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Investing.com -- Shares of Switzerland-based building materials producer Holcim AG (SIX:HOLN) rose 2.2% on Friday after the company reported stronger-than-expected third-quarter profitability, with recurring EBIT 2.5% above consensus and its margin improving to 20.7%.
Holcim said recurring EBIT rose 9.8% in local currency to CHF 2.28 billion for the first nine months of 2025, as the recurring EBIT margin expanded to 19.1%. Net sales increased 2.9% in local currency to CHF 11.9 billion.
The company cited higher sales of sustainable products and disciplined cost management for the gain.
“We delivered strong profitable growth for the first nine months of the year with a 9.8% increase in recurring EBIT in local currency1 and an industry leading margin of 19.1%,” Chief executive Miljan Gutovic said in a statement.
“Margin expansion was driven by our high-value strategy, scaling up our sustainable offering to meet customer demand, and accelerating decarbonization and circular construction for profitable growth, even as we completed 14 value-accretive transactions.”
Third-quarter net sales totaled CHF 4.04 billion, compared with CHF 4.14 billion a year earlier. Recurring EBIT reached CHF 836 million versus CHF 835 million in the same period of 2024, and the margin rose to 20.7% from 20.2%.
Jefferies said the third-quarter recurring EBIT was “3.8% ahead of our estimate and 2.5% ahead of company consensus,” with margins “130 basis points higher year on year.”
The brokerage reiterated its “buy” rating and CHF 81.40 price target for Holcim, saying the results “once again highlights Holcim’s ability to drive margins ahead of estimates.”
The Zurich-based group confirmed its full-year 2025 guidance, targeting recurring EBIT growth of 6% to 10% in local currency, a margin above 18%, and free cash flow before leases of about CHF 2 billion. It expects net sales growth of 3% to 5% and more than 20% growth in recycled construction demolition materials.
Regional results were mixed. In Europe, recurring EBIT rose 5.9% in local currency with a 130-basis-point increase in margin.
Latin America recorded 10% net sales growth but a 10.3% decline in recurring EBIT. In Asia, the Middle East and Africa, recurring EBIT increased 14.7% in local currency with a 240-basis-point gain in margin.
Holcim said it completed 14 transactions this year, including acquisitions in France, Spain, Bulgaria, Serbia, Germany, Poland, Mexico, Argentina and Peru.
It also finalized divestments of its Nigeria operations and Karbala Cement Manufacturing Ltd. in Iraq.
Demand for sustainable materials continued to rise. ECOPact low-carbon concrete made up 31% of ready-mix net sales, up from 26% a year earlier, while ECOPlanet cement represented 35% of cement net sales, compared with 32% last year. The company said it increased recycling of construction demolition materials by about 20% year over year.
In October, Holcim signed a binding agreement to acquire Xella, a European producer of sustainable walling systems with projected 2025 net sales of about €1 billion.
Gutovic said the deal “will give Holcim a new growth platform in the highly attractive EUR 12 billion-plus walling market.” The transaction is expected to close in the second half of 2026, subject to regulatory approval.