Monday, 16 May 2022 Reading time : 2 minutes

Strong figures
With sales growth of 20%, rising sales prices and strategically effective acquisitions, Holcim opens the financial year with a strong first quarter. The building materials producer significantly exceeded analysts' consensus estimates, particularly in terms of EBIT. The Solutions & Products segment in particular is expected to continue to grow strongly; in 2022, the segment should account for at least 17% of Group sales, which would correspond to an increase of 3%.

Transformation holds potential
Holcim is not only strengthening its focus on Solutions & Products through acquisitions, but is also aiming to significantly reduce its dependence on the energy- and capital-intensive cement business. In addition, the share of the emerging markets business in the Group result is to be reduced, among other things through divestments.

Exit from India
This morning it was announced that the sale of the India business - a 63% stake in India's Ambuja Cements - to Adani Group has been signed, with proceeds from the sale amounting to CHF 6.4 billion. For Holcim, this will result in significantly lower net debt of less than CHF 4 billion (previously CHF 10 billion), enabling further growth steps in the Solutions & Products segment.

As planned, the sale in India reduces Holcim's dependence on the cement business in the emerging markets. Not to be neglected is also the reduction of the Group's environmental footprint, which goes hand in hand with this sale.

ZKB Equity Research rates the Holcim share as "overweight" and therefore assumes a relative overperformance.

Reverse Convertible on Holcim

• 7% coupon p.a.
• 90% Strike
• 12 months Maturity
• Subscription period May 19, 2022
• Termsheet

indicative information

 

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