2024 Alternative Performance Measures

Organic Growth information factors out changes in the scope of consolidation (such as divestments and acquisitions occurring in the current year and the prior year) and currency translation effects (current-year figures are converted with prior-year exchange rates in order to calculate the currency effects).

Growth in local currency factors in organic growth and acquisitions and divestments by excluding currency translation effects.

The recurring operating costs indicator represents all recurring costs. It is defined as: 

+/– Recurring EBITDA after leases 
– Net sales 
– Share of profit of joint ventures

The Recurring EBITDA (earnings before interest, tax, depreciation and amortization) measures the performance of the Group excluding the impacts of non-recurring items. It is defined as: 

+/– Operating profit/loss (EBIT) 
– Depreciation, amortization and impairment of operating assets 
– Restructuring, litigation and other non-recurring costs

The Recurring EBITDA margin measures the profitability of the Group excluding the impacts of non-recurring items. It is defined as the Recurring EBITDA divided by net sales.

The Recurring EBITDA after leases (earnings before interest, tax, depreciation and amortization) measures the performance of the Group including the impacts of lease depreciation and excluding the impacts of non-recurring items. It is defined as the Recurring EBITDA less the depreciation of right-of-use assets.

The Recurring EBIT is defined as Operating profit/loss (EBIT) adjusted for restructuring, litigation, other non-recurring costs and for impairment of operating assets.

The Recurring EBIT margin measures the profitability of the Group excluding the impacts of restructuring, litigation and other non-recurring costs. It is defined as the Recurring EBIT divided by net sales.

Restructuring, litigation and other non-recurring costs relate to significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business-related litigation cases.

Profit and loss on disposals and other non-operating items comprise gains or losses on the sale of Group companies, associates and joint ventures, impact of other non-operating items that are not directly related to the Group’s operating activities such as revaluation gains or losses on previously held equity interests, indemnification provisions and disputes with minority shareholders.

The Operating profit/loss (EBIT) before impairment measures the profit earned from the Group’s core business activities excluding impairment charges which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as: 

+/– Operating profit/loss 
– Impairment of Goodwill and long-term assets

Net income/loss before taxes, impairment and divestments excludes impairment charges and capital gains and losses arising on disposals of investments which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as: 

+/– Net income/loss before taxes 
– Gains and losses on disposals of Group companies 
– Impairment of Goodwill and long-term assets

Net income/loss before impairment and divestments excludes impairment charges and capital gains and losses arising on disposals of investments which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. This indicator is net of taxation and is defined as: 

+/– Net income/loss 
– Gains and losses on disposals of Group companies, net of taxation 
– Impairment of Goodwill and long-term assets, net of taxation

The EPS (Earnings per Share) before impairment and divestments measures the theoretical profitability per share of stock outstanding based on a net income/loss before impairment and divestments. It is defined as Net income/loss before impairment and divestments attributable to the shareholders of Holcim Ltd divided by the weighted average number of shares outstanding.

The CapEx or CapEx Net (Net Maintenance and Expansion CapEx) measures the cash spent to maintain or expand its asset base. It is defined as: 

+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification) 
+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow 
– Proceeds from sale of property, plant and equipment.

Employee benefits and other operating items reflect the non-cash impact on the operating profit of the employee benefits schemes net of any cash payments, the non-cash impact of the specific business risks provisions net of any cash payments, the non-cash share based compensation expenses and any other non-cash operating expenses.

Change in other receivables and liabilities includes the net change of other receivables and liabilities that are not already disclosed separately in the consolidated statement of cash flows or that are not of a tax or of a financial nature.

The Free Cash Flow after leases (also referred as Free Cash Flow) measures the level of cash generated by the Group after spending cash to maintain or expand its asset base. It is defined as: 

+/– Cash flow from operating activities 
– Net Maintenance and Expansion CapEx 
– Repayment of long-term lease liabilities

The Free Cash Flow margin measures the efficiency of the Group to convert net sales into cash. It is defined as Free Cash Flow after leases divided by net sales.

The Net financial debt (“Net debt”) measures the financial debt of the Group after deduction of the cash. It is defined as: 

+ Financial liabilities (short-term and long-term) including derivative liabilities 
– Cash and cash equivalents 
– Derivative assets (short-term and long-term)

The Net financial debt to Recurring EBITDA ratio is used as an indicator of financial risk and shows the number of years it would take the Group to repay its debt if Recurring EBITDA and net debt are held constant.

The Working Capital days on sales is an efficiency ratio measuring the level of trade accounts receivable, trade accounts payable and inventories in comparison to sales of the current month and the previous months until the respective balance is covered. It is defined as: 

+ Days sales outstanding 
+ Days inventories outstanding 
– Days payables outstanding

The Invested Capital measures total funds invested by shareholders, lenders and any other financing sources. 

It is defined as: 

+ Total shareholders’ equity 
+ Net financial debt 
– Assets classified as held for sale 
+ Liabilities classified as held for sale 
– Current financial receivables 
– Long-term financial investments and other long-term assets

It is defined as: 

+/– Net Operating Profit (loss) (being the Recurring EBIT and share of profit of associates) 
– Income Taxes (determined by applying the Group’s effective tax rate to the Net Operating Profit/loss as defined above)

The ROIC (Return On Invested Capital) measures the Group’s ability to efficiently use Invested Capital. It is defined as Net Operating Profit (loss) After Tax (NOPAT) divided by the average Invested Capital. The average is calculated by adding the Invested Capital at the beginning of the period to that at the end of the period and dividing the sum by 2 (based on a rolling 12-month calculation). In case of material change in scope during the year, the Average Invested Capital is adjusted pro rata temporis.

The cash conversion measures the Group’s ability to convert profits into available cash. It is defined as Free Cash Flow after leases divided by Recurring EBITDA after leases.

Personnel (FTE) measures the number of full time equivalent own personnel (FTE) assigned to functions and tasks.

Net CO₂ emissions are CO₂ emissions from the calcination process of the raw materials and the combustion of traditional kiln and non-kiln fuels. Cementitious materials refer to clinker production volumes, mineral components consumed in cement production and mineral components processed and sold externally.

The absolute CO₂ (thousand metric tons) emissions Scope 1 and Scope 2 divided by millions of net sales.

ECOPact is Holcim's low-carbon concrete product range that delivers equal or better performance than conventional concrete and has at least 30 percent lower CO₂ emissions compared with a local concrete using Ordinary Portland Cement (OPC alternatively known as CEM I) in the same strength class.

ECOPlanet is Holcim's range of low-carbon cement that delivers equal or better performance than conventional cement and has at least at 30 percent lower CO₂ emissions compared to Ordinary Portland Cement (OPC alternatively known as CEM I).

Total volume of freshwater withdrawn by the cement plant divided by the total production of cementitious material.

Number of on-the-job injuries that require a person to stay away from work for a day or more per one million hours worked.

The Sustainability Capital Expenditures with significant positive impact on Process Decarbonization, Clean Energy, Carbon Efficient Construction, Circular Economy, Biodiversity, Air & Water and Communities such as but not limited to carbon capture, waste heat recovery, 3D printing, electrical fleet, calcined clay technology, alternative fuels & raw materials installations.

Waste derived resources is the sum of all waste raw materials and fuels consumed in the production processes as well as recycled materials processed sold externally. This includes alternative raw materials, alternative fuels, industrial mineral components, returned concrete, recycled aggregates and asphalt. Construction Demolition Materials are included in waste derived resources.

CDM recycled volume is generated from construction, renovation, repair and demolition of houses, large building structures, roads, bridges, piers and dams. This includes alternative raw materials, recycled aggregates, asphalt and return concrete reused in Cement, Aggregates, Ready-mix concrete, Asphalt and Concrete Products. CDM is equivalent to construction and demolition waste (CDW) as defined by the EU Waste Framework Directive.

Any initiatives Holcim puts in place to address social issues and to contribute to society that are not primarily motivated by generating a direct financial return to the Group’s business such as but not limited to housing & infrastructure, health, education & skills, environment, cultural and recreational.

Any committed financing instrument drawn and undrawn with a sustainability feature which includes performance-based (sustainability KPI, ESG linked) or use-of-proceed-based products (green, social, transition bonds) incurred by the parent company or consolidated entities.

Green bond is a fixed-income instrument which enables the funding of green eligible projects as defined by the Green Bond Principles and endorsed by the International Capital Markets Association (ICMA). A green bond has a dedicated use of proceeds in projects that are sustainable and socially responsible such as projects in the field of renewable energy, carbon capture, clean transportation, circular economy.

Thermal substitution rate (TSR) corresponds to the relation of thermal energy consumption of alternative fuels to the total amount of thermal energy consumption in the cement kiln system.

Refers to a Metric ton, or 1,000 kg. 

Organic Growth information factors out changes in the scope of consolidation (such as divestments and acquisitions occurring in the current year and the prior year) and currency translation effects (current year figures are converted with prior year exchange rates in order to calculate the currency effects).

Growth in local currency factors in organic growth and acquisitions and divestments by excluding currency translation effects.

The recurring operating costs indicator represents all recurring costs. It is defined as: 

+/– Recurring EBITDA after leases 
– Net sales 
– Share of profit of joint ventures

The Recurring EBITDA (earnings before interest, tax, depreciation and amortization) measures the performance of the Group excluding the impacts of non-recurring items. It is defined as: 

+/– Operating profit/loss (EBIT) 
– Depreciation, amortization and impairment of operating assets 
– Restructuring, litigation and other non-recurring costs

The Recurring EBITDA margin measures the profitability of the Group excluding the impacts of non-recurring items. It is defined as the Recurring EBITDA divided by net sales.

The Recurring EBITDA after leases (earnings before interest, tax, depreciation and amortization) measures the performance of the Group including the impacts of lease depreciation and excluding the impacts of non-recurring items. It is defined as the Recurring EBITDA less the depreciation of right-of-use assets.

The Recurring EBIT is defined as Operating profit/loss (EBIT) adjusted for restructuring, litigation, other non-recurring costs and for impairment of operating assets.

The Recurring EBIT margin measures the profitability of the Group excluding the impacts of restructuring, litigation and other non-recurring costs. It is defined as the Recurring EBIT divided by net sales.

Restructuring, litigation and other non-recurring costs relate to significant items that, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing performance, such as strategic restructuring, major items relating to antitrust fines and other business-related litigation cases.

Profit and loss on disposals and other non-operating items comprise gains or losses on the disposal of material property, plant and equipment, gains or losses on the sale of Group companies, associates and joint ventures, impact of other non-operating items that are not directly related to the Group’s operating activities such as revaluation gains or losses on previously held equity interests, indemnification provisions and disputes with minority shareholders.

The Operating profit/loss (EBIT) before impairment measures the profit earned from the Group’s core business activities excluding impairment charges which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as: 

+/– Operating profit/loss 
– Impairment of Goodwill and long-term assets

Net income/loss before taxes, impairment and divestments excludes impairment charges and capital gains and losses arising on disposals of investments which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. It is defined as: 

+/– Net income/loss before taxes 
– Gains and losses on disposals of Group companies 
– Impairment of Goodwill and long-term assets

Net income/loss before impairment and divestments excludes impairment charges and capital gains and losses arising on disposals of investments which, because of their exceptional nature, cannot be viewed as inherent to the Group’s ongoing activities. This indicator is net of taxation and is defined as: 

+/– Net income/loss 
– Gains and losses on disposals of Group companies, net of taxation 
– Impairment of Goodwill and long-term assets, net of taxation

The EPS (Earnings per Share) before impairment and divestments measures the theoretical profitability per share of stock outstanding based on a net income/loss before impairment and divestments. It is defined as Net income/loss before impairment and divestments attributable to the shareholders of Holcim Ltd divided by the weighted average number of shares outstanding.

The CapEx or CapEx Net (Net Maintenance and Expansion CapEx) measures the cash spent to maintain or expand its asset base. It is defined as: 

+ Expenditure to increase existing or create additional capacity to produce, distribute or provide services for existing products (expansion) or to diversify into new products or markets (diversification) 
+ Expenditure to sustain the functional capacity of a particular component, assembly, equipment, production line or the whole plant, which may or may not generate a change of the resulting cash flow 
– Proceeds from sale of property, plant and equipment.

Employee benefits and other operating items reflect the non-cash impact on the operating profit of the employee benefits schemes net of any cash payments, the non-cash impact of the specific business risks provisions net of any cash payments, the non-cash share based compensation expenses and any other non-cash operating expenses.

Change in other receivables and liabilities includes the net change of other receivables and liabilities that are not already disclosed separately in the consolidated statement of cash flows or that are not of a tax or of a financial nature.

The Free Cash Flow after leases (also referred as Free Cash Flow) measures the level of cash generated by the Group after spending cash to maintain or expand its asset base. It is defined as: 

+/– Cash flow from operating activities 
– Net Maintenance and Expansion CapEx 
– Repayment of long-term lease liabilities

The Free Cash Flow margin measures the efficiency of the Group to convert net sales into cash. It is defined as Free Cash Flow after leases divided by net sales.

The Net financial debt (“Net debt”) measures the financial debt of the Group after deduction of the cash. It is defined as: 

+ Financial liabilities (short-term and long-term) including derivative liabilities 
– Cash and cash equivalents 
– Derivative assets (short-term and long-term)

The Net financial debt to Recurring EBITDA ratio is used as an indicator of financial risk and shows the number of years it would take the Group to repay its debt if Recurring EBITDA and net debt are held constant.

The Working Capital days on sales is an efficiency ratio measuring the level of trade accounts receivable, trade accounts payable and inventories in comparison to sales of the current month and the previous months until the respective balance is covered. It is defined as: 

+ Days sales outstanding 
+ Days inventories outstanding 
– Days payables outstanding

The Invested Capital measures total funds invested by shareholders, lenders and any other financing sources. 

It is defined as: 

+ Total shareholders’ equity 
+ Net financial debt 
– Assets classified as held for sale 
+ Liabilities classified as held for sale 
– Current financial receivables 
– Long-term financial investments and other long-term assets

It is defined as: 

+/– Net Operating Profit (loss) (being the Recurring EBIT and share of profit of associates) 
– Income Taxes (determined by applying the Group’s effective tax rate to the Net Operating Profit/loss as defined above)

The ROIC (Return On Invested Capital) measures the Group’s ability to efficiently use Invested Capital. It is defined as Net Operating Profit (loss) After Tax (NOPAT) divided by the average Invested Capital. The average is calculated by adding the Invested Capital at the beginning of the period to that at the end of the period and dividing the sum by 2 (based on a rolling 12-month calculation). In case of material change in scope during the year, the Average Invested Capital is adjusted pro rata temporis.

The cash conversion measures the Group’s ability to convert profits into available cash. It is defined as Free Cash Flow after leases divided by Recurring EBITDA after leases.

Personnel (FTE) measures the number of full time equivalent own personnel (FTE) assigned to functions and tasks.

Net CO₂ emissions are CO₂ emissions from the calcination process of the raw materials and the combustion of traditional kiln and non-kiln fuels. Cementitious materials refer to clinker production volumes, mineral components consumed in cement production and mineral components processed and sold externally.

The absolute CO₂ (thousand metric tons) emissions Scope 1 and Scope 2 divided by millions of net sales.

ECOPact is Holcim's low-carbon concrete product range that delivers equal or better performance than conventional concrete and has at least 30 percent lower CO₂ emissions compared with a local concrete using Ordinary Portland Cement (OPC alternatively known as CEM I) in the same strength class.

ECOPlanet is Holcim's range of low-carbon cement that delivers equal or better performance than conventional cement and has at least at 30 percent lower CO₂ emissions compared to Ordinary Portland Cement (OPC alternatively known as CEM I).

Total volume of freshwater withdrawn by the cement plant divided by the total production of cementitious material.

Number of on-the-job injuries that require a person to stay away from work for a day or more per one million hours worked.

The Sustainability Capital Expenditures with significant positive impact on Process Decarbonization, Clean Energy, Carbon Efficient Construction, Circular Economy, Biodiversity, Air & Water and Communities such as but not limited to carbon capture, waste heat recovery, 3D printing, electrical fleet, calcined clay technology, alternative fuels & raw materials installations.

Waste derived resources is the sum of all waste raw materials and fuels consumed in the production processes as well as recycled materials processed sold externally. This includes alternative raw materials, alternative fuels, industrial mineral components, returned concrete, recycled aggregates and asphalt. Construction Demolition Materials are included in waste derived resources.

CDM recycled volume is generated from construction, renovation, repair and demolition of houses, large building structures, roads, bridges, piers and dams. This includes alternative raw materials, recycled aggregates, asphalt and return concrete reused in Cement, Aggregates, Ready-mix concrete, Asphalt and Concrete Products. CDM is equivalent to construction and demolition waste (CDW) as defined by the EU Waste Framework Directive.

Any initiatives Holcim puts in place to address social issues and to contribute to society that are not primarily motivated by generating a direct financial return to the Group’s business such as but not limited to housing & infrastructure, health, education & skills, environment, cultural and recreational.

Any committed financing instrument drawn and undrawn with a sustainability feature which includes performance-based (sustainability KPI, ESG linked) or use-of-proceed-based products (green, social, transition bonds) incurred by the parent company or consolidated entities.

Green bond is a fixed-income instrument which enables the funding of green eligible projects as defined by the Green Bond Principles and endorsed by the International Capital Markets Association (ICMA). A green bond has a dedicated use of proceeds in projects that are sustainable and socially responsible such as projects in the field of renewable energy, carbon capture, clean transportation, circular economy.

Thermal substitution rate (TSR) corresponds to the relation of thermal energy consumption of alternative fuels to the total amount of thermal energy consumption in the cement kiln system.

Refers to a Metric ton, or 1,000 kg.