Thu, Apr 25th 2024
Despite a slight decline in sales, Holcim boosts its profitability in Q1, beating expectations with strategic acquisitions and operating gains.
Holcim posted lower sales in the first quarter, but earned more in operating terms. Sales fell by 2.4% to 5.59 billion Swiss francs.
The strong Swiss franc had a negative impact on the result, the world’s largest cement company announced on Thursday.
On a comparable basis, business grew by 3.4% in local currencies.
The company was able to increase its recurring operating profit EBIT by 7.8% to CHF 532 million.
This does not include restructuring, process and other one-off costs or impairments on operating assets. The building materials group does not disclose its consolidated net profit in quarters with uneven results.
Holcim thus fell slightly short of the financial community’s expectations in terms of sales, but clearly exceeded them in terms of profitability.
In local currency, recurring EBIT increased by 17.1%, explained Group CEO Jan Jenisch.
The company’s reorganization also continued. Holcim also made five acquisitions and completed four disposals in the first quarter. “Overall, our M&A activities contributed more than 3% to our sales in the first quarter,” said Jenisch.
Recurring EBIT is expected to increase disproportionately. The recurring EBIT margin is expected to rise to 18%t. Free cash flow is expected to exceed CHF 3 billion.
In addition, further progress is being made with the listing of the North American business in the USA, it was reported.
Holcim had surprisingly announced at the end of January that it would separate its North American business from Holcim next year and list it as a fully independent company in the USA.
The background to this is the US government’s investment programs worth billions: “They will lead to unprecedented expenditure for the construction industry over the next eight to ten years,” said Holcim President.
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