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EXCLUSIVE-Germany's HeidelbergCement to sell five assets as revamp picks up pace

* Company plans to realise first deals by end of June

* More optimistic now than before Christmas, CEO says

* Jefferies estimates 3 bln euros of assets could be sold

* GRAPHIC-Road to recovery: tmsnrt.rs/3a2QzLn (Adds analyst reaction, graphic)

FRANKFURT, Feb 9 (Reuters) - HeidelbergCement has identified five assets to sell in a review of its business and it made a good start to 2021, the chief executive told Reuters, as the world’s No. 2 cement maker enters the next phase of its plan to boost margins.

“We’re now shifting gears. And that’s happening faster than we originally thought,” Dominik von Achten, who took the helm a year ago, said in his first interview with international media.

Von Achten said the first of the sales, which vary in size, were expected in the first half of the year. He declined to say which countries were affected out of the more than 50 in which the firm operates, nor how much it hoped to raise.

Analysts have identified weaker assets worth as much as 2.5 billion to 3 billion euros ($3 billion-$3.6 billion) that could be sold. Jefferies said in a note after the interview that assets worth 3 billion euros in sales, or 16% of the group’s total, could be divested to offer a bigger return to shareholders.

“There are no sacred cows. Everything was on the table,” von Achten said of the review, adding there were “rock-solid” markets, such as northern Europe, which it would not exit.

Asked about Indonesia, which Berenberg analysts have named as a disposal candidate, von Achten said: “Indonesia, too, is an important market for us, no doubt.”

HeidelbergCement owns a 51% stake in Indocement.

The group, which is active in Europe, Asia and the Americas, has in the past said its North American business was underperforming, leading it to launch a margin improvement plan that von Achten said was on track.

(For an interactive version of this chart click here tmsnrt.rs/3a2QzLn)

He said the group was focused on raising the productivity of underperforming assets, which could range from ready-mix concrete plants to cement factories, or disposing of them.

HeidelbergCement, along with rivals such as Switzerland’s LafargeHolcim, has recovered swiftly from the coronavirus crisis that brought construction activity around the world nearly to a halt last year.

Von Achten said the company now had a handle on the situation, including mass testing at factories to ensure workers’ safety, and he did not expect a big impact on sites.

“We’ve reached calmer waters,” he said, adding the group was well on track to meet its 2020 targets, including higher core profit, a leverage ratio of less than 2.0 times as well as savings of around 1 billion euros.

He also said the group had made a major step towards its mid-term targets of a core profit margin of 22% and a return on invested capital of clearly more than 8% by 2025.

“With regard to the market I am now more optimistic than I was before Christmas,” he said.

Von Achten said HeidelbergCement, which is due to report preliminary 2020 results on Feb. 23, had made a good start to the year, even though visibility on future prospects remained low.

“We’re largely done growing muscle ahead of time, we’re fit for a marathon again,” he said.

($1 = 0.8302 euros)

Editing by Mark Potter and Edmund Blair

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