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Investing.com -- Heidelberg (ETR:HDDG) Materials reported stronger-than-expected first-quarter results on Thursday and reaffirmed its full-year outlook, supported by solid growth in Africa.
Revenue for the quarter came in at €4.72 billion, 2% above the company consensus of €4.64 billion. Operating EBITDA rose to €557 million, 5% higher than the €531 million expected by analysts.
Result from current operations (RCO) climbed 1.3% year-on-year to 235 million euros ($266 million), ahead of the 207 million euros expected by analysts, based on a company-provided poll.
The company’s shares rose more than 2% in Frankfurt trading.
“Despite the political and economic uncertainties as well as difficult weather conditions in some regions, we got off to a very good start to the 2025 financial year,” said CEO Dominik von Achten.
The company maintained its 2025 RCO guidance of between 3.25 billion and 3.55 billion euros, roughly in line with the 3.44 billion-euro market consensus.
Management still expects demand to “stabilise at a low level." Heidelberg also reaffirmed its return on invested capital at around 10% and a slight reduction in CO2 emissions.
Performance in North America, which contributed over 20% of group revenue in the first quarter, fell sharply, with RCO in the region dropping by nearly two thirds.
"Heidelberg delivered a strong first quarter beating revenue expectations by 2% and EBITDA by 5%, we appreciate that Q1 is a small quarter, but this does not detract from the impressive performance," RBC Capital Markets analysts said in a post-earnings note.
"The shares are likely to pause for breath ahead of the Capital Markets Day later this month, which we believe will focus on long term aspirations rather than shorter term upgrades," they added.
While the ’Transformation Accelerator’ could deliver positive surprises, some investors may look to lock in gains following recent strong performance, RBC said.
Separately, Barclays (LON:BARC) analysts said Q1 was "a solid print overall" for Heidelberg. "We think the bar to clear had moved considerably higher after peers results (e.g. Holcim (SIX:HOLN)), though this print has succeeded in beating expectations."