The results shown strong performance in key countries affirms our confidence in 2017 guidance. These key performance countries are US, Nigeria and Mexico delivering strong results while India recovering post demonetization and slight earnings decline in Europe, positive underlying trends is good to go.
Nevertheless there are some challenges in selected markets to continue, action plans progressing like Malaysia, Philippines and Indonesia facing challenges in diverse market conditions, Margin pressure in Egypt following currency devaluation is there but we have initiatives in place to mitigate downside with first benefits of turnaround captured in Brazil
We are introducing commercial strategy and ongoing costs savings to improve performance said the report.
“Strong results improvement in Nigeria despite lower market demand; favorable price dynamics and improved operational performance, Margin pressure in Egypt in challenging environment following currency devaluation, Continued good results in Algeria supported by increased volumes, Launch of Binastore banner across the region to strengthen retail strategy
Beat Hess, Chairman and interim CEO in response to the performance said: “LafargeHolcim delivered positive earnings growth for the fifth consecutive quarter supported by favorable pricing, cost discipline and synergies.
“The unique strengths of our balanced portfolio are once again evident in our results with key countries such as the US, India, Nigeria and, notably this quarter, Mexico making significant contributions to earnings, more than offsetting headwinds in some of our markets.
On that basis, and with our performance to date, we remain confident that we will achieve our full year guidance and our 2018 targets.
“In addition, our continued efforts to transform our commercial capability and improve our cost base put us in a strong position to fully capitalize on market growth.”
In 2017, we will deliver sustainable, profitable growth through continued strong focus on synergies, structural cost savings, commercial differentiation of our products and building solutions and Capex discipline. This will be particularly supported by the contribution of several markets such as the US, India, Nigeria and some countries in Europe. Based on the first half market development, we now forecast demand in our markets to increase by between 1 to 3 percent.
In Q2, the Group delivered the fifth consecutive quarter of like-for-like Operating EBITDA Adjusted growth. Our Middle East Africa, Latin America and North America regions all contributed to earnings momentum with the US, Nigeria and Mexico among the notable performers.
Despite positive results in India – which continued its recovery post-demonetization – the Asia Pacific region was weighed down by persistent challenging market conditions in Indonesia, Malaysia and the Philippines. Earnings in Europe were marginally down for Q2, though underlying trends are positive.
Despite the effect of fewer working days in the period, like-for-like cement volumes were up slightly compared to the prior year. Globally, cement prices improved by 5.5 percent compared to the prior year on a like-for-like basis.
Sequentially, prices were 2.3 percent higher than in Q1 2017. Synergies of CHF 121 million were delivered in Q2. At quarter end, the Group was close to delivering CHF 1 billion of total synergies, well ahead of the accelerated target of year-end 2017.