DAVY VIEW

HeidelbergCement unexpectedly updated on trading last night (February 12th). The group reported Q4 2019 EBITDA c.3% below market estimates on the back of a marked slowdown in sales. That loss of momentum was driven by a significant decline in the trading unit and a deliberate strategy to prioritise price over volume. Margins held up, helped no doubt by lower input costs (likely energy-related). No outlook commentary was provided for 2020, but the risk to market forecasts clearly lies to the downside.