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The world’s largest cement maker, LafargeHolcim Ltd, which generated CHF 33 billion of revenue in 2014 and employs 115,000 people across 90 countries, pledged to pay shareholders a bigger dividend this year despite sales missing estimates in its first financial report since the world’s top two cement makers combined. The Swiss-French company, created this year in a $35 billion merger of Holcim Ltd. and Lafarge SA, plans to generate at least 10 billion Swiss francs ($9.9 billion) in cash flow through 2018 and proposed a dividend of 1.50 Swiss francs for 2015, up from earlier guidance of at least 1.30 francs given in July, it said in a statement on Wednesday.
Third-quarter sales fell 1.1 percent to 7.83 billion francs compared with an estimate of 7.92 billion francs compiled by Bloomberg. LafargeHolcim will aim to “maximize cash flow and create sustainable value with the focus on returning excess cash to shareholders,” Chief Executive Officer Eric Olsen said in the statement. Olsen is under pressure to deliver on some $1.5 billion in annual savings as LafargeHolcim looks to leverage its size and gain a cost advantage over rivals after the economic crisis cut demand for building materials and forced some kilns to run at a loss. Shares have fallen about 25 percent in value since the stock of the combined company, based in Zurich, began trading on July 14. Earnings before interest, taxes, depreciation and amortization fell 9 percent on a like-for-like basis to 1.64 billion francs, in line with an average of analyst estimates. The third quarter was hit by “the difficult economic context in some of our large markets, and considerable negative foreign exchange fluctuations,” Olsen said in the statement.