Sales increases boost for companies

Major European aggregates and cement companies are reporting first quarter increases as efficiency packages start to take effect.

Once again they are quoting many emerging countries as the growth areas, but the US is also proving a success.

Bruno Lafont, chairman and chief executive officer of 725 Lafarge, said: “The group is focused on debt reduction, strict cost discipline, the maximisation of its cash flows, and the achievement of at least €1 billion of strategic divestments this year. The management reorganisation accelerates the group’s actions towards efficiency and organic growth.

The group’s first quarter figure shows group sales up 5% to €3.353 billion and net income improved to €18 million, with an increase in EBITDA and current operating income driven by higher activity in Middle East and Africa, Asia, Latin America, and North America. Emerging markets continue to be the main driver of demand.

Lafarge also achieved €70 million of cost savings and is on track to reach at least €400 million for the year.

680 Holcim’s consolidated net sales increased by 2.2% to CHF 4.8 billion (approximately €4 billion) with Asia Pacific ranked first with CHF 2.2 billion (€1.8 billion).

Higher cement shipments were achieved by group companies in India, the US, Thailand, the Philippines, Indonesia, Russia and Azerbaijan, and the negative weather effects in Europe could be almost entirely absorbed.

Holcim expects demand for building materials to rise in emerging markets in Asia and Latin America along with Russia and Azerbaijan in 2012. A slight improvement for North America is expected and demand in Europe should remain stable, provided that the situation is not undermined by further systemic shocks.

Sustained growth in Asia Pacific and Africa-Mediterranean Basin; continuing recovery in North America and parts of Europe, and an increase in revenue and operating income is expected by 674 HeidelbergCement.

During the first quarter group revenue improved by 8% to €2.8 billion and the outlook for 2012 is positive.

“The increase in revenue and sales volumes in the first quarter despite the extreme cold wave in Europe is further proof of the advantageous geographical positioning of our company,” explains Dr Bernd Scheifele, CEO of HeidelbergCement.

“In view of the higher costs of energy and raw materials we launched price increases and in some markets we were already able to execute them in order to improve our operating margins.”

Higher sales, mainly from operations in the United States, South and Central America and the Caribbean, helped 643 Cemex increase its consolidated net sales for the first quarter by 4% to approximately US$3.5 billion (€2.64 billion) compared to the same period in 2011 while operating EBITDA increased by 7% to US$567 million.

Fernando A. González, executive vice president of finance and administration, said: “The favourable performance in most of our regions leads us to believe that we are in the initial stages of a turnaround.

“We also continue to be confident in our ability to meet all of our financial obligations.”