Global cement, aggregates, and ready-mix concrete producer LafargeHolcim (XSWX:LHN, Financial) declined 2% in the quarter and over the year. During the quarter, CEO Eric Olsen presented his three year operating plan with an intense focus on free cash flow generation, internal growth, and returning cash to shareholders. The plan should enable debt to return to investment grade and a dividend payout ratio near 50%. With only modest volume and pricing assumptions, combined with realizing synergies from the LafargeHolcim merger, we believe the plan is achievable. We are excited to own a company with a collection of geographically advantaged assets at less than approximately 8x normalized FCF earnings power and strong cash generation that should be allocated to maximize value per share.
From Longleaf Partners' International Fund commentary on the fourth quarter 2015.
