The Pro Forma Financial Information for the year ended December 31, 2015 reflects the merger of Holcim and Lafarge as if the Merger had occurred on January 1, 2015.
It reflects a hypothetical situation and is presented exclusively for illustrative purposes, as such it does not provide an indication of the results of operating activities that would have been obtained for the period ended on December 31, 2015.
Adjusted Operating EBITDA margin
On a like-for-like basis, the Group’s adjusted operating EBITDA margin decreased by 1.0 percentage point to 19.5 percent in 2015. The challenging markets in Brazil, China, Switzerland, Indonesia, Iraq and the lower gains from CO2 sales of CHF 70 million could not be compensated by an overall effort on implementing price increases and reducing costs. In the discussion which follows, all comments about operating EBITDA margin refer to the adjusted operating EBITDA margin.
On a like-for-like basis, the operating EBITDA margin in Asia Pacific fell by 1.3 percentage points to 17.3 percent as lower prices outweighed cost savings and volume increases. Most countries in the region either maintained their margins or saw a slight decrease. China, Indonesia, and India were the main contributors to margin deterioration. Australia, Vietnam, and the Philippines achieved a margin increase.
In Europe, the operating EBITDA margin decreased by 1.2 percentage points, on a like-for-like basis. Cost saving initiatives were not able to compensate for the negative impacts of lower volumes, prices and sales of CO2 certificates. The main contributors to the margin decline were Switzerland, Azerbaijan, and France. Notably, the United Kingdom and Russia increased their margins mainly due to higher selling prices and a concerted focus on cost reductions.
The operating EBITDA margin in Latin America decreased by 0.7 percentage points, on a like-for-like basis. Most countries in Latin America increased their margin compared to last year, notably Mexico, Argentina and El Salvador. The drop in the regional margin was caused by Brazil and Chile. In Brazil, lower volumes, higher costs and lower prices were affecting the operating EBITDA margin. In Chile, higher variable costs and lower ready-mix concrete sales were the main reasons for the decline.
Middle East Africa’s operating EBITDA margin decreased by 2.0 percentage points. Overall, the region was impacted by a slower growth as local economies were affected by prices for commodities and oil and gas. In many countries newly added capacity positively impacted volumes; however, prices were under pressure. Increases in operating EBITDA margin in Jordan, Kenya and Uganda could not offset the declines in operating EBITDA margin in Iraq, Zambia, Egypt, and South Africa.
North America was the only Group region to record an improvement of the operating EBITDA margin on a like-for-like basis, achieving a gain of 1.2 percentage points. Good top line performance mainly stemming from record high cement prices in the United States offset the margin deterioration in Canada.
In the cement segment, the operating EBITDA margin decreased on a like-for-like basis by 0.6 percentage points to 25.9 percent. Partially offsetting the decline from other group regions, North America managed to improve its operating EBITDA margin in this segment. Operating EBITDA margin in the aggregates segment declined on a like-for-like basis by 1.3 percentage points to 15.5 percent. In this segment, Asia Pacific and North America achieved a margin improvement whereas the margin deteriorated in the other Group regions.