Uninterrupted growth persists for Heidelberg Materials
In the ever-changing landscape of the global economy and public construction sector, Heidelberg Materials, a company with promising medium- to long-term prospects, finds itself navigating through short-term risks.
Recent data from the construction industry shows a volatile trend. Order intake stagnated in April, down 0.5% compared to the previous month, but rebounded in May, increasing by 5.3% year-on-year, adjusted for price. Sales followed a similar pattern, with a 4.1% increase in May compared to the previous year.
However, Heidelberg Materials' financial performance in 2025 has been less encouraging. The company experienced a 50% drop in net profit in Q1 2025 compared to the same quarter in 2024, with revenue falling 11% year-on-year. Profit further declined by about 5.26% in Q2 2025, despite a marginal sales revenue decrease of 0.48%. The first half of 2025 saw a 47% decline in net profit.
While the exact causes of these financial declines are not explicitly detailed, the current weakness of the dollar and potential impacts from the resolution of the US-EU trade conflict are factors that could be influencing Heidelberg Materials' results. As a multinational company, Heidelberg Materials could be vulnerable to dollar weakness, which might affect international sales pricing and costs. However, no direct reference connects any resolution of US-EU trade conflicts to Heidelberg Materials’ recent financial performance, suggesting that either the trade conflict effects have not prominently impacted Heidelberg’s short-term results or that any such impacts are not yet quantified or disclosed publicly.
Despite the challenges, Heidelberg Materials' CEO, Dominik von Achten, remains optimistic for the current year. Analyst Glynis Johnson maintains a "Buy" rating for Heidelberg Materials' stock and expects the company's second-quarter operating profit (EBITDA) to match the consensus estimates. Johnson has set a price target of €217.70 for Heidelberg Materials' stock.
The construction industry, including the residential sector, is showing signs of stabilization at a low level, and the ZDB construction industry association expects the order situation to remain positive in the second quarter of 2025, although at a slower pace.
Heidelberg Materials' stock is currently trading on the DAX stock exchange, and the stop-loss for the stock should be maintained at €132.00. If the US-EU trade conflict is not resolved, Heidelberg Materials' stock could experience a significant downturn.
In the midst of these challenges, Heidelberg Materials is hoping for a resolution to the US-EU trade conflict, which could potentially help the company navigate the short-term risks and position itself for long-term growth.
[1] Heidelberg Materials AG Quarterly Report Q1 2025 [2] Heidelberg Materials AG Quarterly Report Q2 2025 [3] Heidelberg Materials AG Half-Year Report 2025
The volatility in the construction industry's order intake and sales could indicate potential opportunities for investing in related businesses, including Heidelberg Materials. However, the company's recent financial performance in 2025 suggests a downturn, with a significant drop in net profit and a weakened dollar being possible factors.
