Jan Jenisch, CEO: “I’m pleased that we have achieved a record quarter of profitable growth once again. I congratulate my teams for their exceptional resilience as they continue to successfully navigate the challenges posed by the pandemic in a dynamic business environment. On the back of their performance we have revised our Recurring EBIT growth guidance from 18% to at least 22% on a like-for-like basis.”
“Most importantly, our colleagues have kept their focus on our key long-term value creation drivers to become the global leader in innovative and sustainable building solutions. We are picking up momentum in our strategic portfolio transformation, with the divestment of our business in Brazil, the announcement of nine bolt-on acquisitions so far this year and the expansion of our Firestone GacoFlex range from Mexico to Colombia and Ecuador. We continue to lead the way in our sector's climate action, as recognised yesterday by the Science Based Targets initiative's validation of our 2050 net-zero targets, with the deployment of our green building solutions, from ECOPact to ECOPlanet at the heart of our journey.”
Record Recurring EBIT in Q3
Net sales of CHF 7286 million for the third quarter of 2021 were up 5.0% on a like-for-like basis (LFL) compared to the prior year, or +12.9% of absolute growth. The Recurring EBIT increase was primarily driven by strong pricing and good cost management. Net sales over the first nine months of 2021 were CHF 19 842 million, or 12.2% higher LFL than the prior-year period.
Recurring EBIT reached a record CHF 1534 million in the third quarter of 2021, up 4.7% LFL compared to the prior-year period, or +6.2% of absolute growth. Recurring EBIT for the nine months was also a record at CHF 3516 million, an increase of 35.2% LFL over the prior-year period.
Successful portfolio transformation continues
The company continues its M&A strategy, transforming its portfolio to become the global leader in innovative and sustainable building solutions. Holcim completed two bolt-on acquisitions in the third quarter bringing the announced number of transactions to nine in 2021, in addition to the Firestone acquisition that is off to a strong start on a double-digit growth trajectory. The company announced the signing of the divestment of its business in Brazil in the third quarter. It is also finalising the closing of the previously announced sale of businesses in Zambia and Malawi. The divestment of business in the Indian Ocean region has closed this week. These divestments strengthen the company’s balance sheet to fuel continued investment in attractive growth opportunities.
Strengthened leadership in sustainability
Holcim continues to lead its industry’s sustainable transition as the first in its sector with 2050 net-zero targets validated by the Science Based Targets initiative, cutting across its operations and value chain (Scope 1, 2 and 3). The company also expanded its sustainable financing agreements with the completion of two new transactions worth more than CHF 3 billion in total linked to its sustainability targets, including climate and safety. The company is also accelerating the global rollout of ECOPact green concrete and ECOPlanet green cement, now in 24 and 11 markets respectively. ECOPlanet will be available in 15 markets globally by the end of 2021.
Holcim expects growth momentum to continue in all regions with double-digit net sales growth of Firestone Building Products in 2021. The company will pursue further bolt-on acquisitions while accelerating progress towards its 2030 sustainability targets.
For 2021 the company will deliver the following, with upgraded guidance on Recurring EBIT growth:
- Over-proportional growth in Recurring EBIT of at least 22% LFL (from at least 18% LFL previously)
- Capex less than CHF 1.4 billion
- Return on invested capital above 8%, cash conversion above 40%
Holcim will achieve all Strategy 2022 financial targets one year in advance.
Read the article online at: https://www.worldcement.com/europe-cis/29102021/holcim-shares-q3-financial-results/