(AOF) – Holcim has acquired the sand and aggregate quarries of Pioneer Landscape Centers, a leader in the fast-growing metropolitan markets of Denver, Phoenix and Colorado Springs and a major supplier of construction aggregates to the region. The transaction includes thirteen quarries and completes Holcim’s December 2022 acquisition of aggregate reserves in Greeley, Colorado. These acquisitions will support Holcim’s growth in the region for several decades.
The acquisition will advance Holcim’s “Strategy 2025 – Accelerating Green Growth” by further fueling growth through targeted acquisitions in the aggregates and ready-mixed concrete sectors.
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Key points
– World number one in cement, aggregates and concrete with leadership positions in 8 of its 10 markets, born in 2015 from the merger between the French Lafarge and the Swiss Holcim;
– Activity of 26.8 MdsFS distributed between %, Europe for 30%, North America for 28%, Asia-Pacific for 23%, South America for 10%, Near Africa East for 9%;
– Revenues from cements up to 60%, processed products (20%), aggregates (12%) and solutions & products;
– Business model based on growth in developed countries, the rationalization of operational structures, financial solidity through asset disposals and the limit of 2 billion SF of investments and the commitment of employees “Vision and people”:
– Open capital, Thomas Schmidheiny being the leading shareholder with 8.44% of the shares, Beat Hess chairing the 12-member board of directors and Jan Jenish as general manager;
– Comfortable financial position with a net debt of 1 billion SF and reinforced by disposals, amounting to 7.3 billion SF at the end of September.
Challenges
– 2025 “Accelerating green growth” strategy:
– annual growth of 3 to 5% for sales, greater than 5% for operating profit, return to 10% of invested capital and debt leverage of less than 5;
– Innovation strategy that quickly contributes to profits and focused on offering more sustainable construction methods:
– open innovation with Holcim Accelerator and Maqer,
– academic partnerships with more than 40 institutions,
– deployment of artificial intelligence and robotics on production sites,
– short-term objective of 300 patented products per year,
– 40% of patented inventions and + 50% of R&D related to low-carbon solutions;
– Environmental strategy for carbon neutrality in 2050 with intermediate objectives for 2025:
– 25% of sales with EcoPacts green aggregates (10% in March 2022),
– circular economy: 10 million tons of recycled waste and 75 million tons of recycled materials,
– 40% of financing linked to sustainable objectives;
– Expansion of the transformed products division, which is less capital-intensive than cement plants and operational spinoffs from the Canadian C02 capture pilot site;
– Acceleration of portfolio transformation: disposals in India, Brazil and Zimbabwe and strong growth in the North America zone and in roofing, insulation and building solutions activities.
Challenges
– Russia-Ukraine conflict: sale in progress of activities in Russia (1% of revenues);
– Energy inflation: risk of production disruption at European sites during the winter;
– Third increase in 2022 objectives after a turnover gain of 14% and an operating profit up 5.9% at the end of September: minimum growth of 12% in sales and debt leverage of 1;
– Buyback of shares for SF2 billion.
Learn more about the Building Materials sector
Lack of visibility
The National Union of Quarry and Building Materials Industries (Unicem) indicates that, after an initial downturn in the second quarter, activity continued to deteriorate in the third quarter and recorded a drop in both aggregates (-1.3 %) than on ready-mixed concrete (-0.9%). Over the first nine months of the year, the decline was 2% for the materials business as a whole. Only tiles and bricks manage to show slight increases in activity.
The general outlook is deteriorating and recruitment difficulties and rising costs are the main sources of concern. Furthermore, Unicem underlines the difficulties in implementing the projects. The production of materials could decline this year by 3% for ready-mixed concrete (BPE) and 4% for aggregates.