HeidelbergCement Outlook Revised To Positive On Expected Credit Metric Improvement; 'BBB-' Ratings Affirmed

We expect Germany-based HeidelbergCement AG's credit metrics to progress in 2019-2020, benefiting from both resilient free operating cash flow (FOCF) and debt reduction due to asset disposal. We anticipate that the group's adjusted funds from operations (FFO) to debt will reach 25% in 2019 and settle comfortably above 25% in 2020. We expect HeidelbergCement will continue to benefit from still positive, albeit reduced, economic growth in both the U.S. and Europe, a favorable pricing environment in most countries, and a stabilization of the slowdown in South-East Asia. The group's ongoing portfolio optimization and commitment to reduce debt over 2019-2020 supports our view. We are therefore revising our outlook on HeidelbergCement to positive from stable, and affirming our 'BBB-/A-3' ratings. The

...July 18, 2019 - We expect Germany-based HeidelbergCement AG's credit metrics to progress in 2019-2020, benefiting from both resilient free operating cash flow (FOCF) and debt reduction due to asset disposal. We anticipate that the group's adjusted funds from operations (FFO) to debt will reach 25% in 2019 and settle comfortably above 25% in 2020. - We expect HeidelbergCement will continue to benefit from still positive, albeit reduced, economic growth in both the U.S. and Europe, a favorable pricing environment in most countries, and a stabilization of the slowdown in South-East Asia. - The group's ongoing portfolio optimization and commitment to reduce debt over 2019-2020 supports our view. - We are therefore revising our outlook on HeidelbergCement to positive from stable, and affirming our '###-/A-3' ratings. - The positive outlook reflects our view that we may raise the ratings if HeidelbergCement's FFO to debt comfortably exceeds 25% on a sustainable basis and the adjusted EBITDA margin...

Ratings Action