Holcim Delivers Strong First-Half Results and Raises Full-Year Sales Guidance; Shares Remain Cheap

The merger between Lafarge and Holcim in 2015 created the largest producer of building materials and introduced significant exposure to perceived faster-growing emerging markets compared with its European-domiciled competitors. However, lower barriers to entry in these regions and the cyclical nature of demand has meant volume growth has not always transpired. We have been impressed by management’s self-help actions following the acquisition, which have strengthened Holcim’s balance sheet and protected best in-class-operating margins through divestments and cost savings.