Building materials companies: Three value creation paths for the recovery
In this short piece, A&M summarizes insights from project work and conversations with CEOs of European building material companies.
The chain of disruptive events of the last four years has affected especially the European building materials industry and made obvious weaknesses in the business models.
We identified a relationship between performance (along the dimensions of EBITDA and revenue evolution and the current cash and financing situation) and the “depth” of the business model.
Deep models, i.e., those that are sophisticated along the products/services and distribution dimensions are in a much better situation than more shallow models. However, in expectation of the potential up-cycle, all models face their specific challenges which now must be addressed. Value creation in the context of the expected market recovery can happen along three paths: scaling, shifting/transforming, and turnaround/restructuring.
