Heidelberg Materials reported that it closed the third quarter of 2024 with a strong performance. The company increased its result from current operations before depreciation and amortization (RCOBD) by 3% to €1,451 million (previous year: 1,393), while further improving its RCOBD margin by 39 basis points to 25.2% (previous year: 24.8). The result from current operations (RCO) grew by 3% to €1,124 million (previous year: 1,080).
“Our persistently strong performance in North America combined with a continued focus on cost management across key markets helped offset volume headwinds and contributed to further increasing our operational result and improving our profitability,” stated Dr. Dominik von Achten, chairman of the managing board of Heidelberg Materials. “Looking at the full year, we remain confident and upgrade our outlook for 2024 by lifting the lower end of the anticipated range for our result from current operations.
“We have also made significant progress on expanding our offering around low-carbon and circular products. We are on track with the mechanical completion of the sector’s first industrial-scale CCS facility at our Brevik plant in Norway, paving the way to deliver the world’s first carbon-captured net-zero cement and concrete next year.”
Against the backdrop of a challenging environment characterized by ongoing volume pressure and partly difficult weather conditions in the third quarter, disciplined cost management as well as a solid price performance over-compensated for declining volumes in some Group areas. This led to the overall result and margin growth. A main driver to this development were the good results in North America which additionally benefitted from the strong contributions of recent acquisitions.
To further accelerate its transformation toward sustainable products and profitable growth, Heidelberg Materials has embarked on a “Transformation Accelerator” initiative with a focus on cross-border network optimization, efficiencies across functions, and technical initiatives on a global scale. A particular focus area will be the optimization of the clinker and cement network in Western Europe. Overall, the initiative is expected to lead to a yearly result contribution of €500 million by the end of 2026.
With three important acquisitions in the third quarter, Heidelberg Materials enhanced its existing footprint in the United States while also adding to its rapidly growing portfolio of circular solutions across North America.
- In August, the company acquired Highway Materials, Inc., one of the largest independent aggregates and asphalt producers in the Greater Philadelphia market.
- The acquisition of Carver Sand & Gravel, the largest aggregates producer in the Albany, N.Y., area, followed also in August.
- In addition, Heidelberg Materials acquired Victory Rock, a producer of high-quality aggregates for concrete and asphalt as well as other related products.
To further strengthen the company’s large footprint in Morocco, Heidelberg Materials’ subsidiary Ciments du Maroc acquired controlling stakes in Asment de Témara, a cement and ready-mixed concrete producer, and Grabemaro, a supplier of aggregates. The investment creates substantial synergies through the usage of alternative fuels and accelerates decarbonization in an attractive growth market.
Heidelberg Materials’ ambitious decarbonization efforts continue to gain momentum. The company is on track to start up the world’s first industrial-scale carbon capture facility in a cement plant. Nearing mechanical completion of its Norway-based Brevik CCS project at the end of 2024, the company will deliver the world’s first carbon captured net-zero cement and concrete under its evoZero brand in 2025.
In September, the company started a feasibility study for another decarbonization project that is conducted at its Rezzato-Mazzano cement plant, which is set to become the first plant in Italy to produce carbon captured net-zero cement and concrete. With expertise from its broad range of CCUS projects that have already been launched and an ambitious CO₂ roadmap, Heidelberg Materials is well positioned to participate in the development of the CCS sector in Italy.
Heidelberg Materials successfully placed its second Green Bond as part of its Green Finance Framework. The issue volume amounts to €500 million with a term until 2031. In June, Heidelberg Materials already issued a Green Bond with an issue volume of €700 million. The Green Bonds complement the company’s sustainable financing portfolio. The range of projects financed by these bonds extends from the modernization of plants, for example to increase the use of alternative fuels, to the expansion of carbon capture technologies.