Holcim Group Services Ltd / Key word(s): Miscellaneous
Jan Jenisch, CEO: 'I would like to thank all members of the Holcim family for their remarkable resilience as we navigate challenging times, from the pandemic to geopolitical uncertainty. I am extremely proud of how our teams are keeping our people and operations safe, while going above and beyond to stand by our communities.
'I am very encouraged by the record start of the year, setting a solid foundation to our 'Strategy 2025 - Accelerating Green Growth'. In the first quarter, we achieved Net Sales growth of 20% and over 16% Recurring EBIT growth in Swiss francs. Our Roofing business was a strong contributor to this performance with a 17% EBIT margin and the addition of Malarkey Roofing Products as a new growth engine in the highly attractive residential market. We further accelerated our growth with four bolt-on acquisitions in the quarter and ECOPact green concrete reaching 10% of ready-mix sales in March.
'With sustainability at the core of our strategy, we published our first Climate Report, sharing our net-zero journey with 2030 and 2050 targets validated by the Science-Based Targets initiative. A first in our industry, it reviews our decarbonization actions, from green building solutions, all the way to circular construction and next generation technologies.'
During the first quarter, as human tragedy unfolded across Eastern Europe, Holcim's number one priority remained the safety, protection and well-being of all its affected colleagues and their families, no matter where they are. The company is actively engaged in supporting humanitarian efforts to alleviate suffering across the region, from providing shelter and essential goods to medical supplies. In March, Holcim announced its decision to initiate the process of divesting its business in Russia in line with the company's values to operate in the most responsible manner.Record first quarter with strong contribution from Roofing business
The North America region had an outstanding first quarter. Volumes grew across all business segments, with strong market growth in the US and Canada West and a significant contribution from the newly acquired Roofing business. Order books for 2022 are full with strong growth momentum across all businesses.
The Latin America region continued its strong profitable growth with Argentina, Colombia and El Salvador showing good market growth. To supply growing demand in El Salvador, Holcim opened a new cement production line in this market. Overall, the region showed strong pricing and positive price over cost. Roofing products continued to be rolled out through the Disensa retail network.
The Europe region delivered an outstanding performance with Recurring EBIT margin improvement. Strong pricing allowed the company to contain cost inflation, supported by good market demand in Eastern Europe. Driving cement's green transformation, Holcim successfully launched the modernization of its Małogoszcz cement plant in Poland and invested in proprietary calcined clay technology in France. Calcined clay is an innovative low emission raw material for its green building solutions.
The Middle East Africa region showed a strong ability to offset cost inflation. Continued strong pricing across the region delivered positive price over cost for the quarter, with good demand in Nigeria, Iraq and Kenya. Decarbonizing its operations, the region delivered a significant increase in usage of alternative fuels.
The Asia Pacific region faced a challenging environment amid cost inflation. An expansion of the aggregates business in China and improved profitability in Australia helped to partially offset softer cement demand in the region. A new production line at the Tikaria plant in India is expected to be supportive of growth going forward.Accelerating expansion of Solutions & Products
Holcim's Roofing business was a strong contributor to this quarter's performance, delivering highly profitable growth at 17% Recurring EBIT margin. Expanding its reach in the attractive residential roofing market, Holcim successfully closed the Malarkey Roofing Products acquisition on 28 February 2022, with projected 2022 Net Sales of USD 600 million.
Holcim continued to expand its aggregates and ready-mix concrete portfolio with four bolt-on acquisitions in the quarter. Further pursuing its ongoing portfolio optimization, Holcim has finalized the divestment of its cement operations in Northern Ireland.Continued leadership in sustainability
With sustainability at the core of its strategy, Holcim published its first Climate Report, sharing its net-zero journey with 2030 and 2050 targets validated by the Science-Based Targets initiative. A first in its industry, it details Holcim's decarbonization actions, from green building solutions with innovative raw materials like calcined clay and construction & demolition waste, all the way to circular construction. It shares Holcim's focus on next generation technologies such as its portfolio of over 30 Carbon Capture, Utilization and Storage projects and innovation programs cutting across digitalization, energy efficiency and renovation.
Continuing its focus on sustainable construction, ECOPact green concrete represented 10% of ready-mix net sales in March, making good progress towards its objective of reaching 25% by 2025.
In January, Holcim launched the industry's first sustainability-linked bonds in the Swiss franc market, raising a total of CHF 425 million. This represents a significant step toward delivering its strategic goal of linking over 40% of its financing agreements to the company's sustainability goals.Outlook
Despite volatile market conditions and geopolitical uncertainty, Holcim expects growth momentum to continue in all regions. The record start to the year and the positive demand outlook globally gives Holcim the confidence to upgrade its guidance with:
1 after leasesGroup and regional figures
Reconciling measures of profit and loss to the Holcim Group's consolidated statement of income:
As announced in March 2022, Holcim has initiated the process to exit the Russian market. Effective from 1 March 2022, Russia is excluded from Holcim's main business performance indicators.
Media conference: 09:00 CEST Analyst conference: 10:00 CEST
Switzerland: +41 (0) 58 310 50 00
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Germany: +49 (0) 69 505 0 0082
United Kingdom: +44 (0) 207 107 06 13
United States: +1 (1) 631 570 56 13
The media conference at 09:00 am CEST and analyst's conference at 10:00 am CEST will be held by phone.
In order to participate in the analyst's conference, please go to https://www.holcim.com/investors.
Important disclaimer - forward-looking statements:
End of ad hoc announcement
1332595 22-Apr-2022 CET/CEST