Record profitable growth in H1 for Holcim

• Record recurring EBIT, up +12.7% in local currency, up +8.1% in CHF
  Net sales up +1.6% in local currency.
• Record recurring EBIT margin of 23.2% (+210 bps) in Q2 2024
• +10.0% growth in EPS before impairment and divestments
• Disciplined M&A execution continues with 11 value-accretive acquisitions and 4 divestments
• FY 2024 updated guidance: recurring EBIT margin increased to above 18.5% with low single-digit net sales growth in local currency

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 centers.

“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 CHF 3 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, capitalizing 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%¹.”

Performance overview H1

Profitable growth continues

Net sales of CHF 12,813 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 CHF 2,210 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 our 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 CHF 2.44, 10% higher than the prior-year period.

Free cash flow after leases was CHF 48 million in H1 2024, compared to CHF 79 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 guidanceHolcim’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 CHF 3 billion

·    20% growth in recycled Construction Demolition Materials to 10 million tons

·    Progress towards U.S. listing of North American business

The planned listing of Holcim’s North American business in the U.S. 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
CHF 1 billion until year-end. By 30 June 2024, 5.2 million shares had been repurchased for CHF 413 million. Holcim remains committed to a strong investment grade credit rating.

Key Group figures

Segment performance

North America

North America reached a new level of profitability, with an increase in H1 recurring EBIT margin of 240 basis points to 19.4%. There are strong market fundamentals in place, with Holcim having secured more than 100 infrastructure projects between 2023 and 2026. Strong performance is expected in 2024.

Latin America

Latin America delivered its 16^th consecutive quarter of profitable growth, with an outstanding H1 recurring EBIT margin of 35.6%. The region benefited from its leading Disensa retail distribution network with more than 2,000 stores. Nearshoring trends across the region are driving infrastructure and commercial investments.

Europe

This was Europe’s seventh consecutive quarter of profitable growth. H1 recurring EBIT margin expanded significantly by 240 basis points to 16.2%, with sustainability driving profitable growth. There were 6 bolt-on acquisitions, in aggregates, ready-mix, construction demolition materials and recycling solutions. The strong earnings momentum is expected to continue.

Asia, Middle East & Africa

Good market dynamics in North Africa leading to a double-digit increase in H1 recurring EBIT and a 240 basis points expansion in H1 recurring EBIT margin to 23.5%. There was continued portfolio management with three divestments closed. The earnings momentum is expected to continue in H2 2024.

Solutions & Products

Solutions & Products reported the strongest H1 net sales growth of the segments, driven by roofing. There was a significant expansion of the recurring EBIT margin in H1 by 100 basis points, driven by scale, and three acquisitions in Europe and Latin America. There is a strong outlook for the year.

Reconciliation to Group accounts

Reconciling measures of profit and loss to the Holcim Group’s consolidated statement of income:

Reconciliation of Free Cash Flow after leases to the Holcim Group’s Consolidated Statement
of Cash Flows:

Reconciliation of Net financial debt to the Holcim Group’s consolidated statement of financial position:

Additional information

Alternative Performance definitions 

Some Alternative Performance measures are used in this release to help describe the performance of Holcim. A full set of these Alternative Performance definitions can be found on our website.

Analyst presentation and 2024 Half-Year Report

The analyst presentation of the Half-Year 2024 Results and the 2024 Half-Year Report are available on our website.

¹ Half-year 2024 scope 1 + scope 2 CO₂ emissions / net sales, compared to half-year 2023.