Heidelberg Materials sees early signs of construction recovery, CEO says

Heidelberg Materials CEO Reports Early Construction Sector Recovery Signs

Early Recovery and Industry Developments

By Christoph Steitz and Ilona Wissenbach

FRANKFURT, Oct 23 (Reuters) - Building materials maker Heidelberg Materials is seeing first signs of a recovery in the construction sector, its CEO said, with investment linked to Berlin's €500 billion ($560 billion) infrastructure package beginning to gain traction.

Pipeline Projects and Recovery Indicators

"There is a pipeline of projects that are essentially ready for implementation and should now be getting underway," Dominik von Achten told Reuters, pointing to "tentative signs of recovery" in the July-September period.

Growth in Energy Infrastructure and Data Centres

He said investments in energy infrastructure and data centres, which are needed for artificial intelligence technology, were slowly gaining momentum.

Industry Peers and Financial Outlook

Larger peer Holcim on Friday raised its 2026 outlook for the second time this year as it sold more higher-margin low-carbon products. Heidelberg Materials is scheduled to release third-quarter results on November 4.

Engagement with Technology Firms

Supplying Lower-Carbon Construction Materials

Von Achten said the company was in talks with major hyperscalers, big technology firms that operate global data center networks, about supplying lower-carbon construction materials as scrutiny grows over their energy use, water consumption and carbon footprint.

Profit Outlook and Cost Management

Heidelberg Materials in July had to tone down its profit outlook for the year due to higher energy costs following the escalation in the Middle East, which is hitting the firm's energy intense cement-making business.

Energy Prices and Cost Strategies

"The upward trend in energy prices has levelled off, but it is still heading in the wrong direction," von Achten said, adding the group still benefited from electricity and gas purchases locked in several years ago.

He said higher costs could largely be passed on, while cost cuts remained on the agenda after recent plant closures in Europe.

($1 = 0.8933 euros)

(Reporting by Christoph Steitz and Ilona Wissenbach, editing by Kirsti Knolle)