The ratings on Switzerland-based Holcim Ltd. reflect the group's position as the second-largest cement producer in the world, effective geographical and product diversification, which has led to stable profitability over the past five years, and strong cash flow generation. These factors are offset by Holcim's moderate financial profile, and by its strategy of making debt-financed acquisitions. The inherent cyclicality, seasonality, and high capital intensity of the building materials industry also have negative implications for the ratings. At June 30, 2005, Holcim had lease- and pensions-adjusted net debt of Swiss franc (SFr) 14.8 billion ($11.5 billion) compared with SFr9.4 billion ($7.3 billion) in the previous year. Holcim has been integrating the business of Aggregate Industries--which it acquired earlier in 2005--with its
