Haorui Group achieves new profit margin high in 2025 after divesting businesses, signs two acquisition agreements

Investing.com — Swiss building materials manufacturer Holcim Ltd announced on Friday that its recurring EBITDA margin will reach a record 18.3% in 2025, up 80 basis points. The company completed the divestment of its North American operations and immediately signed agreements to acquire European wall system manufacturer Xella and a majority stake in Peruvian Cementos Pacasmayo.

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Based on restated benchmarks, net sales decreased from CHF 16.2 billion last year to CHF 15.72 billion, but excluding the impact of the North American divestment, the growth rate in local currency, excluding large acquisitions, is 3%. Recurring EBITDA, in local currency, increased by 10.3% to CHF 2.88 billion.

Net financial debt significantly decreased by more than half from CHF 8.45 billion to CHF 3.79 billion. The company attributes this decline to asset divestments rather than operating cash flow.

The debt leverage ratio dropped from 1.2x to 0.9x. The transactions for Xella and Cementos Pacasmayo still require regulatory approval, with Xella expected to close in the second half of 2026 and Pacasmayo in the first half of 2026.

Proposed dividends were adjusted from CHF 3.10 per share to CHF 1.70, a 45% reduction. Holcim stated this reflects the scaled-down size of the company after divestments. The dividend proposal is subject to shareholder approval at the annual general meeting on May 13, 2026.

Excluding impairments and asset divestment effects, earnings per share from continuing operations increased by 5% to CHF 3.22. Net profit attributable to the group declined by 73.4% to CHF 387 million due to impairments and divestment losses. Free cash flow increased slightly from CHF 2.12 billion to CHF 2.15 billion, with a cash conversion rate of 54%.

CEO Miljan Gutovic stated, “All targets for 2025 have been achieved. As all 2025 goals are met, our NextGen Growth 2030 strategy is being fully executed,” Gutovic said.

Holcim completed 18 acquisitions and 3 asset divestments during the year, exiting markets in Nigeria, Jordan, and Iraq. The company also signed agreements to exit Lebanon and Cyprus, both expected to close in January 2026. Of the 18 acquisitions, 14 are located in Europe.

Xella is a wall system manufacturer with expected 2026 net sales of €1 billion, over 50 production facilities across 21 countries, and more than 4,000 employees. The deal was signed in October, with an implied 2026 EBITDA multiple of 6.9x, including synergies.

Cementos Pacasmayo reported net sales of $600 million for 2025, with three cement plants. The deal was signed in December, with an implied 2025 EBITDA multiple of 7.1x, including synergies.

Return on invested capital slightly increased by 10 basis points to 11.2%. As of December 31, the company held CHF 5.44 billion in cash and CHF 3.31 billion in undrawn committed credit lines.

The average debt maturity is 4.7 years, with the average nominal interest rate decreasing from 3.2% to 2.4%.

By region, recurring EBITDA in Europe was CHF 1.47 billion, with a profit margin of 17%, up 140 basis points.

In Latin America, recurring EBITDA margin was 30.6%, down 320 basis points, with recurring EBITDA of CHF 953 million. In Asia, Middle East, and Africa, recurring EBITDA was CHF 935 million, with a profit margin of 24.6%, up 220 basis points.

Holcim’s stock closed at CHF 77.8 on December 31, 2025, up 74.9% for the year. The Swiss market index increased by 14.4% over the same period. Market capitalization is CHF 44.1 billion.

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