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1. Company Snapshot

1.a. Company Description

Holcim Ltd, together with its subsidiaries, operates as a building materials and solutions company in the Asia Pacific, Europe, Latin America, the Middle East, Africa, and North America.It operates through four segments: Cement, Aggregates, Ready-mix Concrete, and Solutions & Products.The company offers cement, hydraulic binders, clinker, and other cementitious materials; aggregates, such as crushed stone, gravel, and sand; and ready-mix concrete, precast concrete products, asphalts, and mortars.


In addition, it engages in the provision of contracting and other services; and retail activities, as well as waste management services.Its products are used in infrastructure projects, such as roads, mines, ports, dams, data centers, stadiums, wind farms, and electric power plants; building projects comprising individual housing, collective housing, office buildings, industrial and commercial buildings, and public buildings; and affordable housing.The company was formerly known as LafargeHolcim Ltd and changed its name to Holcim Ltd in May 2021.


Holcim Ltd was founded in 1833 and is headquartered in Zug, Switzerland.

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1.b. Last Insights on HOLN

Holcim Ltd.'s recent performance is driven by strategic expansion and growth initiatives. The company plans to acquire Xella for $2.16 billion, bolstering its building solutions business. This move taps into the booming $16 billion walling market and Europe's housing rebound. Additionally, Holcim's intrinsic value is estimated to be CHF118, suggesting it's undervalued by 44%. The company's focus on sustainable construction and dividend stability, with a yield of up to 11.3%, is likely to attract investors seeking reliable income streams.

1.c. Company Highlights

2. Holcim's Robust First-Half 2025 Results

Holcim reported strong first-half 2025 results, with net sales growth driving robust recurring EBIT growth and an industry-leading margin of 18.3%. The company's high-value strategy, including scaling up sustainable offerings and accelerating decarbonization and circular construction, drove profitable growth. Recurring EBIT rose 10.8% in local currency, with EPS increasing 7.4% in Swiss francs. The net debt leverage ratio was 1.2x at the end of last year, and the company expects to close out 2025 at around 1.1x.

Publication Date: Aug -04

📋 Highlights
  • Strong Net Sales Growth: - Achieved 18.3% industry-leading margin with robust net sales growth.
  • M&A Activity: - Closed 11 value-accretive M&A transactions, including 8 in Europe and 2 in Latin America.
  • EPS Growth: - Earnings per share rose 7.4% in Swiss francs, reflecting strong profitability.
  • Net Debt Leverage: - Improved to 1.2x at the end of last year, targeting 1.1x by end of 2025.
  • Recurring EBIT Growth: - Delivered 10.8% recurring EBIT growth in H1, with double-digit growth in Asia, Middle East, and Africa.

Segment Performance

The company delivered double-digit growth in recurring EBIT across various regions, with Europe and Latin America up more than 6% each and Asia, Middle East and Africa up double digits. This performance was driven by strong demand for sustainable offerings, including ECOPact and ECOPlanet. Holcim's guidance for full-year 2025 includes recurring EBIT growth of 6% to 10% in local currency, with a recurring EBIT margin of above 18%, and free cash flow before leases of around CHF2 billion.

Growth Strategy and Outlook

Holcim's NextGen Growth 2030 strategy focuses on scaling up sustainable offerings, accelerating decarbonization and circular construction, expanding high-value building solutions, value-accretive M&A, and a deeply embedded performance culture. The company aims to deploy a total capital of up to CHF22 billion until 2030, focusing on growth and shareholder returns, with a rebased progressive dividend and a payout ratio of approximately 50% per year. According to Miljan Gutovic, "We expect better momentum in H2 in Europe, driven by infrastructure pipeline and residential recovery."

Valuation and Financials

At current prices, Holcim trades at a P/E ratio of 17.38, a P/B ratio of 1.35, and a P/S ratio of 1.77. The EV/EBITDA multiple is 9.78, with a dividend yield of 4.76% and a free cash flow yield of 5.93%. The ROIC is 5.28%, and the ROE is 7.98%, with a net debt/EBITDA ratio of 1.74. With a strong track record of value-accretive M&A and a focus on sustainable growth, Holcim's valuation metrics suggest that the company's growth prospects are well-priced, but not excessive.

Analyst Estimates and EPS

Analysts estimate next year's revenue growth at 3.4%. The actual EPS came out at 3.3, relative to estimates at 3.3, indicating that the company's earnings growth is on track. With a modest price premium on its low-carbon products and a strong momentum in M&A, Holcim's growth prospects remain intact.

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.10%)

6. Segments

Cement

Expected Growth: 3.3%

The cement segment is likely to benefit from the ongoing global infrastructure development and urbanization trends, potentially leading to a slightly higher growth rate than the global average. Its essential role in construction ensures a relatively stable demand.

Solution & Products

Expected Growth: 4.0%

The Solution & Products segment is poised for higher growth due to the increasing demand for specialized and sustainable building solutions. Its focus on innovation and customer needs positions it well to capitalize on emerging trends in the construction industry.

Ready-Mix Concrete

Expected Growth: 3.0%

The growth of the Ready-Mix Concrete segment is expected to be slightly lower than the global average due to potential regional variations in demand and local competition. However, its growth remains supported by the overall expansion of the construction industry.

Aggregates

Expected Growth: 3.2%

The Aggregates segment is expected to grow in line with the global average, driven by the ongoing demand for construction materials. Its growth is supported by the need for aggregates in various construction applications, including infrastructure projects.

Corporate/Eliminations

Expected Growth: 3.1%

The Corporate/Eliminations segment is assumed to grow at the global average rate, as it is not directly tied to the operational performance of the business segments. This rate reflects the overall growth hypothesis.

7. Detailed Products

Cement

Holcim's cement is a binding agent used in construction to hold concrete together. It is available in various types, including Portland cement, masonry cement, and specialty cement.

Aggregates

Holcim's aggregates are inert materials used in construction, including crushed stone, gravel, and sand.

Ready-Mix Concrete

Holcim's ready-mix concrete is a pre-mixed blend of cement, aggregates, and water, delivered to construction sites in a ready-to-use form.

Asphalt

Holcim's asphalt is a mixture of aggregates, asphalt cement, and additives, used for road construction and maintenance.

Mortar

Holcim's mortar is a mixture of cement, sand, and water, used for binding and filling gaps in masonry construction.

Concrete Pipes

Holcim's concrete pipes are used for drainage, sewage, and water supply systems.

Precast Concrete

Holcim's precast concrete is a manufactured concrete product, used for building structures, such as bridges, buildings, and tunnels.

8. Holcim Ltd's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Holcim Ltd is medium due to the availability of alternative building materials such as steel, wood, and glass. However, cement remains a dominant material in the construction industry, limiting the impact of substitutes.

Bargaining Power Of Customers

The bargaining power of customers is low due to the fragmented nature of the construction industry, where many small and medium-sized contractors and builders rely on Holcim's products. This limits their ability to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of several large suppliers of raw materials such as limestone and gypsum. However, Holcim's scale and vertical integration mitigate the impact of supplier power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the cement industry, including significant capital requirements, regulatory hurdles, and the need for specialized expertise.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several large players in the global cement industry, including Lafarge, HeidelbergCement, and Cemex. This leads to intense competition for market share and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 31.56%
Debt Cost 6.63%
Equity Weight 68.44%
Equity Cost 9.45%
WACC 8.56%
Leverage 46.12%

11. Quality Control: Holcim Ltd passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Vicat

A-Score: 7.1/10

Value: 7.9

Growth: 6.1

Quality: 4.8

Yield: 6.9

Momentum: 9.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Titan Cement

A-Score: 7.0/10

Value: 7.2

Growth: 8.2

Quality: 6.3

Yield: 8.1

Momentum: 5.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Buzzi Unicem

A-Score: 6.1/10

Value: 6.1

Growth: 7.3

Quality: 7.2

Yield: 3.8

Momentum: 8.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
HeidelbergCement

A-Score: 5.8/10

Value: 4.7

Growth: 5.6

Quality: 5.9

Yield: 4.4

Momentum: 9.5

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
CRH

A-Score: 5.4/10

Value: 2.6

Growth: 7.2

Quality: 5.3

Yield: 4.4

Momentum: 7.5

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
Holcim

A-Score: 4.4/10

Value: 3.4

Growth: 4.0

Quality: 7.2

Yield: 7.5

Momentum: 2.0

Volatility: 2.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

74.9$

Current Price

74.9$

Potential

-0.00%

Expected Cash-Flows