The ratings on Switzerland-based Holcim Ltd. are supported by its good and stable profitability, which translate into strong cash flow generation for the group. Holcim's leading business position as the world's second-largest cement producer and good geographic and product diversification are also positive rating factors. These strengths are offset by the group's strategy of growth through acquisitions, which results in an intermediate financial profile. This is illustrated by Holcim's debt-financed acquisitions in India, China, the U.K., the U.S., and Canada over the past couple of years. Holcim has helped offset the impact of its debt-financed acquisitions through capital increases. Holcim sold 85% of its 54% stake in Holcim South Africa in June 2007, which resulted in a capital gain of
