Analyst Note| Matthew Donen, CFA |
A recovery in sales volumes across HeidelbergCement’s product categories was the primary driver behind the group’s second-quarter revenue and EBITDA growth of 18% and 22%, respectively. HeidelbergCement has lifted its profit guidance for the year following a robust first half of the year from a slight increase in profits to “strong” growth. We don’t expect much margin expansion for the remainder of the year due to cost inflation and forward contracts unwinding but expect high levels of demand to persist. We raise our EBITDA growth forecasts for 2021 to 6% from 2%, which together with a moderate lift margin forecasts, results in our fair value estimate increasing to EUR 81 from EUR 72. Shares remain fairly valued.