The ratings on Germany-based cement producer HeidelbergCement AG reflect the group's high--albeit since mid-2003 improving--debt-leverage, and the cement industry's cyclicality and heavy capital intensiveness. These factors are offset by HeidelbergCement's large size, broad geographical diversity, strong market positions, and sustained ability to generate healthy funds from operations (FFO). With sales of €6.4 billion ($8.0 billion) in 2003, HeidelbergCement is the fourth-largest cement producer worldwide after France-based Lafarge S.A., Switzerland-based Holcim Ltd., and Mexico-based Cemex S.A. de C.V. Unadjusted net financial debt was €3.6 billion at year-end 2003. In the first nine months of 2004, ended Sept. 30, HeidelbergCement posted an 8.3% increase in sales to €5.2 billion compared with the same period in 2003, due to the new consolidation of
