Holcim to target M&A deals to fuel growth following Amrize spin-off

ZURICH (Reuters) - Holcim is targeting average annual growth in earnings before interest and taxes of 6% to 10% by 2030, driven in part by mergers and acquisitions, the Swiss cement maker said on Friday.

Under a strategy programme dubbed NextGen Growth 2030, the company said it aims to be the "leading partner for sustainable construction", following the planned listing of its North American business Amrize later this year.

The Amrize spin-off is expected to be one of the largest deals in the global construction industry, with the company initially targeting a $30 billion valuation when it was announced in January 2024.

Holcim, which in 2024 had net sales of 16.3 billion Swiss francs ($18.48 billion) excluding North America, would have a total estimated capital deployment capacity of 18-22 billion francs from 2025 to 2030, the company said.

"Excess capital will be allocated to large strategic acquisitions and opportunistic share buybacks," the firm said.

Mergers and acquisitions will be one of the key drivers of growth, CEO Miljan Gutovic said. No further spin-offs were planned, he added.

Holcim aims to boost building solutions to 50% of net sales by 2030, up from 37% in 2024. Lower-carbon brands should grow to make up more than half of net sales of ready-mix and cement.

"We are seeing a strong demand emerging across all our markets for sustainable products," Gutovic said. "This is becoming a norm."

Rising carbon costs would be more than offset by a mix shift to sustainable solutions, Vontobel analyst Mark Diethelm said.

"We consider the financial targets, which confirm the previous statements, the high cash generation and the planned capital allocation to be attractive," Zuercher Kantonalbank analyst Martin Huesler said.

Details of the Amrize spin-off, set to occur in the first half of 2025, were shared with investors on Tuesday.

It will require shareholder approval at Holcim's AGM on May 14, with the new company slated to be listed on the New York Stock Exchange and the SIX Swiss Exchange.

Holcim will not retain any stake in Amrize, shares of which will be distributed to Holcim shareholders.

($1 = 0.8820 Swiss francs)

(Reporting by Ozan Ergenay, John Revill and Ariane Luthi; Editing by Ludwig Burger, Sherry Jacob-Phillips and Joe Bavier)