Performance Evaluation of

‘Heidelberg Cement Bangladesh Ltd’ and ‘Lafarge Holcim

Bangladesh Ltd’
Performance Evaluation of HeidelbergCement Bangladesh Ltd and
LafargeHolcim Bangladesh Ltd"

Submitted To:
Md. Humayun Kabir (MHKB)
Lecturer
Department of Business Administration
East West University

Submitted By:
Name ID

Business Finance
Section: 04

Date of Submission: 22th September, 15 2020

 Letter of Transmission

22th September 2020

Md. Humayun Kabir
Lecturer,
Department of Business Administration
East West University

Subject: Submission of term paper on "Performance Evaluation of LafargeHolcim

Bangladesh Ltd and HeidelbergCement Bangladesh Ltd."

Dear Sir,

We are submitting our Term Paper on on “LafargeHolcim Bangladesh Ltd and

HeidelbergCement Bangladesh Ltd." We have tried our best to work on it carefullyand
sincerely to create an informative report.This way we can do the research and get very
remarkable experience.

The study we conducted enhanced our knowledge to make an executive report. This term paper
has given us an exceptional experience that may have immense uses in the future endeavors and
we sincerely hope that it will be able to fulfill your expectations.

We have put our sincere efforts to give this term paper a presentable shape and make it as
informative and precise as possible.  We thank you for providing us with this unique opportunity.

Sincerely yours,

Name ID Signature

Acknowledgement
At the very beginning, we would like to express our deepest gratitude to Almighty Allah for
giving us the opportunity with strength and patience to carry on this work.We are highly grateful
to MD. Humayun Kabir (MHKB), Course Instructor FIN201, East West University for
giving us a good guideline for assignment through numerous consultations.. His suggestion and
direction have greatly inspired us to prepare this report successfully.

Finally, we extend our thanks to all of our well-wishers for their help during this work.We like to
give thanks especially to our friends and many individuals, for their enthusiastic encouragements
without whom it was impossible to be here wherever we are.
 Executive Summery

The report is all about the analysis of financial performance of LafargeHolcim Bangladesh Ltd
and Heidelberg Cement Bangladesh Ltd. We have discussed about the objectives of the study,
limitations, overview, and mission, vision of both companies. Financial Ratio system has been
followed for analyzing the financial performance. Current Ratio, Quick Ratio, Inventory
Turnover Ratio, Days Sales Outstanding Ratio, Fixed Asset Turnover Ratio, Debt Ratio, Total
Asset Turnover Ratio, Time interest Earned Ratio, Fixed Charge Coverage Ratio, Profit Margin
Ratio, Return on Total Asset Ratio, Return on Common Equity Ratio, Price/ Earnings Ratio,
Market/ Book value Ratio are calculated to obtain an overall view of its financial performance.
Financial Ratios help to evaluate the company’s performance and compare it other similar
businesses in their industry. The report only contains the analysis of LafargeHolcim Bangladesh
Ltd and Heidelberg Cement Bangladesh Ltd 2014 to 2018

.
TABLE OF CONTENTS

1. Introduction.................................................................................................................................................................2
1.1 Origin of the report...............................................................................................................................................3
1.2 Scope of the study................................................................................................................................................3
1.3 Sources of data.....................................................................................................................................................3
1.4 Objectives of the study.........................................................................................................................................3
1.5 Limitations of the study........................................................................................................................................4
2. Company Overview....................................................................................................................................................4
2.1 LafargeHolcim Bangladesh Ltd. (LHBL)............................................................................................................5
2.1.1 Corporate Profile...........................................................................................................................................5
2.1.2 Historical Background..................................................................................................................................5
2.1.3 Strenth...........................................................................................................................................................6
2.1.4Corporate Social Responsibility.....................................................................................................................6
2.1.5 Products & others..........................................................................................................................................7
2.1.6 AWARDS & RECOGNITION.....................................................................................................................7
2.2 HeidelbergCement Bangladesh Ltd......................................................................................................................8
2.2.1 Corporate Profile...........................................................................................................................................8
2.2.2 Historical Background..................................................................................................................................8
2.2.3Corporate Mission..........................................................................................................................................8
2.2.4 Strategy & Management...............................................................................................................................9
3. Analysis......................................................................................................................................................................9
3.1Liquidity Ratio.....................................................................................................................................................11
3.1.1 Current ratio................................................................................................................................................11
3.1.2 Quick test or acid test ratio.........................................................................................................................12
3.2Asset Management Ratio.....................................................................................................................................14
3.2.1 Inventory Turnover Ratio............................................................................................................................14
3.2.2 Days Sales Outstanding (DSO)...................................................................................................................15
3.2.3Fixed Assets Turnover.................................................................................................................................17
3.2.4 Total Assets Turnover.................................................................................................................................18
3.3 Debt Management Ratio.....................................................................................................................................19
3.3. DEBT to Total Assets...................................................................................................................................19
3.3.2Time Interest Earned....................................................................................................................................20
3.4. Profitability........................................................................................................................................................21

1
 3.4.1 Net profit Margin........................................................................................................................................21
3.4.2Return on Assets..........................................................................................................................................22
3.4.3Return on Equity..........................................................................................................................................23
3.5. Market Value.....................................................................................................................................................25
3.5.1 Price/Earnings (P/E):...................................................................................................................................25
3.5.2Market/Book (M/B):....................................................................................................................................26
4.0 Findings:.................................................................................................................................................................27
Recommendations.........................................................................................................................................................28
Conclusion....................................................................................................................................................................29
Bibliography.................................................................................................................................................................30
Appendix.......................................................................................................................................................................31

2
1. INTRODUCTION

1.1 ORIGIN OF THE REPORT

This term paper is required for FIN201 course from the Department of Business
Administration, East West University. In today’s world, education is the imperative tool to
understand the real world and to apply knowledge for betterment of the society as well as in the
business sector. From the education session the theoretical knowledge is obtained from various
courses throughout the programs, which is only the half way of the subject matter. Practical
knowledge has no alternative. The term paper attempts to identify the overview of two
manufacturing companies and the assigned organizations are:

"LafargeHolcim Bangladesh Ltd and HeidelbergCement Bangladesh Ltd."

1.2 SCOPE OF THE STUDY

LafargeHolcim Bangladesh Ltd and HeidelbergCement Bangladesh Ltd are two leading
manufacturing companies in Bangladesh. The scope of the study is on all LafargeHolcim
Bangladesh Ltd and HeidelbergCement Bangladesh Ltd. The report covers the organizational
structure, background, ratios, performance, functions and the performance of the Bank.

1.3 SOURCES OF DATA

Data sources to complete our report the main source of data is:

 Dhaka Stock Exchange

 Company Website.
 Annual Report.
 Internet.

3
1.4 OBJECTIVES OF THE STUDY

Objectives For more in-depth knowledge about Heidelberg Cement Bangladesh Limited’s
and LafargeHolcim Bangladesh Ltd performance and policy, we will have to conduct relevant
ratio analysis with the help of data presented in its financial statements

 To know the financial performance

 To get an overall practical knowledge concerning activities as a manufacturing company.

 To know the annual reports and ratios and their growth rates of various accounts.

 To identify problems related to growth rates of the accounts.

1.5 LIMITATIONS OF THE STUDY

The limitations of the study are those characteristics of design or methodology that impacted or
influenced the application or interpretation of the results of your study. The main limitation of
this research might be the access to the sensitive internal information about the organization.

While doing this research we faced the following limitations-

 Limited access to data

 Insufficient sample size for statistical measurement

 Lack of previous research studies on the topic

 Time constraints

 Self-reported data

 Methods used to collect the data

4
2. COMPANY OVERVIEW

Cement is a great creation of modern science which is the most essential ingredient in
any kind of construction activity. It is indeed, cement industry which plays a crucial role in the
infrastructural development of a country. Due to the vast geographical size and immense
population of the country, various construction activities are under taken by the local
governments, public sector and other organizations, including private sectors which generate
enormous demand for cement. In addition, market demand of cement for private consumption is
increasing constantly day by day due to increase standard of living of the inhabitants. Cement
industry in Bangladesh is not an ancient industry. Producing cement and establishment of cement
factory started from1992. There are 70 cement factories currently operating in Bangladesh. Over
the years, the amount of construction projects has followed an increasing trend as the urban
growth rate has boosted all across the country in places like Chattogram, Bogra, Mongla and
other cities in addition to the expanding capital city of Dhaka.

2.1 LAFARGEHOLCIM BANGLADESH LTD. (LHBL)

2.1.1 CORPORATE PROFILE

LafargeHolcim Bangladesh Limited has one of the most unique operations in Bangladesh,
clearly setting the company apart from the rest of the cement companies and other industries in
Bangladesh.The state of the art technology and international standard Quality Control and
Monitoring system is also another distinctive feature that sets LafargeHolcim Bangladesh
Limited apart from the rest of the cement companies. The company’s products go through
stringent quality control 24/7. While the dedicated experts in the business are concentrating to
provide customers with the best product and services, the high-end machinery automatically tests
and sends real-time online production results against strict adherence parameters.

5
2.1.2 HISTORICAL BACKGROUND
LafargeHolcim Bangladesh is also unique in its contribution to the development of the
country and economy. This commercial venture, with an investment of USD 500 million is
one of the largest foreign investments in Bangladesh. By supplying clinker to other cement
producers in the market and through import substitution of clinker, the company helps the
country save USD 45 million worth of foreign currency per year. Apart from these, the
Company also contributes to the sustainable development of the society, economy and
environment though its Corporate Social Responsibility initiatives in the area of education,
health, employment generation, infrastructure development and environmental management

2.1.3 STRENTH
 The only integrated cement plant in Bangladesh.
 The only manufacturer that can ensure consistent quality cement as we produce our own
clinker whereas the rest of the cement companies import from abroad.
 Source for limestone from own quarry, one of the best limestone mines in the world.
 Have state of the art technology and processes and an international standard 24/7 Quality
Control and Monitoring system

2.1.4CORPORATE SOCIAL RESPONSIBILITY

The Company’s Community Development Center (CDC), located beside its plant, is the hub of
all its community development activities. It is home to a primary school, where children can
receive free education up to class five; a medical centre, where people can receive free medical
services and medicines; and also a training center, where both men and women are provided skill
development trainings for employment and income generation. Five “LafargeHolcim Sub-
Centers” located in remote villages have also been setup to serve the people who cannot access

6
the benefit of the CDC. Through these centers, the company provides its community
development services to more than 26,000 people.

 Enlightening communities through education

 Empowering communities through employment and income generation
 Developing local infrastructures
 Protecting the environment
 Developing the communities of Meghalaya

2.1.5 PRODUCTS & OTHERS

LafargeHolcim Bangladesh Limited continues to strive to come up with a range of products
and solutions that will convert architectural dreams into realities and provide the building
blocks for a modern and beautiful country.

Brands:

 Supercrete

 Plastercrete

 HolcimREd

 Holcim Gray

 Holcim Strong

 Holcim Strong Structure

Products:

 Cement (general purpose and specialized cement)

 Ready Mix Concrete (RMC or RMX)

 Aggregates (crushed stone, sand and gravel)

7
2.1.6 AWARDS & RECOGNITION
 Mines Environment and Mineral Conservation Week 2016 – 2017
 Mines Environment and Mineral Conservation Week 2015 – 2016
 Mines Environment and Mineral Conservation Week 2014 – 2015
 Mines Environment and Mineral Conservation Week 2013 – 2014
 Mines Environment and Mineral Conservation Week 2012 – 2013


2.2 HEIDELBERGCEMENT BANGLADESH LTD

2.2.1 CORPORATE PROFILE

HeidelbergCement Bangladesh Ltd is one of the group companies of
HeidelbergCement Group, founded in Germany in 1873, with its core products are
cement, ready-mixed concrete which aggregates and conducts related activities. It is
one of the leading producers of building materials worldwide. The group employs
60,000 people in 3,000 locations of 60 countries.

2.2.2 HISTORICAL BACKGROUND

In 1998, HeidelbergCement Group established its presence in Bangladesh by setting up a floating
terminal with onboard packing facilities in the port of Chittagong. In 1999, the Group further
strengthened its position in Bangladesh and built a greenfield plant in Kanchpur, near Dhaka,
under the name ScanCement International Limited. In 2000, HeidelbergCement bought a
minority position in Chittagong Cement Clinker Grinding Co. Limited (CCCGCL), followed
soon thereafter by acquisition of a controlling stake. In 2003, the two companies were merged
and the name changed to HeidelbergCement Bangladesh Limited. Since 2004, the company has
diversified its product range by introducing Portland Composite Cement (PCC) into the market.
The company also produces Ordinary Portland Cement (OPC).

8
2.2.3CORPORATE MISSION

 The Corporate Image

 Business Culture:
 Employee Policy
 Market Strategy:
 Customer Philosophy:
 Quality Standard:

2.2.4 STRATEGY & MANAGEMENT

The strategy and the measures that Heidelberg Cement is implementing in the following areas:

 Business & Compliance

 Product & Innovation
 Production & Supply Chain
 Employees & Employment
 Society & Corporate Responsibility

9
3. ANALYSIS

Ratio analysis can be used to establish a trend line for one company's results over a large number
of financial reporting periods. This can highlight company changes that would not be evident if
looking at a given ratio that represents just one point in time.

Since companies in the same industry typically have similar capital structures and investment in
fixed assets, their ratios should be substantially the same. Different ratio results could mean that
one firm has a potential issue and is underperforming the competition, but they could also mean
that a certain company is much better at generating profits than its peers. Many analysts use
ratios to review sectors, looking for the most and least valuable companies in the group. Here we
will calculate the ratios of

 Liquidity Ratio

 Asset Management Ratio

 Debt Management Ratio

 Profitability

 Market Value

10
3.1LIQUIDITY RATIO
Liquidity ratios are a class of financial metrics used to determine a debtor's ability to pay off
current debt obligations without raising external.

3.1.1 CURRENT RATIO

Table 1

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 2.39 2.33
2015 2.96 1.96
2016 3.21 1.73
2017 2.72 1.04
2018 1.29 1.25

11
Interpretation:

Here, the current ratios of LafargeHolcim Cement Bangladesh ltd. from 2014-2018 which are
respectively 2.39, 2.96, 3.21, 2.72, 1.29. The current ratio of Heidelberg Cement Bangladesh
Ltd. from 2016-2019 are accordingly 2.33, 1.96 ,1.73,1.04,1.25 (In times)

So, we can say that in 2014 both of the company’s current assets were better in state of their
current liabilities. But from 2017 the current ratio of Heidelberg Cement Bangladesh Ltd has
decreased. And till 2018 their current ratio was decreasing. But LafargeHolcim Cement
Bangladesh ltd has a consistent flow of current ratio.

3.1.2 QUICK TEST OR ACID TEST RATIO

Table 2

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 1.77 1.96
2015 2.42 1.65
2016 2.74 1.34
2017 2.29 0.68
2018 0.96 0.70

12
Interpretation: The quick ratio of LafargeHolcim Cement Bangladesh Ltd. from 2014-2018 are
accordingly 1.77, 2.42, 2.74, 2.29, 0.96 (in times). And quick test of Heidelberg Cement
Bangladesh Ltd. from 2016-2019 are accordingly 1.96,1.65,1.34,0.68,0.70 (in times).

So, it can be said that quick ratio of LafargeHolcim Cement Bangladesh ltd and Heidelberg
Cement Bangladesh ltd are showing that their Current assets are decreasing day by day.

13
 3.2ASSET MANAGEMENT RATIO
Asset management (turnover) ratios compare the assets of a company to its sales revenue. They
indicate the ability of a company to translate its assets into the sales.

3.2.1 INVENTORY TURNOVER RATIO

Table 3

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 5.45 8.28
2015 6.22 8.08
2016 7.28 5.25
2017 7.40 6.70
2018 6.23 5.30
9
8.28 8.08
8
7.28 7.40
7
6.70
6 6.22 6.23
5.45 5.25 5.30
5 LafargeHolcim Bangladesh
Ltd
4 HeidelbergCement
Bangladesh Ltd
3

0 0.00
Year 2014 2015 2016 2017 2018

Interpretation:

14
The inventory turnover of LafargeHolcim Cement Bangladesh ltd has turned over their inventory
by 7.40 times. And they also increased their inventory turnover in 2015,2016,2017. But it
decreased in 2018.

On the other hand, the inventory turnover of Heidelberg Cement Bangladesh ltd was 8.28 in
2014. But after that their inventory turnover started decreasing. So, there is a negative impact on
their inventory turnover.

3.2.2 DAYS SALES OUTSTANDING (DSO)

Table 4

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 26.89 34.07
2015 29.81 35.17
2016 45.69 38.88
2017 59.45 41.89
2018 86.38 26.37
100
90
86.38
80
70
60 59.45
LafargeHolcim Bangladesh
50 Ltd
45.69 HeidelbergCement
40 41.89
38.88 Bangladesh Ltd
34.07 35.17
30 29.81
26.89 26.37
20
10
0 0.00
Year 2014 2015 2016 2017 2018

15
Interpretation:

The Days sales outstanding ratio of LafargeHolcim Cement Bangladesh ltd was 26.89 & 29.81 in
2014 and 2015.Then the ratio increased. So, it can be said that their cash collection period has
increased.

On the other hand, the Days sales outstanding ratio of Heidelberg Cement Bangladesh ltd was
increasing from 2016 to 2017, but it decreased in 2018. They are efficient in collecting their cash
from others.

3.2.3FIXED ASSETS TURNOVER

Table 5

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 0.95 2.82
2015 0.96 2.93
2016 0.97 3.00
2017 1.02 2.85
2018 0.78 3.16

16
 3.5
3.16
3 2.93 3.00
2.82 2.85
2.5

2 LafargeHolcim Bangladesh
Ltd
1.5 HeidelbergCement
Bangladesh Ltd
1 0.95 0.96 0.97 1.02
0.78
0.5

0 0.00
Year 2014 2015 2016 2017 2018

Interpretation:

The fixed assets turnover of LafargeHolcim Cement Bangladesh ltd was consistent from 2014 to
2016. It increased in 2017, but in the next year it decreased a lot from 1.02 times to 0.78 times.

But fixed assets turnover of Heidelberg Cement Bangladesh Ltd. is pretty good. There is a
positive outlook in their fixed assets ratio pattern.

3.2.4 TOTAL ASSETS TURNOVER

Table 6

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 0.64 1.03
2015 0.59 1.07
2016 0.57 1.04
2017 0.59 1.12
2018 0.57 1.32

17
 1.4
1.32
1.2
1.12
1.07 1.04
1 1.03

0.8 LafargeHolcim Bangladesh

Ltd
0.64 HeidelbergCement
0.6 0.59 0.57 0.59 0.57 Bangladesh Ltd
0.4

0.2

0 0.00
Year 2014 2015 2016 2017 2018

Interpretation:

The total assets turnover ratios of LafargeHolcim Bangladesh Ltd. are consistent from 2014 to
2018. Sometimes it decreased, sometimes it has increased.

On other side, the total assets turnover of Heidelberg Cement Bangladesh ltd is increasing day by
day. It was 1.32 times in 2018. There is a positive relationship in their total assets in state of
sales.

3.3 DEBT MANAGEMENT RATIO

The debt management ratio measures how much of a company's operations comes from debt
instead of other forms of financing, such as stock or personal savings.

3.3. DEBT TO TOTAL ASSETS

Table 7

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 33% 36%
2015 31% 41%
2016 27% 45%
2017 24% 46%

18
 2018 42% 46%

Interpretation:

The debt ratio of Heidelberg Cement Bangladesh Ltd was almost at a moderate level. On the
other hand, LafargeHolcim Bangladesh Ltd debt ratio rapidly increased from 2016 to 2018.

3.3.2TIME INTEREST EARNED

Table 8

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 70.85 62.58
2015 31.27 27.36
2016 21.94 8.34
2017 10.80 6.22
2018 1.23 0.90

Interpretation:
19
The time interest earned ratio was decreased from 2014 to 2018 in, LafargeHolcim Bangladesh
Ltd. On the other hand, in Heidelberg Cement Bangladesh Ltd. interest earned ratio was decrease
from 2014 to 2018. On 2015,

3.4. PROFITABILITY
Profitability ratio is used to evaluate the company’s ability to generate income as compared to its
expenses and other cost associated with the generation of income during a particular period.

3.4.1 NET PROFIT MARGIN

Table 10

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 15% 11%
2015 15% 13%
2016 13% 14%
2017 5% 8%
2018 7% 6%

20
 0.3
13% 14%
11%
0.25

0.2

HeidelbergCement
0.15 15% 15% Bangladesh Ltd
13% 8% 6% LafargeHolcim Bangladesh
Ltd
0.1
7%
0.05 5%

0 0%
Year 2014 2015 2016 2017 2018

Interpretation:

The net fixed asset ratio of Lafarge Holcim Bangladesh Ltd. was 15% 2016, but it decreases after
that. It was at a low stage in 2018(7%).

On the other hand, the net profit margin ratio of Heidelberg Cement Bangladesh ltd. is also
decreasing in the recent years. Their net profit margin is fluctuating in every year.

3.4.2RETURN ON ASSETS
Table 11

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 10% 12%
2015 9% 14%
2016 8% 15%
2017 3% 9%
2018 4% 8%

21
 0.25
14% 15%
12%
0.2

0.15
HeidelbergCement
9% 8% Bangladesh Ltd
LafargeHolcim Bangladesh
0.1 10% Ltd
9%
8%
0.05
4%
3%

0 0%
Year 2014 2015 2016 2017 2018

Interpretation:

The return on total assets ratio of Lafarge Holcim Cement Bangladesh ltd is decreasing day by
day. There is a negative pattern in their ROA.

The return on total assets of Heidelberg Cement Bangladesh ltd is also decreasing day by day.

3.4.3RETURN ON EQUITY

Table 12

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 13% 20%
2015 11% 27%
2016 10% 30%

22
 2017 4% 20%
2018 6% 18%
0.45

0.4 30%
27%
0.35
20%
0.3

0.25 18% HeidelbergCement

20% Bangladesh Ltd
0.2 LafargeHolcim Bangladesh
Ltd
0.15
13%
11%
0.1 10%

0.05 6%
4%
0 0%
Year 2014 2015 2016 2017 2018

Interpretation:

The return on equity of LafargeHolcim Bangladesh Ltd. was decreasing constantly from 2014 to
2018. It was lowest in 2017 (4%). There is a negative relation in their return on equity.

On the other hand, the return on equity ratio of Heidelberg Cement Bangladesh Ltd. is
fluctuating. Sometimes it increases, sometimes it decreases.

23
3.5. MARKET VALUE
Market value ratios are used to evaluate the current share price of a publicly-held company's
stock. Calculated as the total dividends paid per year, divided by the market price of the stock

3.5.1 PRICE/EARNINGS (P/E):

Table 13

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 54.16 23.92
2015 37.87 22.66
2016 42.76 20.69
2017 100.87 29.90
2018 45.52 26.58

Interpretation:

24
The P/E ratio of LafargeHolcim Bangladesh Ltd is better than Heidelberg Cement Bangladesh
Ltd. The investors of LafargeHolcim Bangladesh Ltd are likely willing to pay more per taka of
reported profits in comparison to investors of Heidelberg Cement Bangladesh Ltd

3.5.2MARKET/BOOK (M/B):
Table 14

LafargeHolcim Bangladesh Heidelberg Cement Bangladesh

Year Ltd Ltd
2014 11.53 2.77
2015 6.03 3.25
2016 6.20 3.06
2017 5.29 2.75
2018 3.26 2.24

Interpretation:

25
The return on equity of LafargeHolcim Bangladesh Ltd is higher than of Heidelberg Cement
Bangladesh Ltd, the investors are willing to pay more compared to Heidelberg Cement
Bangladesh Ltd book value per share.

4.0 FINDINGS:

The findings for the two companies are individually highlighted below:

LafargeHolcim Bangladesh Limited

1. LafargeHolcim Bangladesh ltd has a consistent flow of current ratio but the quick ratio
was increasing consistently but decreased in 2018.

2. The inventory turnover of LafargeHolcim Bangladesh ltd has increased and remained
consistent and their DSO indicates that their cash collection period is increasing which is
better for their company and the fixed assets turnover is consistent and moderate.

3. The debt ratio of Heidelberg Cement Bangladesh Ltd was almost at a moderate level.
On the other hand, LafargeHolcim Bangladesh Ltd debt ratio rapidly increased from 2016
to 2018.

4. The net fixed asset ratio of Lafarge Holcim Bangladesh Ltd. was 15% 2016, but it
decreases after that. It was at a low stage in 2018(7%).

5. The investors are willing to pay more compared to book value per share and willing to
pay more per taka of reported profits in comparison to investors of Heidelberg Cement
Bangladesh Ltd.

Heidelberg Cement Bangladesh Ltd:

1. The current ratio is decreasing and also the quick ratio is decreasing day by day.

2. The Heidelberg Cement Bangladesh Ltd is efficient in managing their fixed assets to
generate sales; they have a positive relationship in their total assets in state of sales.

3. Their debt management ratio is moderate.

26
 4. The net profit margin ratio of Heidelberg Cement Bangladesh ltd. is also decreasing in
the recent years. Their net profit margin is fluctuating in every year.5. The investors are
willing to pay more to LafargeHolcim cement Bangladesh ltd over them

RECOMMENDATIONS

LafargeHolcim Bangladesh Ltd:

 The company should increase efficiency in profit margin, they should take initiatives to
increase operating profit margin either by reducing operation expenses, or by increasing
sales of the company.
 Excessive debt finance of the company is troublesome; thus the company should try to
make a more reasonable balance between their debt and equity by raising more funds
from equity sources and reducing the debt obligations accordingly.

Heidelberg Cement Bangladesh Ltd:

 The company should increase efficiency in their inventory management. To manage their
inventory more efficiently they should forecast more accurately
 To increase efficiency of assets management, the company should make more justified
allocations of assets.
 To increase efficiency of assets management, the company should make more justified
allocations of assets.

27
 CONCLUSION
Cement industry is in the new sector of industrial sector of Bangladesh. It has passed only 23
years. The trend of growth and performance of cement industry rapidly increased day by day
during the 18 years. The findings and solutions section of the report shows that the production,
sale and investment of the cement company increased day by day due to some barriers like
increase price of raw material, low price of cement in the world.
Cement Industry in Bangladesh has a potential future for growth. Despite of many hurdles, this
industry is producing more than its local demand as the government is providing many export
facilities to the local producers. If the Bangladeshi Government makes the duty structure
friendlier by exemption of some duties on exportable cement and granting cash incentives to Sri
Lanka, Nepal, Bhutan and Middle Eastern countries will be feasible in future. On the other hand,
almost all the manufacturers produce cement by importing clinker mainly from China and
Indonesia, at a high rate of transportation cost and also higher duty fees. If our local
manufacturers are producing these raw materials locally then the production cost will be reduced.

28
BIBLIOGRAPHY
(n.d.). Company Profile. Retrieved from https://www.heidelbergcement.com/

heidelbergcement bd. (2018). Annual Report 2018. Dhaka: heidelbergcement bd.

https://lankabd.com/. (n.d.). Retrieved from lankabd:

https://lankabd.com/Company/Search?
searchText=LHBL&cn=LafargeHolcim_Bangladesh_Limited_(LHBL)

https://lankabd.com/. (n.d.). Retrieved from lankabd:

https://lankabd.com/Company/Search?
searchText=LHBL&cn=heidelbergcementbangladesh

https://www.dsebd.org. (n.d.). Retrieved from dsebd:

https://www.dsebd.org/displayCompany.php?name=HEIDELBCEM

https://www.dsebd.org/. (n.d.). Retrieved from Dsebd:

https://www.dsebd.org/displayCompany.php?name=LHBL

Lafargeholcim Bangladesh Limited. (2018). Annual Report 2018. Dhaka: Lafargeholcim

Bangladesh Limited.

(n.d.). Strategy & Management. Retrieved from https://www.heidelbergcement.com/

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APPENDIX
LafargeHolcim Bangladesh Ltd

Year Net Interest Total Liabilities Total Assets

Profit/Income
2014 3,532,862 49,867 6555033 19,810,672
2015 2,823,371.00 90,278.00 6,333,537.00 20,695,036.00
2016 2,947,462.00 134,350.00 5,607,147.00 20,979,585.00
2017 1,355,822.00 125,581.00 5,276,954.00 21,550,657.00
2018 1,882,736.00 8,655.00 11,309,910.00 26,888,230

Year Current Assets Current Liabilities Inventories

2014 5,804,079.00 2,429,487.00 1,514,543.00
2015 7,170,470.00 2,425,641.00 1,297,900.00
2016 7,629,641.00 2,379,265.00 1,103,363.00
2017 7,815,691.00 2,875,862.00 1,232,948.00
2018 5,840,923.00 4,532,161.00 1,501,367.00

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Heidelberg Cement Bangladesh Ltd

Year Net Profit/Income Interest Total Liabilities Total Assets

2014 1,654,721.00 3648857 10,172,859.00
2015 1,896,863.00 3,992,860.00 9,771,707.00
2016 2,075,442.00 248,803.00 4,596,898.00 10,188,507.00
2017 1,155,495.00 185,694.00 4,030,836.00 8,730,499.00
2018 1,177,341.00 167,950.00 3,969,552.00 8,641,419.00

Year Current Assets Current Liabilities Inventories

2014 6,447,873.00 2,769,599.00 1,025,789.00
2015 6,187,424.00 3,155,378.00 983,226.00
2016 6,656,843.00 3,846,551.00 1,495,556.00
2017 3,443,404.00 3,324,759.00 1,171,532.00
2018 4,000,021.00 3,205,401.00 1,761,342.00

31