Holcim has announced record profitable growth in the first half of 2024. Net sales for the six-month period came in at CHF12,813m (US$14,516m), down 1.9 per cent YoY from CHF13,067m in the same period a year earlier but up 1.6 per cent in local currency terms. Recurring EBIT over the same time frame advanced 12.7 per cent in local currency from CHF2043m to CHF2210m, with the recurring EBIT margin coming in at 17.2 per cent in the 1H24 compared to 15.6 per cent in the 1H23. Operating profit in the opening half of 2024 stood at CHF2036m, marking a 3.3 per cent advance YoY from CHF1970m.
Holcim’s earnings per share before impairment and divestments in the 1H24 were CHF2.44, 10 per cent up on the prior-year period. Free cash flow after leases was CHF48m in the 1H24, compared to CHF79m in the 1H23, putting the company on track to achieve full-year 2024 guidance of above CHF3bn.
The six-month period saw four highly-accretive acquisitions in Europe to accelerate circular construction – in Belgium, Switzerland, the UK and Germany – scaling up Holcim’s ECOCycle® recycling technology. These included three acquisitions in Europe and Latin America to expand its Solutions & Products business, as well as bolt-on acquisitions in North America, Latin America and Europe to strengthen its aggregates and ready-mixed concrete sectors. Holcim also closed four divestments in the 1H24.
In North America Holcim reached a new level of profitability, with an increase in the 1H24 recurring EBIT margin of 240 basis points to 19.4 per cent. According to the company, there are strong market fundamentals in place, with Holcim having secured more than 100 infrastructure projects between 2023 and 2026. A strong performance is expected in 2024 with the first half of the year seeing net sales to external customers of CHF2913m and recurring EBIT of CHF576m, the latter seeing a 9.2 per cent advance YoY and 12.2 per cent growth in local currency terms.
In Latin America Holcim delivered its 16th consecutive quarter of profitable growth, with an outstanding 1H24 recurring EBIT margin of 35.6 per cent. Near shoring trends across the region are driving infrastructure and commercial investments, according to the company, which reported a 3.1 per cent YoY advance in net sales to external customers in the 1H24 to CHF1447m and an 6.3 per cent expansion in recurring EBIT to CHF519m.
The 2Q24 marked Europe’s seventh consecutive quarter of profitable growth for Holcim. In the 1H24 the recurring EBIT margin expanded significantly by 240 basis points to 16.2 per cent, with sustainability driving profitable growth. There were six bolt-on acquisitions, in aggregates, ready-mix, construction demolition materials and recycling solutions. The strong earnings momentum is expected to continue, according to the company, which saw 1H24 net sales slip 2.6 per cent YoY to CHF3599m but noted a 13.8 per cent improvement in recurring EBIT to CHF606m.
For the Asia, Middle East and Africa region, good market dynamics in north Africa leading to a double-digit increase in 1H24 recurring EBIT and a 240 basis points expansion in recurring EBIT margin to 23.5 per cent. There was continued portfolio management with three divestments closed. Net sales in the region in the 1H24 came in at CHF1773m, up 0.3 per cent in local currency terms, with the earnings momentum expected to continue into the seocnd half of the year.
Solutions & Products reported the strongest 1H24 net sales growth of the segments, driven by roofing. There was a significant expansion of the recurring EBIT margin by 100 basis points, driven by scale, and three acquisitions in Europe and Latin America. There is a strong outlook for the year with the opening six months seeing net sales advance by 10.7 per cent YoY to CHF2867m and recurring EBIT up 22.6 per cent YoY, and 26.5 per cent in local currency terms to CHF287m.
