Financing activity

Holcim’s investments were funded from the cash flow from operating activities. New debt capital issuances were mainly conducted to refinance existing borrowings. In the year under review, capital market transactions of CHF 0.7 billion were undertaken by Holcim, enabling the Group to lock in historically low interest rates and to extend the average maturity of financial liabilities. The main capital market transactions were as follows:

EUR 500 million

Holcim Finance (Luxembourg) S.A. bond with a coupon of 3.00%, term 2014–2024

MXN 2,000 million

Holcim Capital México S.A. de C.V. bond with a floating interest rate, term 2014–2018

Net financial debt

Net financial debt increased by CHF 183 million to CHF 9,644 million due to an unfavorable currency impact of CHF 250 million and a change in consolidation structure impact of CHF 45 million. On a like-for-like basis, net financial debt decreased by CHF 113 million. At the end of 2014, the ratio of net financial debt to shareholders’ equity (gearing) was 48.0 percent (2013: 50.7). Gearing declined as a result of the higher shareholders’ equity. The Group’s financial structure remained solid and allows sufficient flexibility to capture new opportunities.

Financing profile

Holcim was able to further strengthen its financial profile. 75 percent of the financial liabilities are financed through various capital markets (see overview of all outstanding bonds and private placements under Note 27 Financial liabilities) and 25 percent through banks and other lenders. There are no major positions with individual lenders. With 5.2 years, the average maturity of financial liabilities was successfully extended in comparison to the previous year (2013: 5.0). The Group’s maturity profile is widely spread with a large proportion of mid to long-term financing.

Maintaining a favorable credit rating is one of the Group’s objectives and Holcim therefore gives priority to achieving its financial targets and retaining its investment-grade rating. Detailed information on the credit ratings can be found under Capital market information and Risk management of this Annual Report. The ratio of funds from operations to net financial debt declined by 1.7 percentage points to 31.7 percent (Holcim target: >25 percent), and the ratio of net financial debt to EBITDA slightly deteriorated to 2.3x (Holcim target: <2.8x). The EBITDA net interest coverage reached 8.6x (Holcim target: >5x), and the EBIT net interest coverage 5.7x (Holcim target: >3x). The average nominal interest rate on Holcim’s financial liabilities as at December 31, 2014, was 4.2 percent (2013: 4.6), whereas the proportion of fixed-rate debt stood at 58 percent (2013: 56).

Capital market financing of the Group as per December 31, 2014 (CHF 8,862 million)

Maturity profile of total financial liabilities as per December 31, 20141

1 After risk-related adjustment of CHF 555 million from current financial liabilities to long-term financial liabilities.