DAVY VIEW

Buzzi Unicem’s (BZU) Q3 trading statement stands out in the cement sector. Sales were comfortably ahead of estimates; prices were positive in all markets in both cement and RMC; net debt is already below end-year expectations; and FY guidance was better. The USA was the positive delta in the quarter, helping to lift the overall out-turn. The group is now suggesting that consensus estimates of c.€650m (pre-IFRS) look sensible (consensus is typically €20m ahead of guidance). The debt performance is equally impressive and should fall close to 1x EBITDA by year-end. This leaves BZU with lots of capital allocation options in 2020.