LafargeHolcim make good progress in 2017
Good performance across all key metrics with new Strategy 2022 set to drive growth over next five years
LafargeHolcim have reported a 4.7% increase in net sales to CHF26.1 billion (€22.6 billion) on a like-for-like basis, for the full year ended 31 December 2017, largely driven by higher cement volumes (up 3.3%), whilst recurring EBITDA increased by 6.1% to reach CHF6.0 billion (€5.2 billion) for the full year. Free cash flow was up by 1.5% to CHF1.7 billion (€1.46 billion) in 2017, whilst net debt was reduced by around CHF400 million (€346 million) to CHF14.3 billion (€12.4 billion).
In a bid to drive top and bottom line growth going forward, the company today launched its new Strategy 2022 – ‘Building for Growth’. Over the next five years this will see LafargeHolcim commit to: annual net sales growth of 3–5%; annual recurring EBITDA growth of at least 5%; improvement in free cash flow to more than 40% of recurring EBITDA; and improvement in ROIC to more than 8%.
Jan Jenisch, group chief executive officer, said: ‘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.
‘Our new Strategy 2022 – ‘Building for Growth’ – will allow us to more vigorously capture market opportunities, capitalizing on the best assets in a growing building materials market. We have already started to create a leaner more agile organization, 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.’
For 2018, LafargeHolcim are targeting net sales growth of 3–5% and an over-proportional increase in recurring EBITDA of at least 5% on a like-for-like basis. And whilst there will be a focus on selected growth initiatives, the Group says capex spending will remain below CHF2 billion (€1.7 billion).
