HeidelbergCement AG - Capital Markets Day along expected lines – greater cash focus but no magic bullet

Davy Research
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HeidelbergCement's Capital Markets Day (CMD) saw the launch of the group's "Vision 2020" strategy. The plan leans heavily on efficiency, vertical integration and improved cash generation to deliver for shareholders. Unlike previous plans, management has been deliberately cautious in an effort to under-promise and over-deliver. The update was largely along expected lines, targeting moderate EBITDA growth with a capex-light model and a renewed focus on cash. Deleveraging comes first, so a buyback remains a distant prospect. We remain ‘Outperform’, albeit the stock may now lack catalysts in the short term.