Holcim delivers excellent performance in H1

“Our excellent financial results, from net sales and recurring EBIT to our record earnings per share, confirm the strength of our strategy, with continued profitable expansion in the attractive North American market and accelerated green growth in Europe and Latin America. We continued the fast-paced execution of our transformation with 18 value-accretive acquisitions, continuing to expand our Solutions & Products business while strengthening our Aggregates and Ready-Mix segments.

“In line with our ‘Strategy 2025 - Accelerating Green Growth’, we reduced our overall CO₂/net sales by 18% while building billion-dollar brands with ECOPact and ECOPlanet. It’s exciting to be at the forefront of decarbonising Europe with three additional grants from the EU Innovation Fund for our Carbon Capture, Utilisation and Storage projects, making us the first in our sector with five projects supported by the EU. We look forward to finishing the year strong and to further decarbonising building.”

Net sales of CHF13 067 million for the first half of 2023 were up +7.4% on an organic basis compared to the prior year. Growth reflects the strengthened earnings profile of the Group as it moves its portfolio towards businesses with superior growth and profitability.

Recurring EBIT for H1 2023 grew over-proportionately compared to net sales, with organic growth of +13.4% compared to prior year, reaching CHF 2,043 million. Profitability increased sharply in Q2 2023 with a record recurring EBIT margin of 21.1%. Holcim is well on track to deliver an industry-leading margin of above 16% in 2023.

Holcim’s earnings per share in H1 2023 were CHF2.19, 15.3% higher than in the prior-year period, reaching an all-time high since the 2015 acquisition. Free cash flow after leases was CHF79 million in H1 2023 compared to CHF275 million in H1 2022.

Holcim is continuing to invest in profitable growth with CHF1.8 billion in the first half of 2023 for 18 value-accretive acquisitions – CHF1.3 billion for eight acquisitions in the high-growth Solutions & Products segment and CHF0.5 billion for ten highly synergistic acquisitions to grow Aggregates and Ready-Mix, focusing on Europe and North America.

Holcim is continuing to expand in the attractive North American market, on track to reach ~40% of Group net sales for 2023, or around US$12 billion (pro forma). As North America’s number-one in cement, number-two in commercial flat roofing and number-five in aggregates and ready-mix concrete, Holcim is best positioned for profitable growth. Targeting new growth opportunities from the Infrastructure Investment & Jobs Act and the Inflation Reduction Act, Holcim has already secured over 70 infrastructure projects for the 2023-2026 period to generate around 5% additional organic growth per year, benefitting all four business segments.

With the acquisition of Duro-Last in H1 2023, Holcim has now fully established a leading growth platform in roofing with 30 production facilities throughout the US, completing its range of advanced roofing systems in North America. Holcim is now number-two in US commercial flat roofing and number-five in US residential roofing, with 80% of sales from system selling and 70% of sales from re-roofing. With ongoing demand normalisation in commercial roofing and strong underlying demand in residential, the company expects strong growth in H2 2023.

Holcim continued to make progress in sustainability, reducing its CO₂/net sales by 18% in the first half of 2023 compared to the full year 2022, well positioned to outperform its target reduction of at least 10% for the full year.

Scaling up sustainable solutions, Holcim is building billion-dollar brands with ECOPact low-carbon concrete and ECOPlanet low-carbon cement. ECOPact reached 18% of Ready-Mix Concrete net sales in H1 2023, on its way to delivering CHF1 billion in total net sales for 2023 and on track to reach the strategic target of 25% of ready-mix sales by 2025, while Holcim’s ECOPlanet range is on track to become a CHF2 billion brand in 2023. Its most recent launch was ECOPlanet RC in Austria, offering a 50% lower carbon footprint versus standard cement3, while also driving circular construction with 25% of ECOCycle® recycled construction demolition materials inside, including Holcim’s proprietary recarbonation technology, RapidCarb.

In July, Holcim was selected for three grants from the European Union (EU) Innovation Fund for breakthrough Carbon Capture Utilization and Storage (CCUS) projects in Belgium, France and Croatia. The projects were selected for their highly scalable profile, mature technologies and advanced partnerships to advance the EU’s Green Deal, putting clean technologies to work for a net-zero future. With these three grants, Holcim is now advancing five decarbonisation projects with EU Innovation Fund support, adding to its ongoing CCUS projects in Germany and Poland. All five projects are an integral part of Holcim’s net-zero roadmap, which includes over 50 CCUS projects worldwide with a commitment to invest CHF2 billion by 2030.

The Board of Directors appointed Nollaig Forrest as Chief Sustainability Officer and member of the Group Executive Committee, effective 1 September 2023. Since joining Holcim in 2020, Nollaig has played an instrumental role in Holcim’s net-zero transition, and she will continue advancing Holcim’s leadership in sustainability in this new capacity.

She succeeds Magali Anderson who decided to pursue new career opportunities as a Board member and supporter of NGOs. The Board of Directors and Executive Committee sincerely thank Magali for her many contributions to the company as she led a new era of excellence in sustainability, innovation and health and safety at Holcim, from launching the sector’s first net-zero roadmap to reaching a new level of performance in health and safety.

The strong performance in the first half of the year confirms Holcim’s positive guidance for the full year. Holcim expects demand across its markets to remain robust and to continue profitable growth with:

• Organic net sales growth of above 6%
• Over-proportional organic growth in recurring EBIT of above 10%
• Industry-leading recurring EBIT margin of above 16%
• Free cash flow after leases of around CHF3 billion
• Reduction of CO₂ per net sales by over 10%

The full results can be found here

Read the article online at: https://www.worldcement.com/europe-cis/27072023/holcim-delivers-excellent-performance-in-h1/