Cementir Holding

In our opinion, the 300bp EBITDA margin improvement by 2022 as well as the back-ended green capex should drive EPS higher as soon as 2020, compared to our previous assumptions. Cementir remains a strong buy in the capital-intensive cement industry thanks to its clever capital allocation: it now favours internal investment rather than acquisitions, due to the fact that the payback period is about half that of an acquisition. Bottom line, Cementir is truly the king of capital allocation in the cement sector.

We have reviewed our long-term assumptions: we believe that the industrial plan offers some upside to our valuation. Nonetheless, we remain especially cautious in our long-term assumptions especially on the cash generation side of our DCF, meaning that there is more chance of a revision upwards than of a revision downwards.