Displaying items by tag: Holcim

Australia/Europe: The European Commission (EC) has approved a deal that will see Heidelberg Materials and Holcim acquire joint control of Australian business BGC Cementitious via their joint venture Cement Australia. BGC Cementitious, the cementitious division of the Buckeridge Group of Companies, is active in the cement, concrete, quarrying, asphalt and transportation sectors. The EC concluded that the planned deal would not hurt competition given the limited impact on the European Economic Area. The transaction includes, among others, the Kwinana Cement plant in Western Australia. Financial details of the deal were not disclosed.

UK: Aggregate Industries has rebranded as Holcim UK. The company operates over 200 sites across the UK with 4000 employees. Following 20 years as a UK-based subsidiary of Holcim Group, the new direction sees the business align more closely with its Swiss-based parent company, which operates across 70 countries and employs over 60,000 people worldwide.

Holcim UK CEO Lee Sleight said “Our evolution from Aggregate Industries to Holcim UK is much more than a rebrand. It represents a commitment to leading the sector towards a more sustainable future through a commitment to innovation and collaboration.”

Europe: 77 decarbonisation projects (including 14 for the cement sector) have signed grant agreements under the Innovation Fund 2023 Call (IF23), following the announcement of results in October 2024. The cement projects, spanning nine European countries, will begin operations between 2025 and 2029.

The funding, sourced from the EU Emissions Trading System, provides grants ranging from €4.4m to €234m, supporting projects expected to avoid 118Mt of CO₂. The total 77 projects funded have the potential to reduce emissions by around 398Mt of CO₂ equivalent over their first 10 years of operation. The projects funded in the cement industry mostly involve carbon capture and storage (CCS). Among the selected CCS projects are Carbon2Business in Germany, Olympus in Greece, Go4Zero in Belgium and Cementir’s Accsion project in Denmark.

Cement producers based in North America and Europe reported stable revenues and growing earnings in 2024. Revenue growth at scale could be found in India and Sub-Saharan Africa. Notably, India-based UltraTech Cement’s sales volumes of cement surpassed those of Holcim’s. Yet, the European-headquartered multinationals were mostly happy due to increased earnings. Holcim lauded record performance in 2024, for example, and Heidelberg Materials reflected upon “a very good financial year.” This review of financial results looks at selected large heavy building materials companies, outside of China, that have released financial results so far.

Graph 1: Sales revenue from selected cement producers in 2023 and 2024. Source: Company reports. Note: Figures calculated for UltraTech Cement, consolidated data from Ambuja Cement used for Adani Cement.

Holcim’s net sales may have dropped on a direct basis from 2023 to 2024 but its focus is on earnings. Its recurring earnings before interest and taxation (EBIT) rose by 4% year-on-year to US$1.31bn in 2024 from US$1.26bn in 2023. And the changing nature of where its earnings come from in recent years has led to the impending spin-off of the US business, scheduled to occur by the end of the first half of 2025. The company will be called Amrize and will be listed on the New York Stock Exchange, with an additional listing on the SIX Swiss Exchange. By product line, sales were down for cement, ready-mixed concrete (RMX) and aggregates, but they were up for the group’s Solutions & Products division. Despite this earnings were up for all four product lines. By region sales fell in North America, Europe and Asia, Middle East & Africa. They rose in Latin America. For reference, North America and Europe are the group’s two biggest segments.

Heidelberg Materials’ sales revenue remained stable in 2024 on a direct basis, although it dipped slightly on a like-for-like comparison. Its result from current operations before depreciation and amortisation (RCOBD) grew by 6% to US$3.4bn. Geographically, revenue in Europe and Asia Pacific fell. RCOBD increased, notably, by 19% to US$4.80bn in North America. It grew everywhere else apart from Africa-Mediterranean-Western Asia. As is becoming customary for Heidelberg Materials, it made a point of highlighting its sustainability progress. This includes demonstrating progress towards its sustainable revenue target and reminding markets that the delivery of its first carbon captured net-zero cement evoZero product is planned during 2025. The group plans to release its 2024 full annual report at the end of March 2025.

Graph 2: Cement sales volumes from selected cement producers in 2023 and 2024. Source: Company reports. Note: Annualised sales volumes provided for CRH, figures calculated for UltraTech Cement.

CRH’s strength in North America gave it both rising revenues and earnings. Sales revenue from its Americas Materials Solutions division reported 5% growth to US$16.2bn in 2024. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) sprung up by 22% to US$3.75bn. Revenue growth was attributed to price increases and acquisitions. Earnings growth was pinned on growth across all regions, pricing, cost management, operational efficiency and gains on land asset sales. Despite this, reported volumes in the division were down in 2024. The group’s International Solutions division performed more in line with its competitors, with revenue down slightly but earnings up. Lastly, CRH’s annualised sales volumes of cement grew in 2024. This is likely primarily due to the group’s acquisition of assets in Australia.

Cemex had a tougher time of it in 2024, compared to the previous three companies, with both sales revenues and earnings down. Sales and earnings were down on a direct basis for each of its three main regions – Mexico, the US, and Europe, Middle East, and Africa - although the picture was better in Mexico on a like-for-like basis. Sales volumes of cement, RMX and aggregates were either static or down in each of these areas. In the US the group may have been unlucky as it took an earnings hit from four hurricanes and a deep freeze in Texas. Group earnings improved in the fourth quarter of 2024. In spite of this it introduced ‘Project Cutting Edge’ in February 2025, a three-year, US$350m cost saving exercise.

The first takeaway from UltraTech Cement’s performance in 2024 is that a second (mainly) national producer has overtaken the multinationals. This happened with several China-based cement producers over the last decade. Now it has occurred in India with Ultratech Cement. It reported sales volumes of 120Mt in the 2024 calendar year. Shifting to the Indian financial calendar, Ultratech Cement ‘s revenue rose slightly in the nine months to 31 December 2024 but its new profit fell by 19% year-on-year to US$458m. Local press has blamed this on weak price realisations despite sales volumes growing. At the same time its energy costs have fallen so far in its 2025 financial year. Adani Cement, meanwhile, reported strong growth in both revenue and earnings in the 12 months to 31 December 2024. It too is likely to become one of the world’s largest cement producers by sales volumes by 2030, outside of China, if it follows-through on its expansion targets.

Finally, Dangote Cement reminded us all what growth really looks like as the Nigerian market started to rebound. Sales revenue increased by 62% to US$2.39bn and EBITDA by 56% to US$591m. Despite high domestic interest rates in Nigeria the group managed to grow its sales volumes of cement. Elsewhere in Sub-Saharan Africa sales volumes declined a little due to bad weather conditions in Tanzania and election uncertainties in Senegal and South Africa.

The importance of the US market for many multinational cement producers continued in 2024. However, this reliance on one place can carry risks, as Cemex’s results seem to suggest. Another reminder of this occurred this week when the US government imposed 25% tariffs on Canada and Mexico. The Portland Cement Association said in a statement, “The US cement industry would like to work with the administration to address federal laws and regulations that prevent American cement companies from increasing production, making it necessary for the US to import some 20% of its total cement consumption annually - including from Canada and Mexico.” Elsewhere, markets are changing as mega-markets such as India and Sub-Saharan Africa unleash their potential. China-based Huaxin Cement, for example, may start to gain a place on international round-ups like this one in 2025 when it completes its acquisition of Lafarge Africa.

Switzerland: Holcim has announced its 2024 financial results, reporting record performance with full-year net sales of €28.2bn and an operating profit of €4.9bn. The company increased its use of recycled construction demolition materials by 20% to 10.2Mt. The planned listing of its North American business remains on track for completion by the end of the first half of 2025.

Holcim's net sales in the cement sector reached €14bn. In North America, net sales were €6.8bn despite challenging market conditions. Latin America achieved its 18th consecutive quarter of profitable growth, with net sales of €3bn. During the year, there were four acquisitions to enter the new market of Peru and expand operations in Mexico and Guatemala. The Asia, Middle East and Africa region reported net sales of €3.85bn, driven by growth in Australia and North Africa, alongside four divestments completed in 2024. The Solutions and Products sector continued its profitable growth, with net sales of €6.3bn, primarily due to increased sales of its advanced roofing systems. Sustainable building solutions contributed to profitable growth in Europe, with net sales of €7.7bn

In the fourth quarter of 2024, Holcim's net sales were €6.9bn, a 1.6% increase compared to the same period in 2023. The company remains optimistic about 2025, with a strong outlook across all business segments.

North America: Switzerland-based Holcim has announced the name for its upcoming spin-off of its North American operations: Amrize. Amrize will operate as an independent public company and a leader in the North American building materials sector ‘from foundation to rooftop.’ Holcim says that the new name combines the business’ values and vision of ‘ambition’ and ‘rising.’ A spin-off on the New York Stock Exchange and SIX Swiss Exchange is scheduled for completion before 30 June 2025, pending shareholder and regulatory approvals.

Holcim Chair and designated Chair and CEO of Amrize Jan Jenisch said "This is an exciting time for construction in North America, with the ongoing modernisation of infrastructure, the reshoring of manufacturing and the opportunity to bridge the housing gap with the most advanced building solutions. With our planned spin-off of Amrize, we aim to be the partner of choice for our North American customers and unlock value for all our stakeholders.”

US President Donald Trump threatened tariffs on imports from Canada, China, Mexico and the European Union this week. Tariffs to Canada and Mexico were announced on 1 February 2025 and then paused for a month to allow for negotiations. Ones to China have been implemented. Tariffs to the European Union have been proposed but nothing has happened yet. What does this mean for the cement sector?

Graph 1: Imports of cement and clinker to the US. Source: USGS. Estimated data for 2024.

The data suggests that whacking 25% tariffs on cement imports from Canada and Mexico would have an impact. The US imported 26.5Mt of cement and clinker in 2023. Based on United States Geological Survey (USGS) data from January to October 2024, imports in 2024 have fallen by 8% year-on-year but they still represent a large chunk of consumption. Türkiye has been the biggest source of imports over the last five years but Canada has been the second biggest supplier. Together with Mexico, it provided over a quarter of imports in 2023. A similar share is expected in 2024. Greece, a country in the EU, has also been present in the top five importing countries to the US during this time.

The Portland Cement Association (PCA) reinforced this view. In a carefully worded statement it took pains to point out alignment with the intentions behind the tariffs, such as appreciating that the administration was open to negotiation and appeared to be flexible. However, it warned that the moves could adversely affect energy and national security, delay infrastructure projects and raise costs. It pointed out the import share from Canada and Mexico, adding that this represented nearly 7% of the US’ cement consumption. It noted which states were the main entry points for cement imports from the two countries. Finally, it highlighted the high level of consumption (36%) that imports from Canada might account for in northern states such as New York, Washington and so on. Meanwhile, Mexico’s National Chamber of Cement (CANACEM) warned that the proposed actions might trigger a ‘competitiveness crisis’ in the US.

Holcim’s CEO, by contrast, nonchalantly told Reuters that he didn’t expect any impact by tariffs on his business. Miljan Gutovic described the group’s US operations as a local business with production happening in the country and equipment and spare parts all being sourced locally. This optimistic view is likely to be influenced by the company’s impending spin-off of its US business. The listing in the US remains scheduled for the first half of 2025 with no complications expected from tariffs.

Clearly, implementing tariffs on imports of cement and clinker from Canada and Mexico could cause a shortage in the US in the short term. This, in turn, could lead to higher prices for consumers in the US. This potential effect would be pronounced in border regions that are reliant on imports. It is worth noting that a number of production lines in both Mexico and Canada have previously been mobilised to meet the export market to the US. These lines would likely be mothballed if tariffs were to be implemented, unless they could find other markets. In the medium term though, as the World Cement Association (WCA) pointed out this week, the world produces too much cement. So it looks likely that the US cement market would adjust to a new equilibrium. Taxing imports from the EU would have a similar effect. Although it seems like it would be less pronounced for the US cement market unless it was in conjunction with tariffs to Canada and Mexico. It would certainly be bad news for cement producers in Greece.

Cement producers in the US look set to benefit from tariffs as demand for their products and prices could increase. There is a risk that too sudden a change to the import market could cause adverse market effects through shortages. Many of these companies are multinational groups with headquarters in foreign countries. However, the strength of the US market compared to elsewhere has prompted some of these businesses to become more ‘American’ through listing in the US or focusing merger and acquisition activity in North America.

At this point we’re stuck in a half-way house place where import tariffs have been threatened and negotiations are pending. The relatively muted stock market reaction to the tariffs and Trump’s swiftness in enacting pauses suggest that it is brinkmanship by the US administration. If this situation continues for any length of time then it will likely have an effect all of its own. In which case don’t expect any export-focused investment by cement companies in Canada and Mexico any time soon.

Egypt: Lafarge Egypt has appointed Khaled El Dokani as its CEO.

El Dokani has worked for Holcim group since 2004. He started his career with the building materials manufacturer as the chief financial officer of Lafarge Algeria. He became the Country Manager for Qatar in 2016. This was followed by Country CEO roles in Iraq, Nigeria and the GCC (UAE, Qatar & Oman). He holds a bachelor's degree in commerce and accounting from Alexandria University.

UAE: Lafarge UAE has appointed Ali Saad as its CEO.

Saad previously worked as the General Manager - UAE from 2023. He started his career working for Lafarge Canada. Financial management roles followed with Unisource Canada and Cemena in Bahrain before he joined Holcim group in 2010. He worked as the chief financial officer in Iraq and then held general management positions in Iraq, Jordan and the UAE. Saad is a graduate in finance and strategic management from McGill University in Canada. He also holds a Master of Business Administration (MBA) from the University of Quebec in Montreal, Canada.

US: Holcim’s CEO Miljan Gutovic says he does not expect any effects of proposed US tariffs upon his company. "I don't really see any impact, because our business is a local business (in the US)," said Gutovic in an interview with Reuters. "We are producing locally, we are sourcing the equipment, the spare parts locally, so how is this going to affect us? I do not see it." He added that the proposed tariffs were also unlikely to pose any problems to the group’s planned spin-off of its business in the US. The listing of its North America-based business is remains scheduled for the first half of 2025.

The US government proposed tariffs upon imported goods from Canada and Mexico in early February 2025 but these have been paused for one month. Tariffs on China are set to start on 4 February 2025. US President Donald Trump has also spoken about implementing tariffs on the EU.