HeidelbergCement's operating line makes progress

Financial guidance for 2019 is for 'solid' or 'moderate' growth in Heidelberg Cement's revenue, EBITDA and EPS, and 'significant' net debt reduction (depending on which report you read). The group's management expects volume increases in all business lines, a tail-wind from energy cost inflation, and further margin improvement from the EUR100m SG&A cost cutting programme, reports Bernstein.

HeidelbergCement reported earnings per share (EPS) grew by 25 per cent to EUR5.76 on EBIT growth of one per cent. Free cash flow before growth capex and disposals fell by -7.5 per cent to EUR1.3bn from EUR1.4bn in 2017.

Return on invested capital in FY18 was 6.9 per cent (7.2 per cent in 2017). There were EUR600m of disposals achieved in 2018 and a further EUR200m secured for 2019. Financial expenses fell by -12.3 per cent to EUR367m.

Net debt at year-end stood at EUR8.37bn, (2.7x ND/EBITDA vs. 2.6x in 2017). This is despite higher than normal growth capex driven by acquisitions.