HeidelbergCement announced new mid-term strategic priorities and financial targets for the five-year period until 2019. On the back of the positive outlook for the current fiscal year and a strong asset base, the company aims to increase revenue from €12.6 billion in 2014 to more than €17 billion by 2019. Over the same period, operating EBITDA is expected to grow from €2.3 billion to more than €4 billion.7 HeidelbergCement 300

Following the successful deleveraging over the past years, the company also intends to further shift its priorities for capital allocation toward disciplined growth and increased shareholder returns. HeidelbergCement projects cumulative free cash flow of about €8.8 billion for the period from 2015 to 2019. Of this amount, it intends to invest approximately €2.5 billion in organic growth while using approximately €1 billion to keep leverage in a range which supports a solid investment grade rating. More than €2 billion shall be allocated to shareholders through progressive dividend payments.

Dr. Bernd Scheifele, chairman of the management board, commented: “We have delivered on our strategy of growth and deleveraging which we announced in 2010. As we enter the next phase of our corporate development, HeidelbergCement is in an excellent position to capitalize on its considerable strengths and drive future growth and value creation. We have a compelling strategy in place which clearly differentiates us from our competitors and we remain the industry leader in business excellence and cost efficiency. Over the next five years, we intend to achieve continuous growth and significantly increase our free cash flow with the clear commitment to building shareholder value.”

“We are focused on being the first major building materials company to earn our cost of capital in 2015,” added HeidelbergCement’s Chief Financial Officer Dr. Lorenz Näger. “On this solid financial base, we will allocate our strong free cash flow to carefully selected growth initiatives and increasing shareholder returns. We intend to significantly raise our dividend pay-out ratio and offer our shareholders progressive dividends based on affordability and sustainability.”

HeidelbergCement is setting out for the next phase of accelerated growth. Its mid-term strategic priorities will focus on four levers: benefit from significant operating leverage, sustain cost leadership, leverage operational strength through vertical integration and integrated management of the businesses, and capitalize on growth opportunities in attractive markets to further expand its geographic footprint.

As important markets improve, the company anticipates to benefit from its considerable operating leverage which should drive further earnings growth. In order to bolster its position as an industry leader in cost management, the company will continue to realize efficiency improvements through the enhanced digitalization of the value chain and by promoting a culture of entrepreneurship across the entire company.

In addition, HeidelbergCement will deepen vertical integration in urban centers as a key driver of future growth and value creation. The company has already made considerable progress in implementing an integrated management model across its asset base. By further integrating processes across business lines and sites, HeidelbergCement will be able to leverage its operational excellence on a larger scale. This will result in better customer service and improved delivery capabilities and will support a shift towards customer solutions and cross-selling. It will also enable a further reduction of operating costs. Going forward, HeidelbergCement intends to further expand and develop vertically integrated positions in urban centers around the globe.

HeidelbergCement is furthermore optimally positioned to capture the growth potential in important mature and emerging markets. The company will carefully deploy capital for selected growth opportunities in existing geographies and expand its footprint to new markets through a targeted and disciplined M&A approach.

2017 Cement Directory

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