Profitable growth continues with record results

  • Record H1 net sales of CHF 14,681m (+16.9%)
  • Record H1 Recurring EBIT of CHF 2,173m (+9.6%) and EPS of CHF 1.90 (+39.7%)
  • Accelerated portfolio transformation with expansion of Solutions & Products and divestment of India
  • Rating upgrades to BBB+ (Standard & Poor’s) and Baa1 (Moody’s)
  • Net sales growth guidance for FY2022 upgraded to at least 10% LFL


Performance overview H1

Group (in million CHF) H1 2022 H1 2021 ±% ±%LFL
Net sales 14,681 12,556 +16.9 +12.7
Recurring EBIT 2,173 1,983 +9.6 +5.7
Recurring EBIT margin (%) 14.8 15.8    
Operating profit (EBIT) 2,067 1,794 +15.2  
Net income, Group share 1,157 839 +38.0  
Net income before impairment and divestments, Group share 1,304 881 +48.0  
EPS (CHF) 1.90 1.36 +39.7  
EPS before impairment and divestments (CHF) 2.14 1.43 +49.7  
Free Cash Flow1 275 814 -66.2  
Net financial debt 13,365 12,438 +7.5  

Jan Jenisch, CEO: “I would like to thank all members of the Holcim family for their continued resilience and outstanding performance in spite of our challenging times. Our teams are going above and beyond to keep our people and communities safe, while firmly leading our decarbonization journey. I am encouraged by how we are engineering scalable Carbon Capture Utilization and Storage technologies, which are receiving innovation grants in the EU to advance their impact.

“Our record results, from net sales to Recurring EBIT and earnings per share, are setting solid foundations to deliver our ‘Strategy 2025 – Accelerating Green Growth’. Our roofing and insulation businesses stood out as growth engines, on track to reach pro-forma net sales of CHF 3.5 billion in 2022. This remarkable achievement gives us the confidence to revise our 2022 guidance to at least 10% net sales growth on a like-for-like basis.”

Record net sales and Recurring EBIT

Net sales of CHF 14,681 million for the first half of 2022 were up +16.9% in Swiss francs and +12.7% on a like-for-like basis compared to the prior year. The increase was driven by sales growth in all segments. Net sales in the second quarter alone were CHF 8,240 million, or +13.6% higher like-for-like than the prior-year period.

Recurring EBIT reached a record CHF 2,173 million for the first half of 2022, up +9.6% in Swiss francs and +5.7% on a like-for-like basis compared to the prior-year period. Recurring EBIT growth for the standalone second quarter was +7.0% on a like-for-like basis, with strong price over cost. This record result was driven by robust improvement of profitability in the Solutions & Products segment and strong Recurring EBIT margin expansion in North America.

Net income Group share reached CHF 1,157 million, up +38.0% compared to the prior-year period. Reported earnings per share reached CHF 1.90, up +39.7%. Earnings per share before impairment and divestments increased by 49.7% to reach CHF 2.14 for the first half of 2022 versus CHF 1.43 for H1 2021. Free Cash Flow after leases was at CHF 275 million in the first half of 2022 versus CHF 814 million in H1 2021.

Holcim’s balance sheet remained strong and was recognized by credit rating upgrades. Standard & Poor’s upgraded Holcim’s credit rating to BBB+ in March 2022 and Moody’s upgraded Holcim’s credit rating to Baa1 in June 2022.

Strong progress on portfolio transformation

Holcim is making strong progress on its portfolio transformation with the continued expansion of roofing, insulation and specialty building solutions and eight bolt-ons in the first half of 2022. The Solutions & Products segment reached 18% of the Group’s total net sales in H1, up from 8% for 2020, putting the company on track to reach its strategic goal of 30% of net sales from Solutions & Products by 2025. Profitability of Solutions & Products also improved significantly, with a Recurring EBIT margin of 15.0% for Q2 2022, up from 8.8% in the prior year. Roofing and insulation businesses are on track to reach pro-forma net sales of CHF 3.5 billion in 2022, while specialty building solutions pro-forma net sales are estimated to reach CHF 600 million.

Holcim has signed divestments for its businesses in India, Brazil and Zimbabwe with expected proceeds of above USD 7 billion.

Further strengthening leadership in sustainability

Holcim continued to progress in its sustainability ambitions with ECOPact green concrete reaching 10% of Ready-Mix Concrete net sales in H1 2022, on its way to delivering the strategic target of 25% of ready-mix sales by 2025. ECOPlanet green cement also achieved significant net sales growth and is now available in 16 markets. Driving circular construction, Holcim recycled 2.9 million tons of construction & demolition waste in its products in H1 2022, on track to reach 10 million tons by 2025.

In July, Holcim was selected for two investments from the European Union Innovation Fund for its breakthrough Carbon Capture Utilization and Storage projects in Germany and Poland. In Germany, the EU will support Carbon2Business, which is part of the Westküste 100 project, where carbon captured from Holcim’s Lägerdorf plant will be turned into synthetic fuel for the mobility sector and as feedstock for the chemical industry. The EU is also supporting Holcim's Go4ECOPlanet project in Poland, which aims to create an end-to-end carbon capture and storage chain starting from CO2 capture from its site in Kujawy to offshore storage in the North Sea, with the vision to be a net-zero plant by 2027.

Outlook

Despite volatile market conditions and geopolitical uncertainty, Holcim expects growth momentum to continue with:

  • Growth in net sales of at least 10% LFL, upgraded from 8%, and at least 10% in Swiss francs
  • Double-digit net sales growth in Solutions & Products to achieve net sales of above CHF 5 billion
  • Accelerated progress towards 2025 sustainability targets
  • Positive growth in Recurring EBIT like-for-like and in Swiss francs
  • Free Cash Flow2 above CHF 3 billion


Key Group figures

Group Q2 2022 2021 ±% ±%LFL
Net sales (CHFm) 8,240 7,194 +14.6 +13.6
Recurring EBIT (CHFm) 1,559 1,455 +7.2 +7.0
Recurring EBIT margin (%) 18.9 20.2    
Group H1 (in million CHF) 2022 2021 ±% ±%LFL
Net sales 14,681 12,556 +16.9 +12.7
Recurring EBIT 2,173 1,983 +9.6 +5.7
Recurring EBIT margin (%) 14.8 15.8    
Operating profit (EBIT) 2,067 1,794 +15.2  
Net income, Group share 1,157 839 +38.0  
Net income before impairment and divestments, Group share 1,304 881 +48.0  
EPS before impairment and divestments (CHF) 2.14 1.43 +49.7  
Free Cash Flow after leases 275 814 -66.2  
Net financial debt 13,365 12,438 +7.5  
Group results by segment H1 2022 H1 2021 ±% ±%LFL
Sales of cement (mt) 95.3 99.0 -3.7 -1.1
Net sales of Cement (CHFm) 8,596 7,932 +8.4 +12.2
Recurring EBIT of Cement (CHFm) 1,563 1,654 -5.5 -2.0
Recurring EBIT margin of Cement (%) 18.2 20.9    
         
Sales of aggregates (mt) 122.7 123.0 -0.3 -1.2
Net sales of Aggregates (CHFm) 1,974 1,864 +5.9 +6.2
Recurring EBIT of Aggregates (CHFm) 236 217 +8.8 +8.4
Recurring EBIT margin of Aggregates (%) 11.9 11.6    
         
Sales of ready-mix concrete (m m3) 23.7 22.1 +7.2 +4.7
Net sales of Ready-Mix Concrete (CHFm) 2,764 2,462 +12.3 +12.2
Recurring EBIT of Ready-Mix Concrete (CHFm) 52 40 +31.2 +44.2
Recurring EBIT margin of Ready-Mix Concrete (%) 1.9 1.6    
         
Net sales of Solutions & Products (CHFm) 2,613 1,423 +83.6 +25.4
Recurring EBIT of Solutions & Products (CHFm) 323 72 +346.4 +140.8
Recurring EBIT margin of Solutions & Products (%) 12.4 5.1    


Regional H1 Performance

Asia Pacific
Demand recovery in India and a good order book in Australia helped to partially offset strong cost inflation and negative price over cost. Cement demand was softer in China and the Philippines compared to the first half of 2021, partially offset by expansion of the aggregates and ready-mix businesses in China.

Asia Pacific H1 2022 H1 2021 ±% ±%LFL
Sales of cement (mt) 35.3 35.8 -1.3 -1.3
Sales of aggregates (mt) 16.1 16.9 -4.7 -4.7
Sales of ready-mix concrete (m m3) 4.0 3.9 +2.8 +2.8
Net sales to external customers (CHFm) 3,098 2,998 +3.3 +4.0
Recurring EBIT (CHFm) 525 713 -26.4 -26.7
Recurring EBIT margin (%) 16.9 23.8    


Europe
A good performance was delivered with strong price momentum and positive price over cost, offsetting inflation. Accelerated execution of green capex drove an increase in the use of alternative fuels. Growth was boosted by bolt-on acquisitions as well as the expansion of Solutions & Products.

Europe H1 2022 H1 2021 ±% ±%LFL
Sales of cement (mt) 20.1 22.2 -9.5 -0.4
Sales of aggregates (mt) 56.5 56.1 +0.7 -0.7
Sales of ready-mix concrete (m m3) 10.1 9.9 +2.2 +0.6
Net sales to external customers (CHFm) 4,223 3,886 +8.7 +13.4
Recurring EBIT (CHFm) 470 469 +0.3 +8.0
Recurring EBIT margin (%) 11.0 11.9    


Latin America
Another quarter of strong profitable growth was delivered. Pricing was robust with good market demand, especially in Argentina and Colombia. The aggregates business expanded in Colombia, Ecuador and El Salvador and the use of alternative fuels showed a strong increase.

Latin America H1 2022 H1 2021 ±% ±%LFL
Sales of cement (mt) 13.3 13.3 -0.2 -0.2
Sales of aggregates (mt) 3.8 2.9 +32.2 +32.2
Sales of ready-mix concrete (m m3) 2.7 2.3 +20.3 +19.0
Net sales to external customers (CHFm) 1,464 1,269 +15.3 +14.9
Recurring EBIT (CHFm) 454 425 +6.7 +6.9
Recurring EBIT margin (%) 30.6 33.2    


Middle East Africa
Strong ability to offset cost inflation resulted in positive price over cost. Solid market demand in Nigeria and Iraq was partially offset by softer demand in Egypt. The use of alternative fuels showed a strong increase. Strong growth in aggregates and ready-mix.

Middle East Africa H1 2022 H1 2021 ±% ±%LFL
Sales of cement (mt) 17.3 17.8 -3.1 -2.2
Sales of aggregates (mt) 2.2 2.0 +9.8 +10.7
Sales of ready-mix concrete (m m3) 1.8 1.4 +22.1 +8.1
Net sales to external customers (CHFm) 1,190 1,162 +2.4 +14.6
Recurring EBIT (CHFm) 199 198 +0.8 +17.9
Recurring EBIT margin (%) 15.4 16.2    


North America
An outstanding performance was delivered led by double-digit growth. Market demand was excellent, supported by a significant contribution from the roofing business. Price momentum was also strong with a full order book and robust demand in all end-markets.

North America H1 2022 H1 2021 ±% ±%LFL
Sales of cement (mt) 10.0 9.1 +9.6 +9.6
Sales of aggregates (mt) 44.1 45.2 -2.3 -3.2
Sales of ready-mix concrete (m m3) 5.1 4.7 +10.3 +6.9
Net sales to external customers (CHFm) 4,414 2,984 +47.9 +19.0
Recurring EBIT (CHFm) 709 380 +86.4 +48.7
Recurring EBIT margin (%) 15.9 12.6    


Reconciliation to Group accounts

Reconciling measures of profit and loss to the Holcim Group’s consolidated statement of income:

In million CHF H1 2022 (unaudited) H1 2021 (unaudited)
Net sales 14,681 12,556
Recurring operating costs (11,728) (9,834)
Share of profit of joint ventures 155 207
Recurring EBITDA after leases 3,107 2,928
Depreciation and amortization of property, plant and equipment, intangible and long-term assets (934) (945)
Recurring EBIT 2,173 1,983
Restructuring, litigation and other non-recurring assets (18) (175)
Impairment of operating assets (88) (13)
Operating profit 2,067 1,794
In million CHF H1 2022 (unaudited) H1 2021 (unaudited)
Recurring EBITDA 3,289 3,105
Depreciation of right-of-use assets (182) (176)
Recurring EBITDA after leases 3,107 2,928
In million CHF H1 2022 (unaudited) H1 2021 (unaudited)
Net income before impairment and divestments, Group share 1,304 881
Net income before impairment and divestments, non-controlling interests 145 233
Net income before impairment and divestments 1,449 1,114
Impairment of goodwill and long term assets* (58) (10)
Loss on disposals of Group companies* (89) (32)
Net income 1,302 1,072
EPS before impairment and divestments in CHF 2.14 1.43

*Adjustments disclosed net of taxation.

Reconciliation of Free Cash Flow after leases to the Holcim Group’s Consolidated Statement of Cash Flows:

In million CHF H1 2022 (unaudited) H1 2021 (unaudited)
Cash flow from operating activities 1,151 1,457
Purchase of property, plant and equipment (743) (519)
Disposal of property, plant and equipment 48 51
Repayment of long-term lease liabilities (181) (176)
Free Cash Flow after leases 275 814


Reconciliation of Net financial debt to the Holcim Group’s consolidated statement of financial position:

In million CHF H1 2022 (unaudited) H1 2021 (unaudited)
Current financial liabilities 3,174 2,536
Long-term financial liabilities 15,199 13,465
Cash and cash equivalents (4,399) (3,465)
Short-term derivative assets (322) (63)
Long-term derivative assets (287) (36)
Net financial debt 13,365 12,438


Additional information

As announced in March 2022, Holcim has initiated the process to exit the Russian market. Effective from 1 March 2022, Russia is excluded from Holcim's main business performance indicators.

Non-GAAP definitions
Some non-GAAP measures are used in this release to help describe the performance of Holcim. A full set of these non-GAAP definitions can be found on our website.

Analyst presentation
The analyst presentation of the Half-Year 2022 Results is available on www.holcim.com.

Media conference: 09:00 CEST
Switzerland: +41 (0) 58 310 50 00
France: +33 (0) 1 7091 8706
Germany: +49 (0) 69 505 0 0082
UK: +44 (0) 207 107 06 13
US: +1 (1) 631 570 56 13

Analyst conference: 10:00 CEST

The media conference at 09:00 am CEST and analyst’s conference at 10:00 am CEST will be held by phone.

In order to participate in the analyst’s conference, please go to https://www.holcim.com/investors.

1 After leases
2 After leases (does not include the impact from the divestment of India)

About Holcim

Holcim builds progress for people and the planet. As a global leader in innovative and sustainable building solutions, Holcim is enabling greener cities, smarter infrastructure and improving living standards around the world. With sustainability at the core of its strategy Holcim is becoming a net zero company, with its people and communities at the heart of its success. The company is driving circular construction as a world leader in recycling to build more with less. Holcim is the company behind some of the world’s most trusted brands in the building sector including ACC, Aggregate Industries, Ambuja Cement, Disensa, Geocycle, Holcim, Lafarge and Malarkey Roofing Products. Holcim is 70,000 people around the world who are passionate about building progress for people and the planet through four business segments: Cement, Ready-Mix Concrete, Aggregates and Solutions & Products.

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).

Analyst Call Replay

Audio file

Contact Media Relations

Phone: ​+41 (0) 58 858 87 10

Email: media@holcim.com

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