Broad geographic diversity; Large size and strong market positions in highly consolidated areas; and Good cash flow generation. Exposure to the structurally difficult German market; Industry cyclicality and heavy capital intensity; and Moderate financial structure. The ratings on HeidelbergCement reflect the group's large size, broad geographic diversity, strong market positions, and sustained ability to generate healthy funds from operations (FFO). The ratings are constrained by the company's moderate financial structure and the cement industry's cyclicality and heavy capital intensity. With sales of €7.8 billion in 2005, HeidelbergCement is the world's fourth-largest cement producer after France-based Lafarge S.A. (BBB/Stable/A-2), Switzerland-based Holcim Ltd. (BBB+/Stable/A-2), and Mexico-based Cemex S.A. de C.V. (BBB/Stable/--). HeidelbergCement's unadjusted net debt was €3.6 billion at June 30, 2006.
