The group adds that profitable growth continues in 2024 with recurring EBIT (earnings before interest and taxes) margin expansion of +0.9 percentage points.
A strong contribution has come from Holcim's Solutions & Products business, with roofing sales up +67% in local currency'
Chairman and CEO Jan Jenisch commented: “This quarter’s performance, with a significant contribution from solutions & products, demonstrates the strength of our market-leading positions.
“In Q1 2024, we delivered over-proportional recurring EBIT growth of 17.1% in local currency, which more than offset the strength of the Swiss franc. We continued to execute value-accretive transactions, making five acquisitions and closing four divestments, with net M&A adding more than 3% to our net sales in the first quarter. With the further expansion of our industry-leading recurring EBIT margin, I confidently confirm our full-year guidance for 2024.
“During the quarter, we accelerated our advanced branded solutions, with ECOPact and ECOPlanet reaching 26% of total ready-mix and cement sales, respectively. Advancing climate action, we reduced CO2 per net sales by a further 5% year-on-year and hosted the groundbreaking of our carbon capture and utilisation project with our partners in Germany.”
North America delivered margin expansion with a 3.9% increase in local currency recurring EBIT driven by strong underlying market demand. While Q1 was impacted by fewer shipping days and adverse weather conditions, strong performance is expected to continue in 2024.
In Latin America, Holcim achieved record Q1 net sales and recurring EBIT, along with a strong margin expansion to above 36%. The nearshoring trend in Mexico accelerated during the quarter and the region has a strong pipeline of infrastructure projects ahead.
Europe delivered double-digit Q1 recurring EBIT growth, with an increase in the recurring EBIT margin of 1.5 percentage points - the sixth consecutive quarter of margin improvement. The strong results are set to continue.
In Asia Middle East & Africa, profitable growth in local currency continued with an expansion in recurring EBIT margin of 1.7 percentage points. The region recorded a significant increase in alternative fuels usage, advancing decarbonization.
Solutions & Products posted strong results, with recurring EBIT more than doubling versus the prior year period and margin expansion of 2 percentage points. Growth in net sales was mainly driven by roofing, with normalization of demand after destocking. Sales in roofing were up 67% in local currency, of which 38% came from organic growth and 22% from the acquisition of Duro-Last.
Holcim continued its M&A execution during the quarter, making five acquisitions of family-owned businesses and closing four divestments.
In solutions & products, Holcim acquired ZinCo, a global leader in advanced green roofing systems based in Germany, and Tensolite, a leading manufacturer of innovative precast and pre-stressed concrete construction systems with a strong presence in fast-growing Latin American markets.
Holcim made three acquisitions in aggregates, ready-mix and construction demolition materials, while closing the divestments of Russia, South Africa, Tanzania, and Uganda.
In Q1, net sales of Holcim’s low-carbon ECOPact concrete accounted for 26% of ready-mix sales, and net sales of low-carbon ECOPlanet cement represented 26% of cement sales, up significantly from 16% in each case in the prior year period. State-of-the-art production of high-performance insulation boards ramped up at Holcim’s new Salt Lake City plant, increasing capacity in the region.
Leading in sustainability, Holcim reduced CO2 per net sales by 5% year-on-year. Holcim this month hosted the groundbreaking of its carbon capture and utilisation project in Lägerdorf, Germany, designed to capture and utilise 1.2 million tons of CO2 per year by 2029.
Following continued margin expansion in Q1, Holcim has confirmed its outlook for the year, with organic net sales growth of above 4%, additional growth from M&A of above 2%; over-proportional growth in recurring EBIT; increase in recurring EBIT margin to 18%; free cash flow of above CHF3bn; 20% growth in recycled construction demolition materials to 10 million tons; progress towards US listing of North American business.
