Displaying items by tag: Switzerland
Swiss prosecutor opens Holcim insider trading probe
02 February 2015Switzerland: The Swiss Attorney General's office has opened an investigation into possible insider trading in the securities of cement producer Holcim Ltd, the office has said in a statement.
The investigation was first reported by the NZZ am Sonntag newspaper, which said that suspected insider trading took place just before Holcim's announcement in April 2014 of a plan to merge with France's Lafarge. The investigation is probing a possible offence by a 'secondary insider,' not someone with authorised access to insider information, but who obtained such information in an unauthorised way, the Attorney General's office said. The statement gave no further details.
What next? Expect the unexpected…
21 January 2015On 15 January 2015, the Swiss National Bank (SNB) abandoned the Euro1.20 cap on the Swiss Franc. The effects of the decision were immediate, with the value of a Franc dropping from Euro1.20 to just Euro0.99. The decision caused turmoil for currency brokers and big business in Switzerland's normally bullet-proof finance sector, with some brokers out of business by the end of the same day.
It is not hard to see why these brokers were caught out by the sudden change in the SNB's position. On 18 December 2014 Thomas Jordan, Chairman of the SNB's Governing Board, stated in no uncertain terms that, "The SNB remains committed to purchasing unlimited quantities of foreign currency to enforce the minimum exchange rate with the utmost determination." In research conducted by Bloomberg News on 9 - 14 January 2015, not one of 22 economists questioned expected the SNB to abandon the cap in 2015. That's quite an about-turn by the SNB in less than a month.
The decision to 'scrap-the-cap' shows the potential of outside influences to suddenly unseat even the most secure of businesses. Such companies include Holcim, the share-price of which went on a rollercoaster on the SIX Swiss Exchange in the immediate aftermath of the announcement. At one point on 15 January 2015 Holcim had lost 20% of its value before closing 11% down on the day. It has since recovered somewhat, although a whopping Euro3bn of its capital has been swallowed up due to the plummeting Franc.
Following the sudden changes to its circumstances, Holcim immediately reinforced its commitment to its merger with Lafarge. "Regarding a possible impact on the combination with Lafarge, what we can say is that we remain committed to the merger," said spokesman Eike-Christian Meuter. There was an almost simultaneous reciprocal statement from the French producer, also stating its commitment. No change there then.
The calmness of Holcim's statements was broadly in line with commentary from bankers, which stated that large deals were unlikely to be affected by the change. This is because Swiss firms can insure themselves against the effects of such moves. Another 'get-out of jail free card' could have been a material adverse change (MAC) clause. If in place a MAC would allow the merging parties to terminate a transaction if an external event significantly changes the outlines of the deal. It is not possible to know whether Lafarge and Holcim have such a clause due to confidentiality issues.
Despite the fundamentals of the LafargeHolcim merger appearing to be unaffected, the scrapping of the Franc cap is an excellent example of how external policy makers can have a direct and unexpected impact on the underlying conditions of the global cement industry. Another major external influence at present is the low oil price, mainly affected by the oil producing cartel OPEC. HeidelbergCement said this week that it expects the oil price fall to have a positive impact on its profit in 2015. It makes 80% of its revenue in oil-importing countries, which should see reduced transport and production costs. This will result in improved economic conditions, higher levels of construction and hence cement production. For HeidelbergCement 2015 could be a case of costs down, sales up.
That surely sounds like good news, for some stagnant 'old' developed economies at least. However, in the world of 'new normals' it is the IMF that has sounded the biggest warning this week. It dropped its 2015 global economic growth forecast from 3.8% to 3.5%. As fuel prices slump, so too has inflation. In the EU this has resulted in deflationary pressures that could yet stump the recovery. Consumers (and construction firms alike) may go from a position of not being able to afford things, to not wanting to buy them. In the longer term, this may be yet more bad news for the cement sector in established markets.
Pending LafargeHolcim and Sika deals forge ahead despite SNB’s abandonment of Swiss Franc cap
16 January 2015Switzerland: On 15 January 2015, the Swiss National Bank (SNB) abandoned the Euro1.20 cap on the Swiss Franc, causing market turmoil. However, deals involving domestic companies Holcim and Sika are expected to survive the impact of the shock decision.
Bigger deals are insulated against the effects of the sudden surge in the value of the Swiss currency because the companies involved are able to to buy insurance to protect them against such moves. However, some bankers said that the volatility introduced by the SNB decision to scrap the cap after three years could dampen deal-making in the longer term.
Holcim also said that it remained committed to a planned merger with France's Lafarge despite the move by the SNB that knocked almost Euro2.95bn (3bn Swiss Francs) off Holcim's market value.
"Regarding a possible impact on the combination with Lafarge, what we can say is that we remain committed to the merger," said Holcim spokesman Eike-Christian Meuter. According to Reuters, a spokesman for Lafarge said that it also remains committed to the merger.
Holcim was one of the companies caught up in a 10% all-in Swiss blue chip stocks on fears over the impact on their exporting power. Holcim slumped 20% at one point.
France/Switzerland: Holcim and Lafarge have announced the executive committee for the proposed merged company, LafargeHolcim, due to be formed in the first half of 2015. As previously announced, Lafarge's current CEO Bruno Lafont will become LafargeHolcim's first CEO and the chairman of the new board will be Wolfgang Reitzle, currently chairman of Holcim.
Lafont will lead a project team of 10 managers from both Holcim and Lafarge to handle the transition. Once the merger is finalised, the members of this project team will be officially appointed members of the Executive Committee.
The future executive committee is composed of:
- Finance: Thomas Aebischer, currently in charge of Finance at Holcim;
- Integration, Organisation and Human Resources: Jean-Jacques Gauthier, currently in charge of Finance at Lafarge;
- Europe: Roland Köhler, currently in charge of Europe at Holcim;
- Asia Pacific: Ian Thackwray, currently in charge of East Asia Pacific and Trading at Holcim;
- Middle-East Africa: Eric Olsen, currently in charge of Operations at Lafarge;
- North America: Alain Bourguignon, previously in charge of North America and UK at Holcim;
- Latin America: Saâd Sebbar, currently in charge of Morocco at Lafarge;
- Performance and Cost: Urs Bleisch, currently in charge of Corporate Functions at Holcim;
- Growth and Innovation: Gérard Kuperfarb, currently in charge of Innovation at Lafarge;
In India both companies are well on track in preparing the merger of Holcim and Lafarge, with the future structure for the subcontinent to be announced in due course upon clearance by the Competition Commission of India.
The current executive committees of Holcim and Lafarge remain in charge and accountable for the activity and operations of their respective groups until completion of the merger. Both groups continue to operate entirely separately as competitors until the merger is completed.
The selection and nomination process for the rest of the leadership team is also well underway. Apart from the future executive committee, the following direct reports of the future CEO have been selected under project mode:
- Strategy and M&A, Christof Haessig, currently in charge of Corporate Finance and Treasury at Holcim;
- Communication, Public Affairs and Sustainable Development, Alexandra Rocca, currently in charge of Communication, Public Affairs and Sustainable Development at Lafarge;
- Legal, Xavier Dedullen, currently in charge of Legal & Compliance at Holcim;
- Health and Safety, Sapna Sood, currently in charge of Health and Safety at Lafarge.
Jacques Bourgon resigns from Holcim
10 December 2014Switzerland: Holcim Group has announced that Jacques Bourgon, its current head of occupational health and safety, senior advisor to the CEO and senior manager has decided to resign from the group to pursue challenges outside Holcim. He will leave on 31 December 2014. Holcim thanked Jacques Bourgon for his valuable contributions over his 24 years at the company.
Holcim expects to pick buyers for assets in January 2015
18 November 2014Switzerland: Holcim has said that it expects to have selected buyers for the assets that it must divest to push through its merger with Lafarge by the end of January 2015. Holcim's CFO Thomas Aebischer said that the company had received more than 60 non-binding bids by 20 October 2014.
Holcim reports weak growth in the first nine months of 2014
05 November 2014Switzerland: Holcim has reported increased cement sales volumes, increased net sales and increased operating profits for the first nine months of 2014, although growth was weaker than expected due to the uneven global economic recovery.
Group-wide cement volumes increased by 1.6% year-on-year to 106Mt over the first nine months of 2014, mainly driven by positive volume developments in the US, India and the Philippines, which offset lower volumes in Azerbaijan, Italy and Argentina.
Consolidated net sales were up by 3.4% year-on-year as a result of higher volumes and better pricing in many markets. Consolidated net sales decreased by 4.7% to Euro11.8bn. Negative currency effects, mainly in Asia Pacific and Latin America, were the main contributor, weighing on consolidated net sales by Euro871m. Operating earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 0.7% year-on-year. Consolidated operating EBITDA was down by 7.1% to Euro2.27bn, mainly due to currency effects. Adjusted for restructuring and merger costs, operating EBITDA was Euro2.34bn. North America and Europe, the two group regions less affected by the significant currency effects, recorded growth in operating EBITDA.
Operating profit reached Euro1.43bn, an increase of 2.8%. Like-for-like and adjusted for merger and restructuring costs, operating profit increased by 7.8% or Euro117m. Net income was down by 9% to Euro96.2m, partly because Holcim has not yet received the final compensation installment of Euro77.9m for the nationalisation of Holcim Venezuela, which was due on 10 September 2014. In addition, the group benefited from the one-time gain from the sale of 25% in Cement Australia in 2013.
For 2014 Holcim expects the global economies to show another year of uneven performance. Construction markets in Europe are expected to have reached the bottom, with slow recovery in sight. At the same time, North American markets are expected to continue to benefit from a further recovery especially in the US. However, Latin America could continue to face uncertainties in Argentina, but should overall show slight growth in 2014. The Asia Pacific region is expected to grow, although at a comparatively slower pace than experienced in recent years. Africa Middle East is expected to gradually improve. Holcim expects cement volumes to increase in all regions in 2014 with the exception of Europe.
"Holcim posted a solid like-for-like performance in the first nine months of 2014, building on the good traction earlier in the year and despite the ongoing challenging market environment," said Bernard Fontana, CEO. "The group increased like-for-like operating profit on the back of the solid financial performance in North America, Europe and Africa Middle East. However, weak emerging market currencies continued to negatively impact consolidated financial performance, in particular in Asia Pacific and Latin America."
Holcim chases Venezuela over missed payment
06 October 2014Venezuela/Switzerland: Holcim Ltd has said that it will continue to pursue a final payment of roughly US$100m from Venezuela after the country's government failed to complete compensation payments related to the nationalisation of the Swiss cement company's operations in the country.
Holcim has already received US$552.5m out of a total of US$650m compensation that it expected following the nationalisation of Holcim Venezuela in 2008.
However, Corporación Socialista Del Cemento, SA, the state-owned company that now operates the former Holcim plants, hasn't transferred a final installment of US$97.5m, according to Holcim. The payment was been due on 10 September 2014.
"Holcim is in contact with the relevant parties in Venezuela to address this situation and, if necessary, will pursue all legal steps to collect the amounts due," said a Holcim statement.
New LC3 cement mixture developed
24 September 2014India: Swiss, Indian and Cuban researchers have come together to develop limestone calcined clay cement (LC3), which can help reduce the carbon dioxide emissions of cement by almost 30%.
"The LC3 project is an example of scientific and technical collaboration between Switzerland and India. The innovative cement production process on which these institutions are working is of great economic and environmental significance," said Switzerland Ambassador to India Linus von Castelmur.
The LC3 is a synergetic hydration of clinker, calcined clay and crushed limestone to achieve the performance required from commercial cements, with clinker factors as low as 0.40. It also costs less than traditional types of cement.
"The testing and application phase is over, now it has to pass through standardisation committee before it is accepted by the industries. The research that has been done will not be patent protected but available to everyone," said Castelmur.
Bernard Terver appointed area manager of India
14 May 2014Switzerland: Onne van der Weijde, Area Manager for India until 25 April 2014, and member of Holcim Senior Management, will leaves Holcim effective from 1 June 2014. The member of the Holcim Executive Committee, Bernard Terver, responsible for the Indian Subcontinent, will take over direct responsibility for the country.