LafargeHolcim reported that for 2019, net sales were up 3.1% like-for-like with record net income of CHF $2,072 million (+32%). Sales of aggregates (mt) were 269.9 million mt, versus 273.8 million mt in 2019, a decrease of 1.4%. In North America, aggregates sales were 113.5 million mt, versus 109.6 million mt the year previous, a 3.6% increase.
The company said that the macroeconomic environment remained favorable in the United States and Eastern Canada with a strong order backlog and several large projects already captured. Western Canada experienced some challenges triggered by the economic downturn in the oil-and-gas-dependent provinces of the Prairies.
Jan Jenisch, CEO, said, “2019 was a very successful year for us and we achieved record results in Operating profit, Net income, EPS and Free Cash Flow. Our sharp decrease in net debt has significantly strengthened our balance sheet. We have achieved all our targets for 2019 and have moved our company to a new level of performance. On top of these record financial results, we strengthened our leadership in sustainability by setting more ambitious targets for carbon emissions and by joining the Science-Based Target initiative. We introduced our first carbon-neutral concrete in key markets and will further focus on expanding our range of low-carbon building solutions.”
Midway through Strategy 2022 “Building for Growth” LafargeHolcim reported that it has achieved almost all 2022 targets. The company significantly strengthened its balance sheet and is now well positioned to continue growing profitably with strong market positions in all regions. Also, eight bolt-on acquisitions in the attractive ready-mixed and aggregates markets were accomplished in 2019.
In 2019, LafargeHolcim made significant progress in reducing its carbon footprint. Compared to 2018 the company reduced its net CO2 scope 1 emissions per ton of cementitious material by 1.4% to 561 kg/ton in 2019, nearly meeting its 2022 target of 560 kg/ton.
Given this strong progress, the company has revised its 2022 target to 550 kg/ton as it moves to reduce its carbon footprint to 520 kg/ton by 2030. In 2019, the Science-Based Targets initiative (SBTi) has validated the targets to reduce the company’s global carbon footprint as adequate and consistent with the effort to keep temperatures below the 2 °C threshold agreed at the COP21 world climate conference in Paris.
Compared to 1990, the company had already reduced its directly attributable (scope 1) net CO2 emissions per ton of cementitious material by 27%, by far the leader among international cement groups.
In October 2019, Chief Sustainability Officer Magali Anderson was appointed as a member of the group executive committee, underlining LafargeHolcim’s industry leadership in regard to social and ecological responsibility.
Recently LafargeHolcim introduced its first fully carbon-neutral concrete in Switzerland and Germany, demonstrating the company’s move toward building a global family of carbon-neutral products.
To keep up this momentum, the company has also revised its incentive scheme so that one-third of the Executive Committee’s performance share rewards is based on progress in carbon emissions, waste recycling and freshwater withdrawal. The health and safety component of the annual incentive scheme will also include a scorecard including both leading and lagging performance metrics. Both changes to the incentives scheme begin in 2020.
For 2020, LafargeHolcim anticipates a continued solid market environment:
- Continued market growth in North America.
- Improving market conditions in Latin America.
- Continued demand growth across most countries in Europe.
- Challenging market conditions in Middle East Africa.
- Demand growth in India, challenging environment in China. (This outlook doesn’t take into account the impact that the Coronavirus (COVID-19) might have on the operating results in China.)