value driven corporate management key success factors holcim

16 Value-Driven Corporate Management

Clear strategy proves effective even in difficult times

The Group’s strategy is based on three pillars: concen￾trating on the core business, geographical diversifica￾tion and balancing business responsibility between

local and global leadership. This formula holds good

even during difficult economic times. High priority is

also given to rigorous cost management and a strong

balance sheet.

Global presence with focus on growth markets

Holcim is a globally active company. The Group oper￾ates in around 70 countries on all continents, employs

a workforce of some 80,000 and has production facili￾ties at around 2,000 locations. This broad-based pres￾ence helps stabilize earnings by evening out cyclical

fluctuations in individual markets more effectively.

Our sound revenue streams from Asia and Latin America

confirm that this compensatory effect operates well

even during recessionary phases.With the acquisition

in Australia, Holcim has once again succeeded in ex￾panding its geographical presence.

Key success factors

Holcim has held its own in a difficult economic environment,

gaining strength. This means that the Group will be among

the winners in the next upturn.

In 2009, the Group companies in the emerging mar￾kets, i.e. in Eastern and Southeastern Europe, Latin

America, Africa, the Middle East and Asia, accounted

for 52.4 percent of Group net sales.

Net sales per region 2009 2008

Million CHF

Europe 7,320 33.6% 10,043 38.3%

North America 3,480 16.0% 4,527 17.3%

Latin America 3,348 15.4% 4,170 15.9%

Africa Middle East 1,206 5.5% 1,354 5.2%

Asia Pacific 6,418 29.5% 6,109 23.3%

2005 2006 2007 2008

Net sales mature versus emerging markets

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Emerging markets

Mature markets

41.1% 45.7% 48.3%

58.9% 54.3% 51.7%

50.8%

49.2%

52.4%

47.6%

2009

Key Success Factors 17

Cement and aggregates are the core business

Holcim is one of the world’s leading building materials

groups. Our success over decades is founded on a

clear product strategy. At its heart are the production

and distribution of cement and aggregates (crushed

stone, gravel and sand) – key basic materials for the

construction industry. Our investment activities and

value creation focus on processing natural resources.

This is by its nature highly capital-intensive and ties

up assets over the long term.

However, Holcim also produces ready-mix concrete,

concrete elements and concrete products as well as

asphalt, albeit mainly in mature markets and major

conurbations. Alongside product-specific advice, its

services also include innovative sales concepts and

system solutions for major projects.

Madrid-based Holcim Trading occupies a leading mar￾ket position in the international trading in cement,

clinker, mineral components and fuels and helps

Group companies buy and sell such products outside

their market areas.

Extracting raw materials, operating cement plants and

distributing building materials to local or regional

markets call for a strong presence in the respective

environment and an awareness of corporate responsi￾bility this entails.

Cement and building materials are a cyclical business

and in 2009, this was reflected in a sharp decline in

demand which was most pronounced in the mature

markets. Over the longer term, though, global popula￾tion growth and rising expectations will lead to

growth across the board. Many countries, particularly

in the emerging markets, still have major quantitative

and qualitative deficits in their infrastructure and

housing sectors. In future, Holcim stands to benefit

from this in all segments.

Central pillars of value creation

Creating added value is Holcim’s paramount objective, an objective

that is based on the three strategic pillars and determines guide￾lines in the functional sectors. The most important foundation on

which everything rests is a workforce that gives its best on a daily

basis.

Creation of value

Product focus

Geographic

diversification

Local management

Global standards

Goal

Mindsets

Base People

Sustainable

environ￾mental

performance

Better cost

manage￾ment

Permanent

marketing

innovation

Human

resources

excellence

Corporate

social

respon￾sibility

Strategy

© Holcim Ltd