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Investing.com -- Moody’s Ratings has affirmed Heidelberg Materials AG’s Baa2 long-term issuer ratings while changing the outlook to positive from stable, the rating agency announced Thursday.
The rating action applies to Heidelberg Materials’ Baa2 senior unsecured Euro Medium Term Notes ratings, (P)Baa2 senior unsecured MTN programme rating, and (P)P-2 other short-term EMTN programme rating. Moody’s also affirmed similar ratings for the company’s subsidiary Heidelberg Materials Finance Luxembourg S.A.
The positive outlook reflects Heidelberg Materials’ strong and diversified business profile that has supported robust operational performance exceeding Moody’s expectations in recent years. The company successfully countered volume pressure in Europe and cost inflation resulting from the Ukraine war through pricing power and cost discipline.
For the 12 months ending June 2025, Heidelberg Materials delivered its highest Moody’s-adjusted operating margin (13.2%) and EBIT/average assets (9.3%) in the past decade, with further gains expected as the company advances its "Transformation Accelerator" initiative.
Since acquiring Italcementi S.p.A. in 2016, the company has significantly reduced its leverage while managing growth and shareholder returns. Its reported net leverage dropped to 1.2x in 2024, a 10-year low. At its recent 2025 Capital Markets Day, Heidelberg Materials tightened its net leverage target to around 1.5x, down from the previous 1.5x-2.0x range.
Moody’s expects the company’s adjusted debt/EBITDA to remain around 2.0x through 2026 with adjusted retained cash flow to net debt in the 40s percentages, assuming annual acquisitions of approximately €1 billion and ongoing EBITDA growth to around €4.7 billion in 2025 and €4.9 billion in 2026.
The rating agency noted that an upgrade could occur if Heidelberg Materials maintains financial policies leading to Moody’s-adjusted retained cash flow to net debt above 30% and gross debt/EBITDA below 2.5x on a sustained basis.
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