Heidelberg Materials - German construction materials giant

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Let’s bump this thread up as well, to make tracking easier!

This is a German construction materials giant, which is the world’s largest producer of aggregates and the world’s second-largest manufacturer of cement. In July 2016, Heidelberg acquired a 45% stake in the Italian company Italcementi for 1.85 billion. The remaining shares were redeemed in October 2016. Before this, Heidelberg was the world’s 4th largest cement producer, but the deal propelled them into second place.

The company’s roots date back to 1870s Germany, when Johann Philipp Schifferdecker founded his company in Heidelberg, in the state of Baden-Württemberg. The company began aggressively acquiring smaller companies from 1914 onwards, and by 1936, the company’s cement production reached one million tons, compared to 80,000 tons in 1896. In the 1930s, the company benefited massively from state-led infrastructure and military industry projects. The company’s CEO joined the NSDAP in 1933 and was a member of the Freundeskreis Reichsführer SS (Circle of Friends of the Economy) https://en.wikipedia.org/wiki/Freundeskreis_der_Wirtschaft. During World War II, the cement industry held a special status. As the war progressed, the cement industry used prisoners of war in many factories. After the war, active global expansion continued through acquisitions. A good history can be found on Heidelberg’s website, link here: https://www.buildingforgenerations.heidelbergmaterials.com/

Here is the current organizational structure:
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Many surely know that cement production is a very heavy process in terms of carbon dioxide emissions. In this regard, the company has quite ambitious targets.

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Related to this, they have an interesting CCS project in Brevik, involving companies like Aker Carbon Capture. Good information on this can be found on the company’s website:

https://www.heidelbergmaterials.com/en/carbon-capture-and-storage-ccs

The company is more of a value plodder than a growth rocket, and given the size of the firm, one could write an incredibly long treatise for this opening, but if the company interests you, I recommend reading or at least glancing at the 2021 annual report and the latest earnings reports.

The annual report is quite hefty, spanning 236 pages: https://www.heidelbergmaterials.com/sites/default/files/2022-03/annual-report-heidelbergcement-2021_1.pdf

Earnings presentations below:
Q3 2022: https://www.heidelbergmaterials.com/sites/default/files/2022-11/2022-Q3-Trading-Update.pdf
Q2 2022: https://www.heidelbergmaterials.com/sites/default/files/2022-07/2022_H1%20Presentation_0.pdf
Q1 2022: https://www.heidelbergmaterials.com/sites/default/files/2022-05/2022-Q1%20Presentation.pdf

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I’ve owned the slightly larger CRH at some point. It does feel a bit cheaper, as German stocks often do. Their dividend taxation is annoying enough, though, that I don’t buy dividend stocks from there in any form other than ETFs. Unless the potential for capital appreciation is tempting. Bauer AG (higher risk, too) was the last one I owned from there, mainly because of its low P/S ratio. Now I’ve just been keeping an eye on it, wondering if I’d dare to jump back in at some point :slight_smile:

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" Decarboni­sation push: Heidel­berg Mate­rials acquires largest fly ash recycling company in the USA and continues port­folio optimi­sation"

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Let’s update a few things here.
Name change: Heidelberg Cement → Heidelberg Materials.

Press release regarding a small investment in France to reduce carbon dioxide emissions at a cement plant.

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H1 2023 figures are out

Report:

Presentation:

Figures:

Here’s the most important part from the H1 report

" Result from current operations now expected to be €2.7 bn to €2.9 bn (previously: €2.50 bn to €2.65 bn) "

Let’s include this as well

" Increase in infrastructure projects and
parts of non-residential expected to
partly offset slowdown in residential
sector"

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This is definitely one of the best cases in my portfolio.
The first purchases were made at the beginning of April '22.

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A few news items here as well

Let’s add this one too

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Let’s add some news here as well

The focus continues: Portfolio optimisation continues | Heidelberg Materials

Concrete green transition changes: First fully decarbonised cement plant in Germany: EU Innovation Fund backs Heidelberg Materials' GeZero project with €191 million

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Last week’s report

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Could this be a strong bet with an eye on the reconstruction of Ukraine?

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Quite an interesting piece regarding CC.

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Heidelberg Materials is continuing its progressive dividend policy: The Managing Board and Supervisory Board will propose to the Annual General Meeting, which will be held on 16 May, to distribute a dividend of €3.00 per share for the 2023 financial year. Subject to the approval of the shareholders, this corresponds to an increase of €0.40 per share or 15% compared to the previous year’s dividend of €2.60 per share. Based on the Heidelberg Materials share price of €80.94 as at 31 December 2023, the dividend yield is 3.7%.

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https://www.crh.com/media/5268/crh-plc-q1-2024-results-presentation.pdf CRH’s interim report

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Q3 2024

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E: @DayTraderXL, also add competitor CRH to your watchlist.

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I happened to catch a segment about the company on CNBC this morning. I don’t follow the construction sector that closely, so it’s a completely new company to me. A strong-looking result given the current market sentiment, and the share price hit a new ATH. I’ll have to add it to my watchlist and take a closer look.

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Let’s also post the competitor’s quarterly report here

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Let’s revive this as earnings season approaches.

Interesting project news from December.

Pioneering the transformation to net zero: Brevik CCS project in Norway reaches mechanical completion

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Q4 2024
Presentation: https://www.heidelbergmaterials.com/sites/default/files/2025-02/FY_2024_Analyst_Presentation.pdf

Figures: https://www.heidelbergmaterials.com/sites/default/files/2025-02/Business_Figures_2024.pdf