from LAFARGEHOLCIM LTD (EPA:LHN)
Record performance in 2024, well positioned for 2025
Holcim Group Services Ltd / Key word(s): Annual Results
Performance overview
“During 2024, we further expanded our industry-leading EBIT margin to 19.1% driven by our differentiated value strategy. Our advanced branded solutions meeting our customers’ most ambitious needs, from ECOPact and ECOPlanet to Elevate, grew to 36% of total net sales. Decarbonization and circular construction continued to drive profitable growth, with a 20% rise in recycled construction demolition materials to above 10 million tons. We continued our momentum in value-accretive M&A, closing 27 transactions to grow in the most attractive markets. “Consistently delivering superior shareholder value, we completed a CHF 1 billion share buyback and the Board has proposed a double-digit dividend increase to a record CHF 3.10 per share. “The next step in our growth and value creation is on track, with the planned listing of our North American business expected to occur by the end of H1 2025. With a strong outlook across all business segments, we are well positioned for 2025. I am confident we will deliver another year of profitable growth.” Delivering record results In the fourth quarter, recurring EBIT rose 9.9% in local currency compared to the prior-year period to reach a record CHF 1,165 million. Fourth-quarter net sales of CHF 6,473 million rose 1.6% in local currency versus the fourth quarter of 2023. Full-year net sales of CHF 26,407 million for 2024 were up 1.3% in local currency compared to the prior year. Recurring EBIT reached a record CHF 5,049 million for 2024, up 10.8% in local currency compared to the prior year. Holcim’s performance more than offset strong foreign exchange effects, with full-year recurring EBIT up 6.1% in Swiss franc versus the prior-year period. Free cash flow after leases for the full year rose 2.6% to reach a record CHF 3,801 million, with a cash conversion ratio of 57%.
With its differentiated value strategy, Holcim further expanded its industry-leading recurring EBIT margin by 150 basis points to a record 19.1% in 2024. Holcim’s multi-billion advanced branded solutions, from ECOPact and ECOPlanet to Elevate, increased to 36% of total net sales in 2024, up from 30% in 2023. ECOPact reached 29% of ready-mix concrete net sales by the end of the year, Decarbonization and circular construction drove profitable growth, with a 20% rise in recycled construction demolition materials to 10.2 million tons, with Holcim achieving its 2025 target of Portfolio optimization through value-accretive M&A continued in 2024, with 27 transactions to focus on the most attractive markets. Holcim closed five additional bolt-ons in the fourth-quarter, with an acquisition in Bulgaria, Croatia and France, as well as two acquisitions in Switzerland. For the full year, Holcim continued to expand in Solutions & Products, acquiring OX Engineered Products, a U.S. leader in advanced insulation systems for commercial and residential applications. Growing across attractive markets, Holcim’s acquisitions included four in Latin America, and four in the fast-growing circular construction market in Europe. Driving superior shareholder value Since 2018, Holcim has made seven transformative acquisitions in Solutions & Products and 93 value-accretive bolt-on acquisitions, while investing CHF 4 billion in growth CAPEX. During the same period, Holcim has completed CHF 3 billion in share buyback programs and returned CHF 8 billion to shareholders via progressive dividends. This capital allocation for growth and shareholder returns is made possible by Holcim’s strong balance sheet with its investment grade credit ratings of BBB+ and Baa1. In light of the company’s record 2024 financial performance and confidence in the future, the Board of Directors proposes a 11% increase in dividend to CHF 3.10 per registered share. Planned listing of North American business on track to occur by end of H1 Holcim is on track to unlock new value for all stakeholders with the planned full capital market separation of its North American business, to be named Amrize, planned by way of a 100% spin-off. Amrize has publicly filed its Form 10 Registration Statement with the U.S. Securities and Exchange Commission (link to media release). Holcim’s Board of Directors appointed Jan Jenisch as designated Chairman and CEO of Amrize and 9 designated independent directors to Amrize’s Board. Amrize is to be listed on the New York Stock Exchange with an additional listing on the SIX Swiss Exchange. Amrize plans to comply with SEC rules applicable to US domestic issuers, reporting in U.S. GAAP and seeking inclusion in relevant U.S. equity indices. Holcim plans to host an Investor Day for Amrize on 25 March 2025 in New York City and for Holcim on 28 March 2025 in Zurich. At these two dedicated events, investors will have the opportunity to learn more about both companies’ distinct strategies, capital structures, capital allocation priorities and financial targets. Holcim shareholders will vote on this next step in growth and value creation at Holcim’s Annual General Meeting on 14 May 2025, with the listing of Amrize expected on the NYSE and SIX by Board of Directors changes After 12 years on Holcim’s Board of Directors, Hanne Sørensen will not stand for re-election at Holcim’s Annual General Meeting in May. Hanne was entrusted by the Board with the role of Vice-Chairwoman. She also chaired the Nomination, Compensation & Governance Committee and, Jan Jenisch and Jürg Oleas will also not stand for re-election to the Holcim Board of Directors at the AGM, after being proposed to serve on the Board of the planned North American company. The Board thanks Jan, Hanne and Jürg for their dedicated service and their outstanding accomplishments. The Holcim Board of Directors has proposed two Board nominees for election at this year's Annual General Meeting: Adolfo Orive, President & Chief Executive Officer of Tetra Pak, and Sven Schneider, Chief Financial Officer of Infineon. Both nominees are highly accomplished executives from engineering and technology-driven industries, who will bring deep expertise to advance Holcim’s
Outlook and guidance Building on its record full-year performance, Holcim has a strong outlook across all of its business segments as follows: • North America: Infrastructure modernization and reshoring of manufacturing to drive growth in 2025 • Latin America: Public and private sectors to drive infrastructure and commercial investments • Europe: Continued strong demand for sustainable building solutions expected to drive profitable growth • Asia, Middle East & Africa: Strong domestic demand in North Africa, positive outlook in Australia, price recovery in China • Solutions & Products: Favorable outlook for both new construction and repair & refurbishment market
Well positioned for 2025, Holcim expects continued profitable growth with: • Mid-single digit Net Sales growth in local currency • Over proportional growth in recurring EBIT • Further expansion of recurring EBIT margin • Free cash flow of above CHF 3.5 billion • Continued double-digit growth in recycled construction demolition materials
Key Group figures
Segment performance North America North America delivered double-digit local currency growth in recurring EBIT to a record CHF 1,624 million in challenging market conditions. The recurring EBIT margin expanded by 330bps to 24.9%. Holcim has now secured 200+ infrastructure projects in the region for the coming years. Infrastructure modernization and the reshoring of manufacturing expected to drive growth in 2025.
Latin America Latin America delivered its 18th consecutive quarter of profitable growth. Recurring EBIT reached a new record while the margin rose 190bps to an outstanding 36.0%. During the year, there were
Europe Sustainable building solutions drove profitable growth in Europe. Recurring EBIT rose +12.1% in local currency to reach a record, with a 200bps expansion in margin to 17.8%. Holcim acquired 13 bolt-ons in the region during the year to expand its footprint in the most attractive markets. Continued profitable growth is expected to come from increasing customer demand for sustainable building solutions.
Asia, Middle East & Africa Profitable growth in the region was led by Australia and North Africa. There was a strong 170bps expansion of the recurring EBIT margin over the year to 22.8%. Four divestments were closed in 2024. The outlook for the year includes strong domestic demand in North Africa, a positive outlook in Australia, and price recovery in China.
Solutions & Products Profitable growth continued with a strong Net Sales increase driven by advanced roofing systems. Recurring EBIT grew by double digits, with margin expansion of 100bps. Holcim made four acquisitions as it focused on expanding its commercial and residential offering. The outlook for both new construction and the repair and refurbishment markets is favorable.
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