Contents
Turning more bullish on cement industry as key markets show signs of life 4
Cement prices have held up very well 7
Why have global cement prices been so resilient? 8
Global cement markets are improving (but not everywhere) 9
Demand has recovered quicker than we forecast 10
The good look set to outweigh the bad 10
North America — US finally showing first signs of life 12
Western Europe – leaving worst behind 14
France – prices stay stable despite weak demand 15
Germany – rising from the ashes 15
Italy – stimulus package disappoints 16
UK – housing leading the charge to recovery 17
Eastern Europe – some good, some bad 17
Poland – signs of recovery in July 18
Czech Republic – holding up well 18
Russia – prices likely to weaken further 19
Ukraine – still a very tough market 19
South America – great long-term fundamentals 20
Argentina – dramatic price rises in recent years 21
Brazil – signs of recovery in July 21
Africa-Middle East – strongest markets in 2009 and going forward 22
Algeria – outlook very bullish 23
Egypt – demand and prices rocketing higher 24
Morocco – strong pick-up in Q2 2009 25
Turkey – the problem country 26
Asia – experiencing mixed fortunes 28
China – stimulus driving demand higher 28
India 31
Changes to company estimates 34
Dramatic changes to estimates driven by more positive view and increased costcutting
35
Lafarge – big changes reflect more positive stance 35
Holcim – not as much upside in 2010 36
HeidelbergCement – strong recovery in 2010 37
Costs reduction programs are key 38
Valuation – should cement companies be re-rated going forward? 40
Normalised P/E shows how cheap cement names are 40
Replacement cost underlines value 41
Cement margins not as cyclical as they used to be 45
HeidelbergCement – short-term catalysts could drive stock higher 47