(Bloomberg) -- Holcim Ltd. tweaked its revenue outlook for the year after first-half sales missed estimates on subdued residential construction activity.
The Swiss manufacturer now sees low single-digit sales growth in local currency terms, from a previous guidance of 6%. The company also slightly raised its annual profitability outlook Friday, bolstered by a bet on more expensive cement products.
“Our leading sustainable building solutions position us as the partner of choice for large-scale projects like infrastructure and data centers,” Chief Executive Officer Miljan Gutovic said in a Bloomberg TV interview, adding that two of its main customers in that space are Meta Platforms Inc. and Amazon.com Inc.
Holcim’s earnings show that its value-over-volume strategy “is playing out,” Vontobel analyst Mark Diethelm said in a note. But he also flagged softer-than-expected growth in North America.
Holcim shares declined as much as 3.8% in Zurich. They’re still up around a quarter this year.
The manufacturer is set to build 90 new data centers around the world in the next four years, half of which will be in the US, with the remainder in Europe and Australia.
Gutovic previously said decarbonization and more sustainable construction are the company’s profitable growth drivers. That’s in part because customers will have to pay a premium for these products that can be anywhere from 20% to twice as much.
Sales in North America have doubled in the past 10 years, with the company the region’s top supplier for cement and third-biggest for roofing. It aims to roughly double sales again to about $20 billion by 2030. Holcim sees strong market fundamentals in place in the region, saying it has secured more than 100 infrastructure projects between 2023 and 2026.
The company is seeking to tap rapid US market growth as builders race to relieve a chronic lack of single-family homes and meet regulatory pressures for more energy-efficient buildings. Its North American business planned listing in the US is on track to be completed in the first half of next year.
Holcim has come through a period of acquisitions and divestments to reduce carbon emissions. The building solutions giant continued its M&A execution with 11 acquisitions and four divestments in the first half.
(Updates with CEO comment in third paragraph)
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