The company announced the “portfolio review “ after missing third-quarter sales and earnings expectations as the stronger Swiss franc and lower prices weighed on its first results since its creation through the merger of France’s
The Switzerland-based company has started discussions with interested parties, including private-equity firms and industry rivals about some of the assets, with the proceeds set to be returned to shareholders through dividends or share buybacks, chief executive Eric Olsen said, as well as being used to support the company’s balance sheet by paying down debt.
“We have a position of number 1, 2 or 3 in 70% of our markets. Where we don’t have that position we are looking at divesting or swapping assets,” Olsen told reporters on a conference call.
Speaking with the Wall Street Journal, Olsen said he expected the first sales to be completed in the first half of 2016, while further asset pruning could also take place beyond the planned €3.29 billion of divestments.
“I believe active portfolio management is absolutely essential,” Olsen said. “Expect to see more from us in the coming years as well.”
The process could see LafargeHolcim exit entire countries where the market conditions were weak, he said, although the company wasn’t targeting any specific region.
“We are in 90 countries at present and there is great strength in a diversified portfolio,” he said, saying the sales could come from both developed and developing markets.
Olsen was speaking after LafargeHolcim reported an 8.7% drop in sales to €7.2 billion (7.83bn francs) in the three months to September 30 from €7.88 billion (8.57bn francs) a year earlier, missing analyst forecasts of €7.31 billion (7.95bn francs).
