Continued Profitable Growth in Q3 with Record Recurring EBIT

• Q3 net sales of CHF 7,340m, +4.3% organic growth
• Record Q3 recurring EBIT of CHF 1’600m
• New roofing systems ambition to reach above USD 6 billion in net sales and above USD 1.3 billion in EBIT by 2026
• 20% reduction of CO₂ per net sales in 9M 2023
• Industry-leading profitability, upgrading full-year guidance for recurring EBIT margin to above 17%

Jan Jenisch, Chairman and CEO: “I thank all members of the Holcim family for delivering profitable growth in Q3 despite challenging economic conditions, marked by softer demand in some markets and foreign exchange headwinds. This is a testimony to our teams’ resilience and efforts across all our markets to lead the transition to sustainable building.

“Q3 confirms Holcim’s strong earnings profile, with broad-based growth drivers delivering another increase in profitability. This performance gives us the confidence to upgrade our 2023 guidance to an industry-leading recurring EBIT margin of above 17% for the year, and advance our roofing systems ambition to reach above USD 6 billion in net sales and USD 1.3 billion in EBIT by 2026.

“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.”
 

Performance overview Q3

Performance overview 9M

Continued profitable growth

Profitable growth continued in Q3 2023 despite economic headwinds. Net sales were CHF 7,340 million, up 4.3% organically compared to the prior-year period. Net sales over the first nine months of 2023 were CHF 20,407 million, or 6.2% higher organically than in the prior-year period.

Recurring EBIT reached a record CHF 1,600 million in the third quarter of 2023, a 14.1% rise on an organic basis compared to the prior-year period. The absolute CHF 49 million increase in recurring EBIT versus the prior-year period came despite softer demand in some markets and a negative foreign exchange impact of CHF 157 million. Recurring EBIT for the nine months was CHF 3,643 million, an increase of 13.8% organically. Holcim’s recurring EBIT margin for the first nine months is at a record 17.9%, up 1.5 percentage points. Holcim has upgraded its 2023 recurring EBIT margin guidance for the full year to above 17%, up from above 16%.

New ambition for roofing systems

Advancing its leadership in roofing systems, Holcim announced its new ambition to reach above USD 6 billion in net sales and above USD 1.3 billion 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 state-of-the-art 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 expanding its advanced roofing systems in Europe and Latin America.

Investing for growth

Holcim 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.

Accelerating climate action

Decarbonizing its building solutions, Holcim has reduced its CO₂ per net sales by 43% since 2020. Accelerating green growth, ECOPact low-carbon concrete accounted for 19% of Holcim’s ready-mix net sales in the first nine months, and is on track to be a CHF 1 billion brand this year. ECOPlanet low-carbon cement accounted for 19% of cement net sales in the first nine months, on course to becoming a CHF 2 billion brand this year. Holcim increased its recycling of construction demolition materials by 17% in the first nine months compared to the prior-year period, and is driving circular construction with the scale-up of its ECOCycle® technology.

In the third quarter, Holcim secured a sixth European Union innovation fund grant for the development of carbon capture, utilization 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. This is a further step on Holcim’s decarbonization journey, and its commitment to invest CHF 2 billion by 2030 in carbon capture, utilization and storage technology and to capture 5 million tons of CO₂ annually by 2030.

Upgrading 2023 guidance

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%
• Industry-leading recurring EBIT margin above 17%, up from above 16%
• Free Cash Flow after leases of around CHF 3 billion
• Reduction of CO₂ per Net Sales above 10%

Key Group figures 

Segment performance

North America

In the first nine months, North America delivered record net sales and recurring EBIT, leading to a recurring EBIT margin of 21.7%. There was an over-proportional organic growth of 19.8% in recurring EBIT over the same timeframe, with good performance expected to continue in Q4.

Latin America

The third quarter was Latin America’s thirteenth consecutive quarter of profitable organic growth, with a strong reduction in CO₂ per ton of cementitious material. Strong performance in Mexico was driven by demand for infrastructure projects. Holcim sees the good performance continuing in Q4. 

Europe

Holcim reported a strong increase in profitability in Europe for the first nine months of the year, with strong margin expansion and record recurring EBIT. The increase in profitability was broad-based across all key markets and decarbonization progress has accelerated.

Asia, Middle East & Africa

In Asia, Middle East & Africa, Holcim delivered broad-based profitable organic growth in the first nine months, with strong margin expansion of 5.5 percentage points despite a soft market in China. These strong trends are expected to continue in the fourth quarter.

Solutions & Products

Within Solutions & Products, underlying market demand in the US and Europe is healthy, and strong growth in roofing is expected in the fourth quarter. For Q3, Solutions & Products recorded a margin improvement in roofing and achieved a positive price over cost.

Reconciliation to Group accounts

Reconciling measures of profit and loss:

Alternative Performance Measure definitions

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

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