HEI: Pre-Q2 Model Update

Research evidence excerpt

HEI: Pre-Q2 Model Update

Heidelberg Materials AG

Estimate changes

Regions

• Europe: We forecast organic growth of 1.0% (prev. +2.0%). We estimate that low single digit

pricing in the region (driven by cement) will offset minor volume declines given continued

uncertainty, with the same regional differences applying (weakness in Germany, France and

the UK despite greenshoots of demand), and strength in Southern and Eastern Europe).

Following margin declines of 100bps in Q1'26, we factor in a broadly flat margins development

in Q2, as we expect pricing actions and the transformation accelerator cost program to offset

inflation on the cost base

• North America: We forecast organic growth of +3.0% (prev. +4.0%). We expect pricing in the

US to be lower than in Europe for cement, but slightly stronger for aggregates. We also expect

a stable volume environment, given the strength in infrastructure and non-residential markets

offsetting a weak residential sector. Following a c.290bps margin decline YoY in Q1 (driven by

weak weather), we factor in 50bps of margin declines in Q2, as cost inflation (mainly dispel)

more than offsets pricing actions.

• APAC: We forecast organic growth of -1.0% (prev. 0.0%). We forecast similar trends in the

region in Q2, though the comparison base gets c.2.5ppts harder on organic growth in Q2

(Q1'26 LFL: +3.4%), with strength in Australia offsetting a poor volume and pricing environment

in China and Indonesia. We forecast c.80bps of margin decline YoY (in line with Q1'26),

accounting for cost growth acutely focused on the region.

• Africa: We forecast organic growth of 0.0% (unchanged). While we anticipate the region

continues to see a buoyant market environment, we note the strong prior-year comparison

base of +16% LFL.