• Higher sales volumes, net sales and operating EBITDA
• Not only did many emerging markets continue to grow but also better results in North America
• Difficult business conditions in many European markets
• Stringent cost controls support Group result
• Further strengthening of efficiency and competitiveness
• Appointments to the Executive Committee of Holcim Ltd
 
Table: 1st half results 2010/1st half results 2009 - Group
 
 
No global economic recovery

After a first quarter beset by heavy winter snowfall in the northern hemisphere, the overall economic picture improved slightly. In some Western European markets and in North America, demand for building materials increased, and Asia remained on a growth trajectory. Latin America and in particular Group region Africa Middle East held up well. However, one cannot speak of a global economic recovery. Elements of uncertainty still exist and make forecasting difficult. These include high levels of government debt which are limiting further stimulus programs, particularly in Europe. Even though the US economy has improved, the upturn is not yet broadly based.
 
 
The Group shows organic growth at operating EBITDA level

Important key figures of the Group have improved in comparison with the first half of 2009, and the company has achieved further growth. The Group benefited from its strong presence in the emerging markets, which accounted for more than 50 percent of consolidated net sales and more than 70 percent of operating EBITDA in the first half of the year. The large Asian economies such as India, Indonesia and the Philippines recorded particularly strong growth. Brazil witnessed a similar trend. Progress was also made in mature markets, particularly in North America.
 
Australia made an important contribution to the Group’s success. Holcim  Australia, with its substantial positions in the aggregates and ready-mix concrete sectors, has been fully consolidated since last fall – as has the local cement group Cement Australia.
 
Measures to cut costs and boost efficiency continued Group-wide. Despite the commissioning of approximately 5 million tonnes of new cement capacity, fixed costs on a like-for-like basis were reduced compared with the same period a year ago.
 

Higher sales volumes in all segments

In the first half of the year, consolidated cement sales grew by 4.1 percent to 67.8 million tonnes. Sales of aggregates increased by a more substantial 17.1 percent to 73.2 million tonnes, while sales of ready-mix concrete grew by 13.5 percent to 21.9 million cubic meters. In comparison with the first quarter of 2010, sales increased in all segments. The main contribution to volume growth came from the newly consolidated Holcim Australia. Group companies in the UK, Canada, Brazil and Morocco sold significantly more aggregates. The Group companies in Canada, India and Vietnam achieved marked increases in sales of ready-mix concrete.
 
Better operating results and higher cash flow from operating activities Primarily as a result of acquisitions, consolidated net sales increased by 8.1 percent to CHF 10.9 billion, and operating EBITDA rose by 9.3 percent to CHF 2.3 billion. The biggest contributions to the result came from the mature markets in Australia and North America and from Group region Africa Middle East – supported by stringent cost management throughout the Group. Due to intensified competition in some markets, price pressure increased. Nevertheless, the margin improved slightly to 21.5 percent, and internal operating EBITDA growth reached 2 percent. Cash flow from operating activities increased by 12.5 percent to CHF 906 million.
 
Net income declined 22.4 percent to CHF 611 million, and the share attributable to shareholders of Holcim Ltd decreased by 37.2 percent to CHF 331 million. The lower earnings reflect the non-recurring cash-neutral tax charge of CHF 186 million recorded in the first quarter of 2010 in connection with the restructuring of the Group's interests in North America. 


Appointments to the Executive Committee of Holcim Ltd

In the course of the succession process of the Executive Committee, Thomas Aebischer (born 1961), currently CFO of Holcim US, has been appointed a Member of the Executive Committee as of January 1, 2011. Effective April 1, 2011, he will take over Group CFO responsibility from Theophil H. Schlatter, who will be retiring at end of March 2011. Andreas Leu (born 1967), currently Area Manager and member of the senior management of Holcim Ltd, has been appointed a Member of the Executive Committee of Holcim Ltd as of January 1, 2011. He will take over responsibility for Latin America from Thomas Knöpfel, who will be retiring at year-end 2010.
 

Outlook

The economic trend in Group regions Europe and North America remains considerably uncertain despite some positive market signals. Holcim expects demand in most countries of Latin America to be stable. Demand in the Group regions Africa Middle East and in particular Asia Pacific will grow further.
 
In the second half of the year, Holcim will continue to concentrate its efforts on factors it can directly influence, such as cost efficiency along the whole value chain and the efficient commissioning of new state-of-the-art production facilities in the fast-growing emerging markets.
 
Certain countries are witnessing signs of economic slowdown and increasing pressure on prices. Holcim is confident of coping well with these challenges thanks to the operational measures initiated at an early stage.


[Media release on 1st half results 2010 PDF ]