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TITAN CEMENT | Leader of the Pack

Outperformer on all ends… – Titan has emerged as an all-around outperformer in recent years, leading its global peer group in EBITDA growth (28% 3Y CAGR), and ranking among the top performers in terms of share price (>150% 2Y return). Its strategic presence in regions with strong underlying fundamentals has positioned Titan among the few players to achieve volume growth since 2022, while disciplined cost control and high-return capex have driven a sector-leading 7pps margin expansion. Despite its superior performance & positioning, Titan still trades in line with EU peers (6.1x 1yr fwd EV/EBITDA) and at a >20% discount to its US counterparts, with further value crystallization likely to come from a potential re-rating of its US listed subsidiary.

US import tariffs readthrough – The newly imposed US import tariffs are set to affect the local cement market, which increasingly relies on imports (>19% of consumption) amid peak local capacity. For Titan, exposure is limited, as >65% of its US sales come from local production, rendering imports a minority in the mix. Our sensitivity analysis suggests that under most pass-through and demand elasticity assumptions, Titan’s top-line should grow, as lost import volumes are replaced by domestic output, boosting margins. While broader macro risks remain, including recession-related demand destruction, easing energy and freight costs may cushion any demand-side softness.

Easy comps & solid fundamentals underpin growth… – Incorporating price hikes in Greece and the H2’25 tariff impact in the US, we pencil in a 3.6% price effect for 2025e, extending to a 2.5% 3Y CAGR. Amid ongoing demand uncertainty in the US, we project a 1.4% volume 3Y CAGR (0.8/2% for cement/Aggregates-RMC), supported by a mix shift towards non-cement products, bringing 2027e revenue to €2.95bn (+3.7% CAGR). On the cost side, we factor in a 110bps margin expansion on softer energy & logistics costs and the reversal of one-off 2024 items, estimating FY’25 EBITDA at €630mn (+8.6% yoy) and ultimately €681mn by 2027e (5.5% CAGR). Regionally, the US is set to benefit from strong non-residential spending and a favorable product mix, Greece from a growing economy and large-scale projects, SEE may ease after an exceptional 2024 and East Med is positioned for further growth, supported by renewed macro stability in Egypt.

Underleveraged Balance Sheet, M&A optionality – Mgt has guided for a capex step-up to €300mn in 2025 to support decarbonization, logistics and bolt-on deals aiming to enhance product diversification. Despite the higher capex bill, Net Debt/EBITDA is set to fall further to 0.6x in 2025e, supported by robust OCF, the IPO proceeds and the €80mn Turkey exit, further strengthening the already underleveraged balance sheet. While this creates an opportunity for more one-off returns to investors, we expect mgt to stick to their conservative dividend policy for FY’25 building war chest for M&A.

Reiterating top-pick – We proceed with minor revisions to our numbers, reflecting shifting dynamics across regions, and the minority listing of the US business, coalescing to an unchanged PT of €48.5, while reiterating Titan as one of our top picks. With the Group’s 2026e targets now effectively outdated, the upcoming Investor Day in autumn stands out as the next major catalyst, likely to provide a refreshed strategic roadmap.