Margins Contract More Than We Expected in HeidelbergCement’s 3Q; Reducing Fair Value Estimate
After HeidelbergCement issued a profit warning a month ago, the company reported third-quarter earnings on Nov. 8. Driven by rising energy costs, HeidelbergCement’s operating EBITDA fell 2% to a little over EUR 1 billion. Cement operating EBITDA margins contracted nearly 250 basis points, a much larger decline than we had anticipated. As a result, we’ve further cut our full-year EBITDA forecast. Although cement producers can generally pass costs on to customers, price increases tend to lag, whic...HeidelbergCement is engaged in the production and distribution of cement and aggregates, concrete and building products. Co.'s product range is complemented by downstream activities, such as ready-mixed concrete, concrete products, and concrete elements; in some countries, asphalt and building products, such as bricks and roof tiles, lime, or sand-lime bricks, are also manufactured. Furthermore, Co. provides services such as worldwide trading in cement and coal by sea. Co.'s products are used for the construction of houses, infrastructure, and commercial and industrial facilities.
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