Design Delight Studio

Holcim Shares Surge Following Strong Q3 Earnings and Cost Control

Swiss building materials giant Holcim AG (SIX: HOLN) experienced a 2.2% rise in share price on Friday after outperforming profit expectations for the third quarter of 2025. The company’s recurring EBIT came in 2.5% above consensus estimates, with its EBIT margin improving to an impressive 20.7%, driven largely by effective cost control and a strategic focus on sustainable products.

Key Financial Highlights:

• Recurring EBIT: Increased by 9.8% in local currency to CHF 2.28 billion for the first nine months.
• Recurring EBIT Margin: Expanded to 19.1% for the same period.
• Net Sales: Grew 2.9% in local currency to CHF 11.9 billion.
• Q3 Net Sales: CHF 4.04 billion, slightly down from CHF 4.14 billion a year ago.
• Q3 Recurring EBIT: CHF 836 million, up from CHF 835 million in Q3 2024.
• Q3 EBIT Margin: Rose to 20.7% from 20.2% year-on-year.

Jefferies praised Holcim’s performance, noting the recurring EBIT beat was 3.8% above their estimate with margin expansion of 130 basis points. The brokerage reiterated a “buy” rating with a CHF 81.40 price target, highlighting Holcim’s consistent margin improvement.

Strategic Growth and Sustainability Focus:

Holcim’s CEO Miljan Gutovic emphasized the company’s profitable growth driven by a high-value strategy, particularly its push into sustainable building materials. Notably:

• ECOPact low-carbon concrete sales represented 31% of ready-mix net sales, up from 26% the previous year.
• ECOPlanet cement accounted for 35% of cement net sales, rising from 32% last year.
• Recycling of construction demolition waste surged approximately 20% year-over-year.

The company completed 14 strategic acquisitions across Europe and Latin America, while divesting non-core assets in Nigeria and Iraq.

Regional Performance Snapshot:

• Europe: Recurring EBIT up 5.9% with a 130-basis-point margin increase.
• Latin America: Net sales grew by 10%, but recurring EBIT declined by 10.3%.
• Asia, Middle East & Africa: Recurring EBIT rose 14.7%, with a margin gain of 240 basis points.

Outlook and Guidance:

Holcim confirmed its 2025 full-year outlook:

• Recurring EBIT growth target of 6-10% in local currency.
• EBIT margin expected above 18%.
• Free cash flow before leases aimed at around CHF 2 billion.
• Net sales growth projected between 3-5%.
• Recycled construction material growth forecasted over 20%.

Additionally, Holcim announced a binding agreement to acquire Xella, a leading European sustainable walling systems producer, with expected 2025 net sales around €1 billion. This acquisition, anticipated to close in H2 2026 pending regulatory approval, aims to establish a new growth platform in the €12 billion+ walling market.

Conclusion:

Holcim’s strong financial performance, disciplined cost management, and strategic focus on sustainability underscore its leadership in the building materials sector. The company’s margin expansion and growth initiatives, particularly in low-carbon materials and recycling, align with rising demand for eco-friendly construction solutions, reinforcing Holcim’s position as a sustainable industry frontrunner.

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