FX.co ★ Holcim Q1 Recurring Earnings, But Net Sales Down; Confirms FY24 Outlook

Swiss construction materials corporation, Holcim Group, announced a 7.8 percent increase in their recurring earnings before interest and taxes (EBIT) for the first quarter, amounting to 532 million Swiss francs from the previous year's 493 million. This represents a 17.1 percent growth in local currency.

The company also recorded a recurring EBITDA of 1.01 billion francs, an increase from the previous year's 970 million. However, the net sales saw a slight dip of 2.4 percent to 5.59 billion francs, down from the previous year's 5.73 billion. Nevertheless, in local currency terms, sales experienced a 3.4 percent growth, indicating flat organic growth.

North America contributed notably to the margin expansion displaying a 3.9 percent rise in local currency recurring EBIT. This surge owes to the robust underlying market demand. Meanwhile, in Latin America, Holcim saw substantial growth in net sales and recurring EBIT. Europe also contributed to the growth figures with a double-digit recurring EBIT uptick, enhancing the recurring EBIT margin by 1.5 percentage points.

Looking ahead to fiscal year 2024, Holcim remains optimistic with an expected organic net sales growth of over 4 percent, besides a projected additional growth from mergers and acquisitions (M&A) of over 2 percent.

The corporation expects to maintain a greater than proportional growth in recurring EBIT, aiming for an increase in recurring EBIT margin to 18 percent. Furthermore, the company anticipates its strong performance in North America to continue in 2024.

Holcim's Chairman and CEO, Jan Jenisch, expressed his confidence in the positive Q1 results, pointing to the 17.1 percent growth in local currency recurring EBIT. He reaffirmed their continued execution of value-accretive transactions and successful M&A strategy, adding over 3 percent to the net sales in the first quarter. He thus firmly reaffirms the full-year guidance for 2024.