Heidelberg Materials: Boom expected thanks to large infrastructure package!

Heidelberg Materials: Boom expected thanks to large infrastructure package!

The German government has ambitious plans to finance the country's ailing infrastructure. Economics Minister Katherina Reiche emphasizes that 90 percent of the necessary investments must come from the private sector. This is happening as part of a newly approved infrastructure and climate fund with a volume of 500 billion euros, which is intended to serve as a stimulus for the economy. Germany faces the challenge of crumbling bridges, damaged rails and inadequate digitalization. In addition, an increase in defense spending is sought to promote additional economic growth.

International investors have already shown interest in German investment opportunities. Stefan Wintels, CEO of KfW, reports a strong willingness to invest in cities such as New York, London and Zurich. Robin Winkler from Deutsche Bank sees the political measures as a significant incentive for private investment. In this context, the company Heidelberg Materials, formerly known as HeidelbergCement, plays a central role.

Heidelberg Materials and the investment prospects

Heidelberg Materials plans an annual profit increase of 7 to 10 percent. The company's share price rose by around 81 percent in the last twelve months, while the DAX rose by 31 percent. Analysts estimate a price target of between 155 and 206 euros for the next four weeks, with an expected price increase of around 3 percent. The stock shows annual volatility of 35 percent and a beta of 1.36.

The company employs around 52,000 people and is a leading global manufacturer of building materials. The business activities include the production and distribution of cement, aggregates as well as ready-mix concrete and asphalt. Particularly noteworthy is the takeover of the Italian building materials manufacturer Italcementi in 2016, which significantly strengthens the market position of Heidelberg Materials. The company has also formed a joint venture with Holcim in Australia to take over a division of the Buckeridge Group of Companies.

Financial indicators and developments

In the 2024 financial year, Heidelberg Materials achieved sales of 21.2 billion euros, which corresponds to the previous year's level. The surplus amounted to 1.8 billion euros, after 1.9 billion euros in the previous year. Profit growth of around 30 percent is forecast for the coming years. In addition, the dividend is to be increased by 10 percent to 3.30 euros per share. Analysts expect adjusted EBIT to increase by up to 11 percent to between 3.25 and 3.55 billion euros.

A special focus is on the key region of North America, where 25 percent of the company's revenues are generated. Heidelberg Materials employs 9,000 people in the United States, further underscoring the growth potential in this important region. These positive signals indicate that Heidelberg Materials is benefiting from the initiatives to strengthen the infrastructure in Germany Investor Publishing reported.

In summary, the German government's strategic investments in infrastructure bring a new wave of growth opportunities not only for the country itself, but also for companies like Heidelberg Materials. These developments could also potentially have an impact on the entire European market.

For further information about the current situation at Heidelberg Materials and the economic prospects for the industry, read also Focus.