Heidelberg Materials present Strategy 2030
Company driving global advantages in the areas of sustainability, digitalization, and technical excellence
TODAY, Heidelberg Materials presented their ‘Strategy 2030: Making a Material Difference’ at this year’s Capital Markets Day in Brevik, Norway. Building on a strong track record of profitable growth since the company’s last Capital Markets Day in 2022, the new Strategy 2030 outlines an ambitious path towards accelerated growth and profitability.
‘After delivering on our 2025 mid-term targets ahead of plan, we remain focused on the future as our building materials continue to be an integral part of the solution to the needs of a changing world,’ said Dr Dominik von Achten, chairman of the managing board of Heidelberg Materials.
‘We are witnessing the biggest waves of capital investment ever. Key megatrends in the world – such as energy transition, infrastructure rebuilds and newbuilds, housing and urbanization, defence revamping, and digitalization with an exploding demand for data centres – are driving demand for our products in markets where Heidelberg Materials have developed leading positions. We are in the right places with the right products to capitalize on these large-scale global trends and growth opportunities for sustainable concrete applications.
‘We are thrilled to embark on this new chapter, in which we will continue to deliver sustainable value to our customers and shareholders. At Heidelberg Materials, we can build on the collective strength of our high-performance team around the world. Just over 50,000 people, led by a great management team with the right entrepreneurial spirit, complement their local ambitious agenda with global best practices and a relentless drive for rigorous change, creativity, and innovation.
‘Our company is in a stronger position than ever to further accelerate growth, scale our leadership, and seize the opportunities ahead. We combine unmatched global advantages with a unique footprint and radical focus. This strategic positioning enables us to grow faster and intensify our decarbonization efforts. We see significant opportunities ahead of us – ranging from operational growth as volumes return and an expanding sustainable product portfolio to cost savings through optimisation and efficiencies – to help us grow faster and more sustainably,’ said Dr von Achten.
Heidelberg Materials are committed to a pure-play strategy and continue to strengthen their resilience by maintaining a diversified presence across geographies at different stages of the economic cycle, while optimizing its portfolio by prioritizing markets with strong growth profiles.
‘Through our operational growth and asset optimization push, as well as our sustainability and digital initiatives, we expect the result from current operations (RCO) to grow by 7–10% on average per annum. In addition, we are raising our original target of achieving a return on invested capital (ROIC) of over 10% and now aim to achieve a ROIC of around 12% by 2030,’ said René Aldach, chief financial officer of Heidelberg Materials. ‘We are accelerating our organic and inorganic growth, through a disciplined approach to M&A focused on high returns in attractive markets and positive impacts to our CO2 roadmap and sustainability targets.’
Heidelberg Materials say they are continuing to set the standard by delivering the industry’s most ambitious targets with the reduction of specific net CO2 emissions to <400kg of CO2 per tonne of cementitious material and by generating more than 50% of its revenue from sustainable products by 2030. The company aims to further increase the alternative fuels rate to more than 50% and achieve a clinker ratio of 64% by 2030.
In addition, the company plans to continue with a disciplined capital expenditure approach with a slightly increased net capex target of €1.3 billion on average per annum. Heidelberg Materials plan to increase their cash conversion, ie the ratio of free cash flow to the result from current operations before depreciation and amortization, to about 50% by 2030. The leverage ratio is expected to be around 1.5x.
To deliver on their accelerated targets, Heidelberg Materials are driving their efforts across geographies and businesses by being a locally rooted, globally connected, and digitally empowered leader in the heavy building materials sector. This, they say, is being accomplished through their global advantage along three distinct value drivers: sustainability, digitalization, and technical excellence.
‘Already today, Heidelberg Materials are offering their customers a wide range of new sustainable products and materials with evoBuild, the company’s global brand for low-carbon and circular products, and evoZero, the world’s first carbon-captured net-zero cement,’ added Dr Katharina Beumelburg, chief sustainability and new technologies officer at Heidelberg Materials. ‘We deliberately chose the cement plant in Brevik as the backdrop to this year’s Capital Markets Day and the launch of our Strategy 2030. Home to the world’s first and only industrial-scale carbon-capture unit in a cement plant, our project showcases the company’s strong determination to push the boundaries of sustainability and technological innovation.’
Digital innovation is another decisive factor supporting the company’s sustainability efforts, along with technical excellence by leveraging automation and AI. Together with their partners, Heidelberg Materials are building a digital ecosystem with smartly integrated AI services to unlock efficiencies across the value chain. Moreover, technology will continue to be a core value driver at Heidelberg Materials, as it is leveraged across every plant, process, and project to spearhead industrial efficiencies, technological innovations, and decarbonization advancements.
