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Holcim raises expectations after strong quarterly results

Net sales jumped 14.6% between April and June, reaching 8.24 billion. On a comparable basis, growth reached 13.6%.

Building materials giant Holcim has raised its full-year forecast after solid revenue growth in the second quarter and the first half of the year as a whole. The good performance was driven by the Solutions & Services division and price increases, as the company carries out a transformation of its portfolio.

Net sales jumped 14.6% between April and June, reaching 8.24 billion. On a comparable basis, growth reached 13.6%. Recurring Ebit increased by 7.2% to 1.56 billion, while the related margin stood at 18.9%. The high prices in relation to the costs have supported profitability, specifies the Zug-based company in its press release.

For the second quarter, the AWP consensus was counting on sales of 7.93 billion when growth on a comparable basis was expected at 9.2%. Ebit was expected at 1.42 billion for a related margin of 17.9%.

Over the first half as a whole, net sales reached 14.68 billion, representing growth of 16.9% or 12.7% on a comparable basis. In volumes, sales of cement and aggregates fell by 1.1% and 1.2% respectively on a comparable basis, while that of ready-mixed concrete increased slightly.

Progress in portfolio transformation

The Solutions & Products division, which includes, among other things, roofing and insulation activities, is gaining importance in the group’s revenues, now representing an 18% share, compared to 8% in 2020. The objective is to reach 30 % by 2025. Revenues in this division jumped by a quarter on a comparable basis, to 2.61 billion in the first half.

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Over the first six months, recurring Ebit reached 2.17 billion, up 9.6% or 5.7% on an adjusted basis. The related margin was 14.8%, after 15.8% a year earlier. Net profit group share stood at 1.16 billion, up 38% over one year.

Net debt widened by 7.5% to reach 13.37 billion.

In Asia-Pacific, the recovery in India and strong orders in Australia partially offset high cost inflation.

In Europe, inflation was balanced by price increases and growth was boosted by acquisitions and the expansion of the Solutions & Products activities. The activities in Russia are excluded from the results due to the current exit from this market.

Profitability was particularly good in Latin America, thanks to solid demand in Argentina and Colombia and price increases.

In the Middle East and Africa, Holcim benefited from strong demand in Nigeria and Iraq, while Egypt was more tentative.

Finally, in North America, activities were driven by “excellent demand”, particularly for roofing.

For the full year, Holcim expects net sales growth of at least 10% on a comparable basis, compared to 8% previously. Growth should reach at least 10% in Swiss francs. In the Solutions & Products division, sales should reach at least 5 billion. An improvement is also expected in adjusted Ebit.

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