Net sales

For the full year, net sales receded by CHF 608 million or 3.1 percent to reach CHF 19,110 million in 2014. An unfavorable currency effect of CHF 1,030 million or 5.2 percent and negative changes in consolidation structure impact of CHF 173 million or 0.9 percent strongly harmed net sales performance. Like-for-like net sales increased by CHF 595 million or 3.0 percent. All regions recorded like-for-like net sales increases. This growth mostly resulted from price increases, particularly in North America against the backdrop of a favorable market environment and in Latin America in response to cost inflation.

Net sales by region

Million CHF

Jan–Dec
2014

Jan–Dec
2013

±%

±%
like-for-like

Asia Pacific

6,970

7,282

–4.3

+3.8

Latin America

3,012

3,349

–10.0

+0.6

Europe

5,554

5,611

–1.0

+0.2

North America

3,336

3,171

+5.2

+10.7

Africa Middle East

861

884

–2.6

+0.8

Corporate/Eliminations

(623)

(578)

 

 

Total

19,110

19,719

–3.1

+3.0

In Asia Pacific, net sales rose by CHF 274 million or 3.8 percent on a like-for-like basis, driven by the two Indian companies, the Philippines and Indonesia. Both Indian Group companies increased their top line, thanks to commercial initiatives opening new markets and the sale of premium products, as well as overall price increases in almost all regions, partly implemented as a response to cost inflation. At Holcim Philippines, net sales improved mostly on the back of volume growth. The cement construction industry grew at a dynamic pace, boosted by the new government’s infrastructure projects and the continued high level of demand from the private sector backed by increased confidence in the government. Holcim Indonesia recorded a top-line growth due to price increases in cement and ready-mix concrete, as well as an increase in volumes thanks to commercial initiatives and the opening of new markets with the commissioning of Tuban I. Most Group companies in Asia Pacific witnessed net sales growth on a like-for-like basis; however, at Holcim Australia, prices were hit by a detrimental regional and product mix effect. At Holcim Singapore, volumes of ready-mix concrete fell, reflecting challenging market conditions.

In Latin America, net sales grew by CHF 20 million or 0.6 percent on a like-for-like basis with an uneven economic development throughout the Group region. This growth was mostly supported by Holcim Argentina, driving prices up. Stronger cement and ready-mix concrete prices were also witnessed at Holcim Mexico, making up for a volume contraction in the aggregates and ready-mix concrete businesses following the closure of several plants. On the other hand, net sales at Cemento Polpaico in Chile suffered from lower volumes in all segments. This volume effect was particularly sharp in the ready-mix concrete business, which was affected by the completion of several mining projects and the right-sizing initiatives implemented in late 2013. Lower volumes harmed net sales growth at Holcim Ecuador, while growth in the construction industry decelerated on the back of a drop-off in government spending which partly resulted from weakening oil revenue. A reduction in net sales at Holcim Brazil was driven by weaker volumes in the ready-mix concrete business, mostly explained by the strategic right-sizing of the business last year. Despite a difficult economic situation affecting the construction market, the Group company managed to raise cement volumes thanks to strong demand in larger cities, mitigating the overall volume loss impact on net sales.

Europe reported a modest like-for-like net sales growth of CHF 12 million or 0.2 percent thanks to the significant positive contribution of Aggregate Industries UK. Growth became more firmly established in the United Kingdom, where activity was buoyed by improved credit conditions and increased confidence. Government programs supported residential construction and drove the demand for building materials. The Group company’s top line benefited from this robust momentum. In this context, prices were raised further. Despite the sanctions against Russia deteriorating the country’s business environment and deterring foreign investment, Holcim Russia managed to increase net sales through higher volumes in 2014 due to capacity optimization in its Shurovo plant. At Holcim Romania, net sales profited from the higher volumes generated out of specific projects in the Bucharest area, even though the country experienced modest growth in the construction industry. These good performances where however hampered by adverse net sales developments caused by lower volumes in France, Azerbaijan, Switzerland, Belgium and Italy.

In North America, net sales were up CHF 338 million or 10.7 percent on a like-for-like basis. Strong volumes development in both countries and higher prices implemented in a favorable economic context in the United States coalesced to push revenues up. In the US, net sales growth was strongly supported by volumes improvement driven by a favorable economic environment in most states with a higher growth in Mid-Atlantic, Texas, Colorado and Oklahoma. The return to growth allowed Holcim US to achieve market price increases while Customer Excellence initiatives were implemented toward margin optimization and supported top line growth. In Canada, the net sales progression relied mainly on volumes growth. The cement volumes reported by the Group company were up during the period under review, as construction markets in all regions except Quebec and Atlantic were more dynamic. Deliveries of aggregates and ready-mix concrete also increased thanks to greater demand for highways as well as a number of large projects that were kicked off in summer.

In Africa Middle East, net sales increased by CHF 7 million or 0.8 percent like-for-like. In Holcim Morocco, the main contributor to net sales, the growth resulted from higher volumes thanks to clinker exports to Socimat in Ivory Coast and efficient pricing management from various commercial initiatives. On the other hand, net sales in Holcim Lebanon were affected by a drop in ready-mix concrete sales due to plant closure and lower demand in the Beirut area. Cement prices contracted as well, while the demand for construction material fell versus last year. Guinea, impacted by the outbreak of Ebola virus, recorded a strong drop in cement volumes.

The relative weight of Europe in the Group’s total net sales increased slightly compared to the previous year, to 29 percent. The contribution of Asia Pacific at 37 percent remained close to the previous year value. However, the weighting of emerging markets slightly decreased to 51 percent of total net sales (2013: 53).