Holcim reports record profitable growth in H1

Miljan Gutovic, CEO: “I thank all members of the Holcim family for delivering record profitability in the first half of 2024. With our deeply embedded performance culture, our teams focused on successfully meeting our customers’ needs. Our leading sustainable building solutions, from ECOPact low-carbon concrete, to Elevate energy-efficient roofing systems, position us as the partner of choice for large-scale projects like infrastructure and data centres.

“We delivered broad-based profitable growth in H1, achieving a superior earnings profile with a record recurring EBIT margin of 23.2% in Q2, and are well on course to deliver free cash flow of above CHF3 billion in 2024. With our track record of creating superior value across all market conditions and economic cycles, we are committed to another year of record results, capitalising on our markets’ strong fundamentals.

“Our disciplined M&A execution continued with 11 value-accretive acquisitions to accelerate circular construction and scale up our ECOCycle^® technology, while expanding Solutions & Products and strengthening our aggregates and ready-mix businesses. Advancing climate action, we reduced CO₂ per net sales by 7%.”

Profitable growth continues

Net sales of CHF12 813 million in H1 2024 were up +1.6% on a local currency basis compared to the prior year.

Recurring EBIT for H1 2024 grew over-proportionally compared to net sales to a record CHF2210 million, with a rise of 12.7% in local currency versus the prior-year period. Profitability increased sharply in Q2 2024 with a record recurring EBIT margin of 23.2%, reflecting Holcim's strategic focus on high-value solutions. Consequently, Holcim is well on track to again deliver industry-leading margins for the full year.

Holcim’s earnings per share before impairment and divestments in H1 2024 were CHF2.44, 10% higher than the prior-year period.

Free cash flow after leases was CHF48 million in H1 2024, compared to CHF79 million in H1 2023, on track to achieve full-year 2024 guidance of above CHF 3 billion.

Investing in the most attractive markets

Holcim is continuing to invest in profitable growth with 11 value-accretive acquisitions, predominantly family-owned businesses bringing significant synergy upside.

There were four highly-accretive acquisitions in Europe to accelerate circular construction – in Belgium, Switzerland, the UK and Germany – scaling up Holcim’s ECOCycle^® recycling technology; three acquisitions in Europe and Latin America to expand Solutions & Products; and bolt-on acquisitions in North America, Latin America and Europe to strengthen aggregates and ready-mix. Holcim also closed four divestments in H1.

Leading in sustainability

Customer demand for Holcim’s sustainable building solutions increased. In H1, net sales of Holcim’s low-carbon ECOPact concrete and low-carbon ECOPlanet cement accounted for 28% and 26% of ready-mix net sales and cement net sales, respectively, up significantly from 19% in each case at end December 2023.

Advancing climate action, Holcim reduced CO₂ per net sales by 7% compared to the prior-year period. In Q2, Holcim broke ground with its partners on two large-scale carbon capture, utilization and storage (CCUS) projects, in Germany and Belgium.

Outlook and guidance

Holcim’s strategy continues to deliver superior performance. Building on its record Q2 recurring EBIT margin, Holcim updates its full-year guidance for 2024, with:

• Low single-digit net sales growth in local currency.
• Over-proportional growth in recurring EBIT.
• Increase in recurring EBIT margin to above 18.5%.
• Free cash flow of above CHF3 billion.
• 20% growth in recycled Construction Demolition Materials to 10 million t.
• Progress towards US listing of North American business.

The planned listing of Holcim’s North American business in the US is on track to be completed in the first half of 2025, with the aim of unlocking a new era of value creation for all stakeholders.

Holcim launched its previously announced share buyback on 18 March 2024 to purchase up to CHF1 billion until year-end. By 30 June 2024, 5.2 million shares had been repurchased for CHF413 million. Holcim remains committed to a strong investment grade credit rating.

Read the article online at: https://www.worldcement.com/europe-cis/30072024/holcim-reports-record-profitable-growth-in-h1/