Holcim spin-off Amrize targets robust growth in US construction market

ZURICH: Holcim’s imminent North American spin-off Amrize is targeting robust growth in earnings and sales through 2028, albeit at a slower pace than in recent years as it navigates a challenging environment with trade clashes clouding the outlook.

The building materials company said on Tuesday it aims for annual growth in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of about 8-11% between 2025 and 2028, alongside annual sales growth of 5-8%.

An Amrize listing by the end of the first half of 2025 remains on track, the company said in a statement. Holcim targeted a $30 billion valuation when the spin-off was first announced in January 2024.

“The company will invest in organic and inorganic growth, with a capital allocation strategy to drive growth and outperformance,” said Holcim, whose chairman Jan Jenisch is due to become the chair and CEO of Amrize.

The Amrize separation is likely to be one of the biggest deals in the global construction industry, which is grappling with the impact of tariffs on key building materials such as steel and aluminium imposed by US President Donald Trump.

Amrize, which has over 1,000 sites across the United States and Canada and 19,000 employees, is the largest cement manufacturer in North America.

Jenisch said during a presentation to investors in New York that Amrize’s cement footprint is largely domestic, insulating the company from imports, as it is expensive to ship the imported product long distance.

The company said it was positioned to grow stronger than the market in its building envelope operations, and Jaime Hill, the head of building materials, forecast his division would deliver above market growth and margin expansion in the next few years.

In 2024, Amrize generated $11.7 billion in revenue, posting annual growth of 13% since 2021, a year when the global economy rebounded from the impact of the COVID-19 pandemic. Adjusted EBITDA has logged annual growth of 16% since 2021.

The US construction market is dealing with high interest rates weighing on residential and commercial construction, while inflation is reducing the impact of government projects.

The Portland Cement Association expects US cement consumption to fall this year, the third year of declines, and post only tepid growth after that.

“The US construction market going into 2025 continues to face headwinds, namely the adverse effects of high interest rates on private construction,” said PCA economist Brian Schmidt.

“On the commercial side, high interest rates coupled with uncertainty regarding tariffs and potential softening in the economy have hampered activity.”

Holcim shareholders must approve the spin-off at their AGM on May 14 with the new company due to be listed on the New York Stock Exchange and the SIX Swiss Exchange.