Strong sales growth and increase of net income in 2018

Net sales grew 5.1 % on a like-for-like basis for the full year, largely driven by higher cement volumes. Net sales reached CHF 27466 million. 2018 reported net income amounted to CHF 1719 million. Recurring EBITDA reached CHF 6016 million, up 3.6 % LFL for the full year, with cement, aggregates and ready-mix concrete segments all contributing to the solid outcome. Free cash flow stood at CHF 1703 million versus CHF 1685 million in the previous year.

Net debt amounted to CHF 13518 million at year-end, an improvement of CHF 828 million over the prior year, reflecting the cash conversion of 28.3 % and a positive impact following the classification of Indonesia’s local external net debt as held-for-sale.

Good progress on Strategy 2022 – “Building for Growth”

The global roll out of the new Strategy 2022 – “Building for Growth” has been successfully started. Strong progress was made in all four drivers of the strategy delivering results ahead of plan.

Switching gears to growth is the most fundamental principle of Strategy 2022. First results have been achieved and the growth momentum accelerated throughout the year with a strong sales increase of 5.1 % LFL. All four business segments were contributing to this growth. Four bolt-on acquisitions were completed in 2018 in Europe and North America which drove growth and added to the company’s presence in ready-mix concrete and aggregates. These acquisitions had immediate impact on profitability. Four more bolt-on acquisitions were signed in 2019 in Europe, Australia and North America.

In terms of simplification & performance, the closure of four corporate offices in Singapore, Miami, Zurich and Paris has been completed. The 400 million SG&A savings program has been executed successfully and is delivering results ahead of target. Strong progress was made towards closing the gap to best-in-class performance in aggregates and ready mix concrete. Both businesses achieved significant improvements in profitability.

The strategy driver financial strength has led to improvements across all key performance indicators. More than CHF 1.5 billion was refinanced.

Asia Pacific

The Asia Pacific region benefited from favorable market conditions in most countries, leading to strong Net Sales and Recurring EBITDA growth. China was a key driver of higher profitability. India’s solid demand was driven by infrastructure and rural housing, whereas in the Philippines demand was mainly supported by the public sector. The Malaysian market continued to remain challenging.

The divestment of the entire Indonesian shareholding to Semen Indonesia for an enterprise value of CHF 1.75 billion, on a 100 % basis, was successfully closed at the end of January 2019.

Net sales for the Asia Pacific region overall grew by a strong 8.3% on a like-for-like basis. All segments benefited from pricing traction and contributed to the positive net sales development.

Recurring EBITDA showed very strong growth of 22.5% on a like-for-like basis. Strict cost management and price discipline more than compensated for increasing energy costs across the region.


2018 was a strong year for the Europe region. Increased public infrastructure spending in Eastern and Central Europe combined with a rebound in construction and residential segments. The favorable market environment was also supported by the SG&A savings program to drive the region’s recurring EBITDA growth.

Net sales for Europe grew 5.0 % on a like-for-like basis as a result of sales volume gains in all segments combined with price improvements in the key markets of Germany, Spain, Poland and Russia.

Recurring EBITDA for the region grew by 5.0 % like-for-like, as good volumes and price management combined with improved results in ready-mix concrete. These positive drivers more than offset continuous inflation in fuel and energy costs.

Latin America

After a strong first half of 2018, the Latin America region suffered an overall softening of cement demand in the last six months. The pressure on margins intensified due to high cost inflation.

In the first part of the year, the cement and ready-mix concrete segments delivered double-digit like-for-like growth in volumes and net sales. This strong performance was boosted by large infrastructure projects in Mexico, solid demand in Argentina and economic acceleration in Brazil. However in the second half of the year, we incurred a decline in volumes due to the post-election slowdown in Mexico, Argentina’s economic collapse and a generally weaker demand in Ecuador and Central America.

Net sales for the region grew by 9.4 % like-for-like, reflecting price increases to compensate for high cost inflation.

Recurring EBITDA in 2018 is slightly below the prior year, impacted by sharp increases in the cost of raw materials and energy, balanced by price increases and strict cost control.

Middle East Africa

Market conditions in the Middle East Africa region remained challenging driven by a changing competitive profile, shifts in supply and demand, sluggish economies and a rise in energy and distribution costs.

Consolidated cement volumes grew by 0.4 % on a like-for-like basis. Despite the increase in volumes, net sales for the region were down by 4.3 % on a like-for-like basis. This decrease in net sales was largely driven by price pressure and lower volumes in oversupplied markets, particularly Algeria, Iraq and Jordan, and by the slowdown in Lebanon and Egypt in the second half of 2018. Net sales developed favorably in Nigeria, Egypt and countries in East Africa.

These overall headwinds, combined with rising distribution and energy costs, resulted in a decrease in recurring EBITDA of 28.2 % on a like-for-like basis.

North America

A growth strategy coupled with effective price management and rigorous cost control laid the basis for solid 2018 results in North America compared to the prior year despite challenging conditions.

The growth strategy was further supported by two bolt-on acquisitions completed in 2018. Net sales grew by 3.0% on a like-for-like basis supported both by the US and Canada. On a segment view, net sales from cement and aggregates increased while ready-mix concrete decreased slightly.

Recurring EBITDA grew by 2.7% on a like-for-like basis at a stable margin. Fuel and energy cost inflation across the region was compensated by cost management, including SG&A cost-cutting programs.

Outlook 2019

Solid global market demand is expected to continue in 2019 with the following market trends:

Continued market growth in North America

Softer but stabilizing cement demand in Latin America

Continued demand growth in Europe

Challenging but stabilizing market conditions in Middle East Africa

Continued strong demand growth in Asia Pacific

Based on the above trends and the successful execution of Strategy 2022, the previously communicated targets are confirmed for 2019:

net rales growth of 3 to 5 % on a like-for-like basis

recurring EBITDA growth of at least 5 % on a like-for-like basis

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