BUILDING MATERIALS : Europe in the lime-light

Research evidence excerpt

BUILDING MATERIALS : Europe in the lime-light

Holcim ADR  Outperform from NeutralBUILDING MATERIALS Holcim  Outperform from Neutral

Europe in the lime-light

The market has unfairly punished European cement-exposed names for regulatory uncertainty this18 JUNE 2026

Sector Research Report year. With the ETS here to stay, fundamentals intact and higher regional returns ahead, we upgrade

Production time: 16:39* (London time)

Holcim (= to +) and are now buyers of all four heavyside stocks. CRH (+) stays our sector top pick.

Research Analysts & Publishing Entities

Paul Roger, CFA Recent debates around the Emissions Trading Scheme (“ETS”) are just noise

BNP Paribas London Branch Discussions in Brussels suggest refinement is more likely than a radical regulatory overhaul. The

(+44) 203 430 8415

paul.b.roger@uk.bnpparibas.com regional industry doesn’t need strict carbon rules to improve profitability anyway. Pricing power is

solid and volumes are depressed – still down -30% vs. pre-GFC. Carbon comes on top further out.

Anna Schumacher

BNP Paribas SA

+46731541818 Differentiated work suggests the medium-term outlook is still exciting

anna.schumacher@bnpparibas.com An industry-verified database analysing 343 cement plants, forensic dive into the CO2 emissions

log and company-specific strategic mapping suggests fine-tuned legislation will still be robust

enough to reshape the landscape, with most of the 124 independent players likely leaving the field.

The result: a more asset-light industry and 40%+ cement EBITDA margins for green survivors.

Holcim (raised to +) well placed – TP to CHF92 (from CHF77), EPS +5% vs. FY27 cons

Holcim has the largest sales exposure to Europe (~56% group) and generates the best margins.

Recent execution has been strong.