Holcim reports 1H23 organic net sales up 7%

Holcim reports 1H23 organic net sales up 7%
27 July 2023

Holcim saw its net sales decline by 11 per cent YoY to CHF13,067m in the 1H23, but organic net sales expanded by 7.4 per cent over the same period, reports the Swiss-based building materials group.

“Growth reflects the strengthened earnings profile of the Group as it moves its portfolio towards businesses with superior growth and profitability,” said the group in a statement. The company invested CHF1800m in the 1H23 in the acquisition of 18 companies, including CHF1.300m for eight acquisitions in the high-growth Solutions and Products segment and CHF500m for 10 companies to grow its Aggregates and Ready-Mix segment, focussing on Europe and North America.

Recurring EBIT fell six per cent to CHF2043m while organic recurring EBIT increased by 13.4 per cent YoY. The recurring EBIT margin improved to 15.6 per cent in the 1H23 from 14.8 per cent in the 1H22.

The company’s operating profit decreased by -4.7 per cent to CHF1970m. The group’s share of net income advanced nine per cent to CHF1261m in the 1H23.

Holcim Chairman and CEO, Jan Jenisch, said: “Our excellent financial results, from net sales and recurring EBIT to our record earnings per share, confirm the strength of our strategy, with continued profitable expansion in the attractive North American market and accelerated green growth in Europe and Latin America. We continued the fast-paced execution of our transformation with 18 value-accretive acquisitions, continuing to expand our Solutions & Products business while strengthening our Aggregates and Ready-Mix segments.”

Product performance
Net sales of cement were down 21 per cent, but up 13.8 per cent in organic terms, to CHF6794 in the 1H23. Recurring EBIT of the cement business fell 5.8 per cent but increase by 23.4 in organic terms to CHF1472m. As a result, the recurring EBIT margin improved to 21.7 per cent in the 1H23 from 18.2 per cent in the year-ago period.

Net sales of aggregates advanced 7.2 per cent (+11.3 per cent organically) to CHF2116m. Recurring EBIT of the aggregates product range increased by 12.3 per cent (organic: +17.2 per cent) to CHF265m in the 1H23 when compared with the previous year’s first half. The recurring EBIT margin improved to 12.5 per cent in the 1H23 from 11.9 per cent in the 1H22.

Ready-mix concrete net sales edged up by 4.8 per cent (+13 per cent in organic terms) YoY to CHF2896m in the 1H23. Recurring EBIT was up 76.1 per cent (organic: +66.7 per cent) while its margin improved in the 1H23 to 3.2 per cent YoY from 1.9 per cent.

Solutions and Products net sales slipped by 0.5 per cent and 14 per cent in organic terms to CHF2601m. Its recurring EBIT fell 33.4 per cent (organic: -37.8 per cent) to CHF215m, leading to a EBIT margin declining to 8.3 per cent in the 1H23 from 12.4 per cent in the 1H22.

Sustainability performance
Holcim continued to make progress in sustainability, reducing its CO2/net sales (Scope 1 and Scope 2) by 18 per cent  in the 1H23 compared to the full year 2022, well positioned to outperform its target reduction of at least 10 per cent for the full year.

Scaling up sustainable solutions, Holcim is building billion-dollar brands with ECOPact low-carbon concrete and ECOPlanet low-carbon cement. ECOPact reached 18 per cent of ready-mix Concrete net sales in H1 2023, on its way to delivering CHF 1 billion in total net sales for 2023 and on track to reach the strategic target of 25 per cent of ready-mix sales by 2025, while Holcim’s ECOPlanet range is on track to become a CHF2000m brand in 2023. Its most recent launch was ECOPlanet RC in Austria, offering a 50 per cent lower carbon footprint versus standard OPC, while also driving circular construction with 25 per cent of ECOCycle® recycled construction demolition materials inside, including Holcim’s proprietary recarbonation technology, RapidCarb.

In July the company was selected for three grants from the European Union (EU) Innovation Fund for breakthrough CCUS projects in Belgium, France and Croatia. The projects were selected for their highly scalable profile, mature technologies and advanced partnerships to advance the EU’s Green Deal, putting clean technologies to work for a net-zero future. With these three grants, Holcim is now advancing five decarbonisation projects with EU Innovation Fund support, adding to its ongoing CCUS projects in Germany and Poland. All five projects are an integral part of Holcim’s net-zero roadmap, which includes over 50 CCUS projects worldwide with a commitment to invest CHF2000m by 2030.

“In line with our ‘Strategy 2025 - Accelerating Green Growth’, we reduced our overall CO2/net sales by 18% while building billion-dollar brands with ECOPact and ECOPlanet. It’s exciting to be at the forefront of decarbonising Europe with three additional grants from the EU Innovation Fund for our Carbon Capture, Utilisation and Storage projects, making us the first in our sector with five projects supported by the EU. We look forward to finishing the year strong and to further decarbonising building,” said Mr Jenisch.

Published under Cement News