Amrize Ltd Ordinary Shares

Good morning, everyone, and welcome to Holcim's full-year 2024 results presentation. I'm Bernd Pommerin, and I'm very happy to be joined by our CEO, Miljan Gutovic, and our CFO, Steffen Kindler. After the presentation, you will have the opportunity to ask your questions. When you're joining by webcast, please click the button Request to Speak. And if you join by telephone, please press star 1-4 if you want to ask a question. We will repeat these instructions just before the Q&A. And with this, I directly hand over to Miljan. Miljan, please.

Thank you, Bern. Good morning to all of you and a very warm welcome to Holcim's full year results here at Zurich's Kunsthaus, a building designed by a star architect, David Chipperfield, and of course, built with Holcim's cement inside. Stefan and I are pleased to be with you today to present our results. And after that, we will turn it over to you for your questions. 2024 was a year of record performance for Holcim, in which we focused on our strategic priorities with impeccable execution by 65,000 of our employees around the world. To start with, let me take you through the key highlights. For the full year, we delivered a record recurring EBIT of more than 5 billion Swiss francs for the first time in our history. This was up 11% in local currency and 6% in Swiss francs. We also achieved new heights in our earnings per share, up 5%, and 2024 free cash flow reached a record of $3.8 billion. This, of course, came with further expansion of our industry-leading EBIT margin to a record 19.1%, up a significant 150 basis points. Margin expansion was driven by our multi-billion advanced branded solutions, from Ecopact and Ecoplanet to Elevate, which grew to 36% of the total net sales in 2024, up from 30% in 2023. I will come back to you with some other key drivers listed here later on in this presentation. As you can see, we are laser-focused on driving shareholders' value with our strong balance sheet, the 11% growth in our proposed dividend, which translates to 3.1 Swiss francs per share, and of course, the 1 billion share buyback, which was completed in December 2024. Therefore, we are well positioned for 2025 with a strong outlook across all our business segments and across all our markets. In terms of guidance, it's mid-single-digit net sales growth in local currency with further expansion in margin growth. and free cash flow above 3.5 billion. And yes, the planned listing of our North America business is on track to be completed in H1 this year. So let's look at some of the highlights in more details. First, let's look at the progression of our recurring EBIT and EBIT margin on the rolling 12-month basis. This shows how we have been able to further expand both consistently over consecutive quarters, culminating in the 19.1% margin and EBIT, as I said, first time above 5 billion Swiss francs. Next, earnings per share, which are up 5% versus a year ago, reached 5.7 Swiss francs. We've gone here back to 2018 to show how we have been able to grow this at compound rate over several years. Again, this is about consistent delivery. Free cash flow at 3.8 billion. Free cash flow after lease in 2024 rose 3% to reach a record cash flow of $3.8 billion, and which is even more impressive, 57% cash conversion. Again, you can see the consistent progressive improvement in our cash generation over consecutive years. Now we are going to industry-leading EBIT margin. Let's zoom in further expansion of our industry-leading EBIT margin by a significant 150 basis points to 19.1%. There has been excellent development in this key financial metric over the past several years. The consistent margin expansion reflects the resilience of our business model across all market conditions and across all economic cycles. And it is grounded in Holcim's rigorous focus on our differentiated value strategy from continuing to advance sustainable building solutions to decarbonization and circularity, driving profitable growth, all the way to empowered leadership with its strong performance culture. An important driver are the growing multi-billion brands we offer our customers to meet, I would say, their most ambitious needs. In 24, we generated 36% of the total sales from this advanced branded solution. And the year before that, we were on 30%. There are some big numbers here. For instance, Ecoplanet suppressing 3 billion in net sales. Ecopact at more than 1.5 billion. One SEM at more than $2.5 billion. And, of course, our Elevate brand, more than $2 billion. Overall, customer demand for Holcim's Ecopact and Ecoplanet continues to grow. Net sales of Ecopact and Ecoplanet reached 29% and 26% of their respective categories, up substantially from the previous year. Here we set a target for Ecopack to reach more than 25% of the total ready-mix sales in 2025. And as you can see from this graph, we exceeded that a full year in advance. And it is our sustainable building solutions like EcoPact and EcoPlanet that make Holcim the partner of choice for our customers. Take a look at these projects where we add value to our customers with our sustainable, circular, durable, energy-efficient building solutions. The first one is European Patent Office in Vienna with whole seam solution throughout from our eco-packed concrete to eco-cycle technology and also elevate insulation. In the U.S., this advanced semiconductor water manufacturing facility in Texas with one seam and high-strength concrete. And in Ecuador, the largest social housing project in the whole Latin America is being built with eco-packed insight to provide homes for nearly 200,000 people. Another highlight is circular construction, which we are advancing as a driver of profitable growth. We have reached 10.2 million tons in recycled construction and demolition materials in 2024. That is more than 2,000 truckloads every working day of the year. And we did close four highly accretive circular construction bolt-ons in 2024 to accelerate profitable growth in UK, Germany, Belgium, and Switzerland. Value accretive M&A was another driver of expansion of our industry-leading margins. We continued our M&A execution in 2024 with 27 transactions, strengthening our geographical footprint. Just alone in fourth quarter, we closed five in Bulgaria, Croatia, France, and also two in Switzerland. We have also closed divestment of Kenya business. For the full year, Holcim continued to expand also in solutions and products, acquiring Ox Engineering Products, a U.S. leader in advanced insulation systems for commercial and residential applications. Also, I would like to emphasize that in Latam, which I would like to remind you is our most profitable region, with the highest EBIT margins in the group, we have made significant investments in 2024. Growing across attractive markets, we made four synergetic acquisitions in the region. Two in Peru gave Holcim access to this highly profitable market as well as growth platform for solutions and products. While we also expanded our business in Mexico with a bolt-on and our presence in Guatemala by acquiring cement and ready mix operations. And this record performance, of course, with significant margin expansion, is made possible thanks to Holcim's deeply embedded performance culture. At the end, it is down to more than 500 of our P&L leaders who are empowered to take decisions close to our customers while being accountable and focused on delivering against group targets. And Holcim established in-house business school, continuously upskilling our leaders even as it trains up new talent. With that, I would like to hand it over to Holcim CFO Stefan, who will take you through some financial highlights.

Good morning. Thank you, Miljan, and good morning to all of you. Warm welcome also from my side. It's a pleasure to be here with you today. Turning first to the net sales bridge that you know, you can see that net acquisitions provided 1.1% of local currency net sales increase with an organic growth of 0.2%. The FX, or the foreign exchange effect, is minus 3.5% or 950 million. 40% of that, roughly 40% of that, comes from mature markets. Over the same period, we reached an absolute record in recurring EBIT with a 10.8% increase in local currency. And that takes us above 5 billion Swiss francs for the first time ever. This is a very strong performance driven by organic growth, and recurring EBIT is also up more than 6% in Swiss francs. It's worth noting that this result comes in spite of the continued appreciation of the Swiss franc throughout the period, which impacted EBIT by minus 4.8%. If we take a closer look now at how our business progressed throughout 2024 from quarter to quarter, this slide here shows how consistent our EBIT growth has been at or near double digits in each of the quarters of 2024. The sales growth showed an increasing momentum from the second to the fourth quarter, which we find is promising. Looking at the next slide, I think it is important to note that our growth was broad-based, as it usually is, and delivered over-proportional EBIT growth in all our business areas and regions in 2024. As you can see here, there were some very strong growth numbers from our five segments. And now in turn, let me go into the details of those five segments, one after the other. I start with North America. North America achieved a double-digit recurring EBIT growth in challenging market conditions in 2024. This was accompanied by a 330 base points increase in the margin to a record of almost 25%. We have now secured more than 200 infrastructure projects over the coming years. Infrastructure modernization, the reshoring of manufacturing, those both are expected to drive growth in 2025. Next, we go to Latin America, where we achieved an outstanding recurring EBIT margin of 36%. Also, Q4 was another excellent quarter in this high-growth region where we have now delivered 18 consecutive quarters of profitable growth. Over the course of 2024, we made four synergistic acquisitions. Milian already mentioned that, to enter a new market of Peru, to expand our business in Mexico and in Guatemala. And we see the public and private sector drive infrastructure and commercial investments in 2025 going forward. In Europe, sustainable building solutions are driving profitable growth. As you can see, EBIT grew by more than 12% in local currency to 1.3 billion Swiss francs, and our margin was up 200 basis points. We have a very active and value-accretive M&A, as described before. in Europe with 13 bold on acquisitions to accelerate profitable growth. We expect continued demand from a portfolio and premium branded solutions driving value and from the leadership in decarbonization going forward. In Asia, Middle East, Africa, EMEA has delivered profitable growth led by Australia and North Africa, really. Along with double-digit growth, we achieved strong margin expansion to 22.8%. Portfolio optimization continues with the closing of four divestments in this region and the signing of another one towards the end of 2024. To end, a bit of color on our outlook since this is a diverse region. We expect strong domestic demand in North Africa and a positive outlook in Australia plus a price recovery in China. Our final business segment, solutions and products, has produced the largest percentage increase both in net sales and recurring EBIT driven by our advanced roofing systems. The double-digit EBIT growth came with 100 basis points expansion of the margin. We made four acquisitions during the year to expand our commercial and residential offering. This is including the Ox Engineered Products, a leading U.S. supplier of advanced insulation systems. For 2025, we expect a favorable outlook for both new construction and repair and the refurbishment markets. After the region, switching back to the group-level financials, on this slide, you can see our consistent growth in earnings per share year on year. Our double-digit growth in recurring EBIT obviously is the biggest contributor, but also we have a boost from share buybacks at the same time while we manage all other P&L lines with discipline and relentless cost focus. So we grew earnings per share before impairments and divestments at 5.3% to a record of 5 Swiss francs 70 in 2024. And even including the additional cost of our spin-off project already included. Next, the free cash flow generation, also a number that we find is very strong. We took it to a new record of 3.8 billion Swiss francs in 2024, which is roughly 100 million higher than last year. The bridge here shows that we did so while making 1.5 billion of CapEx investments. Comparing to 2023, our increase in key free cash flow is driven predominantly by additional EBITDA of 300 million. accompanied by solid management of working capital, which was slightly offset by the higher capex I already mentioned and the timing of cash payments and cash expenses for our spin-off project. The cash conversion ratio, Milian already mentioned that before, is at a very robust 57%. The next slide, also important, shows the strength of a balance sheet. We maintained the same net financial debt leverage as in 2023 while returning a total of $2.6 billion in cash to our investors. That is even after we spent a net half a billion on acquisitions after disposals and a slightly lesser amount on a hybrid bond repayment. I look now at our dividends. This is the fourth year in a row that the board is able to propose a double-digit increase in dividends per share, taking it to a new record of three Swiss francs 10, up 11% from last year. As Miljan explained, that amounts to 12% annual growth in dividends since 2020, and it demonstrates our ability to drive shareholder value. Remember, too, that these dividends are paid out of foreign capital reserves and they are therefore free from Swiss withholding taxes. You know that in December we completed our latest share buyback program for a total of 1 billion Swiss franc, which was for about 2.1% of our total shares issued. And we were able to repurchase those shares at a price of 81.6 franc. When you compare this to the current share price, we probably gained quite a bit of economic value with this program. Finally, I'd like to spend a short moment on this capital allocation slide, which we find was timely to share with you. It illustrates how we have balanced yet an agile approach to capital allocation. About 40% of the 33 billion Swiss francs that we allocated in the last seven years went to growth investments. That's M&A and growth capex. 35% has been returned to shareholders through progressive dividends and share buybacks, and 25% has been for debt service, demonstrating our strong commitment to a BBB Plus or BAA1 credit rating. And with that, I'm pleased to hand it back over to Miljan, and he will continue with the presentation.