OREANDA-NEWS. November 10, 2015. Fitch Ratings shows in its global peer study that the building materials sector is suffering from sub-investment grade financial profiles, despite investment-grade business profiles. Balance sheets are growing because of consolidation and deleveraging has been delayed - in some cases by years.

Mega-deals are shaping the industry and changing the face of companies in the sector. The most prominent examples are the merger between the world's largest cement manufacturers, Holcim Ltd and Lafarge SA, to create LafargeHolcim Ltd (BBB/Stable), CRH plc's (BBB/Negative) EUR6.5bn acquisition of LafargeHolcim's global assets, and HeidelbergCement AG's (BB+/Stable) acquisition of Italcementi SpA.

Companies in the sector will improve their financial headroom over the coming years, as they focus on better credit metrics through disposals, capital increases and earnings growth. We assume moderate earnings growth across the sector as capacity utilisation improves and due to the cost-cutting programmes of recent years, which have given companies leaner operating structures.

This detailed peer comparison reviews the key rating strengths and weaknesses for each company in the sector. It also discusses different factors assessed in Fitch's Building Materials Rating Navigators and compares how each company is positioned against its peers.