LafargeHolcim announces roadmap for 2H15

Byjirong

Updated Fri, 31 Jul 2015 17:47:39 GMT

LafargeHolcim has announced its roadmap for 2H15, following the release of 1H15 results for both individual companies.

“We continue to operate in a demanding global market environment and this has affected our first-half performance,” said CEO Eric Olsen. “However, as a new company we have hit the ground running. A team of 200 senior leaders of LafargeHolcim met as early as last week to align on priorities, targets and initiatives to drive the integration process. It is a great team we have on board, We have launched a set of synergy acceleration activities covering areas such as capex, procurement, cement industrial performance, network optimisation as well as commercial transformation. We expect to see first tangible results in all areas by year-end.”

The combined company expects to deliver CHF100 million synergies impacting earnings in the period to the end of the year and CHF1.5 billion (€1.4 billion) by year three.

The company has also launched a review of its asset base and the planned capital expenditures for the remainder of the year, targeting a reduction in capex of CHF200 million minimum until year-end (compared with planned expenditure by both companies on a standalone basis). This brings capex below CHF1.4 billion for 2H15. Further optimisation is also being explored.

LafargeHolcim has decided on a progressive dividend policy, starting at least at CHF1.30 per share for FY15, subject to the approval of the AGM in 2016.

In terms of net debt, the Group expects net proceeds of around CHF6.0 billion by year-end from divestments, which will be used to reduce debt, supporting a solid financial structure. This would bring net debt below CHF15 billion by year-end, prior to the fair value adjustment on the Lafarge debt and a potential squeeze-out of Lafarge S.A.