Heidelberg Materials CEO at Davos: Defence and infrastructure will drive construction in 2026.

Dominik Von Achten, the Chief Executive of Heidelberg Materials, said that he expects to see a slight improvement in the market for building material this year. The growth will be driven by infrastructure and defense spending.

In the next few years, the European Union intends to increase defence spending by 800 billion euros (938.80 billion dollars). Germany, home to Heidelberg, the largest cement manufacturer in the world has set up a 500 billion euro fund for modernising its infrastructure.

Von Achten said on the sidelines at the World Economic Forum, in Davos, Switzerland that the pledge for defence spending was not small.

Typically, investments in defence are also accompanied by some tangible benefits. He said that there are urgent needs in energy, infrastructure and defence.

Von Achten stated that projects related to the energy transformation will also be driving growth.

He said, "Overall, we expect a slight volume increase this year."

HOUSING MARKET 'NOT REALLY MOVING', M&A DEALS ON THE TABLE

Von Achten, who declined to provide details about the company's performance in 2025 before its earnings announcement on February 25, said that its current outlook of a result of current operations between 3.3 billion and 3.5 billion euro was "fine".

He said, "We feel comfortable with this guidance."

He warned that the housing market could be'subdued.

He cited lower migration, and the fact that fewer renovations were carried out in the wake of pandemic, as possible reasons.

Heidelberg plans to continue with its acquisitions and has a pipeline of potential deals.

Von Achten stated that the company had a "war chest" of 10 billion euro to spend in acquisitions up until 2030 and would be open to deals of all sizes, even those exceeding 1 billion euro.

He added that acquisitions would be made only if they fit within the strict financial framework of the company.

The U.S. may be the main focus of M&A but it is not the only one. We also do deals around the world... but we avoid doing huge deals worth more than 10 billion Euros in 20 different countries. This is definitely off the table." The dollar is worth 0.8522 euro (Reporting and editing by Andrew Heavens, Joe Bavier and John Revill)

(source: Reuters)