Holcim shares H1 results
Published by Emily Thomas,
Jan Jenisch, CEO: “As we close H1 under our new Group identity, I sincerely thank all members of the Holcim family for the teamwork and resilience they continue to demonstrate to navigate the challenges of the pandemic. I am proud of how our 70 000 colleagues around the world are protecting our people and communities, with health and safety top of mind, while supporting our customers.
“At this time last year I said that Holcim would emerge stronger from this crisis. These half-year results prove it. In the first half of 2021 we set new records in Recurring EBIT, free cash flow and earnings per share. I congratulate our teams for this remarkable achievement and for giving me the confidence to revise our 2021 guidance for Recurring EBIT growth to at least 18% like for like.”
“I’m pleased by the strong start of the Firestone business, with its double-digit volume growth and expansion into Latin America. Also, our growth momentum continued in mature markets, fuelled by seven bolt-on acquisitions. Advancing our vision to become the global leader in innovative and sustainable building solutions, we launched our global green cement range ECOPlanet following the success of ECOPact green concrete, accelerating sustainable construction around the world.”
Record Recurring EBIT, EPS and Free Cash Flow growth in H1
Net sales of CHF 12 556 million for the first half of 2021 were up 16.6% on a like-for-like basis (LFL) compared to the prior year. The record increase was driven by volume growth in all regions and segments. Net sales in the second quarter alone were CHF 7194 million, or 25.5% higher LFL than the prior-year period.
Recurring EBIT reached a record CHF 1983 million for the first half of 2021, up 72.2% on a like-for-like basis compared to the prior-year period. This record result was driven by significant margin improvement in all business segments.
Earnings per share increased by 77.8% to reach CHF 1.43 for the first half of 2021 versus CHF 0.80 for H1 2020.
Free Cash Flow after leases was at CHF 814 million in the first half of 2021 versus CHF 749 million in H1 2020, up 8.6%, as the measures taken to protect the business during the global pandemic continued to deliver efficiencies.
Firestone Building Products starts strong; 7 bolt-on acquisitions in H1 to fuel future growth
With the acquisition of Firestone Building Products officially closed as of 31 March 2021, the company experienced strong demand in all product lines and regions with volumes up 21% in Q2. Firestone Building Products has already begun to leverage the Holcim global procurement and sales network, notably in Latin America, where Holcim Mexico introduced GacoFlex TechoProtec. Holcim also continued to develop its portfolio through seven bolt-on acquisitions in the first half of 2021, building capacity in mature European and North American markets, primarily in aggregates and ready-mix concrete.
Pursuing its ongoing portfolio optimisation, in H1 Holcim entered agreements to divest operations in Zambia, Malawi and the Indian Ocean. Closing of all transactions is expected by year-end.
Leadership in green building solutions continues with ECOPlanet and ECOPact
Holcim continued to progress in its sustainability ambitions by introducing ECOPlanet, an innovative range of green cement that delivers at least 30% lower carbon footprint with equal to superior performance. ECOPlanet will be distributed across 15 markets in 2021. This builds on the success of ECOPact, the world’s broadest range of green concrete, which is now available in 24 markets across all regions.
Change in Executive Committee
The Board of Directors appointed Matthias Gaertner as Head of Legal and Compliance and member of the Group Executive Committee, effective 01 September 2021.
Matthias Gaertner, previously General Counsel of Honeywell Building Technologies, is a proven senior legal leader in innovation-driven building solutions with a strong track record in international mergers & acquisitions and compliance.
He succeeds Keith Carr who decided to pursue new opportunities outside of Holcim. He will continue to serve the company until the end of the year to ensure a seamless transition. The Board and Executive Committee sincerely thank Keith for his many contributions to the company's success.
Holcim expects the growth momentum to continue in all regions, supported as of H2 2021 from various stimulus programmes. The company expects to continue the growth of Firestone Building Products and 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 18% LFL (from at least 10% LFL previously)
- Capex less than CHF 1.4 bn
- Return on invested capital above 8%
Moreover, Holcim expects to achieve all Strategy 2022 targets one year in advance.
Regional H1 performance
Region Asia Pacific
The Recurring EBIT margin expansion for the first six months of 2021 of 5.7pp was the highest of all the regions. This strong performance was driven by robust cement volume growth across the region and the good performance in Australia, which benefited from government stimulus programs. India delivered outstanding margin improvement despite a second wave of COVID-19 infections and inflationary pressure. Marwar Mundwa cement capacity expansion in India will commence operations in Q3 2021.
The good momentum continued, with strong recovery in the UK, solid demand in France and continuous growth in Eastern European markets. Market demand was robust in all business segments, driving significant over-proportional Recurring EBIT growth. Plant modernisation in Martres, France, remains on track to expand the opportunities for further growth.
Region Latin America
The region delivered another quarter of outstanding performance for a record first half of the year. Outstanding volume growth in all business segments drove strong improvement in the Recurring EBIT margin. The company is positioned to capture continued growth in the Mexican market with the opening of a new grinding station in Merida and the launch of Firestone-branded products to be sold across the country’s Disensa retail network.
Region Middle East Africa
Strong performance, particularly in Nigeria and Iraq, supported a record Recurring EBIT margin improvement of 4.8 percentage points, with strong volume growth across all business segments. The East Africa region experienced broad recovery, with Kenya benefitting especially from infrastructure spending.
Region North America
The region showed good momentum to deliver a strong margin improvement overall, with strong market demand in the US and good recovery in Canada West. In Canada East demand was supported by key projects in Montreal and Toronto. Volumes grew in all business segments in the second quarter and pricing was positive.
Read the article online at: https://www.worldcement.com/europe-cis/30072021/holcim-shares-h1-results/
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