While construction materials markets have been more resilient than many others, LafargeHolcim reports that it is now experiencing disruptions in operations in various countries.
In China, the recovery of the construction sector has started and all its plants outside of Hubei Province are operating. The company forecasts the market demand to further recover and to supply 70 percent of last year’s volume in April 2020.
In most of the other key markets, however, the construction sector is disrupted, and it forecasts significant volume declines in April and May, with a significant negative impact on its business in the second quarter.
“Currently the development of the Coronavirus pandemic and its implications for the business are volatile and very different from country to country,” the company said in a press release. “In order to mitigate the financial impact of the situation, we have launched the action plan ‘HEALTH, COST & CASH’ for immediate execution in all countries.”
Key objectives include the following:
- Reduction of CAPEX by at least $416 million compared to 2019;
- Reduction in fixed cost by $312 million in 2020;
- Realization of reduction of energy prices and full review of all third-party products and services; and
- Reduction of net working capital at least in line with level of activity.
Based on a significantly strengthened balance sheet, LafargeHolcim has liquidity of $8.3 billion as of March 26, 2020.
“Due to the impact of the Coronavirus pandemic, the guidance for 2020 is no longer valid,” it notes. “While the implementation of the action plan ‘HEALTH, COST & CASH’ is in full execution, the dynamic, volatile development of the Coronavirus pandemic makes it currently no longer possible to fully evaluate its impact on the performance of LafargeHolcim in 2020. We will provide a more comprehensive business update at the first quarter 2020 results release on April 30, 2020.”
In response to the COVID-19 pandemic, construction materials producers are stepping up to the help their communities all over the globe.
- LafargeHolcim’s innovation center in Lyon has donated its 4,000 N95 masks and 10,000 gloves to the the Bourgoin Jailleu hospital.
- York Building Products donated 200 N955 masks to Lancaster General.
- CEMEX mixers in Columbia delivered a special soap and water mixture to sanitize an area that will be set up as a large temporary hospital.
- Martin Marietta and Granite Construction are encouraging donations to the American Red Cross.
These companies and so many more are showing what it means to be a good neighbor!
In the U.K., Aggregate Industries launched its 2020 Apprenticeship Program, designed to offer people the chance to earn while they learn. Successful candidates are given the opportunity to gain on-the-job experience, while achieving professional qualifications – helping them to lay a solid foundation for a career in construction.
Each year, the Aggregate Industries offers placements for the apprentices across a variety of business divisions, including working at some of the U.K.’s largest quarries, state-of-the-art asphalt plants, and on major road improvement projects – as well as areas such as finance and HR.
“With the continued need to address the ongoing skills gap faced by the sector, a key focus for us is our 2020 Apprentice Program, which demonstrates our commitment to training and investing in the next generation of talent,” said James Roberts, human resources director at Aggregate Industries U.K., in a press release. “Successful applicants will be exposed to a wide range of roles within the business and learn valuable skills.
This year’s program will include nearly 30 nationwide positions, including apprenticeship roles in areas such as business administration, mobile and stationary plants, minerals management, electrical and mechanical engineering, plant operations, and sales. In the program’s 15th year, Aggregate Industries has successfully trained more than 300 graduates and apprentices in a number of these roles to date.
“In recent years through our Diversity & Inclusion Strategy, we’ve also worked hard to increase the uptake of the females,” Roberts added. “To support this, we’ve introduced a successful female mentorship program designed to help our female apprentices tackle the unique challenges they may face within the sector. We look forward to welcoming this year’s recruits and helping them reach their full potential in the future.”
LafargeHolcim CEO Jan Jenisch described 2019 as “a very successful year,” noting that the company 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,” he added in a press release. “We have achieved all our targets for 2019 and have moved our company to a new level of performance.”
Midway through its Strategy 2022 “Building for Growth,” the company has achieved almost all of its 2022 targets. It significantly strengthened its balance sheet and is now well positioned to continue growing profitably with strong market positions in all regions. It also completed eight bolt-on acquisitions in the ready-mix and aggregates markets in 2019.
LafargeHolcim had 2019 net sales of $27.9 billion, which grew 3.1 on a like-for-like basis, driven by growth in Europe and North America, good prices dynamics across all business segments, and higher prices in most markets.
Recurring EBITDA reached $6.4 billion, up 6.5 percent on a like-for-like full year. Contributing to the increase is a $418 million SG&A cost savings program. Net debt was reduced by $4.9 billion.
From a global perspective, aggregate sales were down 3.1 percent to 269.9 million tons in 2019, while cement sales were down 6.3 percent to 207.9 million tons and ready-mixed concrete sales were also down 6.3 percent to 47.7 million cubic meters.
In North America, aggregate sales were up 3.6 percent to 113.5 million tons, cement sales were up 5.3 percent to 20.8 million tons, and ready-mixed concrete sales were up 7.6 percent to 10.2 million cubic meters.
LafargeHolcim notes that Allen’s experience will support the company as it continues to strengthen and expand its business.
LafargeHolcim has appointed Woodrow “Chance” Allen general manager for the Mountain Region for the U.S. Aggregates and Construction Materials (ACM) organization. Allen has extensive experience in lean manufacturing and managing large-scale businesses.
“Chance brings a valuable perspective of the US aggregates and construction materials industry,” said Jay M. Moreau, CEO, US ACM, in a press release. “His experience in production and in developing and executing strategic growth initiatives will support LafargeHolcim as we continue to strengthen and expand our business.”
Most recently, Allen was the general manager, Aggregates & Asphalt for the Mountain Region, where he managed quarry operations, asphalt plants, and a recycle business, among other responsibilities, including related logistics. Prior to joining LafargeHolcim in October of 2019, he served as vice president of the Central Texas area at Martin Marietta, where he worked for nearly 20 years. During this time, he held positions of increasing responsibility, including district production manager and general manager for the San Antonio District.
Allen has a bachelor of science degree in mining engineering from the University of Missouri Science & Technology. He earned an MBA from Strayer University and has served on the board of multiple organizations, including the Texas Workforce Commission and the University of Missouri Science & Technology.