VON32623269

1/7 Vontobel Research / 03-08-26

– What's new? – HOLCIM (Buy, 85.0): Majority divestment of Holcim Philippines - Transaction expected to be margin accretive - Buy – SANDOZ (Hold, 75.0): Sandoz takes further steps to resolve legacy US generic medicine litigation; PT CHF 75, Hold

– Financial model update – CLARIANT (Hold, 9.40 (NEW)): Estimates updated following 1H26 results, confirmed outlook, and positive ethylene case developments - Hold rating confirmed with a new price target of CHF 9.40 (previously CHF 8.20).

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2/7 / Equity Morning Note / 03-08-26 Vontobel

WHAT'S NEW? Majority divestment of Holcim Philippines - Transaction expected to be margin accretive - Buy HOLCIM FACTS & COMMENT: Analyst: Bloomberg: HOLN SE Price: CHF 73.3 Sales of Holcim Philippines in two steps: Holcim has signed an agreement Enterprise value (mns) CHF 48,263 to divest its 99% stake in Holcim Philippines to Huaxin Building Materials, a Market cap (mns) CHF 40,566 Reporting Currency CHF Chinese company in which Holcim has a 41.8% JV holding. The transaction will occur in two steps: an initial sale of 67.6% of Holcim Philippines for an EV Buy PT: CHF 85.0 of USD 527m, followed by the divestment of the remaining ~31% stake within three to five years. The remaining stake has a minimum floor price of USD 280m, bringing the overall transaction valuation to USD 807m. Based on Holcim's tax transparency report, Holcim Philippines generated sales of CHF Income Stat. (mns) 2025A 2026E 2027E 2028E 318m (USD 392m) in FY25. Revenues EBITDA Deal rationale: LafargeHolcim attempted to sell its Philippines operations in EBIT , but the transaction did not close due to regulatory disapproval. Net profit Subsequently, this market has become increasingly challenging for Holcim, Growth (%) 2025A 2026E 2027E 2028E and we believe the operation is low EBIT margin (<5%). We estimate an Revenues -3.0 6.1 8.9 4.7 Net profit EV/EBITDA in the mid- to high-teens, which is attractive given the EPS (rep.) - circumstances. This will be margin accretive to the group (~20 Bp.) once the Margin analysis (%) 2025A 2026E 2027E 2028E transaction is approved & deconsolidated. Gross margin EBITDA margin EBIT margin OUR CONCLUSION: Balance sheet (%) 2025A 2026E 2027E 2028E NWC/Revenues 8.1 4.8 5.1 5.3 Holcim continues its portfolio transformation. The exit from the Philippines is Net debt (mns) margin-accretive, given a difficult market environment and a lower-margin Equity to tot. assets business, and we therefore see the value extracted (mid/high-teens Gearing EV/EBITDA vs. Holcim's 13x) from the divestment as attractive. We view the Net debt/EBITDA 1.1 1.7 1.2 0.9 likelihood of deal approval as high, expected by mid-2027, with the cash CF statement (mns) 2025A 2026E 2027E 2028E Capex - inflow from the initial divestment likely funding European M&A. Operating FCF Inc(+)/Dec(-) in cash CF analysis (%) 2025A 2026E 2027E 2028E Op. CF margin Capex/Revenues 6.2 6.1 5.7 5.5 Capex/Depreciation Per-share data (CHF) 2025A 2026E 2027E 2028E EPS (rep.) EPS (adj.) Net cash - Dividend Payout ratio (%) Valuation (X) 2025A 2026E 2027E 2028E P/E P/E (adj.) P/B EV/EBITDA FCF yield % 4.2 5.0 6.1 6.5 Dividend yield % 2.2 2.6 2.9 3.1 Profit. ratios (%) 2025A 2026E 2027E 2028E ROIC ROE ROA 1.0 6.1 7.2 8.1 BB Consensus (mns) 2025A 2026E 2027E 2028E Revenues EBITDA EBIT Net profit EPS Conference call/analyst meeting No conference call or analyst meeting scheduled

Source: Bloomberg, Vontobel Equity Research