exhibit 1 credit opinion lafargeholcim's leverage …» good liquidity profile and access to...

CORPORATES

CREDIT OPINION21 March 2017

Update

RATINGS

LafargeHolcim LtdDomicile Switzerland

Long Term Rating Baa2

Type LT Issuer Rating - DomCurr

Outlook Negative

Please see the ratings section at the end of this reportfor more information. The ratings and outlook shownreflect information as of the publication date.

Contacts

Stanislas Duquesnoy 49-69-70730-781VP-Sr Credit [email protected]

Florian Zimmermann 49-69-70730-971Associate [email protected]

Anke Rindermann 49-69-70730-788Associate [email protected]

LafargeHolcim LtdUpdate following rating confirmation

Summary Rating RationaleThe Baa2 rating mainly takes into account LafargeHolcim's (LH) (i) position as a worldwideleading producer of cement, aggregates, ready-mix concrete, asphalt and related services,(ii) good geographical diversification, (iii) better resilience to cyclical swings in demandfor cement, aggregates and ready-mix concrete in individual countries given its improvedbusiness profile following the merger of Lafarge and Holcim in 2015, (iv) synergies still tobe generated in the next years, thereby improving the group's profitability, and (v) disposalproceeds that if applied to debt reduction would improve LH's leverage ratio.

Factors constraining the rating relate to (i) current credit metrics that are tight for the Baarating category exemplified in the high leverage of the merged group with 2016 Debt/EBITDAof 4.1x and RCF/net debt of 20.4% (as per Moody's calculation) although credit metricshave improved markedly over the last twelve months, (ii) exposure to the cyclicality of thecement and aggregates industry, and (iii) the announced increase in dividend to CHF2 pershare in 2017 and of a share buyback programme of CHF1 billion over two years on the backof expected improvement in operating performance.

Exhibit 1

LafargeHolcim's Leverage has Improved Markedly over the last 12 monthsMoody's Adjusted Debt/EBITDA development

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 2017e

Debt / EBITDA Downgrade Trigger

Dec. 2011 to Dec. 2014 are Holcim standalone; Dec. 2015 to 2017e are for the combined groupSource: Moody's Financial Metrics, Moody's

https://www.surveygizmo.com/s3/1133212/Rate-this-research?pubid=PBC_1064828

MOODY'S INVESTORS SERVICE CORPORATES

Credit Strengths

» Largest producer of cement and aggregates worldwide

» Business model protected by high barriers to entry

» Strong geographical diversification with material exposure to emerging markets

» Good liquidity profile and access to debt capital markets

» Strong operating performance (including positive pricing development) in 2016

Credit Challenges

» Complexity and costs related to the merger of two large international companies such as Lafarge and Holcim, that partly offset thestrong synergy generation potential from the combination

» Contrasted performance across regions with certain emerging markets not delivering anticipated results

» Shareholder distribution measures announced at the end of last year at a time when credit metrics were tight for the current rating

» Low capacity utilisation by historical standards in several markets makes it difficult to raise prices

Rating OutlookThe negative outlook assigned to the ratings reflects (1) credit metrics, which still remain tight for the current rating, and (2) somematerial headwinds going into 2017 (scope effect: CHF330 million negative EBITDA impact, energy: CHF300 million negative impact,general cost inflation: more than CHF600 million negative impact as estimated by Moody's), which will make it more difficult to de-lever going forward.

Factors that Could Lead to an Upgrade

» Rating upgrade not anticipated in the short term

» RCF/net debt reaching at least 25% on a sustainable basis

» Debt/EBITDA ratio below 3.0x on a sustainable basis

Factors that Could Lead to a Downgrade

» RCF/net debt below 20% on a sustainable basis

» Debt/EBITDA above 3.5x on a sustainable basis

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 21 March 2017 LafargeHolcim Ltd: Update following rating confirmation


Key Indicators

KEY INDICATORS [1]

LafargeHolcim Ltd

12/31/2016 12/31/2015 12/31/2014 12/31/2013 12/31/2012

Revenue (USD Billion) $27.3 $24.5 $20.6 $21.3 $22.6

Operating Margin 10.8% 8.0% 12.6% 12.4% 10.6%

EBIT / Avg. Assets 4.1% 2.4% 6.3% 6.6% 6.1%

Debt / Book Capitalization 37.2% 38.4% 38.9% 40.5% 42.7%

Debt / EBITDA 4.1x 7.0x 3.4x 3.1x 3.5x

EBIT / Interest Expense 3.3x 1.6x 3.9x 3.9x 3.6x

RCF / Net Debt 20.4% 12.5% 20.4% 21.6% 23.4%

[1] All ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-Financial Corporations. Source: Moody's Financial Metrics™

Detailed Rating ConsiderationsLEADING MARKET POSITIONS WITH WIDE GEOGRAPHICAL FOOTPRINT

After the successful completion of the merger of Holcim Ltd with Lafarge SA in July 2015, the combined group emerged as one ofthe world's leading building materials suppliers, benefiting from an industry with considerable barriers to entry (high capital intensity,regulatory constraints in accessing quarries, privileged access to raw materials and lead time in bringing brown or greenfield projects toproduction), very limited substitution risk especially for cement and a relatively fragmented customer base which favors suppliers.

The group's rating is also supported by its strong international footprint, with operations spread across more than 80 countries and agood mix between exposure to mature and developed economies. The improved business profile should provide for a better resilienceto cyclical swings in demand for cement, aggregates and ready-mix concrete in individual countries. Although the merged company willremain exposed to the cyclicality of the cement and aggregates industry, we believe the increase in scale and the further geographicaldiversification will support the company to strengthen its market position versus its closest competitors, namely HeidelbergCement AG(Baa3 stable), as well as Cemex (unrated) and CRH Ltd (Baa2 stable).

IMPROVEMENT IN OPERATING PERFORMANCE IN 2016 BUT CREDIT METRICS REMAIN TIGHT FOR THE CURRENT RATINGCATEGORY

Despite mixed market trends across LH's key geographies, which led to slightly negative volume developments across all business lines,the group managed to post a 8.7% increase in LH adjusted operating EBITDA supported by CHF638 million in synergies and CHF200million positive price effect. LH's cash flow generation also improved strongly albeit from a low base with an Operating Free cash flowof CHF1,666 million in 2016 versus a consumption of CHF51 million during the same period in 2015.

As a result, credit metrics of LH did improve markedly. Debt/EBITDA currently stands at 4.1x (7.1x at FYE2015) and RCF/Net debt at20.4% (12.1% at FYE2015), which is at the lower end or slightly below our requirement for the Baa2 rating category. Moody's wouldexpect credit metrics to only slowly improve in 2017 as LafargeHolcim will face more headwinds in 2017 from higher energy costs,negative scope effects, general cost inflation and the dividend increase (impact on retainred cash flow).

INCREASED DIVIDEND AND SHARE BUYBACK AT A TIME WHEN CREDIT METRICS ARE TIGHT FOR THE RATING CATEGORY

At its investor day at the end of last year, LH has announced a number of measures to bolster the remuneration for shareholdersincluding a dividend increase to CHF2 per share to be paid out in 2017 from CHF1.5 per share paid out in 2016 (more than CHF250million increase in payout ratio compared to 2016). LH has also announced its intention to distribute CHF1 billion to shareholders overtwo years through share buybacks.

These measures come at a time when credit metrics of LH are at the lower end or even slightly below our requirements for the ratingcategory. While the share buyback will be spread over two years and should be at least partly funded from the group's free cash flow,the dividend increase is material in comparison to the group's funds from operations, even more so in light of the fact that LH will loosesome contribution from disposed assets in 2017.



ASSET DISPOSAL PLAN SHOULD FURTHER SUPPORT DELEVERAGING BUT ABILITY TO MAINTAIN CURRENT RATING LARGELYPREDICATED ON IMPROVEMENTS IN OPERATING PERFORMANCE

As part of its portfolio optimization measures the company expects to achieve EUR5 billion of disposal proceeds by 2017. However LHwill also loose approximately CHF300 million of adjusted operating EBITDA from the divestments, which will reduce the deleveragingimpact from the divestments.

The ability of LH to restore credit metrics in line with our requirement for the current rating remains therefore largely predicated onLH's ability to continue posting robust operating performance in 2017 despite material headwinds listed above. While we remaincautious on LafargeHolcim's ability to deliver its public target of a l-f-l adjusted operating EBITDA of CHF7 billion by year-end 2018,we believe that LafargeHolcim would need an EBITDA of CHF6.2 - 6.4 billion to achieve our target gross debt/EBITDA of below 3.5xfor the current rating category. This compares to an EBITDA of CHF5.8 billion achieved in 2016 and is much more achievable than thecompany's public target. We also gain comfort from LafargeHolcim's new net leverage target of below 2.0x (2.5x reported for 2016) for2017, which underpins more solidly its commitment to a solid investment grade rating.

Liquidity AnalysisMoody's regards LafargeHolcim's liquidity profile as very good. At 31 December 2016, the group's liquidity position consisted of CHF4.9billion available cash & cash equivalents and CHF6.3 billion availability under committed credit lines with no financial covenants.Moody's notes, however, that a portion of the group's cash balance is not immediately available as it is constrained in fully consolidatedbut not fully owned subsidiaries or in countries with limitations on the transfer of foreign currency (e.g., China or Egypt). Even excludingthat effect, LafargeHolcim's cash sources together with its funds from operations and the expected cash inflows resulting from theasset disposals should be more than sufficient to cover cash outflows such as debt repayments, capex, working capital changes anddividends during the next 12 months.

Corporate ProfileHeadquartered in Jona, Switzerland, LafargeHolcim was created from the merger of Holcim and Lafarge and is the world leader in thebuilding materials industry with 353 million tons (mt) of cement production capacity sold and 292 mt of aggregates volumes sold in2016. Additional activities include ready mix concrete, asphalt and a range of other services. LH generated revenues of CHF27 billionand reported a company adjusted operating EBITDA of CHF5.8 billion for 2016.

Rating Methodology and Scorecard FactorsThe one notch differential between the grid indicated rating outcome for the Moody's forward looking view and the actual ratingsassigned reflects both the remaining uncertainty with regards to the deleveraging path of LafargeHolcim over the next 12 to 18 monthsand the group's relatively weak financial profile for a Baa2 credit rating even at the end of our 12 to 18 months forward looking view.



Rating Factors

LafargeHolcim Ltd

Building Materials Industry Grid [1][2]

Factor 1 : Scale (5%) Measure Score Measure Score

a) Revenue (USD Billion) $27.3 Aa $28 - $28.5 Aa

Factor 2 : Business Profile (15%)

a) Business Profile Aa Aa Aa Aa

Factor 3 : Profitability and Efficiency (30%)

a) Operating Margin 10.8% Ba 12% - 13% Baa

b) Operating Margin Volatility 16.9% Baa 15% - 16% Baa

c) EBIT / Avg. Assets 4.1% Ba 5% - 6% Ba

Factor 4 : Leverage and Coverage (40%)

a) Debt / Book Capitalization 37.2% Baa 31% - 33% Baa

b) Debt / EBITDA 4.1x Ba 3.3x - 3.5x Baa

c) EBIT / Interest Expense 3.3x Ba 4.5x - 5.5x Baa

d) RCF / Net Debt 20.4% Baa 20% - 22% Baa

Factor 5 : Financial Policy (10%)

a) Financial Policy Baa Baa Baa Baa

Rating:

a) Indicated Rating from Grid Baa2 Baa1

b) Actual Rating Assigned Baa2 Baa2

[1] All ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-Financial Corporations.

[2] As of 12/31/2016; Source: Moody's Financial Metrics™[3] This represents Moody's forward view; not the view of the issuer; and unless noted in the text, does not incorporate significant acquisitions and divestitures

Current FY 12/31/2016 Moody's 12-18 Month Forward View

As of 3/17/2017 [3]

Ratings

Exhibit 5Category Moody's RatingLAFARGEHOLCIM LTD

Outlook NegativeIssuer Rating -Dom Curr Baa2Senior Unsecured -Dom Curr Baa2Other Short Term (P)P-2

HOLCIM US FINANCE S.A R.L. & CIE S.C.S.

Outlook NegativeBkd Senior Unsecured Baa2Bkd Commercial Paper P-2Bkd Other Short Term -Dom Curr (P)P-2

LAFARGEHOLCIM ALBION FINANCE LTD

Outlook No OutlookBkd Sr Unsec MTN (P)Baa2Bkd Other Short Term (P)P-2

LAFARGEHOLCIM CONTINENTAL FINANCE LTD


LAFARGEHOLCIM INTERNATIONAL FINANCE LTD


LAFARGEHOLCIM STERLING FINANCE(NETHERLANDS)

Outlook No OutlookBkd Sr Unsec MTN -Dom Curr (P)Baa2Bkd Other Short Term -Dom Curr (P)P-2

HOLCIM FINANCE (LUXEMBOURG) S.A.

Outlook NegativeBkd Senior Unsecured -Dom Curr Baa2Bkd Other Short Term -Dom Curr (P)P-2

LAFARGE SA

Outlook NegativeSr Unsec Bank Credit Facility -Dom Curr Baa2Senior Unsecured Baa2



HOLCIM FINANCE (BELGIUM) S.A.

Outlook No OutlookBkd Commercial Paper -Dom Curr P-2

LAFARGEHOLCIM FINANCE US LLC

Outlook NegativeBkd Senior Unsecured Baa2

HOLCIM CAPITAL CORPORATION LTD.

Outlook NegativeBkd Senior Unsecured Baa2Bkd Commercial Paper P-2

HOLCIM FINANCE (AUSTRALIA) PTY LTD

Outlook NegativeBkd Senior Unsecured -Dom Curr Baa2Bkd Other Short Term -Dom Curr (P)P-2

HOLCIM OVERSEAS FINANCE LTD.


HOLCIM GB FINANCE LTD.


Source: Moody's Investors Service



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REPORT NUMBER 1064828


http://www.moodys.com


Contacts

Stanislas Duquesnoy 49-69-70730-781VP-Sr Credit [email protected]

Florian Zimmermann 49-69-70730-971Associate [email protected]

Anke Rindermann 49-69-70730-788Associate [email protected]

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454


exhibit 1 credit opinion lafargeholcim's leverage …» good liquidity profile and access to...

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