Record results in 2023, achieving Strategy 2025 ahead of plan
- Full-year net sales of CHF 27,009m, recurring EBIT of CHF 4,760m and industry-leading recurring EBIT margin of 17.6%
- Free cash flow after leases of CHF 3,705m
- Earnings per share1 up 9% to CHF 5.42
- Proposed 12% increase in dividend to CHF 2.80 per share
- New share buyback of CHF 1 bn in 2024
- Strong 2024 outlook
| Group Q4 | 2023 | 2022 | ±% | ±% organic growth |
| Net sales (CHFm) | 6,602 | 6,463 | +2.1 | +5.5 |
| Recurring EBIT (CHFm) | 1,117 | 1,028 | +8.7 | +17.9 |
Jan Jenisch, Chairman and CEO: “With record results in 2023, Holcim is stronger than ever, achieving Strategy 2025 two years ahead of plan. Thanks to our empowered and accountable performance culture, our 63,448 colleagues worldwide went above and beyond to deliver advanced branded solutions for our customers. Our “multi-billion Swiss franc brands” from ECOPact and Elevate to Fuerte now represent 30 percent of our net sales. We accelerated our leadership in sustainability, reducing our CO2 per net sales by 20% compared to 2022, while making decarbonization a driver of profitable growth and driving fast-paced growth in circular construction, with a 24% increase in recycled construction demolition materials in 2023.
“Moving our business from volume to value, we have successfully shifted to the most attractive markets with strong growth drivers and margins. Through our disciplined M&A approach for superior value creation, Holcim delivered 97 value-accretive transactions since 2018, including six major acquisitions in Solutions & Products and 72 bolt-ons, of which 80% were family-owned companies bringing significant synergy upside, while closing 19 divestments.
“Thanks to our broad-based, profitable organic growth, we achieved a superior earnings profile, with industry-leading margins including a recurring EBIT margin of 17.6% and record free cash flow of CHF 3.7 billion. As we move forward in 2024, we are committed to another year of record results and value creation for all of our stakeholders. I sincerely thank all our colleagues around the world for making Holcim the great company it is today.”
| Group Full-Year 2023 | 2023 | 2022 | ±% | ±% organic growth |
| Net sales (CHFm) | 27,009 | 29,189 | -7.5 | +6.1 |
| Recurring EBIT (CHFm) | 4,760 | 4,752 | +0.2 | +14.7 |
| Recurring EBIT margin (%) | 17.6 | 16.3 | ||
| Operating profit (CHFm) | 4,577 | 3,221 | +42.1 | |
| Net income, Group share (CHFm) | 3,060 | 3,308 | -7.5 | |
| Net income before impairment and divestments, Group share (CHFm) | 3,089 | 2,218 | +39.3 | |
| EPS (CHF) | 5.37 | 5.48 | -2.0 | |
| EPS before impairment and divestments (CHF)2 | 5.42 | 4.96 | +9.2 | |
| Free Cash Flow after leases (CHFm) | 3,705 | 2,765 | +34.0 | |
| Free Cash Flow after leases (CHFm)² | 3,705 | 3,544 | +4.5 | |
| Net financial debt (CHFm) | 7,896 | 6,032 | +30.9 |
Profitable growth, significant cash generation
In the fourth quarter, recurring EBIT rose 17.9% organically compared to the prior-year period to reach a record CHF 1’117 million. Fourth-quarter net sales of CHF 6,602 million rose 5.5% on an organic basis versus the fourth quarter of 2022. Holcim’s profitable growth more than offset strong foreign exchange effects, with fourth-quarter net sales up 2.1% and recurring EBIT up 8.7% in Swiss franc versus the prior-year period.
Full-year net sales of CHF 27,009 million for 2023 were up 6.1% on an organic basis compared to the prior year. Recurring EBIT reached a record CHF 4,760 million for 2023, up 14.7% organically compared to the prior year. This record result was driven by positive price over cost in cement, aggregates and ready-mix.
Free cash flow after leases for the full year rose 4.5% to reach a record CHF 3,705 million, with a record cash conversion ratio of 58%.
Earnings per share before impairment and divestments increased by 9% to a record CHF 5.42. Since 2018, Holcim has delivered a compound annual growth rate (CAGR) of 15.6% in earnings per share before impairment and divestments.
Superior earnings profile, achieving Strategy 2025 ahead of plan
Holcim’s new level of financial performance is driven by its superior earnings profile, based on its industry-leading margins, strong balance sheet and deeply embedded and accountable performance culture with more than 500 P&L leaders empowered for customer-centric decision-making.
In 2023, Holcim’s recurring EBIT margin reached an industry-leading 17.6%. This strong performance reflects the Group’s successful shift from volume to value. Holcim also reported an industry-leading free cash flow margin of 13.7% for the year, up significantly from 6.2% in 2018.
Holcim’s return on invested capital (ROIC) for 2023 increased to 10.6% (2022: 9.5%). Its net financial debt was CHF 7,896 million at the end of 2023 for a net debt leverage ratio of 1.2x.
With these results, Holcim is achieving Strategy 2025 two years ahead of plan.
Growing in the most attractive markets
In 2023, Holcim grew fast in the most attractive markets. North America accounted for 39% of Group net sales3 and Europe for 34%, up from 22% and 28% respectively in 2018. Solutions & Products has expanded rapidly to account for 21% of Group net sales in 2023, up from 9% in 2018, and putting the company on track to reach its strategic goal of 30% of net sales from the segment by 2025. Net sales to external customers in Solutions & Products reached CHF 5,608 million in 2023.
Solutions & Products grew further in 2023 through 11 acquisitions, including the iconic Duro-Last brand. Holcim continued to expand its aggregates and ready-mix concrete portfolio with 17 bolt-on acquisitions, delivering significant growth and synergies. In addition to these 28 acquisitions, Holcim signed agreements to sell its businesses in Uganda, South Africa and Tanzania to further sharpen its geographic footprint.
On 28 January 2024, Holcim announced its intent to list its North American business in the US with a full capital market separation. It will be subject to shareholder approval at an Extraordinary General Meeting, as well as other customary approvals. Holcim post US listing of North America is expected to remain included in the Swiss Market Index.
Advanced branded solutions
Offering its customers the most advanced building solutions, Holcim generated 30% of net sales in 2023 from its “multi-billion Swiss franc brands”. ECOPlanet low-carbon cement became a “two-billion CHF brand” by net sales in 2023, reaching 19% of Group cement net sales, up significantly from 7% in 2022. ECOPact low-carbon concrete is now a “one-billion CHF brand” and reached 19% of Group ready-mix net sales in 2023, compared to 13% in 2022.
Fuerte and Apasco are flagship brands for Holcim in Latin America, accounting for over CHF 1 billion in net sales in 2023. In North America, OneCem, the leading US cement brand, and Elevate, the most advanced roofing system brand, each became “two-billion CHF brands”.
Leading in sustainability
Holcim has continued to advance decarbonization as a driver of profitable growth, reducing CO2 per net sales by 20% in 2023 and by a total of 42% since 2020. In 2023, Holcim announced its goal to offer 8 million tons of net-zero cement per annum by 2030. This will be enabled by Holcim’s Carbon Capture, Utilization and Storage projects, six of which have now been selected for grants from the European Union Innovation Fund to capture 5 million tons of CO2 per annum by 2030.
Driving fast-paced growth in circular construction, Holcim launched its proprietary ECOCycle® technology platform to recycle Construction Demolition Materials (CDM) into new building materials. It recycled 8.4 million tons of CDM in 2023, up 24% from the prior year.
In 2023, Holcim continued to make progress towards its net-zero 2050 targets aligned with a 1.5℃ trajectory, validated by the Science Based Targets initiative (SBTi). Advancing its leadership in nature, Holcim was selected as one of only 17 companies worldwide to pilot the world’s first science-based targets for nature with the Science-Based Targets Network (SBTN).
Profitable growth to continue with attractive returns
The strong operational performance of 2023 with record free cash flow and a strong balance sheet, combined with a positive outlook for 2024, allow Holcim to return additional cash to shareholders. The Board of Directors therefore proposes a 12% increase in dividend to CHF 2.80 per registered share.
Holcim plans a share buyback program for a total amount of CHF 1 billion until year-end 2024, with the share cancellation to be approved at the Annual General Meeting in 2025. The buyback will be funded from available cash on the balance sheet. Holcim remains committed to a strong investment grade credit rating. The share buyback will be executed on a 2nd trading line on the SIX Swiss Exchange and is subject to the necessary regulatory approvals.
Outlook and guidance
Holcim delivered superior performance quarter by quarter in 2023 and has achieved an industry-leading earnings profile, despite challenging market conditions. Holcim is best positioned to capitalize on the growth opportunities ahead and expects continued profitable growth in 2024 with:
- Organic sales growth above 4%, additional growth from M&A of above 2%
- Over-proportional growth in recurring EBIT
- Increase in recurring EBIT margin to 18%
- Free cash flow of above CHF 3 billion
- 20% growth in recycled Construction Demolition Materials to 10 million tons
- Progress towards US listing of North American business
Key Group figures
| Group Q4 | 2023 | 2022 | ±% | ±% organic growth |
| Net sales (CHFm) | 6,602 | 6,463 | +2.1 | +5.5 |
| Recurring EBIT (CHFm) | 1,117 | 1,028 | +8.7 | +17.9 |
| Recurring EBIT margin (%) | 16.9 | 15.9 |
| Group Q4 | 2023 | 2022 | ±% | ±% organic growth |
| Net sales (CHFm) | 27,009 | 29,189 | -7.5 | +6.1 |
| Recurring EBIT (CHFm) | 4,760 | 4,752 | +0.2 | +14.7 |
| Recurring EBIT margin (%) | 17.6 | 16.3 | ||
| Operating profit (CHFm) | 4,577 | 3,221 | +42.1 | |
| Net income, Group share (CHFm) | 3,060 | 3,308 | -7.5 | |
| EPS (CHF) | 5.37 | 5.48 | -2.0 | |
| EPS before impairment and divestments (CHF) | 5.42 | 3.66 | +48.0 | |
| EPS before impairment, divestments and DOJ resolution (CHF) | 5.42 | 4.96 | +9.2 | |
| Free Cash Flow after leases (CHFm) | 3,705 | 2,765 | +34.0 | |
| Net financial debt (CHFm) | 7,896 | 6,032 | +30.9 |
| Group Full Year Results by Product Line | 2023 | 2022 | ±% | ±% organic growth |
| Net sales of Cement (CHFm) | 13,758 | 16,340 | -15.8 | +10.4 |
| Recurring EBIT of Cement (CHFm) | 3,301 | 3,301 | 0.0 | +19.4 |
| Recurring EBIT margin of Cement (%) | 24.0 | 20.2 | ||
| Net sales of Aggregates (CHFm) | 4,402 | 4,195 | +4.9 | +8.4 |
| Recurring EBIT of Aggregates (CHFm) | 644 | 646 | -0.2 | +10.3 |
| Recurring EBIT margin of Aggregates (%) | 14.6 | 15.4 | ||
| Net sales of Ready-Mix Concrete (CHFm) | 5,979 | 5,748 | +4.0 | +10.6 |
| Recurring EBIT of Ready-Mix Concrete (CHFm) | 241 | 137 | +75.6 | +68.1 |
| Recurring EBIT margin of Ready-Mix Concrete (%) | 4.0 | 2.4 | ||
| Net sales of Solutions & Products (CHFm) | 5,632 | 5,550 | +1.5 | -8.6 |
| Recurring EBIT of Solutions & Products (CHFm) | 574 | 668 | -14.0 | -12.8 |
| Recurring EBIT margin of Solutions & Products (%) | 10.2 | 12.0 |
Segment performance
North America
Record results in net sales and recurring EBIT drove a strong recurring EBIT margin of 21.7%. Optimized distribution led to strong cement sales in the US, while all product lines saw significant price over cost. Holcim expanded its operational footprint over the year with 3 bolt-on acquisitions in aggregates and ready-mix.
| North America Full Year | 2023 | 2022 | ±% | ±% organic growth |
| Net sales to external customers (CHFm) | 6,711 | 6,336 | +5.9 | +12.6 |
| Recurring EBIT (CHFm) | 1,483 | 1,353 | +9.6 | +18.1 |
| Recurring EBIT margin (%) | 21.7 | 20.9 |
Latin America
Latin America delivered its 14th consecutive quarter of profitable organic growth in the fourth quarter. Record recurring EBIT led to a strong recurring EBIT margin of 34.1% for the full year. Strong performance across the region was led by Mexico. Latin America achieved significant CO2 reduction through increased use of alternative fuels and low-carbon products.
| Latin America Full Year | 2023 | 2022 | ±% | ±% organic growth |
| Net sales to external customers (CHFm) | 2,861 | 2,853 | +0.3 | +20.8 |
| Recurring EBIT (CHFm) | 985 | 956 | +3.0 | |
| Recurring EBIT margin (%) | 34.1 | 33.0 |
Europe
Europe delivered record results in net sales and recurring EBIT, with a strong recurring EBIT margin of 15.8%. The region is leading on circular construction, with more than 90 recycling centers in operation. Europe also made 12 bolt-on acquisitions in aggregates, ready-mix and construction demolition materials. Progress on decarbonization accelerated over the year, from low-carbon formulations to carbon capture, utilization and storage technologies.
| Europe Full Year | 2023 | 2022 | ±% | ±% organic growth |
| Net sales to external customers (CHFm) | 7,284 | 6,875 | +6.0 | +7.4 |
| Recurring EBIT (CHFm) | 1,202 | 981 | +22.5 | +24.8 |
| Recurring EBIT margin (%) | 15.8 | 13.6 |
Asia, Middle East & Africa
Asia, Middle East & Africa delivered a significant recurring EBIT margin expansion of 5.3 percentage points to 21.2%. There were strong results across the region, led by Australia. Two bolt-on acquisitions were made in Australia and New Zealand. Holcim also signed the divestments of South Africa, Uganda and Tanzania.
| Asia, Middle East & Africa Full Year | 2023 | 2022 | ±% | ±% organic growth |
| Net sales to external customers (CHFm) | 3,982 | 6,982 | -43.0 | +5.8 |
| Recurring EBIT (CHFm) | 898 | 1,144 | -21.5 | +18.3 |
| Recurring EBIT margin (%) | 21.2 | 15.9 |
Solutions & Products
Solutions & Products saw demand recovery and margin expansion in the fourth quarter. Advanced mortars in Europe delivered strong growth over 2023. The business expanded with 11 acquisitions, including the iconic US roofing brand Duro-Last. Positive growth momentum in Q4 is set to continue into 2024.
| Solutions & Products Full Year | 2023 | 2022 | ±% | ±% organic growth |
| Net sales to external customers (CHFm) | 5,608 | 5,518 | +1.6 | -8.6 |
| Recurring EBIT (CHFm) | 614 | 685 | -10.3 | -11.8 |
| Recurring EBIT margin (%) | 10.9 | 12.3 |
Other Profit & Loss Items
Restructuring, litigation and other non-recurring costs stood at CHF 84 million, compared to CHF 846 million in 2022. 2022 was impacted by the resolution with the US Department of Justice (DOJ).
Net financial expenses for 2023 were CHF 499 million versus CHF 459 million in the prior year.
The effective income tax rate before impairment and divestments was 24%.
Net income Group share decreased by 7.5% to CHF 3,060 million and EPS, before impairment and divestments, was up 9.2%4 to CHF 5.42 for 2023.
Net capital expenditure for 2023 was CHF 1,408 million.
Reconciliation to Group accounts
Reconciling measures of profit and loss to the Holcim Group’s consolidated statement of income:
| Million CHF | 2023 | 2022 |
| Net sales | 27,009 | 29,189 |
| Recurring Operating costs | (20,935) | (22,942) |
| Share of profit of joint ventures | 304 | 308 |
| Recurring EBITDA after leases | 6,378 | 6,554 |
| Depreciation and amortization of property, plant and equipment, intangible and other long-term assets | (1,618) | (1,802) |
| Recurring EBIT | 4,760 | 4,752 |
| Restructuring, litigation and other non-recurring costs | (84) | (846) |
| Impairment of operating assets | (99) | (685) |
| Operating profit | 4,577 | 3,221 |
| Million CHF | 2023 | 2022 |
| Recurring EBITDA after leases | 6,378 | 6,554 |
| Depreciation of right-of-use assets | 359 | 358 |
| Recurring EBITDA | 6,737 | 6,912 |
| Million CHF | 2023 | 2022 |
| Net income before taxes, impairment and divestments | 4,218 | 3,513 |
| Impairment of goodwill and long-term assets | (99) | (719) |
| Gain on disposals of Group companies | 55 | 1,761 |
| Net income before taxes | 4,174 | 4,555 |
| Million CHF | 2023 | 2022 |
| Net income before impairment and divestments Group share | 3,089 | 2,218 |
| Net income before impairment and divestments Non-controlling interests | 116 | 228 |
| Net income before impairment and divestments | 3,205 | 2,446 |
| Impairment of goodwill and long-term assets, net of taxation | (82) | (682) |
| Gain on disposals of Group companies, net of taxation | 53 | 1,764 |
| Net income | 3,176 | 3,528 |
| EPS before impairment and divestments in CHF | 5.42 | 3.66 |
Reconciliation of Free Cash Flow after leases to the Holcim Group’s Consolidated Statement of Cash Flows:
| Million CHF | 2023 | 2022 |
| Cash flow from operating activities | 5,470 | 4,562 |
| Purchase of property, plant and equipment | (1,505) | (1,549) |
| Disposal of property, plant and equipment | 96 | 114 |
| Repayment of long-term lease liabilities | (357) | (362) |
| Free Cash Flow after leases | 3,705 | 2,765 |
Reconciliation of Net financial debt to the Holcim Group’s consolidated statement of financial position:
| Million CHF | 2023 | 2022 |
| Current financial liabilities | 1,416 | 1,655 |
| Long-term financial liabilities | 12,665 | 14,475 |
| Cash and cash equivalents | (6,082) | (9,824) |
| Short-term derivative assets | (13) | (118) |
| Long-term derivative assets | (90) | (157) |
| Net financial debt | 7,896 | 6,032 |
Alternative Performance Measures 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 2023 Integrated Annual Report are available on our website.
Media conference: 09:00 CET
Analyst conference: 11:00 CET
1 Before impairment and divestments
2 2022 before Department of Justice (DOJ) resolution
3 Net sales to external customers excluding trading activities
4 2022 before DOJ resolution
About Holcim
Holcim is a global leader in innovative and sustainable building solutions with net sales of CHF 27.0 billion in 2023. Driven by our purpose to build progress for people and the planet, our 63,448 employees are on a mission to decarbonize building, while improving living standards for all. We empower our customers across all regions to build better with less, with a broad range of low-carbon and circular solutions, from ECOPact and ECOPlanet to our circular technology platform ECOCycle®. Through innovative systems, from Elevate roofing to PRB insulation, Holcim makes buildings more sustainable in use, driving energy efficiency and green retrofitting. With sustainability at the core of our strategy, we are on the way to becoming a net-zero company with 1.5°C targets validated by SBTi.
Learn more about Holcim on www.holcim.com, and by following us on LinkedIn and Twitter
Important disclaimer – forward-looking statements:
This document contains forward-looking statements. Such forward-looking statements do not constitute forecasts regarding results or any other performance indicator, but rather trends or targets, as the case may be, including with respect to plans, initiatives, events, products, solutions and services, their development and potential. Although Holcim believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions as at the time of publishing this document, investors are cautioned that these statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are difficult to predict and generally beyond the control of Holcim, including but not limited to the risks described in the Holcim's annual report available on its website (www.holcim.com) and uncertainties related to the market conditions and the implementation of our plans. Accordingly, we caution you against relying on forward-looking statements. Holcim does not undertake to provide updates of these forward-looking statements.
This document contains inside information within the meaning of the Market Abuse Regulation (EU) (No 596/2014).
