The sales growth was driven by rising sales in all segments, with the recurring EBIT uptick thanks to a robust improvement in profitability in Holcim's 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 recognised 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.
Holcim CEO Jan Jenisch said: "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 decarbonisation journey. I am encouraged by how we are engineering scalable Carbon Capture Utilisation 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."
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 US$7 billion.
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 Utilisation and Storage projects in Germany and Poland. In Germany, the EU will support Carbon2Business - part of the Westküste 100 project where carbon captured from Holcim's Lägerdorf plant will be turned into synthetic fuel for mobility and 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.
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 Flow above CHF 3 billion.
