The world’s largest cement manufacturer LafargeHolcim has signaled a raising of its full year guidance after reporting higher sales and doubling its operating profit during the first quarter, sending a positive signal for the global construction sector.
The company got off to a record start to 2021, led by net sales improving by 7.4% and an increase in Recurring EBIT of 130.7% compared to the prior year period, both on a like-for-like basis. Cement volumes grew by 5.6% for the Group and Ready-Mix Concrete volumes grew by 2.2%, while Aggregates volumes decreased by 4.0%, all on a like-for-like basis. All regions showed a significant increase in the Recurring EBIT margin.
The Europe region showed good momentum with a strong increase in margin. Performance in March was excellent, with strong volumes in all segments and strong pricing trends overall. Market conditions improved in the UK and demand in France continued to be strong. These factors led to over-proportional Recurring EBIT growth compared to net sales.
Jan Jenisch, CEO: “I am pleased to share that we are off to a strong start to the year, delivering record Q1 results, with net sales up 7.4% and Recurring EBIT up 131%. This continues our strong growth momentum of the last quarters, and we expect it to accelerate with the Firestone Building Products acquisition and the many government stimulus investments ahead. We are set to deliver the targets of Strategy 2022 one year in advance.
“The pandemic has emphasized for all of us the need to build back a better normal. We are fully committed to playing our part. For instance, in the US, we are ready to contribute to President Biden’s American Jobs Plan, offering a once-in-a-generation opportunity to rebuild infrastructure, such as roads and bridges, in a more sustainable way, while making buildings more energy-efficient. With our sustainable building solutions, from Firestone’s insulating roofing systems to our ECOPact green concrete, we are committed to deploying our technologies at scale to put climate action at the heart of the recovery.
“I would like to sincerely thank everyone within LafargeHolcim for their continued resilience and agility throughout the pandemic. I’m extremely proud of how our teams are keeping our people and operations safe, while going above and beyond to stand by our communities. Our number one priority remains the health and safety of all.”
In addition to its record financial results, LafargeHolcim has continued to advance on its leading sustainability achievements in 2021. Vigeo. Eiris, the environmental, sustainability and governance (ESG) rating and research agency, has ranked LafargeHolcim as number one in its sector, giving the company its highest rating of A1+. LafargeHolcim was also named best in its sector in terms of transitioning to a low-carbon economy. This rating places LafargeHolcim within the top 2% of companies ranked worldwide.
LafargeHolcim expects positive demand trends in all regions, to be accelerated as of H2 2021 from various stimulus programs, as governments announce measures to support the economic recovery with a focus on infrastructure. LafargeHolcim is ready to contribute to these programs around the world, from the CHF 2 trillion ‘Build Back Better’ plan in the US, to the nearly CHF 2 trillion expected from India’s ‘National Infrastructure Pipeline’ plan, and the UK’s CHF 800 billion infrastructure plan.
The company expects to develop the Firestone Building Products business in 2021, to accelerate bolt-on acquisitions and to continue to progress on its 2030 sustainability targets. LafargeHolcim further expects to achieve all Strategy 2022 targets one year in advance, delivering:
- Net sales growth of 3%-5% LFL
- Over-proportional growth in Recurring EBIT of at least 10% LFL
- Return on invested capital above 8%
- Cash conversion of above 40%
- Debt leverage below 2x
- Capex less than CHF 1.4bn