Jan Jenisch, CEO: "I thank all members of the Holcim family for this strong start to the year. This quarter’s performance demonstrates the strength of our portfolio and regional footprint, delivering broad-based profitable growth, driven by high-value solutions, from ECOPact to ECOPlanet, supporting our customers in achieving their sustainability goals.
"In Q1 2023, net sales grew organically by 8% and Recurring EBIT by 12%. This profitable growth was led by strong performances across our building materials businesses. Our teams continued our fast-paced execution, with 12 value-accretive acquisitions, including Duro-Last, completing our range of flat roofing systems. With strong underlying trends across all our businesses, we are confident we will close the full year strong. We are upgrading our guidance accordingly to achieve organic net sales growth of above 6% and organic Recurring EBIT growth of above 10%, while delivering an industry-leading Recurring EBIT margin of above 16%.
"We accelerated climate action with upgraded 1.5°C targets, as shared in our second Climate Report while expanding our range of sustainable building solutions. We reached 16% of ready-mix net sales with ECOPact low-carbon concrete and expanded our ECOPlanet range with two calcined clay production facilities in France and Mexico, delivering low-carbon cement with up to 50% less CO2. Scaling up circular construction, we launched our ECOCycle® technology, recycling construction demolition materials into new building solutions, to exceed our 2025 target of 10 million tons."
The North America region delivered a strong start to the year in Cement, Aggregates and Ready-Mix Concrete, with strong market demand in both the USA and Canada. Roofing volumes were impacted by inventory normalization. Holcim’s roofing offer was further strengthened in the quarter with the closing of Duro-Last, alongside two other acquisitions in Aggregates. Order books are strong in all business segments.
The first quarter of 2023 in Latin America was the region’s eleventh consecutive quarter of profitable organic growth, with performance driven by Mexico, Colombia and Argentina. The company expanded the Solutions & Products business in roofing and waterproofing in Argentina and in Mexico. Holcim expects these strong results to continue with an excellent pipeline of infrastructure projects ahead.
In Europe, Holcim delivered strong results across the region, with margin expansion driven by high-value solutions. Holcim closed two acquisitions in Solutions & Products and five in Aggregates and Ready-Mix. The company expects strong results to continue.
The Asia Middle East & Africa region showed profitable organic growth with significant margin expansion. Performance was driven by Australia, Algeria and Egypt. Decarbonizing its operations, the region delivered a significant increase in alternative fuels. Order books for the region are good and the recovery in China is progressing.
Holcim continued its successful transformation, with twelve value-accretive acquisitions, including the highly synergistic strategic Duro-Last acquisition. Four other acquisitions were added to the Solutions & Products business segment in the quarter covering roofing, waterproofing, retail and precast. Seven other acquisitions were added in Aggregates and Ready-Mix Concrete.
Leadership in sustainability
In line with Holcim’s commitment to lead its sector’s transition to net zero, the Board of Directors has submitted the company’s second Climate Report for an advisory vote, reflecting the company’s commitment to give its shareholders a say on the company’s climate-related matters. The Climate Report was published on 31 March 2023.
Accelerating climate action, Holcim reduced its CO2 per net sales by 21% in 2022 and will reduce it by over 10% in 2023. The 2023 Climate Report includes Holcim’s upgraded 2030 targets aligned with the 1.5°C framework and validated by the Science Based Targets initiative. Making progress in carbon capture utilisation and storage, Holcim commits to invest a cumulative CHF 2 billion by 2030 in mature technologies to capture more than 5 million tons of CO2 per year. Driving circular construction across its business, Holcim launched its proprietary ECOCycle circular technology platform in April to accelerate recycling of construction and demolition materials. The company is on track to exceed its target to recycle 10 million tons of construction and demolition materials by 2025.
Continuing its focus on sustainable construction, ECOPact low-carbon concrete represented 16% of Ready-Mix net sales in the first quarter, continuing to make progress towards its objective of reaching 25% by 2025. ECOPlanet low-carbon cement is now available in 27 markets, with the first calcined clay production in France and Mexico with up to 50% less CO2.
Outlook and Guidance
Holcim expects continued profitable growth and is upgrading its guidance, with:
- Organic net sales growth of above 6%
- Over-proportional organic growth in Recurring EBIT of above 10%
- Industry-leading Recurring EBIT margin of above 16%
- Free cash flow after leases of around CHF 3 billion
- Reduction of CO2 per net sales by over 10%
Read the article online at: http://www.song-family.net/africa-middle-east/21042023/holcim-reports-strong-start-to-the-year--guidance-upgraded/
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This group brings together government ministers, the investment community and real-economy company representatives from a range of sectors, to look at industry roadmaps to net zero and how to deliver them.