Holcim Ltd., the world’s largest cement maker, is considering disposals as Chief Executive Officer Bernard Fontana deals with a greater-than-expected slowdown in Europe.
“There are things cooking,” Fontana told journalists at a press conference in Zurich. Any transactions would have to be announced at the “right time,” he said.
Holcim may consider swapping some assets with competitors given market conditions, Fontana said in an interview.
The Swiss company is now a “little bit more negative” on Europe than at the start of the year, Chief Financial Officer Thomas Aebischer said. Third-quarter profit missed analysts’ estimates because of restructuring at sites spanning Hungary and Spain, and Holcim booked writedowns totaling 47 million francs ($49 million) at its European business.
Holcim, based in Jona, Switzerland, dropped as low as 2.5 percent to 63.85 francs and traded at 64.75 francs as of 11:16 a.m in Zurich, giving the company a market capitalization of 21.3 billion francs.
Like its peers, the company needs to cut debt to adapt European operations to a building slump. Lafarge SA and HeidelbergCement AG report later this week, and both have debt reduction plans in place. Holcim is the only major cement maker to have retained its investment grade credit rating.
Any divestments would be smaller in scale than those planned by peers, Aebischer said. Further adjustments to the cost-base will be made in weaker markets and Holcim may book more charges in the current quarter after initiating a “significant re-sizing” in Australia 10 days ago, he said.
Holcim expects to meet a target of raising earnings this year. It sold more cement in emerging markets, often at better prices, with units from India to Mexico leading growth in cement sales.
Fontana, who became CEO in February, reshuffled European management as he seeks to boost earnings by 1.5 billion francs by 2014 with better logistics and purchasing methods. He confirmed today that Holcim is on track to meet the 150 million-franc target of savings to come from his Leadership Journey savings program this year.
Net income increased to 394 million francs from 356 million francs. Analysts in a Bloomberg survey predicted 409.8 million francs. Sales rose 9.8 percent to 5.84 billion francs, meeting estimates.