Holcim achieves highest ever net sales in 2022

Building materials giant achieved its highest ever net sales of CHF29.2bn (€29.45bn) in 2022.
Quarry Products / February 27, 2023
By Liam McLoughlin
Holcim CEO Jan Jenisch says the company expects continued profitable growth in 2023
Holcim CEO Jan Jenisch says the company expects continued profitable growth in 2023

Net sales were up +12.9% on a like-for-like basis compared to the previous year. This was driven by the fast expansion of Holcim's Solutions & Products division, which grew by 54% from 2021. 

CEO  Jan Jenisch said 2022 was a record year for Holcim and paid tribute to the efforts of the company's 60,000 employees worldwide. They delivered record performance, navigating challenges from geopolitical uncertainty to inflationary pressure, to keep our customers running at all times," said Jenisch.

"They successfully transformed our company to accelerate green growth, already reaching 19% of our net sales from Solutions & Products and expanding in the most attractive North American market. Advancing our leadership in sustainability, we reduced our CO2 per net sales by 21% this year, and continued to expand our green building solutions with ECOPact reaching 13% of total ready-mix net sales."
Recurring EBIT reached a record CHF4,752m for 2022, up +7.2% on a like-for-like basis compared to the prior year. Holcim says this record result was driven by very strong margins in the roofing business as well as positive price over cost for cement, aggregates and ready-mix combined.
Reported net income group share reached CHF3,308m, up +44.0% compared to the prior year. Reported earnings per share reached CHF5.48, up +46.9%.
Earnings per share before impairment and divestments and before the resolution with the US Department of Justice (DOJ) increased by a significant 24.6% at CHF4.96.
Free Cash Flow after leases and before the DOJ resolution reached CHF3,544m, or a cash conversion ratio of 54%.
Holcim’s net financial debt was CHF 6,032m at the end of 2022 for a record-low leverage ratio of 0.9x. 
Jenisch commented: “As we enter 2023, we are continuing our fast pace. We’ve already made seven acquisitions in the first two months of the year, including Duro-Last, a roofing systems leader in the most attractive North American market. We also acquired German roofing leader FDT to expand our commercial roofing presence in Europe, as well as a range of bolt-ons across Europe and the US. I look forward to another year of continued profitable growth and fast-paced transformation, to become the global leader in innovative and sustainable building solutions.”
The group’s return on invested capital for 2022 was 9.5%, in line with our Strategy 2025 target of 10%.

Holcim says it is making strong progress on its portfolio transformation with 23 M&A transactions in the year: six acquisitions in Solutions & Products, 13 bolt-ons in Aggregates and Ready-Mix Concrete, and four divestments, notably India and Brazil. The Solutions & Products segment reached 19% of the group’s total net sales, up from 8% for 2020, putting the company on track to reach its strategic goal of 30% of net sales from Solutions & Products by 2025. 

With the announced acquisition of Duro-Last in February 2023, roofing and insulation businesses are on track to reach pro-forma net sales of US$4bn in 2023, or 10% of the US$40bn North American roofing market. 
In this fast-growing North America roofing market, Holcim is focused on the most attractive segments, delivering above-market profitable growth with system and specification selling. From Elevate’s (formerly Firestone Building Products) self-adhering membranes to Malarkey’s circular roofing shingles, Holcim has generated a significant increase in profitability, with a Recurring EBIT margin of 19% in roofing in 2022.
Holcim says it continued to advance its leadership in sustainability with the reduction of CO2 per net sales of 21% in 2022, with a target to reduce it by over 10% in 2023. It continues to expand its green building solutions with ECOPact low-carbon concrete reaching 13% of Ready-Mix Concrete net sales in 2022, on target to reach 25% by 2025. ECOPlanet low-carbon cement also delivered net sales growth and is now available in 27 markets. Scaling up its ECOPlanet range, Holcim launched Europe’s first calcined clay cement operation in France, with a proprietary technology enabling 48% lower CO2. Driving circular construction, Holcim recycled 6.8 million tons of construction & demolition waste in its products in 2022, on track to reach 10 million tons by 2025. 
In light of the company’s record 2022 financial performance and confidence in the future, the board of directors proposes a 14% increase in dividend to CHF 2.50 per registered share. 
Holcim has started 2023 with continued fast pace, with seven acquisitions in the first two months and is confident that it will continue the fast-paced execution of its Strategy 2025 – Accelerating Green Growth, delivering superior performance, successful transformation and leadership in sustainability.
The company says it expects continued profitable growth with net sales growth of 3%-5% like-for-like (LFL), over-proportional growth in Recurring EBIT (LFL), free Cash Flow after leases of around CHF3bn, and reduction of CO2 per net sales by over 10%.

Regional performance
The Asia Pacific region faced challenging markets in India and China, with high cost inflation in India and softer demand in China amid COVID lockdowns. These factors were partly offset by good performance in Australia. The region accelerated its increase in alternative fuel use.

The Europe region delivered strong results with good profitability despite softer volumes with a strong pricing more than offsetting cost inflation. Demand for low-carbon products is high across Europe, and the region is accelerating its decarbonization.

Latin America delivered strong profitable growth. Mexico, Colombia and El Salvador all delivered good performance. The region overall is benefitting from an excellent pipeline of infrastructure projects, strong growth in ready-mix concrete. Latin America is also improving significantly in materials recycling and alternative fuel use.
The Middle East Africa region generated over-proportional Recurring EBIT growth on a like-for-like basis, with good demand in key markets and positive price over cost. The region increased alternative fuel use and completed the divestment of Zimbabwe in December 2022.     
North America delivered an outstanding performance and successful transformation, with growth led by Solutions & Products. Market demand was strong, with over-proportional Recurring EBIT growth for 2022. North America is accelerating its shift to low-carbon building products.

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