Holcim reports profitable Q3 growth despite challenging conditions

Building materials provider Holcim says that it saw continued profitable growth in the third quarter of 2023, despite challenging economic conditions including weakened demand in some construction markets such as China and Europe.
Concrete Plants, Equipment & Applications / October 30, 2023
By Liam McLoughlin
Chairman and CEO Jan Jenisch says Holcim reduced its CO₂ per net sales by 20% in the first nine months of 2023
Chairman and CEO Jan Jenisch says Holcim reduced its CO₂ per net sales by 20% in the first nine months of 2023

Holcim's net sales in Q3 totalled CHF7,340m (€7,719m), an organic growth of 4.3%. The company adds that it saw record Q3 recurring EBIT (earnings before interest and taxes) of CHF1,600m (€1,682.61m). Net sales over the first nine months of 2023 were CHF20,407m (€21,460.69m), or 6.2% higher organically than in the prior-year period.

The company's sustainabilty efforts saw a 20% reduction of CO₂ per net sales in the first nine months of 2023.

Holcim says its "industry-leading" profitability has led to it upgrading full-year 2023 guidance for recurring EBIT margin to above 17%.

Chairman and CEO Jan Jenisch, commented: “Q3 confirms Holcim’s strong earnings profile, with broad-based growth drivers delivering another increase in profitability." 

He added: “Leading the transition to sustainable building, we reduced our CO₂ per net sales by 20% in the first nine months of the year. We continue to build momentum with our sustainable brands generating billions in net sales, from ECOPact low-carbon concrete to Elevate advanced roofing systems. Driving circular construction, we increased our recycling of construction demolition materials by 17% in the first nine months and are scaling up our ECOCycle technology.

"As part of our net zero journey, we continue to advance our carbon capture, utilization and storage projects and secured a sixth European Union innovation fund grant, partnering to scale up our impact.”

Holcim has announced its new ambition for its roofing systems business to reach above US$6bn in net sales and above US$1.3bn in EBIT by 2026, at its investor day in September. This new ambition is driven by Holcim’s above-market growth and over-proportional increase in profitability. 

With more than 40 production facilities, Holcim makes 80% of sales in systems selling - manufacturing and supplying the complete roofing system - and generates 70% of sales from re-roofing in the resilient repair and refurbishment market. Building on its North American footprint, Holcim is says it expanding its advanced roofing systems in Europe and Latin America.

Holcim adds that it continues to invest for profitable growth, and has made a total of 21 value accretive acquisitions this year. The latest acquisitions include a UK provider of construction demolition materials to advance circular construction across this key market, a ready-mix concrete acquisition in Australia to strengthen Holcim’s position in the Victoria market, and a roofing company in Germany to continue the expansion of advanced roofing systems in Europe. 

In the third quarter, Holcim secured a sixth European Union innovation fund grant for the development of carbon capture, utilisation and storage technology. The grant was awarded to Holcim’s plant in Milaki, Greece, which aims to capture 1 million tons of CO₂ per annum as of 2029. The company says this is a further step on its decarbonisation journey, and its commitment to invest CHF2bn (€2.1bn) by 2030 in carbon capture, utilisation and storage technology and to capture 5 million tons of CO₂ annually by 2030.

Based on the positive results over the first nine months, Holcim is confirming its outlook and upgrading its full-year guidance for recurring EBIT margin: organic net sales growth above 6%; organic recurring EBIT growth above 10%; recurring EBIT margin above 17%, up from above 16%; free cash flow after leases of around CHF3bn (€3.15bn); and reduction of CO₂ per net sales above 10%.

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