Heidelberg Outperformed in Aggregates in 2016. Cemex Was Stronger in Cement

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Heidelberg achieved a higher Return on Capital employed than Cemex and LafargeHolcim in 2016, and covered its cost of capital for the second year running.

LafargeHolcim had the highest operating EBITDA margin in 2016, but the lowest asset turn. The latter could be partly due to the revaluation of the Lafarge assets during the merger in July 2015.

Heidelberg’s profitability in 2016 strongly outperformed in aggregates, but lagged Cemex in cement.

In cement, Cemex increased its EBITDA margin by 5.0 percentage points to 35.5%, 9.1 percentage points higher than LafargeHolcim and 11.4 percentage points higher than Heidelberg.

Cemex generated $32 of EBITDA per tonne of cement sold in 2016, whereas LafargeHolcim only generated $21 and Heidelberg $19, with the latter’s reduced by $2 on 2015, probably reflecting the initial impact of the Italcementi acquisition.

The additional EBITDA per tonne generated by Cemex was entirely due to its higher average selling price. Its cost per tonne of $58 was the same as that of LafargeHolcim, although it was $2 lower than for Heidelberg.

Heidelberg had a significantly more profitable aggregates business than both LafargeHolcim, and Cemex in 2016. Heidelberg’s aggregates EBITDA margin of 24.9% was 7.5 percentage points higher than LafargeHolcim’s and 10.6 percentage points higher than Cemex’s.

Cemex does not publish a regional split of its aggregates EBITDA, but the difference between Heidelberg and LafargeHolcim’s aggregates margins was concentrated in North America and Australia.

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