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Holcim launches its Strategy 2025 “Accelerating Green Growth”
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Holcim (OTC-PINK:HCMLY) has launched its "Strategy 2025 - Accelerating Green Growth" to establish itself as a leader in sustainable building solutions. This strategy aims for 3%-5% net sales growth and a target of 30% sales contribution from Solutions & Products by 2025. Holcim plans to recycle 10 million tons of construction waste and achieve 10% ROIC with a cash conversion rate of 45%. The company aims to capitalize on megatrends in construction while promoting sustainability and innovation.
Positive
Achieving 3%-5% net sales growth.
Targeting 30% of Group sales from Solutions & Products.
Recycling 10 million tons of construction & demolition waste.
10% ROIC and 45% cash conversion by 2025.
Negative
None.
Becoming global leader in innovative and sustainable building solutions
Expanding Solutions & Products to 30% of Group net sales
Leading the circular economy by recycling 10 million tons of construction & demolition waste in its products
Delivering continuous profitable growth with 3%-5% net sales growth lfl1and over-proportional Recurring EBIT growth lfl
Achieving superior returns with 10% ROIC, cash conversion of 45% and leverage below 1.5x2
Holcim (Paris:HOLN) announces its “Strategy 2025 – Accelerating Green Growth” to become the global leader in innovative and sustainable building solutions, following the overachievement of “Strategy 2022” one year in advance. With “Accelerating Green Growth,” Holcim will achieve profitable growth across all its businesses, fueled by sustainability and innovation. It will accelerate the expansion of its Solutions & Products business to reach 30% of Group sales, positioning itself in the most attractive segments of the construction value chain with new technologies.
Jan Jenisch, CEO Holcim: “We delivered what we promised with our Strategy 2022 one year in advance, setting strong foundations for our next era of growth. With our new level of performance, we have the firepower to invest in Solutions & Products to make it 30% of our company, while leading the way in green building solutions from ECOPact green concrete to energy-efficient roofs. With our strategy ‘Accelerating Green Growth’ we are ready to seize the opportunities ahead, on our way to become the global leader in innovative and sustainable building solutions.”
Holcim’s new “Strategy 2025 - Accelerating Green Growth” has four value drivers:
Accelerating Growth
With today’s megatrends, from the rise in population and urbanization to improving living standards, the construction sector has never been more attractive. In this context, Holcim will accelerate growth across all its markets with leading profitability and cash flow. Holcim’s profitable growth will be driven by innovative building solutions, from ECOPact green concrete to energy-efficient roofing systems. It will lead cement’s green transformation, with solutions like ECOPlanet, including the world’s first cement with 20% construction & demolition waste inside. The company will further fuel its growth with bolt-on acquisitions in mature markets in the aggregates and ready-mix concrete businesses. Strengthening its performance, Holcim will scale up digitalization across its value chain, from its operations and distribution to its customer experience.
Expanding Solutions & Products
Holcim will reach 30% of its Group net sales in Solutions & Products. Growing closer to its customers, this business will expand its range of integrated solutions and systems from construction and energy efficiency to repair and refurbishment. This builds on Holcim’s acquisition of Firestone Building Products, a global leader in roofing systems, as a new growth and innovation engine for the company. Roofing sales are already delivering double-digit growth in the USD 50 billion global flat roofing market and will double to USD 4 billion by 2025 with strategic investments and acquisitions.
Leading in Sustainability and Innovation
Sustainability is at the core of Holcim’s strategy, with the industry’s first 2050 net-zero targets, endorsed by the Science Based Targets initiative (SBTi). Holcim will remain at the forefront of green building solutions, with 25% of ready-mix net sales coming from ECOPact, ranging from 30% to 100% lower CO2 footprint. Leading the circular economy, Holcim will recycle 75 million tons of materials across its business including 10 million tons of construction & demolition waste by 2025. Holcim will continue to deploy smart technologies, from 3D printing using 70% less materials to green mineral components like calcined clay. It will further develop next-generation technologies including 30 pilot projects in carbon capture, utilization and storage, in line with its target to operate at least one net-zero plant by 2030.
Delivering Superior Performance
Holcim’s “Strategy 2025 – Accelerating Green Growth” financial targets are:
3%-5% net sales growth lfl
Over-proportional increase in Recurring EBIT lfl
45% cash conversion
10% return on invested capital in 2025
Ratio of net financial debt to EBITDA of under 1.5x in 2025
The strategy includes ambitious 2025 sustainability targets in line with Holcim’s net-zero roadmap, validated by the SBTi:
25% of ready-mix sales from ECOPact, with 30% to 100% lower CO2 footprint
10 million tons of construction & demolition waste recycled in its products and 75 million tons of recycled materials overall
Green CAPEX of CHF 500 million
>40% of financing agreements linked to sustainability goals
Holcim will deliver these results by fostering a high-performance culture while operating at the highest level of ethics and integrity.
The full presentation of the strategy will take place today at Holcim’s Capital Markets Day beginning at 14h (CET). Investors, journalists and all stakeholders are invited to learn more about “Accelerating Green Growth” in a webinar hosted by CEO Jan Jenisch and other Holcim senior leaders. Details and log-on information is available here.
About Holcim
Holcim builds progress for people and the planet. As a global leader in innovative and sustainable building solutions, Holcim is enabling greener cities, smarter infrastructure and improving living standards around the world. With sustainability at the core of its strategy Holcim is becoming a net zero company, with its people and communities at the heart of its success. The company is driving the circular economy as a world leader in recycling to build more with less. Holcim is the company behind some of the world’s most trusted brands in the building sector including ACC, Aggregate Industries, Ambuja Cement, Disensa, Firestone Building Products, Geocycle, Holcim and Lafarge. Holcim is 70,000 people around the world who are passionate about building progress for people and the planet through four business segments: Cement, Ready-Mix Concrete, Aggregates and Solutions & Products.
Important disclaimer – forward-looking statements:
This document contains forward-looking statements. Such forward-looking statements do not constitute forecasts regarding results or any other performance indicator, but rather trends or targets, as the case may be, including with respect to plans, initiatives, events, products, solutions and services, their development and potential. Although Holcim believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions as at the time of publishing this document, investors are cautioned that these statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are difficult to predict and generally beyond the control of Holcim, including but not limited to the risks described in the Holcim's annual report available on its website (www.holcim.com) and uncertainties related to the market conditions and the implementation of our plans. Accordingly, we caution you against relying on forward-looking statements. Holcim does not undertake to provide updates of these forward-looking statements.
This document contains inside information within the meaning of the Market Abuse Regulation (EU) (No 596/2014).
1 like-for-like
2 Leverage, ROIC and cash conversion targets to be reached by 2025
Holcim's new strategy, titled "Strategy 2025 - Accelerating Green Growth," focuses on achieving sustainable growth and increasing its Solutions & Products business to 30% of total sales.
What are the key financial targets of Holcim's Strategy 2025?
Key financial targets include 3%-5% net sales growth, 10% return on invested capital, and a cash conversion rate of 45% by 2025.
How does Holcim plan to contribute to sustainability by 2025?
Holcim aims to recycle 10 million tons of construction waste and ensure that 25% of ready-mix sales come from low CO2 ECOPact products.
