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HeidelbergCement Announces Vision 2020; Confirms 2018 Outlook - Quick Facts

HeidelbergCement (HDELY.PK) announced, for the three-year period starting 2018, the Group aims to increase free cash flow generation to about 6 billion euros. The company assumes an organic EBITDA growth of around 5% per year over the three year period. HeidelbergCement intends to continue the progressive dividend strategy with a target pay-out ratio of around 40%. The company plans to reduce its leverage to below 2.0x and / or net debt to below 7 billion euros, paving the way to achive a solid BBB/Baa2 rating.

In the three-year period until 2020, HeidelbergCement expects to generate proceeds from disposals in the range of 1 billion to 1.5 billion euros that will be used to finance growth capex in the order of between 1.5 billion and 2 billion euros. Overall, net growth capex will thus be limited to a maximum of 1 billion euros.

HeidelbergCement said it will focus on three levers to further increase free cash flow: continuous efficiency improvements, active portfolio management with a disciplined capex approach and reduction of financial costs.

Lorenz Näger, Chief Financial Officer, said: "We have strong cash generation potential not only from operations but also from financial cost reductions and disciplined capex management. We intend to continue with our progressive dividend strategy based on affordability and sustainability, deleverage our balance sheet and optimize our asset portfolio."

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