Holcim sees 4% organic growth in 3Q23 sales
Holcim reported net sales of CHF7340m (US$8147m) in the third quarter of 2023, down 8.8 per cent in absolute figures but up 4.3 per cent organically when compared with the 3Q22 when net sales reached CHF8045m.
Recurring EBIT increased by 3.1 per cent (14.1 per cent organically) to CHF1600m in the 3Q23 from CHF1551m in the 3Q22.
Jan Jenisch, Holcim chairman and CEO, said: “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 per cent for the year, and advance our roofing systems ambition to reach above US$6bn in net sales and US$1.3bn in EBIT by 2026.
“Leading the transition to sustainable building, we reduced our CO₂ per net sales by 20 per cent 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 per cent 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, utilisation and storage projects and secured a sixth European Union innovation fund grant, partnering to scale up our impact,” he continued.
January-September 2023
In the first nine months of 2023 Holcim’s net sales declined 10.2 per cent in absolute figures but were up 6.2 per cent organically, to CHF20.407m from CHF22,725m in the 9M22.
Net sales of cement saw a 19.8 per cent drop (+11.5 per cent organic) to CHF10,392m in the 9M23 from CHF12,956m in the 9M22. Aggregates net sales increased 5.8 per cent (+9.7 per cent organic) to CHF3347m from CHF3164m over the same period, while net sales of concrete were up by four per cent (+11.7 per cent organic) to CHF4509m from CHF4336m. Net sales of Solutions and Productions slipped by 0.8 per cent (-12 per cent organic) to CHF4250m in the 9M23 from CHF4283m in the previous year’s nine months.
Recurring EBIT in the 9M23 showed a 2.2 per cent drop but 13.8 per cent organic growth to CHF3643m from CHF3724m in the year-ago period.
Recurring EBIT of cement in the 9M23 slipped 2.8 per cent (+20.6 per cent organic) to CHF2509m from CHF2580m in the 9M22. The recurring EBIT margin improved from 19.9 per cent in the 9M22 to 24.1 per cent one year later. In aggregates recurring EBIT increased 5.6 per cent (+12.8 per cent organic) to CHF493m from CHF467m in the same period. Ready-mix concrete recurring EBIT advanced 66.5 per cent (+59.5 per cent organic) to CHF190m from CHF114m, resulting in a corresponding margin improvement to 4.2 per cent from 2.6 per cent. Recurring EBIT of Solutions and Products declined 19.9 per cent (-22.6 per cent) to CHF451m in the 9M23 from CHF563m in the year-ago period. As a result, the recurring EBIT margin slipped from 13.2 per cent in the 9M22 to 10.6 per cent in the 9M23.
Investment continues
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.
2023 outlook
Holcim is confirming and upgrading its full-year guidance, forecasting organic net sales growth of over six per cent with organic recurring EBIT growth surpassing the 10 per cent mark. It expects its recurring EBIT margin to increase to above 17 per cent.
In addition, free cash flow after leases is expected to be around CHF3bn. In terms of its carbon emissions, it predicts a reduction of CO2 per net sales above 10 per cent.
