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Holcim Ltd HOLN

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Morningstar’s Analysis

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Holcim Raises Profit Growth Guidance Once Again Following Record First-Half EBIT; Maintain Our FVE

Matthew Donen, CFA Equity Analyst

Analyst Note

| Matthew Donen, CFA |

Narrow-moat Holcim reported a strong set of first-half results that saw management raise recurring EBIT growth guidance for the second time this year. First-half EBIT growth of 72% year over year to CHF 2 billion is a record high for the group and is impressively 19% above 2019 levels despite revenue being below prepandemic levels. Margin expansion was mostly driven by volume growth across geographies and product categories coupled with healthy pricing, which was able to mitigate higher energy prices. Our forecasts were already bullish prior to the guidance upgrade, and thus we maintain our CHF 56 fair value estimate. We believe shares are trading in fair value territory.

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Company Profile

Business Description

LafargeHolcim is a global manufacturer of construction materials such as cement, aggregates and concrete. The company is the result of a merger between Lafarge and Holcim, completed in 2015, which created a leader in the building materials sector. LafargeHolcim has a global presence, operating in over 70 countries with 72,000 employees. The company also has significant investments in ACC Limited and Ambuja Cement, two major cement players listed in India.

Zurcherstrasse 156
Jona, 8645, Switzerland
T +41 588585858
Sector Basic Materials
Industry Building Materials
Most Recent Earnings Dec 31, 2017
Fiscal Year End Dec 31, 2021
Stock Type
Employees 67,409