued demand growth in Asia.
This article first appeared in our sister title Aggregates Business.
