European building materials: Citi sees cement path to recovery

Titan SA

11/12/2020 08:32

** Citi Research expects start of recovery for European
building materials with volume growth, as favourable sector
fundamentals should drive strong returns in coming years 
    ** In 2021, it expects around 4.3% cement volume growth in
European and emerging markets, but warns against tougher
comparables in the U.S.
    ** Sees lile-for-like (LFL) revenue growth of about 3.5% and
EBITDA growth of nearly 6.1% for the sector with EBITDA margin
expanding further by circa 70 bps in 2021
    ** Citi says margin expansion is likely to continue at least
in H1 2021, however, sees risks to margins in H2 2021 due to
higher fuel and energy costs
    ** LafargeHolcim  LHN.S  is the broker's top pick as it 
expects the group to deliver the highest LFL revenue/EBITDA
growth
    **  Among small-mid cap, Vicat  VCTP.PA  is the top pick
with the highest exposure to emerging markets
    ** "The industry is well positioned to benefit from
favourable trends in coming years and the sector is trading at
attractive valuations", the brokerage adds
    ** 

 ((juliette.portala@thomsonreuters.com))