Record performance and successful transformation in 2022

• Record performance, from net sales of CHF 29,189m (+12.9% LFL) to Recurring EBIT of CHF 4,752m (+7.2% LFL)
• Record financial results with EPS of CHF 4.96¹ and Free cash flow² of CHF 3,544m
• Accelerated growth of Solutions & Products, already reaching 19% of Group net sales
• Expansion in the most attractive North American market representing 35%³ of Group net sales
• Accelerating green growth with 21% reduction of CO₂ per net sales versus 2021
• Board proposes 14% increase in dividend to CHF 2.50 per share, strong 2023 outlook confirmed

Performance overview

Jan Jenisch, CEO: “2022 was a record year for Holcim. My sincere thanks goes to our 60,000 colleagues worldwide who made this possible. They delivered record performance, navigating challenges from geopolitical uncertainty to inflationary pressure, to keep our customers running at all times. 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.

“In 2022, we delivered record financial results with CHF 29.2 billion in net sales, CHF 4.8 billion in Recurring EBIT, 9.5% ROIC and a record leverage ratio of 0.9x. Holcim has never been stronger. This gives us the freedom to invest in our future and further accelerate green growth with continued acquisitions and the ongoing decarbonization and digitalization of our operations.

“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.”

Record net sales and Recurring EBIT

Net sales of CHF 29,189 million for 2022 were up +12.9% on a like-for-like basis compared to the prior year. The increase was driven by the fast expansion of Solutions & Products, which grew by 54% compared to the prior year.

Recurring EBIT reached a record CHF 4,752 million for 2022, up +7.2% on a like-for-like basis compared to the prior year. 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 CHF 3,308 million, up +44.0% compared to the prior year. Reported earnings per share reached CHF 5.48, 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 CHF 4.96.

Free Cash Flow after leases and before the DOJ resolution reached CHF 3,544 million, or a cash conversion ratio of 54%.

Holcim’s net financial debt was CHF 6,032 million at the end of 2022 for a record-low leverage ratio of 0.9x.

The Group’s return on invested capital for 2022 was 9.5%, in line with our Strategy 2025 target of 10%.

Successful transformation

Holcim 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.

Continued expansion in roofing

With the announced acquisition of Duro-Last in February 2023, roofing and insulation businesses are on track to reach pro-forma net sales of USD 4 billion in 2023, or 10% of the USD 40 billion 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.

Delivering high value, system selling represents around 80% of Holcim’s sales, from full roof design and insulation to installation systems. Holcim is positioned for continued growth in the resilient repair & refurbishment market, with over 70% of sales from re-roofing. With the successful integration of its roofing acquisitions, Holcim has generated a significant profitability increase in this business leading to an enterprise value to EBITDA multiple⁵ of 7x.

Leading in sustainability

Holcim 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.

Recognizing the scalability of its technologies, Holcim was selected for two investments from the European Union Innovation Fund for its breakthrough Carbon Capture Utilization and Storage projects in Germany and Poland, for a total of EUR 328 million. The company was recognized as a global sustainability leader with a CDP “Double-A” ranking in Climate and Water, one of 15 companies in Europe out of 15,000. Its ESG profile reached an industry-leading ranking with Moody’s, placing first in its sector with a score of 71/100. Continuing to invest in sustainability, Holcim’s Green CAPEX reached CHF 403 million, 15% higher than in 2021 and 28% of the 2022 total. Continuing its rigorous science-driven approach, Holcim upgraded its 2030 net-zero targets to be in line with the 1.5℃ scenario, and validated them with the Science Based Targets initiative (SBTi).

Dividend increase and strong outlook confirmed

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.

Holcim 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 CHF 3 billion
• Reduction of CO₂ per net sales by over 10%

Key Group figures

Regional performance

Region Asia Pacific
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.

Region Europe
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.

Region Latin America
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.

Region Middle East Africa
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.

Region North America
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.

Other Profit & Loss Items

Restructuring, litigation and other non-recurring costs stood at CHF 846 million, impacted by the resolution with the US Department of Justice (DOJ), compared to CHF 194 million in 2021.

Net financial expenses for 2022 showed double-digit improvement this year, at CHF 459 million versus CHF 556 million in the prior year.

The income tax rate excluding the DOJ resolution and before impairment and divestments was 25%.

Net income (Group share) increased by +44.0% to CHF 3,308 million and EPS, before impairment, divestments and resolution with the DOJ, was up +24.6% to CHF 4.96 for 2022.

Net capital expenditure for 2022 was CHF 1,435 million.

Reconciliation to Group accounts

Reconciling measures of profit and loss to the Holcim Group’s consolidated statement of income:

Reconciliation of Free Cash Flow after leases to the Holcim Group’s Consolidated Statement of Cash Flows:

Reconciliation of Net financial debt to the Holcim Group’s consolidated statement of financial position:

Additional information

Alternative Performance definitions
Some Alternative Performance measures are used in this release to help describe the performance of Holcim. A full set of these Alternative Performance definitions can be found on our website.

Analyst presentation and Integrated Annual Report
The analyst presentation of the results and the Holcim 2022 Integrated Annual Report are available on our website.

Media conference: 09:00 CET
Analyst conference: 11:00 CET
 

¹ Before impairment, divestments and resolution with the US Department of Justice (DOJ)
² After leases and before DOJ resolution
³ Net sales to external customers, excluding trading activities
⁴ Before DOJ resolution
⁵ 2022 EBITDA on a pro forma basis, for Elevate, Malarkey, SES and PSNA