Continued profitable growth in Q3 with record recurring EBIT

Jan Jenisch, Chairman and CEO: “I thank all members of the Holcim family for delivering profitable growth in Q3 despite challenging economic conditions, marked by softer demand in some markets and foreign exchange headwinds. This is a testimony to our teams’ resilience and efforts across all our markets to lead the transition to sustainable building.

“Q3 confirms Holcim’s strong earnings profile, with broad-based growth drivers delivering another increase in profitability. This performance gives us the confidence to upgrade our 2023 guidance to an industry-leading recurring EBIT margin of above 17% for the year, and advance our roofing systems ambition to reach above USD 6 billion in net sales and USD 1.3 billion in EBIT by 2026.

“Leading the transition to sustainable building, we reduced our CO₂ per net sales by 20% in the first nine months of the year. We continue to build momentum with our sustainable brands generating billions in net sales, from ECOPact low-carbon concrete to elevate advanced roofing systems. Driving circular construction, we increased our recycling of construction demolition materials by 17% in the first nine months and are scaling up our ECOCycle^® technology. As part of our net zero journey, we continue to advance our carbon capture, utilisation and storage (CCUS) projects and secured a sixth European Union innovation fund grant, partnering to scale up our impact”.

Continued profitable growth

Profitable growth continued in Q3 2023 despite economic headwinds. Net sales were CHF 7340 million, up 4.3% organically compared to the prior-year period. Net sales over the first nine months of 2023 were CHF 20 407 million, or 6.2% higher organically than in the prior-year period.

Recurring EBIT reached a record CHF 1600 million in the third quarter of 2023, a 14.1% rise on an organic basis compared to the prior-year period. The absolute CHF 49 million increase in recurring EBIT versus the prior-year period came despite softer demand in some markets and a negative foreign exchange impact of CHF 157 million. Recurring EBIT for the nine months was CHF 3643 million, an increase of 13.8% organically. Holcim’s recurring EBIT margin for the first nine months is at a record 17.9%, up 1.5 percentage points. Holcim has upgraded its 2023 recurring EBIT margin guidance for the full year to above 17%, up from above 16%.

New ambition for roofing systems

Advancing its leadership in roofing systems, Holcim announced its new ambition to reach above US$6 billion in net sales and above US$1.3 billion in EBIT by 2026, at its investor day in September. This new ambition is driven by Holcim’s above-market growth and over-proportional increase in profitability.

With more than 40 state-of-the-art production facilities, Holcim makes 80% of sales in systems selling – manufacturing and supplying the complete roofing system – and generates 70% of sales from re-roofing in the resilient repair and refurbishment market. Building on its North American footprint, Holcim is expanding its advanced roofing systems in Europe and Latin America.

Investing for growth

Holcim continues to invest for profitable growth, and has made a total of 21 value accretive acquisitions this year. The latest acquisitions include a UK provider of construction demolition materials to advance circular construction across this key market, a ready-mix concrete acquisition in Australia to strengthen Holcim’s position in the Victoria market, and a roofing company in Germany to continue the expansion of advanced roofing systems in Europe.

Accelerating climate action

Decarbonising its building solutions, Holcim has reduced its CO₂ per net sales by 43% since 2020. Accelerating green growth, ECOPact low-carbon concrete accounted for 19% of Holcim’s ready-mix net sales in the first nine months, and is on track to be a CHF 1 billion brand this year. ECOPlanet low-carbon cement accounted for 19% of cement net sales in the first nine months, on course to becoming a CHF 2 billion brand this year. Holcim increased its recycling of construction demolition materials by 17% in the first nine months compared to the prior-year period, and is driving circular construction with the scale-up of its ECOCycle technology.

In the third quarter, Holcim secured a sixth European Union innovation fund grant for the development of CCUS technology. The grant was awarded to Holcim’s plant in Milaki, Greece, which aims to capture 1 million tpy of CO₂ as of 2029. This is a further step on Holcim’s decarbonisation journey, and its commitment to invest CHF 2 billion by 2030 in CCUS technology and to capture 5 million tpy of CO₂ by 2030.

Upgrading 2023 guidance

Based on the positive results over the first nine months, Holcim is confirming its outlook and upgrading its full-year guidance for recurring EBIT margin:

• Organic net sales growth above 6%.
• Organic recurring EBIT growth above 10%.
• Industry-leading recurring EBIT margin above 17%, up from above 16%.
• Free Cash Flow after leases of around CHF 3 billion.
• Reduction of CO₂ per net sales above 10%.

For the full results click here.

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