Holcim reports 'record' H1 results

Building materials giant Holcim says its growth momentum continued in the first six months of the year with a more than 16% increase in net sales on the first half of 2020.
Quarry Products / August 3, 2021
By Liam McLoughlin
 CEO Jan Jenisch says the group set new records in recurring EBIT, free cash flow and earnings per share in H1
CEO Jan Jenisch says the group set new records in recurring EBIT, free cash flow and earnings per share in H1

The company reported significant margin increases in all regions, and record free cash flow of CHF814m (€756.27m), up by 9%.

Net sales of CHF12,556m (€11,666.36m) 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 were CHF7,194m (€6,683.57m), or 25.5% higher LFL than the prior-year period.

Recurring EBIT (earnings before interest and taxes) reached a record CHF1,983m (€1,842.30m) for the first half of 2021, up 72.2% on a like-for-like basis compared to the prior-year period. Holcim says the result was driven by significant margin improvement in all business segments.

Group sales of aggregates in millions of tonnes increased by 8.1% (6.2% like-for-like) in H1 to 123.0m (113.8m in H1 2020).

Group sales of cement in millions of tonnes increased by 13.5% (13.2% like-for-like) in H1 to 99.0m (87.2m in H1 2020).

The former LafargeHolcim launched its new Holcim group identity in July, which the group says unites all its market brands behind its purpose to build progress for people and the planet.

Holcim CEO Jan Jenisch commented: “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.

“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."

Jenisch said he was pleased by the strong start of the Firestone business that was acquired in March, with its double-digit volume growth and expansion into Latin America.

He added that Holcim's growth momentum continued in mature markets, fuelled by seven bolt-on acquisitions. Advancing its vision to become the global leader in innovative and sustainable building solutions, Holcim launched its global green cement range ECOPlanet following the success of ECOPact green concrete.

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.

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 in Europe, 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.

The Latin America 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.
          
The Middle East Africa region gave a strong performance, particularly in Nigeria and Iraq. This 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 benefiting especially from infrastructure spending.

The North America 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.

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