LafargeHolcim sees slower 2019 sales growth but higher profitability
Reuters
Published Nov 28, 2018 06:54
LafargeHolcim sees slower 2019 sales growth but higher profitability
By John Revill
ZURICH (Reuters) - LafargeHolcim (S:LHN) expects slower sales growth but higher profitability during 2019, the world's largest cement maker said on Wednesday, adding that it is counting on "solid market demand" for its building materials to continue.
The French-Swiss company expects full-year sales growth of 3 percent to 5 percent next year, a slowdown from the 4 percent to 6 percent targeted for this year, after disposals of businesses and currency swings are taken into account.
The outlook was made as LafargeHolcim prepared for its first investor day on Wednesday under Chief Executive Jan Jenisch in Birmingham, as he focuses on cutting costs, concentrating on certain markets and making small acquisitions.
The company's performance during 2018 showed the strategy was working, with the company now simpler than before and ahead of its target to save 400 million francs (314 million pounds), the executive said.
In May, the cement maker had announced the closure of its offices in Singapore, Paris and Miami, and the plan to shift its headquarters from Zurich. LafargeHolcim had said it would sell assets worth around 2 billion francs and could also head out of two or three countries.
The biggest deal so far came earlier this month when it sold its Indonesian business to Semen Indonesia (JK:SMGR) for about $917 million (720 million pounds).
"With the recent divestment of our Indonesia operations, we reached a major milestone in focusing our portfolio which allowed us to accelerate deleveraging," said Jenisch, adding that he aims to speed up debt reduction during 2019, reducing the ratio of net debt to recurring EBITDA to two or less by the year-end.
Jenisch also confirmed LafargeHolcim's targets for net sales growth of 4 percent to 6 percent during 2018 and increasing recurring EBITDA by 3 percent to 5 percent, both on a like-for-like basis.
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