Holcim Q1 2025 slides: Margin expansion continues despite flat sales

Introduction & Market Context

Holcim (SIX:HOLN) reported its first quarter 2025 results on April 25, showing resilience in a challenging economic environment. The building materials giant delivered flat sales but improved profitability, demonstrating its ability to navigate varying regional market conditions through its high-value strategy and focus on sustainable building solutions.

The company reported net sales of CHF 5,544 million, representing a marginal decline of 0.2% in local currency compared to the same period last year. Despite this, Holcim achieved over-proportional recurring EBIT growth of 1.7% in local currency, highlighting its successful focus on higher-margin products and operational efficiency.

Quarterly Performance Highlights

Holcim’s Q1 2025 performance revealed a company effectively executing its margin expansion strategy. The recurring EBIT margin increased to 19.1%, continuing a steady upward trajectory from 16.3% in Q1 2023 and 17.9% in Q1 2024.

As shown in the following chart of recurring EBIT and margin growth:

The company’s net sales remained relatively stable year-over-year, with organic growth slightly negative at -0.6%, partially offset by a 0.4% contribution from acquisitions and divestments. Currency effects had a negative 0.6% impact on reported figures.

The following bridge illustrates the components affecting net sales performance:

Similarly, recurring EBIT showed resilience with organic growth contributing 1.5% and acquisitions adding 0.2%, though currency effects reduced the reported figure:

Regional performance varied significantly across Holcim’s global operations. North America faced challenges with net sales declining 5.4% in local currency and recurring EBIT falling sharply by 112.3%, which the company attributed to unfavorable weather conditions. In contrast, Latin America delivered strong results with 8.1% net sales growth and 5.8% recurring EBIT growth in local currency, maintaining an industry-leading margin of 35.0%.

Europe showed mixed results with net sales declining 2.1% but recurring EBIT growing 5.9%, while Asia, Middle East & Africa achieved impressive 10.5% recurring EBIT growth despite a 1.8% decline in net sales. The Solutions & Products segment saw 2.0% net sales growth but a slight 1.7% decline in recurring EBIT.

This regional breakdown is illustrated in the following segment performance overview:

Strategic Initiatives

Holcim continues to advance its sustainability-focused strategy, with significant growth in its eco-friendly product lines. The company’s ECOPact low-carbon concrete now represents 32% of ready-mix concrete sales, up from 29% in 2024 and 13% in 2022. Similarly, ECOPlanet low-carbon cement has grown to 29% of cement sales, compared to 26% in 2024 and just 7% in 2022.

The following chart illustrates this rapid adoption of sustainable building materials:

The company is also making progress in circular construction, reporting a 21.1% increase in recycled construction and demolition materials compared to Q1 2024. Holcim highlighted its recognition as a global climate leader, appearing on CDP’s "A list" for climate action for the fourth consecutive year.

Value-accretive M&A remains a key growth driver, with five acquisitions completed in the quarter. These strategic moves support Holcim’s expansion in attractive markets and strengthen its position in sustainable building solutions.

The company’s innovation hub continues to develop advanced solutions, as evidenced by projects like the Grand Egyptian Museum (Africa’s first building to receive IFC EDGE advanced Green Building Certification) and data centers for Meta (NASDAQ:META) incorporating AI-powered solutions.

Forward-Looking Statements

Holcim confirmed its full-year 2025 guidance, projecting mid-single-digit net sales growth and over-proportional growth in recurring EBIT with further margin expansion. The company expects to generate free cash flow above CHF 3.5 billion and achieve continued double-digit growth in recycled construction materials.

The outlook for 2025 is summarized in the following guidance:

A significant development remains the planned spin-off of Amrize, Holcim’s North American business. The company reported that the full capital market separation is on track, with the listing on the New York Stock Exchange expected in June 2025. The separation will be executed as a 100% spin-off, with Amrize complying with SEC rules as an independent entity.

Holcim emphasized its resilient business model, characterized by a decentralized approach with 2,600 local sites operating on a "local-for-local" basis. This structure, combined with financial discipline, positions the company to navigate various economic cycles effectively.

The company expects infrastructure modernization and manufacturing onshoring to drive growth in North America through 2025, with over 230 infrastructure projects already secured through 2028. In Europe, the expansion of sustainable solutions is anticipated to drive profitable growth, while Latin America benefits from both public and private sector investments.

Full presentation:

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