Holcim reported that global economic trends remain subdued despite significant growth in several emerging markets and improved economic data from the U.S. Demand for construction materials fell in key markets such as India, Mexico, Canada, and to a lesser extent, Brazil, while Europe stabilized.
Despite these circumstances, Holcim said it generated a further increase in net income and cash flow from operating activities and a slightly improved operating EBITDA margin, the company said. This success was based primarily on positive earnings performance in Group regions Europe, North and Latin America and the cost discipline applied throughout the Group.
Weaker operating results in India, Mexico, Brazil and Canada in particular led to a reduction in consolidated operating EBITDA and operating profit for the first nine months of the year. However, on a like-for-like basis, i.e. factoring out changes in the scope of consolidation and the clearly negative currency translation effects, both operating results improved. This upward trend also intensified in the third quarter of the current business year.
Sales volumes for the group were down in all three segments in the first nine months, with the greatest declines occurring in ready-mix concrete. These developments are partly attributable to the lower demand for building materials in some markets, but are also driven by the targeted restructuring measures already introduced to improve margins, for example in Europe and Asia Pacific.
Operating results for Europe, North and Latin America exceeded those for 2012. In these three Group regions, in particular Aggregate Industries UK, Holcim US and Cemento Polpaico in Chile, made a significantly higher contribution to operating EBITDA.
The results in Azerbaijan continued to be robust. In Asia Pacific, Holcim Philippines achieved a markedly better operating result. However, developments in this Group region were slowed by poorer financial performance by the Indian Group companies. In Africa Middle East, Holcim Lebanon was the main company to post better results. Holcim Morocco only reported a distinct positive performance in the third quarter.