Design Delight Studio

Holcim Shares Rise on Strong Q3 Performance and Cost Control

Overview:
Shares of Holcim AG, the Swiss building materials giant, climbed 2.2% following the company’s robust third-quarter 2025 financial results. The firm beat analyst expectations on margins and EBIT, driven by effective cost management and growing demand for sustainable products.

Key Financial Highlights (Q3 & Nine Months 2025)

• Recurring EBIT:

  • Q3: CHF 836 million, slightly up from CHF 835 million year over year, beating consensus by 2.5%.
  • First nine months: CHF 2.28 billion, a 9.8% increase in local currency.

• EBIT Margin:

  • Q3 margin improved to 20.7% from 20.2% year over year.
  • Nine-month margin expanded to 19.1%.

• Net Sales:

  • Q3 net sales stood at CHF 4.04 billion, marginally down from CHF 4.14 billion.
  • For nine months, net sales rose 2.9% to CHF 11.9 billion in local currency.

Drivers of Growth and Profitability

Holcim credits its margin expansion and EBIT growth to:

• Strategic cost discipline and operational efficiency.
• Increased sales of sustainable products such as ECOPact low-carbon concrete (now 31% of ready-mix net sales vs. 26% previous year) and ECOPlanet cement (35% of cement net sales, up from 32%).
• Accelerated decarbonization and circular construction initiatives.
• A strong focus on recycling, with 20% year-on-year growth in recycled construction demolition materials.

Regional Performance Insights

• Europe: Recurring EBIT increased 5.9%, with margin improvement of 130 basis points.
• Latin America: Net sales grew by 10%, but recurring EBIT declined 10.3%.
• Asia, Middle East, and Africa: Recurring EBIT rose 14.7% with a significant 240 basis points margin increase.

Strategic Moves and Outlook

• Holcim completed 14 value-accretive transactions across Europe and Latin America, alongside divesting certain operations in Nigeria and Iraq.
• Recently announced acquisition of Xella, a sustainable European walling systems producer with projected 2025 net sales of approximately €1 billion, expected to close in late 2026 pending regulatory approval. This expands Holcim’s reach into the €12 billion walling market.
• Maintained full-year guidance: recurring EBIT growth of 6-10%, margin above 18%, net sales growth of 3-5%, and over 20% growth in recycled materials.
• Targets free cash flow before leases to be around CHF 2 billion in 2025. —

Analyst Commentary

Jefferies highlighted Holcim’s ability to surpass earnings expectations and improve margins consistently, reaffirming their "buy" rating with a price target of CHF 81.40. The brokerage emphasized strong operational discipline and growth in high-value sustainable products as key factors behind the performance.

Conclusion

Holcim’s third-quarter results emphasize its leadership in sustainable building solutions and effective cost control, translating into improved profitability and solid outlook. The company’s expansion through targeted acquisitions like Xella signals ongoing commitment to sustainable growth in the global construction materials market.

Sources: Investing.com, Holcim AG official statements, Jefferies analyst report.

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