Company making good progress with acceleration of its portfolio optimization action plan
HeidelbergCement have reported good progress with the acceleration of their portfolio optimization during recent weeks. The company closed the divestment of its 50% share in Ciment Québec and its minority participation in Syria in December 2018.
In addition, a former cement plant area in Egypt, close to the river Nile within the Cairo metropolitan area, has been auctioned, and the divestment of the company’s Ukrainian business has been signed, with closing of these transactions expected to occur in 2019.
HeidelbergCement say all these divestments together have a total value exceeding €150 million and will have a slightly positive effect on operating EBITDA in 2019 compared with 2018.
Dr Bernd Scheifele (pictured), chairman of the managing board of HeidelbergCement, said the company was ‘delivering on its action plan and had accelerated its efforts to improve its portfolio and generate cash in order to speed up deleveraging’.
‘For 2018, we expect to realize about €500 million in disposal proceeds and we are well on our way to reach our target of €1.5 billion by the end of 2020. We remain committed to improving shareholder value and maintaining a solid investment grade rating,’ he said.
At HeidelbergCement’s Capital Markets Day in summer 2018, the company announced its goal to reduce complexity and risk by disposing of non-core businesses, market positions with high risks or limited growth potential and idle assets. The original target was to generate proceeds from disposals in the range of €1 billion to €1.5 billion in the three-year period from 2018 to 2020.
In their third-quarter earnings report on 8 November 2018, HeidelbergCement announced an action plan to drive earnings and cash flow generation. As part of this action plan, the company intends to accelerate disposals and review further divestment potentials with the goal to reach or even exceed the upper end of the target range set at the Capital Markets Day.
