Operating Margin - Breedon Group PLC (XBER:CQB)

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Price: 3.94 EUR

Market Cap: 10.9B EUR

8.8%

Current

10%

Average

5.2%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

8.8%

Operating Profit

143.9m

Revenue

1.6B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
JE		Breedon Group PLC LSE:BREE	1.1B GBP	9%
IE	C	CRH PLC NYSE:CRH	83.4B USD	14%
CH		Holcim AG SIX:HOLN	41.5B CHF	17%
DE		HeidelbergCement AG XETRA:HEI	39.1B EUR	31%
US		Vulcan Materials Co NYSE:VMC	38.5B USD	20%
US		Martin Marietta Materials Inc NYSE:MLM	38.2B USD	24%
IN		UltraTech Cement Ltd NSE:ULTRACEMCO	3.4T INR	13%
US	A	Amrize AG SIX:AMRZ	23.8B CHF	16%
DE	H	Heidelberg Materials AG XMUN:HEI	25.6B EUR	31%
IN		Grasim Industries Ltd NSE:GRASIM	1.9T INR	15%
MX		Cemex SAB de CV NYSE:CX	17.2B USD	10%

Breedon Group PLC
Glance View

Market Cap

10.9B EUR

Industry

Construction

Imagine walking through the diverse landscapes of the UK and Ireland and realizing that beneath your feet lies the heart of a robust business empire—Breedon Group PLC. This dynamic company, founded in 2008, has carved its niche in the realm of construction materials. They have transformed the mundane into a thriving enterprise, mastering the art of turning raw, natural resources into vital components of modern infrastructure. Whether it's quarrying aggregates, producing cement, or manufacturing ready-mixed concrete and asphalt, Breedon's operations are intrinsic to the development of roads, bridges, and buildings that define urban and rural landscapes alike. Their strategic acquisitions over the years have expanded their geographic footprint and diversified their service offerings, ensuring a steady demand for their products across various sectors. The magic of Breedon's business model is in its vertical integration—a seamless amalgamation of extraction, production, and distribution processes. This approach not only elevates operational efficiency but also fortifies their market position against volatility. Breedon's revenue streams are supported by long-standing relationships with construction companies, local authorities, and commercial enterprises requiring a consistent supply of construction materials. They leverage their extensive network of quarries and plants to maintain a stronghold in regional markets, ensuring product availability and timely delivery. Breedon's focus on sustainability and innovation, including efforts to reduce carbon footprints and participate in the circular economy, illustrates their commitment to align business success with environmental stewardship. By marrying traditional industrial practices with forward-thinking strategies, Breedon continues to fortify its position as a cornerstone of the construction materials industry.

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CQB Intrinsic Value

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What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Breedon Group PLC
XBER:CQB