The ratings on HeidelbergCement AG, the fourth-largest cement producer worldwide, reflect the group's aggressive debt leverage, as well as the cement industry's cyclicality and heavy capital intensiveness. This is offset by HeidelbergCement's large size, broad geographic diversity, strong market positions, and sustained ability to generate healthy funds from operations. In the first half of 2003, ended June 30, HeidelbergCement posted a 6% decline in sales to €3.0 billion ($3.5 billion) compared with the same period in 2002, reflecting mainly ongoing challenging conditions in the domestic market, as well as negative exchange rate effects in the U.S. Operating margins decreased to 13.1% from 15.4% in the same period of 2002, owing to low prices in Germany and negative currency effects. HeidelbergCements's
