Heidelberg Earnings: North America Segment Drives EBITDA Despite Sales Decline; Raising Valuation

Narrow-moat Heidelberg Materials delivered a 4% increase in EBITDA to EUR 1.3 billion during the second quarter, broadly in line with company-compiled consensus. EBITDA margin expansion of 130 basis points to 23.4% was entirely driven by the North America segment, due to the ramp-up of its new cement plant in the region. Management appears to be on track in executing its margin expansion targets, which provides us confidence in lifting our EBITDA margin assumptions and subsequently raising our fair value estimate to EUR 92 from EUR 84. We view shares as fairly valued.