Holcim confident on 2023 after raising guidance, launching buyback

By John Revill

ZURICH (Reuters) - Holcim gave a bullish outlook for the rest of 2022 and into 2023 after the world's biggest cement maker reported stronger than expected third-quarter results and announced a 2 billion Swiss franc ($2.02 billion) share buyback.

The Swiss company brushed off concerns about a global economic slowdown hitting the construction sector with CEO Jan Jenisch saying he expected strong demand to continue.

Holcim's North America business - which represents 40% of its sales - had a full order book, he said.

"In North America we have sold out basically with all our production, we have no slowdown," Jenisch told reporters.

"We have strong order books, especially in North America and Latin America, and I expect this to continue into next year."

A bumper performance in North America in the third quarter more than offset a slight downturn in Europe, where the company faced spiraling energy costs and some project delays.

Overall group sales rose to 8.05 billion francs in the three months to Sept. 30, beating forecasts for 7.73 billion francs in a company-gathered consensus of analysts.

Recurring group operating profit rose to 1.55 billion francs, slightly ahead of 1.48 billion franc forecasts.

Shares were up 1.9% in premarket activity in Switzerland after a positive reaction from analysts.

Holcim now expects its full-year sales to increase by at least 12% on a like-for-like basis, up from its previous view of a 10% increase.

It added it expected recurring EBIT to increase in the mid-single digit percentage range. Previously it had said it only expected "positive growth."

Holcim also completed the sales of its India and Brazil businesses at the end of August, which raised 7.3 billion francs. Holcim will use the cash for acquisitions and also launch a new 2 billion franc share buyback in November.

Its results, however, did not include $778 million in fines and forfeitures the company agreed to pay after it pleaded guilty to a U.S. charge it had made payments to groups designated as terrorists by the United States.

This payment will be charged in the company's net profit when it reports its fourth-quarter earnings.

Jenisch said he was pleased the U.S. case had been resolved, while an ongoing investigation in France was "nothing that disturbs us."

The CEO said he expects a payment of around 30 million euros to resolve the French inquiry into Lafarge - which merged with Holcim in 2015 and which has admitted paying groups including Islamic State.

"We are fully cooperating in France and are happy to end this at any time," Jenisch said.

($1 = 0.9892 Swiss francs)

(Reporting by John Revill; Editing by Paul Carrel, Rashmi Aich and Jane Merriman)