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Holcim has raised its full-year 2026 guidance after reporting stronger-than-expected second-quarter financial results, supported by improving demand across its business and growing interest in low-carbon building products. The company said it is seeing more residential housing projects begin, particularly in Europe, where governments are introducing measures to address housing shortages. Holcim also reported higher sales and operating profit than market estimates and said the third quarter has started on a positive note. The revised outlook reflects the company's confidence in market conditions for the remainder of the year.
Swiss building materials company Holcim has raised its full-year 2026 financial guidance after reporting better-than-expected results for the second quarter, supported by improving demand for its products and early signs of a recovery in residential construction across Europe.
The company reported second-quarter sales of 4.41 billion Swiss francs (USD 5.46 billion), an increase of 6.4% compared with the same period last year. The figure exceeded analysts' expectations of 4.27 billion Swiss francs, according to a company-compiled consensus.
Recurring operating profit (EBIT) rose 13.1% year-on-year to 1.01 billion Swiss francs, also ahead of analysts' estimates of 958 million Swiss francs.
Following the stronger performance, Holcim revised its full-year outlook and now expects organic sales growth of around 5% in 2026, compared with its earlier guidance of 3% to 5%. The company also expects full-year recurring EBIT to increase by 10%, reaching the upper end of its earlier guidance range.
Speaking after the results, Chief Executive Officer Miljan Gutovic said the company had become more confident about its performance for the rest of the year and therefore decided to upgrade its outlook, although such revisions are not usually made during the first half of the year.
Holcim said it is witnessing an increase in new residential housing projects, indicating that the European housing market is gradually recovering after a prolonged slowdown.
Residential construction activity across Europe had remained weak since interest rates started rising in 2022, as higher mortgage costs, expensive project financing, elevated material and labour costs, and planning-related constraints reduced demand and led to fewer building permits.
According to Gutovic, governments across Europe are now introducing policies to encourage homebuilding and address the housing shortage. He said estimates indicate that Europe is facing a shortage of nearly 10 million homes, prompting several countries to introduce measures aimed at increasing residential construction. He referred to France's plan to support the construction of up to 2 million homes by 2030 as one such initiative.
Apart from improving housing activity, Holcim said demand for its low-carbon building materials also contributed to the stronger quarterly performance. The company has been expanding its portfolio of sustainable construction solutions in recent years as builders and developers increasingly focus on reducing carbon emissions from construction projects.
Holcim, one of the world's largest building materials manufacturers, produces cement, roofing systems, walling solutions and several other construction products. The company has also been reshaping its business in recent years by increasing its focus on building solutions and sustainable products while reducing dependence on traditional cement operations.
The company added that the third quarter has started on a positive note. Gutovic said the recent heatwave across Europe had only a negligible impact on construction activity, allowing projects to continue largely without disruption.
Reacting to the results, Bank Vontobel analyst Mark Diethelm said Holcim had delivered a strong quarter, with both higher sales and the upward revision in recurring EBIT growth guidance coming as positive surprises for the market.
Source Reuters
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