Profitable growth continues, record Q3
- Good momentum continues, Q3 net sales CHF 7,286m, +5.0% LFL
- Record Q3 Recurring EBIT of CHF 1,534m, +4.7% LFL
- Progress with expansion of Solutions & Products
- 2050 net-zero targets validated by Science Based Targets initiative
- Guidance for FY2021 Recurring EBIT growth upgraded to at least 22% LFL
Performance overview Q3
| Group (in million CHF) | Q3 2021 | Q3 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Net sales | 7,286 | 6,455 | 12.9 | 5.0 |
| Recurring EBIT | 1,534 | 1,445 | 6.2 | 4.7 |
Performance overview 9M
| Group (in million CHF) | 9M 2021 | 9M 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Net sales | 19,842 | 17,148 | 15.7 | 12.2 |
| Recurring EBIT | 3,516 | 2,639 | 33.3 | 35.2 |
Jan Jenisch, CEO: “I’m pleased that we have achieved a record quarter of profitable growth once again. I congratulate my teams for their exceptional resilience as they continue to successfully navigate the challenges posed by the pandemic in a dynamic business environment. On the back of their performance we have revised our Recurring EBIT growth guidance from 18% to at least 22% on a like-for-like basis.
“Most importantly, our colleagues have kept their focus on our key long-term value creation drivers to become the global leader in innovative and sustainable building solutions. We are picking up momentum in our strategic portfolio transformation, with the divestment of our business in Brazil, the announcement of nine bolt-on acquisitions so far this year and the expansion of our Firestone GacoFlex range from Mexico to Colombia and Ecuador. We continue to lead the way in our sector's climate action, as recognized yesterday by the Science Based Targets initiative's validation of our 2050 net-zero targets, with the deployment of our green building solutions, from ECOPact to ECOPlanet at the heart of our journey.”
Record Recurring EBIT in Q3
Net sales of CHF 7,286 million for the third quarter of 2021 were up 5.0% on a like-for-like basis (LFL) compared to the prior year, or 12.9% of absolute growth. The Recurring EBIT increase was primarily driven by strong pricing and good cost management. Net sales over the first nine months of 2021 were CHF 19,842 million, or 12.2% higher LFL than the prior-year period.
Recurring EBIT reached a record CHF 1,534 million in the third quarter of 2021, up 4.7% LFL compared to the prior-year period, or 6.2% of absolute growth. Recurring EBIT for the nine months was also a record at CHF 3,516 million, an increase of 35.2% LFL over the prior-year period.
Successful portfolio transformation continues
The company continues its M&A strategy, transforming its portfolio to become the global leader in innovative and sustainable building solutions. Holcim completed two bolt-on acquisitions in the third quarter bringing the announced number of transactions to nine in 2021, in addition to the Firestone acquisition that is off to a strong start on a double-digit growth trajectory. The company announced the signing of the divestment of its business in Brazil in the third quarter. It is also finalizing the closing of the previously announced sale of businesses in Zambia and Malawi. The divestment of business in the Indian Ocean region has closed this week. These divestments strengthen the company’s balance sheet to fuel continued investment in attractive growth opportunities.
Strengthened leadership in sustainability
Holcim continues to lead its industry’s sustainable transition as the first in its sector with 2050 net-zero targets validated by the Science Based Targets initiative, cutting across its operations and value chain (Scope 1, 2 and 3). The company also expanded its sustainable financing agreements with the completion of two new transactions worth more than CHF 3 billion in total linked to its sustainability targets, including climate and safety. The company is also accelerating the global rollout of ECOPact green concrete and ECOPlanet green cement, now in 24 and 11 markets respectively. ECOPlanet will be available in 15 markets globally by the end of 2021.
Outlook
Holcim expects growth momentum to continue in all regions with double-digit net sales growth of Firestone Building Products in 2021. The company will pursue further bolt-on acquisitions while accelerating progress towards its 2030 sustainability targets.
For 2021 the company will deliver the following, with upgraded guidance on Recurring EBIT growth:
- Over-proportional growth in Recurring EBIT of at least 22% LFL (from at least 18% LFL previously)
- Capex less than CHF 1.4bn
- Return on invested capital above 8% , cash conversion above 40%
Holcim will achieve all Strategy 2022 financial targets one year in advance
Key Group figures
| Group 9M | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Net sales | 19,842 | 17,148 | 15.7 | 12.2 |
| Recurring EBIT | 3,516 | 2,639 | 33.3 | 35.2 |
| Group results by segment 9M | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 150.0 | 139.2 | 7.8 | 7.3 |
| Net sales of Cement (CHFm) | 12,203 | 11,135 | 9.6 | 14.8 |
| Recurring EBIT of Cement (CHFm) | 2,786 | 2,249 | 23.9 | 30.4 |
| Recurring EBIT margin of Cement (%) | 22.8 | 20.2 | ||
| Sales of aggregates (mt) | 201.4 | 190.5 | 5.7 | 4.0 |
| Net sales of Aggregates (CHFm) | 3,018 | 2,780 | 8.5 | 5.9 |
| Recurring EBIT of Aggregates (CHFm) | 456 | 322 | 41.9 | 38.5 |
| Recurring EBIT margin of Aggregates (%) | 15.1 | 11.6 | ||
| Sales of ready-mix concrete (m m3) | 34.6 | 31.0 | 11.6 | 9.5 |
| Net sales of Ready-Mix Concrete (CHFm) | 3,846 | 3,391 | 13.4 | 10.0 |
| Recurring EBIT of Ready-Mix Concrete (CHFm) | 101 | 0 | n.m. | n.m. |
| Recurring EBIT margin of Ready-Mix Concrete (%) | 2.6 | 0 | ||
| Net sales of Solutions & Products (CHFm) | 2,566 | 1,418 | 80.9 | 8.4 |
| Recurring EBIT of Solutions & Products (CHFm) | 173 | 71 | 143.5 | 20.1 |
| Recurring EBIT margin of Solutions & Products (%) | 6.7 | 5.0 |
Regional performance Q3
Region Asia Pacific
The Asia Pacific region demonstrated strong resilience to mitigate cost inflation in the quarter. Australia experienced good market trends while China slowed down. India recorded a solid performance and Marwar Mundwa cement capacity expansion started production in the quarter as expected.
| Asia Pacific Q3 | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 15.9 | 16.2 | -1.7 | -1.7 |
| Sales of aggregates (mt) | 9.0 | 7.4 | 21.7 | 13.6 |
| Sales of ready-mix concrete (m m3) | 2.0 | 1.8 | 8.9 | 8.9 |
| Net sales to external customers (CHFm) | 1,404 | 1,341 | 4.7 | 3.1 |
| Recurring EBIT (CHFm) | 307 | 317 | -3.2 | -6.0 |
Region Europe
The Europe region showed a strong ability to offset cost inflation, with good demand in key markets and strong performances in the UK and Eastern European markets. The region maintained positive price over cost through the quarter and good progress in reducing CO2 intensity across its operations.
| Europe Q3 | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 12.8 | 12.7 | 0.5 | 0.5 |
| Sales of aggregates (mt) | 30.8 | 31.5 | -2.1 | -2.6 |
| Sales of ready-mix concrete (m m3) | 5.1 | 5.0 | 1.2 | -0.4 |
| Net sales to external customers (CHFm) | 2,156 | 1,992 | 8.3 | 2.8 |
| Recurring EBIT (CHFm) | 414 | 397 | 4.2 | 1.5 |
Region Latin America
The region delivered Recurring EBIT margin expansion in Q3. Volume growth was significant in all business segments, with strong demand in Mexico and Argentina and recovery in Ecuador. Latin America maintained positive price over cost in the quarter, while further growth will be supported by continued expansion of the Disensa retail network.
| Latin America Q3 | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 7.2 | 7.0 | 2.6 | 2.6 |
| Sales of aggregates (mt) | 1.8 | 1.3 | 36.9 | 36.9 |
| Sales of ready-mix concrete (m m3) | 1.2 | 1.1 | 8.9 | 8.9 |
| Net sales to external customers (CHFm) | 675 | 623 | 8.4 | 16.3 |
| Recurring EBIT (CHFm) | 238 | 217 | 9.7 | 19.0 |
Region Middle East Africa
The Middle East Africa region showed a solid performance in the quarter with good demand trends in Nigeria and Kenya and recovery in South Africa offsetting softer market conditions in Algeria and Egypt. The region maintained positive price over cost in the quarter.
| Middle East Africa Q3 | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 9.3 | 8.9 | 4.9 | -2.5 |
| Sales of aggregates (mt) | 1.2 | 1.0 | 13.2 | 13.2 |
| Sales of ready-mix concrete (m m3) | 1.0 | 0.8 | 30.5 | 1.8 |
| Net sales to external customers (CHFm) | 653 | 602 | 8.5 | 10.7 |
| Recurring EBIT (CHFm) | 102 | 106 | -4.2 | 8.0 |
Region North America
Profitable growth continues in the North America region, with solid market trends in the US despite supply constraints in some markets and good demand growth in Canada. North America maintained positive price over cost with strong price momentum in the quarter.
| North America Q3 | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 6.0 | 6.0 | 0.2 | 0.2 |
| Sales of aggregates (mt) | 35.6 | 35.6 | 0.1 | -0.6 |
| Sales of ready-mix concrete (m m3) | 3.1 | 3.0 | 1.9 | 0.8 |
| Net sales to external customers (CHFm) | 2,291 | 1,791 | 27.9 | 3.4 |
| Recurring EBIT (CHFm) | 568 | 504 | 12.7 | 5.9 |
Regional performance 9M
| Asia Pacific 9M | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 51.7 | 44.2 | 17.0 | 17.1 |
| Sales of aggregates (mt) | 25.8 | 20.5 | 26.0 | 12.9 |
| Sales of ready-mix concrete (m m3) | 5.9 | 5.4 | 8.7 | 8.7 |
| Net sales to external customers (CHFm) | 4,402 | 3,754 | 17.3 | 17.8 |
| Recurring EBIT (CHFm) | 1,020 | 754 | 35.3 | 35.6 |
| Europe 9M | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 35.0 | 33.7 | 4.1 | 4.1 |
| Sales of aggregates (mt) | 86.9 | 83.3 | 4.3 | 4.4 |
| Sales of ready-mix concrete (m m3) | 15.0 | 13.3 | 12.9 | 11.0 |
| Net sales to external customers (CHFm) | 6,043 | 5,265 | 14.8 | 9.9 |
| Recurring EBIT (CHFm) | 883 | 685 | 28.9 | 25.4 |
| Latin America 9M | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 20.5 | 17.3 | 18.0 | 18.0 |
| Sales of aggregates (mt) | 4.7 | 3.5 | 35.0 | 35.0 |
| Sales of ready-mix concrete (m m3) | 3.5 | 2.8 | 26.7 | 26.7 |
| Net sales to external customers (CHFm) | 1,944 | 1,603 | 21.3 | 36.2 |
| Recurring EBIT (CHFm) | 663 | 492 | 34.7 | 52.4 |
| Middle East Africa 9M | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 27.2 | 24.5 | 11.1 | 6.5 |
| Sales of aggregates (mt) | 3.2 | 2.4 | 30.3 | 30.3 |
| Sales of ready-mix concrete (m m3) | 2.4 | 2.0 | 22.3 | 5.6 |
| Net sales to external customers (CHFm) | 1,815 | 1,780 | 2.0 | 13.6 |
| Recurring EBIT (CHFm) | 299 | 243 | 23.3 | 46.7 |
| North America 9M | 2021 | 2020 | ±% | ±% LFL |
|---|---|---|---|---|
| Sales of cement (mt) | 15.1 | 14.9 | 1.5 | 1.5 |
| Sales of aggregates (mt) | 80.8 | 80.8 | -0.0 | -0.7 |
| Sales of ready-mix concrete (m m3) | 7.8 | 7.5 | 3.1 | 2.1 |
| Net sales to external customers (CHFm) | 5,275 | 4,357 | 21.1 | 2.3 |
| Recurring EBIT (CHFm) | 948 | 764 | 24.1 | 14.7 |
Reconciliation to Group accounts
Reconciling measures of profit and loss to the Holcim Group’s consolidated statement of income:
| In million CHF | 9M 2021 (unaudited) | 9M 2020 (unaudited) |
|---|---|---|
| Recurring EBITDA | 5,201 | 4,326 |
| Depreciation of right-of-use assets | (270) | (269) |
| Recurring EBITDA after leases | 4,931 | 4,057 |
| Depreciation and amortization | (1,414) | (1,419) |
| Recurring EBIT | 3,516 | 2,639 |
| Restructuring, litigation, implementation and other non-recurring costs | (181) | (64) |
| Impairment of operating assets | (24) | (173) |
| Operating profit | 3,312 | 2,401 |
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 results is available on our website at www.holcim.com.
Media conference: 09:00 CEST Analyst conference: 10:00 CEST
Switzerland: 41 (0) 58 310 50 00
France: 33 (0) 1 7091 8706
UK: 44 (0) 207 107 06 13
US: 1 (1) 631 570 56 13
Due to restrictions caused by COVID-19, the media conference at 09:00am CEST and analyst’s conference at 10:00am CEST will be held virtually.
In order to participate in the analyst’s conference, please go to https://www.holcim.com/analyst-call
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 the circular economy 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, Firestone Building Products, Geocycle, Holcim and Lafarge. 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.
More information is available on www.holcim.com
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).
