Medium term Group targets adjusted and upgraded
2018 targets have been adjusted to accurately reflect the adjusted scope of the Group and to take into account the evolution of exchange rates. LafargeHolcim have identified and initiated CHF 200 million of additional cost savings, which enables the company to upgrade the 2018 adjusted operating EBITDA target to CHF 7 billion, taking into account these adjustments. This translates into a 2018 run rate operating Free Cash Flow range of CHF 2.8 – 3.3 billion, or CHF 5 per share. The company now expect a cumulated operating Free Cash Flow of CHF 7.5 billion over 2016 – 18.
LafargeHolcim maintain commitment to a 2018 run rate capex of less than CHF 2 billion and ROIC improvement of 300bps in 2018 vs. 2015 level.
Cash returns to shareholders within strict capital allocation discipline
Consistent with LafargeHolcim’s strict capital allocation discipline and commensurate with maintaining a solid investment grade credit rating, the company will sustain an attractive dividend policy.
Therefore, LafargeHolcim will propose a dividend per share of CHF 2, up from CHF 1.50 for the previous year, to shareholders at the May 2017 Annual General Meeting. The company expect to grow the dividend from a minimum of CHF 2 per share targeting an average payout ratio of 50% through the cycle.
Reflecting LafargeHolcim’s confidence in the strength of its portfolio and its ability to generate cash, the company also intend to buy back up to CHF 1 billion of our shares over the next two years.
As the improvement of LafargeHolcim’s operating performance crystallises, the company intend to return excess cash to shareholders, notably through special dividends.
