This article first appeared on GuruFocus .
Holcim ( HCMLY ) reported a stronger-than-expected first quarter, with recurring EBIT rising 8.3% to 431 million Swiss francs, ahead of a 407 million franc consensus, as demand for its more sustainable building materials continued to hold up. The company indicated that pricing remained a key lever, with mid-single-digit increases implemented across geographies, helping offset both unfavorable exchange rates and unusually cold weather earlier in the quarter. In Europe, momentum improved into March, and management suggested that successful price pass-through could support a positive price-over-cost dynamic.
The currency backdrop, however, could remain a headwind. The stronger Swiss franc reduced sales by 5.6% in the quarter, reflecting ongoing pressure from a currency that has strengthened amid geopolitical volatility and a weaker US dollar. Even so, Holcim signaled confidence in its ability to manage costs through pricing, while reiterating expectations for profit growth of up to 10% this year. That outlook appears to be supported by continued infrastructure activity in Europe and a pickup in residential building permits, which could help sustain demand across key markets.
At the same time, the company is leaning further into structural initiatives that could shape longer-term performance. Alternative fuel usage has reached 70%, which management said is helping shield the business from energy price swings, while around 80% of 2026 energy costs are covered through hedging and long-term contracts. Holcim is also investing 20 million francs annually into artificial intelligence across production, logistics, commercial and administrative functions, targeting a potential 200 million franc profit impact by 2028. Alongside that, it completed five transactions in the first quarter, including a majority stake in Cementos Pacasmayo, and is aiming for around 15 deals this year as it continues to refine its portfolio.
