The Big Four in 2023 – Financial Performance and Analysis of the Giants of the Heavy Building Materials Industry

Cobi Busst, a specialist consultant in Beaumont Bailey’s Industrial practice, takes a look at the recently released financial reporting data from the building materials industry’s big four – CRH, Holcim, Heidelberg Materials and CEMEX.

The Big Four heavy building material companies have diverse product lines serving worldwide markets, specifically in Cement, Aggregates, RMX and aligned Verticals.  Amongst a myriad of competition, these 4 emerge as spiritual leaders in Scale of Operations, Decarbonisation and Innovation, particularly across Europe and the Americas.

CRH

CRH retains market leading position, as the largest heavy-side materials organisation in both Europe and North America. The Irish group’s revenue rose by 7% to reach $34.9bn in 2023, and they had an adjusted EBITDA of $6.2bn, resulting in a margin of 17.7%.

CRH’s success as a business is largely due to their unique and differentiated strategy, running not as a materials business but as an integrated solutions organisation. Complete end-to-end construction solutions are offered to the customer, rather than purely materials.

Unsurprisingly considering the steady rise of construction projects and complexity, this approach proved to be exceptionally well-suited to the US market, a key growth driver for all of the Big Four. 75% of the group’s adjusted EBITDA is attributed to their Americas market and in 2023 the group celebrated both its US listing on the New York Stock Exchange (NYSE) and a 10th successive year of margin improvement.

Holcim

Holcim closely follows CRH and substantiates robust presence in Europe and North America with a significant portfolio in emerging markets in Latin America, the Middle East and Asia. For decades the Swiss group has been one of the largest global brands operating across the sector globally.

Although reporting a reduction in overall net sales vs 2022 of around 7%, the group has achieved a record year of financial performance, with an industry-leading margin, record free cashflow, a strong balance sheet and over 28 M&A transactions. For 2023, Holcim prioritised a shift in volume to value, pulling out of less favourable markets and pursuing superior product quality and innovation, in growth rich areas. 2023 was certainly a strong year of investment into the future of the business.

In addition, the group is in a leading position in the race to Net-Zero, presenting the most ambitious targets in sustainability, alternative fuel usage and decarbonisation. The group has 6 Carbon Capture, Utilisation and Storage (CCUS) projects currently in construction, with over 8M tonnes of net-zero cement aiming to be produced by 2030 and 5m tons of CO2 to be captured per year as well.

Heidelberg Materials

Heidelberg Materials’ strong run and gain on CRH and Holcim continues, with the group posting a record year of solid growth in EBITDA and revenue (4.4%). In an effort to pursue continuous new growth, the group completed numerous acquisitions across the globe and continued to optimise its portfolio with divestments in less attractive markets. Substantial growth of 8% in revenue in the North American market was a large factor for this success. A German business, Heidelberg Materials retains the largest % of its operations in Europe, with 45.9% of its revenue coming from the region, however their total portfolio stretches globally.

Perhaps less publicly appreciated is Heidelberg’s commitment and progress to net-zero, with the group making very strong progress in alternative fuel rate, and a 3% CO2 emission reduction, specifically within cementitious material. The group also launched two new global and sustainable product ranges – evobuild and evozero.

2023 proved to be a very strong year for Heidelberg Materials, despite significant market challenges in European strongholds, such as Germany. Their approach to innovation, commitment to decarbonisation and overall growth has been very impressive, and I am excited to watch it continue.

Cemex

Cemex has been hit especially hard in recent years, following extraordinary inflationary pressures across their core markets. However, in one of the industry’s most impressive comebacks, the group has delivered excellent strategic, operational, financial performance – doubling free cash flow generation and growing EBITDA by 25%. The group also experienced a revenue growth of over 12%, largely due to an effective global business strategy, prioritising flexibility, new technology implementation and growth through bolt-on acquisitions.

Cemex holds the market leading position in Mexico and Central America and continues to grow its solutions offering across North America. Although the smallest of the Big Four and perhaps earnings a reputation for being less dynamic over the past few years, Cemex has demonstrated a committed approach to changing and developing its operations in recent times. Perhaps this is a sneak peak into a very positive future for the organisation.

If you would like to discuss any of the thoughts and topics raised in this piece or would like to learn more about how Beaumont Bailey can support your executive hiring strategy, please reach out to Cobi: cobi.busst@beaumontbailey.com

Sources:

https://www.crh.com/media/5126/crh-annual-report-2023-web-version.pdf https://www.holcim.com/sites/holcim/files/2024-02/28022024-finance-holcim-fy-2023-report-full-en.pdf
https://www.heidelbergmaterials.com/en/investor-relations/reports-and-presentations
https://www.cemex.com/documents/d/cemex/cemex-2023-integrated-report-en