The ratings on Switzerland-based cement producer Holcim Ltd. reflect the group's strong business position as the second-largest cement producer in the world, with sales of Swiss franc (SFr) 2.9 billion ($1.8 billion) in the first quarter of 2002, as well as the group's moderate financial profile. Key rating factors are Holcim's: Broad geographical diversification and cost-efficient operations; Good stable profitability over the past five years and strong free cash flow generation; Moderately challenging industry fundamentals such as cyclicality and capital intensity; and Acquisitive growth strategy over the past few years, which has resulted in a deterioration of financial ratios. In the first quarter of 2002, Holcim recorded EBITDA of SFr 683 million, with margins stable at 24%. Sales are gradually
