HeidelbergCement reveals its 'Beyond 2020' strategy

HeidelbergCement reveals its 'Beyond 2020' strategy
17 September 2020

Dr Dominik von Achten, CEO of HeidelbergCement announced the company’s ambitious new strategy ‘Beyond 2020’ in its Capital Markets Day live webinar yesterday. HeidelbergCement set new targets for carbon reduction, improved EBITDA margin and return on investment capital (ROIC). It also indicated that it would shift its divesting focus of non-core assets to more core asset disposals while investing in digitalisation and low-carbon products.

The group has reset its CO2 reduction goals for 2025 and 2030. By 2025 the company aims to reduce specific net CO2 emissions to below 525kg/t of cementitious material. This figure corresponds to a reduction of 30 per cent compared to 1990 and had previously only been targeted for 2030. The group has already reduced its CO2 emissions by 22 per cent between 1990 and 2019, and by 2030, emissions are expected to fall to below 500kg/t of cementitious material. To achieve this, the company has defined concrete measures for all plants worldwide.

HeidelbergCement has also set itself new medium-term targets for EBITDA margin and return on invested capital. By 2025, the ratio of result from current operations before depreciation and amortisation to revenue (EBITDA margin) is to increase by 300 basis points to 22 per cent.

In addition, the multinational aims to achieve a return on invested capital (ROIC) of clearly above eight per cent by 2025. The targeted leverage ratio is now set at 1.5x-2.0x to be reached by the end of 2020.

Dr Achten further announced a comprehensive digitalisations strategy for the group's global operations based on three digital pillars of HConnect, for improving customer experience and driving 75 per cent of sales volumes by 2025, HProduct and HService for plant production  and administration efficiencies, respectively.

Published under Cement News