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. In the first six months of 2006, HeidelbergCement posted a 22% increase in sales to €4.3 billion compared with the same period in 2005, due to strong growth in North America, as well as growth
