LafargeHolcim announced that like-for-like net sales grew by 5.8 percent for the third quarter of 2018 and by 5.1 percent in the first nine months of 2018 compared to the prior-year period. Growth was driven by increased demand as well as sales price increases.
All four business segments contributed to the net sales increase. When compared to the prior-year period, like-for-like net sales of cement grew by 6.5 percent for the third quarter; aggregates, 6.0 percent; ready-mix concrete, 3.8 percent; and solutions and products, 5.6 percent.
Recurring EBITDA grew over-proportionally by a very strong 8.1 percent in the third quarter compared to the prior-year period on a like-for-like basis, demonstrating strong momentum. Steep cost inflation in energy and logistics was more than offset by the company’s volume growth as well as the effectiveness of its pricing and efficiency programs.
The North America region delivered a robust contribution supported by favorable market conditions and successful commercial initiatives. However, results from the Latin America region were lower in the third quarter of 2018 compared to the very strong performance in the prior-year period, impacted by weakening demand in several countries.
“In Q3 we were able to increase our positive momentum and to continue delivering on our Strategy 2022 – ‘Building for Growth’,” said Jan Jenisch, chief executive of LafargeHolcim. “Despite headwinds from steep cost inflation, we delivered stronger net sales and our earnings grew even faster. I am very satisfied with our growth in volumes, our solid pricing and the impact of our cost and efficiency programs.”
The accelerated sales growth and over-proportional increase in Recurring EBITDA demonstrates the strength of Strategy 2022 – “Building for Growth”. This positive momentum is expected to continue in the fourth quarter of 2018 with the following underlying market trends:
- Continued growth in North America.
- Softer cement demand in Latin America.
- Strong markets in Europe.
- Challenging but stabilizing conditions in Middle East Africa.
- Continued demand growth in Asia.
Based on the above trends and positive momentum, the net sales guidance for 2018 is adjusted upwards to 4 to 6 percent on a like-for-like basis (compared to 3 to 5 percent as previously guided).
While continued headwinds from cost inflation remain challenging, the volume growth, solid pricing and efficiency programs are expected to result in further growth in Recurring EBITDA in the fourth quarter of 2018. The Recurring EBITDA growth guidance for 2018 is adjusted to 3 to 5 percent on a like-for-like basis.