Holcim FY22 Profit Up, Sees Growth In FY23; Names New Chairman

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Swiss building materials firm Holcim Group reported Friday higher profit in fiscal 2022 with srong sales, even as fourth-quarter recurring EBIT, a key earnings metric, and sales were weak. Further, the company lifted its dividend, and said it projects growth in profit and sales for fiscal 2023.

Separately, Holcim announced that its Board of Directors intends to propose CEO Jan Jenisch as the new Chairman at the AGM in May 2023, as Beat Hess, Chairman of the company since 2016, has decided not to seek re-election to the Board.

Jan Jenisch will continuing in his current role for a limited duration. The company plans to announce CEO successor within the next 12 months.

Further, Vice Chairperson Hanne Sorensen has been appointed as Lead Independent Director, and will continue to chair the Nomination, Compensation & Governance Committee.

The Board proposed a 14 percent increase in dividend to 2.50 Swiss francs per registered share, based on its strong 2022 financial performance and confidence in the future.

Regarding its outlook, Holcim said it has started 2023 with continued fast pace, and is confident to continue the fast-paced execution of its Strategy 2025 - Accelerating Green Growth.

Holcim expects continued profitable growth with net sales growth of 3 percent to 5 percent like-for-like, and over-proportional growth in Recurring EBIT on LFL basis.

Jan Jenisch, CEO said, "As we enter 2023, we are continuing our fast pace. We've already made seven acquisitions in the first two months of the year..... I look forward to another year of continued profitable growth and fast-paced transformation, to become the global leader in innovative and sustainable building solutions."

In the fourth quarter, recurring EBIT dropped 6.2 percent to 1.03 billion francs from 1.10 billion francs last year. Recurring EBIT margin, however, grew to 15.9 percent from 15.7 percent a year ago.

Net sales fell 7.6 percent to 6.46 billion francs from 6.99 billion francs last year. On a like-for-like basis, net sales for the quarter grew 9.5 percent.

In fiscal 2022, net income Group share reached 3.31 billion francs, up 44 percent from last year's 2.30 billion francs.

Earnings per share were 5.48 francs, a growth of 47 percent from 3.73 francs a year ago.

Adjusted earnings per share were 3.66 francs, compared to 3.98 francs last year. Adjusted earnings per share before the resolution with the US Department of Justice increased 24.6 percent at 4.96 francs from 3.98 francs a year earlier.

Operating profit or EBIT, meanwhile, was down 26.8 percent from the prior year to 3.22 billion francs. Recurring EBIT grew 3 percent from last year to 4.75 billion francs, while recurring EBIT margin dropped to 16.3 percent from 17.2 percent a year ago.

Net sales of 29.19 billion francs for 2022 grew 8.8 percent from last year's 26.83 billion francs. Sales were up 12.9 percent on a like-for-like basis. The increase was driven by the fast expansion of Solutions & Products, which grew 54 percent from the prior year.

Net sales of Cement edged down 0.4 percent to 16.34 billion francs, with an 8 percent drop in recurring EBIT.

Aggregates net sales grew 4 percent and recurring EBIT increased 4.4 percent. Net sales of Ready-Mix Concrete also grew 11.2 percent, but recurring EBIT fell 11.5 percent.

The Asia Pacific region's sales fell 18.6 percent as it faced high cost inflation in India and softer demand in China amid COVID lockdowns, despite good Australian performance.

The Europe region delivered 4.5 percent rise in sales and good profitability. Latin America delivered strong profitable and sales growth.

North America's sales and profit climbed in strong double digit percentage rates with strong market demand.

In Switzerland, Holcim shares were trading at 57.46 francs, up 0.28 percent.

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