• Recurring EBIT: Record CHF5 billion, up 11% in local currency and 6% in Swiss francs.
• Earnings Per Share (EPS): Increased by 5% to CHF5.7.
• Free Cash Flow: Record CHF3.8 billion, with a 57% cash conversion rate.
• EBIT Margin: Expanded by 150 basis points to 19.1%.
• Dividend Growth: Proposed dividend up 11% to CHF3.1 per share.
• Share Buyback: CHF1 billion completed in December 2024.
• Net Sales Growth: Mid-single digit growth in local currency projected for 2025.
• North America EBIT Margin: Increased by 330 basis points to nearly 25%.
• Latin America EBIT Margin: Achieved 36% margin.
• Europe EBIT Growth: More than 12% increase in local currency.
• Asia, Middle East, Africa Margin: Expanded to 22.8%.
• Solutions and Products EBIT Growth: Double-digit growth with a 100 basis points margin expansion.
• Recycled Materials: 10.2 million tons of recycled construction and demolition materials in 2024.

• Warning! GuruFocus has detected 4 Warning Sign with FUGRF.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Holcim Ltd (HCMLF) achieved a record recurring EBIT of more than CHF5 billion for the first time in its history, marking an 11% increase in local currency.
• The company reported a significant expansion in its EBIT margin to 19.1%, driven by advanced branded solutions like ECOPact and ECOPlanet.
• Holcim Ltd (HCMLF) completed a CHF1 billion share buyback in December 2024, enhancing shareholder value.
• The company achieved a record free cash flow of CHF3.8 billion, with a robust cash conversion ratio of 57%.
• Holcim Ltd (HCMLF) proposed an 11% increase in dividends, translating to CHF3.1 per share, marking the fourth consecutive year of double-digit dividend growth.

Negative Points

• The company faced a foreign exchange effect that negatively impacted EBIT by 4.8%, due to the appreciation of the Swiss franc.
• Holcim Ltd (HCMLF) incurred approximately CHF350 million in extra costs related to legal expenses, asset write-offs, and goodwill impairments.
• There is a risk of project delays or cancellations in North America once the Infrastructure and Jobs Act runs out.
• The company is cautious about its free cash flow guidance for 2025, setting it at above CHF3.5 billion, which is lower than the 2024 record.
• Holcim Ltd (HCMLF) faces challenges in maintaining its supply of slag-based cement in Europe due to the decarbonization of the steel industry.

Q & A Highlights

Q: How did Holcim secure significant EU funding for its CCUS projects, and what are the expected cost savings from modernizing its plants? A: Holcim's success in securing nearly EUR1 billion in EU funding for seven CCUS projects is attributed to creating independent teams with diverse expertise. This modernization is expected to yield significant cost savings, particularly as obsolete kilns are upgraded to state-of-the-art technology, with more details anticipated by 2027. (Miljan Gutovic, CEO)

Q: Can you elaborate on the extra costs incurred in 2024, such as legal costs and impairments, and their impact on the financials? A: The extra costs, totaling around CHF350 million, were primarily due to the spin-off, impairments related to CCUS projects, and disposals, with no extraordinary legal expenses incurred. These are considered one-off costs. (Steffen Kindler, CFO)

Q: What is the outlook for North American infrastructure projects, and are there risks of delays or cancellations? A: Holcim is involved in over 200 infrastructure projects in North America, with expectations for continued momentum and no anticipated delays, especially with the new US administration's focus on infrastructure and public-private partnerships. (Miljan Gutovic, CEO)

Q: What are Holcim's expectations for the Solutions and Products segment, particularly in terms of growth and market focus? A: The Solutions and Products segment, especially the roofing business, is expected to benefit from the growing repair and refurbishment market, with an organic growth ambition of high single to double digits. (Miljan Gutovic, CEO and Steffen Kindler, CFO)

Q: How does Holcim view the potential impact of the EU's shift from a Green Deal to a Clean Industrial Deal on its operations? A: Holcim is optimistic about the EU's shift, which aims to simplify processes and provide more financial incentives for decarbonization, positioning the company well to capture these opportunities. (Miljan Gutovic, CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.